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Thursday, 2 May 2013

Argos, Homebase and Habitat owner reports profits down for fifth year

Home Retail Group chief executive Terry Duddy hails 'good outcome to … challenging year' after 23% fall in profits

Argos has underlined the waning importance of the high street to retailers by revealing that more customers buy its products online and through click-and-collect services than by making traditional in-store purchases.

Profits at its parent, Home Retail Group, which also owns Homebase and Habitat, have fallen for a fifth consecutive year as the retail industry undergoes a transformation against a backdrop of weak consumer confidence.

Homebase stores will increasingly stock Habitat and Laura Ashley products.

Home Retail Group reported a 23% fall in profit before tax to £99m in the 12 months to 2 March, with revenues broadly flat at £5.48bn.

Despite what he described a "challenging year", HRG's chief executive, Terry Duddy, said the transformation of Argos from a catalogue to a digital retail business was progressing, as he said like-for-like sales increased for the first time in five years, delivering a 2% rise in like-for-like revenues with underlying profits up 6% to £100m.

Duddy explained the key factor in growth was click-and-collect sales – where online purchases are collected in the shop – which now account for 30% of business.

He said: "If you go back to 2002 when we went from a telephone system for ordering products and went onto the internet for the first time, did I think that would now be 30% of our sales? No."

However, Homebase profits were washed away by poor weather last summer, with sales down nearly 5% and underlying profits halving to £11m.

With nearly £400m of cash in the bank and no debt, the company is pushing ahead with a three-year investment plan announced last October. Homebase stores will be given a facelift, and will increasingly stock products from Habitat and Laura Ashley, including a recently created range of Habitat paints, wallpapers and tiles.

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Article source : http://www.guardian.co.uk

MP John Robertson calls for official tax inquiry into npower

Npower admitted to energy and climate change select committee that it had paid almost no corporation tax for three years

A row over alleged tax avoidance by npower has flared again after a member of a parliamentary watchdog called for an official investigation.

The call from John Robertson MP, who sits on the energy and climate change select committee, came as the number of people signing a petition against npower rose above 167,000.

"The taxman should establish an urgent inquiry to get to the bottom of how npower have got away with paying no tax despite making hundreds of millions of pounds in profits," said Robertson, a long-term campaigner over fuel poverty. "If npower aren't tax dodging, what possible reason can there be for a business in Britain paying money to a German company via Malta?"

Npower admitted to his committee two weeks ago that it had paid almost no corporation tax for three years but explained that was because it could write off profits against the huge power station investments it was making.

The argument blew up again this week when German-owned n power admitted money was moving via a company it owned in Malta and revelations that the former boss of n power, Volker Beckers, was working as a non-executive director for HM Revenue and Customs.

But the company denied that the use of its Maltese financing subsidiary, Scaris Ltd, was designed to avoid paying tax in Britain and was just a way of borrowing cash to fund British investment "more efficiently."

Paul Massara, chief executive of npower, said: "The use of Malta in making payments on our financing made no difference to our UK tax contributions. Npower has not, and will not, engage in tax avoidance. Our corporation tax bill was low between 2009 and 2011 because we made losses in our retail business and invested billions into the UK."

But Richard Murphy, an accountant who runs a consultancy called Tax Research, said it remained unclear why RWE, npower's parent company, would lend money to its UK business via Malta "unless tax avoidance was its motive. The tax saving that results is very clear."

Article source : http://www.guardian.co.uk

UK's largest coal producer 'seeks voluntary liquidation'

Up to 2,000 jobs at risk after UK Coal Operations hit by £300m losses and 'disastrous' Daw Mill mine fire

Britain's largest coal miner, UK Coal, is fighting for survival as it grapples with the consequences of the devastating fire that closed its biggest colliery.

The firm refused to deny reports that it is seeking voluntary liquidation, which would allow parts of the business to continue trading, in order to avoid enforced liquidation and a full shutdown. Following the blaze at the Daw Mill colliery in March the company lost £100m of equipment, £160m of coal and ran up £35m in costs, making further restructuring inevitable.

UK Coal said this week that it is holding talks "with a wide range of interested parties" over the future of its last two deep mines – Kellingsley in North Yorkshire and Thoresby in Nottinghamshire – as well as six open-cast mines in north and central England. The company produced 7.3m tonnes of coal in 2011, helping generate 5% of the UK's electricity.

Kevin McCullough, chief executive of UK Coal Mine Holdings, said: "Our main focus has been on preserving 2,000 jobs and securing the future of UK coal mining. Our remaining mines have been performing well since the fire at Daw Mill and we continue to work closely with our employees, government, pension funds, the Pensions Regulator, suppliers and customers. We remain positive that we have an underlying profitable business."

"There will undoubtedly be some difficult decisions as we have had to look at all possible options, but there is a good business here with 2,000 families depending on our workforce and I am confident we will be able to announce more news in the coming days." Company spokesmen did not respond to further questions.

The company announced the closure of Daw Mill in north Warwickshire with the loss of 650 jobs in March after the worst coal-mining fire in 30 years.

The fire was the latest blow to the industry following Hargreaves Services's decision last year to mothball the Maltby mine near Rotherham with the loss of 500 jobs.

Voluntary liquidation would allow a subsidiary to run the firm's surviving mines but could pass on the company's £540m pension deficit to the UK Pension Protection Fund, which would force losses on some of the company's 6,800 savers. If UK Coal fell into insolvency the workforce could see 10% of the value wiped off their pensions. The Pension Protection Fund pays 90% of a pension's value to workers yet to reach retirement age, but usually pays out 100% to existing retirees and those with long-term health problems.

UK Coal has been grappling with its pension deficit for years and recently spun off its less-risky property business, Harworth Estates, to help solve the problem in a move that won the approval of the Pensions Regulator.

"At £540m this would be one of the very largest hits for the PPF, since it opened in 2006," said John Ralfe, an independent pensions consultant. "This would wipe out half [PPF's] surplus." The PPF reported reserves of £1.06bn in 2012. "Last year's convoluted restructuring, approved by the Pensions Regulator, only managed to paper over the cracks. The devastating pit fire has brought things to a head very quickly, but with UK Coal's pension problems things were never going to end well."

A spokeswoman at the Pension Protection Fund said it was monitoring ongoing developments and liaising with other parties including the pension scheme and the Pensions Regulator.

Chris Kitchen, secretary of the National Union of Mineworkers, said it was disappointed that the government had not done more to help UK Coal, following a promise from former energy minister John Hayes in March that "the government will do all it can ... to protect the interests of [the Daw Mill] workers".

The NUM wants the government to grant closure aid to Daw Mill, which would allow mine workers to keep an enhanced redundancy package worth £12,000 more than the statutory minimum. "The minister made a statement that they wanted to help. There is a route that is open to them. But it involves the government spending money."

A spokesman at the Department for Energy and Climate Change said the government was helping Daw Mill workers find jobs through "full mobilisation of a job centre rapid response process".

Article source : http://www.guardian.co.uk

Wednesday, 1 May 2013

RBS collapse: Vince Cable rebuked by Scottish legal chief

Scotland's lord advocate 'disappointed' to learn of the business secretary's desire to have a quick answer on taking action against Fred Goodwin and other RBS directors

Scotland's chief legal officer has rebuked Vince Cable for intervening in Scottish prosecutors' deliberation about whether or not to take action against the directors of Royal Bank of Scotland (RBS) at the time of the taxpayer bailout in 2008.

Lord advocate Frank Mulholland said he was "disappointed" to learn that the business secretary had asked Lord Wallace, advocate director for Scotland, to reach a decision "as quickly as possible" about whether or not to take action against Fred Goodwin and other RBS managers at the time of the bank's collapse.

The matter was referred to Scottish prosecuting authority the Crown Office and Procurator Fiscal Service in January 2012 following a damning report into the bank by the Financial Services Authority (FSA).

Mulholland said the advocate general had no role in the investigation or prosecution of crime, and added that it would be "unfortunate" if Cable's intervention were to be "construed as attempted interference with independent investigation and prosecutorial decision-making by the law officers".

Cable said he was simply asking for an update on the prosecutors' investigation given that it is now five years since the bank's £45bn bailout and "the public are impatient in terms of holding people to account".

He insisted he was "not seeking to influence the outcome". The business secretary is understood to be keen for the Scottish authorities to make a decision so that he can prepare for the possibility of stripping the former RBS bosses of the right to hold company directorships.

Mulholland said the Scottish Crown Office had kept Cable's officials "appropriately advised" of the progress of the "complex and ongoing" investigation. He added that he would be "happy" to brief Cable on the progress of the investigation and the time scale of possible prosecutions if the business secretary contacted him directly rather than via the media.

No one has yet faced criminal prosecution over the collapse of RBS, but a civil case was launched last month by shareholders claiming they were misled by directors over the 2008 £12bn rights issue before the bailout.

Article source : http://www.guardian.co.uk

House prices fall for first time in seven months

Nationwide figures reveal 0.1% drop in house prices in April - but figures still higher than 12 months before

House prices fell by 0.1% in April, the first fall in seven months, but they remained higher than they were 12 months previously, according to the UK's biggest building society.

The figures from the Nationwide put the annual price of a UK home at £165,586. This is higher than the £164,630 recorded in March, but the seasonally adjusted figures, designed to smooth out changes driven by seasonal differences in activity in the market, showed a 0.1% fall over the month.

House prices are edging down, says the Nationwide

This was the first drop since September, and smallest of four during the last 12 months.

The annual rate of change, which is not seasonally adjusted, showed prices were up by 0.9% on April 2012, while a quarterly comparison showed a 0.5% increase on the previous three months' averag Robert Gardnere.

April's fall followed a flat-lining in prices in March, and reports of a slowdown in the mortgage market at the start of the year.

ouse prices fell by 0.1% in April, the first fall in seven months, but they remained higher than they were 12 months previously, according to the UK's biggest building society.

This was the first drop since September, and smallest of four during the last 12 months.

April's fall followed a flat-lining in prices in March, and reports of a slowdown in the mortgage market at the start of the year.

Article source : http://www.guardian.co.uk

Tuesday, 30 April 2013

Solid earnings, ECB rate cut prospects lift FTSE

The benchmark share index rose on Tuesday, inching back towards its 2013 highs after upbeat earnings reports from BP and Lloyds bank and on expectations for a European Central Bank (ECB) rate cut this week.

"We're looking forward to a possible ECB rate cut later this week. That stimulus has kept everyone upbeat," said Darren Easton, director of trading at Logic Investments.

Expectations of fresh stimulus measures and rate cuts from world central banks, such as the ECB and U.S. Federal Reserve, have boosted equity markets. The lower rates and injections of liquidity should help companies export more overseas and have also led investors to shift money out of bonds and into equities for better returns.

Easton said he had taken out "long" positions to bet on further gains for the FTSE this week.

"We wouldn't want to bet against this market going higher in the near term."

Solid results from leading UK companies supported sentiment.

According to Thomson Reuters Starmine data, 80 percent of companies who have reported first-quarter results in the broader FTSE 350 index, which comprises the FTSE 100 and the FTSE 250 mid-cap sector, have beaten or met expectations.

Oil major BP continued that trend on Tuesday with forecast-beating first-quarter profits, sending BP shares up 2.

Part-nationalised British bank Lloyds also posted higher first-quarter profits to send its shares up by 5.1 percent to the top of the FTSE 100's leaderboard.

The FTSE 100 has risen by nearly 10 percent since the start of 2013 but some traders expect the market to trade sideways or fall slightly in the next couple of months as some investors sell shares in order to book profits on the rally.

"I would still sell strong rallies on the FTSE," said Hartmann Capital trader Basil Petrides.

(Editing by Susan Fenton)

Azure is led by experienced Chartered Accountants and business advisers and specialises in providing online accountancy services to owner managed businesses.Azure Global’s vision is to be widely recognized as a reputed firm of financial business advisors, achieving real growth for ambitious companies and to become the first choice for F&A outsourcing for accountancy practices and businesses alike for more info visit our site Azure Global and join us On Facebook

Article source : http://uk.reuters.com

Axa plans to axe final salary pension scheme

Axa will move almost 2,500 staff on to a defined contribution scheme, with future payments dependent on the performance of the underlying fund

Financial services group Axa has announced plans to close its final salary pension to existing members, in a move one union claimed would result in employees having to work an extra five years to achieve the same retirement pay out.

The company told staff it planned to move 2,300 employees currently in the scheme to a defined contribution pension, where payments are not guaranteed and depend on the performance of the underlying fund. These schemes are cheaper to run as the investment risk is transferred from the employer to the employee.

Axa, which provides pensions and other financial products, will shift the risk on to its members.

In common with many other firms Axa, whose business is providing pensions alongside other financial products, had already closed the final salary scheme to new members. Since 2003 they have been enrolled in a defined contribution scheme.

"We have worked hard to maintain our defined benefit (final salary) pension scheme over the past few years and have introduced a number of changes to try to keep the scheme sustainable," a spokesperson said. "Like many other companies before us, we are now proposing that the scheme be closed pending a further 60 days of consultation."

Benefits that have already been accrued in the scheme will be kept. The spokesperson added: "This allows us to harmonise pension arrangements in a fairer way across our employee base and ensure that all of our employees have access to long-term pension provision."

Unite, Britain's biggest union and the representative for Axa staff, expressed anger over the plans and said it could not rule out industrial action. It said it had put forward a range of alternatives including possible changes to members' contributions or accrual rates, but these had all been rejected by Axa.

Unite's national officer, Dominic Hook, said: "The move to end the defined benefit pension scheme at Axa is appalling and unjustified. Long-serving staff now face the prospect of having to work an extra five years to get the same level of pension and [the move] puts all the investment risk on to the staff."

He added: "The decision by Axa is unacceptable and industrial action will be among the options being discussed with members if Axa refuses to reconsider its proposals."

Article source : http://www.guardian.co.uk