Newspaper Summary
The Times
Osborne draws battle line with business over £9 living wage: George Osborne launched into battle with small business leaders by announcing that he is going to force all companies to pay staff a minimum wage of £9 an hour by 2020.
Iron’s in the fire as ore price follows Chinese markets’ downward spiral: The Chinese stock market panic spread to iron ore, amid mounting concern about the state of the world’s second-largest economy.
Small banks count cost of surcharge: Britain’s big lenders are the main beneficiaries of changes to the bank levy that came after months of industry lobbying and threats by HSBC to leave the country.
Former Sainsbury’s Chief Justin King to lead review of Thomas Cook: A veteran supermarket Boss who led J Sainsbury for a decade is to carry out an independent review of Thomas Cook after fierce criticism of the holiday company over the deaths of two children at a hotel in Corfu.
So, what’s it going to be — living wage or cheap groceries?: Staff at Sainsbury’s could be forced to choose between higher pay and cut-price groceries as the supermarket chain contemplates the cost of introducing a living wage.
The Independent
Greece debt crisis: Athens blinks first as Alexis Tsipras promises to ‘immediately implement’ reforms in return for loan from bailout fund: Greek leaders appeared to blink first in the Eurozone stand-off with Germany, promising to “immediately implement” tax and pension-related measures in return for a three-year loan from Europe’s bailout fund.
China stocks: The financial crisis that has wiped $3 trillion off the stock markets: While most recent financial news has focused on the crisis currently facing Greece, another disaster is stirring further east that makes Alexis Tsipras’s problems look like chicken feed.
Financial Times
Monitise suffers fresh blow with Visa Europe to sell its stake: Embattled mobile money group Monitise has suffered a fresh blow after Visa Europe, one of its key shareholders, announced plans to sell its stake in the company, just days after issuing its fourth revenue warning since last year.
Summer Budget: Mortgage subsidy shake-up hits jobless households: Mortgage subsidies are set to be recouped from the homes of unemployed people, in a radical change to the benefit system that lenders’ bodies said could put more pressure on the finances of struggling households.
SABMiller names FD as groups switch Finance Chiefs to other roles: SABMiller said on Wednesday that acting Finance Director Domenic De Lorenzo would assume the role permanently, in the latest of a string of new finance appointments in the consumer industries sector.
Summer Budget: Bank levy cuts aim to retain HSBC and StanChart: The government is to cut a punitive bank tax and reduce its impact on global lenders in an attempt to keep HSBC and Standard Chartered from moving abroad, but damped cheer with a new surcharge on British banks.
Rosneft buys stake in Essar Oil refinery in India: Rosneft, the Russian state oil company, has agreed to buy up to 49% of a refinery owned by India’s Essar Oil as part of a long-term supply deal, the two groups said on Wednesday.
U.K. life sciences funding at 10-year high: Financing for U.K. life science companies has reached its highest level for at least a decade in an echo of the biotech boom in the U.S.
Didi Kuaidi raises $2 billion in fresh funding: Didi Kuaidi has raised $2 billion in a new round of fundraising, giving China’s leading car-hailing company a war chest of more than $3.5 billion to fend off a challenge from Uber.
Uber bids to turn itself into ecommerce group in Indonesia: Uber has announced plans to establish itself as an ecommerce business in Indonesia in an attempt to sidestep the regulation and taxes rival taxi operators are exposed to in Southeast Asia’s largest economy.
Alcoa takes upbeat tone despite dented aluminium price: Alcoa, the aluminium group, has reported earnings below analysts’ expectations but taken an upbeat tone on the rest of the year, opening a U.S. corporate reporting season that is expected to show an increase in profits for most sectors.
Norwegian Air Shuttle targets long haul via U.K.: Norwegian Air Shuttle has revealed plans to set up a U.K. subsidiary as the low-cost airline sets its sight on further expansion in the long-haul market.
India’s Flipkart to go app-only: Flipkart, India’s largest ecommerce group by sales, will close its website later this year, becoming the most prominent global start-up to adopt an “app-only” strategy focused on smartphone customers.
Lex:
Microsoft: dialling it down: There are lots of examples of value-destroying acquisitions but few are as fast and brutal as Microsoft and Nokia. The $7.9 billion deal (net of cash) closed in April 2014; now Microsoft has announced a $7.6 billion write-down on Nokia assets and the firing of 7,800 staff, many from Nokia. Chief Executive Satya Nadella has been doing some heavy-duty spring cleaning (the Nokia deal was struck under his predecessor, Steve Ballmer), and Mr Nadella is right to chuck out underperformers. Microsoft’s phone hardware unit has been the least profitable part of the company during the past three quarters. In the most recent quarter it had the distinction of being the only division to report gross losses before tax. Microsoft will still keep making phones in a limited way, focusing on three types of customer: business customers, value customers and hardcore Windows fans (apparently these do exist). But even as these phones become better and more integrated, Microsoft’s smartphones will never be a main driver of other software sales. At the same time, Microsoft is already betting on a future that goes beyond the smartphone entirely, by developing the HoloLens, a holographic virtual reality system that can be used for communication and games. If this is successful in, say, 20 years’ time, even the scale of Microsoft’s mishandling of the smartphone business will one day be forgotten.
Malaysia: well grounded: Allegations of dirty money flows involving a government development fund have plagued the government of Najib Razak, Malaysian premier. The country’s currency, the ringgit, has taken the strain, down 8% versus the dollar, hurt by the scandal and the economy’s perceived dependence on oil and gas. Yet, Malaysia has some positives, which may explain why MSCI Malaysia — though its valuation is higher than that of other emerging markets — has outperformed the broader emerging markets benchmark since mid-May. First the bad news. Malaysia’s state derives a quarter of its revenues from oil and gas. Its oil industry, though, is past its prime. The country has become a net importer of oil and oil products, so lower prices might help the economy. Petronas Dagangan, the retail sales arm of the state oil company, seems OK; its shares are up a fifth this year in a down market. Those foreigners may hold on a while longer. Local fund Managers continue to buy up any government securities available, supporting the price. In addition, the strength of some parts of the economy should support the government’s current account. Manufacturing and services make up more than two-thirds of exports, according to Moody’s, and a weaker ringgit can only boost those. Malaysia’s current account surplus improved in the first quarter of this year to 3.4% of GDP. Elsewhere, a new value-added sales tax (known as GST) has broadened the government’s revenue base. And the removal of domestic fuel price subsidies will help to keep government spending down. Both should keep foreign bond holders happy, thinks Nomura.
Chinese markets: the wild wild east: During a crisis it is practically standard procedure for Asian governments to intervene in their stock markets by buying shares. Declaring it illegal to sell shares is, by contrast, an innovation. China has crossed this strange frontier, declaring that Executives, board members and anyone owning a stake in a company exceeding 5% may not sell for six months. Two consequences are foreseeable. One: when prices are falling, and not everything can be sold, people will sell what they can. So any selling pressure this move removes on one stock will reappear as pressure to sell another — or sell something besides a stock. Two: international investors’ perception of China is going to change. The change will be visible, for example, in whether MSCI includes mainland China shares in its emerging market indices — a decision that is, or was, due soon. MSCI might be having a rethink. There are plenty of companies that have been heavily sold off and which have low valuations, ample free cash flow and increasing revenue. If you fancy the solidity of real estate, Cheung Kong Holdings is down 15%, trades at 14 times earnings and has grown free cash flow at over 20% over the past year. Insurance companies such as AIA, Ping An and PICC have come down sharply, look cheap and generate cash. Kingdee software may not be cheap yet — but it is half the price it was a month or two ago. The list goes on. China is a strange market — and now an interesting place to shop.
Lombard:
Timing is everything: Unusually, there were few gags in Galliford Try’s trading update on Wednesday: 2014 was a record year, said Chairman Greg Fitzgerald with a straight face. But timing is everything in business as well as in comedy, and Galliford’s 51-year-old master builder has both, apparently, in spades. Nonetheless, the company’s management under incoming Chief Executive Peter Truscott must kick the bricks and question whether Mr Fitzgerald is right to want to double the company’s bet on construction. After all, they will be left running the show when Mr Fitzgerald quits Galliford for good in 2017. But for now, construction is delivering margins of little over 1%, against 15% plus for house building, and brickies are still charging a grand a week. Rising house prices protect housebuilders but general builders can only try to manage the cash flow and keep going.
Lenigas: He’ll be back: The junior market lost a little colour on Wednesday when David Lenigas, of Gatwick Gusher fame, chose to quit as Chairman of U.K. Oil & Gas. This is the Aussie whose exuberance over oil found under the Sussex Downs prompted Aim’s regulator to insist on a clarification. But like the Terminator, the 54-year-old will be back. And, like Arnold Schwarzenegger, he is already turning to Twitter to promote his next venture. Arnie is currently inviting followers to blow stuff up with him in the latest film, Genisys. Mr Lenigas, a serial Director of oil exploration and mining start-ups from Africa to Mexico, has begun chatting about his next project in Cuba.
The Daily Telegraph
Budget 2015: OBR says strong chance Osborne will not balance books by 2020: The Government only has a 55% chance of balancing the books by the end of the decade, according to its independent fiscal watchdog, which stressed that Britain’s ageing population would make the goal harder in future years.
Budget 2015: George Osborne gives more powers to English cities: Devolution in England “has only just begun”, George Osborne has said, as he unveiled plans to give more power to cities in a bid to boost economic growth across the country.
Budget 2015: British business reacts to Osborne’s ‘double-edged’ plans: British business has applauded George Osborne’s balancing act in slashing corporation tax in return for the “rabbit out of the hat” legislation on higher wages.
Buy-to-let: How ‘s Budget will affect landlords: Landlords across the U.K. will be hit in the pocket after the Chancellor announced that he is reducing tax relief on private rented homes, in an attempt to quell the economic risk posed by the booming buy-to-let market.
House prices crash through the £200,000 ceiling for the first time: The average cost of a home in Britain has breached the £200,000 threshold for the first time, after house prices edged up in June.
Grant Thornton fined nearly £1 million for shortcomings in building society audit: Grant Thornton has been severely reprimanded and fined £975,000 for shortcomings in its audits of Manchester Building Society.
Europeans told to bring Greece back from the brink and avoid descent into ‘uncontrolled’ Grexit: Europe’s creditor powers have been warned against igniting an “uncontrolled” financial and geopolitical crisis in Greece by letting the country fall out of the Eurozone at the end of the week.
Apple to order largest-ever production run for next iPhone: Apple is preparing for the largest initial production run for its next iPhones by the end of the year.
The Guardian
New York stock exchange reopens after ‘technical issue’ forced shutdown: The New York stock exchange reopened on Wednesday afternoon after a more than three-and-a-half-hour shutdown caused by a still unexplained “internal technical issue”.
Microsoft to cut 7,800 jobs as it takes $7.6 billion loss on mobile phone business: Microsoft announced on Wednesday that it is cutting 7,800 jobs and taking a loss of $7.6 billion on its money-losing mobile phone business.
Budget boost for HMRC in new push on tax evasion: Stretched HMRC tax investigators are to be armed with £800 million of extra funding over the next five years to combat tax evasion and non-compliance, the Chancellor has promised, as part of a drive to raise £7.2 billion.
U.K. Oil & Gas Chairman who wanted to drill under Gatwick steps down: David Lenigas, the flamboyant Executive who made ambitious claims that there were up to 100 billion barrels of oil under the ground close to Gatwick airport in southern England, has abruptly stepped down from his position as Executive Chairman of U.K. Oil & Gas Investments (UKOG).
Daily Mail
Bankers blast new surcharge on bank profits but cheer Osborne’s decision to slash levy: Chancellor George Osborne bowed to pressure from the big banks and slashed the unpopular levy on lenders. But he unveiled a new surcharge to raise an extra £2billion from the industry, creating a burden for the so-called challenger banks.
Mulberry finally bags its man as former Celine designer Johnny Coca takes up the reins: British handbag brand Mulberry finally welcomed its new creative Director – nearly two years after its star designer Emma Hill quit.
Entrepreneurs cheer corporation tax cuts and welcome increase in annual investment allowance to £200,000: Cuts in corporation tax and measures to support investment won a warm welcome from business, offsetting some of the anxiety about the Chancellor’s moves to introduce a National Living Wage.
Dividends shake-up to hit wealthy Bosses as experts warn new tax may deter investment in private and listed companies: Some of Britain’s wealthiest Bosses are set to lose tens of millions of pounds from sweeping changes to the way dividends are taxed.
State-owned asset sale will set new record as Osborne plans to sell off stakes worth £32 billion this year to bring down debt: Government stakes in a host of companies will be sold off this year to bring down the debt.
Living wage burden hits retailers’ shares as small shops say plan is ‘reckless’: Shares in some of Britain’s biggest retailers fell after investors reacted to the Chancellor’s surprise move of introducing a new National Living Wage of £9 an hour for workers by 2020.
Housebuilders take a hit as Osborne unveils clamp down on buy-to-let market: Housebuilders took a hit as Chancellor George Osborne unveiled moves to clamp down on the booming buy-to-let market.
Fizzing sales are a tonic for Fever-Tree as profit leap on 60% sales increase: Shares in upmarket tonic water and ginger beer maker Fever-Tree Drinks fizzed 10% higher as sales and profit leapt.
Daily Express
Barclays Chief out in efficiency drive: Barclays has ousted its Chief Executive Antony Jenkins after three years as it steps up its efficiency drive to boost returns to shareholders.
Greece spoils GVC record: A fall in sports betting activity in Greece took the shine off record half year trading at gaming group GVC.
Orders surge for Galliford: A buoyant housing market has laid the foundations for record profit at Galliford Try.
The Scottish Herald
North Sea player closes in on funding for East of Shetland field: North Sea-focused Independent Oil & Gas appears to be closing in on securing funding to bring an oil field East of Shetland into production.
RJ McLeod lifts profits in competitive year: Construction and civil engineering firm RJ McLeod has delivered a “healthy” profits rise following a significant leap in turnover in its latest financial year – despite conditions remaining tough in its core markets.
Scottish Equity Partners backs language app: Scottish Equity Partners has spearheaded a $22 million (£14.3 million) investment round into Babbel, the language learning app.
Weir Group in near $50 million U.S. expansion: Investors have wiped £180 million off the stock market worth of Weir Group after it moved to increase its exposure to the oil and gas market in spite of the crude price plunge.
Share sale of Royal Bank of Scotland could raise £25 billion: The U.K. Government hopes to raise at least £25 billion in the next five years by selling at least three-quarters of its stake in Royal bank of Scotland.
The Scotsman
Barnetts sees new motor sales drive up turnover: Tayside and Fife car dealer Barnetts Motor Group said a wave of pre-registration activity was putting the squeeze on profit margins of “genuine” ex-demonstrators as it booked a rise in annual sales.
New chapter begins for Story agency: Advertising agency Story, which works with clients including Glenmorangie and Edinburgh’s Quartermile development, is expanding with a series of new appointments and a move to larger offices in the capital.
City A.M.
Pawnbroker sees glittering year ahead: Pawnbroker H&T Group said it expects full-year profit to be in line with forecasts, despite the low global gold price and a challenging market.
Micro Focus gets revenue boost from takeover: U.K. IT maintenance giant Micro Focus International has seen a big jump in revenue after its acquisition of Attachmate.
Spanish bank Sabadell to apply squeeze out on TSB’s investors: Sabadell put out a compulsory purchase order for the remaining shares in TSB, after the vast majority of stakeholders accepted the Spanish bank’s offer.
West End retailers take control of shops: Retailers on Oxford Street and Bond Street are increasingly seeking to take control of their shops, with stores owned by brands rising 28% and seven% respectively over the past two years.
Birds Eye Owner Nomad plans a share placing to fund more deals: Nomad Foods, the Owner of Birds Eye, said it plans to raise cash through a share placing to fund future acquisitions.
Booker’s sales rise as it awaits green light for Londis takeover: Booker Group, which owns food wholesalers including Makro, unveiled a 0.4% rise in first-quarter sales, while it awaits regulatory clearance to complete its takeover of Budgens and Londis.
