|
|
By Alan, on March 12th, 2012
 The controversial advertising campaign ran by TUI Travel that capitalised on the plight of their big rival Thomas Cook has paid off, and the biggest tour operator in the world last month significantly outperformed the rest of the market.
The company behind the First Choice and Thomson brands have said in a first-quarter update that the sales of summer holidays during they key January booking period had been flat compared to 2011, although the wider industry has suffered a 14% slump.
The chief executive of TUI, Peter Long, has admitted that TUI were clearly a beneficiary in the troubles that Thomas Cook were facing, who last year were forced to take measures of emergency financing. TUI launched a new campaign at the height of their competitors woes which bragged that ‘unlike a certain holiday company, customers didn’t have to worry about how they ran their business’.
Mr Long has defended this move, and insisted that TUI had to make it clear to everyone that the Thomson brand is not part of the Thomas Cook group, a popular misconception among many. He said that what they did at the time was to make it crystal clear to customers that Thomas Cook and Thomson were two completely different companies under completely different ownership.
Mr Long also said that he was satisfied with the performance of TUI during the 3 months to 31st December, despite their operating losses widening from £86m to £109m. This has been blamed on the unexpected downturn in demand for holidays to North Africa. TUI reported their first quarter results the day before Thomas Cook, but said that they have not yet seem the major impact that the Costa Concordia disaster could have on their cruises.
By Alan, on March 9th, 2012
 It cost the BBC £877m to relocate to Salford in what turned out to be an ill planned move given the fact that it has been so unpopular, did not create many jobs for locals, and was simply too costly to be practical.
In fact, John Simpson called the move a simple box-ticking act, and given the fact that many people had to move 200 miles in order to keep their jobs their employees were not happy either.
Locals are upset about it as well seeing as the area was promised 15,500 new jobs would become available with the move, most of which did not open up In fact, last week it was discovered that only 16 local people in Salford were actually hired to work at BBC North full time, even though the city sports a population of over 200,000.
This is despite the fact that BBC North is now the home of Radio 5 Live, BBC Children, and BBC Sport. Soon the BBC North location will also be the home of BBC Breakfast and BBC Three.
Local MP, Hazel Blears, said that she was disappointed and shocked by the news that the broadcaster has not followed through with its promise of creating local jobs and the community newspaper, Salford Star, stated that the news was scandalous. At the same, time that locals are criticising the move, and stories are starting to come out about just how much the move cost the BBC, making it seem like the entire affair was misguided from the start.
It is estimated so far that the BBC has spent around £11m on just travel and temporary accommodation for its workers over the past two years and an additional £8m on hotels for its London employees. The move also most likely caused its executives’ expenses to increase by about 20% over 2011 because of the high costs of regular rail fare and accommodation.
The BBC Corporation stands by its decision claiming that they will earn back the last few years of costs in the next two decades while at the same time offering a better level of service to its Northern customers.
By Alan, on March 7th, 2012
 Shares in the transport company Stobart have recently fallen by over one percent after an announcement that the company are going to be purchasing a property business in London.
Stobart recently announced that they are buying a group of retail, commercial, and industrial properties, with a value of over £100 million.
This is what is known as a related party transaction which means that the company must seek the approval of its shareholders before it goes through. The deal was announced last April and there have so far been no shareholders who have dissented, however there is plenty of opportunity for them to do so before the deal goes through.
Interestingly, the company is buying the properties off its leading directors and this is not the first time that such a purchase has happened. In 2009, Carlisle airport was taken over by the company through a purchase from its director William Stobart.
When the deal was announced in April, it was originally hoped that it would have all been completed by August. Unfortunately, there were then some delays which the company have said are due to the fact that they want to conduct an appropriate amount of due diligence. The company has announced that they want to make sure that the structure is as tax efficient as possible and that the debt is managed the best way.
Mr Stobart recently announced that he is expecting his company to meet the market expectations overall. He has said that some divisions have underperformed, while others of over performed, but they have balanced out to meet the market figures.
He also highlighted how transport is a business being hard hit by the recession and some restructuring has taken place to better handle the change in the economic climate.
By Alan, on March 3rd, 2012
 The recent sale of the family’s dairy business means that the Wiseman brothers are going to be getting a lot of financial advice about how to invest the profits they have just made from the sale.
The company has been sold to Muller for nearly £100 million. Alex Salmond is not going to be as pleased as the brothers as he has constantly been seeing more and more Scottish companies being taken over by international giants.
One of the most high-profile takeover deals in recent times was the sale of the British company Cadbury to the American company Kraft. This was something that attracted a great deal of criticism in the UK but despite this, people are generally quite cavalier towards the idea of international companies taking over British firms.
Interestingly, some governments place restrictions on the sale of domestic companies to international giants. For example, in France, there are regulations which would make the dairy takeover by Muller forbidden. In the past, France decided that yoghurt making is an industry that cannot have its firms taken over by international competition.
This is not something that is restricted in the UK and although the sale of this dairy company might not seem to be very significant it is important to remember that milk is a staple food. In the past, companies that have been sold to Germany have caused an effect on the UK consumer, and this has not always been positive.
The sale of Thames Water to an international company caused Britain to suffer a bad drought in 2005. The sale was reversed by the government in order to make sure that the problem wouldn’t happen again.
The Comment Agricultural Policy distorts the milk market and additional problems are faced because supermarkets put a great amount of pressure on milk suppliers. This has made the market unpredictable and is probably one of the reasons why Robert Wiseman wanted to get out of it. By taking the Euros from Muller he was able to avoid all of the troubles in the market.
The problem with the sale of companies to international rivals is that it generally only benefits investors. Harm can actually come to the UK consumer and the government should pay some consideration to this and consider introducing restrictions. When takeover decisions are made, consumers, food research, and the jobs of the people at the company are usually a secondary consideration after profit.
The Royal Bank of Scotland has been coming under a great amount of criticism lately. Despite being owned largely by the UK taxpayer, they helped finance the takeover of Cadbury by Kraft, which was a largely unpopular move with the population.
The takeover has meant that a factory was closed in Bristol and many jobs were lost. Furthermore, controversy has surrounded the owners of Cadbury who have now decided to do their taxes from Switzerland to avoid their dues.
The bank has also come under criticism for offering to pay its chief executive £5 million despite his failure at bringing the bank out of trouble. This whole situation seems quite unusual because the bank seems determined to undermine commercial interests in the UK despite being owned by the UK taxpayer. Many people have called for the bonuses of these banking executives to be cut as they are an embarrassment to the banking system.
In other news, the market has not responded well to estimates by the cruise company Carnival, after they have estimated that they will lose just over £60 million because of the sinking of the Costa Concordia. The figures seem to completely ignore any damage to the firm’s reputation that might be done by the sinking of the vessel.
By Alan, on February 24th, 2012
 Orion Group, the provider of engineering manpower, has recently worked out a deal with a Canadian energy company that is going to provide them with £100 million worth of work over the next five years.
The deal has been struck with Nexen Petroleum UK and the company is going to be providing the manpower for a development taking place in the North Sea. The companies already have a working relationship and they have confirmed that the companies will be working together on these deals for an additional three years. If you include the current contracts which have been extended then the company is providing $20 million every year to the Orion Group.
Nexen Petroleum is a company that is owned by an oil and gas company called Nexen Inc, which is based in Canada. The Orion Group is based in Inverness and it has been chosen to supply works for two of the company’s projects which are taking place just 40 miles from the city of Aberdeen.
A spokesperson from the Orion Group has stated that this is going to have an immediate effect on the company. The chairman of the company is Alan Savage who has also commented, “The fact we’ve been selected by this company to provide their manpower solutions is a testament to our ability and strength. Nexen is one of the world’s greatest energy suppliers and we are very pleased to be able to offer them our services.
“This is going to be a very important year for the company and we are expecting many new opportunities to arise over the coming months”. The company was established in the late 1980s and it was initially a small employment company. Now however it has grown into a much larger operator with around 3500 staff being based in the UK alone.
By Alan, on February 22nd, 2012
 Bovis Home Group is a British house builder that is expecting to increase the amount of profit it makes significantly this year.
It has recently introduced measures which are expected to boost the company’s profit margins.
David Ritchie is the Chief Executive of the company and he has recently stated, “We are expecting to see an increase in revenue as well as offering better prices and increasing margins. When you combine all these factors together it is going to have a very positive effect on our bottom line.”
UK house builders have had several difficult years but recently they have started to improving their profit margins, and this is helping to improve the overall picture for them. Furthermore, the cost of land is falling and a shift from demand in apartments towards houses is helping to increase business.
Bovis is a relatively small building company and in order to boost profits they have decided to focus more on the south of the country where things are more prosperous. The company are also going to be increasing the number of sites that they are operating from in the country.
These moves by the company are enabling their profits to recover and despite the market being rather flat overall, the company is doing quite well. Mr Ritchie has stated that he expects the market to remain in a poor condition in the near future but he expects that the fortune of his company will be increasing soon enough.
He commented, “So far things have been going well in 2012 and I expect this to continue throughout the year. It seems that people are still interested in buying homes and of course this is good for business.”
That said, in the market there are fewer people looking to buy a home for the first time. Mortgages have been hard to find and many young people are failing to find the money to afford one. The government is attempting to launch measures to improve the situation in the market and one of the latest to launch is the mortgage indemnity scheme which should be coming this Spring.
By Alan, on February 21st, 2012
 Scientists in the United States have recently called for the government to introduce stricter regulation about the consumption of sugar.
Scientists have said that sugar can be as damaging to health as alcohol and it is the major cause of the obesity epidemic in the United States.
Scientists are proposing that a tax on sugary foods should be introduced but responses to the proposal have been rather mixed. A similar tax has been suggested for the UK and once again people have a mixed feeling about it. One of the biggest criticisms is that many people feel it would just be another tax on the poor. From a more scientific standpoint, people are saying that sugar is not the greatest problem but that fat is.
Taxing foods that contain what the government sees as having too much sugar is not exactly a new idea. In Hungary there is already a tax in effect for food with too much sugar. In Switzerland, Denmark and Austria bans have already come into place stopping the use of trans-fats in foods.
Studies have shown that sugar has a similar effect on the brain as some addictive substances. In fact, the association with the brain and sugar stimulates similar receptors that are turned on by opiate drugs.
The idea behind the tax is that it will discourage people from buying food that is unhealthy as it will be more expensive. Research has shown that this is likely more effective than people being better informed about the health consequences of eating unhealthy foods.
The question many people will ask is whether this sort of tax has been effective in the past. A common criticism is that people who smoke don’t stop buying cigarettes simply because the tax on them has increased.
There are also potential health consequences about taxing sugary foods. In some countries that have imposed the tax they have seen a significant increase in the amount of salt people are consuming. One of the major complaints is also the fact that everyone will be penalised by this tax, even people who have an otherwise very healthy diet. It is also expected that this tax would disproportionately affect the poor.
By Alan, on February 17th, 2012
 Unions have repeatedly called on the government to place employees at the centre of measures that are supposed to be able to tackle the overcompensation of executives.
Vince Cable has recently come under a lot of criticism for refusing these calls and instead saying that it is the responsibility of shareholders to reduce the amount of money that executives are being paid.
The Business Secretary had to bring forward the announcement of its plan because of pressure from his shadow in the Labour Party, Chuka Umunna. The plans states that shareholders will be able to hold a vote about how much remuneration executives are going to get. The vote is only going to apply to amounts that are more than the rate of the executive salaries.
Many campaigners have said that this is not a convincing enough step to reduce executive remuneration. Many in the city however have welcomed the announcement by Mr Cable. The GMB union is led by Paul Kenny who is a veteran campaigner for employee rights and he commented, “It is unacceptable to think that shareholders will be responsible in deciding how much managers get paid.
The fund managers are often benefited by the high compensation of executives and we can’t expect them to be fair about their votes. Essentially, Mr Cable is limiting the voice of employees within companies and it is unacceptable.”
Mr Cable did comment that there is no magical way to solve the problem of executive pay. He commented, “What is clear though is that it is unacceptable for the pay of executives to rise so much when the stock exchange is in such poor shape.” He recently appeared in the House of Commons during an unscheduled performance and it did not impress the party’s Conservative partners. Philip Davies a Conservative MP said to Mr Cable, “In all my years in politics I have never heard such nonsense.”
Many other Conservative MPs echoed the comments of Mr Davies saying that Mr Cable should not be getting involved with big business and instead just letting them get on with the process of creating more jobs.
Mr Cable also outlined several other plans during this consultation including plans for greater diversity on board rooms. He specifically said that there must be two people on a board that have never sat on one before. This will help remuneration reports be more understandable by the layman. Previously these reports have been so complex people generally don’t understand how much everyone is getting paid.
Much of the criticism directed at Mr Cable has been that his department is not taking a radical enough approach. In answer to these criticisms, Mr Cable said that out of the 12 proposals that have been put forward by the High Pay Commission, he has taken 10 forward. Other people have said that his steps are very significant, including a remuneration partner for the accounting company PricewaterhouseCoopers, Sean O’Hare, who commented, “These plans by Mr Cable bring the most significant change the way executives are paid for over 10 years.”
There is some degree of scepticism over the influence that the shareholders will have over remuneration. About 40 percent of shares in these companies are held overseas and the holders are more familiar with markets and economies that are very different.
By Alan, on February 11th, 2012
 Laura Ashley, one of the High Street’s most established names, has renewed its deal with Venda, one of the world’s leading providers of online retail services.
The chain will now continue to use Venda’s eCommerce services for another three years having originally signed up in 2005. Gail Cayuela, head of direct business at Laura Ashley, added that her company had been extremely happy with the relationship they had developed with Venda and hoped for an even more successful future for both parties.
The partnership is also an award-winning one, having secured two prizes in the 2011 Website of the Year awards. Laura Ashley won Best Website in the Housing & Interior category, one of the first projects launched on Venda’s cloud-based platform six years ago.
Group CEO at Venda, Eric Abensur, praised Laura Ashley for the company’s commitment to multi-channel commerce websites and the fact that they have embraced technology as a selling tool so enthusiastically. He too welcomed the new deal and hoped for a long and successful relationship between the two businesses.
By Alan, on February 2nd, 2012
 Nearly £500 million has been awarded to a Bristol company responsible for manufacturing missile systems. The money has come in the form of a contract from the Ministry of Defence. The company is called MBDA UK and is going to be creating a system for the Royal Navy which is going to be capable of destroying missiles in coming at speeds faster than the speed of sound.
It is expected that this new contract is going to allow the company to keep 500 people employed and is going to last for around half a decade. Peter Luff is the Minister for defence equipment and he has commented, “The UK is a leading country in the development of missiles and we are committed to providing our armed services with state-of-the-art battle technology.
This missile system is at the cutting edge of the missile creation world and it is going to help protect the U.K.’s interests at home and abroad.” The concept designs for the missile means it is going to be able to protect over 500 square miles of the sea or land. The missiles will also be able to travel at Mach 3 and can destroy multiple targets at once.
The missiles are designed to be fitted on a frigate ship and are going to be replacing the current air defence systems of these vessels which is scheduled to go out of service in four years time. It is also expected that the missiles are going to be adapted for use by the RAF and the Army.
|
|
The controversial advertising campaign ran by TUI Travel that capitalised on the plight of their big rival Thomas Cook has paid off, and the biggest tour operator in the world last month significantly outperformed the rest of the market.
