Good morning and welcome to the Business Breakfast live blog for Thursday, June 28. I’m Jonathon Manning and I’m running the blog today.
The business team’s live blog brings you all the breaking news from across the North East, the UK and beyond – basically anything and everything from the world of business.
The Financial Conduct Authority (FCA) has revealed it is “looking into” allegations of insider trading at collapse construction giant Carillion.
In a letter penned by Andrew Bailey to Labour MP Frank Field, the FCA boss explained that the City watchdog was considering whether earlier announcements made by the firm Carillion were false or misleading. MR Bailey added that the FCA is “aware of allegations of insider trading”.
Before its collapse Carillion employed 20,000 people in the UK.
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Everything you need to know…
That’s all for this morning’s Business Breakfast Blog.
I’m sure a lot of your are recovering from our Best Places to Work awards last night. For those who couldn’t make the event be sure to check out our coverage of the night.
Nissan is ‘in the dark’ around Brexit, CEO says
Nissan has revealed that it is “in the dark” over Brexit, according to comments made by the company’s CEO.
speaking to the BBC Carlos Ghosn said:
So far we have absolutely no clue how this is going to end up.
Mr Ghosn, who is chief executive of the Renault-Nissan-Mitsubishi alliance, said the uncertainty surrounding Brexit left him unable to make long-term decisions about Nissan’s UK operations.
His comments have once again sparked concerns over the future of the car manufacturer’s factory in Sunderland, which produces nearly one third of the cars made in the UK.
We don’t want to take any decisions in the dark. We don’t want to take any decisions we might regret in future.
I don’t think any company can maintain its activity if it is not competitive. If competitiveness is not maintained, little by little you’re going to have a decline. It may take some time, but you’re going to have a decline.
Nissan has said it plans to build two new models in Sunderland, but future investment plans have been put on the back burner. However, Mr Ghosn did say that leaving the EU could turn out to be positive for the economy.
There is no reason to say Brexit is going to be bad. Maybe Brexit will be better than we think it’s going to be.
Union newsletter reveals concerns leading up to TSB IT meltdown
TSB boss Paul Pester is facing pressure after details have emerged that the bank rushed preparations for a major IT migration which sparked a banking meltdown in April.
The Treasury Select Committee has released union newsletters containing staff concerns over the project dating back to September. THe committee has been scathing in TSB’s handling of the IT meltdown and has called for the chief executive to be sacked.
The TBU union – which is not recognised by the bank but represents around 4,000 staff – quoted bank branch workers as saying there was a “growing concern that we are running out of time” on training ahead of a planned migration of customer data from former owner Lloyds’ IT system to a new one managed by current owner Sabadell.
It also claimed some branch managers were rated “off-track” for failing to train staff in time for the original November deadline, which was usually delayed.
The union newsletter also noted rumours that the delays were caused due to the system not being functional, and that some of the coding was “not up to scratch”.
In a response to the union newsletters, a TSB spokeswoman said:
As we have said throughout, we would never have moved across to the new system if we didn’t believe we were ready.
We are of course undertaking a full investigation.
Oil giant BP buys electric charging firm
Oil giant BP has bought Chargemaster, the UK’s largest electric vehicle charging firm.
Chargemaster, which is based in Luton, has more than 6,500 charging points across the UK.
Tufan Erginbilgic, chief executive of BP’s downstream division, said:
Bringing together the UK’s leading fuel retailer and its largest charging company, BP Chargemaster will deliver a truly differentiated offer for the country’s growing number of electric vehicle owners.
At BP we believe that fast and convenient charging is critical to support the successful adoption of electric vehicles.
Combining BP’s and Chargemaster’s complementary expertise, experience and assets is an important step towards offering fast and ultra-fast charging at BP sites across the UK and to BP becoming the leading provider of energy to low carbon vehicles, on the road or at home.
Next set to close Gateshead store, putting 60 jobs in jeopardy
Retail giant Next is believed to be planning to shut one of its North East stores, putting scores of jobs in jeopardy.
It is is understood that the fashion and home retailer has told the 60 staff at its store at Team Valley’s Retail World in Gateshead of its intention to bring down the shutters this September, with all staff being offered redundancy.
A member of staff said:
All of the staff have been informed they can either take redundancy or they will try and match their contract at another local next store, however at the moment there aren’t the hours available in the region to accommodate all of the staff.
I’m not in a union but I know some of my colleague are looking into it as they are currently full-time and Next are no longer offering full-time contracts in any store so they are going to lose out when the store closes.
Next were said to be signing a deal to launch a new Costa in store in the autumn alongside a new store refit – however the plans have been pulled. They were only in last week doing the plans.
There’s really low morale in the store after we all found out and we’re all angry. Even the store management didn’t know until recently so they are devastated too.
Next is one of 26 major retailers based at Retail World, which is owned by fund manager ARES and managed by property consultancy GVA. It has been based at the shopping estate for more than 15 years.
Developers unveil £250m plan for Newcastle Quayside urban village
Developers have unveiled grand plans to transform a derelict site on Newcastle into a £250m urban village of 1,500 homes, which could create more than 1,000 jobs.
North Yorkshire developer Newby wants to take on the former Calders Site on Skinnerburn Road, overlooking the River Tyne, and create a network of apartment buildings as well as commercial and leisure properties.
Known as Quayside West, the development could deliver up to 575 permanent jobs in addition to more than 600 construction and supply chain jobs.
A public consultation on the proposals will now start ahead of a planning application being submitted.
The former Calders site is a central plank of Newcastle City Council’s ambitious plans to redevelop the area between Central Station and the Quayside at Skinnerburn Road. Known as Forth Yards, the council published a Development Framework for the area in March 2015. The former Calders site was identified by the council for a new mixed-use development, to include housing, leisure and commercial opportunities.
Newby director Nick Moody said:
Our 10-year vision for Quayside West is ambitious, but ultimately deliverable. Working with award-winning local architects, FaulknerBrowns, we have created a development which will bring a stepchange for the city in the form of a brand-new, high-quality and vibrant urban community on this important but neglected site.
The Calders site has stood empty for almost 20 years, despite previous planning approvals for new housing.
Newcastle City Council has had the vision to identify the Forth Yards area for major redevelopment and Quayside West will act as the catalyst. Although this would be a privately funded development, we have had positive discussions with the council regarding these proposals.
Stagecoach ‘learns lessons’ after £85.6m hit from failed East Coast line
Transport giant Stagecoach has said it has learned “lessons” for future bids after confirming an £85.6m hit after being stripped of the East Coast Main Line franchise by the Government.
I am disappointed to be reporting significant exceptional costs in respect of Virgin Trains East Coast but I am pleased that there is now clarity for both customers and shareholders.
We have examined our bid for and operation of the franchise closely and have also looked more broadly at our rail bid governance.
We involved external advisers in that, and we have made changes to our processes to strengthen our approach to bidding and contract management in UK rail. The lessons learnt have been reflected in our subsequent bids.
Stagecoach saw annual operating profits slump 12.6% to £24.9m at its rail division, while revenues tumbled 30.8% to £1.5bn.
Vivienne Westwood fashion store closes doors in Newcastle
Upmarket retailer Vivienne Westwood has closed its Newcastle store after 11 years as one of the city’s most exclusive fashion brands .
When the doyenne of British design announced the opening of the Hood Street boutique in 2007, fashionistas were clamouring for her ranges, and retail sector observers saw it as a huge vote of confidence in the city.
At the time, the then Sunderland manager Roy Keane claimed footballers were steering clear of the North East because the shops weren’t good enough for their WAGs, and the arrival of Vivienne Westwood clearly refuted his claims.
The store has now closed its doors, however, making Yorkshire the nearest place to travel for one of the firm’s remaining seven standalone UK stores.
A sign in the window now reads:
Unfortunately Vivienne Westwood is sadly saying goodbye to Newcastle on Sunday 24th June. From 25th June your closest store will be Leeds.
Newcastle property firm Bradley Hall is now marketing the unit, which has annual rent costs of £36,000.
Vianet to continuing to grow smart machines division
Internet-of-things company Vianet is set to tell investors that trading is in line with expectations, and that it is continuing to grow its smart machines division, at the company’s AGM later today.
James Dickson, chairman, will provide the following trading update at today’s meeting:
Benefiting from solid momentum into the new financial year, the Group’s trading in the first two months is broadly in line with the Board’s expectations. The business is also making good strategic progress through our focus on strong growth opportunities in the Smart Machines division.
The Smart Machines division, where there is real emphasis on taking advantage of our leading position in coffee vending and contactless payment device connectivity, is building sales momentum which will fuel growth. The integration of Vendman is also progressing well and traction is increasing as we seek to overlay c 200,000 Vendman mobile connections with higher value Smart Machines connections and also cross sell from the portfolio to existing customers and vending operators internationally.
In the Smart Zones division trading is marginally behind last year so far due to installation phasing although there is encouraging progress with revenue growth in our managed compliance service.
The Board remains confident that Vianet’s long term strategy is the right one and that the Group is well positioned to deliver earnings growth and expand the future strategic options for Vianet. This is reflected in the Board’s decision to recommend maintaining the final dividend at 4p per share.
Gateshead College, Ubisoft Reflections, O Communications and Muckle win Best Places to Work awards
Gateshead College, Ubisoft Reflections, O Communications and Muckle LLP were the big winners at the North East’s first celebration of the region’s Best Places to Work.
The college was ranked top place to work in the region and also took the prize for the best non-profit organisation in an initiative run by The Journal as part of our Invest in the North East campaign.
Newcastle computer game company Ubisoft Reflections was named best large company while fellow city firms Muckle LLP and O Communications took the medium and small business prizes.
There were also prizes for Hoults Ltd, operators of the Hoults Yard business village in Newcastle’s east end, which took the prize for best perk for giving staff free driving lessons, discounts at on-site hairdresses, regular social events and even pole-dancing classes.
Northumberland chipboard manufacturer Egger UK won the prize for community involvement for a range of projects in Hexham, support for the Northumbria Blood Bikes charity and for providing an annual bursary to put a young person through university.
The best office award went to Newcastle’s NBS, which has turned the city’s old post office on St Nicholas Street into much-admired offices for its fast-growing global base.
And the event was rounded off with Gateshead College principal Judith Doyle – described by Ofsted as a “dynamic and inspirational” leader – winning the prize for best boss.
The event, which was sponsored by Northern Gas & Power with support from Muckle LLP and Penshaw View Training, was held at the Biscuit Factory in Newcastle before a sell-out audience.
‘12,000 jobs under threat’ as report warns of 2,400 more bank closures
Britain’s biggest five banks could be on track to axe up to 2,400 more branches, putting 12,000 jobs at risk, according to new research.
The report by banking and financial services analyst David Black, of DJB Research, and commissioned by the Nottingham Building Society, pointed to estimates suggesting that a network of just 600 branches could deliver “effective nationwide customer coverage”.
Mr Black said:
Looking at the number of branches the top five banks have today, I estimate that, if this strategy was adopted, some 2,400 branches could still be closed.
The figure is around 25% of the branches at Lloyds, RBS, NatWest,Barclayse and HSBC.
Research from consumer group Which? shows that 670 branches have already been closed this year, with the figure for the whole of 2018 on track to eclipse last year’s figure of 879 closures.
Mr Black added:
There is little doubt that more bank and building society branches will close – this is inevitable as the way people manage their money is changing.
However, the extent to which they are closing could be radically reduced if branches took on new services and approaches.
FTSE and pound opening
The FTSE-100 index opened at 7621.69.
The pound at 8am was 1.3077 dollars compared to 1.3138 dollars at the previous close.
Financial watchdog examining allegations of insider trading at Carillion
The Financial Conduct Authority (FCA) has revealed it is “looking into” allegations of insider dealing in shares of collapsed construction giant Carillion.
In a letter written by Andrew Bailey – chief executive of the City watchdog – to Labour MP Frank Fields, Mr Bailey said it was “aware of allegations of insider trading” and examining them.
The FCA is investigating events that led up to Carillion’s collapse. The construction and outsourcing giant employed 20,000 people in the UK and was working on a number of major government contracts when it failed.
In the letter Mr Bailey said:
We are also considering whether earlier announcements made by Carillion were false or misleading.
Our investigation currently covers potential breaches of the Market Abuse Regulation, Listing Rule and Principles.
We are aware of allegations of insider trading in Carillion’s shares prior to its trading update on July 10 2017 and are looking into them.
Mr Field, chair of Parliament’s Pensions Committee, has calculated that former directors Richard Adam, Richard Howson, Philip Green, Keith Cochrane, Alison Horner and Andrew Dougal, pocketed a total of nearly £17m over 10 years while at the firm.
The revelations comes just days after The Pensions Regulator said it was considering issuing a “contribution notice” – a legally enforceable demand for a financial contribution to the pension deficit – against Carillion’s former directors.
At the moment the burden for Carillion’s pension is being picked up by the Pension Protection Fund. The bill is estimated to be around £800m.
Carillion’s liquidation in January left a £900m debt pile and hundreds of millions of pounds in unfinished public contracts.
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