The Times
Rebels yell yet again over Icap’s pay policy: A third of shareholders at Icap have voted against the company’s pay policy for the second year running, despite an attempt by the dealer broker to head off a rebellion by discussing the Executive bonus scheme with leading investors.
Brussels ready to review the rules on banks’ capital: Senior officials in Brussels have said that European banks could have their capital requirements slashed, only six years after a financial crisis during which lenders collapsed or needed multibillion-pound state rescues because of their lack of an adequate loss buffer.
We are being hung out to dry for the big boys, claim furious smaller banks: George Osborne has faced angry demands from small banks to alter his new charges on the industry.
BHP Billiton takes $2.8 billion fracking hit: BHP Billiton has written down nearly a quarter of the value of a $12 billion breakthrough acquisition into the American fracking market.
Ordnance Survey charts a new course in the great outdoors: Ordnance Survey is branching out into the clothing business through a deal to lend its name to a range of outdoor apparel.
Social housing changes ‘threaten to increase national debt by £60 billion’: An extra £60 billion could be dumped on the national debt as a result of the Chancellor’s aggressive recent interventions in the social housing sector, the government’s fiscal watchdog has warned.
The Independent
Network Rail’s upgrade plans face further delays down the line: Network Rail will not be able to complete all the infrastructure work planned within its £38.5 billion five-year spending programme, directors at the state-backed company have told The Independent.
Regulator to crack down on misleading supermarket offers: Tesco, Asda, Sainsbury’s, Morrisons, Aldi, Lidl and other large supermarket chains are set to get a major dressing down from officials as the consumer watchdog responds to a super-complaint over misleading promotions.
Unemployment rises in the U.K. for the first time in two years: The number of jobs in the U.K. economy has fallen and unemployment has gone up for the first time in two years – but labour market analysts insisted this is likely to represent a temporary blip rather than a derailing of the British recovery.
Financial Times
Cheese and whisky exports help Lidl’s U.K. sales hit record £4 billion: The success of the German discounters in the British retail market has been underlined by sales at the U.K. arm of Lidl reaching a record £4 billion.
Tech group behind Pluto images set on mission for growth: e2V technologies, which provided the technology to capture the spectacular images of Pluto this week, is looking to expand its space division following the successful Nasa mission to the outer edge of the solar system.
Vodafone outlines government efforts to censor telecoms networks: Governments regularly block content, engage in censorship on telecoms networks and restrict freedom of expression, according to a report by Vodafone that details the number of lawful interception and communications demands the company received in 28 countries.
ICAP’s Michael Spencer predicts further market volatility: ICAP’s Chief Executive Michael Spencer is forecasting more days of extreme turbulence in global markets as the U.S. prepares to raise interest rates and banks withdraw from their traditional role in the market.
U.K. space start-ups to get boost from venture capital fund: The U.K. space sector is to get a boost from corporate investors such as Thales and Airbus after they backed an £80 million venture capital fund aimed at fuelling growth in small start-up companies.
Sir Mike Rake to step down as Barclays Deputy Chairman: Sir Mike Rake is to step down as Deputy Chairman of Barclays this year to become Chairman of Worldpay, the payments processing company, having last week orchestrated the sacking of the bank’s Chief Executive.
Carmakers eye golden Iranian opportunity in wake of nuclear deal: The world’s carmakers have been plotting their assault on Iran for several years. But when they arrive in the newly opened country — marking a long-awaited return for some — they will have to share the spoils with aggressive Chinese competitors.
AmorePacific taps growing U.S. taste for natural beauty products: AmorePacific of South Korea is stepping up expansion in the U.S. as it seeks to tap growing demand for high-end beauty products.
Blythe Masters joins subprime auto group: Blythe Masters, the former JPMorgan Chase Executive who helped pioneer credit derivatives in the 1990s, is to become the new non-Executive Chairman at Santander Consumer U.S.A, the subprime auto loans group.
Rio Tinto cuts guidance on weather disruption: Rio Tinto has cut its guidance on 2015 shipments of iron ore, citing “severe and unseasonal weather.”
Lex:
Nordic banks: dropping balls: Norway’s DNB performed most of those stunts last week; its second-quarter profit was better than expected. Swedish bank SEB also beat expectations this week — yet revenue was flat and profit lower than a year ago. Even the meticulous Nordics, it seems, can miss a trick. While DNB’s earnings quality was assured by solid growth in net interest income and also commission and fee income, SEB — with its greater focus on corporate banking — was more reliant on a surge in trading revenue as net interest income fell. And while SEB reported lower loan losses (Handelsbanken, Nordea, and Swedbank are expected to follow suit), DNB’s bad loan charge leapt from a year ago as mining loans turned sour. Another ball slips away. But it cut its full year loan loss guidance, and its stock of bad loans fell. The latter are under 1% of total lending at both banks anyway (against 40% for Greek banks).
ASML: chipping away: Chipmakers have had a difficult quarter but they are still investing for better times. That is great news for ASML, which makes the lithography machines used to etch silicon chips. With an 85% market share, it benefits from investment in new semiconductor plants. Its second-quarter numbers on Wednesday beat expectations, with sales up slightly from a strong base a year ago. There are still risks. As ASML’s machines get fancier, it sells fewer of them, and for higher prices. Its most advanced lithography machines, which use extreme ultraviolet lithography (EUV), go for around €100 million. Revenue recognition could get lumpy, especially because there is a lag between delivery of an EUV machine and payment for it (because certain performance criteria have to be met.) EUV orders — there are six right now — have historically been slow to convert to actual revenues.
Posco: blast-off: China’s economy grew 7% in the year to June, a shade faster than expected. Yay! Shareholders in Posco, the South Korean steelmaker, will be forgiven for not joining the party. Slowing growth in China is wreaking havoc on its business model. Posco’s Chinese rivals, struggling to find sufficient demand for their products at home, have taken to exporting in a big way. Year-to-date exports have surged 28%. That follows a similar percentage increase in the first half of last year. Inevitably, those exports have depressed prices. The company launched “Innovation Posco” in March 2014 to address the already weakening global steel market, and fix unprofitable non-steel businesses. But the plan was apparently not innovative enough. Profits are still falling — as demonstrated by Wednesday’s second-quarter results — dragging the share price with them. Posco’s shares have performed terribly this year, down 24%, much worse than peers such as Nippon Steel. Yet Posco is not especially cheap. Its enterprise value is almost seven times forward earnings before interest, tax, depreciation and amortisation. That is a higher valuation than ArcelorMittal. The question now is whether this more forceful cost cutting will be enough to offset the falling steel price. Perhaps — but what the company really needs is an upturn in domestic demand for Chinese steelmakers. Best keep watching those GDP figures.
Lombard:
Barclays rows on without Rake as the tide turns for BarCap: John McFarlane, incoming Chairman of Barclays, was attending the waterborne bunfight when he drafted the release announcing the departure of Chief Executive Antony Jenkins. Its burden was that deputy Chairman Sir Mike Rake had heaved the Chief Executive out of the boat. That leaves the bank wobbling high in the water after losing so many of its crew. Staff of the investment bank should be pulling more lustily than before, though. The tone at the top concerning the business formerly known as BarCap is changing for the better, and not before time. It is too early for investment bankers to celebrate with the picnic of wine and lobster mentioned in the boating song of Eton College, which encapsulates a bravely permissive attitude to underage drinking. The tide is still running against them, even if it is slackening. Their unit’s full year return on equity was a dire 2.8%, while its cost-to-income ratio ballooned to 82%. Mr McFarlane will continue cutting back capital-intense bond trading while bolstering the capital-light advisory arm. But his emphasis may shift from the former to the latter. Central banks cannot suppress indefinitely the volatility that drives trading profits, even if higher capital ratios have reduced the business to a client support function.
Pool players: Money never sleeps. But it does go on holiday. Decision makers head for the beach in late July and in August. The dog days of summer would therefore be a good time for activist investor Edward Bramson to launch a second tilt against the board of Electra, according to City conspiracy theorists. Mr Bramson would be pushed to force a poll in mid-August, the most propitious time. However, he could stand for the board in early September if he requisitioned an election soon. That timetable could reduce scope for the Electra board, led by Chairman Roger Yates, to mobilise supporters during August, when many of them will be building sandcastles rather than business empires. Another activist, Elliott Advisors, won a notable victory over Alliance Trust earlier this year, catapulting two new Directors on to the board. However, Electra has performed better and taken some of the sting out of Sherborne’s criticisms by agreeing to pay dividends. Mr Yates, a former Chief Executive of Henderson Group, also has a bigger fan base than Katherine Garrett-Cox of Alliance Trust.
The Daily Telegraph
British taxpayers ‘protected’ as Osborne strikes deal on Greek loans: British taxpayers will not be left exposed for another Greek bailout, George Osborne hopes, under a compromise struck with Jean-Claude Juncker.
U.K. households risk debt crisis by switching credit cards, warns Moody’s: U.K. households are risking a personal debt crisis by switching credit cards instead of paying off balances, a leading credit ratings agency has warned.
Raising minimum wage a ‘completely hopeless’ way of reducing poverty, says OBR: The Chancellor’s new “national living wage” is a “completely hopeless” way of trying to reduce poverty that could leave the economy with higher unemployment if another crisis hits, economists have warned.
Netflix now has a bigger population than the U.K.: Netflix added nearly a third more subscribers than expected in the second quarter, taking its total to more than 65 million worldwide.
Britain’s independent retailers experiencing sales ‘roller coaster’: Small businesses are experiencing their most volatile retail sales in more than two decades, as a mixture of slow economic growth, disruptive weather and changes to government policy puts strain on independent retailers struggling to compete with larger stores.
BT criticised by shareholders over condition of classic red phone boxes: BT has admitted it should improve the “diabolical” condition of its classic red phone boxes following sharp criticism from shareholders.
The Questor Column:
Avoid Admiral until its growth path is clearer: Ahead of the insurance sector’s interim results next month, Questor takes a look at Admiral, one of the more colourful firms in the car insurance market. When Admiral sets out its half-year earnings on August 19, it could be the last time that Henry Engelhardt presents the figures. The American who helped to found the firm is due to leave before next May, ending 25 years in charge. Admiral was among the first car insurers to raise prices in late 2014. Several years of fierce price cuts since a Government clampdown on dubious claims are now giving way to new forms of claims inflation. The car hire firm Uber recently chose to underwrite its own drivers, according to UBS analysts who said this was the sort of nasty shock facing insurers that do not adapt to new technology. Meanwhile, up to half of all cars will be autonomous in some way by 2025, Deloitte has predicted, making them safer but shifting the risk from motorists to manufacturers. Admiral set up Confused.com in 2002, and while the site’s revenues of £81 million and profits of £16 million last year are a drop in ocean, the firm has made its mark online. The trick now is to keep up. Admiral is one of the most generous dividend payers in the FTSE 100, handing over 95% of its earnings per share last year. This payout is uncertain, with an expected profit dip, an unsustainable release of reserves in recent results and a surprise £200 million bond issue last year. Questor would sit on the sidelines until the firm’s trajectory is clearer.
The Guardian
Greek MPs pass austerity bill as Athens police clash with protesters: Five years into the worst crisis to hit their country in decades, Greek MPs voted by a large majority in the early hours of Thursday morning to accept draconian austerity as the price of further bailout funds but at great personal cost to Prime Minister Alexis Tsipras.
Britain’s average pay rises, but so does unemployment: Britain enjoyed a bumper pay rise in spring, with average earnings 3.2% higher in the period from March to May 2015 than a year earlier, highlighting the increasing skills shortages forcing employers to offer higher wages.
U.S. Chamber of Commerce lobbies against class actions in U.K. courts: The U.S. Chamber of Commerce is lobbying to prevent U.S.-style class actions being brought in the U.K. courts as litigation funding expands to promote consumer rights.
British Gas to cut gas prices by 5%: British Gas has announced it will cut gas prices by 5% from the end of August but its customers will still be paying £70 a year too much for their energy, according to one expert.
National Grid accused of ‘failing Britain’ by overseeing capacity drop: A prominent energy industrialist has accused the National Grid of failing the country by overseeing a huge fall in spare capacity that has left Britain closer than ever to blackouts this winter.
Aga Rangemaster sold to U.S. company Middleby in £129 million deal: It’s enough to collapse Mary Berry’s lemon souffle. Aga Rangemaster, maker of the favourite cooker of Britain’s rural middle class, has been bought by Middleby Corp, of Elgin, Illinois.
Daily Mail
Shares in Entertainment One slump as largest investor sells more than a third of its stake: Shares in Entertainment One slumped after its biggest shareholder sold more than a third of its holding.
Ineos Chairman Jim Ratcliffe’s billion dollar bet on the shale revolution: The British Consul-General should have been standing on the podium with rags-to-riches billionaire Jim Ratcliffe, in Qidong, two hours north of Chinese city of Shanghai.
Middle-aged men in lycra boost Halfords as group sales rise: Halfords report a strong first quarter as the rise of the ‘Mamil’ – middle-aged men in lycra – boosted demand.
Daily Express
FirstGroup hits buffers as transport group counts the cost of last year’s loss: Firstgroup is set to count the cost of last year’s loss of key rail franchises last year.
Defence firms fire off rocket to the Government for lack of support: Defence companies are warning of a lack of Government support in an increasingly fierce £50billion battleground for orders from abroad.
Bank of England Governor: ‘Greek deal needs Herculean efforts to go through’: The Bank of England Governor Mark Carney has warned that the third bailout for debt-struck Greece will be very hard to implement.
The Scottish Herald
Scotland outperforms U.K. with above-trend growth in Q1: Economic growth in Scotland outstripped expansion in the U.K. as a whole in the first quarter as the dominant services sector put in a solid performance and construction output surged, official figures have revealed.
Smart Metering Boss nets £3.5 million from share sale: The Chief Executive of Glasgow-based Smart Metering Systems has netted nearly £3.5 million after selling more than 1.1 million ordinary shares in the company.
September launch for Aberdeen Crowne Plaza: A Crowne Plaza Hotel will open at Aberdeen International Airport will open on September 1, Owner Dominvs Hospitality has announced.
Carr’s holds up against market pressures: Carr’s, the farming, food and engineering group based in Cumbria, says its £17 million Kirkcaldy flour mill has continued to generate efficiencies and enhance the company’s reputation. In a trading update for the 19 weeks to July 11 Carr’s said its food division had continued to perform well with volumes ahead of last year.
Dairy farmers stunned by Graham’s price cut: Scotland’s dairy producers have received yet another blow following an announcement by Graham’s the Family Dairy that it is to halve the price it pays suppliers for some of its milk to 7p per litre (ppl).
Distillery cuts carbon emissions by 90%: One of Scotland’s leading whisky producers has cut its carbon footprint by 90% at a Highland distillery.
Corinthian Club to open boutique casino: The Corinthian Club is to open a boutique casino and cocktail lounge next month aimed at revitalising the Glasgow institution on Ingram Street
The Scotsman
Wetherspoon Chief criticises living wage plan: Pubs giant JD Wetherspoon has became the latest firm to raise concerns over government plans to bring in a living wage, warning of “unsustainable pressure” on an industry already struggling with taxes and competition from supermarkets.
Burberry sales figures cooled by Asia slowdown: Luxury fashion brand Burberry has seen its sales growth ease amid weakening demand in Asia and a volatile American market.
AA set to enter mortgages market with BoI link-up: Breakdown service AA is set to launch its first mortgage product next year after agreeing a ten-year partnership deal with Bank of Ireland.
City A.M.
Man who made £18 million turns his hand to Matalan: Serial entrepreneur Shane Quigley, who turned £5,000 into £18 million by co-founding digital marketing group Epiphany, is leading the charge for Matalan’s launch of an online-only homeware brand – Matalan Direct.
Severn Trent targeting positive 2016 performance as costs drop: Utility firm Severn Trent issued a reassuring trading update, and told investors it is on track to deliver a full year performance in line with expectations.
Afren suspends shares and cuts oil projections: Shares in troubled oil firm Afren were suspended due to uncertainty surrounding the ongoing review of its business plan.
Singapore firm builds Galliard with £50 million stake: Singaporean property developer Oxley Holdings has bought a 20% stake in Galliard Group for £50 billion in a bid to expand within London.
