Morning Financial Press Review 29/11/19
Below are the key morning press headlines, featuring the The Times, The Telegraph, The Daily Mail & more - see the full Press section here.
Britain provides a better environment for small and medium-sized companies than France and Germany, according to research. UK businesses have the best market for credit in Europe, according to analysis of 13 economies by Euler Hermes, while a flexible labour market and low levels of red tape also makes Britain a more attractive place to start and grow a business than some of its prominent competitors. The credit insurance provider analysed six factors, including tax policy, export opportunities and the level of competition, to produce the ranking. Canada was rated the best place to run a small or medium-sized business, followed by Hong Kong and the United States. Germany was placed eighth and France 11th.
Brexit will not hinder ability to attract the world’s best scientific talent to its new £750 million research and development centre in Cambridge, Pascal Soriot, chief executive of the drugs giant, has claimed. “Cambridge has attracted the best brains in the world for the last 800 years. It is going to continue to for a few more,” he told The Times/KPMG regional summit in Cambridge. Mr Soriot said that the imminent exit from the EU had, however, created “more of a challenge”, with staff worried about pension rights, for example. But these were relatively “minor issues”. He added: “We attract American and Chinese scientists, why not Spanish even if the UK [has left]?”
The value of rose by almost a fifth yesterday after investors bet that the bank is on a sounder footing than previously thought despite racking up an annual loss of £194 million. The bank will not pay a dividend this year after falling to a deeper annual loss owing to a £385 million provision for payment protection insurance mis-selling made in the final three months. Ian Smith, the chief financial officer, said the decision to suspend the dividend was a disappointment, but was taken to conserve capital. The bank will consider resuming payments next year. Virgin Money also owns the Clydesdale and Yorkshire Bank brands. CYBG, the parent company of the pair, paid £1.7 billion for Virgin Money last year.
Problems in Manchester, Oxford and Stuttgart will hold back this year. David Brown, chief executive of the bus and train group, warned that profit expectations from its bus division should be “slightly lowered”. The cocktail of problems affecting the trading update yesterday, which covered the first four months of its financial year ending in June, include a slowdown in the rate of growth of bus patronage, traditionally linked to the health of the economy, and larger problems than expected in its takeover of a bus depot in Manchester from First Group. Go-Ahead has also been hit by rising driver costs amid record levels of employment and regulatory changes that forced bus companies to give better holiday pay.
has generated £707 million of cash this year, just above its annual target. It estimates that £540 billion of people’s savings is tied up in books of business that insurance companies no longer have open to new customers. Of that, about £380 billion is believed to be in the UK. The aim of its model is to throw off cash as capital held against policies freed up when they expire. It delivered £1.3 billion cash generation in 2017 and 2018 and says it is well placed to grow. Phoenix’s target for 2019 had been between £600 million and £700 million in cash.
Hobby specialist is beginning to see the light at the end of the tunnel after enduring several years under poor management. The model train company and creator of Airfix models, which dates back to 1901, saw its revenue increase by 15% to £15.9m in the six months to September. As Hornby focused on pushing out new products, such as a Harry Potter train kit and an Airfix Hellcat fighter jet, its loss before tax narrowed to £2.4m from £3m during the same period last year. But the company is facing its eighth consecutive year in the red, and investment in new products pushed debt up from £1.7m to £8.4m. Hornby is hoping most of this should be paid off over the coming months following Christmas trading.
said revenues in this division grew by around 2.5% between June 30 and October 26, when compared with its performance during the same period of 2018. But difficulties integrating a bus company in Manchester and other trading hiccups forced Go-Ahead to lower its full-year expectations for that part of the business. Shares in the mid-cap transport group slid to 2208p. Its international and London bus arm sped ahead, with revenues up 8%. Go-Ahead also said it is in talks with the Government to extend its contract to run Southeastern rail beyond an extension it already has until March.
Pressure is mounting on the blue-chip companies still giving huge pension top-ups to their bosses as a top offender refuses to budge. The building materials giant last year paid chief executive Albert Manifold a pension contribution worth 46% of his salary or €684,000 (£585,000), among the highest pay-outs for any business in the index. However, a source said Tarmac owner CRH has no plans to review the amount. They said: “Shareholders have not been beating a path to their door to discuss the issue.” The refusal comes despite a rebellion by 15% of investors at CRH’s annual meeting in April.
The threat of recession has receded in the Eurozone but a growth bounce-back looks unlikely next year, a leading ratings agency warned on Thursday. S&P forecast that eurozone growth will shift down a gear in 2020, falling from 1.2% this year to 1%. Although the manufacturing slump that pushed Germany to the cusp of recession could be “bottoming out” according to the agency, its senior economist Marion Amiot added that it did not expect a sharp rebound in industrial activity. S&P puts the chances of recession at lower than one in 10, but added the European Central Bank could be forced to cut rates again in March.
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