Aston Martin sets aside £30m to navigate any Brexit-related disruption

(qlmbusinessnews.com via news.sky.com– Thur, 28th Feb 2019) London, Uk – –

The luxury carmaker says 2018 proved an “outstanding” year and it is on track to handle the UK's looming departure from the EU.

Aston Martin Lagonda has used its first annual results since its stock market debut to announce a £30m fund to help navigate any Brexit-related disruption.

The luxury carmaker, which listed on the London Stock Exchange last October, said its board had approved “plans for up to £30m of advanced working capital and/or operating expenses” linked to the UK's departure from the EU.

The decision marks the latest in a string of actions by the car industry in the run-up to the 29 March deadline – with the sector firmly opposed to a no-deal scenario.

Aston has made no secret of the fact its business is less exposed to the possibility of extra tariffs and supply disruption than its high volume rivals such as Nissan, Honda and Jaguar Land Rover.

All three have made headlines in recent weeks for investment decisions such as Honda's decision to shut its Swindon plant – though Brexit has only formed part of the story as weaknesses in the global economy have dominated.

The industry lobby group the SMMT separately reported on Thursday that UK car exports to China fell 72% in January.

Aston Martin – best known worldwide for its association with the James Bond movie franchise – said it had enjoyed sales growth across all regions in 2018 – including China.

It reported record revenue of £1.1bn – a rise of 25% on 2017 – though its bottom line was hit by a series of costs including £136m linked to its stock market listing.

The company achieved a pre-tax loss of £68.2m following profits of £85m the previous year.

It said of its Brexit preparations: “To date the company has spent a minimal amount (on racking and packaging) and has committed, but not spent, (around) £2m on revised supply chain routes.

“Whilst we are mindful of these external factors and the uncertain and more challenging external environment, particularly in the UK and Europe, we remain disciplined in our execution and maintain our guidance for financial year 2019, whilst also reconfirming our medium-term objectives”.

Shares were up to 13% lower in early trading – with the company losing a third of its market value since flotation.

The company said its expansion – including plans for its first sports utility vehicle, the DBX, were progressing well.

Chief executive Dr Andy Palmer said: “2018 was an outstanding year for Aston Martin Lagonda, delivering strong growth, with improving revenues, unit sales and adjusted profits.

“As the UK's only listed luxury automotive group, we have demonstrated our legitimacy in the global luxury market.

“Our well-defined expansion plans, that combine outstanding high-performance cars with iconic brand-status, are on track as we manage through the uncertainties and disruption impacting the wider auto industry.

“Given our progress on the Second Century plan – including completion of our new manufacturing plant at St Athan and our preparations for the DBX, we are confident that Aston Martin Lagonda will deliver another year of growth.

“Whilst we are mindful of the uncertain and more challenging external environment, particularly in the UK and Europe, we remain disciplined in our execution and maintain our guidance for financial year 2019, whilst also reconfirming our medium-term objectives.”

He later told the Reuters news agency that any delay to the Brexit process would be a “further annoyance” – adding: “You're holding that contingency stock for longer which means that your working capital is tied up for longer.

“More importantly, what you're doing is you're creating continued uncertainty,” he said.


By James Sillars, business reporter

Booker Prize finds new sponsor in billionaire Sir Michael Moritz

(qlmbusinessnews.com via bbc.co.uk – – Thur, 28th Feb 2019) London, Uk – –

The Booker Prize will be funded by venture capitalist Sir Michael Moritz for the next five years after the Man Group, the previous sponsor, withdrew.

The prestigious literary award will be paid for by Crankstart, the charity run by Sir Michael and wife Harriet Heyman.

Welsh-born Sir Michael, who is based in San Francisco, is worth $3.4bn (£2.5bn), according to Forbes magazine.

But the prize will not bear his name – it will be known as The Booker Prize after 18 years as the Man Booker Prize.

Last year's £50,000 prize was won by Belfast writer Anna Burns for Milkman.

Sir Michael will also support The International Booker Prize.

He began his career as a journalist for Time magazine and wrote the first biography of Steve Jobs and Apple in 1984.

He went on to join Silicon Valley venture capital firm Sequoia Capital, investing in companies including Google, LinkedIn and PayPal.

Harriet Heyman is a former writer for Life and The New York Times, and published a novel in 1989.

Sir Michael said: “Neither of us can imagine a day where we don't spend time reading a book. The Booker Prizes are ways of spreading the word about the insights, discoveries, pleasures and joy that spring from great fiction.

“Just like The Booker, I was born in Britain and before coming to America was reared on English literature. Harriet and I feel fortunate to be able to support prizes that together celebrate the best fiction in the world.”

The couple founded Crankstart in 2000 to support and organise scholarship funds for university students from low-income families.


Analysis

By Will Gompertz, BBC arts editor

The corporate sponsorship market is notoriously difficult for fundraisers working in the arts sector. Brands aren't exactly queuing up to pour cash into exhibitions, fancy extensions, and annual prizes.

Those that do often don't hang around for long, and the more loyal can sometimes lead to negative publicity (such as BP) or strained relations.

With this in mind, the Booker Prize will be very pleased to have found a donor willing to make a major philanthropic gift without demanding his name be attached to the prize, nor – one imagines – instructing his marketing team to milk the relationship for all that it is worth.

Arts organisations across the country will be looking on enviously, and, I suspect, forming a queue to invite Sir Michael to lunch.

M&S and Ocado confirm deal to start home delivery service next year

(qlmbusinessnews.com via bbc.co.uk – – Wed, 27th Feb 2019) London, Uk – –

Marks & Spencer and Ocado have confirmed a deal which will give the High Street retailer a home delivery service for the first time.

M&S will buy a 50% share of Ocado's retail business for £750m.

The joint venture will be called Ocado and will deliver M&S products from September 2020 at the latest, when Ocado's deal with Waitrose expires.

Under the deal Ocado will also continue to supply its own-label products and big name branded goods.

M&S will fund the deal by selling £600m of shares and by cutting its dividend payout to shareholders by 40%.

“We think we've paid a fair price,” said Steve Rowe, M&S chief executive.

“It's the only way we could have gone online within an immediately scalable, profitable and sustainable business,” he said.

He added that one third of M&S business would be online in the future.

M&S shareholders were sceptical – shares fell 8% following the announcement, while Ocado rose by 8%.

Neil Wilson, chief markets analyst at Markets.com, questioned whether the value of a shop with M&S was big enough for online shopping.

“Basket sizes at M&S are extremely small relative to other larger supermarkets and significantly below the current Ocado minimum for delivery.

At the moment M&S shoppers spend an average of £13 on each shop, while Ocado average just over £100 per shop.

M&S said that part of the reason it has such a relatively low average spend was that customers could not access a wider range of products.

The company said the Ocado deal would offer their customers the ability to do a full shop online.

According to Mr Wilson, there is also a risk that shoppers will defect to Waitrose when the current arrangement with Ocado comes to an end.

“I would also query whether M&S can retain the current Ocado customer base who are used to getting Waitrose products. There is a high risk of customer leakage as consumers rotate to Waitrose's in-house delivery service,” he said.

However, Ocado founder and chief executive Tim Steiner brushed off that suggestion.

“Our customers have told us that they are looking forward to getting their M&S Percy Pig sweets', he said.

Mr Steiner told the BBC of the 50,000 products it currently sold, about 4,500 were Waitrose branded.

When the new joint venture is up and running these would be replaced by more than 4,500 M&S products, he added.

Mr Rowe claimed that current Ocado customers would benefit from the deal as Marks and Spencer products were on average cheaper than comparable Waitrose products.

The deal could also see some of Ocado's own brand products being stocked in M&S stores.

Commenting on the deal, Waitrose managing director Rob Collins said the supermarket chain had strengthened its own online business “significantly” and that it planned to double Waitrose.com within five years.


Analysis: By Dominic O'Connell, Today business presenter

The two companies' share price reactions give a succinct verdict.

M&S was down nearly 9% in early trading; Ocado up 4%. Retail experts – and professional investors – think there is a lot more in this for Ocado than for M&S.

The latter is paying £750m for a half share in a division of Ocado that last year made just over £80m of trading profit. Shareholders will have to find £600m of the purchase price from their own pockets.

The high price explains some of investor misgivings, but there are bigger questions about the fit between the two.

M&S is a (relatively) upmarket convenience store, where the average basket price is just £13.

Ocado, thanks to its tie-up with Waitrose and its wide-range of own-label products, is a full-service grocery store where most customers are doing their weekly shop, not topping up.

Will M&S be able to push enough of its products through Ocado to justify the price, and how will Ocado customers react when its relationship with Waitrose comes to an end next year?

Archie Norman, M&S's wily chairman and chief strategist, might judge these criticisms short-sighted, and typical of the City's lack of long-term vision.

Having lagged behind on online shopping for years, M&S has been catapulted into the front ranks at a stroke.

The cost of the deal, Norman might argue, should be judged against the cost of the alternatives, and the cost of doing nothing.

BBC and ITV in joint venture to launch Netflix rival BritBox

(qlmbusinessnews.com via theguardian.com – – Wed, 27th Feb 2019) London, Uk – –

Streaming service to launch this year will feature archive shows and new commissions

The BBC and ITV have confirmed plans to join forces and launch a paid-for streaming service called BritBox by the end of this year, in an attempt to head off Netflix.

Netflix is eating into the market share of traditional broadcasters, as audiences increasingly desert established channels and expect shows to be available instantly on streaming services.

BritBox will mainly feature archive BBC and ITV shows, alongside new British commissions made especially for the service. There were no details on pricing; the announcement said it would be “competitive”.

However, BritBox will not have the latest BBC and ITV shows, which will remain available through the catch-up BBC iPlayer and ITV Hub services. Other broadcasters are expected to join the service later, with Channel 4 known to have taken part in discussions, which were revealed by the Guardian last year.

ITV has pledged to invest up to £65m in the joint venture over the next two years. The publicly funded BBC would not comment on whether it was putting a similar amount of money into the project.

The decision means British broadcasters are likely to stop licensing their archive material to services such as Netflix to try to drive subscribers to the new UK service, which will operate on a fraction of the budget of its deep-pocketed US rivals.

The ITV chief executive, Carolyn McCall, said BritBox would be pitched as an add-on for British households that already had one streaming service: “It’s complementary to Netflix because it’s doing a very different thing.”

She said Netflix commissioned shows on a global basis but BritBox’s original material would be aimed at UK viewers: “When we’re commissioning content we’re looking at it working in the UK specifically. It is a permanent, comprehensive home for the widest range of British content available in one place.”

The decision to launch the service came a decade after Project Kangaroo, a proposal for a similar British cross-channel streaming service, was blocked on competition grounds. Many in the British TV industry blame the Competition Commission’s decision for opening the door for Netflix to dominate.

This time around, the media regulator, Ofcom, said it welcomed the BritBox proposal because it wanted to see British broadcasters “collaborating to keep pace with global players, by offering quality UK content that’s available to viewers whenever and however they want to watch it”.

BritBox is already available in the US, where it has 500,000 customers who pay for a selection of UK television shows. The new service will only be available to British subscribers. They will be able to watch it on holiday within the EU, but only if the government strikes a trade deal with Brussels.

McCall admitted the existing ITV Hub catch-up service was not good enough and “very clunky”, but said ITV was investing heavily in improving it.

She said: “If you look at it today, the look and feel has already changed. It’s much cleaner and nicer to be on. You’ll also be led through it in a much better way. There’s a whole load of things to come.”

ITV programmes are available on ITV Hub for a month after their initial broadcast, in line with the BBC’s iPlayer policy. However, the BBC is seeking approval to make many shows available on iPlayer for up to a year, which could affect when material becomes exclusively available on Britbox.

The announcement that talks on Britbox had almost concluded was timed to coincide with ITV’s annual financial results, which show the broadcaster’s profits dipped slightly in a tough market.

The company warned this year could be tougher, since 2018 was aided by strong advertising in a World Cup year and success in its production business, which makes shows for other channels, such as the BBC’s Bodyguard.

The BBC director general, Tony Hall, said the streaming service would be “truly special”. “A new streaming service delivering the best homegrown content to the public who love it best,” he said. “The service will have everything from old favourites to recent shows and brand new commissions. It’s an exciting time for the viewing public.”

By Jim Waterson 

Mark Carney – Bank of England likely to help UK economy after no-deal Brexit

(qlmbusinessnews.com via uk.reuters.com — Tue, 26th Feb 2019) London, UK —

LONDON (Reuters) – Bank of England Governor Mark Carney said on Tuesday he expected the British central bank would provide more support for the economy in the event of a no-deal Brexit.

Carney said the BoE’s interest-rate setters had stressed that their response to the shock of a no-deal Brexit would not be automatic.

“As my colleague Gertjan Vlieghe has noted, that does not necessarily mean that, in the event of a no-deal, no-transition scenario, either direction of policy is equally likely,” Carney said in an annual report to lawmakers.

“Given the exceptional circumstance associated with Brexit, I would expect the Committee to provide whatever monetary support it can consistent with the price stability remit given to the Committee by Parliament. But there are clearly limits to its ability to do so.”

Writing by William Schomberg

Simon Emeny Fuller’s pubs chief executive joins WH Smith board

(qlmbusinessnews.com via cityam.com – – Tue, 26th Feb 2019) London, Uk – –

The chief executive of Fuller's pubs has joined the board of WH Smith to sit as a non-executive director, the high street retailer announced this morning.

Simon Emeny, group chief executive of London brewery Fuller, Smith and Turner, will be joined by Greensill Capital chairman and former Citibank chief executive Maurice Thompson.

Current managing director of the WH Smith high street business Carl Cowling is the third new appointment to the board today.

WH Smith chairman Henry Staunton said: “We are delighted to welcome Simon and Maurice on to the board of WH Smith.

“Their combined retail and financial expertise will ensure we continue to be well positioned to invest in new opportunities and grow the business.

“Since joining WH Smith in 2014, Carl has made a significant contribution to the company, in both our travel and high street businesses.

“He will be a valuable addition to the board as we continue to deliver the strategies for each business and create value for shareholders.”

In January the retailer announced that sales were up six per cent over the Christmas period, with sales boosted 16 per cent in the firm's travel division.

The company's long-term strategy is to transform from a high street giant to a retailer expanding in travel hub markets such as airports and railway stations.

By Jessica Clark

Karren Brady quits as chairman of Philip Green’s holding company amid controversy

(qlmbusinessnews.com via telegraph.co.uk – – Mon, 25th Feb 2019) London, Uk – –

Baroness Karren Brady has resigned her job as non-executive chairman of Taveta, the holding company for Sir Philip Green's retail empire, the company has announced.

Baroness Karren Brady has stepped down from her post as chairman of Taveta, the holding company for Sir Philip Green’s retail empire.

Lady Brady was chairman of Taveta Investments, the company that owns Arcadia Group, which runs Sir Philip’s retail empire, including Topshop, Miss Selfridge and Dorothy Perkins.

A spokesman for Lady Brady told confirmed that she had resigned from her post, but added that she would not be issuing a comment on Monday. 

Teveta, in a statement to Sky News, confirmed that Sharon Brown – the company's non-executive director – had also stood down from her role on its board. 

It said: “Taveta would like to announce that Karren Brady and Sharon Brown (in their respective capacities as non-executive chairman and non-executive director) have resigned from its board.

“Taveta thanks them for their contribution and wishes them well for the future. Taveta is in active discussions with individuals who have significant relevant experience and expects to make a further announcement as to the composition of its board shortly.”

Earlier this month, Lady Brady said that she would not resign from Taveta following revelations about the staff complaints in The Telegraph.

In the past, she has consistently condemned powerful men who have been accused of sexual harassment.

In 2017, after Sir Michael Fallon’s resignation as defence secretary over inappropriate behaviour, she wrote in a newspaper: “What Michael Fallon, Harvey Weinstein and Kevin Spacey are accused of is abusing their power in an organisation to get someone to do something they don’t want to do, or tolerate something they don’t like.

“Lots of men are asking: ‘When is it appropriate to touch a colleague?' If you are in doubt, how about … NEVER?”

Sir Philip announced Lady Brady’s appointment as chairman of Taveta in 2017. She initially joined the company as a non-executive director in 2010.

It is understood that Lady Brady, who has been one of Britain’s most high-profile businesswomen for decades, was closely involved with Arcadia because the retail firm is Taveta’s only asset.

Sources close to Arcadia told The Telegraph earlier this month that she was regularly seen at the company’s offices in London.

On February 9, Lady Brady told this newspaper that she would “not be resigning” as chairman of Taveta, adding: “Why should I?”

As she walked away from a reporter, she said the claims against Sir Philip had been “denied”.

Sir Philip paid a female executive more than £1 million as part of a settlement agreement after she accused the retail tycoon of groping her in a series of allegations that were only disclosed after a six-month legal battle.

He is also alleged to have racially abused a senior black employee, telling him that his “problem” was that he was still “throwing spears in the jungle”.

The black member of staff received around £1 million, while two other female employees were paid hundreds of thousands of pounds each after complaining of Sir Philip’s “inappropriate” behaviour that included “grabbing” one woman by the face and putting another in a “headlock”.

Five complainants each signed a gagging clause  – known as a non-disclosure agreement (NDA) – in return for the pay-offs.

The Telegraph was able to make public for the first time details of the allegations after the High Court action brought by the billionaire against this newspaper was formally abandoned.

She had been chairman since July 2017.

The firm said Sharon Brown had also resigned as non-executive director of Taveta, which owns the Arcadia group.

The resignations come as Sir Philip continues to face allegations of sexual harassment and racial abuse of staff, which he strongly denies.

“Taveta thanks them for their contribution and wishes them well for the future,” the company said.

Earlier this month, Sir Philip dropped legal action against the Daily Telegraph newspaper, which had been prevented from publishing accounts of his alleged misconduct towards five employees.

The paper subsequently reported that he paid a female employee more than £1m to keep quiet after she accused him of kissing and groping her.

Shortly after that, Baroness Brady said in a statement to the Telegraph, released via her agent, that she would stay in her post because she felt “a real sense of duty” to the 20,000 people working at Taveta, including her own daughter.

By  Gareth Davies 

Bullring owner Hammerson report annual loss, plans to sell off assets to cut debts

(qlmbusinessnews.com via bbc.co.uk – – Mon, 25th Feb 2019) London, Uk – –

Shopping centre owner Hammerson, owner of Birmingham's Bullring, has reported an annual loss and says it will sell off more assets as it tries to cut its debt burden.

The firm, which also owns the Bicester Village designer outlet and London's Brent Cross centre, is targeting more than £500m of disposals for 2019.

The announcement came as it unveiled its 2018 results, showing a pre-tax loss of £266.7m.

In 2017, it made a £413m profit.

Contributing factors included a £79.9m loss on the sale of properties and a £161.4m loss on the revaluation of properties that it still holds.

Chief executive David Atkins said 2018 had been “a tough year, particularly in the UK”, after a number of high-profile retailers went into administration.

“Tenant failures, the structural shift in retail and a more considered consumer created a difficult operating environment, putting pressure on property values.”

Shareholder value

Hammerson said net rental income had fallen by 1.3% at its UK flagship destinations and by 4.3% at retail parks.

The value of its portfolio shrank by 5.9% to £9.94bn. Its properties fell in value by an average of 4% during 2018, including a reduction in UK values of 11%.

Its latest sell-off plan comes on the back of asset disposals worth £570m in 2018.

Hammerson said its board had been in discussion with key shareholders and had entered into a “relationship agreement” with activist investor Elliott Advisors, which holds a significant stake in the company.

Elliott issued a statement welcoming Hammerson's moves, which include a decision to recruit two additional independent non-executive directors.

Elliott said: “This increased focus on strategic disposals, as marked by updated targets for 2019 and a current pipeline of potential sales of over £900m, signals a positive development in the company's progress, and its ability to ensure that its portfolio of high-quality assets delivers compelling value for all shareholders.”

Analysts at Liberum Capital praised management's “open-minded” approach to increasing the level of sell-offs, but warned that getting a decent price for “non-core assets” might prove difficult in the current climate.

“The trading backdrop for retail remains challenging, with valuation declines accelerating, and this is likely to continue to weigh on Hammerson returns,” it added.

Grant Cardone SUCCESS Motivation: How to Develop a MILLIONAIRE Mindset

Source: Evan Carmichael

More about Grant Cardone: He's internationally renowned business and sales expert. He's the author of 7 sales and business books. He has worked with companies like Google, Aflac, Toyota, GM, Ford and many more. He appears regularly on Fox News, CNBC, Fox Business, and contributes to Entrepreneur.com. He was named the #1 marketer to watch in 2017 by Forbes Magazine. He helps his followers and clients to make success their duty. He's the creator of customized sales training programs for Fortune 500 companies and entrepreneurs. He's the author of New York Times bestseller book “If You're Not First, You're Last”. He captivates and motivates audiences with his engaging and entertaining speaking style. He's heavily involved in civic affairs and charitable organizations.

10 Trucks & Buses Of The Future You Have To See!

Source: Thansis 1997

Tesla Semi Truck : The Tesla Semi is an all-electric battery-powered Class 8 semi-trailer truck prototype which was unveiled on November 16, 2017 and planned for production in 2019 by Tesla, Inc. Volvo VNL Truck : The Volvo VNL is built for the needs of today’s—and tomorrow’s—long-haul trucking operations. The VNL delivers long-haul efficiency, along with premium comfort and amenities. Mercedes-Benz Future Truck 2025 : This concept vehicle has ushered in a new era for the transport industry: it has gone into the history books as the world's first autonomously driving truck. Yet its futuristic concept is closer to reality than you think. Freightliner SuperTruck : After five years and $115 million of development, the Freightliner SuperTruck is Daimler's answer to a lofty challenge set by the Department Of Energy: “improve semi-truck fuel economy by at least 50 percent.” Mercedes-Benz Future Bus : What urban public transport will look like in the future is shown by the semi-automated city bus with CityPilot – it operates even more safely, efficiently and comfortably than conventional buses. Walmart Advanced Truck : Walmart showcased its futuristic truck at the Mid-America Trucking Show (MATS) in Louisville, Ky. The Walmart Advanced Vehicle Experience is a tractor-trailer combination that features leading edge aerodynamics, an advanced turbine-powered range extending series hybrid powertrain and sophisticated control systems. WILLIE – Transparent LCD Bus : With nothing displayed on the side-elevation transparent LCD screens, there's not much differentiating the Willie from a traditional bus – except for its “organic” frame. Volvo Electric Bus : The Volvo Electric Bus is an integrally-constructed single-decker rigid bus and single-decker articulated bus, most commonly available as a hybrid electric bus named Volvo 7900 Hybrid or just Volvo 7900H.

How Huawei Went From A Small-Time Parts Reseller To A Homegrown Tech Giant

(qlmbusinessnews.com via bloomberg.com – – Sat, 23rd Feb, 2019) London, UK – –

Huawei has been rocked by political and legal turmoil at a time when it also happens to be poised to build the worldwide 5G revolution. Is the timing a coincidence, or a coordinated attempt to knock China's biggest company down a peg? This is the story of how Huawei went from a small-time parts reseller to the homegrown tech giant China always hoped for, and the west always feared.

Video by Henry Baker

Victoria Beckham On The Road To Launch Her Latest Collection In New York

Source: Victoria Beckham

Join me as I travel to New York to launch my #ReebokxVictoriaBeckham collection, celebrate female artists at the Old Masters preview event at Sotheby’s and chat all things fashion on Live with Kelly and Ryan. Click the links below to shop my exclusive travel edit with items from my #VBSS19 collection!

Cathedral City maker Dairy Crest poised for takeover by Canada’s Saputo in a near-£1bn deal

(qlmbusinessnews.com via bbc.co.uk – – Fri, 22nd Feb 2019) London, Uk – –

Dairy Crest, whose brands include Cathedral City cheddar and Country Life butter, has agreed to be bought by a Canadian company in a near-£1bn deal.

Saputo, one of the biggest dairy processors in the world, will pay 620p a share, valuing Dairy Crest at £975m.

The deal is Saputo's first in Europe and it said Dairy Crest was an “attractive platform” for UK growth.

Dairy Crest said “virtually” all its 1,100 UK jobs are safe, including 150 at its head office in Surrey.

Saputo has expanded rapidly in recent years through acquisitions. It said its interest in Dairy Crest had been motivated by a desire to increase its international presence and “enter the UK market by acquiring and investing in a well-established and successful industry player”.

The Canadian company said that, under its ownership, Dairy Crest would continue to manufacture its products from its existing UK facilities, and that it also intended the management of its UK operations to remain in Surrey.

Dairy Crest's brands

  • Cathedral City cheese
  • Davidstow cheese
  • Country Life butter
  • Clover
  • Utterly Butterly
  • Frylight
  • Vitalite

Saputo chairman and chief executive Lino Saputo Jr said: “We believe that under Saputo ownership, Dairy Crest will be able to accelerate its long-term growth and business development potential and provide benefits to Dairy Crest's employees and stakeholders.”

Dairy Crest's board has unanimously recommended that shareholders accept Saputo's offer.

The chairman of Dairy Crest, Stephen Alexander, said: “The acquisition should enable Dairy Crest to benefit from Saputo's global expertise and strong financial position to fulfil and accelerate its growth ambitions.

“The businesses have strong shared values and the board is confident that Saputo's plans to invest in and grow the Dairy Crest business mean the proposed transaction is positive for all its stakeholders.”

‘Brexit-proof’ property areas where house prices are forecast to rise

(qlmbusinessnews.com via telegraph.co.uk – – Fri, 22nd Feb 2019) London, Uk – –

The recent slump in house price growth has been blamed by many experts largely on the political and economic uncertainty caused by the Brexit vote – but there are some areas of the country that have bucked this trend. 

According to Nationwide’s latest house price index, house price growth “ground to a halt” in January, with prices just 0.1pc higher than the same time last year. Estate agent Jeremy Leaf said the figures confirmed a market “struggling to weather the Brexit storm, but not collapsing”.

While some areas in London and south-east England have seen considerable falls in growth since Britain voted to leave the European Union in June 2016, the opposite is true for many other regions across the country. 

Buying agent Garrington Property Finders analysed Land Registry data to identify the regions in England and Wales that have weathered the Brexit storm, and are likely to see future house price rises. Its research is based on two determining factors of future appreciation – property affordability (house price to earnings ratio) and the pace of job creation.

It found that property increased in price in East Staffordshire in the West Midlands by 10pc in 2018, four times higher than the UK average of 2.5pc. It also has a good ratio of affordability in the area and a high employment growth rate, making it the top “Brexit-proof” property hotspot in the country.

The area's robust economy means jobs are being created at a prodigious rate, with local employment growing by 9.4pc in 2018, almost eight times faster than the national rate of 1.2pc, while its affordability ratio is 7.7. 

The second-placed market in the ranking was Rochdale in Greater Manchester, which clocked price growth of 8.7pc and employment growth of 7pc in 2018, yet has a good affordability ratio of 5.6, second only to Liverpool’s 5.1 ratio.

All 10 areas in the league table have an affordability ratio – the average property price divided by the average resident’s salary – lower than the England and Wales average of 7.77 (London’s is 12.36, according to the ONS), and a rate of job creation in excess of the national average.

Derby, Derbyshire, Salford, Greater Manchester, and Bassetlaw, in Nottinghamshire, round out the top five, with property price growth in 2018 of 7.7pc, 6.9pc and 6.8pc respectively. 

Jonathan Hopper, managing director of Garrington, said that while at a national level the property market is cooling to the point of inertia – with average prices rising at the slowest pace for five years – a number of hot micro-markets have emerged that completely buck the trend.

Mr Hopper said this includes the Midlands which currently has a “combination of Brexit-defying economic momentum, good affordability and, above all, strong future growth potential.”

The Royal Institution of Chartered Surveyors (Rics) has previously predicted that national house price growth will come to a “standstill” this year, but a supply shortage “will negate outright falls”. 

Halifax’s Russell Galley is more bullish, however. “On the basis that it is still most likely that the UK exits the EU with a form of withdrawal agreement and transition period”, he said that he expects annual house price growth nationally to be between 2pc and 4pc by the end of the year.

By  Sophie Christie 

Centrica: British Gas owner’s shares down 12% after price cap warning

(qlmbusinessnews.com via news.sky.com– Thur, 21st Feb 2019) London, Uk – –

The FTSE 100 group spooked investors by admitting that cash flows for the year ahead were expected to miss targets.

Shares in British Gas owner Centrica have fallen sharply after it warned 2019 financial performance would be hit by factors including the energy price cap.

The FTSE 100-listed group was down 12% after it also revealed that it had shed 742,000 UK customer accounts last year in a “highly competitive” market.

Centrica said profits at its UK home energy supply division were down by 19% to £466m for 2018, though the overall group's headline measure of adjusted operating profit was up 12% to £1.39bn.

The group had said in November that the cap on default energy tariffs, introduced at the start of January, would have a one-off impact of £70m in the first quarter of 2019.

In its latest statement it said that the impact of the cap, together with a declining performance for its energy exploration and production division and nuclear arm, would see cash flow about £300m below target for the year as a whole.

The company also said it was selling its North American franchisee home services business Clockwork Inc for $300m after a slower than expected recovery for its operations in the region last year.

Chief executive Iain Conn said: “Centrica's financial performance in 2018 was mixed against a challenging backdrop.

“We are taking actions to strengthen the company in 2019 and improve underlying performance in 2020, including driving cost efficiency hard and delivering further divestments.”

The results come after regulator Ofgem introduced a cap on default energy prices following years of political pressure, which came into force on 1 January and promised to save customers a typical £76 a year.

It had an immediate impact on British Gas, the UK's biggest energy supplier, as the cap was set at a level £68 lower than its standard variable tariff (SVT).

However the regulator said just weeks later that the cap would rise on 1 April by an average £117, blamed on higher wholesale gas and electricity costs.

All of the UK's so-called “big six energy” suppliers including British Gas have now followed suit, lifting their own SVTs to the newly increased cap level.

Centrica reiterated in its latest results that it does not believe the price cap is a “sustainable solution for the market” and was “likely to have unintended consequences for customers and competition”.

Analysts pointed to fears that the group's dividend could be cut being behind its sharp share price fall.

George Salmon, equity analyst at Hargreaves Lansdown, said: “The bad news for Centrica is that the weaker outlook comes from a multitude of factors – the government's price cap, continued outages in the nuclear business and weak offshore production activity.

“This all means the dividend is starting to creak. We wouldn't be surprised if a cut was around the corner.”

By John-Paul Ford Rojas

Barclays, chief executive Jes Staley pledges to return more money to shareholders

(qlmbusinessnews.com via theguardian.com – – Thur, 21st Feb 2019) London, Uk – –

Bank reports flat profits and sets aside £150m to cover uncertainty over Brexit

The Barclays chief executive, Jes Staley, has promised to return more money to shareholders in an effort to fend off the attentions of the activist investor Edward Bramson, as the bank reported flat profits for 2018.

Pre-tax profits of £3.5bn were held back by litigation and conduct charges of £2.2bn for the year, while the bank also took a £150m charge to cover economic uncertainty over Brexit.

Staley has come under pressure in the past year after Bramson amassed a 5.5% stake in the bank through his Sherborne investment vehicle and called for a major change of strategic direction. Bramson wants to cut back Barclays’ investment bank to free up capital for more profitable activities.

Bramson is also agitating for a seat on the Barclays board. Top executives at Barclays will meet Bramson in March to discuss his views on the bank’s strategy for the first time. However, the Barclays board on Thursday wrote a unanimous letter to shareholders saying that Bramson’s request should be denied to maintain a “cohesive” board.

The Barclays boss said the 6.5p dividend for 2018 represented “excellent progress but not sufficient”.

Staley said: “We will use the strong capital generation of the bank to return a greater proportion of earnings to shareholders by way of dividends and to supplement those dividends with additional returns, including share buybacks. I am optimistic for our prospects to do more in 2019 and beyond.”

Barclays declined to give further details on the timing and size of any share buybacks, although Staley suggested the bank would be “prudent” while Brexit uncertainty persists.

The bank’s fixed income, currencies and commodities trading arm, a key part of the investment bank which Bramson wishes to shrink, earned £570m in the fourth quarter of the year. While that represented a 6% year-on-year fall, Barclays outperformed other European rivals, who saw double-digit declines in income amid market volatility.

Investors appeared to welcome the buyback plans. Shares in Barclays rose by 3.3% in morning trading on Thursday, the top riser on the FTSE 100, to reach 166p.

Gary Greenwood, a banking analyst at Shore Capital Markets, said: “It would appear that Barclays’ corporate and investment banking operations fared much better than its US rivals in the final quarter.”

The pressure of an “activist investor breathing down its neck and pressing for an alternative approach” would be likely to spur Barclays to deliver on its targets of increased profitability, Greenwood added.

Barclays group profit before tax excluding costs for fines was £5.7bn, an increase of 20% compared with 2017. Those litigation and conduct costs were inflated by a £400m provision for compensation for payment protection insurance (PPI) and a £1.4bn US fine in March for mortgage securities mis-selling. However, the bank hopes those costs will not recur.

Barclays’ £150m Brexit provision – in line with similar amounts set aside by HSBC and Royal Bank of Scotland – was made to be “cautious and prudent”, Staley said on Bloomberg TV. Barclays has already gained a banking licence for an Irish subsidiary in preparation for Brexit, and has held more than 100 clinics with clients to help them get ready, amid continuing uncertainty.

Staley noted that the bank has so far seen few signs of a deterioration in credit quality, although customers were hoarding more cash in their accounts.

“People are clearly being increasingly cautious as we come to the final weeks – and hopefully not much longer – of uncertainty over Brexit,” he said.

Staley was paid a total of £3.4m in 2018, the same as in 2017, after the bank clawed back £500,000 of his 2016 bonus after he was censured and forced to pay a fine of £642,000 by the City regulator for trying to find out the identity of a whistleblower. The board also faced calls to fire Staley for the breach.

However, Staley still received a bonus of £1.1m for 2018.

Sainsbury’s-Asda proposed tie-up in jeopardy

(qlmbusinessnews.com via bbc.co.uk – – Wed, 20th Feb 2019) London, Uk – –

The UK's competition watchdog has said the proposed tie-up between Sainsbury's and Asda could push up prices and cut choice for customers.

The Competition and Markets Authority (CMA) said it could block the deal or force the sale of a large number of stores or even one of the brand names.

However, it also said it was “likely to be difficult” for the chains to “address the concerns”.

Sainsbury's boss told the BBC the findings were “outrageous”.

The Competition and Markets Authority (CMA) said the deal could be blocked or a large number of stores or even one of the brand names sold.

Chief executive Mike Coupe described the CMA's analysis as “fundamentally flawed” and said the firm would be making “very strong representations” to it about its “inaccuracy and lack of objectivity”.

“They have fundamentally moved the goalposts, changed the shape of the ball and chosen a different playing field,” he told the BBC.

“This is totally outrageous.”

Sainsbury's shares were down more than 12% in early Wednesday trading.

Analysis: Sainsbury's plans crushed

Dominic O'Connell, Today business presenter

Supermarket bosses know that British competition regulators have always had a strong interest in the grocery market. There has been a string of inquiries over the last two decades, both into individual deals and the bigger question of how well the market serves consumer interests.

So Sainsbury's board members would have been nervous when they proposed a takeover of Asda last year – but they did at least have the encouragement that the Competition and Markets Authority (CMA) had approved a tie-up between Tesco and Booker just a few months earlier.

Unfortunately for them, the light at the end of the tunnel turned out to be an oncoming train.

The regulator has crushed Sainsbury's plans. There is no veto, but the strong language used, and the breadth of the problems found, suggest there is no way back.


These are the CMA's provisional findings and the firms will have a chance to respond, before it publishes its final decision on 30 April.

The CMA said the merger could lead to a “poorer shopping experience”.

The watchdog said it had identified two potential remedies to the loss of competition: either blocking the merger entirely or forcing the sale of “assets and operations”, including stores or even the Sainsbury's or Asda brands.

However, it added that it “currently considers that there is a significant risk that a divestiture will not be effective in this particular case”.

The two chains would need to sell “sufficient assets and operations to enable any purchaser to compete effectively as a national in-store grocery retailer”.

It added that it may not be possible to achieve an effective solution to the loss of competition “without also divesting one or other of the Asda or Sainsbury's brands, in addition to physical assets and operations”.

‘Lower prices'

The deal would create a business accounting for £1 in every £3 spent on groceries, with a 31.4% market share and with 2,800 stores.

Stuart McIntosh, chair of the CMA's independent inquiry group, said: “We have provisionally found that, should the two merge, shoppers could face higher prices, reduced quality and choice, and a poorer overall shopping experience across the UK.

“We also have concerns that prices could rise at a large number of their petrol stations.”

However, in a joint statement, Sainsbury's and Asda said combining the two chains would create “significant cost savings, which would allow us to lower prices”.

“Despite the savings being independently reviewed by two separate industry specialists, the CMA has chosen to discount them as benefits.”

Hargreaves Lansdown senior analyst Laith Khalaf said the CMA had “basically kicked the Sainsbury-Asda merger into touch”.

“While the regulator left the door open for the supermarkets to sell off assets to complete the deal, it's clearly not keen on that solution.

Sainsbury's and Asda would also have to find a suitable buyer for the assets on sale, one who is big enough to provide proper competition in the eyes of the regulator, he added.

Patrick O'Brien, UK retail research director for GlobalData, said the CMA's provisional findings had “devastated any prospect of the merger going ahead”.

“The CMA has raised concerns about the tie-up in just about every conceivable way – on national and local grounds, on store and online competition concerns and on major stores, convenience stores and petrol stations.”

UK employment hits 32.6 million record high

(qlmbusinessnews.com via bbc.co.uk – – Wed, 20th Feb 2019) London, Uk – –

The number of people in work in the UK has continued to climb, with a record 32.6 million employed between October and December, the latest Office for National Statistics figures show.

Unemployment was little-changed in the three-month period at 1.36 million.

The jobless rate, remaining at 4%, is at its lowest since early 1975.

Weekly average earnings went up by 3.4% to £494.50 in the year to December – after adjusting for inflation, that is the highest level since March 2011.

The number of people in work between October and December was up 167,000 from the previous quarter and 444,000 higher than at the same time in 2017.

The employment rate – defined as the proportion of people aged from 16 to 64 who are working – was estimated at 75.8%, higher than the 75.2% from a year earlier and the joint-highest figure since comparable estimates began in 1971.

Employment Minister Alok Sharma said: “While the global economy is facing many challenges, particularly in sectors like manufacturing, these figures show the underlying resilience of our jobs market – once again delivering record employment levels.”

ONS deputy head of labour market Matt Hughes said: “The labour market remains robust, with the employment rate remaining at a record high and vacancies reaching a new record level.

“The unemployment rate has also fallen, and for women has dropped below 4% for the first time ever.”

However, Andrew Wishart, UK economist at Capital Economics, warned that next month's figures may not be so buoyant.

“The labour market data didn't reflect the slip in hiring surveys in December, with employment rising,” he said.

“However, the surveys deteriorated more markedly in January, so a Brexit effect might start to weaken employment growth in the next batch of official data.”

Analysis:

By Dharshini David, BBC economics correspondent

The jobs market remains in a robust shape despite the loss of momentum in the economy towards the end of last year – although the Brexit fog effect may be yet to register.

Continuing recent trends, the majority of those entering work were previously inactive (students, looking after home, long-term sick etc).

The demand for labour continues to bolster wage growth. Real wages increased by more than 1% per year, better on the whole than in recent years although about half the rate of the pre-crisis era.

So little sign of Brexit uncertainty hitting hiring so far – but demand in the labour market tends to lag significantly behind changes in output.

More recent employment surveys show a marked deterioration in January, so a Brexit effect might start to weaken employment growth in the next batch of official data.

And productivity – output per hour – was down by 0.2% in the fourth quarter of 2018 versus a year previously, as output rose more slowly than employment. The lack of progress in this area could weigh on wage growth in the longer term.

Skill shortages

Looking at the average earnings figures, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “With surplus labour extremely scarce and job vacancies rising to a new record high, workers are having more success in obtaining above-inflation pay increases.

“Looking ahead, we doubt that wage growth will slip below 3% this year.”

Despite the wage increases and low unemployment figures, Suren Thiru, head of economics at the British Chambers of Commerce, did not think that struggling High Streets would benefit.

He said: “The uplift to consumer spending from the recent improvement in real pay growth is likely to be limited by weak consumer confidence and high household debt levels.

“The increase in the number of vacancies to a new record high confirms that labour and skills shortages are set to remain a significant a drag on business activity for some time to come, impeding UK growth and productivity.”


HSBC profits fall below expectations in fourth quarter

(qlmbusinessnews.com via cityam.com – – Tue, 19th Feb, 2019) London, Uk – –

HSBC posted a 16 per cent annual profit rise but fell below expectations as market volatility hurt the bank in the final quarter.

Shares in the bank fell 3.3 per cent in early trading – the FTSE 100's sharpest faller – as it remained cautious on its outlook for 2019 due to Brexit uncertainty and the ongoing US-China trade war.

The figures

Pre-tax profit rose 16 per cent to $19.9bn (£15.4bn) for the full year, but was lower than analysts’ expectations of $22bn.

HSBC said revenue climbed to $53.8bn, a five per cent increase compared to 2017, driven by a rise in deposit revenue across its global businesses but particularly in Asia.

Return on tangible equity for shareholders rose to 8.6 per cent from 6.8 per cent the previous year.

But the bank’s adjusted jaws – a ratio measuring revenue against costs – was in the negative at -1.2 per cent.

Achieving positive jaws is seen as important for investors and banks as it shows that revenue growth is outpacing costs rates.

Why it’s interesting

HSBC blamed its failure to achieve “positive jaws” on market weakness in the fourth quarter – revenue fell eight per cent over the final three months of 2018 compared with the previous year.

The bank said: “Positive jaws remains an important discipline in delivering our financial targets and we remain committed to it in 2019.”

The world’s major banks have all so far been impacted by the volatility seen across global markets at the end of last year.

What HSBC said

Chief executive John Flint said: “These are good results that demonstrate progress against the plan that I outlined in June 2018.

“Profits and revenue were both up despite a challenging fourth quarter, and our return on tangible equity is significantly higher than in 2017.

“This is an encouraging first step towards meeting our return on tangible equity target of more than 11% by 2020.”

What analysts said

Head of markets at interactive investor, Richard Hunter said: “A tough fourth quarter took its toll on some of the numbers, while a slowing Chinese economy, partially fuelled by the ongoing trade spat with the US, has yet fully to wash through.

“As such, 2019 could begin to see some real impact in an Asian region whose reported profits contribute almost 90% of the group total.”

Steve Clayton, manager of Hargreaves Lansdown's select UK income shares fund, which holds a position in HSBC, said the results were “disappointing.”

He said: “HSBC has always been a bank built around facilitating international trade between Asia and the rest of the World.

“Today’s tariff spats between the US and China are hardly helpful and could begin to hurt the group’s customers in Asia and beyond.

He added: “These results are disappointing, but a bank that has just reported underlying annual profits of almost $22bn and grown income, controlled costs and raised its return on equity can hardly be described as in crisis.”

By Callum Keown

Honda to close Swindon plant with the loss of about 3,500 jobs in 2022

(qlmbusinessnews.com via theguardian.com – – Tue, 19th Feb 2019) London, Uk – –

Denials by the North Swindon Tory MP will not save May from the burden of this decision

We told you so. That will be the reaction of Britain’s leading business groups to the news that Honda is to close its Swindon plant with the loss of about 3,500 jobs in 2022.

For at least a year, bodies such as the CBI, the EEF and the British Chambers of Commerce have been telling ministers that the uncertainty caused by Brexit would have serious consequences. The Honda announcement – with its knock-on consequences for its UK supply chain – will make the employers organisations even more insistent that a no-deal outcome should be ruled out.

Brexit was not the only factor involved. Honda production in Swindon never fully recovered from the deep global recession of 2008-09. Before the financial crisis, the plant produced 230,000 cars a year, but that is now down to 161,000. Of the three models once made in Swindon, two – the Jazz and the CR-V – have been moved elsewhere, leaving just the Civic.

Global factors have not helped either. There has been a sharp decline in demand for diesel vehicles. Japanese companies have a tendency to pull production back home when the world economy looks shaky. What’s more, Donald Trump’s threat of import tariffs on European-made cars may make the export of Swindon’s Civics to the US more expensive.

Honda’s original investment in Swindon in 1985 was motivated by a desire to have a plant inside the EU and so avoid paying the tariff – currently 10% – on imported vehicles. But that tariff will be phased out as a result of a new free trade deal between the EU and Japan which came into force at the start of this month.

Justin Tomlinson, who as Conservative MP for North Swindon represents many of the Honda workforce, said he had been told by the company and the business secretary, Greg Clark, that the decision was down to global market trends and not related to Brexit.

This, though, is overegging things. The hit to global demand was far more severe in 2008-09 than it is at present. Trump may simply be sabre-rattling. The 10% tariff on cars imported into the EU will not be fully phased out until 2027, five years after the Swindon plant is due to close. In 2022 it will still be more than 6%.

So while Honda’s decision is not simply about Brexit, uncertainty caused by Brexit played its part. Japanese policy makers – from the prime minister, Shinzo Abe, down – have been pressing for a soft Brexit ever since the referendum, initially privately but recently more openly.

Politically, therefore, the Honda decision will add to the already considerable pressure on Theresa May.

“The threat of Brexit is already having a damaging impact on investment decisions in the UK,” said Rachel Reeves, the Labour chair of the Commons business committee. “The PM now needs to rule out no deal immediately and keep us in the single market and customs union rather than risk further fatal damage to our car industry.”

By Larry Elliott