Nestlé Chair Warns Over UK Exit From Europe

By Mark Kleinman, City Editor, in Davos

The consumer goods giant Nestle would be forced to re-evaluate the extent of its presence in the UK if Britain decided to leave the European Union, its chairman has told Sky News.

In an interview during the World Economic Forum in Davos, Peter Brabeck-Letmathe said the company was committed to its business in the UK but that he could not envisage a separation from its biggest trading partner being in the country's interest.

Nestle, which makes Nespresso coffee capsules and Kit-Kat chocolate bars, employs approximately 8,000 people in the UK and accounts for exports worth roughly £400m. Its other brands include Nescafe, Smarties and Yorkie.

"From a purely economic point of view, I can't see that the withdrawal of the UK [from the EU] would be favourable for any UK industries," Mr Brabeck-Letmathe, an Austrian, said.

"It would isolate the UK economically. Every company would be forced to re-evaluate the implications of investing in the UK. It would no doubt have an impact on its ability to supply European markets."

The warning, ahead of a likely referendum on Britain's EU membership in 2017, echoes the views of many of the multinational business leaders gathered in Davos.

Prime Minister David Cameron told Sky News on Thursday that he did not believe the Government's stance on EU membership was jeopardising inward investment, saying that companies had been "voting with their feet".

He said: "The argument I make with these business leaders is that the best thing for Britain would be to secure our place within a reformed European Union.

"Simply saying 'let's hope this issue goes away, let's hope that Europe sorts itself out', without doing anything, won't work.

"We need to get in there, change Europe, make it work better, make it more competitive, make it more flexible - help make Britain more comfortable with its membership, have that referendum and then settle this issue."

Mr Brabeck-Letmathe, who also chairs the parent company of Formula One motor racing, said the EU and its single currency had been "an incredible success".

"The EU is full of failures and weaknesses like any large institution, but its achievements are greater. We have to work to strengthen the internal market."

He suggested that the trading bloc's governing mechanisms required reforms such as shrinking the number of EU Commissioners.

"The current system is not an efficient way to run it," he said.

In addition to his corporate roles, Mr Brabeck-Letmathe has also been a leading advocate of water stewardship in large companies, and unveiled new measures this week aimed at improving global water sustainability.

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16.01 | 0 komentar | Read More

Microsoft Gets Xbox One And Surface Boost

Global software giant Microsoft has reported better-than-expected results for the fourth quarter - on the back of booming Xbox One game consoles and tablet sales.

It made a profit of £3.94bn in the three months to the end of December, up nearly 3% on same period in 2012.

The Washington-based company sold 3.9 million Xbox One consoles to retailers and doubled revenue from its line of Surface tablets, compared to the third quarter.

Revenue rose in the fourth quarter by 14% to $24.52bn (£14.76bn).

The firm has also had a solid 12 months on the stock market, with its share price rising around 30% over the previous year.

Outgoing CEO Steve Ballmer said its devices and consumer segment had a "great holiday quarter."

Microsoft launched its Surface tablet last year

Surface tablet revenue rose to $893m (£537m) in the quarter, up 123% from Q3.

The company benefited from a US summer price cut to its first-generation models, unveiled the Surface 2 and expanded the number of places it is sold at retail.

"There's better hardware, the software continues to improve and there's better market perception," Microsoft's general manager of investor relations Chris Suh said.

However, analysts continue to question the company's new focus on manufacturing hardware on top of its mainstay software business.

The Surface division still need to reach manufacturing scale that would make it profitable and knock Apple off its iPad perch.

And the Xbox One, which launched late last year to rival Sony's PlayStation 4, is yet to maximise returns from game sales.

Market watchers are also concerned about the company's purchase in the current quarter of struggling Finnish firm Nokia's phone segment, in a deal valued around £4.7bn.

Xbox One has gone head-to-head against Sony amid Nintendo Wii's woes

On Thursday, Nokia revealed that its smartphone sales plummeted 29% in the December quarter, even though it released new Lumia models.

Microsoft has also continued to weather to storm of declining PC sales, once its main revenue source.

PC sales between October and December are estimated to have fallen globally by 6.5%, but Microsoft said revenue from its flagship operating system fell just 3%.

However it did not give figures for the split between Windows 7 or its troubled Windows 8.1 operating system.

Overall, revenue from its devices and consumer segment grew 13% to $11.91bn (£7.18bn), while business service revenue from server and cloud computing grew 10% to $12.67bn (£7.64bn).

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Non-EU Banks Slip Through Bonus Cap Loophole

By Mark Kleinman, City Editor in Davos

Major global banks such as Morgan Stanley and Nomura are benefiting from a loophole in new European pay rules that could leave British rivals at a big disadvantage.

Sky News understands that banks based outside the European Union (EU) are able to approve bigger bonuses for employees of their subsidiaries in the trading bloc without recourse to external shareholders.

That means Wall Street and Asian banks can instantly consent to variable pay for senior staff worth double the level of their salaries, the maximum permissible under the new EU cap.

However, Barclays, HSBC and other British banks will have to put the same measure to their annual investor meetings. Without approval, they will not be able to award bonuses worth more than 100% of salaries in any one year.

UK banks such as Barclays may be left at a disadvantage over bonuses

Sources said that banks including Bank of America Merrill Lynch and Goldman Sachs had formally discussed the issue at their group remuneration committees "to ensure appropriate corporate governance". Both had already given approval for the 200% cap, they added.

In practice, the UK banks will not be disadvantaged if shareholders back motions at this year's AGMs allowing them to pay bonuses at the higher level.

However, the fact that international rivals have already been able to give staff certainty about their pay from this year onwards was proving to be a valuable recruitment tool, bankers say.

Sky News has revealed in recent weeks the details of plans by Barclays, Goldman, HSBC and Morgan Stanley to raise base salaries through monthly or quarterly allowances for senior staff.

George Osborne, the Chancellor, is aware of the loophole benefiting non-EU banks, aides said on Friday.

Mr Osborne is fighting the ratio cap in the courts, and one senior Treasury official said that while the Government is confident that it has "a decent legal case", recent defeats to Brussels had left it only mildly optimistic about emerging victorious.

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Energy Boss Attacks Price Comparison Websites

The boss of Co-operative Energy has accused price comparison websites of misleading customers and pushing up energy bills.

Group General Manager Ramsay Dunning has called on the likes of uSwitch, MoneySupermarket.com and Energy Helpline to disclose how much they charged in commission each time a business or household moves supplier.

Sky News Business Presenter Joel Hills said it was his understanding the rate of commission could be as much as £60 per account switched.

In a speech at a conference held by Cornwall Energy, Mr Dunning said that far from improving competition, price comparison websites were a negative influence.

He added: "It's time all the advertising costs and fat profits were returned to hard pressed households.

"There is a lot of money spent through the comparison websites - because they charge companies likes us and the Big Six and independents a rate of commission.

"If that rate was a lot lower, or non-existent, the bills to customers would be lower, because our costs would be lower."

Co-operative Energy uses price comparison websites and says it has gained 60,000 customers in the nine months through to the end of last year.

Mr Dunning refused to say how much his company paid the websites in commission, claiming the contracts were commercially confidential, but called for full disclosure.

According to the Department of Energy and Climate Change, almost five million gas and electricity accounts switched in the year through to the end of September 2013.

Ofgem, the regulator, said price comparison websites play an "important role" in the energy market, but admitted it does not know how much they charge in commission.

A spokesperson said: "Ofgem runs a code of practice for these sites and we are reviewing it to ensure that its objectives are in line with our reforms for a simpler, clearer, fairer energy market. We will be consulting on this in spring.

"The code of practice protects consumers in a number of ways. For example switching sites have to state which suppliers they earn commission from.

"They also have to make sure that they do not rank tariffs in accordance with which suppliers from which they are earning commission."

Adam Scorer, director of Consumer Futures, said price comparison websites are popular but there were issues of trust and transparency with their services.

He said: "Consumers should not automatically assume that a price comparison website will save them money on their purchase. In our research this was only true in 21% of cases.

"Without price comparison websites millions of people would be on higher tariffs than they are now."

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High Street Chain Bathstore Groomed For Sale

By Mark Kleinman, City Editor

Another prominent UK high street chain is poised to change hands with the sale of Bathstore, the specialist bathrooms retailer.

Sky News understands that Endless, the investment fund which acquired Bathstore in May 2012, has decided to explore a sale of the company, which operates more than 150 shops across the country.

Rothschild, the investment bank, has been appointed to sound out interest from potential buyers.

Plumbing firm Wolseley acquired Bathstore for £15m

Bathstore was acquired for just £15m from Wolseley, the FTSE-100 plumbing group, which had been struggling to satisfy the City with its financial performance and had decided that the retailer was a non-core asset.

Watford-based Bathstore made a profit of £6.5m on sales of £95m in 2011, a reasonable result at a time when the UK economy was relatively weak.

In a statement, a spokesman for Endless said: "We are pleased with the performance of Bathstore since we made our investment in May 2012.

"There has been encouraging inbound interest in the business and we continue to work with management to support its growth."

It is thought unlikely that Endless will pursue a stock market listing for Bathstore, and will instead opt for a private sale of the business.

However, that will make Bathstore a relative rarity as the owners of thousands of high street shops examine flotations in an effort to take advantage of strong equity markets and a rebounding economy.

Fat Face, House of Fraser, Pets At Home and Poundland are among the private equity-backed retailers looking to go public this year.

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Royal Mail Rides The Online Parcel Wave

The newly-privatised Royal Mail has revealed a rise in parcel delivery revenue of 8% in the nine months to December 29.

The spike in like-for-like earnings comes as the shift to online purchases continues.

The company said the figures were boosted by strong demand over Christmas.

Despite parcel volumes remaining flat, price delivery changes pushed revenue upwards.

Meanwhile, revenue for its letter delivery service was down 3% in the same period - blamed on the rise of email and social media.

Royal Mail said the trading performance was in line with expectations and it has confidence it will deliver results consistent with key value targets for the full year.

The postal firm's part-flotation last October by the Government was fiercely opposed by unions and Labour.

The Government still has a 30% stake but was widely criticised for potentially short-changing the taxpayer on the flotation price.

Shares in the firm closed at 588p on Thursday, up 78% from the 330p per share price.

In early Friday trading shares were flat. The company is valued at around £5.9bn.

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IMF Upgrades UK Growth Forecast Above Rivals

By Ed Conway, Economics Editor

The International Monetary Fund is on the brink of upgrading its growth forecast for the UK more than any other major economy, Sky News has learnt.

The Fund is poised to increase its projection for UK growth in 2014 from 1.9% to 2.4%. Although the Fund will also lift its forecasts for world economic growth, the UK upgrade is significantly stronger.

It is the latest boost to the fortunes of the Chancellor, coming barely 24 hours after the Ernst & Young ITEM Club also increased its projection for UK economic growth this year.

Although the Fund's forecast for growth this year will be shy of the 2.7% predicted by the ITEM Club, the scale of the upgrade underlines how quickly sentiment about Britain's economy has turned in recent months.

The updated forecasts may also be construed as a reputational blow for the Fund itself, whose chief economist warned less than a year ago that the economic policies being carried out by George Osborne amounted to "playing with fire".

Since then, the Fund has already increased its growth projections for Britain once, last October, before this week's anticipated upgrade.

The news comes amid growing optimism about the speed of the UK recovery. In spite of concerns about retailers' fortunes over Christmas, retail sales grew in December at the fastest annual rate in almost a decade.

The Office for National Statistics is expected to announce next week that growth in the final quarter of 2013 remained relatively strong at around 0.7%.

However, some have voiced concern that Britain has been reliant for much of the growth on household spending rather than the exports and manufacturing sector.

The IMF itself has voiced concern that, having failed to rebalance the economy, the government is now reliant, through policies such as Help to Buy, on boosting the housing market and encouraging consumers to take out more debt.

Nonetheless, the IMF upgrade represents the latest evidence that Britain's recovery is starting to take real hold, pushing the country towards robust growth this year.

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16.02 | 0 komentar | Read More

OneSavings Heeds Miliband Call In Float Push

By Mark Kleinman, City Editor

A lender backed by a prominent Wall Street financier is stepping up plans for a stock market flotation that it hopes will help it to become a serious challenger to the main high street banks.

Sky News has learnt that OneSavings Bank, whose Kent Reliance and other trading brands have hundreds of thousands of customers, has hired Barclays, Royal Bank of Canada and Canaccord Genuity to work on the listing.

The flotation is expected to take place this year, and would offer at least a partial exit route for Christopher Flowers, the American tycoon whose investment vehicle helped to devise a rescue plan for the struggling Kent Reliance Building Society in 2010.

The appointment of the investment banks follows calls by the Labour leader, Ed Miliband, for greater competition in Britain's banking sector.

In a speech last week, Mr Miliband said that a Labour government would create two new challenger banks to the 'big five' by forcing established players to shrink their market share.

JC Flowers injected £50m of new capital into KRBS four years ago in exchange for roughly 40% of OneSavings, which describes itself as part of a "unique mutual hybrid arrangement", under which the bank is a subsidiary of an industrial and provident society called the Kent Reliance Provident Society (KRPS).

The restructuring was designed to allay members' fears about the loss of its mutual ethos when it agreed the deal with JC Flowers, one of Wall Street's most prolific investors in financial institutions.

Insiders insisted that a flotation would not diminish that mutual ethos, echoing a vow made by the Co-operative Group as part of its ongoing £1.5bn restructuring.

In a statement issued to Sky News last month, a spokeswoman for OneSavings Bank said:

"I can confirm that OneSavings Bank is reviewing various options to continue to build the business for the long term benefit of all its stakeholders whilst maintaining the bank's mutual ethos - to make any further comment would be premature."

the bank declined to comment on the appointment of advisers.

If it does float, it would herald a return to the stock market in the banking sector for Sir Callum McCarthy, the former boss of the Financial Services Authority, who is among OneSavings' non-executive directors. Stephan Wilcke, the bank's chairman, was one of the architects of the improved deal won by the Co-op Bank's private investors last month.

Since injecting funds into Kent Reliance in 2010, JC Flowers has sought to acquire other lenders in order to create a much larger organisation. However, it has been thwarted in its efforts to buy the Principality Building Society and more than 300 branches being offloaded by Royal Bank of Scotland (RBS).

It did succeed earlier this year in snapping up a package of performing loans from Northern Rock Asset Management, the taxpayer-owned "bad bank", which added 70,000 customers to its ranks.

OneSavings discloses some information about its financial performance because it has subordinated debt instruments which trade on the London Stock Exchange.

In August, it announced that it made a post-tax profit of £12.4m during the first half of the year, against a post-tax loss of £1.8m during the same period a year earlier.

There is an unprecedented pipeline of British banks waiting to list their shares publicly, including branch networks being sold under European state aid rules by both RBS and Lloyds Banking Group.

Metro Bank, which is raising £385m to fund its expansion, plans to float in 2016. Aldermore, a specialist lender to small and medium-sized companies, and Santander UK are also likely to pursue listings in the next two years.

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16.02 | 0 komentar | Read More

Motorway Pub Opens Despite Opposition

A new £1m pub opens at a motorway service station today, in the face of fierce criticism from road safety and alcohol campaigners.

Pub chain JD Wetherspoon says The Hope & Champion will be open from 4am to 1am, seven days a week.

The venue is located in the Extra Motorway Service Area at junction 2 of the M40 in Beaconsfield, Buckinghamshire.

It is the first pub ever to be opened at a motorway service area, and will sell real ale from local and regional brewers.

But critics say the location of the pub is "at odds" with public opinion.

The RAC said a survey of 2,000 people showed only 12% of respondents supported putting pubs into motorway service stations.

Around two-thirds said they did not agree with the move, with older drivers more likely to oppose the sale of alcohol at motorway service areas.

Only 8% of over-55s were in favour, with 71% against, while almost one in five of those aged between 18 and 34 were in support.

The RAC's head of external affairs Pete Williams said: "The public appear to be very much against the introduction of motorway pubs.

"In our view this is a risky and frankly unnecessary move. The question we are struggling to answer is - of all the places to open a pub, why choose a motorway service station?

"The temptation to drink and drive can only be increased by easier access to alcohol."

But Steve Baldwin, manager of the new pub, said the venue would serve the local community.

"The Extra Motorway Service Area, now including The Hope & Champion, primarily serves the motorway users, but its facilities are also available to the surrounding community from the local road network," he said.

Sir Ian Gilmore, Royal College of Physicians special adviser on alcohol and chair of the Alcohol Health Alliance, said: "I am disappointed by the decision to open a JD Wetherspoon on the M40.

"We are trying to prevent harm from alcohol-related traffic accidents and this sends out completely the wrong message."

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16.02 | 0 komentar | Read More

Bingo Hall Burden: MPs Call For Tax Cuts

By Adele Robinson, Sky News Correspondent

The UK's bingo hall business will "stagnate" if the Government does not cut tax on it, campaigners say.

More than 50 MPs are backing calls to reduce duty and bring levies on the game in line with other forms of gambling.

Bingo hall profits are currently taxed at 20% compared with a 15% rate for most other gambling activities.

Campaigners estimate that reducing bingo duty is expected to raise around £40m for the Exchequer over four years.

Miles Baron, from the Bingo Association, says investment is vital for growth.

"By building new clubs and investing in new clubs, attendances would improve that would generate more income, that would generate new taxes, that would employ more people ... this is at the heart of the community, this is a vital and important part of some people's social repertoire."

Campaigners claim gambling taxes are forcing more and more clubs to close

The Government says it would have to carefully consider before reducing the rate because its priority is to cut the budget deficit.

Jim Cunningham, Labour MP for Coventry South, says if more support is not given then the "social service" side of bingo will be lost.

"The implications can be that some of these places may have to close because they're not profitable and if that happens then there is a problem for some of these elderly people, during the day in particular, to find somewhere else to go."

Nearly 400 bingo clubs across England, Scotland and Wales are hosting free bingo games this weekend to support the campaign to cut tax.

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