The Times
VW will use cheat scandal as a catalyst for change: Volkswagen was unable to put a figure on the cost of the emissions scandal as it admitted that a “chain of errors” dating back a decade were to blame.
Glencore pledges to cut debt faster: Glencore cheered investors by raising its debt reduction target in response to the deteriorating outlook for raw materials.
Centrica feels the heat as lower energy bills dampen profits: Centrica has warned that profits from British Gas, its household energy supply business, are likely to dip sharply at the end of this year after a 5% cut in its domestic gas tariffs.
Ofwat plots 10 years of falling water charges: Ofwat said that it was looking forward to a decade of falling water bills as it unveiled plans to get the big companies to source supplies from industrial concerns and private landowners.
Sports Direct on the back foot as investors query performance: Sports Direct was forced to defend its working practices as it revealed that it had missed profit expectations, sparking a plunge in its shares that made the sportswear retail group the biggest faller in the FTSE 100.
Inditex soars above the storm clouds to post big rise in profits and sales: Poor summer weather failed to dent trading at Inditex, as the Spanish retailer reported a substantial rise in profits and sales for the first nine months of the year.
Home from home for FT offers boost for Pearson: Staff at the Financial Times could return to their original home in the City from their prime riverside location on Southwark Bridge in London.
The Independent
Banks look to hire outside of London as employers are priced out of the City: The number of job opportunities in finance in London has taken a dive as employers are priced out of the City, according to a report.
Zero-hours contracts are forcing more people into disastrous debt: Millions of people are living on the edge of problem debt, warns StepChange debt charity. It says the growth in zero-hours contracts, self-employment and other less secure work has left more people susceptible to sudden falls in income which can leave them relying on costly credit to get by. That in turn can lead to a damaging debt spiral.
Champagne Taittinger buys Kent apple orchard to make sparkling wine in the U.K.: Taittinger is bravely becoming the first French champagne house to squeeze fizz from grapes grown on British soil, after it invested in a former Kent apple orchard.
Tech jobs pay over third less in U.K. compared to New York and San Francisco: Tech employees’ salaries are 37% higher in San Francisco compared to London.
Financial Times
AstraZeneca and Wallenbergs join in biological drugs venture: AstraZeneca has teamed up with the Swedish government and the Wallenberg family to invest $100 million in a new research venture that will reinforce the company’s ties to Sweden.
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KKR expands Europe direct lending: KKR has made more than half a billion dollars in loans to companies in Europe this year, as the U.S. private equity group joined a boom in alternative lending aimed at replacing banks that are retreating in the region.
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Jaguar Land Rover poised to enter Formula E racing series: Jaguar Land Rover is set to make a return to motorsport by signing up for the all-electric Formula E series, a move that will burnish the company’s credentials as a maker of zero-emission cars.
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Atlassian shares surge on Nasdaq debut: Australian software company Atlassian soared on its debut emerging as a bright spot in an otherwise gloomy IPO market this year.
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Ford to spend $4.5 billion on electric car range: Ford plans to invest $4.5 billion to more than double the proportion of its vehicles that it offers with electric propulsion by the end of the decade, as part of a comprehensive reshaping of its approach to product development to address challenges such as growing urbanisation.
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Atlantic Media in talks to sell Quartz: Atlantic Media has held talks with a number of potential buyers interested in digital media about a sale of or potential investment in Quartz, the publishing group’s business news site, according to people familiar with the matter.
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FC Barcelona takes a shot at €1 billion revenue goal: FC Barcelona aims to become the first football club in the world with €1 billion in revenues, as part of a six-year business plan that will see the Catalan side expand both its Camp Nou stadium and its commercial presence around the world.
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Vodafone sues KPN alleging anti-competitive behaviour: Vodafone has sued Dutch rival KPN alleging anti-competitive behaviour in the Netherlands in a further sign of its increasing unhappiness with moves made by former telecoms monopolies across Europe.
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Lex:
U.S. high yield: pick your poison: Shareholder returns are residual: dividends and buybacks are to be paid with discretionary cash flows after obligations such as interest payments are made. First losses should be felt by equity holders. A sharp sell-off among high-yield indices has upended that relationship. The S&P 500’s total return this year is 2% while the Merrill Lynch junk bond index is down nearly 3%.
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Mergers: hot fuzz: The headline of the recent Deloitte report is enough to make you hug an M&A banker. What a lot of wealth they create. Sort of. The difference between gross and net, and between plans and execution, should be kept in mind. Deloitte’s $2tn number is derived as follows.
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EDF: socket to them: EDF has had a shocking year. Its shares have fallen 40% and were booted out of the CAC 40 index this week; MSCI’s European Electricity Utilities index is flat. All European generators have suffered from falling power prices, but that has been offset by the fall in fossil fuel input costs. EDF has not: 80% of its fleet is nuclear.
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Lombard:
No more Mr Micawber as Ivan stops waiting for price rises to turn: Hoping for the best, preparing for the worst. Glencore has been driven by events since the summer. There was a quiet riot of shareholders over skimpy debt reduction, then a flash crash in the shares. Now the commodities group is aiming to get back on the front foot with plans to cut debts more heavily than expected to $18 billion-$19 billion.
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Red in tooth and clause: There is rich weirdness to legal terms that define bond issues, such as “force majeure” and “pari passu”. It is easy to ignore them unless there is a dispute of the kind Lloyds has just ironed out in the Appeal Court. The bank wants to redeem £700 million in convertible bonds. Investors, who were enjoying interest as high as 16%, resisted.
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The Daily Telegraph
Coal, nuclear and diesel to keep lights on in £800 million scheme: Hundreds of millions of pounds in subsidies will be paid to diesel generators and old coal and nuclear plants to help keep the lights on later this decade, Ministers are set to confirm on Friday.
Oil price slump will mean Bank of England keeps interest rates low for longer: Policymakers warn that fresh oil declines will keep inflation subdued, as Opec announces that production rose to three-year highs last month.
Gatwick is ‘obvious solution’ to U.K.’s airport crisis, as Government refuses to make a decision: The Boss of Gatwick has claimed the “obvious solution” to Britain’s looming aviation capacity crisis is to build a second runway at the West Sussex airport, after the Government failed to back a controversial proposal to expand rival Heathrow.
British shoppers spent £623 million on Small Business Saturday: British consumers spent £623 million with small firms across Britain as part of Small Business Saturday, according to analysis.
Trouble for Tesco as shares close at 18 year lows: At of the close of trading on Wednesday night, shares in Tesco stood at 153p each, valuing the retailer at £12.6 billion. That marks a new low for this year, and indeed the lowest the shares have closed since October 1997.
U.K.’s trade deficit in goods with EU hits record high: The U.K.’s trade deficit with the European Union in goods has widened to its largest level on record, reflecting sterling’s ascent against a weakening euro.
Whitbread’s new Boss Alison Brittain pledges innovation as sales growth slows: The new Boss of Whibread has vowed that the leisure giant will keep innovating to stay ahead of competitors after disappointing investors with her first set of numbers less than a week into the job.
The Questor Column:
Sell Ocado as shares slide: Ocado, the online grocery distributor, has reported another year of rapid sales growth, but Questor is happy to stay away from the shares as profits remain hard to come by. Ocado reported it had increased retail sales by 14.7% to £1.1 billion in the 52 weeks to November 29. There were signs that falling grocery prices in supermarkets are lowering consumer spending. Ocado’s average order size fell 2.3% to £107.16, from £115 in early 2012. The problem is that Ocado’s profit margin is still wafer thin. It reported pretax profits of £7.2 million on revenue of £949 million last year. Market consensus is for pretax profits of £12.5 million in 2014-15, giving 2p in earnings per share, from the £1.1 billion in sales it reported. That leaves the shares trading on a price/earnings ratio of 166 times. Ocado management have said they will soon agree a deal to roll out their hi-tech warehouse format overseas, as support for the business model. However, the agreement is unsigned. Last year, Questor advised investors to avoid the shares (403.8p, July 3 2014), and they are down 18% since then. There is just way too much risk in this low-profit company for investors. Sell. The supermarket home delivery market is already intensely competitive, but will get a lot worse when Amazon launches its own service, Amazon Fresh. Ocado at 335.8p -23.4p. Questor says Sell.”
Sell Sports Direct as sales flatline: Sports Direct hit a wall as the slowdown in sales in the first half of the year left the shares looking increasingly expensive, especially when there is no dividend on offer. The company’s latest results show that revenues have flatlined, with sales up just 0.1% to £1.4 billion during the 26 weeks to October 25. In a worrying trend ahead of the crucial Christmas period, the core sports retail division reported revenue up only 0.2% to £1.2 billion, compared with an 8.3% increase in the same period last year, and more than 13% in the year before that. Sports Direct’s plans for international expansion have been dealt a serious blow after £32 million was written off the value of recent investments in Austria, because of trading falling short of expectations. This was the main reason for the sharp fall in operating profits during the first half. Cashflow at the business is still strong, with the amount of money generated from operating activities rising 7% to £111 million. The funds raised from selling a £44 million property and the £50 million JD Sports stake boosted cash levels to £163 million at the end of October, from £106 million at the same stage last year. The slowdown in sales at Sports Direct is yet another worrying sign that the U.K. consumer spending spree that has been fuelled by increasing personal borrowing is running out of steam. We highlighted the dangers of slowing retail growth to the valuation of Sports Direct shares earlier this year when we advised selling at 699p on February 21. The shares fell 10%, but with flat sales, lower operating profits, cost pressures and no dividend, there is little value on offer here. Sell. Sports Direct at 592½p -73p. Questor says “Sell”.
The Guardian
Decision on Heathrow third runway put off until at least summer 2016: David Cameron has delayed the decision on whether to allow a third runway at Heathrow airport until summer 2016 over environmental concerns.
Heathrow expansion: no political will to build third runway, says IAG Boss: Willie Walsh, the Chief Executive of British Airways’ parent company, has criticised Heathrow airport and David Cameron as the government considers building a third runway at the London hub.
Plastic fantastic: debit card spending soars in Britain: The use of bank cards to pay for a round of drinks at the bar has increased fivefold over the past decade, according to a report.
Tack! Ikea profits grow as empire expands in new territories: Ikea has reported rising profit as its flatpack furniture empire expanded into new territory.
U.K. shops urged to look at Italian tomato sourcing over exploitation concerns: Food retailers are being urged to investigate the way they source tinned tomatoes and passata after an investigation found evidence of widespread mistreatment of farm workers in Italy.
Toshiba seeks financial help with £8 billion U.K. nuclear project: Toshiba, the technology company at the centre of plans to build more nuclear reactors in Britain, is looking for outside help to fund its £8 billion programme after a collapse in its share price.
Daily Mail
Frosty outlook for Imperial Leather maker Cussons due to weakening economy in Nigeria: PZ Cussons, which makes Imperial Leather soap, said half-year profits would be flat after a strong U.K. performance failed to offset the weakening economy in its key Nigerian market.
Blow to savers who helped rescue Lloyds as bank wins right to cancel high-interest bonds issued during the financial crisis: Thousands of savers who helped rescue Lloyds during the financial crisis will be stripped of their income after losing a bruising court battle.
Online grocer Ocado sees rising sales growth but no news on overseas deal: Ocado saw another quarter of rising sales in an increasingly competitive grocery market, but there was a slowing from the previous quarter, and a lack of news on an overseas deal also disappointed.
Sports Direct shares slump 12% as first half profits fail to meet expectations: Shares in Mike Ashley’s Sports Direct slumped 12% after the retailer’s first half profits fell short of expectations, while a press expose of issues at its warehouse also weighed.
Turnaround at luxury firm Mulberry as handbag specialist posts 5% rise in sales: The turnaround at English leather label Mulberry appears to be taking shape as the handbag specialist reported a 5% rise in its current sales as it posted a small half year profit.
Biggest shortage of homes for sale on record pushes prices higher despite government initiatives to boost housebuilding: The biggest shortage of properties for sale on record continues to drive house prices higher across England and Wales, a new report shows.
Costa Coffee and Premier Inn Owner Whitbread sees shares fall 2.5% after new CEO’s first week on the job: Costa Coffee Owner Whitbread saw a slowdown in sales growth over the third quarter as fewer people went on shopping trips, writes Rupert Steiner.
Daily Express
Britons abroad keep TUI aloft: Tour operator TUI set a course for 10% higher earnings this year as bookings from sun-seeking British holidaymakers increase despite security concerns.
Germany heading for financial meltdown set to sink the EU, says leading expert: With the biggest economy in Europe, Germany is the glue that underpins the Eurozone but it could soon come unstuck.
The Scottish Herald
Wood Group cuts another 1,000 North Sea jobs: Wood Group has shed around 1,000 jobs in the U.K. North Sea since June and indicated more could be cut as it prepares for a prolonged slowdown in oil and gas markets amid the crude price plunge.
Cairn Energy wants $700 million compensation from Indian Government: Cairn Energy is reported to be seeking around $700 million (£460 million) compensation from the Government of India for the fallout from the tax dispute it has become embroiled in there.
McMillan Hotels back into profit: Family owned McMillan Hotels has returned to profit and is now operating almost debt free.
Plexus flags impact of crude price slump on engineering firms: Aberdeen-based oil and gas well technology firm Plexus Holdings, has highlighted the sharp slowdown in the North Sea market in recent months and expressed uncertainty about how lasting its effects will be.
Harper Macleod wins Scottish Government mandate: Law firm Harper Macleod is to work with the Scottish Government on the successor to the Help to Buy scheme.
Metering group snaps up housing sector specialist: Energy Assets Group, the Scottish smart metering business, has snapped up a housing sector specialist in a deal worth up to £5 million.
The Scotsman
Wood Group sticks to outlook despite tough oil market: Energy services giant Wood Group proclaimed its confidence of meeting its profit targets in the face of “challenging” market conditions.
Norman Murray to chair Icas ethics board: Accounting trade body Icas has drafted in one of Scotland’s best-known business figures to spearhead a drive on ethics.
SEP backs legal technology outfit with £10 million: Venture capital firm Scottish Equity Partners (SEP) has invested £10 million in a technology firm focused on the legal and dispute management arenas.
Japanese marine energy to learn from Orkney expertise: Orkney’s European Marine Energy Centre (EMEC) is to lend its expertise to the development of a test facility in Japan.
City A.M.
John Lewis sales suffer post-Black Friday hangover but sales are still up year-on-year: After reporting record-breaking numbers over Black Friday, John Lewis said that it saw a double-digit drop in sales last week.
Companies flock to London to float on stock market after its bumper year of IPOs: Companies have been coming to London in droves to bring their companies to market, according to accountants at PwC.
ICAEW: Low business investment will weigh on economic growth next year: Economic growth will slow next year as business investment stutters, exports weaken further and skills shortages bite, according to the latest forecast from the Institute of Chartered Accountants in England and Wales (ICAEW).
Mortgage lending has another healthy month in November: Mortgage lending climbed last month, according to new figures published this morning. There were 70,511 house purchase approvals in November, the data from surveyors e.surv show. Compared with the same month last year, the number of approvals is up 19%.
First-time housebuyers in a festive frenzy, as number of valuations for this purpose rocketed up 31% compared to last year: Christmas may have come early for some first-time buyers, as the number of valuations for homehunters in this category jumped up last month.
GoPro share price jumps by over 12% after it announces Apple Watch launch: Shares in camera manufacturer GoPro have jumped by over 12.6% after the company announced a new release for Apple Watch users.
Citymapper, Lovefilm and Betfair backer Balderton Capital invests $3 million as The Tab takes on America: Student tabloid The Tab has got America in its sights with a $3 million (£1.98 million) investment from one of Europe’s largest venture capital firms Balderton Capital.
