The Times
Bank admits blunder over tax bill for Directors: The Bank of England was left red-faced after admitting it failed to pay the correct tax on some former senior Directors’ train travel and hotel costs.
Virgin Money surprises by announcing first dividend: Virgin Money surprised investors with a maiden dividend and revealed strong growth in the mortgage market. The challenger bank predicted that profit margins might rise in the intensely competitive mortgage market in the second half of the year. It added that it was well placed to develop its credit card business so that it was not so reliant on 0% balance transfers for growth.
Shawbrook’s pretax profits leap in tough environment: Certain parts of the property market have become bumpier, according to Shawbrook, the challenger bank.
Chinese turmoil takes its toll on oil prices: Oil traded close to its lowest level in nearly six months amid fears over signs of a serious Chinese stock market rout.
Tullett Prebon buys U.S. oil brokerage Moab: A Connecticut-based broker of oil and gas derivatives is the latest venture into the energy sector by Tullett Prebon, the U.K. interdealer broker (IDB).
Former M&S Director has high hopes for new brand: Lord Rose of Monewden, the former Chairman and Chief Executive of Marks & Spencer, is among those backing the launch of a rival clothing brand by one of the retailer’s former senior Executives.
Commuting to London saves £450,000: The daily commute may be a miserable grind but those prepared to suffer two hours a day on Britain’s railways are saving themselves almost half a million pounds on house prices.
The Independent
Ofcom could fine Royal Mail £1 billion over its pricing: Royal Mail could be fined almost £1 billion after the postal regulator found that it broke competition law and prevented rivals from expanding.
ITV Boss backs BBC as channel’s profits soar 25%: The BBC gained an unlikely ally when the Boss of ITV praised the corporation for making successful “commercial” shows such as Strictly Come Dancing.
BP warns oil prices will be lower for longer as its profits plunge tumble: BP’s Chief Executive has warned that oil prices will be “lower for longer” as he revealed that falling prices and a further multibillion-dollar charge relating to the Gulf of Mexico disaster had fuelled a $6.3 billion (£4 billion) loss for the second quarter.
Financial Times
Appetite for mobile apps sees profit surge at Domino’s Pizza: Pizzas ordered via a smartphone outnumbered those through a desktop computer for the first time at Domino’s Pizza Group, which credited ecommerce for a 28% rise in half-year pretax profits.
BAE Systems at risk of missing target as it fights for orders: BAE Systems is at risk of missing its target of modest earnings growth this year as the world’s third biggest defence contractor struggles to clinch orders for fighter jets and warships.
Pemex hit by crude oversupply, low prices and strong dollar: Mexico’s national oil company Pemex reported its 11th consecutive quarterly loss on Tuesday, failing to stage a recovery in crude production amid low international oil prices and a stronger dollar.
Yelp earns one-star as sales outlook cut and Chairman quits: Shares in Yelp, the reviews website, tumbled after it said it was having trouble hiring sales staff and would stop selling display advertising, prompting a big cut to its earnings forecasts for the year.
Nokia makes return to consumer tech with virtual reality camera: Nokia is plotting a return to the consumer market inspired more by a hovering robotic sphere from Star Wars than its once dominant smartphones business, with an unexpected shift into virtual reality.
Orange revenue revival signals hope for end of French price war: Orange signalled that the worst of a three-year price war might be over as revenues for France’s biggest mobile operator by subscribers beat expectations during the second quarter.
HeidelbergCement takes over Italcementi: HeidelbergCement, Germany’s largest cement maker, is to buy a 45% stake in Italcementi, the Italian building materials company, for €1.7 billion in cash and shares, a move that will see it later acquire the remainder of the company.
P&G names David Taylor as successor to Chief Executive AG Lafley: Procter & Gamble has named company veteran David Taylor as the successor to Chief Executive AG Lafley, handing him the reins of the world’s largest consumer-goods group as it looks to shift to growth after two years shedding billions of dollars of brands.
Lex:
Twitter: low altitude: Twitter’s next management team — or Google’s, or Softbank’s, or whichever suitor might eventually buy the social network — has a serious growth problem on its hands. It is not a revenue growth problem, however. In the second-quarter results announced on Tuesday, revenues rose 61% year-on-year to $502 million, beating the company’s own forecast. Indeed, monthly active users (excluding those who use a pared-down text message product) grew 1% compared with the first quarter to 304 million, the slowest growth on record. At that perilous velocity, it is even conceivable that users could fall for the first time during a summer slump. That Twitter has managed to record better revenue growth in those conditions shows skill in squeezing more ad dollars out of existing users. As a not-unimportant nugget, that should strengthen the potential CEO candidacy of Adam Bain, who “oversees Twitter’s worldwide monetisation efforts” and is seen as a possible successor to the departed Dick Costolo — and not just because everyone else has left the building.
General Motors: on the Buffett table: General Motors might have been better off staying private. And perhaps Warren Buffett is the man to return it to its optimal state, away from the public markets that seem to have misunderstood the automaker. GM was only relisted in late 2010 after a stint in the hands of the U.S. government, which rescued it during the financial crisis. Uncle Sam sold off the last of his stake in late 2013. Yet even the revitalised GM trades below its IPO price of $33. In its recent second-quarter earnings, GM announced a record North American profit of nearly $3 billion and a strong operating margin of 10.5%. The performance was driven by high-margin truck and SUV sales. Ford second-quarter results, announced on Tuesday, echoed the strong North American market. Still, shares for both have lagged behind the U.S. market. An outright purchase of GM would allow Mr Buffett to achieve a series of objectives. First, with GM’s market capitalisation of $50 billion he could put an immense amount of capital to work. Second, GM would fit with his preference for industrial, capital-intensive businesses such as his railroad and power utility units. Those bearish on GM point to peaking profits and uncertainty in China. But a valuation discount and an investing horizon lasting decades suggest an opportunity for Mr Buffett.
Melrose: in the right place: Is a £1.5 billion profit enough to leave the golf course for? Christopher Miller and David Roper — happily retired until they founded Melrose, the U.K.-listed industrial group, in 2003 — seem to think so. Melrose’s strategy is to buy and sell companies. On Tuesday it announced its biggest disposal to date. It will receive £3.3 billion from Honeywell for Elster, the metering company it bought in 2012 for £1.8 billion. Beats a hole in one. Melrose looks for underperforming industrial and manufacturing businesses headquartered in northern Europe and North America. Since inception it has spent more than £3 billion on four big acquisitions. After selling Elster, Melrose will have only Brush, a turbogenerator builder. Brush’s sales will increase when a Chinese factory opens, but accounting for less than a fifth of group operating profit last year it is much smaller than Elster. Melrose will be looking to buy more. So the structure is in place: buy an underperforming company, improve it, sell it at a huge profit and return cash to shareholders. The big challenge will be to find the next deal. Valuations across all asset classes have risen in recent years. Underperforming widget makers will be no exception. Melrose shareholders at least have the comfort of knowing that, having returned the cash from the last deal, Messrs Miller and Roper do not need to rush into the next one.
Lombard:
Second-class Directors: Perhaps the regulators had her in mind when they devised so-called Standard Non-Executive Directors. Earlier this year, the Prudential Regulation Authority and the Financial Conduct Authority conjured up the Senior Managers Regime for banks, dubbed catchily SMR. The regime makes the top Executives and the non-Executive chairs of audit, pay and risk committees at banks liable for any misconduct during their watch. It is an odd concept. Creating a two-tier board is divisive and could hole the principle of unitary boards whereby all Directors are collectively responsible for decisions. Directors who fall under the SMR will employ their own advisers to sit by their sides. And they will listen to these advisers rather more attentively than they heed their fellow Directors. It will be another case, as with train fares, where “standard” is code for second class.
Diageo unstuffed: It is gently probing Diageo, the maker of Guinness stout, Johnnie Walker Black Label and Smirnoff, on its shipments into the U.S., which make up a third of sales and 40% of the group’s operating profits. The SEC’s interest emerged less than a week before the British group is due to publish its full-year numbers. The market already expects sales in the U.S. to be weaker than last year. Analysts forecast a small decline in total volumes growth and flat operating profits. First-half revenues were already showing the effects of lower sales into the U.S. Overall, it has been a tough two years for the group since top Boss Ivan Menezes was appointed — the worst in 15 years, say Berenberg analysts. The shares have trailed the FTSE 100 index by 7%. Even without the SEC’s interest (where no allegation has been made) Diageo’s shares could do with some more stuffing of their own.
The Daily Telegraph
Restructure banks to help wider society, says BoE chief economist: Banks are too focused on Executive pay and shareholder dividends and need to focus more on the rights of employees, their creditors and wider society, according to the Bank of England’s chief economist.
Santander U.K.’s finance Boss quits in frustration at float delays: Santander U.K.’s Chief Finance Officer is leaving the bank after four years, as the stock market flotation appears to have been postponed for the foreseeable future.
Twitter is ‘too difficult to use’, says Finance Chief: Twitter failed to add users at a quick enough pace for investors in the second quarter, even as revenue grew sharply, feeding concerns about whether it can ever become a mass-market service like Facebook or Google.
Contactless cards replace cash as shoppers flash the plastic: British shoppers used credit and debit cards in 1.1 billion transactions in May as the adoption of contactless payments helped drive the use of plastic rather than cash.
U.K. recovery ‘motors ahead’ as GDP per head returns to pre-crisis levels: Britain’s recovery is “motoring ahead”, the Chancellor declared on Tuesday, after official data showed faster growth in the second quarter pushed output per head back to pre-crisis levels.
European stock markets bounce back on M&A activity: After a tumultuous start to the week for European stock markets, equities rebounded on Tuesday morning boosted by a slew of acquisition announcements and encouraging company results.
GKN buys Fokker for £500 million to bolster aerospace business: GKN is to buy Dutch aerospace group Fokker for €706 million (£500 million) in a deal that will strengthen the British engineering group’s position in the aerospace industry.
Google tried to buy a meatless burger company (and was rejected): Google has reportedly been trying to take a bite of the burgeoning sustainable food market by bidding to buy Impossible Foods, a company that makes meatless burgers.
The Guardian
Global markets steady despite further falls in Chinese shares: Global markets have steadied despite a second successive day of declines in Chinese shares, as Beijing battled to rein in the stock market turmoil that has returned to haunt the world’s second-largest economy.
Brussels rejects Yanis Varoufakis’ claims that troika controlled Greek tax system: The European commission has denounced as “false and unfounded” claims by Greece’s former Finance Minister Yanis Varoufakis that international creditors had exclusive control over the country’s tax system.
House prices in England and Wales hit record high: House prices in England and Wales have climbed to a new record high after overtaking the previous peak reached at the height of the property boom, according to official data.
Tougher banking rules must stay, says Bank of England deputy governor: A senior policymaker at the Bank of England has said that regulations imposed on the banking sector since the 2008 crisis should not be scaled back in any effort to fuel economic growth.
Sainsbury’s becomes U.K.’s second-biggest supermarket: Sainsbury’s has overtaken Asda to become the U.K.’s second-biggest supermarket as sales at the Walmart-owned chain continue to fall much faster than any of its major rivals.
Daily Mail
Shareholders in engineering and manufacturing turnaround specialist Melrose Industries set for £2 billion windfall: Shareholders in engineering and manufacturing turnaround specialist Melrose Industries are set for a £2 billion windfall after it sold its gas, electricity and water metering firm Elster to Honeywell International for £3.3 billion.
U.K. economy back on track with services sector boosting growth to 0.7% in the second quarter: The U.K. economy is back on track following a weaker-than-expected start to the year after data showed growth of 0.7% in the second quarter.
Daily Express
BP cuts spending after profits suffer: BP is to make further efficiencies and cut spending after profits plunged on the back of falling crude prices.
German Lidl and Aldi chew into the ‘big four’ British supermarkets: Aldi and Lidl have grabbed a record share of the grocery market as sales fell at the big four supermarkets.
The Scottish Herald
BP Chief preparing for crude price to stay low: The Chief Executive of BP, Bob Dudley, has signalled it expects oil prices to remain low for some time after the company unveiled a slump in profits and a further cut in spending on new assets.
Trapoil believes it can still make money in the North Sea: A new management team is set to take charge of loss-making Trapoil in the belief the company can still prosper in the North Sea in spite of the crude price plunge.
Advance Global Recruitment opening construction arm: Advance Global Recruitment is opening a construction subsidiary and aims to be bringing in £3 million of revenue from it by end of next year.
Virgin lifts profits by 37% and grabs one in five new mortgages: Virgin Money has said the new bank surcharge will slow its progress as it reports a continuing grab for market share grab in mortgages, but warns margins are now under pressure.
The Scotsman
Zurich with potential £5.6 billion move on ailing RSA: A shake-up looms at the top of Britain’s insurance industry after Swiss giant Zurich announced to the London Stock Exchange that it was weighing up an offer for troubled FTSE 100 major, RSA.
Next lifts profit outlook after sales boost: Fashion retailer Next has lifted its full-year profit guidance after warmer weather helped deliver a better-than-expected rise in sales.
RBS plans to raise $2.2 billion with Citizens stake sale: Royal Bank of Scotland is planning to raise up to $2.2 billion (£1.4 billion) by selling more shares in its former U.S. subsidiary.
City A.M.
Haldane raises the stakes for U.K. companies: Bank OF England Chief economist Andy Haldane has stepped up his case for an overhaul of U.K. corporate governance with the publication of a surprising new speech.
U.S. group eyes £600 million bid for Wembley developer: Quintain Estates and Development, the property developer behind London’s Wembley Arena, is reported to be in secret talks about a private equity takeover that will value it at more than £600 million.
City of London in talks to buy Smithfield building for £34.6 million: The City of London has agreed to buy back the leasehold to London’s historic Smithfield Market for £35 million.
U.K. consumer confidence hits the high notes: British shoppers are at their most confident since September, new survey figures reveal this morning.
Majestic to roll out Naked Wines click and collect service in stores: Majestic Wines said it will launch a Naked Wines click-collect service in stores across the U.K. following its £70 million acquisition of the younger crowdfunding business earlier this year.
Nigel Rich to step down as Segro Chairman: Warehouse developer Segro announced that its Chairman Nigel Rich will step down after a decade in the role.
Drax Group shares powering up as firm swings back into profit: Shares in power station firm Drax Group leapt up by almost 10%, after the company swung back to a profit in the six months to 30 June.
