IAG reports first profit since pandemic began

(qlmbusinessnews.com via bbc.co.uk – – Fri, 29th July 2022) London, Uk – –

British Airways owner IAG has swung back to profit for the first time since the beginning of the Covid pandemic, despite facing a “challenging” environment at Heathrow Airport.

The company said it had seen a significant increase in the number of flights and passengers it handled.

Operating profit for the second quarter hit £245m, compared with a loss of £809m in the same period last year.

But IAG also issued a warning about the state of the industry.


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Airlines and airports have faced significant disruption this year due to widespread worker shortages and industrial action.

“Our industry continues to face historic challenges due to the unprecedented scaling up in operations, especially in the UK where the operational challenges of Heathrow airport have been acute,” said Luis Gallego, IAG's chief executive.

The company – which also owns Iberia and Aer Lingus – said that these issues at Heathrow had forced British Airways to limit its capacity to 69.1% of pre-pandemic levels between April and June.

“We will continue working with the industry to address these issues as aviation emerges from its biggest crisis ever,” Mr Gallego said.

Between July and October, British Airways will ramp up its capacity to about 75%, IAG said.

It was the company's Iberia and Vueling brands that performed most strongly over the past three months, elevated by a robust demand for domestic flights within Spain, and routes to Latin America.

Last month, both were at higher levels than they were in 2019.

Mr Gallego said he hoped the airline would return to annual profitability this year, with demand showing no sign of weakening.

“In the second quarter we returned to profit for the first time since the start of the pandemic following a strong recovery in demand across all our airlines,” he said. “This result supports our outlook for a full year operating profit.”

“Our performance reflected a significant increase in capacity, load factor and yield compared to the first quarter.”

‘Bizarre'

British Airways has been forced to cancel nearly 30,000 flights this summer as it struggles with staff shortages and rebounding demand for air travel following the lifting of Covid restrictions.

This has been compounded by a lack of ground handling crew and ticketing agents at airports, many of whom were laid off during the pandemic and have not yet been replaced.


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A row broke out this week between Ryanair and Heathrow Airport, with the airline saying airports had not recruited enough staff to cater for the rebound in travellers, saying they “had one job to do to”

But Heathrow hit back at the criticism, labelling it as “bizarre”.

“Airports don't provide ground handling, that's provided by the airlines themselves. So this is like accusing us of not having enough pilots,” said the airport's chief executive John Holland-Kaye.

Women’s Sports Leagues and Crypto: An Overlooked Investment Opportunity?

(qlmbusinessnews.com via coindesk.com — Thur, 28th July 2022) London, Uk – –

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Fans of these leagues have a relatively high knowledge of cryptocurrencies, yet fewer crypto companies invest in female athletes and teams.

The crypto industry has turned to sports to educate the masses. Over the last few years, sponsorships in male sports leagues have popped up in large chunks. For example, soccer’s FIFA World Cup is sponsored by trading platform crypto.com, the National Basketball Association’s (NBA) Golden State Warriors is sponsored by crypto exchange FTX and the National Football League’s (NFL) Dallas Cowboys is sponsored by financial services company blockchain.com.


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But while crypto companies have raced to grow their presence in male-dominated sports leagues, the space has not expanded as fast in the women's. Could this be because crypto is a male-dominated industry? Possibly. But by engaging with women’s leagues, an industry that is growing exponentially, the crypto economy also has enormous opportunity to educate new fanbases.

Women’s sports – an emerging target for investment?

In 2020, women’s sports globally received less than $1 billion in sponsorships, while $467 billion went towards men’s and mixed sports (including Olympic and Grand Slam tennis events). This enormous inequity is astounding, especially given the fact that women’s sports in the United States alone have enormous returns and active engagement from fans.

According to a Nielsen report, sponsorships in women’s sports have gone up by 146% since 2018, indicating that there is vast momentum and a dedicated audience following women’s leagues. Fans of women’s sports are also 25% more likely to buy sponsored products than fans of men’s sports, adding to a widespread sentiment that women’s sports fans are fiercely loyal to their favorite athletes and teams.


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These stats, combined with surveys showing that sports fans have a higher degree of understanding of what cryptocurrencies are, makes breaking into the female leagues that much more pertinent for the crypto industry. A poll from 2021 by the Morning Consult, showed that sports fans are twice as likely as non-sports fans to have some knowledge about Bitcoin or Ethereum, and three times as likely to say they are very familiar with the workings of the crypto ecosystem. Overall, 47% of respondents (who are sports fans) said they are very familiar with crypto, compared to 39% of U.S. adults and 23% of non-sports fans.

But when you break down the audiences and their awareness of the crypto industry, those that are loyal to “niche leagues,” such as women’s leagues, follow the crypto industry more intently than those who actively follow the big four leagues: the NBA, NFL, National Hockey League and Major League Baseball.

By Margaux Nijkerk

Lloyds set aside £377m for loan defaults as profits takes a hit

 

(qlmbusinessnews.com via news.sky.com– Wed, 27th July 2022) London, Uk – –

The country's biggest mortgage lender commits to helping customers navigate the challenges ahead, as rising interest rates complicate the country's cost of living headache but bolster the bank's profitability.

Lloyds Banking Group has set aside £377m to cover a possible increase in loan defaults as interest rates rise in the tough economy.


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The bank, which includes Halifax in its stable of brands, revealed pre-tax profits of £3.7bn for the first six months of the year.

It was better than analysts had predicted, but down from the £3.9bn achieved in the same period last year.

Since then, soaring inflation has taken hold and the Bank of England has raised Bank rate five successive times since last December in a bid to tackle elements of the surge in prices.

A consequence of that effort is higher borrowing costs.

Millions of mortgage customers were immediately hit, with those on tracker and standard variable rate deals seeing their payments rise sharply, while those on fixed rates have also suffered at the end of their terms.

At the same time, there has been no let-up in inflation, which is currently at a 40-year high of 9.4% and predicted to breeze past 11% in the autumn, exacerbating the cost of living crisis.

The Bank said it was seeing increasing signs of customer caution, but was yet to see a rise in borrowers falling behind with repayments.

Despite its provision for the growing threat of loan defaults, Lloyds raised its guidance for 2022 as a whole – thanks to rising rates.

It raised forecasts on a key measure of profitability, return on tangible equity, to 13% from the figure above 11% that was expected in March.

Govt mulls 50-year mortgages

Shares – down almost 9% in the year to date – rose 5% at Wednesday's open in response.

Analysts also credited a 20% lift in the bank's dividend to 80p a share.

Chief executive Charlie Nunn told investors: “While the world has changed significantly since February, our strategic focus remains clear and disciplined.


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“Our strong financial performance demonstrates the resilience of our business model and customer relationships, and has enabled us to enhance guidance for 2022.

“Just as we remain well-placed to withstand the current macroeconomic uncertainty and continue to generate significant capital for our shareholders, so too do we remain committed to maintaining the support we give to our customers every day as they adapt to the challenges they face.”

 

McDonald’s cheeseburger price increase for the first time in 14 years

 

(qlmbusinessnews.com via news.sky.com– Wed, 27th July 2022) London, Uk – –

McDonald's has put up the price of its cheeseburger for the first time in more than 14 years, due to growing cost pressures.

The fast food chain said its UK restaurants would be adding between 10p and 20p to a number of items.

The price of a cheeseburger has increased from 99p to £1.19.

Companies are facing increased costs for things like fuel, wages and ingredients, with prices rising at their fastest rate for 40 years.


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In an email to customers, McDonald's UK and Ireland chief executive Alistair Macrow said the company was facing “tough choices” about its prices.

“We understand that any price increases are not good news, but we have delayed and minimised these changes for as long as we could,” he said, adding that some prices were unaffected.

Some prices will continue to vary across different restaurants as some are operated by franchisees, who can set prices based on recommendations from McDonald's.

Other items that are increasing in price include breakfast meals, large coffees, McNugget share boxes and upgrades from medium to large meals, the company said.

If the price of a McDonald's cheeseburger had increased in line with inflation it would now cost £1.41.5

McDonald's has more than 36,000 restaurants in more than 100 countries.

On Tuesday, it said it was considering whether to add more discounted menu options because the increased cost of living, particularly in Europe, was leading to some lower-income customers buying cheaper items and fewer big combination meals.

It came as the company reported a jump in global sales of 9.7% for the three months to the end of June, compared with the same period last year.

The war in Ukraine has pushed up the cost of fuel and food, with UK inflation – the rate at which prices rise – hitting 9.4% in June, the highest level for more than 40 years.

Some firms are also having to increase wages to attract and retain staff, with job vacancies at near record highs. However, pay increases are not keeping up with the growing cost of living.


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Companies around the world are facing cost pressures, with other countries also affected by high inflation.

Amazon is the latest firm to announce it is increasing prices for customers due to higher costswith the price of its Prime subscription service rising by £1 a month from September.

KitKat maker Nestle, Marmite maker Unilever and bakery chain Greggs are among those which have already increased prices this year.

By Becky Morton

 

Amazon UK Prime subscription service to increase by £1 from September

(qlmbusinessnews.com via theguardian.com – – Tue, 26th July 2022) London, Uk – –

Monthly subscription to increase by 12.5% to £8.99 in latest sign of rising delivery costs

Amazon is to increase the price of its monthly Prime subscription service by 12.5% – or £1 – to £8.99 from September in the latest sign that delivery costs are rising.

The company said the cost of an annual Prime package, which includes unlimited deliveries for online shopping, access to its video and music streaming services and its Amazon Fresh grocery deliveries, would rise by more – 20%, or £16 – to £95, although this remains a discount on the monthly option.


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Amazon said the rise in fees, which will be implemented as members’ contracts come up for renewal from 15 September, was the first since 2014 and came after a series of improvements in its Prime service.

“We have increased the number of products available with fast unlimited Prime delivery, recently added ultra-fast fresh grocery delivery, and have significantly expanded our high-quality digital entertainment, including TV, movies, music, games, and books,” a spokesperson said.

They added that Prime Video had tripled the amount of original Amazon content since 2018, with series including The Boys and The Terminal List, and UK-produced shows such as Clarkson’s Farm and Backstage With Katherine RyanThe service has also added access to Premier League football and Autumn Nations rugby in the UK and will launch The Lord of the Rings: The Rings of Power series in September.

Half of all UK consumers over the aged of 16 – or about 27 million people – are thought to have access to Prime as the service rapidly expanded during the pandemic, when high-street retailers were forced to close for long periods.

More than a third of UK over-16s, about 19 million people, are estimated to be individual members, up from 31% or 15 million in 2019, according to the market research firm Mintel. Prime membership peaks among younger consumers, with almost two-thirds (64%) of 16-34s now having access to the service.

Prime delivery is the most used service, but the video streaming service grew the fastest during the pandemic, with 62% of members regularly using it in 2020, according to Mintel. In contrast, just 7% used the Amazon Fresh grocery delivery service.


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The price rise comes as online retailers and streaming services look for ways to offset inflation in delivery costs and growing difficulties with handling returned goods.

In March, Netflix said it was increasing the cost of its basic and standard plans by £1 a month to £6.99 and £10.99 respectively, while the premium tier will go up by £2 to £15.99. Apple Music is also increasing the cost of its student plan by £1 to £5.99, while the cost of Disney+ has risen by £2 a month to £7.99.

By Sarah Butler

KPMG escapes record fine over Carillion, Regenersis audit checks

(qlmbusinessnews.com via uk.reuters.com — Tue, 26th July 2022) London, UK —

KPMG was fined 14.4 million pounds ($17.27 million) on Monday after the accounting firm admitted to providing false and misleading information to its regulator during spot checks on audits of construction firm Carillion and outsourcing firm Regenersis.

The Financial Reporting Council, the regulator involved, also ordered KPMG to appoint an independent reviewer into the firm's current Audit Quality Review (AQR) policies and procedures.


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KPMG would have been fined 20 million pounds had it not earned a discount for self-reporting the incidents, co-operating with the FRC and admitting to the misconduct, the FRC said.

Without the discount, the fine would have been the largest FRC fine ever, eclipsing Deloitte's 15 million pound penalty in September 2020 for an audit of software company Autonomy.

KPMG, one of the world's “Big Four” auditing firms, also paid 3.95 million pounds towards the costs of the FRC and Tribunal.

Five KPMG employees had challenged FRC allegations of misconduct relating to the audits, but an independent Tribunal found against them. A sixth employee settled hours before Tribunal hearings began in January.

The FRC had told the hearing that the former KPMG employees had “forged” and “manufactured” missing documents which had been requested by the regulator.

“The seriousness of the misconduct that we have found proved scarcely needs explanation,” the Tribunal said.

KPMG faced the same allegations as its employees because it is liable for their conduct.

Four of the five staff who took part in the Tribunal hearing were fined between 30,000 and 250,000 pounds, and banned from the profession for between seven and 10 years. The fifth person was severely reprimanded but escaped a fine.

“I accept the findings and sanctions of the tribunal in full,” said KPMG's chief executive in the UK, Jon Holt.


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Since the incidents, KPMG said it has worked hard and with complete transparency to the FRC, to assure itself that the behaviour of the individuals concerned does not reflect the wider culture of the firm, Holt said.

The FRC is still investigating KPMG's audit of Carillion, whose collapse sparked reviews on how to improve auditing standards.

By Huw Jones

Barclays snaps up stake in $2bn cryptocurrency firm Copper

(qlmbusinessnews.com via news.sky.com– Mon, 25th July 2022) London, Uk – –

Copper, which is advised by Lord Hammond, the former chancellor, is raising funds from existing and new investors including the giant UK lender, Sky News learns.


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Barclays is taking a stake in Copper, one of the most prominent names in the fast-evolving cryptocurrency sector, even as the industry continues to be rocked by a swathe of bankruptcies.

Sky News has learnt that the UK-based bank is among a crop of new investors joining a funding round for Copper, which counts former chancellor Lord Hammond among its advisers.

City sources said Barclays was expected to invest a relatively modest sum in the millions of dollars as part of the round.

The fundraising is expected to be finalised within days.

Copper provides custody, prime broking and settlement services to institutional investors deploying money into crypto assets.

The company, founded by Dmitry Tokarev in 2018, has drawn investors from big names in the global venture capital sector, such as LocalGlobe, Dawn Capital and MMC Ventures.

A number of major market participants, including Three Arrows Capital and Celsius, have filed for bankruptcy in recent weeks, undermining confidence in the industry's previously breakneck growth.

Copper has also grown frustrated with the approach of UK financial regulators, prompting it to establish a hub in Switzerland instead.

Barclays and Copper declined to comment.

 

Embattled property giant Evergrande faces deadline after bosses quit

(qlmbusinessnews.com via bbc.co.uk – – Mon, 25th July 2022) London, Uk – –

Embattled Chinese real estate giant Evergrande is expected to deliver a preliminary restructuring plan this week, following the exit of two bosses.

The firm says its chief executive and finance head have resigned, after an internal probe found that they misused around $2bn (£1.7bn) in loans.

Evergrande has more than $300bn in liabilities and defaulted on its debts late last year.


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The crisis has spooked traders who fear contagion in China's property sector.

On Friday, Evergrande said it found that chief executive Xia Haijun and chief financial officer Pan Darong were involved in diverting 13.4bn yuan ($2bn; £1.7bn) in loans secured by its property services unit to the wider group.

The firm said in a filing to the Hong Kong Stock Exchange that Mr Xia and Mr Pan had resigned because of their “involvement in the arrangement of the pledges”.

In a separate statement, it said the funds “were transferred and diverted back to the group via third parties and were used for the general operations of the group”.

Evergrande added that it was in talks with its property services unit over a repayment plan.

A $2.6bn deal to sell a majority stake in the unit to a rival developer fell through in October.

Evergrande, which is the world's most indebted property developer, had been struggling to make payments on its over $300bn of liabilities and missed a crucial repayment deadline on its offshore debt in December.

Its shares have fallen by more than 75% over the last year in Hong Kong and have been suspended from trading for months.

The company is scheduled to announce a preliminary plan to restructure its debts before next week.

China's property crisis is estimated to have wiped more than a trillion dollars off the value of the sector last year.

The very serious potential fallout from Evergrande collapsing has led some analysts to suggest that Beijing may step in.

On Monday, Japanese banking giant Nomura said “an increasing number of developers have failed to repay their debt and continue their construction works” since the Evergrande crisis.

Also on Monday, it was reported that China was planning to start a real estate fund to support more than a dozen property developers, including Evergrande.

The fund could be worth up to 300bn yuan, according to reports.

Home sales in China have fallen for 11 consecutive months, official data shows. That is the longest slump since China created a private property market in the late 1990s.

Several Chinese developers have halted the construction of homes that had already been sold, because of concerns over cash flow.

In recent weeks, some home buyers have threatened to stop paying their mortgages until the work restarts.


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More than 200 projects by at least 80 developers have been affected, according to the Shanghai-based E-house China Research and Development Institution.

The China Banking and Insurance Regulatory Commission has pledged to help local governments in “guaranteeing the delivery of homes,” state media reported.

 

Why Companies Like Amazon Embrace Burning Waste as Part of a Growing Movement towards “zero landfill”

Source: CNBC

Burning waste to make energy is a $10 billion industry in the U.S., and the fastest growing part of the business is waste from big companies like Amazon, Subaru, Quest Diagnostics and American Airlines. They’re part of a growing corporate movement toward “zero landfill” as pressure mounts to reach sustainability requirements. CNBC got an inside look at a waste-to-energy plant where trash is incinerated to power 18,000 homes in northern California.

 


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Gas supply via Nord Stream 1 pipeline restarted to Europe by Russia

(qlmbusinessnews.com via news.sky.com– Fri, 2 2nd July 2022) London, Uk – –

By

The pipeline restarts after the EU warns a “full cut-off” of Russian gas flows is a “likely scenario” for which the continent needs to be ready.

Moscow has allowed gas to flow through the biggest pipeline between Russia and Germany after it was cut off for 10 days – as the UK warned Vladimir Putin's forces were closing in on Ukraine's second biggest power plant.

The Nord Stream 1 gas pipeline has restarted after concerns Moscow would use its vast energy exports to push back against Western pressure over its invasion of Ukraine.


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Gas stopped flowing through the pipeline while it was undergoing annual maintenance, and while it has now resumed, the gas flow is expected to fall well short of full capacity.

Europe remains braced for possible further supply cuts during an economic tit-for-tat with the Kremlin.

Concerns that Russian supplies of gas sent through the Nord Stream 1 pipeline could be stopped by Moscow prompted the European Union to tell member states on Wednesday to cut gas usage by 15% until March as an emergency step.


ANALYSIS: By Adam Parsons

EUROPE'S RELIEF OVER NORD STREAM EXPOSES AN AWKWARD TRUTH

The reopening of Nord Stream will come as a great relief to many, not least the German government.

Europe's richest country is slowly weaning itself away from Russian gas, but that process will take time and a certain amount of ingenuity.

The question, though, is whether President Putin will allow such flexibility.

The Kremlin wants the huge amounts of money it gets from selling gas to Europe, which goes towards financing the war in Ukraine.

Switching off the Nord Stream tap would have big economic repercussions in both Germany and Russia so President Putin now has a curious balance to draw, between causing Europe pain and drawing out as much money as he can.

The European Commission is desperately trying to persuade its members to adopt a Plan B – measures to limit the use of energy and so end that dependence on Russian supplies.

But even if that's adopted (and no, that isn't guaranteed), it will take time.

The awkward truth is that, for the moment at least, Europe would struggle to cope if Russian pipelines, including Nord Stream, were turned off.

UK warns Russia is trying to capture key Ukrainian power plant

Meanwhile, the UK's Ministry of Defence has warned Russian forces are likely closing in on Ukraine's second biggest power plant at Vuhlehirska in Donetsk.

In its regular bulletin, British military intelligence said Russia is “prioritising the capture of critical national infrastructure, such as power plants”.

It added that Russia is probably attempting to break through at Vuhlehirska as “part of its efforts to regain momentum on the southern pincer of its advance towards the key cities of Kramatorsk and Sloviansk”.

Russia warns West not to supply Ukraine with weapons

The MoD's warning comes as Russia's Foreign Minister Sergei Lavrov said the Kremlin's goals had expanded during the five-month war.

Mr Lavrov told state news agency RIA Novosti on Wednesday that Russia's military “tasks” in Ukraine now go beyond the eastern Donbas region.

He also said Moscow's objectives will expand further if the West keeps supplying Kyiv with long-range weapons such as the US-made High Mobility Artillery Rocket Systems (HIMARS).

“That means the geographical tasks will extend still further from the current line,” he said, adding peace talks made no sense at the moment.

However, Kremlin spokesman Dmitry Peskov later told RIA that Moscow is not closing the door on talks with Kyiv despite Mr Lavrov's comments.

Russia has touched ‘every square metre of Luhansk'

On the battlefront, the Ukrainian military reported heavy and sometimes fatal Russian shelling amid what its says were largely failed attempts by Moscow's ground forces to advance in the Luhansk and Donetsk regions that make up the Donbas.

“In the Luhansk region, there is probably not a single square metre of land left untouched by Russian artillery,” Serhiy Gaidai, the regional governor said.

“Shelling is very intense. They stop only when the metal ‘gets tired'.”

In the previous 24 hours, Ukrainian forces said they had killed more than 100 Russian soldiers in the south and east and destroyed 17 vehicles, some of them armoured.

The Russian-installed administration in the partially occupied Ukrainian region of Zaporizhzhia said Ukraine had conducted a drone strike on a nuclear power


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Russia's invasion has killed thousands, displaced millions and flattened cities, particularly in Russian-speaking areas in
the east and southeast of Ukraine.

It has also raised global energy and food prices and increased fears of famine in poorer countries as Ukraine and Russia are both major grain producers.

The United States estimates that Russian casualties in Ukraine so far have reached around 15,000 killed and perhaps 45,000 wounded, CIA Director William Burns said on Wednesday.

 

UK watchdog fines Pfizer, Flynn Pharma $84 mln for overcharging NHS

(qlmbusinessnews.com via uk.reuters.com — Thur, 21st July 2022) London, UK —

Pfizer (PFE.N) and Flynn Pharma were fined a total of 70 million pounds ($84 million) on Thursday by Britain's antitrust watchdog for overcharging the National Health Services (NHS) for a life-saving epilepsy drug.

The Competition and Markets Authority (CMA) in 2016 had fined Pfizer and Flynn about 90 million pounds for inflating prices for Epanutin by as much as 2,600% to 67.50 pounds for a 100mg pack before the companies won a 2018 appeal against the penalty.


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The Competition Appeal Tribunal had referred the matter back to the CMA, which in August 2021 stuck to its view that the two firms broke the law.

In September 2012, Pfizer sold the UK distribution rights for Epanutin to Flynn. Before that, Pfizer was selling phenytoin sodium capsules to UK wholesalers and pharmacies.

Both Pfizer and Flynn Pharma said they intend to appeal the CMA decision.

“Surprised and disappointed at the Competition and Markets Authority (CMA) issuance of a further (second) Decision finding an abuse of competition law on the part of Flynn,” the company said in a statement emailed to Reuters.

Epanutin is a life-saving drug which is used to control a variety of epileptic conditions, or prevent seizures during or after brain surgery or severe head injury.

The regulator added that the firms have been overcharging for more than four years.


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It said that spending by Britain's NHS on the capsules, containing phenytoin sodium, jumped to about 50 million pounds in 2013 from about 2 million pounds a year earlier.

Reporting by Sinchita Mitra in Bengaluru

Crypto Exchange KuCoin Raises $10M From Susquehanna to Fund Hiring, Growth Plans

(qlmbusinessnews.com via coindesk.com — Thur, 21st July 2022) London, Uk – –

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KuCoin and SIG will also collaborate in incubation and ecosystem building for crypto startups through incubation, investment, and technical consultation.

Crypto exchange KuCoin has raised over $10 million in a strategic investment from Susquehanna International Group (SIG), the company told CoinDesk on Thursday.


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KuCoin and SIG will also collaborate in incubation and ecosystem building for crypto startups through incubation, investment, and consultation, especially the projects built on the KCC chain, the blockchain network backed by KuCoin.

KuCoin will use the funds to upgrade platform infrastructure and enrich the product lineup to prepare for the next bull run. The capital will also support KuCoin’s global expansion and hiring plan, with over 300 job openings as of July 21.

“KuCoin has been through a few crypto cycles, and we are committed to building no matter what,” Johnny Lyu, the CEO of KuCoin, stated. “The support of SIG will solidify our leading role as a centralized exchange and facilitate our ecosystem expansion in the decentralized Web 3.0 world.”

Lyu told CoinDesk that the funds would allow KuCoin to continue the research and development, incubation, and mentorship programs that support crypto startups.


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“Part of the funds will also be used to support the development and improvement of the KCS and KCC ecosystems with a focus on social aspects, DAO infrastructure, and decentralized communities,” Lyu added.

The move follows a $150 million venture funding round led by Jump Crypto through a pre-Series B in May 2022 at a total valuation of $10 billion.

By Shaurya Malwa

 

Netflix subscribers quitting the streaming service hits almost a million

(qlmbusinessnews.com via bbc.co.uk – – Wed, 20th July 2022) London, Uk – –

After enjoying a long reign as the king of streaming, Netflix faces a tough fight to keep its crown.

It lost almost 1m subscribers between April and July, as the number of people quitting the service accelerated.

But that was not as many as the streaming giant had feared.

Asked what may have stopped subscriptions sliding further, the firm's chief executive, Reed Hastings, said: “If there was a single thing, we might say ‘Stranger Things.'”

The new season of the hit drama has been a phenomenal success, and may have helped stem the exodus of Netflix customers.

The company reported its first subscriber loss since 2011 in April, news that was followed by hundreds of job cuts and a sharp drop in its share price.

Rivals are challenging its dominance, while price hikes have taken a toll.


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The subscriber losses reported on Tuesday were the biggest in the firm's history, with the US and Canada home to the highest number of cancellations in the quarter, followed by Europe.

Guy Bisson, executive director at Ampere Analysis, said it was “inevitable” that Netflix would start to see its grip on the market loosen.

“When you're the leader, there's only one direction to go, especially when a large amount of competition launches, which is what Netflix has seen in the last couple of years,” he said.

It is a stark change for Netflix, which enjoyed years of seemingly unstoppable growth, as it revolutionised the way people around the world consumed entertainment.

Its position as a global behemoth was cemented when the pandemic hit in 2020 and people, stuck at home with few other options for entertainment, flocked to monster hits like Squid Game and The Crown.

But as pre-pandemic habits return, Netflix has struggled to attract new sign-ups – and maintain the loyalty of existing members, especially as the cost of living crisis leads to belt tightening.

The company also faces fierce competition from the likes of Apple TV, HBO Max, Amazon Prime and Disney+. Netflix was once the disruptor, making video rental stores like Blockbuster redundant. But the disruptor is fast becoming the disrupted.

Netflix's move to make its service more expensive has also put off some customers.

Price hikes more ‘risky'

A “standard” plan in the US – which allows people in the same home to watch on two devices simultaneously – now costs $15.49, up from $14 in January and just $11 in 2019.

In the UK, basic and standard plans have both increased since January by £1 a month to £6.99 and £10.99 respectively.

“At some point, yes, they're going to reach a threshold where a significant number of people say enough is enough,” Mr Bisson said. “Because of the additional choice… price hikes are a more risky strategy.”

For now, surveys suggest that Netflix is managing to lure back a higher share of deserters than its rivals. Many households also continue to identify it as the streaming option they would retain if forced to have only one.

In all, the company had roughly 220 million subscribers at the end of June – still well north of its closest competition.

But the company, long accustomed to posting double digit growth, is grappling with its most serious slowdown in years, with revenue in the April-June quarter of $7.9bn, up just 8.6% year-on-year.

The firm's share price has dropped more than 60% so far this year, as investors sour on its prospects.

“Netflix's subscriber loss was expected but it remains a sore point for a company that is wholly dependent on subscription revenue from consumers,” said Insider Intelligence analyst Ross Benes.

“Netflix is still the leader in video streaming but unless it finds more franchises that resonate widely, it will eventually struggle to stay ahead of competitors that are after its crown.”

Shares climbed more than 7% in after-hours trade on relief that the losses were not larger. The firm had warned it could lose as many as two million subscribers.

Netflix has said it will jumpstart growth with a new ads-supported service and by clamping down on password sharing – which one study estimated was costing Netflix $6bn a year.

It is already charging more for sharing accounts in some countries in central and South America. It hopes to replicate this model around the world.

However, the company has known about problems with passwords sharing for years, and has so far failed to find a solution.

In its shareholder update, the company said it was “encouraged by our early learnings and ability to convert consumers to paid sharing in Latin America”.

It said it expected its less expensive, ad-supported option to launch in early 2023, starting in “a handful of markets where advertising spend is significant”.

“Like most of our new initiatives, our intention is to roll it out, listen and learn, and iterate quickly to improve the offering,” the company said.

The ad service has the potential to attract both existing customers inclined to cancel over price hikes, as well as new households hesitant to commit to a subscription, Mr Bisson said.

It should be possible for Netflix to make the same amount of money – or more – per user than it did by relying on subscriptions, he added.

Strong content critical

“Assuming they get it right – and by getting it right I mean the price … and the amount of advertising on it – then it's potentially a strong strategic move for them,” he said.

But he said Netflix's most critical task is ensuring it has strong material for people to watch – a job that has grown harder as it pushes to reach an increasingly broad audience.

New sign-ups in the US, for example, are coming from an increasingly older crowd, with different tastes than the younger viewers who were early streaming converts.

“They're increasingly competing for that generalist audience, so the breadth of content that is needed becomes much wider and that's why I think people are saying ‘there's now a lot of stuff I don't like',” Mr Bisson said. “It's a very big challenge.”


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Netflix needs “more frequent hits”, said Eric Steinberg of Whip Media, adding that Netflix also has room to experiment staggering its releases to keep a hold on its subscribers.

The company has already taken steps in that direction by releasing episodes of the fourth season of Stranger Things in two batches this year, but the “pressure is on” he said.

“They don't have the sandpit to themselves anymore,” he said. “In an inflationary environment like the one we're in and also great programming [at the competition], people are going to re-evaluate how much they're willing to pay.”

By Natalie Sherman & James Clayton

 

Iran and Russia’s Gazprom sign $40 billion energy deal

(qlmbusinessnews.com via uk.reuters.com — Tue, 19th July 2022) London, UK —

The National Iranian Oil Company (NIOC) and Russian gas producer Gazprom (GAZP.MM) signed on Tuesday a memorandum of understanding worth around $40 billion, Iran's oil ministry's news agency SHANA said.

The deal was signed during an online ceremony by the CEOs of both companies on the day Russian President Vladimir Putin arrives in Tehran for a summit with his Iranian and Turkish counterparts.


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Gazprom will help NIOC in the development of the Kish and North Pars gas fields and also six oil fields, according to SHANA. Gazprom will also be involved in the completion of liquefied natural gas (LNG) projects and construction of gas export pipelines.

Iran sits on the world’s second-largest gas reserves after Russia, but U.S. sanctions have hindered access to technology and slowed development of gas exports.

Putin's visit to Tehran is being watched closely as Russia's invasion of Ukraine has reconfigured the global oil and gas market, pushing prices to high levels which contribute to higher living costs and rising consumer inflation.

Reporting by Bozorgmehr Sharafedin

Nasstar-owner prepares £500m sale of cloud services provider

 

(qlmbusinessnews.com via news.sky.com– Mon, 18th July 2022) London, Uk – –

Mayfair Equity Partners has hired bankers to oversee a sale next year of a company which counts Eurostar and the Ministry of Defence among its clients, Sky News understands.

The owner of one of Britain’s biggest providers of managed cloud services is to begin exploring a £500m-plus sale of the business.

Sky News understands that Mayfair Equity Partners has hired investment bankers to prepare a review of strategic options for Nasstar.


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City sources said on Sunday that Raymond James had been appointed to oversee the review.

A sale process is expected to take place next year, with interest anticipated from strategic buyers and financial investors.

Nasstar designs, implements and manages hybrid connected multi-cloud solutions and communication platforms for enterprise and public sector customers.

Clients include Eurostar, the NHS, EE, and the Ministry of Defence.

People close to the company say it has been playing an important role in clients' transition to digitally led operations as they adapt to hybrid-remote working.

Estimates suggest that the global public cloud computing market is worth close to $370bn and is expected to grow rapidly until the end of the decade.

Last year, Nasstar recorded £114m in revenue and £22.1m in earnings before interest, tax, depreciation and amortisation, with the latter nearly doubling from the prior year – driven by a string of acquisitions and the launch of additional services.

Mayfair's original investment in the group now called Nasstar took place in 2018, when the private equity firm led a management buyout of GCI Group from chairman Wayne Martin and the bank-backed Business Growth Fund.

Since then, the business has become a broader technology services provider, buying Modality in 2019, Nasstar the following year and KCOM's national ICT Services business in 2021.


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Two years ago, Wayne Churchill, a former Easynet Group executive, joined Nasstar to lead its transformation.

The company now employs more than 1,000 people.

Mayfair's preparations for a sale of Nasstar follow a flurry of deals in the broader industry, including Version1's sale to Partners Group for £675m, and Providence Equity Partners' acquisition of Node4 for roughly £300m.

A Mayfair spokesman declined to comment.

By Mark Kleinman

Starbucks explores UK business sale, reports say

(qlmbusinessnews.com via bbc.co.uk – – Mon, 18th July 2022) London, Uk – –

Starbucks is reportedly exploring a potential sale of its UK business as it faces increasingly tough competition and changing customer habits.

However, a “formal sales process” has not been started, according to media reports.

The world's biggest coffee chain has been hit hard by lockdown measures around the world.


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In May, the company said it is “single-mindedly focused on enhancing our core US business”.

The firm will continue to “evaluate strategic options” for its company-owned international operations, according to the Times, which first reported the story.

Starbucks has taken on advisers Houlihan Lokey to explore possible options for the business, it added

The coffee chain did not immediately respond to a BBC request for comment.

Like much of the food and drinks takeaway industry, Starbucks was hit hard by measures to slow the spread of Covid-19.

Along with its rivals, it is also dealing with rising cost as well as having to adapt to customers' changing habits as many people shift to hybrid work from home schedules.

The company is also facing increased competition in the UK from rival coffee chains including Costa, Pret A Manger and Tim Hortons.

Starbucks oversees around 1,000 outlets in the UK, of which about 70% are franchises while the remainder are owned by the firm.

The group is currently in the process of finding a new permanent chief executive, while former chief executive Howard Schultz took over the role temporarily.

In the US, the company has also been dealing with recent efforts by some of its workers to unionise.


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In May, Starbucks said it would leave Russia after 15 years in the country due to the war in Ukraine.

The firm said that it would retreat entirely from the Russian market, after suspending trading there in March.

Starbucks entered Russia in 2007 and had grown to include 130 coffee shops, owned and operated by a licensee.

Caesars Palace Las Vegas $30K A Night Villa

Source: CNBC

The Titus Villas has hosted some of the biggest names in the world and we got to take a look at the level of luxury they enjoy during their stay. From an outdoor pool to butlers on-call 24 hours a day, the amenities are endless for those willing to pay the price of $30,000 a night.

Amazon to create over 4,000 new permanent jobs in the UK this year

(qlmbusinessnews.com via news.sky.com– Fri, 15th July 2022) London, Uk – –

The online marketplace says the new roles will include work at fulfilment centres to be opened in Wakefield and Knowsley.

Amazon says it will create more than 4,000 new permanent jobs in the UK this year.

The company said this would bring its permanent workforce to 75,000.


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The roles will be spread across the UK and include work at new fulfilment centres, where employees pack and ship customer orders, in Wakefield and Knowsley.

They include jobs in corporate, technology, software development, product management and engineering, as well as in operations teams.

“We're continuing to invest in talent right across the UK, from apprentices in Swansea to data scientists in Edinburgh,” said John Boumphrey, Amazon UK country manager.

“People join us not just for the wide variety of roles, great pay and benefits, but for the career development opportunities we provide.”

“Applicants recognise we are an employer that offers great development potential, and we are proud to have so many employees growing and taking the opportunity to learn new skills that will create paths to new jobs at Amazon and beyond,” Mr Boumphrey said.


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Also on Thursday, Amazon said that shopping during its Prime Day event jumped 8.5% from last year to nearly $12bn (£10.1bn).

The two-day event, which finished on Wednesday, saw members of the Prime loyalty programme buy more than 300 million items – 100,000 a minute.

 

Apple iPhone 13 continues to sell well as smartphone market stumbles, sources say

(qlmbusinessnews.com via uk.reuters.com — Thur, 14th July 2022) London, UK —

The global smartphone market may be in the toilet, but the iPhone 13 continues to sell well, and Apple Inc (AAPL.O) is expecting its upcoming iPhone 14 to do even better at launch.

Apple's slightly higher expectations for the forthcoming iPhone 14 underscore a growing belief among Wall Street analysts that the Cupertino, California company's sales are likely to hold up better than the broader smartphone industry if major economies enter a recession.


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Apple, which reports its fiscal third quarter earnings on July 28, conveyed its expectations to suppliers in initial forecasts as it carries out trial production of the iPhone 14, sources with direct knowledge of the matter told Reuters.

With Apple sitting at the higher end of the market, analysts believe that inflation in core items like food and fuel have taken a lesser toll on its relatively affluent user base. That comes as industry watchers such as Fubon Securities Investment Services Co chairman Charles Hsiao believe demand for consumer electronics will slow overall this year and next.

An economic slowdown in China has already taken a huge bite out of the smartphone market, pulling global sales down 10% year over year to 96 million units in May, the most recent month for which full figures were available, according to Counterpoint Research. It's only the second time in nearly a decade that the monthly figure has slipped below 100 million handsets, the firm said.

But two iPhone supply chain sources with direct knowledge of the matter told Reuters that iPhone sales have continued to do well in July despite signs of cooling market demand for other smartphone makers.

“Others are starting to take a hit,” one of the sources said.

The second source said July shipments for the iPhone 13 from one factory were a third higher than July last year. That pattern was especially unusual because sales of current iPhone models tend to slow down in July and August as consumers await new models that Apple traditionally releases in September.

“Judging by shipment, sales of iPhone 13 are fairly good,” the second source said.

The iPhone has continued to sell well late into its cycle in part because “China demand rebounded sharply after lockdowns ended and the iPhone was a beneficiary” of a June shopping holiday in China, Cowen analyst Krish Sankar wrote in a note to clients.

In keeping with its annual schedule, Apple has started trial production of the iPhone 13's successor with the goal of ramping up mass production in August so the devices can start shipping in the fall. The initial shipment forecasts Apple has given suppliers is “slightly higher” than that of iPhone 13 a year ago, the second source said.

“It’s slightly higher than last year. It’s good, but not explosively good,” the second source said.

For the just-ended fiscal third quarter, some Wall Street analysts are bracing for a slight decline in iPhone 13 shipments even if volumes are higher at some individual factories. But analysts still expect the iPhone to fare better than rivals. Cowen, for example, expects Apple handset shipments to be down about 1% for the just-ended quarter, while overall handset shipments could be down as much as 13%.

The divergence between Apple and the Android market is rippling through Apple's supply chain.

“For Samsung’s display unit, a better-than-expected performance in Q2 is expected due to shipments for iPhones, which is the only smartphone with strong sales,” said Song Myung-sup, analyst at HI Investment & Securities.


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Cowen held steady its “outperform” rating on shares of chipmaker Skyworks Solutions Inc (SWKS.O), noting that it gets about 55% of its revenues from Apple for a radio chip in the iPhone. Skyworks rival Qorvo Inc (QRVO.O), by contrast, gets 30% of its revenue from Apple and has greater exposure to the Android phone market. Cowen downgraded Qorvo to “market perform.”

“Skyworks’ greater relative exposure to Apple in its mobile business likely insulates the company in the near term from significant impacts associated with … downward demand revisions,” Cowen analyst Matt Ramsay wrote in a note to clients.

Reporting by Stephen Nellis , Ben Blanchard, Liang-sa Loh and Yi-Mou Lee and Joyce Lee

Netflix to partner with Microsoft to offer cheaper streaming with adverts

(qlmbusinessnews.com via theguardian.com – – Thur, 14th July 2022) London, Uk – –

Platform belatedly follows rivals in appealing to cash-strapped consumers as it loses subscribers

Netflix has partnered with Microsoft to launch a cheaper subscription plan showing adverts in an attempt to appeal to cash-strapped consumers seeking to cut back on costs.


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The streaming platform first announced plans to launch a cheaper service – giving subscribers the chance to pay less in return for viewing ads – in April after reporting the first loss of subscribers in a decade, wiping almost $60bn (£51bn) off its market value.

Greg Peters, the Netflix chief operating officer, said: “Microsoft has the proven ability to support all our advertising needs as we work together to build a new ad-supported offering.

“More importantly, Microsoft offered the flexibility to innovate over time on both the technology and sales side, as well as strong privacy protections for our members.”

Netflix’s surprise move to belatedly follow rivals such as Hulu, HBO Max and Paramount+ by launching an ad-supported package this year is expected to precede the announcement next week of a further loss of 2 million global subscribers in the three months to the end of June.

“It’s very early days and we have much to work through,” Peters said. “But our long-term goal is clear. More choice for consumers and a premium, better-than-linear TV brand experience for advertisers.”

Netflix had reportedly been in talks with a number of partners to deliver advertising sales, including Google, and Sky owner Comcast’s NBCUniversal, before signing up with Microsoft.


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Netflix has for years been steadfastly against introducing advertising, despite the combination of a cheaper pay element and ad income often making such plans more lucrative than pricier ad-free subscriptions. The company’s co-founder Reed Hastings said they would “exploit” and disrupt the viewer experience.

Disney is also preparing to introduce an ad-supported tier for Disney+ in late 2022 and internationally next year.

By Mark Sweney