(qlmbusinessnews.com via news.sky.com– Wed, 25th Nov 2020) London, Uk – –
The roadside recovery company's prospective new private equity owners plan to tackle its £2.6bn debt mountain.
By John-Paul Ford Rojas, business reporter
The AA has agreed to a £219m takeover with new owners pledging to inject extra cash after years of underinvestment – but warning of possible “limited” head office job cuts.
Private equity groups Towerbrook and Warburg Pincus will take control of the company in a deal likely to complete early in 2021.
The AA has more than three million members and in the last financial year reported revenues of nearly £1bn but is weighed down by a £2.6bn debt pile.
A statement on the deal said the consortium of new owners believed the company had been held back by underinvestment and they planned to inject funds to tackle the debt.
“This investment will safeguard the future of a much-loved business,” they said.
“The AA has a proud heritage but has struggled to reach its full growth potential in recent years.
“By deleveraging this fundamentally high-quality organisation, the business will be able to fully capitalise on its iconic brand, its market-leading positions, and its skilled and committed workforce – so that it can continue to deliver the exceptional levels of service it provides.
“We have no doubt that, on a stronger financial footing, the AA will go from strength to strength, to the benefit of all stakeholders.”
The consortium indicated an increased focus on the AA's insurance, driving school and financial services divisions.
After the planned takeover, it will no longer be listed on the London stock exchange meaning that a “limited number of central corporate and support functions… may be reduced in scope or become unnecessary” though the aim will be to reassign some to other roles in the company.
Its new owners will also conduct a “thorough evaluation of the strategy, operations and organisational structure of the AA” but do not expect to see “material headcount reductions”.
The AA, which employs more than 7,000 people, has a history dating back to 1905 but investment has been held back in recent years in order to service its mountain of debt.
In accepting the takeover offer, its directors said it would be “highly challenging” to try to raise the money it needs to address this debt through a cash-call with existing shareholders. Where jobs have been lost across the UK economy
Chairman John Leach said that having considered the options available it concluded “that the acquisition, which offers certain cash value to the AA's shareholders as well as a significant equity injection to reduce indebtedness, is in the best interests of the AA”.
The agreement comes two days after the AA board indicated that it was willing to accept the offer and entered “advanced discussions” with the bidders.
Shares rose nearly 7% in early trading.
In September, the AA reported a 38% fall in pre-tax profits to £26m for the six months to the end of July as membership numbers fell at a time when road usage dropped due to the COVID-19 lockdown.
Over the weekend, Sky News revealed that former Centrica chairman Rick Haythornthwaite had been approached about chairing the AA if the bid is successful.
(qlmbusinessnews.com via uk.reuters.com — Tue, 24th Dec 2020) London, UK —
By Elizabeth Howcroft, Saikat Chatterjee
LONDON (Reuters) – Once the preserve of gamers, virtual reality (VR) has been seized on by the financial sector as a way of enlivening home working for lonely traders or isolated executives and replicating real-world sales, networking or training events.
With 90% of employees at some of the world’s biggest financial firms now working at home due to a resurgence in coronavirus infections, more and more companies are experimenting with VR.
Some practices could stick beyond the pandemic, particularly as home working becomes more widespread.
At investment manager Fidelity International, executives experimented with a VR auditorium, taking questions from colleagues and even walking up and down the aisles.
“Working from home has massively accelerated the interest in virtual/online spaces,” said Stuart Warner, head of technology at Fidelity International which manages $3.3 trillion in assets.
Having internally explored VR and augmented reality (AR) technology, which unlike VR is not fully immersive and involves computer-generated elements being visible through a smartphone screen for example, Fidelity now aims to trial VR with its sales teams’ interactions with clients.
“It brings it to life a bit,” Warner said.
For London-based Ed Greig, chief disruptor at Deloitte Digital, VR has sparked conversations with potential clients and colleagues in far-flung cities in office get-togethers.
“The other day, I was finishing a VR meeting with somebody and as I was walking out of their office I bumped into a person who was coming in for another meeting and that interaction for a couple of minutes turned into a proper business conversation later,” Greig said.
VR can be useful not just for scheduled meetings but also for helping ease feelings of isolation and giving some workers the office buzz they crave and thrive in.
Swiss bank UBS has experimented with issuing its London-based traders with Microsoft HoloLens smart glasses, which it says allows staff to recreate the trading floor experience at home.
VR headsets allow users to see and interact with others in the same digital room, and movements, such as turning one’s head, correspond with how the person’s avatar moves in the space.
Recreating the feeling of human interaction is what has provided impetus for the VR push.
Executives say they are combating so-called Zoom fatigue – exhaustion brought on by a daily barrage of video conferences, meetings and messaging via tools such as Zoom or Microsoft Teams, which have replaced face-to-face interaction.
The hope is that virtual reality spaces will resuscitate team spirit, especially when bringing in new employees.
Marc Bena, who leads the digital audit business unit at PricewaterhouseCoopers UK, said:
“In a virtual environment you can hear multiple people talking at the same time, which is different in a zoom meeting… when you wear these headsets you are transported into a giant room with a whiteboard and office furniture and you join your other colleagues in brainstorming ideas.”
“You can look around you and interact as if you were in a office. That recreates the sensation of being together.”
After a virtual session he and colleagues had virtual drinks in another zone and could move from table to table.
“You could recreate exactly the same environment as if you were in the cocktail parties with your avatar. The only downside to this is that it can get pretty intense after a couple of hours,” he said.
A PwC study in June found participants in a virtual reality workshop were three times more confident about what they had learned than those learning via traditional classrooms or even via e-learning courses.
The cost to train 13,000 executives in a classroom at the firm is eight times more expensive than via a virtual reality course for the same number of people, the study found.
PwC and American Express use VRtuoso, a virtual reality presentation platform, that utilizes headsets made by Pico Interactive for training and boosting sales.
So far, most of VR’s real-world business applications are in medicine and retail, including training department stores salespeople how to deal with difficult customers.
Julie Ask, vice president and principal analyst at Forrester, a U.S. based-market consultant, says more widespread adoption is inevitable.
“I think VR technology adoption is going to continue to grow over time,” she said.
COST IS THE REALITY
The immersive work experience carries a hefty price tag – Microsoft’s HoloLens 2 headsets cost $3,500 apiece.
But the financial industry is gearing up to spend. Fidelity says tech spending is up “100%-200%” this year versus 2019 and it will keep that level of spending for the next year or two.
David Ripert, chapter president of the UK branch of the global VR/AR Association said that growth in demand for VR was a “silver lining” of the pandemic, as people used the technology to recreate cancelled physical events and conferences.
“Using VR for these networking events is really cool because you get that sense of belonging and connection that you don’t get necessarily through flat 2D video,” he said.
Advances in immersive technology could save banks as much as $1.5 trillion by 2030 with nearly $500 billion coming from virtual reality applications alone, PwC estimates, through the use of VR training or business meetings.
Deloitte estimates that 19% of British firms have invested in VR and augmented reality in 2019 and a further 31% will invest in such technologies by 2021.
Citibank first built an experimental simulated trading environment some years ago when it looked at Microsoft’s HoloLens. At a bond conference in Munich last year, Finnish bank Nordea gave investors a virtual tour of its Copenhagen trading floor through VR headsets.
But while there is momentum in the sector, to be fully effective VR technology must overcome constraints such as limited display size, processing power, and battery life.
This is where a host of start-ups are trying to get in the market by offering cheaper, simpler ways to smooth remote work. Platforms such as Sococo and Gather provide virtual versions of physical spaces online, in which employees can move about and interact without headsets.
“The casual socialisation aspect of work is hard to get when you’re doing everything over Google Meet or Zoom,” said Phillip Wang, who founded Gather with his university friends.
Gather has hosted everything from weddings and parties to meetings and conferences, with 30,000 people coming to the virtual spaces every day from more than 100 countries.
While startups are scaling up quickly, established leaders are launching new innovations.
Zoom Video Communications said it expects VR and AR to become a bigger part of online communication in the future.
This could include new enhancements to alter a person’s appearance to make it more work-appropriate, hiding gym clothes for instance, and translating real-life details into the virtual space, such as the ability to shake hands.
Microsoft said it has seen increased opportunities for VR usage this year. Google declined to comment.
“I think the pandemic has changed people’s perception on what’s possible and what’s feasible,” said Fidelity’s Warner.
Reporting by Elizabeth Howcroft and Saikat Chatterjee
(qlmbusinessnews.com via news.sky.com– Mon, 23rd Nov 2020) London, Uk – –
The prime minister is publishing a COVID Winter Plan, with new restrictions in England in December but a break for Christmas.
Boris Johnson is hoping to lace his latest COVID crackdown with more good cheer, with ministers working on plans to allow families to meet up in a festive bubble.
He is unveiling a new blueprint to fight the pandemic that he hopes will not only save lives during the winter but also prevent a Commons revolt by rebel Tory MPs.
The prime minister is publishing a COVID Winter Plan, which will include tough new restrictions in England in December but a break of up to five days for Christmas.
But despite the restrictions, due to replace England's national lockdown when it ends on 2 December, Mr Johnson will announce:
Non-essential retail will be allowed to open, in a boost for Christmas shoppers – and the high street
Gyms will be allowed to open too, so the nation doesn't pile on the pounds in the run-up to Christmas
The 10pm curfew for pubs and restaurants, which critics claim did more harm than good, will be scrapped
And a mass testing programme is to be launched in Tier 3 areas, using the Army, like the recent pilot programme in Liverpool
In a Commons statement, Mr Johnson is not expected to confirm how many households will be able to bubble together at Christmas, or how long the break in restrictions will last. That is planned for the following day.
But ministers are working on plans for three households and a five-day break, from Christmas Eve to 28 December, subject to agreement from the Scottish, Welsh and Northern Ireland governments.
The mass coronavirus testing programme will be launched in areas facing the toughest restrictions, in Tier 3, using the Liverpool, model, which the government claims has been a success.
Announcing the testing programme, the prime minister is expected to tell MPs: “The selflessness of people in following the rules is making a difference.
“The virus is not spreading nearly as quickly as it would if we were not washing our hands, maintaining social distance, wearing masks and so on.
“And in England, where nationwide measures came into effect at the start of this month, the increase in new cases is flattening off.
“But we are not out of the woods yet. The virus is still present in communities across the country, and remains both far more infectious and far more deadly than seasonal flu.
“But with expansion in testing and vaccines edging closer to deployment, the regional tiered system will help get the virus back under control and keep it there.”
Plans for a Christmas break from restrictions were announced after weekend talks with the first ministers of Scotland, Wales and Northern Ireland – Nicola Sturgeon, Mark Drakeford and Arlene Foster.
The government is proposing “some limited additional household bubbling for a small number of days”. But the public is being urged to remain cautious and avoid travelling wherever possible.
But just hours after the announcement of the festive break was announced by the Cabinet Office, the Scottish government claimed: “No agreement has been reached and discussions are continuing.”
This was echoed by Health Secretary Matt Hancock, who told Sky News a final decision “hasn't been made”.
Speaking to Kay Burley, he said: “We'll confirm it when we have that agreement across the four nations.”
Mr Hancock added: “We've agreed in principle that there should be a set of rules that applies across the board that is balanced, that allows a little bit more freedom, but is still safe.”
The dispute may be over the dates of the break. Last week Scotland's First Minister Nicola Sturgeon said for some families in Scotland Hogmanay would be more important than Christmas.
“For many, bringing in new year is very important,” she said.
“For some families in Scotland that may be the time they get together, even more so than Christmas, so we do have to take that into account in our planning and we need to think across the whole festive period.”
Labour's shadow health secretary Jonathan Ashworth told Sky News: “We understand that people will want to come together, but this still remains a very serious, horrific and deadly virus, so please be cautious.”
And he added that the PM needs to “be honest with the British people” about the tough new restrictions.
“If areas are continuing in these localised lockdowns, we hope there is a proper package of support for the small businesses impacted,” Mr Ashworth said.
In the Commons, Mr Johnson will also face fierce criticism from a growing number of Conservative MPs of his plans to re-impose the three-tier restrictions in England which were in force from 14 October until 5 November.How lockdown leak created surge of social activity
Although the PM will reaffirm his pledge to end England's national lockdown, many Tory MPs are furious at the government's plans to make the restrictions tougher and place more areas in Tiers 2 and 3.
The Covid Recovery Group of Conservative MPs, led by ex-ministers Mark Harper and Steve Baker, has written to the prime minister threatening to vote against the three-tier system when it is voted on in the Commons.
Mr Baker told Kay Burley: “We're determined to do our duty and help the government to come up with the right solutions.”
He added: “Each measure needs to be shown to actually reduce the transmission of COVID and some of the measures can't be shown to do that, not in a material way. Things like closing non-essential retail that's COVID safe.
“We also want to see a cost benefit analysis for each measure, so that we can see that the measures will save more lives than they harm.”
By Jon Craig, chief political correspondent, and Alan McGuinness, political reporter
(qlmbusinessnews.com via bbc.co.uk – – Mon, 23rd Nov 2020) London, Uk – –
Rishi Sunak has said people “will not see austerity” when he makes spending announcements for public services this week, despite the billions spent on the pandemic response.
The government has indicated it will keep to past promises when allocating funds for policing, nurses and schools.
On Wednesday the chancellor will detail the Spending Review.
It will outline how taxpayers' money will be spent on departments such as health and education.
But while ruling out a return to austerity, Mr Sunak has also warned people will soon see an “economic shock laid bare”.
He told the BBC's Andrew Marr show that record government borrowing to deal with the coronavirus must be “grappled with”.
The Spending Review will give a clearer picture of the economic damage wrought by the pandemic so far.
However tax rises and spending cuts were unlikely in the short term, Paul Johnson, director of the Institute for Fiscal Studies (IFS), told the BBC's Today programme.
“We are still in the position of being able to borrow incredibly cheaply and really wanting to protect the economy,” he said.
Although tax rises might end up being “quite significant” they might not come until after the next election, Mr Johnson added.
“It's not something that is super-urgent as we come out of this crisis,” he said.
Last week, reports that Mr Sunak would freeze wages for public sector staff were met with fierce criticism from unions and workers, though NHS frontline staff are likely to be excluded from such a move.
Speaking on Sky's Sophy Ridge On Sunday, the chancellor said: “You will not see austerity next week, what you will see is an increase in government spending, on day-to-day public services, quite a significant one coming on the increase we had last year.”
But, while he said that he “cannot comment on future pay policy”, Mr Sunak added: “When we think about public pay settlements, I think it would be entirely reasonable to think of those in the context of the wider economic climate.”
It is thought the chancellor is keen to freeze public sector pay since average private sector earnings have fallen this year.
The IFS's Mr Johnson said that while a pay freeze would save about £2bn a year, the chancellor would need to balance that with the need to keep money in the economy and the recruitment and retention of teachers and nurses.
“Over this year public sector pay has done much better than private sector pay… but this has come off the back of 10 years when public sector pay has done really quite badly,” he said.
On Monday, the shadow chancellor, Anneliese Dodds, will give a speech which argues that: “Freezing the pay of firefighters, hospital porters and teaching assistants will make them worried about making ends meet ahead of Christmas – that means they'll cut back on spending and our economy won't recover as quickly.”
Labour is calling on the government to bring forward £30bn in capital spending over the next 18 months to create new jobs.
Prior spending commitments made by the government include the hiring of 50,000 more nurses, and 20,000 extra police officers by 2023.
However, the BBC's Reality Check team points out that while 30,000 new nurses will be trained locally or recruited from overseas, 20,000 of the 50,000 roles announced will be existing nurses persuaded to stay in the profession.
The Reality Check team also points out that adding 20,000 police officers will return total staffing levels to the 143,000 police officers employed prior to the 2010 election when the Conservatives came to power.
The government has also promised to increase spending on schools by £2.2bn in the 2021-2022 financial year, and direct £1.5bn towards building works at Further Education colleges.
The Treasury announced on Sunday that another £1.25bn would be allocated to the prisons service.
The government says a total of £4bn will be allocated to build more than 18,000 additional prison places across England and Wales over the next four years. Some 10,000 of these places have been planned since 2015.
Mr Sunak said: “This has been a tough year for us all. But we won't let it get in the way of delivering on our promises – the British people deserve outstanding public services, and we remain committed to delivering their priorities as we put our public services at the heart of our economic renewal.”
The simple wool shoe started as a Silicon Valley favorite and has spread to Hollywood and beyond.
In 2012, Tim Brown called it quits on an eight-year professional soccer career that included a trip to the 2010 FIFA World Cup as New Zealand's vice captain. After retiring, one thing from Brown's playing days would not stop bugging him: the sneakers. Throughout his playing career, Brown's teams (he played in the U.S., Australia and New Zealand) were sponsored by big-name sneaker manufacturers like Adidas and Nike. But Brown felt the sneakers he wore on and off the field were often too flashy, awash with too many different colors and packed with corporate logos. He wanted something simpler. So, he decided to make his own.
2021 may be the most unpredictable year of the decade. No one knows how people are going to react to new business strategies; no one even knows what some of these business strategies will be. Reopening a business during COVID is like a game of chess: without a plan, you’ll lose. For all those that aspire to start a new business or invest in one, this video is for you.
(qlmbusinessnews.com via bbc.co.uk – – Fri, 20th Nov 2020) London, Uk – –
British Gas engineers are being balloted over possible strike action during the festive period as a row over contracts worsens.
Thousands of GMB union members will vote on industrial action which could see engineers not fixing British Gas customers' broken-down boilers.
The elderly and vulnerable in homes without heating will be exempt.
British Gas-owner Centrica said the proposed changes to contracts were vital for its business.
The row between GMB and Centrica centres on proposed new terms and conditions, which include changes to holiday allowances and no extra overtime pay.
The union is angry about Centrica's “threat” made in July to fire and rehire 20,000 workers should those changes not be accepted.
Workers would be fired and then rehired on the conditions regardless of whether they had accepted them or not, the union says. However, Centrica said such a move would be a last resort.
The union said that members' anger was “boiling over”. “People don't like threats and bullying and GMB members are no different.” said GMB national secretary Justin Bowden.
Union members were angry in August after the Centrica “ultimatum” on jobs, and 95% voted for action, he said.
“We sought to get the threat off the table. The best that they [Centrica] were prepared to do was postpone the ultimatum until January,” Mr Bowden added.
Centrica said that it had lost more than a million British Gas customers in the past two years to competitors with lower-priced products, and that it had lost more than half its earnings.
“To win back customers from our competitors and reverse the decline of our business we must have flexibility to give customers what they want, at a price they want and when they need it,” a Centrica spokesperson said.
“Our current terms and conditions are stopping us doing this and modernising the way we work is critical to our success,” the spokesperson added.
Base pay and pensions would be protected, the company said, and the contract changes would reduce its wage bill by 1.5%.
(qlmbusinessnews.com via uk.reuters.com — Thur, 19th Nov 2020) London, UK —
(Reuters) – Royal Mail RMG.L raised its full-year revenue forecast on Thursday as it gained from the surge in online shopping spurred by coronavirus lockdowns, while warning it was still struggling with the costs of social distancing and its loss-making letters business.
The company said it now expects revenue to be 380 million to 580 million pounds higher year-on-year and that its main UK operation could break even if it hit the top end of that forecast.
The company, Britain’s state-owned postal monopoly until its privatisation in 2013, said pre-tax profit dropped to 17 million pounds for the six months ended Sept. 27 from 173 million pounds a year earlier.
Revenue, however, jumped nearly 10% to 5.67 billion pounds as parcel volumes registered strong growth, driven by an increase in e-commerce activity.
“Whilst the COVID-19 pandemic continues to present challenges for both Royal Mail in the UK and GLS (international parcels business), the first-half performance has been above our initial expectations in many areas,” Interim Executive Chairman Keith Williams said in a statement.
Reporting by Patrick Graham and Muvija M in Bengaluru
(qlmbusinessnews.com via theguardian.com – – Thur, 19th Nov 2020) London, Uk – –
CMA says site broke the law by preventing home insurers offering lower prices on other platforms
The competition watchdog has imposed a £17.9m fine on the price comparison site Comparethemarket.com after it found that clauses in its contracts with home insurers broke competition law.
The Competition and Markets Authority (CMA) said the website prohibited home insurers on its platform from offering lower prices on other comparison websites, ensuring it was not undercut elsewhere.
As a result, competition between Comparethemarket and its rivals was restricted and it was likely to have resulted in customers paying higher insurance premiums, the CMA said.
Michael Grenfell, the CMA’s executive director for enforcement, said: “Price comparison websites are excellent for consumers. They promote competition between providers, offer choice for customers and make it easier for consumers to find the best bargains.
“It is therefore unacceptable that Comparethemarket, which has been the largest price comparison site for home insurance for several years, used clauses in its contracts that restricted home insurers from offering bigger discounts on competing websites – so limiting the bargains potentially available to consumers.
“Digital markets can yield great benefits for competition, and therefore for consumers. We are determined to secure those benefits and to ensure that competition is not illegitimately restricted.”
A spokeswoman for the company said: “Comparethemarket.com is disappointed with the CMA’s decision and does not recognise its analysis of the home insurance market.
“We fundamentally disagree with the conclusions the CMA has drawn and will be carefully examining the detailed rationale behind the decision and considering all of our options.
“For 14 years Comparethemarket.com and the other price comparison websites have revolutionised the way in which consumers shop for their insurance. In the past year alone, we have helped more than 6 million customers save money.
“We will continue to deliver on our mission to drive competition, transparency and choice that benefits consumers, so our customers get the best deals possible.”
Rocio Concha, director of advocacy and policy at Which?, said: “The actions of Comparethemarket have fallen well below the standard you’d expect from a company who claims to be working in the best interest of consumers, so it is positive to see the CMA intervening to protect consumers and issuing this large fine.
“Customers should be able to trust that they can find the best deals when using price comparison sites, and any business found to be flouting the rules should be held to account.”
(qlmbusinessnews.com via news.sky.com– Wed, 18th Nov 2020) London, Uk – –
The private equity firm is one of a number of parties circling the online gifts retailer, Sky News understands.
By Mark Kleinman, City editor
The owner of Moonpig, the online greeting cards retailer, is among a pack of prospective suitors eyeing bids for Notonthehighstreet.
Sky News understands that Exponent, the private equity firm, has held preliminary talks with advisers to the online portal for selling personalised gifts such as books, jewellery and toys.
It was unclear on Wednesday whether Exponent, which is in the process of preparing a stock market listing for Moonpig, had submitted a firm offer for the company.
It emerged last month that Notonthehighstreet, which was founded in 2006, had hired the investment bank Evercore to conduct an auction that could see it valued at more than £200m.
Some private equity executives believe the business, which is based in Richmond and employs more than 150 people, is likely to attract offers of around £150m.
A number of trade bidders and private equity groups are thought to have expressed an interest in buying the company, which acts as a marketplace for 5,000 small business-owners.
Set up by Holly Tucker and Sophie Cornish, Notonthehighstreet has become a popular destination for consumers wanting to buy personalised gifts.
Its prominent customers include the Duke and Duchess of Cambridge, who used the site to buy Prince George a personalised dressing gown that was seen when they met the then US President Barack Obama in 2016.
In its latest annual report for the 2019 financial year, the company said it had served more than 2.5 million customers during the period, but seen total revenues flat compared to the year before at just over £35m.
Notonthehighstreet is not unusual among online retailers in being loss-making, although it trimmed its after-tax loss in the year to March 2019 to £1.5m.
It said it had done so after focusing its marketing activity on its most profitable customers.
The company's backers include Hubert Burda Media, the German publisher, which became a shareholder in 2016 as part of a £21m fundraising.
Other investors include Index Ventures and an arm of the asset management giant Fidelity.
Notonthehighstreet is chaired by Darren Shapland, the former finance chief of J Sainsbury.
Mr Shapland's appointment in 2015 sparked speculation that Notonthehighstreet was preparing to float on the stock market, but its performance since then, and its shareholders' preference for a sale, have led it to launch the auction with Evercore.
Last year, the company appointed a former HelloFresh executive, Jill Davenport, as its chief executive.
(qlmbusinessnews.com via bbc.co.uk – – Wed, 18th Nov 2020) London, Uk – –
US safety regulators have cleared Boeing's 737 Max plane to fly again, lifting grounding orders put in place in March 2019 after two deadly crashes.
The move marks a key milestone for the firm, which was thrust into crisis by the tragedies and investigations that blamed it for the accidents.
Its financial woes deepened this year as air travel slowed due to the virus.
Existing aircraft will need to be modified before going back into service, with changes to their design.
Safety regulator, the US Federal Aviation Administration (FAA), said the clearance would not allow the plane to “return immediately” to the skies.
Alongside the software and wiring changes, pilots will also need training.
The FAA said the design changes it had required “have eliminated what caused these particular accidents”.
The boss of the FAA, said he was “100% confident” in the safety of the plane.
“We've done everything humanly possible to make sure” these types of crashes do not happen again,” Steve Dickson said.
The approval comes roughly a year after Boeing had first hoped but too soon for many of the victims' families.
Analysis: Theo Leggett
Will the 737 Max be safe?
Boeing and the FAA insist it will be – and certainly the direct cause of the accidents has now been fixed. Pilots and safety experts seem confident that the changes made to the plane will be effective.
But both Boeing and the regulator still have much to prove.
For Boeing, that the scathing criticisms of its corporate culture have been addressed, and that safety really is, as it often claims, its number one priority.
For the FAA, that it can stand up to the aerospace giant and recover from the failures that allowed a deeply flawed plane into service, resulting in tragedy.
The aircraft is coming back, but the world has changed. It was designed for a booming market, in which airlines desperately needed new planes and in which high fuel prices put a premium on efficiency.
Now, the aviation industry is on its knees thanks to the Covid crisis. It's no surprise then that some airlines have been cancelling orders.
However, the industry looks to the long term. Air traffic will ultimately recover, and pressure to keep costs down will return. Environmental pressures are only going to grow.
The 737 Max still has a role to play.
The US is the first to reverse the grounding orders, which hit the firm around the world in March 2019. European aviation officials have said they are close to making a similar decision.
The crashes in Indonesia and Ethiopia came within five months of each other and together killed 346 people. They have been attributed to flaws in automated flight software called MCAS, which prompted the planes to nosedive shortly after take-off.
A US congressional report last month said Boeing's rush to production, a decision to ignore internal safety concerns and concealment of key changes to the plane, including pilot training needs, contributed to the accidents.
It also faulted the FAA for oversight lapses, including “excessive delegation to Boeing”.
Boeing has estimated the cost of the grounding at roughly $20bn.
Before the crashes, Boeing churned out more than 50 of the popular 737 Max per month. But airlines around the world have cancelled and delayed orders due in part to the pandemic.
Last month, Boeing said it did not expect its production rate to top 30 planes a month until 2022. It warned investors of a backlog of about 450 737 Max planes, of which only about half of which would be delivered by the end of next year.
(qlmbusinessnews.com via uk.reuters.com — Tue, 17th Nov 2020) London, UK —
LONDON (Reuters) – Against the backdrop of the COVID-19 pandemic British shoppers are preparing for Christmas earlier than ever before, supermarket group Asda said on Tuesday.
Asda, Britain's third largest grocer after Tesco TSCO.L and Sainsbury's SBRY.L, said it had already seen a surge in demand for Christmas products and “lockdown proof” festive goods.
“We have already seen a marked shift in buying patterns with customers stocking up their freezers and cupboards with festive essentials earlier than ever before,” said CEO Roger Burnley.
He highlighted sales of Christmas puddings up 71% year-on-year, and mince pies up 44%. Sales of Christmas trees were up 83% and festive lights by 57%.
Asda said there was also evidence customers were preparing for smaller Christmas gatherings, given current government restrictions on meeting friends and family. Sales of frozen turkey crowns, which typically serve three to four people, had increased by 230%.
Asda is currently owned by U.S. giant Walmart WMT.N.
However, last month the Issa brothers and private equity group TDR Capital agreed to buy a majority holding in Asda in a deal giving it an enterprise value of $8.8 billion.
The deal, under which Walmart will keep a minority stake, requires regulatory approvals and is expected to close in the first half of 2021.
Asda said like-for-like sales, excluding fuel, rose 2.7% in the third quarter to Sept. 30 – a slowdown from growth of 3.8% in the previous quarter.
Industry data has shown Asda's growth to be lagging that of Tesco, Sainsbury's and Morrisons MRW.L, partly reflecting Asda's lack of a local convenience store offer – a format that has proved popular with consumers during the crisis.
Asda is, however, performing well online, with sales soaring 72% in the quarter.
It expects rapid growth in online shopping to continue in the Christmas quarter and has increased the capacity of its grocery home shopping service to 765,000 weekly slots.
Asda has also extended its delivery trial with Uber Eats from 50 to 100 stores.
Separately on Tuesday Walmart posted a bigger-than-expected increase in quarterly same-store sales.
(qlmbusinessnews.com via news.sky.com– Tue, 17th Nov 2020) London, Uk – –
The giant US investor is in talks about a takeover of the self-styled ethical lender, Sky News can reveal.
The giant American investor which bought £13bn of mortgages from British taxpayers in 2015 is in talks to take control of The co-operative Bank.
Sky News can exclusively reveal that Cerberus Capital Management is in preliminary talks with the lender's board and shareholders about a deal.
Sources said on Tuesday that Cerberus was likely to seek a cut-price deal for The co-operative Bank, which has lurched from one crisis to another during the last decade.
Cerberus is one of the world's most active investors in banking and financial services, holding stakes in major European companies including Deutsche Bank, where it has led calls for a boardroom shake-up.
It has also deployed billions of dollars on acquiring companies and assets that were left distressed after the 2008 financial crisis, including substantial sums on mortgage and other loan portfolios offloaded by British banks.
In the UK, it has been criticised over its treatment of so-called mortgage prisoners whose home loans were part of the £13bn government sale process.
Cerberus was among the bidders for The co-operative Bank in 2017 when the company last ran a formal sale process, but opted not to conclude a deal.
If a takeover can be agreed this time, it would involve transferring the lender's ownership from a consortium of hedge funds including BlueMountain Capital, GoldenTree Asset Management and Silver Point Capital to a single investor.
One insider suggested that Cerberus might seek to pay as little as £200m for the company, which has 3.3m personal banking customers across the UK.
On Tuesday morning, The co-operative Bank said it had received an approach about a bid but declined to name its suitor.
It refused to comment when asked about the talks with Cerberus.
“The Bank has recently attracted an approach from a financial sponsor with knowledge and experience of investing in European financial services businesses regarding the possibility of a sale of the Bank and/or the holding company,” it said.
“The Bank continues to be in discussions with this financial sponsor, although such discussions remain at a preliminary stage.
“There can be no certainty that discussions with this financial sponsor will progress further, or that any binding offer will be forthcoming nor whether the Bank's ultimate shareholders will find the terms of a binding offer (if any) acceptable.”
The announcement came as The co-operative Bank – which recently appointed its sixth chief executive in a decade – said it was initiating discussions with investors about raising new regulatory capital.
Its current shareholders are said to be reluctant to underwrite the issuance of MREL-qualifying debt themselves.
Sky News revealed at the start of the year that the existing hedge fund backers were working with Goldman Sachs to canvas interest from potential bidders.
A formal process has been stymied by the impact of the COVID-19 crisis and the recent exit of Andrew Bester, tThe co-operative Bank's chief executive.
Mr Bester was said to have become frustrated by the hedge funds' plans for the business.
He was recently replaced by Nick Slape, the chief financial officer.
The co-operative Bank has retained a substantial chunk of Britain's personal banking market despite being plagued by financial and governance crises over a long period.
In 2013, it almost collapsed after trying to buy more than 630 branches from Lloyds Banking Group, only to discover a £1.5bn hole in its finances that had to be plugged by the hedge funds and the Co-op Group.
Subsequent investigations by the Treasury Select Committee and the City watchdog exposed a string of failings in management, corporate governance and regulatory supervision – including, infamously, the exposure of its chairman Paul Flowers' private life, which led to him being dubbed “the crystal methodist”.
Four years later, it was forced to turn to its owners again for £700m in new funding that saw retail investors swallowing heavy losses.
The Co-op Group subsequently sold its 20% stake in the bank.
(qlmbusinessnews.com via theguardian.com – – Mon, 16th Nov 2020) London, Uk – –
Stamp duty holiday has kept demand high despite second lockdown in England
About 650,000 homes in Great Britain are in process of being sold, the property website Rightmove has estimated, with the stamp duty holiday increasing activity in the most expensive regions.
The listing website said the number of sales agreed was up by 50% year on year in October across the board, and in the east of England the figure was up by 72%.
Despite the second lockdown in England, and the two-week circuit-breaker lockdown in Wales, it said demand for properties had remained high.
As a result, it said it believed 650,000 properties were at some stage between being under offer and sold, a figure that is 67% higher than the same period last year.
Recently, there have been about 1.2m sales each year in the UK. Until a sale is completed, it is not recorded, so it is difficult to say accurately at any time how many transactions are in progress.
Rightmove made its estimate using the number of agreed sales listed on its site, and projections for how many units are in plots listed by developers.
Some properties may be listed with more than one agent, and some of the deals will break down before a sale is completed. However, the snapshot gives an idea of how busy the market has been since being frozen during the first national lockdown, and hints at how long sales are taking to complete.
The demand for homes, coupled with Covid restrictions that have made it harder to carry out valuations, and the redeployment of some council staff, has slowed the homebuying process in some parts of the country.
Rightmove said about a third of transactions in the pipeline would still be exempt from stamp duty after the holiday ends, but there could be problems for the others.
The holiday, which means there is no tax for people buying a main home for up to £500,000 in England and £250,000 in Scotland and Wales, was introduced in the summer to support the housing market.
The tax break has fuelled a market that was already booming after the spring lockdown, and has continued to operate in England despite the new measures to tackle Covid.
Tim Bannister, the Rightmove director of property data, said: “After some brief hesitation as people waited for the detailed government guidance and legislation, it’s now clear that home movers are carrying on with their searches and sales during this second lockdown in England with the market staying open.
“This ongoing activity means that the processing logjam continues to pile up because of the sheer number trying to reach the finish line by the end of March.”
David Greene, the president of the Law Society of England and Wales, which represents conveyancing solicitors, said the residential housing market was facing many pressures.
“The end of the stamp duty land tax holiday coincides with the busy Easter holidays period – a popular time to move – and the end of the help-to-buy scheme in its current format,” he said.
“An extension to the SDLT holiday deadline, or introducing appropriate transitional arrangements, would help release the growing pressure on the conveyancing system that is being experienced by buyers and sellers [as well as solicitors].”
Rightmove’s data showed the average asking price for a property coming on to the market in November was down by 0.5% on October’s figure, at £322,025. However, it remains 6.3% higher than in November 2019 and on track to hit the site’s revised prediction of a 7% increase in 2020.
Across all regions of Britain asking prices are higher than a year ago, although some areas have reported waning demand from buyers.
Rightmove’s figures show that in some of the priciest parts of London this has translated to new sellers asking lower prices than in 2019. The biggest drop is in Tower Hamlets, where asking prices are 5.5% lower a year ago at an average of £559,826. There are also falls in Westminster, Southwark and Kensington & Chelsea – all areas popular with overseas investors and City workers.
It is “grossly unfair” that supermarkets can sell greeting cards in lockdown while specialist retailers have to shut their shops, the boss of Clintons cards has told the BBC.
Eddie Shepherd said some retailers were “exploiting” ambiguities in the rules.
Until 2 December, any shop in England selling “non-essential” goods such as gifts, books and homeware must close.
But those deemed essential can continue to sell non-essential items if they are stocked on their aisles.
It has sparked a wave of complaints against supermarkets, garden centres and news agents, with the boss of book chain Waterstones saying the government guidance “doesn't make sense”.
Mr Shepherd told BBC Radio 5 Live's Wake up To Money programme: “If our category and product is deemed to be non-essential, which it is, then that should apply in all retail scenarios.
“But garden centres and supermarkets often operate card and gift sections as large as some High Street stores and they are able to continue to trade in these sections whilst we're not.”
He added: “I think elements of the legislation are unclear and it's affording an ambiguity that people are able to exploit.”
Clintons' sales dropped sharply in the first national lockdown and the chain – which has 270 UK shops – hoped to make up for it this Christmas.
But Mr Shepherd said revenue would now be 20% of usual levels this December, in part due to trade lost to essential retailers.
“Undoubtedly an element of what was the available market will be gone at the point we reopen,” he said.
Clothes and book sellers have also criticised the lockdown rules in England, with the British Retail Consortium (BRC) accusing the government of creating “arbitrary” lines between retailers.
During Wales's recent two-week lockdown, essential retailers had to cordon off aisles selling clothes and toys, although this sparked anger among some customers.
‘Hurts the independents'
James Daunt, the boss of book chain Waterstones, has repeatedly criticised the fact that WH Smith continues to sell books in its shops in lockdown because it is a news agent, while his business can only sell online.
On Monday, he told the BBC: “I don't think anyone would object to the supermarkets being open to sell food and pharmacies to sell medicines.
“What I am objecting to is really very comparable retailers are open, and others closed, and I think that really hurts the independents.”
The BRC estimates non-essential retailers in England will lose £2bn of sales in the lockdown, which began on 5 November.
However, the Department For Business, Energy and Industrial Strategy maintains the new restrictions will limit social contact and slow the spread of coronavirus.
“We recognise this continues to be a very difficult period for businesses, which is why we've confirmed that there will be a full package of financial support in place,” a government spokesperson said last week.
To pump out its famous flavors like Half Baked and Cherry Garcia, Ben & Jerry's Vermont plants run 24-7, operated by hundreds of workers and flavor gurus. Business Insider visited the St. Albans factory back in 2019 to see how these iconic pints flip their way to our freezers.
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(qlmbusinessnews.com via theguardian.com – – Thur, 12th Nov 2020) London, Uk – –
Brand says move to install 20% VAT will encourage 1.2m visitors to shop in Europe instead
Burberry has warned that the government’s plan to scrap tax-free shopping will rob the British luxury brand of its “home market advantage” on the eve of Brexit, as wealthy international tourists opt to holiday in mainland Europe instead.
Julie Brown, the chief operating officer of Burberry, said foreign tourists, who traditionally accounted more than half of its UK sales, could “turn to buying in Europe … This represents a challenge as we could lose our home market advantage competing against brands in Paris and Milan,” she said.
The Treasury’s decision to end tax-free shopping on 31 December has caused a storm in retail and tourism circles. It wants to use the end of the Brexit transition period to bring personal duty and tax systems in line with international norms.
Millions of wealthy tourists from China and the Middle East come to Britain each year, spending nearly £18bn on shopping trips, hotels and days out. The current retail scheme hands these non-EU visitors a significant perk as they can reclaim the 20% VAT paid on purchases such as clothes, handbags and jewellery.
The scheme in effect makes goods 20% cheaper, a discount that is particularly significant to luxury brands and department stores such as Selfridges and Harrods, which sell designer clothing and accessories. Burberry’s popular Lola bag, for example, starts at £790, with eligible travellers able to recoup nearly £160.
A recent report by the Centre for Economics Research suggested that withdrawing the scheme would result in a 7% drop in the number of non-EU visitors, the equivalent of 1.2 million people, and up to 41,000 job losses. Heathrow airport is seeking to overturn the decision through a judicial review.
Brown’s comments came as Burberry updated investors on a difficult six months when disruption caused by the pandemic sent sales down 31% to £878m. Pre-tax profits fell 62% to £73m for the six months to 26 September.
The coronavirus crisis, coupled with the tax-free shopping issue and Brexit, meant the business faced “three layers of challenge on top of each other”, she said.
Over the past three years Burberry has been revamped by its Italian chief executive, Marco Gobbetti, who wants it to become a super-luxe brand, in the same league as Gucci and Dior, which both have higher prices and profit margins.
In 2018, the label, previously best known for its trenchcoats and signature check, replaced its longstanding creative chief, Christopher Bailey, with Riccardo Tisci.
The collections created by the former Givenchy designer, which include bomber jackets and bumbags emblazoned with a new logo comprised of interlocking Ts and Bs (the initials of the company’s founder Thomas Burberry), have been well-received and credited with attracting younger shoppers.
Brown said there was a growing buzz around the brand in many countries and, despite the turmoil created by the health crisis, it would be doing less discounting in the coming months to “strengthen the brand even further”.
The overall picture pointed to recovery, with sales down just 6% in the second quarter compared with a 45% slump in the first. Sales returned to growth in October but a second wave of lockdowns has forced the temporary closure of one in 10 of its stores.
By early afternoon on Thursday Burberry shares had given up morning gains and were down 2% at £15.91.
Richard Hunter, the head of markets at Interactive Investor, said Burberry was “running hard to stand still”. The sales growth recorded in October was good news, he added, but “did not incorporate the effects of the second wave lockdowns.
“The impact may not prove as severe as the full lockdowns did earlier in the year but will nonetheless somewhat derail Burberry’s recovery.”
(qlmbusinessnews.com via news.sky.com– Thur, 12th Nov 2020) London, Uk – –
The retailer's latest cuts are in addition to plans announced earlier this year which could see as many as 1,500 jobs go.
By John-Paul Ford Rojas, business reporter
WH Smith says it is planning to close 25 high street stores over the coming months as it reported a £280m annual loss thanks to the impact of the pandemic.
The closures will result in just under 200 job losses, in addition to up to 1500 jobs the company announced earlier this year that could go as a result of restructuring in its travel division.
WH Smith fell into the red for the year to the end of August as sales slumped by 27% and it also took a £175m hit directly related to the COVID-19 crisis.Coronavirus: where jobs have been lost
The charge included a big write-down in the value of the company's store network as well as the cost of its redundancy programme.
The company's annual loss compares to a profit of £135m a year earlier.
WH Smith said that, depending on “negotiations with our landlords and the government's future approach to property rates”, it expected to close around 25 stores in the current financial year as leases on those sites expire.ARTICLE CONTINUES BELOW THIS ADVERT
“While this is not an easy decision to make for our colleagues or the communities we serve, it is vital we retain a strong cash generative high street portfolio going forward,” the company added.
Chief executive Carl Cowling said the company had been “heavily impacted by the pandemic” but that it was now in a “strong position to navigate this time of uncertainty”.
Even stores in hospitals, which remained open throughout, saw sales drop when there were no visitors.
The six months to the end of August was also “very challenging” for the group's high street division, where sales fell 39%.
WH Smith has 568 high street stores of which 558 are currently trading.Economic revival is breathtaking
It also has more than 1,000 stores in its travel division – which also covers hospitals – of which more than 300 are outside the UK.
The company said more than 60% of its UK travel stores remained open.