Asda sales continue to increase

Asda shopping bag

UK supermarket chain Asda has reported a rise in sales for the second quarter in a row, although the rate of the increase slowed.

The retailer, which is owned by US giant Walmart, said like-for-like sales rose by 1.1% in the third quarter of the year.

However, this was lower than the previous quarter’s growth of 1.8%.

Asda chief executive Sean Clarke said the market would continue to be challenging into next year.

However, he added the chain had “clear plans and a renewed level of confidence”.

Sales battle

Although Asda’s sales have risen again, the number of trips to its stores fell by 1.4% in the third quarter compared with last year.

But Walmart’s president and chief executive, Doug McMillon, said Asda shoppers were buying more from them: “The improvements in store experience and price investments are increasing store basket sizes.”

Asda, based in Leeds, is the UK’s third-biggest supermarket, after Tesco and Sainsbury’s but before Morrisons.

All four are fighting hard against the rapid rise of the German discounters, Aldi and Lidl, which are both seeing sales rise in double digits, although that is partly because they are opening new stores.

Unlike their rivals, the German discounters do not give details of their like-for-like sales, which strip out new store openings by comparing sales in stores open for more than a year.

Asda and Morrisons have been hit the hardest by the expansion of the discounters, and both have seen sales fall.

‘Aggressive plans’

Two weeks ago, Asda announced its current president and chief executive, Sean Clarke, would leave his post at the end of the year after just 18 months in the job.

He is being replaced by current deputy chief executive Roger Burnley, who was brought into Asda a year ago from rival supermarket Sainsbury’s.

Tom Berry, retail analyst at GlobalData, said: “As Sean Clarke departs the grocer at the end of 2017, having steered it back into positive growth with the help of an inflationary market, Roger Burnley is set with the task of continuing the positive momentum.

“The key to [Mr] Burnley’s success will be his ability to balance the heavy investment in price, stores and online against the need to pass costs on to consumers – all while the discounters march on with aggressive expansion plans and product diversification. “

FTSE 100 higher despite GKN slump

  • Market trader (file picture)
  • GKN shares fell 4.8% as the engineering company said its chief executive-designate was to leave the firm.
  • Kevin Cummings had been due to take over as chief executive on 1 January, but GKN said it felt the next stage of its development was “best delivered under alternative leadership”.
  • The news came as GKN said it would take a charge of up to £130m at its North American aerospace arm.
  • Despite GKN’s fall, the FTSE 100 closed up 14.33 points at 7,386.94.
  • Royal Mail zigzagged during the day but was 1.7% higher at the close. The postal giant reported a 30% fall in half-year pre-tax profits to £77m, although revenues rose 2% to £4.8bn thanks to a strong performance from its Europe-focused parcel business General Logistics Systems.
  • The company also warned that its performance in the second half of the year, which includes the crucial Christmas trading period, could be affected by the “industrial relations environment” as it tries to reach a deal with unions over workers’ pay and pensions.
  • On the currency markets, the pound rose 0.18% against the dollar to $1.3196 and was 0.36% higher against the euro at €1.1211

Russia and Venezuela agree debt deal

Russia has agreed to restructure $3.15bn (£2.4bn) in debt owed by Venezuela, providing breathing space to the cash-strappe Country.v

The deal, announced on Wednesday, allows Venezuela to make “minimal” repayments on its Russian obligations over the next six years.

It comes a day after credit ratings agencies raised alarm after Venezuela missed recent debt interest payments.

Venezuela owes an estimated $140bn to foreign creditors.

The government hosted a meeting in Caracas earlier this week to discuss restructuring, but creditors who attended the meeting told journalists that it ended without the government making any concrete proposals.

Venezuelan officials said the government had started transferring $200m in interest payments and would continue to meet its obligations.

“Venezuela is moving forward towards recomposing its external debt in benefit of its people” Venezuela’s Finance Minister Simon Zerpa said on Wednesday as he announced the deal with Russia.

Confidence from China

Russia and China are among the main allies of Venezuela, which has historically relied on its oil wealth to buoy its economy and finance its government.

But a decline in oil prices has sent the country into economic and political crisis.

The US and European Union have imposed sanctions, citing repressive policies by the government.

The Russian Finance Ministry said the deal announced Wednesday would allow Venezuela to release funds for economic development and improve its ability to repay all creditors.

Russia previously agreed to restructure Venezuela’s debt in 2014. This deal expects full repayment in 10 years.

Separately, China also expressed confidence in Venezuela’s financial situation.

“We believe that the Venezuelan government and people are capable of properly handling their debt issues,” the Foreign Ministry spokesperson said at a press conference.

“At present, the financing cooperation between China and Venezuela is running as usual.”

Venezuela has borrowed billions of dollars from Russia and China over the years, primarily through oil-for-loan deals.


Analysis: Daniel Gallas, BBC South America correspondent

The world watches Venezuela without quite knowing what to make of its recent missed payment deadlines.

Is this the beginning of the world’s largest debt default? Or is it just a minor setback for a country in financial trouble?

Venezuela says it wants to restructure its massive debt.

But its failure to present a credible plan in a meeting with investors on Monday suggests President Nicolas Maduro’s only real strategy is to buy more time.

Wednesday’s new deal with the Russians may be crucial to honour upcoming payments.

But how long can Venezuela afford to keep buying just time – before it actually goes bankrupt?

Alibaba’s Jack Ma slips to third in China rich list

Alibaba founder Jack MaImage copyrightGETTY IMAGES
Image captionAlibaba founder Jack Ma is China’s third richest man

Jack Ma, the boss of Chinese e-commerce giant Alibaba, has slipped to the third top spot in Forbes’ China rich list.

Mr Ma’s ranking fell one place, even though his net worth increased by more than a third to $38.6bn (£27.3bn).

Asia’s richest tech billionaire, Tencent’s Pony Ma, also known as Ma Huateng, climbed to second after his fortune surged almost 60% to $39bn.

Leading the rankings was China’s richest man, real estate magnate Hui Ka Yan.

The 59-year-old, also known as Xu Jiayin, is the chairman of the China Evergrande Group. His fortune rose more than 400% from last year to $42.5bn.

The huge increase in his wealth is due to the “extraordinary rise in the stock price of his company” which added more than $32bn to the property developer’s net worth, according to Forbes.

Hui Ka Yan

However, Mr Hui’s net worth is less than half that of the world’s richest man, Microsoft co-founder Bill Gates. .

He also trails behind the world’s 10 richest people, which includes Berkshire Hathaway’s Warren Buffet and Amazon chief executive Jeff Bezos.

As well as property, Mr Hui made his wealth from seeing the potential in China’s healthcare spending to create Evergrande Healthcare.

He also owns a majority stake in one of China’s professional football teams, Guangzhou Evergrande Taobao Football club.

Mr Hui is not the only multi-billionaire to have climbed in the rankings. Several Chinese property developers, internet entrepreneurs and manufacturers on the list saw significant gains in their wealth this year.

Evergrande International Football School

As well as Alibaba founder Jack Ma dropping down the list, last year’s richest man in China, Wang Jianlin, the chairman of the Chinese conglomerate Dalian Wanda Group, dropped to fourth place after his fortune fell nearly $8bn to $25.2bn.

His company was once described as the world’s biggest private property developer and the world’s largest cinema chain operator, but it lost value amid a major restructuring.

Other key highlights from 2017’s Forbes China rich list include:

  • The average of age of those on the list is 55
  • The top 10 includes one woman – real estate developer, 36-year-old Yang Huiyan
  • Four of the top 100 on China’s rich list are under 40
  • The four own businesses in property, software, drones and after school tutoring
  • But the big two sectors represented on the list are real estate and technology

Man Utd revenues grow thanks to TV and match-day income

  •  

    Antonio Valencia of Manchester United

    Manchester United has announced that total revenues for the three months to October grew by 17.3% to £141m.

    Broadcasting and match-day revenues leapt more than 30%, while commercial and sponsor income also grew.

    But the Old Trafford club’s income from retail, merchandising, sportswear and product licensing slipped by 0.4% on the previous year.

    The club also reported a big leap in operating profits, from £6.2m a year ago to £15.2m now.

    Manchester United is second in the Premier League and poised to qualify for the Champions League knock-out phase. It is also in the last eight of the Carabao League Cup.

    “We are just over a quarter of the way through what promises to be another exciting season,” said club executive chairman Ed Woodward.

    “In the Champions League, we have won all four games played to-date; we are through to the quarter-final of the Carabao Cup and are looking forward to the next few months as the number of matches ramps up.”

    During the quarterly period, the club took part in a US tour and also signed three new players – Victor Lindelof, Romelu Lukaku and Nemanja Matic.

    Champions League effect

    Broadcasting revenue was £38.1m, an increase of 30.9%, thanks to participation in the Champions League, playing one extra Premier League home game and participation in the Uefa Super Cup final. But that was partially offset by having one fewer Premier League game broadcast live.

    Match-day revenue for the quarter was £22.4m, an increase of 33.3% over the previous year, primarily due to playing two additional home games across all competitions.

    For the total financial year, Manchester United is now predicting total revenues of between £575m and £585m.

    Meanwhile, total operating expenses for the period were £143.1m, an increase of £20.9m, or 17.1%, on the previous year, largely as a result of additional payments caused by Man Utd qualifying for this season’s Champions League.

    Overall, employee benefit costs rose for the quarter, to £69.9m, an increase of 12.2%.

    Other operating expenses for the quarter were £34.5m, a hike of 29.2%, over the year before, primarily due to club playing more tour games this year – five, than in the previous season, when they played one and one was postponed.

    Net debt was £268.1m, a decrease of £69.6m over the year.

Siemens to cut 6,900 jobs worldwide

 

Siemens' headquarters in Germany

industrial group Siemens has announced plans to cut around 6,900 jobs worldwide mostly in its fossil fuels division.

It said global demand for large turbines produced by its power and gas division had fallen dramatically.

Half of the jobs will be lost in Germany, while 1,100 will go in the rest of Europe and 1,800 in the US.

Siemens said it was confident there would be no compulsory redundancies in the UK.

It biggest British factory, which produces small and medium industrial turbines, is in Lincoln and employs 1,500 people.

Brexit: Goldman Sachs chief Lloyd Blankfein suggests second vote

 

Lloyd Blankfein

The chief executive of Goldman Sachs, Lloyd Blankfein, has suggested holding another referendum on Brexit.

Mr Blankfein tweeted: “Here in UK, lots of hand-wringing from CEOs over #Brexit… So much at stake, why not make sure consensus still there?”

The firm, which is known to have taken office space in Frankfurt, employs about 6,000 people in London.

Banks are particularly worried the UK will fail to strike an EU trade deal.

The banks fear that after Britain leaves the EU their businesses will lose “passporting rights”, which allows them to sell financial services across borders.

Mr Blankfein’s tweet went on to say: “Better sense of the tough and risky road ahead. Reluctant to say, but many wish for a confirming vote on a decision so monumental and irreversible.

Mr Blankfein’s twitter account was barely used until recently.

Despite him signing up to the microblogging service in 2011 he only sent his first tweet in June – and since then has shared his thoughts in that way just 26 times.

Nevertheless, he has attracted 69,000 followers.

His previously most noticeable tweet – sent last month – was also Brexit-related: “Just left Frankfurt. Great meetings, great weather, really enjoyed it. Good, because I’ll be spending a lot more time there. #Brexit”.

That was seen as a hint that Frankfurt would become a key European base for the Wall Street giant post-Brexit.

Last month, the Wall Street bank said it had agreed to lease office space at a new building in Frankfurt giving it space for up to 1,000 staff.

That would be five times the current staff of 200 and see the Wall Street giant bolstering activities including trading, investment banking and asset management.

The bank is also thought to be looking at expanding its operation in Paris.

Mr Blankfein was in London attending a client event.

A spokesman for Goldman Sachs said the bank had nothing further to add to Mr Blankfein’s comments.

 

New GKN chief leaves before starting role

GKN engineer

Engineering giant GKN has said its new chief executive is to leave the company before even taking up the role.

Kevin Cummings had been due to assume the role on 1 January, but the company said it was now looking for “alternative leadership”.

The move came as GKN announced another write-down at its aerospace division, which Mr Cummings used to head.

GKN said it would take a further charge of up to £130m at its North American aerospace unit.

Shares in GKN sank more than 7% on the news.

GKN’s products include wing tips for Airbus and components for carmakers.

In October this year, the company issued a profit warning, which was partly due to “operational challenges” at its aerospace business in North America.

At the time, GKN said it would take a £15m charge to cover problems at its plant in Alabama.

All change

In its latest update, GKN said that in light of the issues at its Alabama plant, “a review of working capital has been initiated across other aerospace plants in North America”.

“While this review is not yet complete, it is likely to result in a further write-off estimated to be between £80m and £130m, much of which built up before 2017.”

GKN said it had brought forward the start date of the new chief executive of GKN Aerospace – Hans Buethker, who was formerly chief executive of Fokker Technologies – so he could begin immediately.

Kevin Cummings joined GKN Aerospace in North America in 2008. He was made chief executive of the aerospace division in January 2014 and was appointed to GKN’s board in January 2016.

Following Mr Cummings’ departure, GKN has asked Anne Stevens, currently a non-executive director at GKN, to take over as interim chief executive on 1 January 2018 until a full-time successor is appointed.

The company’s current chief executive, Nigel Stein, is still due to retire at the end of the year.

Myeshia Johnson: Soldier’s widow says Trump made me cry

The widow of a dead US soldier says Donald Trump could not remember her husband’s name when he phoned to offer condolences.

Myeshia Johnson, widow of Sgt La David Johnson, told ABC News the president’s “stumbling” and tone “made me cry”.

But President Trump said that he had used Sgt Johnson’s name “without hesitation” and described the conversation as “very respectful”.

Sgt Johnson was killed in Niger by Islamist militants this month.

President Trump’s call of condolence made headlines last week when Democratic congresswoman Frederica Wilson – who had heard it along with the family – accused him of insensitivity.

Myeshia Johnson appeared to confirm Ms Wilson’s assertion that Mr Trump had told her her husband had known what he had signed up for when joining the military.

“The president said that he knew what he signed up for, but it hurts anyways… It made me cry because I was very angry at the tone of his voice and how he said it,” she said.

“He had my husband’s report in front of him, and that’s when he actually said La David. I heard him stumbling on trying to remember my husband’s name.”

“If my husband is out here fighting for our country and he risks his life for our country, why can’t you remember his name?” she added.

Myeshia Johnson weeping on her husband's coffin at his funeral in Hollywood, Florida on 21 October

The Donald Trump condolence-call story is a White House headache that shows no signs of abating.

It started badly for the president, as he responded to a question about US military casualties in Niger by questioning how his predecessors had dealt with the families of war dead.

It got worse, as the story morphed into one of an allegedly callous presidential call to Myeshia Johnson, a grieving widow of one of the US soldiers killed in Niger.

Now it’s devolved into a he-said, she-said debate. Democratic Congresswoman Frederica Wilson – who knew the slain soldier – and Ms Johnson and her family claim the president mishandled the call, while Mr Trump and Chief-of-Staff John Kelly insist everything went smoothly.

Needless to say, arguing with a war widow is a no-win situation, regardless of who has facts on their side. President George W Bush notably withstood harsh criticism from some bereaved families during the Iraq War without swiping back.

This president is different, which should come as a surprise to no one at this point. His choices could come at a high political price, however.

How did Trump respond?

President Trump defended himself on Twitter on Monday, writing: “I had a very respectful conversation with the widow of Sgt La David Johnson, and spoke his name from beginning, without hesitation!”

He has dismissed the account of the phone call given by Ms Wilson as “totally fabricated”.

Speaking to reporters, he said: “I did not say what she [Ms Wilson] said… I had a very nice conversation.”

The White House said Mr Trump’s conversations with the families of dead servicemen were private.

presentational line

How did this row begin?

Sgt Johnson was one of four US special forces soldiers who died in an ambush in Niger. Mr Trump was criticised for not contacting the families of the dead servicemen right after they were killed, or publicly commenting on their deaths until 12 days later when asked by a reporter.

He responded to this criticism by falsely claiming that his predecessor, Barack Obama, and other former US presidents had not called the relatives of dead service members.

Brexit: Emily Thornberry predicts no deal with the EU

Brexit negotiations with the EU are heading for a “no deal” scenario, Labour’s Emily Thornberry has warned.

Shadow foreign secretary Ms Thornberry said the PM’s failure to control her party was causing “intransigence” on the UK side, which was a “serious threat to Britain” and its interests.

But International Trade Secretary Liam Fox said a failure to agree a deal was “not exactly a nightmare scenario”.

The UK was preparing “mitigation” measures for such an outcome, he said.

Meanwhile, the Spanish foreign minister said the lives of UK expats in Spain would not be “disrupted” – even if no Brexit deal is agreed.

  • Labour demands changes to Brexit repeal bill
  • Brexit: Why a transition period may not buy time
  • What would ‘no deal’ look like?

Theresa May will update MPs on Monday on the progress made at last week’s Brussels summit, where EU leaders agreed to begin scoping work on future trade talks while asking for more concessions from the UK on the opening phase of negotiations.

These talks, covering the UK’s “divorce bill”, the rights of expats after Brexit and the border in Northern Ireland, have failed to reach agreement so far – leading to a focus on what happens if nothing is put in place by the time the UK leaves the European Union in March 2019.

Speaking on the BBC’s Andrew Marr Show, Ms Thornberry said: “I think what we may be seeing is the Europeans trying to make it clear that it is not their fault that there are these difficulties – the intransigence does not come from their side, it comes from Theresa May’s side.

“And in the end I think the reality is the intransigence is on Theresa May’s side, because she doesn’t have the strength or the authority to be able to control her backbenchers, let alone her cabinet. And I think we are heading for no deal, and I think that that is a serious threat to Britain and it is not in Britain’s interests for that to happen.

“We will stop that.”

Labour is seeking to work with Tory rebels to amend a key plank of Brexit legislation – the EU Withdrawal Bill – so that Parliament has the power to reject whatever the outcome of the negotiations turns out to be.

Following last week’s summit, European Council President Donald Tusk said that although not enough progress had been made to begin trade talks, reports of deadlock may have been exaggerated.

French President Emmanuel Macron said there was still much work to be done on the financial commitment before trade talks can begin, adding: “We are not halfway there.”

Speaking on ITV’s Peston on Sunday, Mr Fox said a final figure for the UK’s financial settlement with the EU cannot come “until we know what the final package looks like”, later in the negotiation process.

He also dismissed President Macron’s suggestion that “secondary players” in the UK were “bluffing” about the possibility of a no deal outcome, saying this was “completely wrong”.

Mr Fox, who is responsible for striking global trade deals after Brexit, said he would prefer a “comprehensive” arrangement to be agreed – but was “not scared” of what would happen if this was not possible.

And he said trade talks would only be complicated if the “European elite” tried to “punish Britain for having the audacity to use our legal rights to leave the European Union”.

He said he hoped “economic sense” would prevail, as opposed to the “near-theological” pursuit of closer EU integration.

Expats’ rights

When she addresses MPs on Monday, Mrs May is expected to reaffirm her commitment to EU nationals living in the UK, saying she will “put people first” in the “deeply technical” talks.

Speaking on the Marr show, Spanish Foreign Minister Alfonso Dastis said expats would be allowed to continue living in Spain even if no Brexit deal was reached.

“I do hope that there will be a deal,” he said.

“If there is no deal we will make sure that the lives of ordinary people who are in Spain, the UK people, is not disrupted.

“As you know, the relationship between the UK and Spain is a very close one in terms of economic relations and also social exchanges.

“Over 17 million Brits come to Spain every year and many of them live here or retire here, and we want to keep it that way as much as possible.”