Business news 11 November 2021
James Salmon, Operations Director.
GDP
The UK Economy grew by 1.3% between July and September. Economists were expecting GDP to grow by 1.5%. This was a slowdown from the 5.5% increase in Q2.
The UK’s GDP remains just 0.6% below its pre-pandemic levels after jumping 0.6% in September, according to preliminary figures from the ONS.
Small firms have confidence in online sales
With shoppers maintaining demand for online goods, small businesses are confident of strong Christmas sales even if Covid restrictions return over the winter. Some 71% of consumers expect to do all or the majority of their Christmas business online this year, according to a survey of small firms by TalkTalk Business. Six in ten reported their customers spent more money with them when shopping online than in store, while 81% had increased investment since the outbreak of the pandemic in their e-commerce.
COP-26
The Climate summit was caught off guard when the US and China issued a joint statement promising to work together in the 2020s, collaborating on research, deforestation and decarbonisation. China also promised a plan on Methane.
Asos
Asos will target £7 billion of sales during the next three to four years amid plans to double the growth of its US and EU business and build on its UK growth. The £7 billion in sales equate to a 15%-to-20% compound annual growth rate, and an earnings before interest and tax margin of at least 4%, underpinned by operational initiatives of £50-£100 million.
Burberry
Burberry reported a jump in first half profit as revenue returned to pre-pandemic levels and margins expanded. For the half year through 25 September, pre-tax profit increased to £191 million from £73 million year-on-year as revenue increased 38% to £1.21 billion.H1 FY22 revenues were back at pre-pandemic levels on a constant currency basis.
WH Smith
WH Smith narrowed annual losses as costs cuts offset a slide revenue following the pandemic impact on travel. For the year ended pre-tax losses narrowed to £116 million from £280 million, while revenue declined 13% to £886 million.
Vodafone launches new ‘Shout Out for Small Businesses’ competition
Vodafone has launched its second Shout Out for Small Businesses campaign, offering one small business the opportunity to win a mentoring session with entrepreneur and BBC’s Dragons’ Den star Steven Bartlett. The winning business will also receive a dedicated Facebook and Instagram social media marketing campaign boost worth in excess of £3,000.
B&M European Value Retail
B&M European Value Retail said it performed strongly throughout the first half of its financial year as its pandemic popularity continued. For the 26 weeks to September 25, revenue increased by 1.2% to £2.27 billion from £2.24 billion last year and pretax profit rose 2.4% to £241.4 million from £235.6 million.
US Inflation
US Inflation Data showed that prices are rising faster than they have for three decades, with food and fuel driving the increases. The consumer prices index for October showed prices rose 6.2% over the last twelve months. It marks a sharp jump from September when prices were already rising at 5.4%. Us markets have tumbled in response and the dollar strengthened as the case rises for interest rate increases.
Google
Google lost an appeal against a $2.8 billion antitrust decision, a major win for Europe’s competition chief in the first of 3 court rulings central to the EU push to regulate big tech.
Tesla
Elon Musk sold 4.5 million shares in his first sales since 2016. He sold $1.1 billion worth of stock on Monday to pay taxes on equity options and kept it up over the next two days.
Zebra Power enters administration
Zebra Power has entered administration, appointing PwC to guide the process. The energy retailer supplied gas and electricity to approximately 15,000 domestic consumers before it ceased trading earlier this month.
Food sales drive M&S comeback
Marks and Spencer reported a surge in profits as its food division helped it bounce back after Covid restrictions. Boss Steve Rowe said growth was boosted by pent-up demand after lockdown, but the retailer was also seeing the benefit of its long restructuring. Pre-tax profits for the six months to October were £187m – 17.9% up on the period two years ago before Covid hit. Julie Palmer, partner at Begbies Traynor, said M&S’s food business continued to be the company’s “cash cow”, but warned the company would need to hold on to its transformed brand and soften the impact of supply chain issues to if it “hopes to avoid disappointing investors this festive period”.
Geoffrey Cox defends work for tax haven
As pressure builds on Sir Geoffrey Cox over his work for the British Virgin Islands, from which he has earned nearly £1m through the law firm Withers, the Conservative MP has been forced to issue a statement. He declared that the work he had done for the BVI government had “not been to ‘defend’ a tax haven or, as has been inaccurately reported, to defend any wrongdoing but to assist the public inquiry in getting to the truth”. It is noted that in a 2018 debate in Parliament on the Sanctions and Anti-Money Laundering Bill Sir Geoffrey said it was “beneath the dignity of this parliament” to try and close loopholes being exploited by territories like the BVI. Commenting, Labour deputy leader Angela Rayner said: “You can be an MP serving your constituents or a barrister working for a tax haven – you can’t be both and Boris Johnson needs to make his mind up as to which one Geoffrey Cox will be. A Conservative MP trying to prevent a crackdown on tax avoidance in tax havens at the same time as taking money from companies linked to tax avoidance in tax havens is a glaring conflict of interest and an insult to British taxpayers.”
Hundreds of “off-the-shelf” companies may have committed furlough fraud
Analysis of official data by the Times shows that 7,000 companies registered to only five addresses in London claimed up to £473m from the Government’s furlough scheme between last December and June this year. The paper says HMRC will likely be scrutinising such “off-the-shelf” companies as it seeks to recover an estimated £1bn in fraudulent or mistaken claims. One alleged fraudster is understood to have claimed £27.4m over 14 months despite little evidence that his businesses had any staff or any substantial trade. Susan Hawley, executive director at Spotlight on Corruption, a charity, said: “The British public are going to be picking up the bill from massive fraud on government Covid support schemes for years to come. The lessons from why these schemes were so open to fraud has to be learnt, and learnt quickly.”
Brussels extends euro clearing rights
London’s lucrative euro clearing rights have been extended by Brussels after the European Commission determined that cutting Continental banks off from the market would damage financial stability. Access was granted until June 2022 and this has now been extended, but it is not known for how long. Michael McKee, a partner at the law firm DLA Piper, said: “The European Union has at last accepted how vital UK-located clearing services were to the EU.”
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