Purplebricks Eyes Latest UK Tech Flotation

By Mark Kleinman, City Editor

One of the UK's fastest-growing online estate agents is drawing up plans for a stock market listing that would provide capital for an aggressive assault on established high street rivals.

Sky News has learnt that Purplebricks, which counts the City's best-known fund manager among its shareholders, has been talking to investment banks in recent weeks about working on a flotation.

The company is understood to be planning to hire advisers imminently, sources said on Friday.

The business is among a new breed of digitally-led estate agents which are attempting to bring a similar level of customer experience to industries such as holiday bookings and grocery shopping, which have been revolutionised by online competitors.

Purplebricks was set up less than a year ago, and now has backing from Neil Woodford, the former Invesco Perpetual fund manager, who set up his own asset management venture last year.

Mr Woodford invested £7m in Purplebricks, which enables home-owners to sell their properties for a flat fee of £599, compared to an average sum paid to estate agents of more than £5000 based on the typical commission of 1.8% of a property's value.

Purplebricks also offers a service to landlords, offering a tenant-finding service for a one-off fee of £199.

Its other backers are reported to include Errol Damelin, the former boss of payday lender Wonga, and Paul Pindar, former boss of Capita, the outsourcer.

Last autumn, Mr Woodford was quoted as saying that that the company had "the vision, the technology and an experienced management team. With the funding at its disposal, I see a significant opportunity for the business to lead the market in changing the way we buy and sell houses.

"Given that the vast majority of property searches take place on the Internet, a business that provides a 'virtual' offering without expensive high street offices can significantly undercut the current market." 

Founded by brothers Michael and Kenny Bruce, who ran the estate agent Burchell Edwards before its sale in 2011, Purplebricks is far from the only new entrant to the market.

Sir Charles Dunstone, the co-founder of Carphone Warehouse, recently ploughed millions of pounds into HouseSimple, while the easyJet founder Sir Stelios Haji-Ioannou, has launched a site called easyProperty.

The emerging online players have tried to add value to the property-selling process by allowing customers to personalise the services they use while charging lower fees than high street peers.

A number of estate agents have listed on the stock market in recent years, including Foxtons, the hard-charging firm known for its distinctive fleet of cars, and Zoopla Property Group.

A Purplebricks spokesman declined to comment.

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US Jobless Rate Tumbles To 5.5% In February

The US jobless rate plunged last month as hiring accelerated, raising expectations of a possible interest rate rise by the Federal Reserve.

The world's biggest economy created 295,000 net new jobs in February, despite some severe weather disruption and mounting layoffs in the oil industry because of recent price weaknesses, the Labour Department reported.

The unemployment rate was down to 5.5% from 5.7% in January - its lowest since May 2008.

The data meant that 3.3 million more Americans have taken jobs over the past 12 months.

Separate Commerce Department data also contained good news with the US trade deficit falling to $41.8bn in January as imports declined more than exports.

Financial markets expect the Fed to raise rates this summer and the payroll report will have done little to dampen that forecast.

The dollar, which is at 12-year highs against the euro, gained further ground though stocks barely moved amid the frenzy over rate rise speculation.

However, wage growth - a key metric eyed by the Fed - among the workers of private firms was just 0.1% last month.

It may be that Fed chair Janet Yellen would want to see a stronger rally in salaries before imposing increases in borrowing costs.

The report showed average hourly wages rose just three cents from January - 2% up on a year ago.

Hiring was strong in restaurants, health care and administrative services.

The oil and gas industry, just beginning to cut back in the face of the crash of crude prices, shed about 8,500 jobs.

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Big Firms Forced To Reveal Gender Pay Gap

Thousands of large companies will be forced to share details of the difference between what they pay their male and female workers.

The Government has agreed to implement the Liberal Democrat measure despite years of Tory opposition to it.

The move will mean companies employing more than 250 people will be required to publish the gap between average pay for their male and female workers.

More than 10 million people across the UK are currently working at firms covered by the legislation.

The current approach, which is voluntary, has seen only five out of around 7,000 large companies publish their gender pay gap.

Video: Dec: Gender Pay Gap

The new measure, which will come into force within 12 months, could result in fines of up to £5,000 for firms that do not reveal the details.

Equalities Minister Jo Swinson said she was "delighted" her party won the "argument in Government".

She said the move "will force companies to ask themselves difficult questions about how they are valuing the contribution of women in their workforce and act to address problems".

Deputy Prime Minister Nick Clegg said: "These measures will shine a light on a company's policy so that women can rightly challenge their employer where they are not being properly valued and rewarded."

The legislation will be debated in the Lords on Wednesday, with the Government tabling an amendment to the Small Business Bill.

A Government spokesman said: "Under this Government the gender pay gap is the lowest ever and has virtually been eliminated for those working full time under 40.

"However the pay gap persists, so we think it's time to move forward, so we can create the conditions to ensure that there is equality in workplaces across the country."

Video: Dec: Gemma Arterton On Equal Pay

Shadow equalities minister Gloria De Piero said: "This is fantastic news for women but why have they waited so long?

"The reality is that it's only when the Government realised they would be defeated on this issue by Labour in the House of Lords that they saw the need to act."

The move comes as the head of the UN agency promoting equality for women said not a single country has reached gender parity.

UN Women executive director Phumzile Mlambo-Ngcuka made the comments 20 years after a groundbreaking conference in Beijing where 189 nations adopted a blueprint to achieve equality for women.

Ms Mlambo-Ngcuka said that although progress had been made since Beijing, there are still fewer than 20 female heads of state and government.

She said the number of female politicians increased from 11% to just 22% in the past 20 years.

Ms Mlambo-Ngcuka also said "the sheer scale of the use of rape that we've seen post-Beijing", especially in conflict situations, "tells us that the women's bodies are viewed not as something to respect, but as something that men have the right to control and to abuse."

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Dozens Remain In Millionaires' Ranks At RBS

By Mark Kleinman, City Editor

The state-backed Royal Bank of Scotland (RBS) will disclose on Friday that it paid dozens of employees at least £1m last year, just days after reporting a £3.5bn annual loss.

Sky News understands that the lender will publish figures showing that the number of staff earning more than the £1m sum fell only marginally from 75 individuals a year earlier.

The disclosure will be awkward for RBS despite the fact that its overall bonus pool fell by more than 20% in 2014, and a decision by its chief executive to waive a £1m share allowance.

The bank will include the number of millionaires in its remuneration report, which is also expected to confirm a six-figure payout to Stephen Hester, its former boss, under a long-term incentive plan.

For the first time, RBS will denominate the number of millionaire staff in Euros, in order to comply with guidelines set by the European banking watchdog.

A source familiar with the figures said that when calculated in sterling, the decline in the number of millionaires would be "modest".

Last week, RBS said it had made a loss for the seventh consecutive year since being bailed out with more than £45bn of taxpayers' money.

The performance prompted Ross McEwan, its chief executive, to forego a £1m payment, which he said would have distracted from  to avoid distracting from "the task of building a great bank for customers and shareholders".

This week, the European Banking Authority cast renewed doubt on the ability of banks to continue awarding those payments.

RBS has been plagued by remuneration rows since its rescue in 2008, and was last year prevented by the Treasury from making variable pay awards on the same basis as commercial rivals.

Sky News revealed last month that RBS and Lloyds Banking Group would restrict cash bonuses to £2000 for a further year.

RBS has also decided that it will no longer pay annual bonuses to any members of its executive committee in a permanent decision cast by some City investors as endangering RBS's ability to compete for talent.

Mr McEwan and other top executives remain eligible for share awards under RBS's long-term incentive plan, which in the chief executive's case can have a maximum value at award of £2m.

Last week's results dashed hopes of a return to profit after a £4bn writedown of goodwill relating to Citizens, RBS's US bank.

Mr McEwan also announced further measures to improve the performance of its corporate and investment bank, including "substantial" job cuts which reports this week suggested could account for as many as 80% of the 16,000 positions within the division.

The decision marked another nail in the coffin of RBS's attempts to build a global investment bank, drawn up under Fred Goodwin, its former boss.

RBS also confirmed the appointment of Sir Howard Davies as its new chairman, replacing Sir Philip Hampton.

The bank declined to comment on Thursday on its remuneration report.

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Osborne 'Regrets' Lack Of Radical RBS Reform

The Chancellor has admitted he regrets not beginning a radical restructuring of Royal Bank of Scotland (RBS) following the last General Election.

George Osborne also told the Financial Times he would look to "get rid of" the taxpayer's "massive" 80% stake following the coming election, should he remain in the post, but warned the process may take many years.

He said: "First, it's not an exact science but on some measures it's bigger than all the privastisations of the 1980s put together.

"Second, I think people want to get their money back. The British taxpayer wants to feel they haven't suffered some enormous loss.

"So there are constraints around it but it's certainly something I would want to get moving on in the summer after the election."

Video: RBS Boss Dismisses Job Cull Figure

One option Mr Osborne ultimately ignored was a recommendation to break-up RBS - favoured by the business secretary, Vince Cable in 2012.

In 2013, RBS created its own so-called 'bad bank' to hold billions of pounds of its most risky assets.

Mr Osborne was instrumental in determining the bank's new focus on UK retail and corporate banking, having overseen the departure of chief executive Stephen Hester in favour of Ross McEwan.

Mr McEwan told Sky News earlier this week he would not put a number on an FT report that the bank was planning to shed 14,000 of its 18,000 investment banking jobs as it moves to shrink operations in the US and Asia.

The Chancellor's efforts to sell-off the Government's stake in RBS may be hampered by its share price.

It is currently trading at 377p per share, well short of the 455p average needed to recover the £45bn spent propping up the bank in 2008.

Any Government would be under pressure to secure a profit for the taxpayer - something which has been achieved so far with the slow disposal of Lloyds shares.

The bank revealed last week it remained loss-making in 2014 and Sky News has learned its remuneration report, due to be released later on Friday, will show it continues to pay dozens of staff more than £1m annually.

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Club Med Owner Takes 5% Thomas Cook Stake

The new Chinese owner of Club Med has taken a 5% stake in Thomas Cook to begin a "strategic partnership".

The investment by Fosun, which bought French resort firm Club Med only weeks ago, is aimed at giving both Fosun and Thomas Cook access to new markets - with Thomas Cook hoping for access to China's growing tourism sector in the "medium term".

Its share price rose 16% in early trading in the wake of the announcement.

Fosun told the Hong Kong stock exchange it paid £91.9m for the shares and said it would seek to double its holding in Thomas Cook, the world's oldest travel group, to 10% with purchases on the open market. 

The deal could help Fosun promote holiday packages at Club Mediterranee SA, which is widely known as Club Med, as it looks to turn around the firm's struggling business in Europe.

"The investment in Thomas Cook complements other recent investments of the group in the sector, providing opportunities for further value creation," Fosun chairman Guo Guangchang said.

Thomas Cook, which lost its chief executive Harriet Green late last year, remains in the middle of a cost-saving plan but aims to grow this year despite also facing tough trading conditions in mainland Europe.

New chief executive Peter Fankhauser said: "Our partnership with Fosun is aimed at accelerating our profitable growth strategy by allowing us to further develop our differentiated product in our core destination markets, to collaborate with Fosun's other portfolio businesses particularly in France, and to access the world's largest and fastest-growing tourism markets with an experienced local partner.

"We are looking forward to working closely with Fosun's team to execute the commercial opportunities we are developing."

Thomas Cook's statement said it expected the tie-up to be earnings accretive in the financial year ended 30 September 2016, assuming plans under the partnership were implemented in 2015.

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Eurostar Stake Sale Raises £757m For Treasury

The Government has confirmed its stake in Eurostar is to be sold to a consortium of British and Canadian pension and infrastructure funds, raising almost £760m.

The Chancellor George Osborne said the sale, reported by Sky News on Tuesday night, represented a "fantastic deal" for the taxpayer and the money would be used to draw down debts and on core infrastructure.

However, rail unions accused him of putting short term financial gain ahead of the travelling public.

Under the agreement Caisse de depot et placement du Quebec (CDPQ) and Hermes Infrastructure have agreed to acquire the Government's 40% holding for £585.1m.

In addition, Eurostar will redeem the Government's preference share, raising a further £172m.

Video: Eurostar A 'Long Term Investment'

The stake in the cross-channel rail link operator was put up for sale last autumn as part of a plan to raise £20bn from asset sales by the end of the decade.

Eurostar, which launched its inaugural service in 1994, has seen a surge in demand, with more than 10 million passengers travelling on its trains in 2013 alone.

Among the other bidders for the Eurostar stake were 3i, the private equity firm, a division of the French bank Credit Agricole and an arm of the Singaporean government.

The remainder of Eurostar is owned by SNCF, the French state-owned rail operator, which controls 55%, and the Belgian government.

Mr Osborne said it was "a fantastic deal" for UK taxpayers that exceeds expectations.

"Investing in the best quality infrastructure for Britain, getting the best value for money for the taxpayer and tackling our country's debts are key parts of our long term economic plan, and in today's agreement, we are delivering on all three".

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1. Gallery: Eurostar: Fires, Frost And Facelifts

   Feb 1986: The Treaty of Canterbury is signed and the construction of the Channel Tunnel commences

May 1994: The Queen opens Waterloo International before travelling to Calais for the Channel Tunnel inauguration with the French President

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ScottishPower Sales Ban For Complaint Failure

ScottishPower has been handed a 12-day sales ban for failing to meet targets on handling customer complaints.

The industry regulator said the company, a member of the so-called 'big six' energy suppliers, had agreed to temporarily stop proactive selling from today as punishment for a series of failures.

Ofgem found the supplier had failed to remove a backlog of outstanding Energy Ombudsman decisions by a November deadline.

It said: "Customers were experiencing long call waiting times, receiving late bills and the firm was not implementing Ombudsman decisions.

"ScottishPower ... signed up to three Ofgem targets to improve customer service within three months or suspend proactive sales activities until the targets were met.

"It has failed to reach the target to remove the backlog for acting on Ombudsman decisions for individual complaints by the end of November."

Ofgem said ScottishPower's IT systems only allowed "a partial implementation" of the Ombudsman's proposed remedies and the firm had been providing thousands of affected customers with free energy and writing off past debt as a result.

The statement continued: "ScottishPower has assured us that these Ombudsman requirements will remain in force for any case where the company can only partially implement the Ombudsman's decisions.

"More than 2,000 customers are currently receiving free energy."

Sarah Harrison, who heads enforcement at the regulator, said: "A sales ban illustrates the difficulties ScottishPower is having in delivering the levels of service customers deserve.

"While Ofgem's targets have driven significant improvements in ScottishPower's performance, we remain very concerned about how customers are being treated.

"As well as our ongoing investigation, we require ScottishPower to undertake an independent audit of its progress on improving customer service.

"We will keep the need for any further action under review."

ScottishPower insisted it was committed to improving customer service and said it had voluntarily agreed to the improvement targets.

The chief executive of its retail and generation business, Neil Clitheroe, said: "The process of moving to our new (IT) system has been challenging and has resulted in service problems for some of our customers.

"We are determined to put this right. We continue to correct problems, pay appropriate compensation and ensure no customer is left financially disadvantaged."

It said the failure to clear complaints via the Ombudsman was down to the fact 30 cases had been closed incorrectly.

The statement continued: "We are all fully committed to delivering continued service improvements, return to the high service standards long associated with ScottishPower and ensure that our customers realise the very real benefits of our IT system investment."

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Heathrow Row Over Exchange Of Currency Firms

By Mark Kleinman, City Editor

Heathrow Airport has become embroiled in a bizarre commercial row over the withdrawal of one of the UK's biggest providers of foreign exchange services.

Sky News understands that Moneycorp, which is backed by the private equity firm Bridgepoint, is to leave Heathrow, the UK's busiest travel hub, in June, just 14 months into a five-year deal.

Its 28 outlets and staff will be transferred to Moneycorp's larger rival, Travelex, which will become the exclusive provider of currency exchange services at the airport.

The termination of Moneycorp's deal to operate at Heathrow prompted recriminations between the two parties.

In a statement issued to Sky News on Wednesday afternoon, a Heathrow spokeswoman said: "Moneycorp signed a contract in April 2014 to provide currency exchange services to passengers at Heathrow. 

"After eight months they informed us that they could not honour the financial terms of the contract and served notice that they will cease trading at the airport in June of this year.

"Travelex will now be the currency exchange provider at Heathrow. 

"Travelex comes with a wealth of experience in the foreign exchange market and we will work with them to offer our passengers good value for money, competitive rates and an excellent online pre-order service."

Just hours later, however, Heathrow said it was "rescinding" that statement, and issued a replacement which omitted any mention of Moneycorp being unable to honour the financial terms of its contract.

In a separate statement, Mark Horgan, Moneycorp's chief executive said the company had "resigned its contract with Heathrow Airport and will fully exit operations at each terminal by the summer".

He said: "The commercial opportunities at Heathrow did not materialise as expected and therefore the decision was made to refocus the growth of our retail business elsewhere."

Moneycorp has exclusive deals to offer foreign exchange services at five other UK airports, including Gatwick and Stansted.

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Eurostar Stake Sale Raises £757m For Treasury

The Government has confirmed its stake in Eurostar is to be sold to a consortium of British and Canadian pension and infrastructure funds, raising almost £760m.

The Chancellor George Osborne said the sale, reported by Sky News on Tuesday night, represented a "fantastic deal" for the taxpayer and the money would be used to draw down debts and on core infrastructure.

However, rail unions accused him of putting short term financial gain ahead of the travelling public.

Under the agreement Caisse de depot et placement du Quebec (CDPQ) and Hermes Infrastructure have agreed to acquire the Government's 40% holding for £585.1m.

In addition, Eurostar will redeem the Government's preference share, raising a further £172m.

The stake in the cross-channel rail link operator was put up for sale last autumn as part of a plan to raise £20bn from asset sales by the end of the decade.

Eurostar, which launched its inaugural service in 1994, has seen a surge in demand, with more than 10 million passengers travelling on its trains in 2013 alone.

Among the other bidders for the Eurostar stake were 3i, the private equity firm, a division of the French bank Credit Agricole and an arm of the Singaporean government.

The remainder of Eurostar is owned by SNCF, the French state-owned rail operator, which controls 55%, and the Belgian government.

Mr Osborne said it was "a fantastic deal" for UK taxpayers that exceeds expectations.

"Investing in the best quality infrastructure for Britain, getting the best value for money for the taxpayer and tackling our country's debts are key parts of our long term economic plan, and in today's agreement, we are delivering on all three".

CDPQ is a Canadian institutional fund manager with investments worldwide in major financial markets, private equity and real estate.

Hermes Infrastructure - part of Hermes Investment Management - is a UK-based fund managing approximately £3bn on behalf of clients.

Mick Cash, leader of the RMT union, said: "The news today that the Government has reached a deal to sell off the British slice of
our cash-generating Eurostar assets before the May election is pure Thatcherite industrial vandalism that makes us a laughing stock across Europe".

Manuel Cortes, leader of the TSSA rail union, added: "The reason that France and Belgium already own the majority stake in Eurostar is that they believe in running a publicly owned railway for the benefit of everybody.

"One-eyed Osborne, on the other hand, prefers the private English model where fat cat bosses are at the front of the queue, way ahead of the passengers".

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