Monday 29 November 2010

Total Rok redundancies hits 2,600.

Following a collapse in the sale of some parts of its business, construction firm Rok has announced that a further 1,800 jobs have been cut. Rok plc and Rok Building Limited were put into administration earlier this month after findings showed the company had failed in controlling its financial and operational aspects.

After an initial flurry of interest in the purchase of the maintenance division across the UK and the company construction business in Scotland, buyers lost interest following a review of Rok’s overall cost.

PwC administrator Rob Hunt said: “Regrettably, the redundancies made today were necessary as it became clear in the last 24 hours that we were not going to be able to find a purchaser for these parts of the Group.”

He added: “Operations cannot continue and hence we have had to take steps to close both the maintenance and improvements division as well as the Scottish construction division.”

Rok is still looking to sell its English construction and social housing division, which employs 500 people.

Wednesday 24 November 2010

Cheaper fuel and rising passenger numbers lead to Easyjet profits soaring.

The company reported profits of £154m since last September, tripling the £55m revenue made in 2009. Over the past year, passenger numbers increased by 8% bringing the total to 49 million, and as fuel costs dropped by 9%, the company saw a serious overhaul in takings.

Chief Executive, Carolyn McCall said: “We see clear opportunities for Easyjet to continue to take market share as charter traffic continues to decline, as weaker short-haul carriers retrench or fail and as new infrastructure capacity comes on stream.”

As well as these benefits, Easyjet is profiting from more and more European passengers opting for the British preference of flying via budget airlines.

McCall added the company would see added competition in the next year as budget airlines strive to win passengers in the new market.

The company also revealed its intentions to pay a dividend to shareholders in 2012.

Tuesday 23 November 2010

CBI announces new leader as John Cridland.

The Confederation of British Industry announced ‘veteran’ John Cridland had been appointed as the new director general. Mr Cridland has worked within the company for many years and was passed over for the job when he previously applied five years ago.

Taking on the £310,000-a-year post, Mr Cridland recognised the difficult time ahead for businesses. He said: “There are many challenges ahead in getting the economy growing and no one thinks that securing the UK’s economic future will be easy, but business people across the country are rolling up their sleeves and getting on with the job.”

Insiders have welcomed the news after fears a newcomer would disrupt internal affairs.

Former CBI director general, Lord Jones said appointing Mr Cridland would be beneficial to the business world, adding that his “knowledge, experience, popularity, contacts and prodigious hard work and application to the task will make an enormous contribution to the country in the hard years ahead.”

Thursday 18 November 2010

Google has seen setbacks following Fox TV turndown.

Google TV, launched in October this year, allows viewers to view websites and internet video on their television sets but after four major broadcast networks failed to agree in allowing access to their content, things aren’t looking good.

Following in the footsteps of ABC, CBC and NBC, American TV network Fox, has denied Google TV the right to air their programmes. With fears an online channel would mean advertising revenue would suffer, Fox refused Google in preference of TV adverts.

Reports have shown that Google were vague in their intentions to make profit from the venture and the major networks aren’t convinced.

Despite the recent setback, Google has remained confident, product manager Rishi Chandra said: “The web is a technology and it’s not unheard of whenever there is a new technology that a lot of incumbents in the space are trying to understand what that technology is going to mean for them.”

GE purchases 25,000 electric cars in a bid to boost the market.

In an attempt to “push the emerging technology and profit from its widespread rollout”, General Electric will invest in the fleet over the next five years. Manufacturer of electric charging stations, GE will convert at least half its 30,000 fleet to electric.

Beginning this month, GE hopes the purchase will lead to “wide-scale electric adoption and generate growth for its businesses.” Believing we are on the verge of an electric vehicle ‘boom’, GE will use the first 12,000 Chevrolet Volts as company cars for corporate customers.

GE Chief Executive and chairman Jeff Immelt said: “By electrifying our own fleet, we will accelerate the adoption curve, drive scale and move electric vehicles from anticipation to action.”

Predicting that the investment could lead to $500million in revenue over the next five years through sales of its electric-car recharger and other products, GE also said the purchase would not “reduce the number of Volts available to the public.”

FSA says UK investment firms must have mobile phone calls recorded starting next year.

Currently, landline phone conversations and e-mails regarding orders or transactions must be recorded but the Financial Services Authority says this must be extended to company mobile phones starting next November.

In a bid to “promote cleaner markets”, the FSA hopes to get rid of insider trading and warned steps should be taken to ensure private phones are not used by traders to carry out transactions.

The FSA said: “Removing the exemption will provide an extra source of voice and electronic communication evidence, which can be used to help us counter the key priority of market abuse and increase the probability of successful enforcement.”

With phone conversations recorded and stored for six months, the plans would mean the FSA could demand to hear the recordings at any time, minimising market abuse.

Although a positive step for safer business, financial firms have criticised the proposals branding them too expensive - with a start up cost of around £11m, companies would see figures reaching £18m annually to keep the plans running.

Friday 12 November 2010

Following the Gulf of Mexico crisis, BP is finally out of the red

The oil giant recorded a massive loss of nearly £11bn in their report of the last quarter after the monumental costs of the oil spill disaster.

After writing off over £20bn of the charges from the crisis in July, BP has reported they are back in profit after making revenues of £1.1bn this quarter.

The newest figures comes after a £4.8bn charge to the oil spill fund, proving revenue for the firm would have been higher still. 

Although a positive step for BP, it is still disappointing when compared with the £3.13bn profit the company saw in the same period for 2009.

Chief Executive, Bob Dudley said the results showed “good progress” for the giant adding: “This strong operating performance shows the determination of everyone at BP to move the company forward and rebuild confidence after the terrible events of the past six months.”

Boots sees improved profits thanks to sales of anti-ageing creams.

The company said half-year figures for its health and beauty division has seen profits rise by 2% thanks to the Protect and Perfect creams.

Despite revenue for the company as a whole rising by 6% to £8.9bn, Boots has announced its plans to cut 900 non-store UK jobs in order to cut costs.

With plans to save £56m per year by 2013-14, Boots has announced the majority of cuts will take place in Nottingham, the headquarters of Alliance Boots in the United Kingdom.

Chief executive, Alex Gourlay said the move would allow the company to “have a stronger and more agile support infrastructure fit for the long-term future.”

Thursday 11 November 2010

The Times editor positive about online paper despite falling readership

Following the risky decision to introduce a paywell to their websites, The Times and The Sunday Times has revealed that more than 100,000 people have paid joint subscriptions for content.

Before the paywall was introduced, T|he Times Online saw around 21million users a month, this number has dropped to 2.7million.

Despite the readership dropping, The Times editor, James Harding said the figures were hopeful. He said: “It’s very early days but we’re hugely encouraged by what we’ve seen. We’re seeing that those people who are reading the digital editions of The Times and The Sunday Times really like them, if they sign up for a trial they tend to stick with us.

“We’re at the beginning of transforming the economics of journalism.”

Wednesday 10 November 2010

Banks are right to withhold lending to some businesses

The vogue line from politicians of all colours at the moment is “we need to get banks lending to business again”. Well, at the risk of siding with the banks, many of the companies that are seeking loans and overdrafts are just not a viable risk.

Plimsoll, the leading financial analysts, contests that the reason companies such as Goldtrail Travel Ltd, and more recently Rok Plc, got into trouble was they existed on micro thin profit margins and the first serious bump in the road crippled them. Without the ability to borrow and paper over the cracks at what had become a barely profitable business model, they failed.

But, why should the banks be there to save unprofitable (or barely profitable) businesses? They have been quite correctly vilified for their reckless lending in the property market yet now they are being unfairly criticized for being prudent. Politicians, business leaders and the wider public must decide – either the banks are to lend responsibly or not, you can’t have it both ways.

It is up to business owners to build a “rainy day fund” to get them through the tough times and if they can’t then the bank is not to blame. Would you lend money to a company that exists on wafer thin margins and has to borrow money just to survive a slow couple of years?

Banks were wrong to lend to high risk individuals so recklessly - but refusing credit to risky businesses is what they must do if they are to fulfill government and electorate demands to lend more responsibly.

Friday 5 November 2010

Which industries are the most "dangerous" in the UK economy?

Latest statistics from the Justice Ministry show that number of companies going into administration has  fallen again in the latest quarter and is now down 35% on last year. Across whole sections of the UK economy, companies are getting their balance sheets in order as condition in their relative markets improve.

However, for many companies this improvement in conditions must seem a long way off. Market analysts Plimsoll have named the Top 20 most dangerous UK industries. Having rated every company in the UK across 1,500 different market sectors, we have been able to pick out the sectors with the high percentage of their participating companies in difficulty. This is the Top 20:

  1. Football Clubs
  2. Registered Social Landlords
  3. Care Homes
  4. Hotels
  5. Residential Care Homes
  6. Golf Courses & Clubs
  7. Public Houses, Bars & Inns
  8. Property & Estate Management
  9. Property Developers
  10. Health And Fitness Clubs
  11. Contract Hire
  12. Night Clubs
  13. Renewable Energy
  14. House Builders
  15. Commercial Estate Agents
  16. Van & Truck Hire
  17. Commercial Property
  18. Amusement Parks & Arcades
  19. Letting Agents
  20. Restaurants

These are the UK sectors with the highest percentage of companies in trouble. Click here to find out how many companies are in trouble in your market

Wednesday 3 November 2010

Government says all UK firms must offer pensions by 2016.

The new scheme will mean all UK businesses will be required to offer a company pension scheme to all staff aged over 22 and earning above £7,475 per annum.

With intentions to benefit those who have no retirement fund-currently between four and eight million people-the National Employment Savings Trust (NEST) will mean even those who often change jobs will have build up a pension for their retirement.

The scheme will begin next year and the government hopes all companies will be registered by 2016.

Pensions Minister Steve Webb said the move would help many UK employees who currently have no retirement fund to look forward to: “NEST will be the new low-cost pension scheme that will be the vehicle for saving for millions”.

Small businesses have reacted badly to the news, claiming the cost would not be enough for their books to handle. After the government announcement that the private sector would need to pick up where the public spending cuts left off, the new scheme would mean more financial hardships for ‘micro’ firms.

British Airways offers to restore cabin crew perks in a bid to end strike action.

The 12-month dispute between BA and the Unite union has been a long and gruelling process for BA, one that has cost the airline £150million.

Staff at BA previously received a 90% discount on stand-by tickets but following strike action from crew members, the company revoked the privilege.

It seems now that some BA employees involved with the strike action will have their travel benefits reinstated, but this will not be true for all as BA considers employee loyalty.

BA said that restoring the travel perks would only come into play if Unite agreed to abandon any legal action against the airline.

The Unite union will put the BA offer forward to members with results due in mid-November. If the employees involved agree to the deal, it would end one of the UK’s longest industrial disputes.

Tuesday 2 November 2010

Which UK Airports can cope with soaring security costs

With security costs at UK Airports set to soar in response to the recent Al Qaeda bomb threats, Plimsoll asks the question, "Which of the 138 companies that operate the UK's Airports can absorb the increased cost?"

85 of these companies are already in a precarious state financially and there is a fear in the industry that any new legislation or rules (from what Michael O'Leary calls "securicrats") will push up operators costs to a tipping point.

1 in 3 operators are now making a loss so they have little choice but to increase their prices accordingly, further adding to the cost of flying from the UK. With other European airports not being hamstrung by the controversial Air Passenger Duty intorduced by the UK coalition govetnment, there is a real danger that foreign carriers will look to other major European hubs for their key routes.

So, coupled with even more tax and now these extra security, is the UK set to lose its valuable trans-atlantic hub status and what effect will this have on the companies that run our Airports?

Click here to learn more about Plimsoll's unique assessment of UK Airport operators

UK left behind in top ten most successful countries.

The Prosperity Index by the Legatum Institute conducted the survey across 110 countries revealing the UK was behind in terms of economy and well-being.

The UK came in at number 13 on the list, lagging behind thanks to poor health and education services, although some areas in the economy remain average.

Senior fellow at the Legatum Institute, Dr Ashley Lenihan said: “Despite the recession, the UK continues to perform well on a number of important economic indicators.”

As the figures come in while the government announces the extent of the public spending cuts, it is not good news for Britain.

Dr Lenihan added: “There are signs of weakness in some areas of the UK. Measurements of healthcare, domestic security, and quality of education are the areas in which the UK ranks lowest.”

The group said that although the results were gloomy, the banking crisis was a big factor in the country’s performance as public confidence in financial institutions faltered.