Brexit fears for car makers
British car manufacturers fear that the wrong Brexit deal could prove disastrous for the industry.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, warned today: “Future growth will depend on maintaining our current open trade links not just with Europe but with key international markets.
“A transitional deal will be an important first step but, in the long term, a seamless relationship between the UK and Europe must be maintained.”
The Society has just published January’s motor manufacturing figures which were static, with just 72 fewer vehicles produced than in the same month last year.
However exports drove overall volumes, with output for overseas customers rising 1.5% to a record 119,252 units.
The growth offset a decline in production for the UK market, which fell for the sixth consecutive month – down by 6.0% to 28,229.
That reflects falling UK business and consumer confidence and confusion over government policies on diesel taxation and air quality plans.
Carillion bosses were ‘fantasists’, says Field
Papers released today show that Msheireb, the Qatari company behind a Carillion project in the country, accused the contractor of having “mismanaged the works, under-resourced them and starved the project of cash”.
The papers “reinforce the impression that the upper reaches of Carillion was stocked with fantasists,” said Frank Field, chair of the Works and Pensions Committee.
Rachel Reeves, chair of the Business, Energy and Industrial Strategy Select Committee, added: “The Carillion directors’ litany of excuses for the collapse of the company is fast unravelling.”
Admiral’s shares rise by 5%
On the plus side of share performance insurance group Admiral saw its shares rise by 5% after it reported record profits and turnover.
Shares in housebuilder Taylor Wimpey gained 2% despite a fall in profits. It described market fundamentals as “solid”.
ITV shares fall by 5%
What’s happening to the shares in companies making the news this morning?
ITV shares have fallen by nearly 5% after the release of its results, which revealed a fall in profits.
Estate agency Foxton’s shares are down by 1.6%, after it said profits were 65% lower.
‘We made a mistake’ says Taylor Wimpey boss
Peter Redfern, chief executive of Taylor Wimpey, admits the house builder “made a mistake” over leasehold contracts which forced some homeowners to pay escalating ground rents running into thousands of pounds a year.
Taylor Wimpey has set aside a total £130m to convert homeowners to less onerous contracts.
Mr Redfern told BBC Radio 4’s Today programme: “The truth is on this issue the reason we made a provision is that about 11 years ago we made a mistake.
“The contract structures we set up were too expensive over time for customers and that is why we’ve taken what is a voluntary decision to make those changes at our cost. We think that’s right but that is because of a mistake made a long time ago.”
FTSE falls on opening
The FTSE 100 opened this morning down 0.28% at 7,262.42.
The index had an up-and-down time yesterday (see graph) but ended the day down 7.13 or 0.098%.
Admiral profits hit record
Pre-tax profits at insurer Admiral hit a record £405.4m in the year to 31 December – a rise of 43%.
David Stevens, Group Chief Executive Officer said: “It’s 25 years since the launch of Admiral. 2016 was only the second year we’d ever reported a year on year fall in profits. So it’s great to be back in the groove, with a 23rd year of “record profits”.
Admiral Group has delivered another record set of results in 2017: record turnover and profit, strong return on capital, strong solvency ratio and record customer numbers.
Turnover also hit a record, increasing by 15% to £2.96bn,as did customer numbers which rose by 11% to more than 5.7 million.
Premier Inn expands in Germany
Whitbread says it has bought 19 hotels in Germany from Foremost Hospitality.
It describes the acquisition as an “important step in accelerating Whitbread’s existing international strategy and in replicating Premier Inn UK’s success and network scale in this key strategic market”.
Chief executive Alison Brittain said: “One of our three key strategic priorities is to focus on building strong and sustainable growth in key international markets.
“Today’s announcement marks the next stage in our ambitious growth plan for the Premier Inn brand in Germany.
“We believe Germany has many of the structural growth drivers that have underpinned the success of Premier Inn in the UK and that Germany is a market that will deliver strong returns in the future.”
Taylor Wimpey profits hit by leasehold scandal
Housebuilder Taylor Wimpey said profits fell 5.8% to £555.3m in 2017 after it was forced to take a £105m hit on the leasehold scandal.
It built 14,842 homes in the year which was up 4.6%.
Total revenue climbed 7.9% to £3.965bn.
Boss Pete Redfern said: “Despite some wider macroeconomic uncertainty, consumer confidence remains robust and market fundamentals are solid.”
London property sales at ‘near historic lows’
Estate agency Foxtons has warned that sales activity in London has sunk to “near historic lows”.
The group said full-year pre-tax profits slumped 65% from £18.8m to £6.5m in 2017.
Boss Nic Budden said: “Sales activity in the London property market is near historic lows and this had a significant impact on our overall performance in 2017.”
Revenue from lettings was down 3% on due to downward pressures on market rents, the company said.
GoCompare improves profits
Comparison site GoCompare – which listed on the stock market in November 2016 – said operating profits climbed 20% to £36m last year.
Dividend for the year will be 1.4p a share.
Chief Matthew Crummack said the company’s results “come from control, discipline and a single-minded focus”.
It completed the purchase of discount site MyVoucherCodes in January and has also taken minority stakes in mortgage robo-adviser MortgageGym and Dubai-based comparison site Souqalmal.
Profits down 10% at Travis Perkins
Builders merchant Travis Perkins said adjusted pre-tax profits fell 10% last year to £343m.
Boss John Carter said: “2017 was a challenging year for the Group, with continuing uncertainty in our end-markets, and declining consumer confidence throughout the year.”
However, he added: “The long-term prospects for our businesses remain favourable.”
The company took a £40.9m hit during 2017 to pay for a Plumbing & Heating transportation plan.
Revenue in the year grew 3.3% to £6.4bn and the dividend pay out will be 46p a share.
ITV profits fall by 6%
Broadcasting giant ITV has reported a 6% fall in underlying pre-tax profits to £800m for 2017, but said it was a strong performance in a “challenging environment”.
Various revenue streams rose – with external revenue up 2% to £3.13bn
Total ITV Studios revenue was up 13% to £1.6bn and Online, Pay & Interactive revenue climbed 7% to £248m.
However, as expected ITV Family Net Advertising Revenue fell by 5% “as anticipated” to £1.6bn “impacted by the uncertain economic environment”.
ITV said it had seen a “great start” to 2018 and expects advertising revenues to recover in the first half, forecasting growth of 1% in the first quarter and growth in the second quarter, helped by the Fifa World Cup.
In case you hadn’t heard, snow has fallen in parts of the country.
On Wake up to Money, Michael Kruymans of the Business Continuity Institute was asked for top tips for firms trying to cope with the weather.
“One of the things that can make a big difference… is the ability for employees to work at home,” he said.
Not only are schools closed meaning carers have to look after children, but transport systems are being affected, causing congestion.
“So the more people you can keep at home the better it’s going to be.”
Retailer collapses are ‘inevitable’
With retailers Maplin and Toys R Us close to the end, their collapse was inevitable, says Sue Noffke, UK equities fund manager at Schroders.
Retailers have to make sure they have relevance for today’s consumer, she tells Today.
“Today’s consumer is very demanding. They want multi-channel offerings, very sharp prices, good service, and Maplin and Toys R Us haven’t delivered for customers,” she says.
“Lower interest rates and the low cost of capital really kept a lot of these retailers going in parts of the business that really aren’t relevant today, so we’re getting a coming to fruition of something that may have just been delayed for a few years.”
Comcast needs to ‘broaden horizons’ with Sky
US cable TV giant Comcast has made a £22.1bn bid for Sky, challenging an existing offer from 21st Century Fox, controlled by the murdoch family.
On Wake up to Money Rob Enderle, a tech and media analyst from Oregon, said Comcast has thrown its hat into the ring for Sky because it “needs to broaden its horizons”.
Lot of people are moving away from cable and to their internet provider for entertainment, so Comcast’s growth had “slowed substantially” and it needed to gain territory in other areas, he said.
They needed to get more scale before they “get beat up too much” by the likes of Amazon and Netflix and some of the things being done by Elon Musk and SpaceEx, added Mr Enderle.
‘Several factors make sense’ for Comcast bid for Sky
Why has Comcast made its £22bn bid for Sky now? Ian Whittaker, media analyst at Liberum tells Today that there are several factors in play.
“Comcast is weak internationally, he says. “It’s got a very good US presence but it doesn’t really have much outside.
“If you take control of Sky you’re the leading pay-to-view operator in the UK, Germany and Italy and you also have a presence in Spain as well. That gives you a very good European distribution platform.”
He says timing is also important with Sky’s recent successful lower bid for the next Premier League rights a factor.
But Comcast must have looked at the Competition and Markets Authority’s report on the Fox bid for Sky and seen an opportunity, he says.
“Comcast probably thought, it looks as though this is a little more complicated than previously thought for Fox,” he says.
US slaps new tariffs on China
The US-China trade tensions appear to be heating up. The latest round: aluminium.
The US has said it will slap tough measures on Chinese imports after a lengthy investigation of the case.
The Commerce Department said the metal was being sold below cost or with government subsidies – making it impossible for US producers to compete.
In keeping with President Donald Trump’s tough-on-trade agenda, the duties will be levied on several Chinese firms – ranging from almost 50% to more than 100%.
Beijing has expressed “strong dissatisfaction” with the step and says China will pursue its legal rights. The decision comes just as China’s top economic advisor Liu He is in the US to discuss tensions over trade.
Childcare costs rise by 7%
The price of sending a young child to nursery part-time is now £122 a week, according to a new report.
The Family and Childcare Trust’s 18th annual childcare survey found that sending a child aged under two to nursery part-time, for 25 hours a week, now costs £6,300 a year – up 7% on last year.
On Wake up to Money Jane Smalley owner and manager of Shrewsbury Prepatoria and Nursery said her prices had gone up by 10% over the past four years.
The reason? Costs like insurance, which is very high in the nursery industry, business rates, rent and food have all gone up, she said.
But the big cost is paying staff with 60% of income going towards that.
The school pays above the minimum and living wages, plus it has to contribute to the new Workplace Pension.
Ms Smalley said: “If costs go up, we have to find the money from somewhere.”
‘China’s Neflix’ goes for US IPO
Shares by Chinese video streaming service iQiYi – often called China’s Netflix – will soon be available on the US stock market.
Owned by online giant Baidu, it has filed to be listed on the Nasdaq and plans to raise $1.5bn (£1.1bn).
iQiYi had more than 50 million subscribers by the end of 2017 and an average of more than 420 million mobile users per month, according to Reuters.
But while revenues have risen in recent years, iQiyi has never posted a profit since it launched in 2010.
In China, it competes with fellow streaming platforms Youku Tudou, which is owned by Alibaba, and Tencent Video.
In April 2017, iQiyi signed a licensing agreement with Netflix to steam some of the US provider’s original content including Stranger Things and Black Mirror.
Takata scandal: 2.3 million cars recalled
Yet again: another Takata recall. This time in Australia and it’s one of the biggest the country has ever seen.
A staggering 2.3 million cars will be compulsorily recalled over possibly faulty airbags from the Japanese company.
Exploding airbags have been linked to at least 23 deaths worldwide, including one in Australia, the government in Canberra said.
The airbags contain a defect which can cause ageing units to expand too quickly and spray metal shrapnel into cars, harming drivers and passengers.
Takata and its US arm, TK Holdings, filed for bankruptcy last year.
The company is facing billions of dollars in penalties worldwide. Last week,TK Holdings reached a settlement with 44 US state attorneys-general.
BBC contributed to this report.