JD Wetherspoon shares jumped 9% after reported rise in full year sales and profits.

(qlmbusinessnews.com via bbc.co.uk – – Fri, 15 Sept 2017) London, Uk – –

Shares in JD Wetherspoon have jumped 9% after the pub group reported a rise in full-year sales and profits.

In the year to 30 July, profits before exceptional items rose 27.6% to £102.8m with total sales up 4.1% to £1.66bn.

Like-for-like sales – which strip out the impact of pub openings and closures – rose 4%, and are up 6.1% since the start of August.

However, Wetherspoon chairman Tim Martin said the recent pace of sales growth would not continue.

“Comparisons will become more stretching – and sales, which were very strong in the summer holidays, are likely to return to more modest levels,” he said.

Wetherspoon was the biggest riser on the FTSE 250 index, although the index was down 78.91 points at 19,445.03.

The benchmark FTSE 100 index dropped 32.19 points to 7,263.20. Cruise firm Carnival was the biggest faller on the index, down 3.4%, after Credit Suisse cut its rating in the company to “neutral”.

On the currency markets, the pound hit a year-high against the dollar as traders continued to react to Thursday's comments from the Bank of England which suggested interest rates could rise later this year.

In early trade the pound was up a further 0.25% against the dollar at $1.3432, and was 0.2% higher against the euro at 1.1264 euros.

 

Ryanair loses legal battle with European Court on Cabin Crew Contracts

 

Low cost carrier, Ryanair has insisted that a ruling by the European Court of Justice will not change the current status of employment contracts for thousands of its staff.

The Luxembourg based ECJ said on Thursday that the airline was wrong to force cabin crew based outside Ireland to take their disputes with the company to Irish courts.

Despite losing the case, Ryanair chief Michael O'Leary remained defiant following the decision.

John Lewis profits slides to 53% over the past six months

Roberto Herrett/flickr

(qlmbusinessnews.com via telegraph.co.uk – – Thu, 14 Sept 2017) London, Uk – –

Profits at John Lewis Partnership have more than halved in the past six months as the group behind the department store chain and Waitrose has been hit by costs associated with overhauling the business and weakened customer demand from inflationary pressures and political uncertainty.

Pre-tax profits tumbled by 53.3pc to £26.6m during the six months to 29 July after it had to absorb £56.4m of costs from making a number of redundancies related to restructuring staff roles at Waitrose and John Lewis as it adapts to changing shopping behaviours.

At John Lewis, total sales grew by 2.3pc, helped by the launch of its new exclusive brand AND/OR, while like-for-like sales edged 0.1pc higher. Operating profits before the exceptional items jumped by 38.7pc to £50.2m.

Meanwhile, at Waitrose, total sales grew by 2.3pc to £3.2bn while like-for-like sales inched 0.7pc higher. Waitrose’s operating profits before exceptional items fell by 17.4pc to £100.8m after the upmarket grocer absorbed the higher costs associated with the weaker pound, rather than passing it on to customers in the ongoing intensely competitive supermarket price war.

Sir Charlie Mayfield, chairman, said: “As we anticipated in our full year results in March, the first half of the year has seen inflationary pressures driven by exchange rates and political uncertainty. These have dampened consumer demand, especially in categories connected to the housing market.”

By  Ashley Armstrong

BoE governor Mark Carney unveils the new plastic £10 note at Winchester Cathedral

 

The new plastic £10 note has been unveiled by Bank of England governor Mark Carney at Winchester Cathedral.

The note, which follows the polymer £5, will be issued on 14 September and has a portrait of Jane Austen on the 200th anniversary of the author's death.

It is also the first Bank of England note to include a tactile feature to help visually impaired people.

Meanwhile, a limited supply of a new £2 coin honouring Jane Austen has been put into circulation by the Royal Mint.

The coin will initially only be available in tills at key locations in the Winchester and Basingstoke areas that have connections with Austen, including Winchester Cathedral and the Jane Austen House Museum.
It will be circulated more widely across the UK later this year.

UK’s high street banks are an accident waiting to happen according think tank Adam Smith Institute

(qlmbusinessnews.com via theguardian.com – – Wed, 13 Sept, 2017) London, Uk – –

Bank of England’s stress tests are not gruelling enough, says report to mark 10 years since run on Northern Rock

The UK’s high street banks are an accident waiting to happen and could struggle in another financial crisis, according to a report published on Wednesday to mark the 10th anniversary of the run on Northern Rock.

The report criticises the annual health checks – stress tests – that have been conducted by the Bank of England since the crisis and concludes that the methodology used by Threadneedle Street is flawed and the tests not gruelling enough.

Queues started to form outside Northern Rock branches across the UK on 14 September 2007 after the BBC reported that the Newcastle-based lender had received emergency funding from the Bank of England. It was the first run on a high street bank in the UK since Overend & Gurney in the 1860s and after attempts to find a buyer failed, the bank was nationalised in February 2008.

Kevin Dowd, a professor of finance and economics at Durham University and a long-standing critic of the stress tests, said the Bank does not use the correct measures to assess the health of the banking system. Dowd is also a senior fellow at the Adam Smith Institute, a rightwing thinktank.

His analysis – which the Bank of England has previously rejected – focuses on the health check of the major lenders published last November . Those tests were based on a number of hypothetical scenarios including house prices falling and the global economy contracting by 1.9%. Royal Bank of Scotland failed the test and Barclays and Standard Chartered would both have struggled to cope.

Dowd argued that the scenarios were “hardly doomsday” and disputes the way banks’ capital strength is measured.

“The stress tests are about as useful as a cancer test that cannot detect cancer. They seek to demonstrate a financial resilience on the part of UK banks that simply isn’t there,” said Dowd in the report. “Our banking system is an accident waiting to happen.”

The Bank uses the value of assets as calculated by the banks rather than their value on the markets which, he argued, would give a more accurate assessment of their financial health.

The leverage of banks has fallen by about a third since 2006 on the first measure but, according to Dowd, has increased by a half on the second.

“It is disturbing that 10 years on from Northern Rock, the best measures of leverage – those based on market values – indicate that UK banks are even more leveraged than they were then,” said Dowd.

The Bank of England did not comment on the new report but the subject was the topic of a hearing of the Treasury select committee in January. Bank officials had said the amount of capital in the system in the crisis had been increased and defended the stress tests as being as tough as during the financial crisis. Some of Dowd’s calculations included double counting, officials said.

Dowd said he had met the Bank officials after that select committee meeting but did not disclose the details of their discussions.

By Jill Treanor

Ian King speaks to former aid worker Andrew MacLeod on rebuilding British Virgin Islands after Hurricane Irma

 

Andrew MacLeod is Non-Executive Chairman of Griffin Law and a former humanitarian aid worker, who was Chief of Operations of the UN Emergency Coordination Centre in Pakistan. He speaks to Ian King about what will be needed to help the British Virgin Islands rebuild after Hurricane Irma.

Inflation jump of 2.9% puts squeeze on UK households

(qlmbusinessnews.com via ibtimes.co.uk – – Tue, 12 Sept 2017) London, Uk – –

Inflation in Britain rose at the joint-fastest pace in four years in August, remaining above the Bank of England's 2% target for the sixth consecutive month, after breaking through the threshold for the first time in three years in March.

According to data released by the Office for National Statistics (ONS) on Tuesday (12 September), inflation as measured by the Consumer Price Index (CPI) rose 2.9% year-on-year last month, compared with the 2.6% growth recorded in July, and above and analysts' expectations for a 2.8% reading.

This is only the second time inflation has hit the 2.9% mark in four years, the first being in May 2017.

On a monthly basis, inflation climbed 0.6%, after slipping 0.1% in the previous month. Analysts had expected a 0.5% increase.

The ONS said that rising prices for clothing and fuel were the main contributors to the increase. Air fares also rose between July and August but the rise was smaller than between the same two months a year ago, which partly offset the increase in other categories.

Meanwhile, core inflation, which excludes volatile items such as energy prices, rose 2.7% year-on-year, higher than the 2.4% growth recorded in the previous month and beating expectations for a 2.5% reading. The figure was also the highest on record since 2011.

The latest report is in line with the forecast issued by the BoE last month, when the Bank said it expected CPI inflation to peak at 3% in October this year. Inflation is then forecast to fall to 2.6% in 2018, before settling at 2.2% in both 2019 and 2020 respectively.

However, economists suggested the latest figure has put fresh pressure on the BoE to change their stance towards the monetary policy.

“The number is simply a nightmare for the BoE,” said Naeem Aslam, chief market analyst at Think Markets UK. “The members of the policy makers are already split in their decision and now the market would expect more hawkish tone on Thursday. However, it is important to keep in mind that this kind of inflation which is not supported by higher wages is simply a bad inflation.”

Ben Brettell, senior economist at Hargreaves Lansdown, added: “It looks likely that inflation will fall back in the coming months, as the effect of Brexit-induced sterling weakness falls out of the year-on-year calculation.

“Indeed it's possible that 2.9% will be the highest we see in the current cycle. Mark Carney will certainly be hoping so, as it will save him the trouble of writing to the chancellor to explain himself.

Beyond the currency effect there appear to be few underlying inflationary pressures.

The inflation data comes only a day before the release of the latest snapshot of Britain's labour market, which is expected to show average weekly earnings excluding bonuses only grew 2.2% year-on-year in July.

Economists have previously warned the squeeze on households was being exacerbated by subdued wage growth.

By Dan Cancian

JD Sports to forecast jump in sales

(qlmbusinessnews.com via telegraph.co.uk – – Tue, 12 Sept 2017) London, Uk – –

JD is limbering up to report a jump in sales this week, as it bids to ­allay fears that demand for trendy trainers and yoga outfits is waning.

The sportswear retailer’s shares have been on a rollercoaster ride driven by concern its growth may come to an abrupt halt, as suffered by US rival Foot Locker last month.

Fears over JD Sports have also been stoked by Nike’s deal to directly sell products on Amazon, and signs that old rival Sports Direct is beginning to turn itself around following a calamitous couple of years.

For the past two years JD Sports’s growth has been propelled by the trend for so-called “athleisure” clothing – a term given to the most fashionable and expensive sportswear – which has prompted shoppers to switch their jeans for lycra.

However, analysts Quo Vadis Capital have warned that “athleisure is over” following Foot Locker’s first drop in like-for-like sales since 2008. “We predict several years of pain for the companies that compete in this arena,” they added. Foot Locker executives blamed a lack of innovation by sportswear brands in the last quarter for sluggish sales.

However, Barclays said that the risk to JD Sports was “exaggerated” and that the British company’s international expansion and strong supplier relationships would continue to deliver growth.

Despite the concerns about the health of the wider athleisurewear market, analysts still expect JD Sports’s half-year sales to top £1bn, an increase of 30pc.

The City is generally expecting pre-tax profits to have risen by more than 21pc to £94m. “A marked decline in the share price over the last quarter is unwarranted, in our view, with a perceived increase in possible competitive pressures from the likes of Amazon, as well as the likes of Asos and Sports Direct,” said George Mensah, analyst at Shore Capital.

“We see the company as one of the strongest plays within the retail sector, and see recent share price weakness as an opportunity for investors to buy stock.”

By Ashley Armstrong

Primark strong sales performance helps owner AB Foods increase profits

(qlmbusinessnews.com via uk.reuters.com — Mon, 11 Sept 2017) London, UK —

LONDON (Reuters) – Associated British Foods (ABF.L) raised its forecast for full- year results on Monday following a strong performance by bargain fashion retailer Primark.

A sharp fall in the value of sterling since last year’s Brexit vote, combined with below-inflation pay increases, has eaten into household budgets in Britain, forcing shoppers to tighten their belts and become more price-conscious.

As a result Primark has continued to perform well, with UK like-for-like sales up over 4 percent during the 2016-17 year and its share of the total UK clothing market up “significantly”, the company said in a trading statement.

“What really comes through in this market is value,” Finance Director John Bason told Reuters.

AB Foods said Primark’s 2016-17 overall sales would be 13 percent ahead of last year at constant currency, with like-for-like sales up 1 percent.

Primark’s full-year operating profit margin was forecast to be better than the first half’s 10 percent, ahead of previous guidance.

The fashion retailer added 1.5 million square feet of selling space in 2016-17 and plans 1.2 million in 2017-18.

Primark accounts for about half of AB Foods’ profit.

The group, which also has major sugar, grocery, agriculture and ingredients businesses, forecast “good” growth in adjusted operating profit and adjusted earnings per share (EPS) for its year to Sept. 16. It made EPS of 106.2 pence in 2015-16.

BALSAMIC VINEGAR PURCHASE

Prior to Monday’s update shares in AB Foods, majority owned by the family of Chief Executive George Weston, had increased 19 percent this year and hit a 52-week high earlier this month.

However, they were down 2.8 percent at 3,173 pence at 1048 GMT, reflecting some concern over competition and cost pressures in the UK bread market.

The group has a stock market value of 25.4 billion pounds – some 10 billion pounds more than Tesco (TSCO.L), Britain’s biggest retailer.

AB Foods also said it expected to end the year with net cash of 650 million pounds ($857 million) versus net debt of 315 million pounds in 2015-16.

Some of this cash will be absorbed by the purchase of Acetum, the Italian producer of Balsamic Vinegar of Modena, whose brands include Mazzetti, Acetum and Fini, that was also announced on Monday.

Apple new iPhone X revealed via apparent leak

Roger Schultz/flickr.com

(qlmbusinessnews.com via bbc.co.uk – – Mon, 11 Sept 2017) London, Uk – –

Details of new iPhones and other forthcoming Apple devices have been revealed via an apparent leak.

Two news sites were given access to an as-yet-unreleased version of the iOS operating system.

The code refers to an iPhone X in addition to two new iPhone 8 handsets. It also details facial recognition tech that acts both as an ID system and maps users' expressions onto emojis.

One tech writer said it was the biggest leak of its kind to hit the firm.

Apple is holding a launch event at its new headquarters on Tuesday.

The California-based company takes great efforts to keep its technologies secret until its showcase events, and chief executive Tim Cook spoke in 2012 of the need to “double down” on concealment measures.

Some details about the new devices had, however, already been revealed in August, when Apple published some test code for its HomePod speakers.

But while that was thought to have been a mistake, it has been claimed that the latest leak was an intentional act of sabotage.

“As best I've been able to ascertain, these builds were available to download by anyone, but they were obscured by long, unguessable URLs [web addresses],” wrote John Gruber, a blogger known for his coverage of Apple.

“Someone within Apple leaked the list of URLs to 9to5Mac and MacRumors. I'm nearly certain this wasn't a mistake, but rather a deliberate malicious act by a rogue Apple employee.”

Neither Mr Gruber nor the two Apple-related news sites have disclosed their sources.

However, the BBC has independently confirmed that an anonymous source provided the publications with links to iOS 11's golden master (GM) code that downloaded the software from Apple's own computer servers.

GM is a term commonly used by software firms to indicate that they believe a version of a product is ready for release.

“More surprises were spoiled by this leak than any leak in Apple history,” Mr Gruber added.

Apple could not be reached for comment.

Sand artists built the world’s tallest sandcastle

 

An international team of sand artists have built the world's tallest sandcastle in Germany.

Travel company Schauinsland-Reisen initiated the project, hoping to bring the world record to Duisburg after the city's attempt failed last year.

After almost a month of construction, the finished sandcastle stood at 16.68 metres and was officially recognised by Guinness World Records as the tallest sandcastle in the world.

IoD encourage new start-ups to use pension pot

(qlmbusinessnews.com via bbc.co.uk – – Sat, 9 Sept 2017) London, Uk – –

Older entrepreneurs should be allowed to dip into their pension pot without a tax penalty to fund a new business, a lobby group has suggested.

The Institute of Directors (IoD) said the government should let older people withdraw up to 10% of their pension pot tax-free to get a start-up going.

Younger workers should also receive tax relief to pay for training, it said.

The government brought in major reforms allowing people to access their pension from the age of 55, subject to tax.

The IoD suggested that these reforms should now be extended to support a more flexible, ageing population.

“People in their 60s now are on the front line of the shifting boundaries between work and retirement,” said Lady Barbara Judge, who chairs the IoD.

“The government should consider introducing tax incentives to encourage people to pursue their ideas and invest in training, so that they can continue to have fulfilling working lives beyond the age expected by previous generations.”

Since 2015, the government has allowed anyone aged 55 and over to take 25% of their pension pot as a tax-free lump sum.

They can also cash in the rest of their pension pot, but this is subject to the normal rates of income tax.

A recent report by the City regulator, the Financial Conduct Authority, suggested that withdrawing money from pension pots had become the “new norm”.

However, the pensions industry disputed that claim. The Association of British Insurers (ABI) said 100,000 people took money out of their pension pots every quarter, which was small compared to the 4.7 million people over the age of 55 who left their pots untouched.

Training plan

The IoD said that older entrepreneurs – which it does not define by a specific age – should be allowed to withdraw a further 10% of their pension pot to fund starting up a new business, within the same tax year. This would be in addition to the existing 25% tax-free allowance.

This would be policed by pension providers, the IoD suggested.

It also proposed that the government allow people to pay for training during their working lives from their gross pay, in a similar scheme to childcare vouchers or cycle to work salary sacrifice schemes.

The Treasury said it would outline any tax measures during a Budget, so it would not comment directly on the IoD's proposals.

“We have already made major reforms to pensions that give hardworking people real freedom and choice over how they access their retirement. Many people can now access their pensions from age 55 and can also withdraw up to 25% of their money without paying tax,” a Treasury spokeswoman said.

 

Equifax data breach hits 143 million

(qlmbusinessnews.com via bbc.co.uk – – Fri, 8 Sept 2017) London, Uk – –

About 143 million US customers of credit report giant Equifax may have had information compromised in a cyber security breach, the company has disclosed.

Equifax said cyber-criminals accessed data such as Social Security numbers, birth dates and addresses during the incident.

Some UK and Canadian customers were also affected.

The firm's core consumer and commercial credit databases were not accessed.

Security checks

Equifax said hackers accessed the information between mid-May and the end of July, when the company discovered the breach.

Malicious hackers won access to its systems by exploiting a “website application vulnerability”, it said but provided no further details.

The hackers accessed credit card numbers for about 209,000 consumers, among other information.

Equifax chief executive Richard Smith said the incident was “disappointing” and “one that strikes at the heart of who we are and what we do”.

“I apologise to consumers and our business customers for the concern and frustration this causes,” said Richard Smith, Equifax chairman and chief executive.

“We pride ourselves on being a leader in managing and protecting data, and we are conducting a thorough review of our overall security operations.”

It said it was working with law enforcement agencies to investigate and had hired a cyber-security firm to analyse what happened. The FBI is also believed to be monitoring the situation.

The company said it would work with regulators in the US, UK and Canada on next steps. It is also offering free credit monitoring and identity theft protection for a year.

Equifax said it had set up a website – www.equifaxsecurity2017.com – through which consumers can check if their data has been caught up in the breach. Many people trying to visit the site reported via social media that they had problems reaching it and that security software flagged it as potentially dangerous.

The UK's Information Commissioner (ICO) said reports about the data breach and the potential involvement of UK citizens gave it “cause for concern”.

It said it was in contact with Equifax to find out how many British people were affected and the kinds of data that had been compromised.

“We will be advising Equifax to alert affected UK customers at the earliest opportunity,” said the ICO in a statement.

The breach is one of the largest ever reported in the US and, said experts, could have a significant impact on any Americans affected by it.

“On a scale of 1 to 10, this is a 10,” said Avivah Litan, a Gartner analyst who monitors ID theft and fraud. “It affects the whole credit reporting system in the United States because nobody can recover it, everyone uses the same data.”

Security expert Brian Krebs said Equifax was just one of several credit agencies that had been hit by hackers in recent years.

“The credit bureaus have for the most part shown themselves to be terrible stewards of very sensitive data,” wrote Mr Krebs. “and are long overdue for more oversight from regulators and lawmakers.”

Credit rating firm Equifax holds data on more than 820 million consumers as well as information on 91 million businesses.

Dairy Crest set for £125m windfall from pension deal

(qlmbusinessnews.com via uk.reuters.com — Fri, 8 Sept 2017) London, UK —

(Reuters) – Britain’s Dairy Crest Group (DCG.L) will report an exceptional gain of 125 million pounds ($164 million) in the current financial year after a change in the way in which its pension liabilities are calculated.

The company, which makes Cathedral City cheese, said a change to link future annual increases of pension payments to the CPI measure of inflation had resulted in a reduced deficit of 100 million pounds as of March, 2016.

Dairy Crest said it would have to pay 12 million pounds less than previously expected into the company pension fund over the next two financial years, potentially freeing up more cash for other operations.

Its contributions will then rise to 20 million pounds annually until 2022 by when the intention is for the scheme to be self-funding.

The fund consisted of 8,255 pensioners at the end of 2016.

Jaguar Land Rover cars to be available in electric or hybrid version from 2020

(qlmbusinessnews.com via uk.reuters.com — Thur, 7 Sept, 2017) London, UK —

LONDON (Reuters) – All new Jaguar Land Rover cars will be available in an electric or hybrid version from 2020, Britain’s biggest carmaker said on Thursday, as it speeds up plans to electrify its model range.

Last year, the company, owned by India’s Tata Motors, said it would offer greener versions of half of its new line-up by 2020, but it has now ramped up its plans.

Demand for electric models continues to rise sharply and in July Britain said it would ban the sale of new petrol and diesel cars from 2040 to cut pollution, replicating plans by France and cities such as Madrid, Mexico City and Athens.

RELATED COVERAGE

Bovis new chief exec sets out strategy to fix the beleaguered company

(qlmbusinessnews.com via telegraph.co.uk – – Thu, 7 Sept 2017) London, Uk – –

Bovis Homes' share price has soared more than 8pc as its new chief executive updated investors on his strategic review, which will include building fewer homes and paying out more cash to shareholders, in an attempt to get the beleaguered housebuilder back on track.

Greg Fitzgerald, who joined the company in May, described Bovis's problems as “very fixable”.

In his plans for the overhaul, he said that he would streamline the business and its balance sheet, reducing the number of employees, disposing of developments outside its core areas, and lowering infrastructure spending.

He also added that the company would merge operating regions to create seven key areas, and that the business would aim to build just 4,000 homes a year, a step down from the high-volume model in which the company aimed to build up to 6,000 per annum.

To please investors, the company will hike its dividend and plans to pay out special dividends totalling £180m by 2020, as well as promising to raise the margins from 11.4pc in the first half of this year to 23.5pc.

George Salmon, an analyst at Hargreaves Lansdown said: “[The plan] even includes pledges to return the cash generated from slimming down non-core operations to shareholders. In a big way too: the plans suggest around a third of Bovis’ current market cap will be in shareholders’ pockets by 2020.

“However, it seems fairly apt that the new CEO’s plans include instilling a culture of ‘getting it right first time’. The tailwinds in the sector, namely the combination of low interest rates and supportive government policy won’t last forever.”

 It came as it reported its pre-tax profits have fallen by a third in the six months to June as it reduced volumes in an attempt to repair damage to the company's brand and the homes it built.

Bovis said there was a 6pc fall in the number of homes it built, as it had warned in a previous update, with pre-tax profit down 31pc to £42.7m from £61.7m in the same period last year. Revenues were up 4pc to £427.8m.

The company said that this profitability was impacted by “by legacy customer service costs, overweight operating structure, investment to change the business, and defence costs,” and it had warned that it set aside more than £10m to attempt to fix the problems that emerged earlier this year.

Bovis’s problems started when it ­issued a profit warning last December due to production delays, before it was revealed that the company was offering incentives to persuade home buyers to move into unfinished properties.

The company faced further reports of low-quality homes and service, while in March housebuilders Redrow and Galliford Try tabled takeover bids, although these were ultimately rejected.

Its average selling price increased by 9pc to £277,000, driven by an increase in building more upmarket homes in the south of England. Other measures to change the direction of the company include an increased focus on affordable housing, teaming up with housing associations.

 Mr Fitzgerald, who was previously chief executive at Galliford Try, said: “The new strategy of disciplined volume growth, allied with a renewed focus on customer satisfaction and build quality, will deliver the homes that are required in the locations where people want to live. The group’s strong balance sheet and valuable land bank mean we are well set to provide the stable returns to shareholders that their patience and support have deserved.”

By 

North Sea oil and gas job losses worse than expected

(qlmbusinessnews.com via bbc.co.uk – – Wed, 6 Sept 2017) London, Uk – –

The number of job losses in the UK oil and gas sector was worse than expected last year, a major report has said.

Trade body Oil & Gas UK's annual report said 60,000 direct and indirect jobs were lost across the industry in 2016, more than the 40,000 it had predicted.

The report said the sector could lose another 13,000 jobs in 2017.

However, it suggests that while some companies are still reducing headcount “the largest reductions may now be behind us”.

The oil and gas industry still supports more than 300,000 jobs across the UK but that is 150,000 less than the peak in 2014, the report said.

According to the trade body report: “There are tentative signs that investor confidence is starting to return to the sector.

It highlights the fact that almost $6bn (£4.6bn) was invested in UK continental shelf assets and acquisitions in the first half of 2017.

“More needs to be done to drive any upturn and secure long-term employment,” the report says.

“Up to £40bn worth of potential investment opportunities currently sit in company business plans.”

Figures in the report break down employment in UK offshore oil and gas into three types:.

  • Direct employment – provided by companies involved in the extraction of crude oil and natural gas and supply chain companies who directly support this activity
  • Indirect employment across the extensive supply chain which also exports goods and services overseas
  • Induced jobs created by the sector's spending in the wider economy, such as in hotels, catering and taxis

It said there were 28,300 people employed in direct oil and gas activities, down from 41,300 in 2014.

Indirect jobs fell from 206,100 to 141,900, the report said, and induced employment dropped from 216,500 in 2014 to 132,000 this year.

According to the report, the current low level of exploration activity “remains a serious concern” as it is vital to replenish production with new development opportunities.

Elsewhere in the report, Oil & Gas UK modelled scenarios for the impact of Brexit on tariffs for the oil and gas industry.

The report said Brexit could cost the industry £1.1bn a year if the UK was unable to negotiate new trade deals and reverted to WTO rules.

It said this would be an “unhelpful” additional cost.

Oil & Gas UK chief executive Deirdre Michie said: “There are still serious issues facing our industry which has suffered heavy job losses since the oil price slump. But we are hopeful that the tide is turning and expect employment levels to stabilise if activity picks up.”

She added: “Despite our difficulties, we've got more reasons to be positive and some great stories to tell that demonstrate the real progress that we are now making.”

Ms Michie said the sector was successfully re-positioning itself through efficiency and cost improvements.

“Although we are getting to a much better place, we still need further investment to generate new activity and sustain hundreds of thousands of UK jobs,” she said.

Uk orders fleet of warships to boost shipyard building

HMS Belfast

(qlmbusinessnews.com via theguardian.com – – Wed, 6 Sept 2017) London, Uk – –

A radical shake-up of how warships will be built for the Royal Navy that aims to spread the work around the country has been unveiled by the Ministry of Defence.

Proposals floated by industrialist Sir John Parker in his review of the sector last year have been backed by Defence Secretary Sir Michael Fallon in a move intended to deliver budget vessels to the British military that are also aimed at being attractive to foreign buyers.

Under the National Shipbuilding Strategy, Britain will buy five “Type 31e” general purpose frigates – a cut-price warship – to bolster the Royal Navy’s depleted fleet, with the first one intended to enter service in 2023.

Sir John recommended the new vessels be built at shipyards around the country, using the “modular” system employed to construct the huge Queen Elizabeth-class aircraft carriers.

This saw giant blocks fabricated at sites around the UK, before being towed to Rosyth in Scotland were they were integrated into the 65,000-tonne ships by the Aircraft Carrier Alliance, made up of BAE Systems, Babcock and Thales working with the MoD.

Backing his plans could threaten BAE’s near-monopoly on building vessels for the Navy, throwing it open to other entrants to the market, and raising concerns about jobs at the defence giant’s naval operations focused at its Clyde facilities in Glasgow.

Announcing the plan, the MoD said a £250m-per-ship price cap had been set for the vessels, which were revealed in the last defence review when the Government said it would purchase only eight of the more capable Type 26 frigates, with the Type 31 making up numbers.

“This new approach will lead to more cutting-edge ships for the growing Royal Navy that will be designed to maximise exports and be attractive to navies around the world,” the Defence Secretary said, adding the strategy would “help boost jobs, skills, and growth in shipyards and the supply chain across the UK”.

In July, the Government signed a £3.7bn contract with BAE for the first three Type 26s, underlining their relative expense.

A key focus of Sir John’s report was developing ships likely to be bought by foreign navies, helping create a secure foundation for Britain’s shipbuilders.

Responding to the announcement, Sir John – a trained naval architect who currently chairs Anglo American and has held senior jobs at companies including Babcock and Harland & Wolff – said he was “impressed by the Defence Secretary’s courage in adopting my recommendations, which were very extensive, and will change the shape of naval shipbuilding over the country”.

He added: “The next challenge is to come up with a world-leading design that can satisfy the needs of the Royal Navy and the export market. I see no reason why industry will not rise to that challenge.”

Another recommendation was that the MoD replaces ships once they reach the end of their natural lives, rather than extending their time in service thorough costly refits, creating uncertainty about when contracts to build new ships will be placed.

The £250m price cap was implemented as it was seen as the optimum price to encourage export orders, and the Government said it wants shipyards vying for the contracts to get export customers involved to increase the Type 31e’s marketability.

The prospect of work being spread across the UK has raised anger in some areas, with the GMB union claiming it will take away contracts from its Scottish members who were pledged the work.

Gary Cook, Scotland organiser for the GMB, said: “Let's be clear that the Type 31 contracts were originally promised to the Upper Clyde, so while shipbuilding communities across the UK would benefit from a work-share programme of the Type 31 work, this will be at the expense of the Upper Clyde despite its own future already[being] secured until the 2030s.”

Some defence commentators have questioned the usefulness of the budget vessels, and suggested that without the complex systems of their heavyweight sister ships they could be a liability in a war zone.

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