The Times
Stonemasons to nation’s finest buildings are forced to hang up their chisels: A company with a royal warrant for building and decorating has collapsed into administration.
Dixons Carphone heads to the U.S.: Dixons Carphone is preparing to take on one of the toughest markets for British companies after signing a deal with Sprint, the mobile network, to open as many as 500 stores in the United States.
Ofcom fines EE £1 million for complaints failures: Britain’s largest mobile phone company will be fined £1 million by Ofcom as a punishment for its poor customer service record.
City watchdog left red-faced after pension blunder it would not tolerate from others: It’s a mistake no financial regulator could possibly tolerate. A blue-chip employer hands out pay rises to more than a thousand staff, but omits to raise their pension contributions by the right amount at the same time.
British banks face Brazilian rigging inquiry: Four British banks are among 15 of the world’s largest financial institutions to come under investigation for allegedly rigging the Brazilian currency.
Financier bankrolls artists in campaign against trade deal: The financier and environmentalist Ben Goldsmith is bankrolling a celebrity-backed campaign against a free trade agreement between Europe and the United States.
Record £12 billion fine puts BP at risk of foreign takeover: David Cameron will fight to keep BP British after the company was hit by a £12 billion fine that has left it at risk of foreign takeover.
Towering bids for City landmark: The imposing Heron Tower skyscraper in the City of London that is part-owned by Gerald Ronson, the property tycoon, could come under new ownership after potential buyers came in with unsolicated approaches.
Construction soars to four-month high: The construction sector powered ahead at its fastest pace in 16 weeks last month as new work flowed in on the back of certainty provided by the general election result and an improving economic backdrop.
High street hit by worst June in decade: Britain’s high streets suffered their worst June for nearly a decade despite consumers feeling better off amid ultra-low inflation and improving wages.
Ofcom dashes ITV’s hopes of £140 million fee deal: The media regulator Ofcom has dealt a blow to ITV, Channel 4 and Channel 5 by raising doubts about the idea of public-service broadcasters receiving fees from pay-TV companies for carrying their free channels.
The Independent
Weak American jobs growth hits the dollar: The dollar and U.S. Treasury bond yields have been sent tumbling by a disappointing official jobs report, which crushed market expectations of an interest rate hike from the Federal Reserve this autumn.
House price growth hits two-year low as Bank warns on debt levels: House prices registered a surprise fall in June, according to the latest figures from the Nationwide building society, raising doubts about the property market’s momentum.
Financial Times
Sabadell warned about ‘high risks’ in IT integration of TSB: Banco Sabadell has been cleared by regulators to buy U.K. bank TSB. Now its real challenges begin.
Dixons Carphone confounds merger sceptics and heads back into U.S.: When Dixons and Carphone Warehouse struck their £3.7 billion merger just over a year ago, there were predictions of boardroom bust-ups and big store closures.
Fosun bets on European property with Resolution venture: Fosun, the private conglomerate run by the man dubbed “China’s Warren Buffett”, has taken a big step into the European real estate market by signing a joint venture deal with U.K.-based asset Manager Resolution Property.
Persimmon builds on rising competition in mortgage market: The Conservative victory in the U.K. general election and increasing competition among mortgage lenders have buoyed trading conditions for Persimmon, one of Britain’s biggest housebuilders.
Whitehall eyes sweeping housing benefit cuts: George Osborne will next week promise to cut Britain’s housing benefit bill, which has more than doubled since 1996 to £24.2 billion.
U.S. banks boost market share as European rivals lose ground: The six biggest U.S. investment banks all increased their market share in the first half of the year, while their top European rivals all lost ground, underlining how financial power is shifting to Wall Street.
German carmakers raise fears over Brexit: German manufacturers fear a British exit from the EU will cause more economic harm than a Greek exit from the single currency.
Fiat Chrysler criticised over recalls: Fiat Chrysler put its own customers and other drivers at risk by being too slow to notify drivers about faults and failing to provide critical information to the authorities, U.S. regulators said on Thursday, in their most trenchant attack yet on the company.
YouTube Executive downplays Facebook threat in online video: YouTube has downplayed the threat of Facebook displacing its dominance of online video, saying both companies will be able to grow rapidly for years by cannibalising the television advertising market.
Xiaomi sales put full year goal in doubt: Slowing mobile phone sales in China look to be complicating plans by Xiaomi to nearly double sales this year, as the upstart handset maker released disappointing numbers for the first half of the year.
Lex:
BP: settling down: BP has long waited for the legal clouds to clear after the tragic Deepwater Horizon accident in the Gulf of Mexico, just over five years ago. On Thursday, the company announced an $18.7 billion settlement with U.S. plaintiffs, to be paid over 18 years. Its shares jumped nearly 5% on the news. For the first time in years shareholders have a sense of the final cost of the disaster, no matter how eye-watering. And the annual payments, discounted to ‘s dollars at a 7% rate, come to less than $11 billion; factor in that two-thirds of the settlement can be taken against taxes and the number falls to the range of $9 billion. The jump in BP’s market value on Thursday was almost half that. Other oil companies have growth aspirations, too. BP has been seen as a possible takeover candidate in the past. Potential buyers include ExxonMobil of the U.S. This settlement, which covers almost all the Deepwater Horizon claims, will help to firm up a price for BP as a target. The settlement explicitly provides for an accelerated payment schedule in the event of a change of control. Shareholders might not mind a bid. BP’s shares have performed poorly since the accident. They have trailed the MSCI World Energy index — hardly a star investment itself — by more than 30 percentage points since April 2010. With an enterprise value of 5.2 times earnings before interest, tax, depreciation and amortisation (plus exploration charges), BP’s shares trade at a slight discount to its global rivals.
Salesforce: tree, meet sky: A seller of subscriptions for customer service software (among other things), Salesforce growth flows from sales and marketing dollars — $2.7 billion last year, just over half of revenues. The problem with this model is that it is hard to see the end of it. If Salesforce were to stop spending eye-popping sums on marketing, its growth rate would be likely to slow, cash flow would fall, and it would start feeling its natural customer attrition rate, which is around 9% a year (by value). Salesforce prefers to focus on other financial metrics, especially non-GAAP operating margins. These rose to 12% in the most recent quarter, from 10% a year earlier. That is encouraging, but once Salesforce’s generous stock-based compensation plans are factored in, operating income drops to almost nothing. Some prefer to look at margins before stock compensation, as it is a non-cash expense and it affects earnings per share anyway, by increasing the diluted share count. Perhaps — but look at that share count: it increased 7% during the past fiscal year. In the past five years, it has risen by a quarter. The company’s obsession with growth clearly extends to its share count. The company says that if sales growth were to slow, it would focus on improving margins. Such discipline would require an entirely new skill set. The fight is just starting.
Persimmon: land bank: Take Persimmon, which issued an upbeat trading statement. Its share price is up 35% this year, against 1% for the FTSE 100 index. Relative to book value, the stock is more expensive now than it was at the height of previous booms. Credit conditions remain supportive; mortgages have never been cheaper and will rise only slowly. The government’s Help to Buy scheme, which backs 40% of Persimmon’s sales, runs until 2020. There is pressure on margins from rising labour and materials costs, but Persimmon’s “value over volume” strategy limits its impact. The outlook for land prices, the company’s other major input cost, is benign. Smaller builders, which account for about a quarter of U.K. output, are still struggling to secure finance, limiting their ability to compete in the land market. That means land is cheaper than might be expected at this stage in the cycle. Data from Savills suggest that consented land outside urban areas is 22% cheaper than it was in 2007; had previous correlations with house prices held true, it would be back at its previous peak by now.
Lombard:
Their bad: Mark Carney, Governor of the Bank of England, recently estimated that fines paid by big banks since the financial crisis totalled some $150 billion. Some of these were exacted for misdemeanours with real world consequences — the fraudulent promotion of mortgage-backed securities, for example. But many of the penalties were for misdeeds, such as the attempted rigging of interest rates, where the public suffered no obvious detriment. In contrast, Macondo was an unequivocally bad thing for everyone within an area of more than 2,500 square miles. Particularly the pelicans. BP may thus be deemed to have got bang for its destructive buck. BP came a cropper because it neglected safety in its scramble to tap fresh oil reserves. Banks are writing a bigger cheque — albeit as cosignatories — mainly because employees conspired to defraud. In the calculus of blame, bad faith figures as a multiplier.
Scale effects: A more modest fightback by an old school incumbent is occurring in European investment banking too. UBS, whose City offshoot is infused with the DNA of one-time heavyweight SG Warburg, appears to have arrested a slump in its revenues in the region. UBS’s global investment banking earnings have slumped. So there is no room for complacency. As for Jurassic World, readers planning to see it should exert self-control when the baddy justifies releasing the velociraptors with the cry: “I’m doing it to save this corporation!” Lombard was tempted to punch the air approvingly. Almost three decades as a business hack do funny things to a person’s outlook.
The Daily Telegraph
Greek banks down to €500 million in cash reserves as economy crashes: Greece is sliding into a full-blown national crisis as the final cash reserves of the banking system evaporate by the hour and swathes of industry start to shut down, precipitating the near disintegration of the ruling coalition.
Government defends HS2 from House of Lords criticism: The Government has defended its plans for High Speed 2 against criticism from the House of Lords that it had failed to make a “convincing” economic case for the £50 billion rail project.
Missing U.S. wage growth puts hopes of Fed rate rise on ice: A lack of U.S. wage growth has cast doubts over when the Federal Reserve will choose to raise its interest rates.
F-35 fighter makers leap to its defence after it loses dogfight to 1970s jet: An extraordinary defence of the troubled F-35 Joint Strike Fighter has been issued by the Pentagon and Lockheed Martin, the lead company building the jet.
Insider trading and market abuse falls sharply: Insider trading and market abuse is becoming increasingly rare, despite a string of high-profile cases exposing bad behaviour in finance, according to figures from the City watchdog.
Libyan Investment Authority’s case against Goldman Sachs and SocGen is back on: Rival factions at the Libyan Investment Authority (LIA) have agreed to give their backing to accountancy firm BDO to manage their case against Goldman Sachs and Societe Generale, getting the lawsuit back on track after a three-month hiatus.
Festival spending soars, with Scots leading the way: The amount people are spending on gigs and festivals has jumped 8.5% in the past year, according to a report from Barclaycard.
The Questor Column:
Chasing Persimmon’s returns could be costly at these prices: Three years ago the U.K.s largest house builder Persimmon revolutionised investing in the sector by planning to return the entire value of the company to shareholders during a period of nine years. Investors are now betting record profits mean even more cash is heading their way. The house builders were scrutinised after the financial crisis in 2008. As a group they pursued rapid expansion and were unable to cope with the downturn. Persimmon was no exception and took on huge debts that it struggled to pay back as mortgages dried up and consumer confidence slumped. Shares in Persimmon collapsed from a peak of about £15 in early 2007 to 184p by the end of 2008. Persimmon made its first 75p payment in April 2013, and brought forward the next 70p payment to July last year. The third instalment was increased to 95p and accelerated to April this year. So, barely two years into the scheme it has already made almost 40% of the total payments. Shares in Persimmon reached a record high of £20.51 just two weeks ago, more than three times the level at which the capital return was announced in 2012. Questor has a horrible feeling of déjà vu in the protestation of greater capital discipline and steady future profits with the shares already pushing record highs. Profits from building houses are highly cyclical and investors are now taking an awfully rosy view of the future. Questor is more conservative and would balk at paying these prices. Persimmon at £20.24+8p. Questor says “Hold.”
The Guardian
IMF says Greece needs extra €60 billion in funds and debt relief: The International Monetary Fund has electrified the referendum debate in Greece after it conceded that the crisis-ridden country needs up to €60 billion (£42 billion) of extra funds over the next three years and large-scale debt relief to create “a breathing space” and stabilise the economy.
Lidl has received almost $1 billion in public development funding: The German discount supermarket Lidl and its sister chain Kaufland have benefited from almost $900 million (£576 million) in public development money over the past decade, the Guardian can reveal.
RBS could face $13 billion bill in U.S. case over pre-2008 behaviour: Royal Bank of Scotland has been warned in a U.S. court that it could face a $13 billion (£8.3 billion) bill in a case making allegations about its behaviour before the 2008 crisis.
Two FCA Directors scoop £157,000 in bonuses: The two main Directors of the Financial Conduct Authority have collected a combined £157,000 in bonuses after a year in which the watchdog imposed a record £1.4 billion of fines on City firms.
U.S. unemployment hits seven-year low after adding 223,000 jobs in June: The U.S. unemployment rate has fallen to 5.3% – the lowest in seven years – after the economy added 223,000 jobs in June
Daily Mail
Shares in oil giant BP climb on news it has finally settled long-running U.S. court case over Deepwater Horizon explosion and oil spill: Shares in oil giant BP climbed nearly 5% following a relief rally on news it had finally settled its long-running U.S. court case over the Deepwater Horizon explosion and oil spill that killed 11 workers five years ago.
Indian clothing label popular with Bollywood stars is launching in Britain: An Indian clothing label popular with Bollywood stars is launching in Britain. Anjalee & Arjun Kapoor this week opens its first European store in London’s East Shopping Centre and is now looking for other outlets across the U.K.
Relations between GlaxoSmithKline and China thawing as drug maker announces deal to make HIV medicine with Shanghai firm Desano Pharmaceuticals: Relations between GlaxoSmithKline and China appear to be thawing as Britain’s biggest drug maker announced a deal to make HIV medicine with Shanghai firm Desano Pharmaceuticals.
Housebuilder Persimmon urges Government to do more to improve planning system: Housebuilder Persimmon said confidence in the housing market has picked up since the General Election – but it urged the Government to do more to improve the planning system.
Daily Express
BP agrees to pay £12 billion for oil spill: BP has agreed to pay $18.7 billion (£12 billion) to settle with the American government and five U.S. states over claims resulting from the Gulf of Mexico oil spill five years ago – the biggest environmental disaster in U.S. history.
Persimmon’s new recruits: Housebuilder Persimmon believes it could be “some years” before the industry can manage to build the 200,000 new homes the U.K. needs every year as it looks to step up training programmes.
The Scottish Herald
Analyst hails transformation of Cairn Energy: An analyst has highlighted the progress made at Cairn Energy, saying the company had been transformed in the last five years.
EnerMech seals extension to BP sales contract: Enermech, mechanical engineering group, has secured a 12-month extension to a cranes and lifting contract with BP Exploration (Caspian Sea).
Craft Beer Clan eyes up Asia expansion: The specialist international arm of wholesaler JW Filshill is stepping up its export efforts and is considering moving beyond just distributing beer.
Wren & Bell is latest acquisition for Peter Brett: Wren & Bell, the Edinburgh consultancy, has become the latest acquisition for infrastructure and planning adviser Peter Brett Associates.
Maindec wins public sector IT maintenance contract: The Glasgow-based arm of Maindec Computer Solutions has been successful in a competition for Scottish Procurement’s new single supplier Server Maintenance Framework.
The Scotsman
Plexus Holdings hails ‘milestone’ licensing deal: Oil and gas technology group Plexus Holdings has signed a “transformational” deal to roll out its wellhead equipment around the globe.
Scotch Whisky Chief raises glass to Botswana: Scotch whisky has been given protected geographical status in Africa for the first time, industry Bosses said.
Ryanair takes legal action against Hertz: Budget airline Ryanair is to pursue Hertz for breach of contract and damages after the car hire group terminated its partnership with the carrier.
Kingdom FM licence triggers investment: Radio station Kingdom FM, one of Scotland’s few remaining independents, is planning further investment after being awarded a new 12-year licence by Ofcom.
City A.M.
Barclays cheque scanning tech leaves other banks in the past: Barclays customers are ahead of the curve when it comes to financial technology, as the bank’s secure cheque-scanning service was made available to all smartphone customers.
Sage to move into the Shard: Software company Sage is to move into The Shard after the owners of London’s iconic skyscraper announced it has bagged three new lettings.
Martin Sorrell’s WPP heads to Cuba as part of Latin American expansion plan: Communications giant WPP is about to set up shop in communist-led Cuba – an unprecedented step among the world’s major advertising agencies.
