Bloomberg’s Ashlee Vance heads to England to find out how the country is fighting to inject new life into its technology industry. The trip starts out in Bletchley Park. From there, it’s off to Cambridge, the heart of England’s technology scene. Vance hangs out with learned cows and artificial intelligence whizzes, bikes past Newton’s famed apple tree (at least a reasonable replica of it), and goes punting with the inventor of the Raspberry Pi computer. From Cambridge, it’s off to the Cotswolds and the headquarters of Dyson to see its latest creations. And then on to London to check out some startups and whine about Brexit while drinking the world’s most exotic cocktails at the Langham Hotel.
(qlmbusinessnews.com via uk.reuters.com — Tue, 8th Oct, 2019) London, UK —
LONDON (Reuters) – Britain’s budget deficit is likely to more than double to around 100 billion pounds if the country leaves the European Union without a deal, quickly requiring a return to austerity, a leading think-tank said on Tuesday.
Britain is due to leave the EU on Oct. 31 and Prime Minister Boris Johnson has said he is determined to do so despite parliament ordering him to seek a delay if he cannot negotiate an acceptable transition agreement before then.
The Institute for Fiscal Studies predicted borrowing would rise to 92 billion pounds – equivalent to 4% of national income – by 2021/22 under a “relatively benign” no-deal Brexit scenario, in which there are no major delays at borders.
Even then, the economy would still enter recession in 2020, the IFS said in an annual assessment of the public finances.
If the government undertook enough fiscal stimulus to stop the economy contracting – roughly 23 billion pounds of extra spending in 2020 and 2021 – annual borrowing would peak at 102 billion pounds
“A no-deal Brexit would likely require a fiscal short-term stimulus followed by a swift return to austerity,” IFS deputy director Carl Emmerson said.
In the 2018/19 financial year Britain’s budget deficit was 41 billion pounds or 1.9% of GDP, its lowest since 2001/02, following years of efforts to reduce the deficit from a peak of 10.2% during the depths of the financial crisis in 2009/10.
In the longer term, a no-deal Brexit would mean less money to spend on public services – or higher tax rates – than staying in the EU or leaving with a deal, the IFS said.
Even without Brexit, Britain was likely to have to raise tax rates to fund the cost of pensions and public healthcare for an ageing population, it said.
Finance minister Sajid Javid announced 13.4 billion pounds of extra spending on health, policing, schools and other areas last month – putting borrowing on course to overshoot a cap of 2% of GDP targeted by his predecessor, Philip Hammond.
“The outlook for borrowing has worsened dramatically since March,” Emmerson said.
Javid is due to set out fresh borrowing plans an annual budget before the end of 2019, possibly before an early election as Johnson seeks to regain a working majority in parliament.
The IFS said the government’s budget targets had lost credibility and it was now set to spend almost as much on day-to-day public services as planned by the opposition Labour Party before an election in 2017, promises which drew criticism from the ruling Conservative Party.
It also said the government should wait until the outlook for Brexit was clearer before setting long-term budget goals, and avoid income tax cuts of the type that Johnson suggested when he campaigned to become Conservative leader.
(qlmbusinessnews.com via bbc.co.uk – – Fri 26th July 2019) London, Uk – –
Mike Ashley's Sports Direct has said it is “still finalising” its financial results, which were due to be released early on Friday morning.
It is extremely unusual for a firm to delay results in this way, with one analyst calling events “an utter shambles” after a results presentation was postponed at the last minute.
The firm said it expected its results would still be published on Friday.
The retailer had previously delayed publishing annual results on 15 July.
At the time it cited uncertainty in trading at its House of Fraser chain and increased scrutiny of its auditor as the reasons for the delay. It had also indicated that it might not achieve its profits forecast.
In a statement released on Friday morning, Sports Direct said: “Unfortunately we are still finalising preliminary results.
“We anticipate that our annual results will still be released today, with a presentation to follow, and will update again at midday.
“Apologies for any inconvenience.”
Neil Wilson, chief market analyst for Markets.com, said the events were “a total and utter shambles” that “betrays a number of problems at the business after [Mr] Ashley embarked on his rather random acquisition spree.”
“Above all it betrays a total disregard for shareholders,” he said.
On Wednesday, the firm had said it would be publishing its results on Friday.
UK-listed companies normally publish their results at or close to 07:00, before the London markets open at 08:00.
Sports Direct shares fell about 3% in early trading on the London stock market.
The firm had been due to give a presentation to investors and media at 09:00, but this was cancelled at the last minute.
(qlmbusinessnews.com via news.sky.com– Wed, 17th July 2019) London, Uk – –
The second half of the year may be a buyers' market for much of the UK as average price increases continue to slow sharply.
House prices in London fell in May at their fastest rate for almost a decade, according to official figures.
The Office for National Statistics (ONS) reported a 4.4% decline, on an annual basis, in residential property costs in the capital.
It marked the biggest fall since the 7% reduction recorded in August 2009 as the effects of the financial crisis took a hold on the sector.
The wider ONS figures showed a continuation of the slowdown across the UK as a whole – with prices increasing by 1.2% in the year to May, down from 1.5% in April.
The gradual decline – over the past three years – was first driven by London followed by the wider South East region.
However, house price growth in Wales – while sharply down from a 5.3% rate in April – remains positive at 3%.
The figure was 2.8% for Scotland.
The English region with the strongest rate of growth was the North West at 3.4%.
London saw a surge house price growth after the financial crash that saw prices almost double before cracks began to appear in late 2016.
They were a consequence of concerns about affordability after the boom and shaky sentiment since the Brexit vote.
The ONS said that while London house prices fell over the year, it remained the most expensive place to purchase a property at an average of £457,000.
That sum is 6.7% down on the 2017 peak.
The North East continued to have the lowest average house price, at £128,000, and remains the only English region yet to surpass its pre-economic downturn peak, the ONS said.
There are signs of worse news for prices ahead.
The official figures lag other industry surveys which have already reported on activity during June.
A report by Rightmove earlier this week suggested that the current political uncertainty – as the clock ticks down to the extended Brexit deadline of 31st October – was continuing to weigh on sentiment.
It said average prices had fallen in the UK for the first time in 2019.
Rightmove's director and housing market analyst, Miles Shipside, said: “With record employment, low interest rates and good mortgage availability, buyers have a lot in their favour apart from the lack of political certainty.
“Those who have postponed their purchase should note that estate agency branches have more sellers on their books than at any time for the past four years, so there should be more choice of properties to buy.”
(qlmbusinessnews.com via uk.reuters.com — Wed, 10th July 2019) London, UK —
LONDON (Reuters) – All of Britain’s leading accounting firms have failed to hit quality targets set by their regulator for auditing company books for the second year in a row, with Grant Thornton and PwC singled out to join KPMG under tougher supervision.
The damning review from the Financial Reporting Council (FRC) will pile pressure on the government to implement a proposed sector shake-up prompted by corporate failures at builder Carillion, retailer BHS and an accounting scandal at cafe chain Patisserie Valerie.
The FRC said EY, KPMG, Deloitte and PwC, known as the Big Four, and BDO, Grant Thornton and Mazars from the next tier down, all failed to hit a target that 90% of audits reviewed by the regulator were good or required only limited improvements.
Only 75% of the sample of audits from among Britain’s 350 top listed companies for the year ending December 2017 met the 90% target overall as accountants failed to challenge information clients gave to them, the FRC said.
There was no overall improvement on last year’s findings when all audits reviewed failed to meet the 90% target.
“At a time when the future of the audit sector is under the microscope, the latest audit quality results are not acceptable,” said Stephen Haddrill, the FRC’s chief executive.
Radical reform of the sector was proposed last December to rebuild public trust in audit, including replacing the FRC, described by lawmakers as toothless, with a more powerful watchdog.
Haddrill and his chair Win Bischoff are being replaced.
The bulk of the top 350 listed firms would have two auditors in a bid to improve audit quality, but this depends on Grant Thornton, BDO and Mazars winning the confidence of blue chip companies.
The timing of reform is unclear given it needs legislation to implement and parliament is focused on Britain’s protracted departure from the European Union.
The ICAEW, a professional accounting body, said audit faces a “watershed moment” and the government should implement reform without delay.
The new watchdog should apply “fresh thinking” to improving audit quality and not be constrained by targets and methods bequeathed to it by the FRC, the ICAEW said.
British Business Minister Greg Clark told a parliamentary committee last month there would be a public consultation on a “proportionate package of reforms” to improve audit quality and maintain Britain’s global status as a center of audit expertise.
FAILING TO CHALLENGE
The FRC said it found cases in all seven firms where auditors failed to challenge management sufficiently, a “recurring finding” for several years.
The watchdog said it would raise its target to 100% from 90% for reviews of audits starting from June 2019 financial statement year-ends as having any below standard audits was unacceptable.
Only half of Grant Thornton’s sample audits were assessed as good, down from 75% in 2018, the FRC said. More than a quarter of its audits reviewed in the past five years needed significant improvement.
“The FRC has therefore increased its scrutiny of Grant Thornton,” the watchdog said. It will review a larger number of the firm’s audits in the coming year.
Both Grant Thornton, which audited Patisserie Valerie, and PwC, auditor of BHS, had already announced steps to bolster audit activities in anticipation of the FRC findings.
Grant Thornton said the FRC report showed that the entire profession must improve the quality of its work and that Grant Thornton is no exception.
The deterioration from 84% to 65% in PwC’s results was also “unsatisfactory” and the FRC will “scrutinize closely” how PwC implements its improvement plan.
“While results at KPMG have improved, the firm remains subject to increased FRC scrutiny,” the watchdog said. This will continue until KPMG, which audited Carillion, has demonstrated a sustained improvement in audit quality.Slideshow (2 Images)
The FRC said 84% of Deloitte’s audits met the required standard, up from 76% last year, with EY at 78%, up from 67% in 2018.
But 40% of Mazars’ reviewed audits failed to meet the target, worse than in 2018, while 12.5% of BDO’s sample audits were below the acceptable standard, unchanged from last year.
(qlmbusinessnews.com via theguardian.com – – Tue, 18th June 2019 ) London, Uk – –
Plans unveiled to lower M25 and reroute rivers as campaigners warn of environmental impact
The scale of the disruption from Heathrow airport’s expansion project has been revealed with the publication of detailed plans to lower the M25 for the third runway to cross, reroute rivers, replace utilities and relocate enormous car parks.
A 12-week public consultation opened on Tuesday at 8am, with campaigners warning of the severe impact for years to come of more than 700 extra planes in the sky after 2026, when the runway is due to open.
Heathrow said expansion should “not come at any cost” and has outlined plans for low-emission zones and congestion charges to stem local air pollution. It plans to expand in phases up to 2050 with new terminal buildings added after the runway as passenger numbers grow to keep airport charges and fares down after airlines complained about the projected cost.
Plans to mitigate the effects of expansion include property compensation, noise insulation funding and a 6.5-hour ban on scheduled night flights.
Emma Gilthorpe, the executive director for Expansion, urged local people to participate in the consultation and make their views heard.
She said: “Expansion must not come at any cost. That is why we have been working with partners at the airport, in local communities and in government to ensure our plans show how we can grow sustainably and responsibly – with environmental considerations at the heart of expansion.”
However, campaigners said the proposals would lead to swathes of green belt land around the airport being used for buildings to support a third runway, including a huge new car park for the airport to the north of Sipson village.
Heathrow has committed not to have any more cars using the airport with expansion, and said it was consolidating existing space, including car parks where the new runway will go.
Robert Barnstone, of Stop Heathrow Expansion, said: “Not only does it want to disrupt people’s lives for up to 30 years while building this new runway but now proposes jumbo-size car parks while pledging to reduce the number of people using cars at the airport.
“The new prime minister, whoever that may be, will have to face up to the fact that Heathrow expansion cannot meet legal environmental requirements and will therefore not be able to proceed in the long term.”
John Stewart, the chair of Hacan, the campaign group that opposes a third runway, said: “What hits you is the scale of these proposals. The impact on local people could be severe for many years to come. Disruption from construction; the demolition of homes; the reality of more than 700 extra planes a day.”
The consultation is a statutory requirement of the planning process, after parliament gave Britain’s major airport the go-ahead for a third runway. Heathrow’s final plans, incorporating public responses, will be put to planning inquiry inspectors next year. Their recommendation will be put to the transport secretary to give the final approval in 2021.
(qlmbusinessnews.com via cityam.com – – Thur, 30th May 2019) London, Uk – –
EE’s 5G network went live in six cities today, bringing the new technology to the UK for the first time.
London, Birmingham, Manchester, Cardiff and Belfast are the first locations to benefit from the new mobile network, which will offer users data speeds that are considerably faster than 4G.
However, with EE the first network to launch 5G, prices are set to be considerably higher until rivals begin to compete with their own launches.
Vodafone will be the first of those operators to challenge EE when it launches its own 5G network on 3 July.
5G handsets – what's available?
Meanwhile, the selection of 5G handsets is expected to be limited for the moment, with Samsung, OnePlus, LG and HTC all producing 5G handsets.
Huawei’s Mate 20X (5G) smartphone has been blocked from both EE and Vodafone’s rollouts after Google banned the device from receiving upgrades.
The ban came amid claims from the US that Huawei is acting as a spy for China – something Huawei denies.
“The challenge we have at the moment is we don’t have enough clarity on whether our customers are going to be able to be supported over a timeframe of a two or three-year contract,” EE boss Marc Allera told City A.M. last week.
5G speeds and coverage
EE said its 5G network currently offers speeds 10 times faster than 4G, though it will not launch a fully fledged 5G network until 2022.
William Webb, a 5G expert and chief executive of Weightless SIG, warned that coverage will be thin for years after 5G launches, mirroring the ‘not-spots' of 4G and even 3G in some areas of the UK.
“Initially, coverage will be very patchy – some areas in city centres may have a good connection but little elsewhere. For many, there may be no 5G coverage where they live and work for many years,” he said.
He added that the data-hungry network will eat up allowances very quickly, leaving tariffs looking miserly in contrast to 4G contract deals on offer right now.
“The basic 5G package has 5GB of data. If the promise of 200Mb/s is delivered on – and 5G is aiming for much higher – then this entire monthly allowance will last a total of 200 seconds,” he said.
“The only real benefit here is that 5G networks will be virtually empty, allowing congestion-free communications. This is a big advantage when you consider in places such as Waterloo, Kings Cross or other mainline train stations.
“While lower congestion is a valuable benefit, there is no sign of the services or applications that will deliver the well-documented changes to the way that we live and work that some have promised.”
How can the UK improve 5G coverage?
Kate Bevan, editor of Which Computing magazine, said: “The rollout of 5G will offer great opportunities for consumers to get increased internet speeds, faster downloads and be better connected on the move, but the reality is that we are still lagging behind on 4G – with only two-thirds of the UK able to get access with a choice of all major operators.
“The government needs to clearly outline how it will achieve its 2022 target for 95 per cent of the country to have 4G coverage and the regulator must use its powers effectively to extend coverage.”
Kester Mann, principle analyst at CCS Insight, added: “EE’s launch highlighted that the shift from 4G to 5G is an evolutionary one, as it focused on offering a more reliable mobile experience. Its new 5G propositions contain little that is truly innovative, but address existing customer pain-points without over-inflating expectations.”
Currently an EE 5G contract will cost you £54 per month and £170 for a compatible device, though that will only get you 10GB of data per month.
(qlmbusinessnews.com via uk.reuters.com — Tue, 14th May 2019) London, UK —
LONDON (Reuters) – Britain’s unemployment rate fell to its lowest since the mid-1970s in early 2019 as employers hired in the run-up to the original date for Britain’s EU departure, but there were signs that Brexit was beginning to weigh on the jobs boom.
The rate edged down to 3.8% in the first quarter, its lowest since the three months to January 1975, the Office for National Statistics said on Tuesday. Unemployment dropped by 65,000, the most in more than two years.
But employment growth slowed to 99,000, well below a median forecast of 135,000 in a Reuters poll of economists, and wage growth lost momentum too.
“It is possible to see the shadow of Brexit in some of these figures,” Mike Jakeman, an economist at accountancy firm PwC, said. “March was the month when Brexit anxiety was at its most acute and it might have been the case that firms were more reticent to offer higher wages and advertise new positions.”
The numbers could just as easily be a minor blip in the recent run of strong jobs and earnings growth, he also said.
Britain’s labour market has remained resilient as Brexit has neared, helping households whose spending has driven an otherwise fragile economy.
However, the jobs boom may well reflect how employers have opted to take on workers – who can be laid off quickly during a downturn – rather than commit to longer-term investments while they wait for uncertainty over the conditions of Britain’s departure from the European Union to lift.
Brexit was originally due on March 29. Last month it was delayed for a second time until Oct. 31 to give Prime Minister Theresa May more time to break an impasse over its implementation in parliament and in her own Conservative Party.
The strength of the labour market has pushed wages up more quickly than the Bank of England has forecast, leading some economists to think it might raise interest rates faster than investors expect once the Brexit uncertainty clears.
The ONS said that in January-March, total earnings including bonuses rose by an annual 3.2%, slowing from 3.5% in the three months to February and weaker than a Reuters poll forecast of 3.4%.
Excluding bonuses, pay growth also slowed, rising by 3.3%, in line with the Reuters poll.
The BoE this month said it expected wage growth of 3% at the end of this year.
Many people in Britain have however seen no increase in their living standards since before the financial crisis more than a decade ago, and a Nobel Prize-winning economist said on Tuesday that Britain risked tracking the rise in inequality seen in the United States.
The recent hiring surge, while good for workers in the short term, has weighed on Britain’s weak productivity growth – a major fault line in the economy – raising concerns about the long-term prospects for growth and prosperity.
The ONS said output per hour fell by an annual 0.2% in the first quarter of 2019, its third consecutive fall. In quarterly terms, output per hour dropped by 0.6%, its biggest fall since the end of 2015.
The ONS data also showed the number of EU workers in the United Kingdom rose by an annual 58,000 after three consecutive falls. The number of non-EU workers in the country grew more strongly, up by 124,000.
(qlmbusinessnews.com via bbc.co.uk – – Wed, 8th May 2019) London, Uk – –
KPMG has been fined £5m and “severely reprimanded” after admitting misconduct in its 2009 audit of Co-operative Bank.
The Financial Reporting Council (FRC) said KPMG's bad auditing came in the wake of Co-operative Bank's merger with building society Britannia.
It said the firm's deficiencies included “failures to exercise sufficient professional scepticism”.
KPMG said it regretted that some of its audit work “did not meet the appropriate standards”.
The accountancy giant had also failed to tell Co-op Bank that a number of loans it acquired through the Britannia merger were riskier than thought and failed “to obtain sufficient appropriate audit evidence”, the FRC said.
KPMG will pay £4m after agreeing to a settlement. Audit partner Andrew Walker was also fined, and will pay £100,000. The accountancy firm will also pay the regulator's costs of £500,000.
Co-op Bank problems
The FRC's fines relate to the aftermath of Co-op Bank's merger with Britannia. In 2013, the bank entered a bid for 632 branches being sold by Lloyds Bank.
The deal collapsed after the discovery of a £1.5bn black hole in the Co-op Bank's balance sheet.
The Co-op Bank was subsequently taken over by a group of US hedge funds in a rescue deal in 2013.
In 2017, the bank required another, £700m rescue package from investors to stop it from collapsing.
The bank – which no longer has any association with its former parent the Co-op Group – now has about 68 branches, down from 164 in 2015. In common with its larger competitors, setting aside money for customers wrongly sold PPI loan insurance has hit its performance.
The fine is the latest in a series for KPMG, which is one of the “big four”, the four largest auditors in the UK which as well as KPMG, include PwC, EY and Deloitte.
Last month, it was fined £6m, received another severe reprimand and told to undertake an internal review over the way it audited insurance company Syndicate 218 in 2008 and 2009.
The FRC is also investigating the accountancy giant's audit of the government contractor Carillion, which collapsed under £1bn of debt last year.
In June 2018, the FRC also found an “unacceptable deterioration” in KPMG's work and said it would be subject to closer supervision.
Break them up?
The big four accountancy firms are currently under review by the Competition and Markets Authority (CMA), which has proposed an internal split between their audit and non-audit businesses to prevent conflicts of interest in audits.
MPS have gone further urging a full structural break up of the firms.
Deloitte, EY, KPMG and PwC currently conduct 97% of big companies' audits.
Have you been to the Google office in London? The one at Kings Cross? It's stunning and the best part about it is the people who work there. Take show a look at some of the best aspects of it: from food, to pasta making class to the gym.
(qlmbusinessnews.com via uk.reuters.com — Tue, 23rd April, 2019) London, UK —
LONDON (Reuters) – The London Metal Exchange (LME) on Tuesday launched an initiative that could see it ban or delist brands that are not responsibly sourced by 2022 as part of efforts to root out metal tainted by child labour and corruption.
The 142-year-old LME, seeking to avoid overly punishing small mining brands to the benefit of larger miners such as Glencore, said it would not single out cobalt and tin for accelerated auditing.
The proposal is the largest step yet by the LME, the world’s biggest market for industrial metals, to clean up the global supply chain of all its commodities.
Cobalt is a key ingredient in the batteries that power electric vehicles and one flagged by human-rights groups as particularly high risk.
“Global consumers rightly demand action on responsible sourcing – and our industry must listen,” LME chief executive Matt Chamberlain said in a statement.
The LME said its proposed rules would require all brands to undertake a “Red Flag assessment” based on guidelines set by the Organisation for Economic Co-operation and Development (OECD) by the end of 2020.
The exchange would audit higher-risk brands by 2022 with a view to banning them if they do not comply.
In a consultation paper in October, the LME said it wanted to ban cobalt brands that traded at a significant discount against prices gathered by trade publication Metal Bulletin after 30 days.
The discount was created by concerns that some providers of cobalt to the exchange may have used child labour at operations mainly in the Democratic Republic of Congo, where several organisations have cited human-rights abuses.
The proposal marks a shift from the LME’s traditional role of requiring brands and companies to meet metallurgical standards to including issues of ethical responsibility.
Brands would be forced to publish fully all of their supply-chain information by 2024, the LME said.
By Zandi Shabalala, additional reporting by Eric Onstad
(qlmbusinessnews.com via bbc.co.uk – – Fri, 15th Feb 2019) London, Uk – –
Millennium & Copthorne Hotels has blamed a shortage of workers due to Brexit uncertainty for contributing to falling profits.
The hotel chain reported a 28% fall in pre-tax profits to £106m for the 12 months to 31 December 2018, compared with the same period in 2017.
It said Brexit concerns had affected its UK hotels, particularly in London.
The hotel chain also blamed the US-China trade war, minimum wage and competition from Airbnb for its woes.
For the fourth quarter of 2018, pre-tax profits dropped 76% to £7m.
In particular, revenue per available room in London dropped 7.4%, partly due to the closure of its Mayfair hotel for refurbishment.
“Concerns about Brexit have affected the Group's UK hotels especially in London, where the hotels started to face difficulties in recruiting EU workers which currently comprise more than half of the London workforce,” it said in a statement.
The hotel chain also said that it had been affected by the increase in the minimum wage, which came into force last year.
“The shortage of talent-from rank and file to senior management-is intensifying with many new hotels being built around the world, not to mention the growth of Airbnb and serviced apartments,” said chairman Kwek Leng Beng.
He stressed that all hospitality businesses would “need to evolve and embrace” changes in the industry in order to remain relevant and profitable.
(qlmbusinessnews.com via telegraph.co.uk – – Sat, 19th Jan 2019) London, Uk – –
Gabriel Shohet and Eirik Holth can empathise with the blue back-to-workers who returned to their desks last week; five years ago, they too were uninspired by their careers.
But the duo did something about it, quitting their jobs to start a coffee chain.
The co-founders used to be university flatmates before graduating and joining private equity firms. They lost touch, but caught up on the phone one day about wanting to strike out on their own. “We were used to managing companies from the board, so never got stuck in or started anything from scratch,” explains Shohet. “Getting our hands dirty was very appealing.”
Inspiration struck: why not go into business together? “Coffee was our passion; we were always micro-roasting and experimenting with new blends at the flat,” recalls the entrepreneur. “We agreed to pack in our jobs, set a date and did it.”
From the beginning, they wanted their brand to stand out from the crowd. It inspired the name, Black Sheep Coffee (and its tagline, “leave the herd behind”).
They launched with a different brew: a 100pc speciality-grade robusta coffee that, unlike its commonly used arabica counterpart, has more caffeine and protein, and is higher on the PH scale. It makes for a smoother, frothier drink that’s easier to digest on an empty stomach.
Another difference is its work with homeless people, says Shohet. “We care deeply about doing good, but we wanted to do it directlyand not just donate to a big charity like everyone else.”
The Black Sheep owners introduced an initiative that enables customers to donate a discounted brew or completed loyalty card by sticking it or a note to a board in store. Those who can't afford a coffee can simply come in and grab one. “So many warned us against it, predicting drunks and thieves who would turn new business away,” recalls the co-founder. “They were wrong, of course – people have been polite and often help us to open in the morning.
“It's a neat way to fight social exclusion and break down barriers.”
The duo spent most of a start-up loan on kit, inventory and flights to meet suppliers. They carried out product tests and customer research by popping up at London markets and stations. “We had no salary and very little money,” recalls Shohet. “The first two years were really difficult, but we slowly built up [a positive] cash flow and enough landlord credibility that one eventually bought into our idea.”
A proper shop was a big turning point, but Shohet doesn't regret the financial struggle. “We had discipline and became very creative in terms of making things happen,” he says, giving the example of a stall in Urban Outfitters on Oxford Street. “We only sought out that partnership because we needed someone who would fit out our kiosk and wouldn't charge rent.”
The heavy footfall and prominent window branding was priceless, he thinks. “Not having any cash forces you to come up with cool concepts and different ways of getting things done.”
A £23,000 Kickstarter campaign helped the founders to kit out their first café in Charlotte Street, but they've otherwise shunned investment. “We've tried to grow without calling on institutions that may be looking for a quick return,” he says. “Short-term targets force you to compromise and limit your scope – it can kill the soul of a business.”
Black Sheep has been anything but limited, having grown to £10m in annual turnover and 28 shops across London, Manchester and Manila. “We're scaling very fast, which means we have to hire a lot of new people,” says Shohet, who leads 216 employees.
The biggest challenge has been finding and retaining that talent, he adds. Paying above market rate helps with the former (“if you want the best people, you have to be comfortable with the fact that they will be expensive”), while “clear” and “visible” career progression helps with the latter. “We have a strong training programme through which people can work their way up to head of coffee and gain industry-recognised qualifications.”
A smart benefit also enables staff to pursue their passions; the company will pay any employee to teach a free class to colleagues. “We don't want them to have to choose between Black Sheep and yoga or acting, for example,” says Shohet. “It's all about making sure that people have a good time working for us.”
Having a worse time is the high street, with more casualties expected this year. But the entrepreneur isn't worried. “Coffee is still very much about the experience,” he says. “People want to see it being made and drink it straight away; they want to use the Wi-Fi and hang out or host a meeting.”
In terms of what next for the brand, he wants to continue to focus on its two main mission statements: source the best coffee in the world and hire the best baristas in town. “Get those right and we can't really go wrong,” says Shohet, whose beans are currently sourced from India, Peru, Ethiopia and Papua New Guinea.
It will also keep on in its fight against plastic. Front of house, the business stocks paper straws and 100pc compostable cups and lids, explains the co-founder, who isn't a fan of offering discounts to clients who provide their own reusable cups. “We want to tackle the issue head-on, instead of making people pick between convenience and the environment.
“It's not the their responsibility to bring a cup or recycle another; it's ours.”
While there's still work to be done on the supplier side, Black Sheep has otherwise been plastic-free for three and a half years. “It's not that difficult,” says Shohet. “If we can do it, so can the big chains.”
(qlmbusinessnews.com via bbc.co.uk – – Wed, 16th Jan 2019) London, Uk – –
Chancellor Philip Hammond has raised the possibility of an extension to Article 50, the process by which the UK is due to exit the EU.
In a call with business leaders on Tuesday evening, Mr Hammond sought to reassure the business community that a “no-deal” Brexit could be avoided.
According to the CBI, he outlined how the 29 March date might be postponed.
John Allan, president of the CBI, said the chancellor appeared more relaxed about the possibility of a delay.
The CBI, the UK's biggest business lobby group, has warned a “no-deal” Brexit is a threat to jobs and growth.
Mr Allan said it “wasn't absolutely crystal clear” that the government could avoid that scenario, but he understood, following the call, that there would be moves in Parliament next week which would allow the UK's exit date from the EU to be put back “if it became clear we were heading towards that”.
A delay to implementation of Article 50 would avoid the UK leaving the EU without a negotiated deal.
The CBI chief said he was encouraged by government moves to build a cross-party consensus for a new approach to Brexit.
Andrea Leadsom, leader of the House of Commons, told the BBC the government would not be delaying Brexit.
“We are clear we won't be delaying Article 50. We won't be revoking it,” she said.
Despite fears that the pound would plummet if the government suffered a heavy defeat in Parliament, sterling rallied slightly. Shares traded in London broadly flat on Wednesday morning. Some observers have suggested that there is now a stronger consensus amongst MPs wishing to avoid a “no-deal” Brexit, making that a less likely outcome.
Investment bank Goldman Sachs said Tuesday evening's Parliamentary defeat for the prime minister made it more likely that the UK would pursue a “softer” Brexit, retaining closer ties to the EU, or even that Brexit might be overturned.
“We think the prospect of a disorderly ‘no-deal' Brexit has faded further,” Goldman Sachs' European economist Adrian Paul wrote in a note.
Goldman Sachs still believes the most likely outcome is that “a close variant” of the deal Mrs May has negotiated with Brussels will eventually be passed by the House of Commons.
However, Stephen Martin, director general of the Institute of Directors, said the UK was still “staring down the barrel of no deal”.
“As things stand, UK law says we will leave on 29 March, with or without a withdrawal agreement, and yet MPs are behaving as though they have all the time in the world – how are businesses meant to prepare in this fog of confusion?” he said.
(qlmbusinessnews.com via independent.co.uk – – Tue, 8th Jan 2019) London, Uk – –
Britain’s biggest airport could soon have an extra 68 flights a day squeezed in on the world’s busiest pair of runways.
Heathrow Airport hopes to expand operations by up to 5 per cent whether or not a third runway is built.
As the West London airport launched a consultation into the biggest changes to airspace patterns in 50 years, it also revealed plans for “a short-term change to the way aircraft arrive at Heathrow” that could increase resilience – and squeeze in almost 25,000 flights a year.
To do so would require the 480,000 annual cap on aircraft movements, imposed in 2002 as a condition for building Heathrow Terminal 5, to be lifted.
At present all but 5,000 of the permitted slots at Heathrow are used; the “spare” slots are at times such as late evenings, Saturday afternoons and Sunday mornings when demand is light.
The key proposal is for a move to “independent parallel approaches” (IPA) when both runways are being used for landings.
While the standard operation at Heathrow involves one runway being used for arrivals and the other for departures, at busy times for arrivals – particularly early mornings – both can be used for touchdowns. But strict rules on sequencing mean that simultaneous landings cannot happen.
A Heathrow Airport spokesperson said: “Because Heathrow operates at 98 per cent of its capacity, disruption or delays during the day can have a knock-on effect to the punctuality of flights.
“To mitigate this, we are always looking to improve how we manage aircraft arriving at Heathrow during particularly busy periods, and one of the ways to do this is through the introduction of new technology such as Independent Parallel Approaches [IPA].
“IPA will not only be beneficial for our passengers by improving punctuality, and preventing flight cancellations and delays – it will also help to reduce the number of late running flights into the night which are disruptive to local communities.”
But while initially the focus would be on increasing resilience, the move would also provide the opportunity to increase arrivals by 10 per cent – representing almost 25,000 additional movements.
The airport stressed: “We would like to introduce IPA even if we do not get approval to build a third runway.”
In the consultation document, Heathrow revealed that some of the flight paths used for IPA “could overfly areas that are not affected by Heathrow arrivals today”.
Forty-two months ago, the Davies Commission unanimously recommended a third runway at Heathrow. While no significant works have begun, the airport says the new runway is on track to open in 2026, with the project costing £14bn.
Radical changes to airspace will be necessary ahead of a new runway opening, and Heathrow is asking local residents for their preferences for a range of arrival and departure patterns.
John Stewart, chair of HACAN, representing residents under the Heathrow flight paths, said: “A lot of West London will be badly hit by these proposals but there will be many other communities who will be relieved at the prospect of all-day flying coming to an end.
“It amounts to a near-revolution to Heathrow’s flight paths.”
The Airspace & Future Operations consultation runs until 4 March.
(qlmbusinessnews.com via uk.reuters.com — Thur, 27th Dec, 2018) London, UK —
(Reuters) – France’s Vinci (SGEF.PA) is paying about 2.9 billion pounds for a majority stake in Gatwick, adding the second busiest airport in Britain to its portfolio despite the shadow of Brexit.
Expected to close by June next year, the deal to acquire a 50.01 percent stake would make Gatwick the single largest asset in Vinci’s airport network, which would grow to 46 airports spanning 12 countries, the French company said on Thursday.
“The transaction represents a rare opportunity to acquire an airport of such size and quality,” it said in a statement.
Vinci has been expanding into faster growing and more profitable concessions such as airports and motorways, as well as in engineering projects for the energy industry, to counter signs of weakness elsewhere in the construction sector.
The French group is investing despite short-term uncertainty about the impact on travel of Britain’s departure from the European Union at the end of March.
Gatwick made unwelcome headlines last week after drone sightings caused 36 hours of travel chaos for more than 100,000 Christmas travellers.
Gatwick Chief Executive Stewart Wingate, who will remain in his role, said the airport was learning lessons to avoid a repeat of the disruption.
“While today's announcement marks an exciting moment in Gatwick's future, my team and I remain focused on doing everything we can to help ensure that travel runs as smoothly as possible for everyone over the rest of the festive period,” he said in a statement here.
Vinci is buying the stake in Gatwick from existing shareholders, and the remaining 49.99 percent minority will be managed by investment group Global Infrastructure Partners (GIP), Vinci said.
After the deal, GIP will halve its stake to 21 percent and the Abu Dhabi Investment Authority will be left with 7.9 percent.
The California Public Employees’ Retirement System will retain 6.4 percent, the National Pension Service of Korea 6 percent and Australian sovereign wealth fund the Future Fund Board of Guardians will have 8.6 percent.
In the year to March 2018, Gatwick reported total revenue of 764 million pounds and handles around 46 million passengers annually.
The Gatwick deal follows Vinci’s acquisition earlier this year of the airports management portfolio of Airports Worldwide, which allowed it to enter the United States and expand in Europe.
Between 2014 and 2017, Vinci Airports’ revenue grew 196 percent, driving the concessions business up 19.3 percent, while Vinci Construction fell 9.5 percent in the same period.
(qlmbusinessnews.com via cityam.com – – Thur, 20th Dec 2018) London, Uk – –
Minicab and Uber drivers will no longer be exempt from the £11.50 congestion charge from April next year, Sadiq Khan announced today as part of his push to curb pollution levels.
TfL expects the changes to reduce the number of private hire vehicles entering the congestion zone each day by up to 8,000, a 44 per cent drop from current levels.
The congestion charge applies from Monday to Friday from 7am to 6pm and covers London’s central zone. The boundary stretches round King’s Cross, the city, the Imperial war museum and Buckingham palace.
Higher costs can be expected to hit operators as well as customers looking for a ride in the centre. Uber rival Addison Lee has previously come out with a prediction that the plans will cost it £4m a year.
“We need private hire vehicles and taxis to play their part and help us clean up our filthy air,” said Sadiq Khan, who argued that “tough decisions” needed to be made in order to “protect the health and wellbeing of London”.
Khan has also argued that scrapping the drivers' exemption is necessary to drive down congestion. TfL has said that the pace of the rise in private hire vehicles, which has been bolstered by ride-hailing apps such as Uber, had not been anticipated when the exemption was originally put in place 15 years ago.
The move can also be expected to generate some extra cash for TfL at a time when its revenues have been squeezed as a result of fare freezes and the continued delays hitting its Crossrail project.
The Licensed Private Hire Car Association set up a petition opposing the changes last month, which reached just under 10,000 signatures. Responding to the decision, the group said: “We will do everything we can to challenge this disappointing decision.”
“We do not agree that removing the congestion charge exemption for private hire drivers in London is indeed fair, nor going to reduce congestion.”
An exception will be made for vehicles that are wheelchair accessible, while those that meet certain requirements will be eligible for a new type of cleaner vehicle discount.
Richard Dilks, transport director at London First, said: “The congestion charge has cut traffic in the capital, but London’s roads are still grinding to a halt.
“While it’s right to address the impact of private hire cars, in isolation it is not enough. London is Europe’s second most congested city, and after 15 years of the charge it’s time to modernise the entire system to make sure it continues to work for the capital well in to the future. That includes looking at how to tackle congestion and emissions together, help freight be even more efficient, and make bus journeys faster and more reliable.”
(qlmbusinessnews.com via cnnmoney.com – – Wed, 12th Dec 2018) London, Uk – –
Dixons Carphone sank to a huge loss in its half-year result today, as a £500m writedown in its Carphone Warehouse division weighed the company and its share price down.
Dixons swung to a £440m loss for the six months to the end of October after paying out £490m in impairment charges for a restructure of its Carphone Warehouse arm, compared to a £54m profit before tax last year.
That compares to an underlying profit before tax of £50m for the firm, down from £73m in the same period of 2017.
Revenue grew one per cent year on year, or three per cent on a like-for-like basis, to £4.89bn.
Cash flow dropped by one third to £116m however as Dixons introduced new working capital phasing, while net debt piled up, from £206m last year to £274m now.
However, investors lost 39.7p per share, a far cry from their 4.5p earnings this time last year, while the dividend fell from 3.5p last year to 2.25p this year.
Shares fell by 10 per cent in early morning trading on the news.
Why it’s interesting
Dixons’ huge one-off loss relates to its restructure as it attempts to wean itself off its reliance on the troubled high street, which failed to benefit from November’s Black Friday spending spree.
The company is taking an impairment charge of £225m on its Carphone Warehouse business, along with £113m of charges for related assets and £6m against individual Carphone Warehouse stores.
Instead, new boss Alex Baldock wants to boost activity online, as well as introducing more flexible ways to pay for shoppers through credit plans.
“We're focusing on our core, and on four things that matter most: two big profitable growth opportunities in online and credit; revitalising our mobile business; and giving customers an easy experience,” Baldock said.
“We'll deliver these through capable and committed colleagues, working in one joined-up business, with strong infrastructure.
Dixons’ travails are evidence of further high street pain, according to Ed Monk, associate director of Fidelity Personal Investing’s share dealing service.
But he added that Dixons’ restructuring plan under new boss Alex Baldock could change its fortunes.
He also pointed to an employee share scheme Dixons announced, allowing staff with a year’s service to get up to £1,000 in company shares.
“That’s a sensible move as the company looks to differentiate itself from online rivals like Amazon, with better in-store service.”
What Dixons Carphone said
Alex Baldock, group chief executive, said:
“We believe that Dixons Carphone is now on the path to sustainable success. We have set a clear long-term direction that will deliver more engaged colleagues, more satisfied customers and a more valuable business for shareholders.
“We have powerful strengths, as a growing market leader with amazing people and capabilities no competitor can match. Our plan builds on those strengths. We're focusing on our core, and on four things that matter most: two big profitable growth opportunities in online and credit; revitalising our mobile business; and giving customers an easy experience. We'll deliver these through capable and committed colleagues, working in one joined-up business, with strong infrastructure.
“We're underway and investing in all of these, including giving our colleagues at least £1,000 of shares, making every colleague a shareholder. We strongly believe aligning and energising the business behind our strategy in this way will benefit customers and shareholders.
“There are headwinds and uncertainty facing any business serving the UK consumer, we've had our own challenges, and our plan will take time. But, with this plan, we can now see the way to unleashing the true potential of this business. We believe in our plan, are underway making early progress and determined to make it a lasting success.”
By Joe Curtis