Co-op Group Stake In Its Bank 'Falls To 20%'

Charting The Crisis At The Co-op

Updated: 11:05am UK, Tuesday 11 March 2014

The Co-operative grew from a small shop in Lancashire in the 19th century to a worldwide movement but the future of the modern day Group began to be threatened by a crisis in its banking arm.

:: April 24 2013 - The planned sale by Lloyds of more than 600 branches to the Co-op falls through.

:: May 10 - Co-op Bank rules out Government support after a warning from ratings agency Moody's that it might need taxpayers' money to plug a capital shortfall, which prompts its chief executive Peter Marks to resign. The bank's troubles mainly relate to bad commercial property loans, many acquired through takeover of Britannia Building Society in 2009.

:: June 5 - Co-op Bank appoints veteran banker Richard Pym as chairman to lead the lender's restructuring, replacing the Reverend Paul Flowers.

:: June 17 - Co-op Group unveils plan to force bondholders to help plug a £1.5bn capital hole at Co-op Bank, under which the group will retain a majority stake in the bank while bondholders will end up with at least a quarter of the bank's shares.

:: Oct 21 - Co-op bows to bondholder demands and agrees to hand them control of the bank in order to seal a rescue. The Group is left with a 30% stake.

:: Nov 6 - Reverend Flowers is questioned by Treasury Select Committee on the Lloyds deal and makes mistakes about Co-op Bank's finances. At one point he says it held £3bn of assets when the true figure was £47bn.

:: Nov 17 - Mail on Sunday says Reverend Flowers filmed allegedly arranging to buy cocaine.

:: Nov 20 - Prime Minister David Cameron promises inquiry into how Co-op Bank had been "driven into the wall" and asks why alarm bells had not rung earlier over alleged behaviour of Reverend Flowers.

:: Nov 22 - Police arrest Paul Flowers amid investigation into alleged supply of illegal drugs.

:: Dec 12 - Co-op Group appoints ex-Treasury minister Lord Paul Myners to review its operations for a token £1 salary.

:: Jan 6 2014 - UK financial regulators launch investigation into problems at Co-op Bank, which could lead to fines for the bank and its former directors.

:: Jan 7 - The Financial Conduct Authority (FCA) says it has no regrets about approving the Flowers appointment.

:: Feb 17 - Group chief executive Euan Sutherland launches a public poll on the Co-op's future direction.

:: Feb 26 - Co-op announces plan to sell 15 farms and its pharmacy business.

:: Mar 09 - Observer newspaper publishes leaked details of higher pay awards for Co-op bosses.

:: Mar 11 - Euan Sutherland tenders his resignation.

16.01 | 0 komentar | Read More

Amazon Paid £10m Tax On £4.3bn UK Sales

Online retailer Amazon paid a UK corporation tax bill of £10m last year, despite sales in Britain reaching £4.3bn, it has been revealed.

Amazon.co.uk saw a 56% rise in profit to £17m during 2013, along with a 13% rise in UK revenue.

The company reports most of its European profit through a tax-exempt Luxembourg partnership.

Amazon has faced previous criticism for its complex tax structures, through which sales are logged in the European location despite goods being sourced, stored and sold within Britain.

In a statement to Sky News, the company insisted it paid all applicable taxes in jurisdictions that it operates within.

It said: "Amazon EU serves tens of millions of customers and sellers throughout Europe from multiple consumer websites in a number of languages dispatching products to all 28 countries in the EU.

"We have a single European headquarters in Luxembourg with hundreds of employees to manage this complex operation."

Other large multinationals, including Google and Starbucks, have been grilled alongside Amazon by MPs on the Public Accounts Committee.

Amazon.co.uk is funded by its Luxembourg-based affiliates.

Executies from Amazon, Google and Starbucks were grilled by MPs in 2012

The rates of such inter-company remuneration are usually agreed with the UK tax authority, but HM Revenue and Customs (HMRC) declined to comment on the tax paid by Amazon.

In 2013, intercompany fees paid to Amazon.co.uk Ltd rose 40% to £449m.

This led to Amazon's current tax bill for 2013 being its biggest ever.

"It's possible Amazon may have come under pressure from HMRC to adjust their inter-company agreements," Prem Sikka, Professor of Accounting at Essex University, told Reuters.

16.01 | 0 komentar | Read More

The Week's Big Business Stories

Yo! Sushi Exploring Sale Options

Updated: 2:25pm UK, Wednesday 07 May 2014

Yo! Sushi's executive chairman Robin Rowland has told Sky News that the restaurant chain has appointed advisors for a sale.

From the four restaurants the Japanese chain had in central London in 2000, Yo! Sushi now has 1,650 members of staff and a total of 75 restaurants internationally.

Newly appointed chief executive, Vanessa Hall, has a mandate of preparing the eatery for a sale of £120m.

She takes over from Robin Rowland, chief executive at the sushi company for 14 years, who has now become executive chairman. He confirmed to Business Live presenter Dharshini David that stockbrokers Canaccord Genuity had been appointed as advisors for the future sale.

If a buyer is found at that price tag, it would mean a significant profit for the restaurant's parent group, Quilvest, which took over Yo! Sushi in 2008 in a £51m acquisition.

Vanessa Hall joined the company in September 2013 as chief operating officer. In her previous role at M&B, she was responsible for over 170 restaurants.

Last year, Yo! Sushi delivered earnings before interest of £9.2m, with like-for-like sales for the year up 4.6%.

16.01 | 0 komentar | Read More

BA Owner IAG Stems First Quarter Loss

The owner of British Airways and Iberia said it has reduced first quarter losses through improved performance and cost-cutting.

International Airlines Group (IAG) said losses before exceptional items stood at €150m (£123m) in the three months to the end of March.

This compared to a loss after tax of €278m (£227m) in the first quarter of 2013.

Meanwhile, it saw revenue grow 6.7% to €4.2bn (£3.45bn) compared to the same period last year.

"Iberia has almost halved its losses from quarter one last year," IAG chief executive Willie Walsh said in a statement.

"The airline continues to benefit from restructuring and these figures don't reflect the impact of recent pay and productivity agreements which took effect in April," he added.

BA made an operating loss of €5m (£4m) in the first quarter compared to a €72m (£60m) loss a year ago.

"The airline has increased capacity within a controlled cost environment and benefited from the efficiency of its new Airbus A380 and Boeing 787 aircraft," the statement said of BA.

IAG also revealed a €30m (£24.5m) operating loss at its Veuling airline - the Spanish budget carrier it acquired last year.

IAG said that it expects to improve operating profit for the 2014 full year by at least €500m (£410m).

16.01 | 0 komentar | Read More

Powers To Seize Unpaid Tax Criticised By MPs

Plans to give HM Revenue and Customs (HMRC) the power to seize money directly from the bank accounts of those who owe the taxman money have been criticised by an influential group of MPs.

The Treasury Committee said it has "considerable concern" about the idea, which it warns could result in innocent people having cash taken from them.

HMRC estimates 17,000 people a year will be affected, and says money will only be taken after four demands for payment have been ignored.

The cross-party group wants further scrutiny of Chancellor George Osborne's debt collection proposals before they are implemented, describing a "lengthy and full consultation" as "essential".

Compensation and disciplinary action are suggested by the committee as extra safeguards.

Sky's Chief Political Correspondent Jon Craig, who described the report as "damning", said the criticism could mean the policy is delayed until after next year's election. 

George Osborne announced the plans in this year's Budget

The concerns are contained in a report on this year's Budget.

In the report, the MPs say the change could be akin to the reintroduction of the discredited Crown Preference Rule by stealth.

This gave HMRC priority access to assets when companies went out of business.

"Giving HMRC this power without some form of prior independent oversight - for example by a new ombudsman or tribunal, or through the courts - would be wholly unacceptable," the MPs said.

The Chancellor argues the Department for Work and Pensions has similar powers for chasing child maintenance payments.

But the committee said: "The parallel is not exact: in those cases, DWP is acting as an intermediary between two individuals."

"HMRC would be acting not as an intermediary between two individuals but rather in pursuit of its own objective of bringing in revenue for the Exchequer."

The chance of fraud and errors occurring is also highlighted, with the MPs warning this would be a "serious detriment" to taxpayers.

The report says: "This policy is highly dependent on HMRC's ability accurately to determine which taxpayers owe money and what amounts they owe, an ability not always demonstrated in the past."

A Treasury spokesperson said it was "important people pay the tax they owe on time", and added: "The proposed powers will give HMRC another tool to collect tax debt owed. 

"The current consultation includes a range of safeguards to ensure the power is tightly targeted."

16.01 | 0 komentar | Read More

Co-op Group Stake In Its Bank 'Falls To 20%'

Charting The Crisis At The Co-op

Updated: 11:05am UK, Tuesday 11 March 2014

The Co-operative grew from a small shop in Lancashire in the 19th century to a worldwide movement but the future of the modern day Group began to be threatened by a crisis in its banking arm.

:: April 24 2013 - The planned sale by Lloyds of more than 600 branches to the Co-op falls through.

:: May 10 - Co-op Bank rules out Government support after a warning from ratings agency Moody's that it might need taxpayers' money to plug a capital shortfall, which prompts its chief executive Peter Marks to resign. The bank's troubles mainly relate to bad commercial property loans, many acquired through takeover of Britannia Building Society in 2009.

:: June 5 - Co-op Bank appoints veteran banker Richard Pym as chairman to lead the lender's restructuring, replacing the Reverend Paul Flowers.

:: June 17 - Co-op Group unveils plan to force bondholders to help plug a £1.5bn capital hole at Co-op Bank, under which the group will retain a majority stake in the bank while bondholders will end up with at least a quarter of the bank's shares.

:: Oct 21 - Co-op bows to bondholder demands and agrees to hand them control of the bank in order to seal a rescue. The Group is left with a 30% stake.

:: Nov 6 - Reverend Flowers is questioned by Treasury Select Committee on the Lloyds deal and makes mistakes about Co-op Bank's finances. At one point he says it held £3bn of assets when the true figure was £47bn.

:: Nov 17 - Mail on Sunday says Reverend Flowers filmed allegedly arranging to buy cocaine.

:: Nov 20 - Prime Minister David Cameron promises inquiry into how Co-op Bank had been "driven into the wall" and asks why alarm bells had not rung earlier over alleged behaviour of Reverend Flowers.

:: Nov 22 - Police arrest Paul Flowers amid investigation into alleged supply of illegal drugs.

:: Dec 12 - Co-op Group appoints ex-Treasury minister Lord Paul Myners to review its operations for a token £1 salary.

:: Jan 6 2014 - UK financial regulators launch investigation into problems at Co-op Bank, which could lead to fines for the bank and its former directors.

:: Jan 7 - The Financial Conduct Authority (FCA) says it has no regrets about approving the Flowers appointment.

:: Feb 17 - Group chief executive Euan Sutherland launches a public poll on the Co-op's future direction.

:: Feb 26 - Co-op announces plan to sell 15 farms and its pharmacy business.

:: Mar 09 - Observer newspaper publishes leaked details of higher pay awards for Co-op bosses.

:: Mar 11 - Euan Sutherland tenders his resignation.

16.01 | 0 komentar | Read More

British Gas: Mild Winter Squeezed Profits

The owner of British Gas has confirmed it does not plan to raise household bills this year, despite the mild winter hitting profits.

Centrica reduced its 2014 earnings outlook in a trading update - saying the average British Gas residential energy bill was around 10% lower this winter than last.

It said average consumption of gas and electricity fell 25% and 10% respectively in the first four months of the year.

Its shares opened 4% lower as it revealed the squeeze in profitability - made worse by the loss of 180,000 residential accounts in the year to date.

Centrica also said that margins would be around 4% - down from the previous year's figure of 4.5% - and that would likely impact investment.

The so-called 'Big Six' energy suppliers have previously warned about dangers to energy infrastructure investment from political and public pressure to keep down bills.

Major firms reduced bill increases when the Government agreed to take green levies out of household bills but company profits remain under tight scrutiny.

Speaking on the prospect of rising bills, Centrica said expected upward pressure next year from increasing network charges and higher costs associated with renewable energy.

The statement said: "Assuming that energy market conditions remain benign, and recognising the competitive conditions in the UK energy supply market, we do not currently expect to change our residential energy prices during 2014."

It pointed to increased competition from smaller providers - some now offering tariff packages below £1,000 annually - who are exempt from many environmental obligations.

16.01 | 0 komentar | Read More

Barclays: 20,000 Job Cuts In New Strategy

Barclays has confirmed around 20,000 job cuts under a new strategy building on its aim to become the 'go-to' bank.

The details - as reported by Sky's City Editor Mark Kleinman on Wednesday evening - were revealed following a review which aimed to reduce risk in its investment operation and cut excessive costs.

The bank's update pleased investors - with its share price rising more than 3% when the FTSE 100 opened for business.

Barclays confirmed 14,000 positions would be axed across the Group during 2014 - around half of them in the UK.

Barclays share price has failed to recover from the financial crisis

A further 7,000 positions will go in the investment bank up to 2016 - but 2,000 of those had been previously announced.

In addition to the job losses, the bank's chief executive Antony Jenkins confirmed the creation of Barclays Non-Core - a unit to house "assets which do not fit the strategic objectives" of the group.

Barclays said it would look to run down or exit Risk-Weighted Assets worth £115bn from the new unit.

Mr Jenkins said: "This is a bold simplification of Barclays. We will be a focused international bank, operating only in areas where we have capability, scale and competitive advantage".

He added that Barclays would become "leaner, stronger, much better balanced and well positioned to deliver lower volatility, higher returns, and growth".

More follows...

16.01 | 0 komentar | Read More

Morrisons Reports 7.1% Plunge In Sales

Morrisons has reported a huge fall in sales - a day after its share price took a hit of more than 5% on the FTSE 100.

Like-for-like sales excluding fuel tumbled 7.1% in the 13 weeks to May 4.

The fall extended to 8.2% when fuel sales were included.

Total sales were down 4.2%.

The performance sparked further declines in its market value when the FTSE 100 opened.

The supermarket chain recently embarked on aggressive price cuts of £1bn over three years, announced on March 13, to take on the flight to discounters which has affected sales at the so-called "big four" chains.

Morrisons' share price performance is difficult for Dalton Philips

Its market share - along with that of Tesco and Sainsbury's - was measured on Wednesday to have fallen further while the likes of Aldi and Lidl continued to build business.

Morrisons was said to have had 11% of the grocery market at the end of April and Kantar Worldpanel, which compiles the figures, concluded the chain was the biggest loser among major grocers in terms of market share.

Upmarket operators Waitrose and Marks & Spencer have been gaining share too.

Chief executive Dalton Philips said: "The plans we set out at our results in March are on track.

"The reaction of our customers to the 1,200 'I'm Cheaper' price cuts we announced last week has been very positive.

"Although it will take time for their full impact to be felt, we are confident that these meaningful and permanent reductions in our prices will enable our clear points of difference to resonate strongly with consumers."

16.01 | 0 komentar | Read More

Sainsbury's Posts Slowest Growth For A Decade

The pressure on the major supermarket chains from discounters were underlined by Sainsbury's annual results which showed the slowest profits growth for a decade.

Underlying profit before tax at the chain rose 5.3% to £798m in the year to March 15 though like-for-like sales for the period were almost flat, edging up just 0.2%.

While the performance capped nine years of profits growth for outgoing boss Justin King, he warned conditions in the food sector were likely to remain challenging for the foreseeable future as consumers remained cautious.

Sainsbury's, which trails market leader Tesco and is battling Asda to be the country's second-largest supermarket chain, has credited a focus on quality and affordable own-brand products for its ability to grow sales.

Tesco, Asda and Morrisons recently announced big price cut campaigns in a bid to arrest sliding market shares and profits.

Discounters Aldi and Lidl have benefited at their expense while upmarket chains Waitrose and Marks & Spencer are also gaining
share.

Mr King, who will hand over the reins to commercial director Mike Coupe in July after 10 years in charge, warned: "While the general economic outlook is showing some signs of improvement, conditions in the food retail sector are likely to remain
challenging for the foreseeable future as customers continue to spend cautiously."

But he told Sky News: "We've had a very strong year. I leave in a couple of months and I'm very proud to be able to announce these results today on behalf of the 160,000 colleagues at Sainsbury's."

The chain insisted it was confident its differentiated offer, which includes a focus on own brand products, the "Brand Match" pricing scheme and the Nectar loyalty card, would allow it to outperform peers in the year ahead.

Though Sainsbury's 16.8% market share is its highest for a decade, there are worrying signs too after its nine-year run of quarterly sales growth came to an end in its fourth quarter, when like-for-like sales fell 3.1%.

16.01 | 0 komentar | Read More