MPs Claim PwC Promoted Corporate Tax Avoidance

MPs have accused the accountancy firm PriceWaterhouseCoopers (PwC) of promoting "tax avoidance on an industrial scale".

An investigation by the Commons' Public Accounts Committee (PAC) found the firm's "complex strategies and contrived structures" helped large companies cut their tax bills.

A report by the committee alleges PwC's arrangements to divert profits via Luxembourg "bear all the characteristics of a mass-marketed tax avoidance scheme".

PwC has denied the claims, issuing a statement saying it strongly disagrees with the PAC's conclusions.

"We stand by the evidence we gave the Public Accounts Committee and disagree with its conclusions about the work we do," the statement said.

"But we recognise we need to do more to explain the positive role we play in the tax system and in helping businesses to operate successfully.

"We agree the tax system is too complex, as governments compete for investment and tax revenues.

"We take our responsibility to build trust in the tax system seriously and will continue to support reform."

MPs launched an investigation after hundreds of documents were leaked last year.

The documents appeared to show how the firm secured deals with Luxembourg tax authorities for 343 multinational companies between 2002 and 2010.

Margaret Hodge, chair of the committee, said: "We believe that PwC's activities represent nothing short of the promotion of tax avoidance on an industrial scale.

"The effect has been to reduce the amount of corporation tax that some multinational companies pay in the countries in which they make their profits."

The PAC's report said many companies that received advice from PwC are well-known to the public, including Amazon, Ikea, Burberry and Vodafone.

"These deals appeared to contradict the evidence which PwC had given us in 2013," the report said.

"PwC had told us that it does not sell schemes but the Luxembourg leaks suggest that PwC had advised many multi-national firms to adopt similar complex financial structures for the purpose of avoiding tax."

The PAC has called for the Government to take a more active role in regulating the tax industry.

16.01 | 0 komentar | Read More

Twitter Shares Soar As Revenue Almost Doubles

Twitter's share price rose almost 10% after-hours when the social network reported a near doubling in quarterly revenue, despite weaker than anticipated user growth.

Its latest results showed Twitter raked in $479.1m (£312.5m) during the final three months of 2014, with mobile advertising revenue amounting to 88% of the total.

Its efforts to secure more cash from outside the US also appeared to be paying off, with international revenue more than doubling on the same period last year.

However, Twitter remained loss-making at $125m (£82m) during the quarter.

The number of new Twitter users was less than expected - at four million over the three months.

It had 288 million monthly users at the end of 2014 - a rise of 20% on a year earlier - and the company's boss said the results showed that Twitter had demonstrated it was able to make money from the users it has.

Dick Costolo, who had earlier promised a crackdown on so-called trolls using Twitter -  said: "We have a number of projects under way to grow our user base and provide a compelling valuable experience to anyone in the world whether they have a Twitter account or not."

He told investors in a conference call the plans involved strengthening the core Twitter service, making it easier to join and use and building new applications and services.

Twitter's biggest challenge is growing its user base as it slips behind rivals in growth terms.

LinkedIn reported 347 million users through the end of December while Facebook-owned photo sharing app Instagram recently surpassed 300 million users.

Facebook has 1.39 billion members.

Twitter's stock on the NYSE jumped 9% after-hours in the wake of the release of the earnings report.

Ahead of the results, the stock had fallen almost 40% over the past year largely a result of the concerns about user growth.

16.01 | 0 komentar | Read More

Poundland To Spend £55m On 99p Stores Buyout

Poundland has agreed a £55m takeover of discount rival 99p Stores, subject to clearance by competition authorities.

Poundland, which has previously expressed an ambition to double its UK and Ireland network of more than 500 stores, said the deal comprised a cash consideration of £47.5m and the issue of new Poundland Shares with a value of £7.5m.

The company's statement said: "Poundland believes that the combination of the two businesses will provide better choice, value and service for 99p Stores' customers."

It would take ownership of 251 stores trading as 99p Stores or Family Bargains as well the group's warehouse and distribution centre which would all come under the Poundland brand over time.

Poundland said the acquisition was conditional on the approval of the Competition & Markets Authority (CMA), which had already held preliminary talks with both parties.

The statement added: "The CMA may require Poundland to take actions or give remedies to address any impact on competition arising as a result of the proposed transaction.

"The CMA will commence its public consultation and review process shortly and this process is expected to take at least two months.

"The proposed transaction is conditional on an outcome of this CMA process that is acceptable to Poundland and to the CMA."

Jim McCarthy, Poundland's chief executive, said: "This is a good deal for both businesses and will benefit customers and shareholders.

"Through working together, Poundland will improve choice, value and service for 99p Stores' customers, bringing Poundland's proven know-how and range to 99p Stores.

"We also believe that we can improve the performance of the 99p Stores estate and generate further value for Poundland's shareholders.

"We look forward to working with the CMA as it undertakes its review."

Poundland opened its first store in 1990 and its growth has formed part of the changing face of the high street since the collapse of Woolworth's in 2008 and the financial crisis.

99p Stores was founded by Nadir Lalani with a single site in Holloway, north London, in 2001.

The discount sector has become somewhat squeezed given the rise in recent years of supermarket chains such as Aldi and Lidl, where consumers can also complete a food shop.

99p Stores had recently expanded its offering to include more food products, including baked goods.

16.01 | 0 komentar | Read More

Eight Headaches For Supermarket Giant Tesco

A decade ago Tesco was an investor's delight, with a share price shooting up more than 70% between 2004 and 2007, and healthy dividend payments. So what went wrong?

PROFIT WARNINGS

With 14 years as CEO to his credit, Sir Terry Leahy stepped down in 2011 after overseeing a leap in pre-tax profit from £750m in 1997 to £3.4bn in 2010. Yet less than a year into the job as new CEO, Philip Clarke issued the first profit warning in two decades as a result of a poor 2011 Christmas trading period.

CHANGING TASTES

Tesco was being squeezed by changing consumer tastes, a dislike of its cavernous and cold stores, and complaints about frosty customer service. It unveiled a £1bn revamp plan in April 2012.

AMERICAN ADVENTURE

In April 2013 it reported its first fall in annual profit for 19 years, with a post-tax profit plunging 95% to £120m, after suffering a £1.2bn charge to exit its struggling Fresh & Easy American venture.

PROPERTY BUST

It also suffered a write-down of £804m for land bought at the height of the property boom, earmarked for development but subsequently put on hold.

MEAT SCANDAL

In 2013, Tesco was caught up in the biggest food fraud of the century - with some of its beef burgers found to contain up to 29% horsemeat.

Video: Tesco Investigating Profits Mistake

CLEVER COMPETITION

German discounters continue to nibble away at Tesco's customer base at one end, while M&S and Waitrose take share from consumers willing to pay more for premium products.

BIG NOT NIMBLE

Despite the woes Tesco remains the country's biggest retailer and still dwarfs its competition. Tesco is around the same size as Sainsbury's and Morrisons combined, and globally employs more than half a million people in 12 countries. But big rarely means nimble. A large number of senior staff have quit the company in recent years and 40-year Tesco veteran Mr Clarke was ousted by the board last July, after dismissing critics of his turnaround plans.

SIDELINES

Tesco wholly-owns a retail research company named dunnhumby, with offshoots including BzzAgent, KSS Retail, and Sociomantic - which sells display adverts on Facebook and mobiles.

This analysis arm crunches data from over 350 million consumers in 28 countries and sells it to corporate giants such as Coca-Cola, Shell and Procter & Gamble. The Tesco empire is huge, with numerous and competing divisions, and as a result does not always see the wood for the trees.

Dunnhumby does not trumpet the Tesco parentage on its website - but maybe it is time Tesco starts looking in-house for an answer to its woes.

Video: Tesco Profit Error: Execs Suspended

16.01 | 0 komentar | Read More

BT To Buy Mobile Firm EE For £12.5bn

BT has agreed to buy mobile operator EE in a cash and shares deal worth £12.5bn, the company has revealed.

The group announced in December it was in talks to buy Britain's largest mobile operator and the deal, which will be partly financed with a £1bn share issue, will now create the UK's leading communications provider.

EE's current owners Deutsche Telekom and Orange will hold stakes of 12% and 4% in BT, with Deutsche getting a seat on the board.

Gavin Patterson, BT chief executive, said: "This is a major milestone for BT as it will allow us to accelerate our mobility plans and increase our investment in them.

"The UK's leading 4G network will now dovetail with the UK's biggest fibre network, helping to create the leading converged communications provider in the UK."

Video: 30 Years Since First Mobile Call

The deal is subject to approval by shareholders and the Competition and Markets Authority. It is expected it could be completed by the end of the financial year ending in March 2016.

BT said it plans to sell a full range of its services to the combined customer base, including broadband, fixed line and pay-TV services to EE customers who do not currently use those services.

Mr Patterson added: "This is a very exciting time and a new chapter for BT."

EE has 24.5 million direct mobile customers, but faces competition from Hutchison Whampoa, owner of rival Three, which is in talks to buy the number two mobile operator O2.

EE chief executive Olaf Swantee said: "In the last few years alone, we have built the UK's biggest, fastest and best 4G network, significantly advancing the digital communications infrastructure for people and businesses across Britain.

"Today's announcement will ensure the UK remains at the forefront of the mobile revolution, bringing even more innovation and investment in world leading connectivity for our customers."

16.01 | 0 komentar | Read More

Tesco Facing Probe Over Supplier Dealings

An official investigation is to be launched into practices at troubled supermarket giant Tesco, including delays in payments to suppliers.

The move was announced by the Groceries Code Adjudicator (GCA), Christine Tacon, who said she had formed a "reasonable suspicion" that the retailer has breached supply guidelines.

She said she took the decision after considering information submitted to her after Tesco's profit over-statement last September.

She has discussed the practices with Tesco and will now seek more information from direct suppliers and others to determine what further action to take.

The investigation has been welcomed by Business Secretary Vince Cable

The post of Adjudicator was set up in 2013 to monitor the relationship between the 10 largest retailers and their suppliers.

The investigation, which is the GCA's first, is expected to take up to nine months and the Adjudicator has called for evidence to be submitted by 3 April.

Video: 8 Jan: Tesco Boss On Turnaround

It will cover the conduct of Tesco plc from 25 June 2013 (when the GCA was created) to 5 February this year.

A statement said: "The investigation will consider the existence and extent of practices which have resulted in delay in payments to suppliers. This will include in particular, but not be limited to, delay in payments associated with:

:: Short deliveries, including imposition of penalties

:: Consumer complaints where the amounts were not agreed

:: Invoicing discrepancies such as duplicate invoicing where two invoices were issued for the same product

:: Deductions for unknown or un-agreed items

Video: Tesco Cuts: An Expert's Verdict

:: Deductions for promotional fixed costs (gate fees) that were incorrect

:: Deductions in relation to historical promotions which had not been agreed.

The investigation, which follows a catastrophic period for Tesco including store closures, will also look into suppliers having to make payments for better positioning of goods on shelves not related to a promotion.

Initially the probe will be restricted to Tesco, but it could be expanded to include other supermarkets if warranted.

Ms Tacon said: "I have taken this decision after careful consideration of all the information submitted to me so far.

"I have applied the GCA published prioritisation principles to each of the practices under consideration and have evidence that they were not isolated incidents, each involving a number of suppliers and significant sums of money."

Video: Timeline Of Tesco's Decline

A Tesco spokesman said: "We have taken action to strengthen compliance and ... we are changing the way we work with suppliers.

"We will continue to co-operate fully with the GCA as she carries out her investigation and welcome the opportunity for our suppliers to provide direct feedback."

Business Secretary Vince Cable said: "This is an historic day for the groceries code adjudicator and shows we have created a regulator that has real teeth.

"I would encourage anyone with any evidence of wrongdoing to come forward and to be confident of being able to do so confidentially as their anonymity will be protected by law."

16.01 | 0 komentar | Read More

New Co-Op Chairman To Donate Pay To Charity

By Mark Kleinman, City Editor

The businessman being lined up as the Co-operative Group's first independent chairman is to donate his six-figure pay package to charitable causes linked to the mutual.

Sky News has learnt that Allan Leighton is expected to declare his intention to give away his salary if he is confirmed in the role as expected in the coming days.

The gesture, which has yet to be formally agreed, would reflect Mr Leighton's commitment to the role, according to insiders.

Another option said to have been raised by board members was to pay Mr Leighton a token annual salary of £1.

Discussions about his appointment are understood to have been held by Co-op board members on Tuesday, with the group keen to finalise his appointment as soon as possible, a source added.

If Mr Leighton does take the role, it would represent a major coup for the UK's biggest mutual as it strives to rebuild its reputation after two years of crisis.

The size of the salary which Mr Leighton would accept on a nominal basis was unclear but is understood to run to six figures.

Allan Leighton is in pole position to take the Co-op role

Sky News revealed on Monday that he was in pole position to take the role, with board members attracted to his track record at running organisations with large numbers of employees and reputation for shaking up troubled institutions.

A former chief executive of Asda, Mr Leighton became a prominent figure during talks over the future of Royal Mail during a stint as its chairman several years ahead of the postal operator's privatisation.

His current roles include the chairmanships of Entertainment One, the media group, the set-top box manufacturer Pace and the retail chain Matalan.

Joining the Co-op would represent an important personal step for Mr Leighton, who has frequently cited his father's career as a Co-op store manager in media interviews during recent years.

During his time at Royal Mail, Mr Leighton advocated transforming the business into a mutually owned organisation, and he is understood to have sought a number of assurances about potential reforms at the Co-op during talks with board members.

The Co-op has been seeking a new chairman to succeed Ursula Lidbetter, who took on the role temporarily last year, for several months.

The group was left reeling in 2013 when it emerged that its banking arm was facing a £1.5bn black hole as it tried to acquire more than 630 branches from Lloyds Banking Group.

The Co-op Bank's chairman, Paul Flowers, was subsequently exposed by a tabloid newspaper as a serial drug-user, plunging the Co-op name deeper into crisis even as it surrendered control of the high street lender to American hedge funds.

Separate independent inquiries led by Lord Myners, the former City Minister, and Sir Christopher Kelly, a former civil servant, concluded that there was a need for an urgent overhaul of the Co-op's governance, board structure and array of commercial activities.

There was further turmoil at the top last year when Euan Sutherland quit as the group's chief executive after details of his pay package were leaked to the media.

Mr Sutherland was replaced by Richard Pennycook, a former director of Wm Morrison, the supermarket chain.

Since then, Co-op members have voted to approve reforms including reducing the number of lay directors on its board and the appointment of a majority of independent directors.

Last year, the Co-op Group - which boasts annual turnover of £11bn from businesses ranging from food retailing to funeral-care - returned to the black following a £2.5bn loss in 2013.

The group's seven million members will have the opportunity to vote this year on whether it should end decades of financial support for the Labour Party.

A Co-op spokeswoman declined to comment on Tuesday.

16.01 | 0 komentar | Read More

Sky Beats Forecasts With Strong UK Growth

The UK's biggest pay-television company underlined continuing growth opportunities in its home market on Wednesday with a strong set of half-year results.

Sky plc, the owner of Sky News, said that adjusted operating profit in the six months to December 31 rose by 16% to £675m, with revenue up 5% to just over £5.6bn.

The performance beat City forecasts, and featured a number of notable achievements, including Sky's highest customer growth in nine years and the addition of 1m product sales, the highest level for four years.

Sky, which has just launched Fortitude, the most expensive drama it has ever produced, also said that new revenue streams such as its Sky Store on-demand service had performed well.

Last year, the company struck separate deals costing around £7bn to acquire control of its namesake operations in Italy and Germany.

It said that growth in Germany had hit a record level with 214,000 new customers and the highest growth in 12 quarters in Italy.

Jeremy Darroch, Sky's chief executive, said the results represented "an excellent operational and financial performance".

"The strength of our performance in the UK and Ireland shows that our approach to segmenting the market with the complementary Sky and NOW TV brands is working," he said.

"Across the board, customers are responding to our investment in more high-quality TV and innovative new services.

"This has resulted in the highest customer growth in nine years, the highest total product growth in four years and the lowest churn in a decade."

Since the end of 2014, Sky has announced a partnership with Telefonica Europe that will allow it to offer mobile voice and data services to customers.

Those services are expected to launch next year.

More immediately, Sky faces a crucial test of its ability to retain its position as the leading broadcaster of live Premier League football.

An auction of seven packages of matches for the three years from 2016-17 is scheduled to get underway on Friday.

BT, the other incumbent rights-holder, and Discovery Communications, which has a controlling stake in Eurosport, are also expected to bid.

16.01 | 0 komentar | Read More

Sony Hack Will Not Derail Profit Turnaround

Sony has said it does not expect the devastating hacking attack against its film arm to affect the company's return to profit.

Profit of 20 billion yen (£112m) is forecast for the year ending in March, following a 40 billion yen (£224m) loss the previous fiscal year.

Sony Corp said strong than expected sales of its PlayStation 4 gaming console were boosting its finances.

It also said it was benefiting from solid sales of devices, higher network services revenue and an upturn in its financial services business.

However, continuing decline in its mobile phone business will see 1,100 jobs being cut.

Video: Sony Boss' First Comments On Hack

The company has scaled back its operations in China as cheaper handset makers such as Xiaomi gobble up more of the market.

Both Sony's music and movie divisions benefited from a weakening Japanese yen, which improves profit earned in dollars when brought back to Japan.

Results for the October to December period had been delayed after the hacking attack on Sony Pictures Entertainment.

The cyberattack, which the FBI says originated in North Korean, was in retaliation for The Interview, a Sony film depicting a fictional plot to assassinate Kim Jong-Un.

The Interview has since become Sony's highest-selling online film of all time

16.01 | 0 komentar | Read More

BP Full-Year Profit Down 9.7% Amid Crude Slide

Oil giant BP has seen its full-year profit drop by almost 10%, amid a global slide in crude prices.

It said the underlying replacement profit for the 12 months ending in December was $12.1bn (£8bn) against $13.4bn (£9bn) in the previous year.

The fall of 9.7% was less than expected by industry analysts.

Its major production partnership with Russia's Rosneft saw a profit decline of almost 15%.

BP said net debt for the company at the end of 2014 stood at $22.6bn, compared with $25.2bn in 2013.

The company, which is still feeling the effects of the Gulf of Mexico oil spill in 2010, said it suffered a fourth quarter pre-tax charge of $477m, taking the full-year total to $819m.

The declining fortunes come as global crude prices have dropped by around half since June.

Chief executive Bob Dudley said the company's focus will now be on "resetting BP, managing and rebalancing our capital programme and cost base for the new reality of lower prices".

On Monday, an oil summit was held in Aberdeen where Scotland's First Minister Nicola Sturgeon described the situation as "very challenging".

Industry leaders called for tax cuts in the sector that employs around 440,000 people across Britain.

BP said it would reduce its global capital expenditure this year to around $20bn, down from a previous estimate of some $25bn.

Rival Shell last week said it would cut its expenditure by around 4.5%, while Chevron said it would slice spending by 13%.

Conoco is cutting expenditure by a third.

Meanwhile, BG Group has announced a decision to write down the value of its business by nearly $6bn in 2014, forcing it to slash its 2015 investment budget by around 30%.

BG, Britain's third largest energy firm, said full-year total operating profit fell by 14% year-on-year in 2014 to $6.5bn.

16.01 | 0 komentar | Read More