Long-Running London Bus Drivers' Dispute Ends After 18% Pay Deal

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Every week I’m here to bring you the latest business news of what’s going on both in the UK but also globally. Feel free to let me know if there’s anything specific you’d like me to cover in future updates.

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GENERAL

FTSE 100 hits 8,000 points mark for first time - The UK's top flight share index, the FTSE 100, has crossed the 8,000 points barrier for the first time. It was less than a fortnight ago that the collective market value of its 100 constituents exceeded the previous record high - seen all the way back in May 2018. The intraday record of 8,003 was achieved with less than an hour of Wednesday's trading to go.

Government crackdown on buy now pay later firms - The UK Government has released draft legislation to clamp down on the booming buy now pay later (BNPL) sector, in an effort to protect consumers from potential harm. The draft legislation comes over two years after the Government originally revealed its plans to regulate the industry and is still subject to consultation and parliamentary approval. It is estimated that the new rules will take months to be enforced. The finance ministry announced the eight-week consultation on Tuesday, estimating that the new regulations would protect roughly 10 million consumers.

UK inflation slows but remains close to 40-year high - Price rises in the UK slowed for a third month in a row but inflation remains near a 40-year high, official figures show. Inflation, which measures the increase in the price of something over time, fell to 10.1% in the year to January from 10.5% in December. The drop was largely due to the price of fuel and cost of restaurants and hotels slowing. But this was offset by rising prices of alcohol and tobacco.

Long-running London bus drivers' dispute ends after 18% pay deal - Around 1,800 London bus drivers have accepted a pay increase, worth 18% to many, to end a long-running dispute that involved more than 20 days of strike action. The Unite union, which represents the drivers employed by Abellio, said those with over two years' service would get ￡18 per hour. It equated to an 18% hike on the basic rate, it explained, way ahead of the main consumer prices index measure of inflation which currently stands at 10.5%.

Number of days lost to strike action in 2022 highest since 1989 - The number of working days lost to strike action totalled 843,000 in December, bringing the total number of strike days from June to December 2022 to 2,471,000, the highest since 1989, official figures show. There were 4,129,000 days lost to strike action in 1989 due to industrial action by rail workers and coal miners, the Office for National Statistics (ONS) said. The loss in days due to labour disputes in December is the highest since November 2011 when public sector workers striked over pensions. That month saw 997,000 working days lost.

Wages rise but fail to keep up with inflation - Regular pay has grown at the fastest rate in more than 20 years, but is still failing to keep up with rising prices, official figures show. Pay, excluding bonuses, increased at an annual pace of 6.7% between October and December 2022, the Office for National Statistics (ONS) said. The ONS said the increase was the strongest growth seen outside of the Covid pandemic. However, when adjusted for inflation, regular pay fell by 2.5%.

UK banks set to report record profits of ￡37bn beating pre-financial crisis highs - After sharp interest rate hikes boosted the lenders’ coffers last year, the big five FTSE 100 banks – Barclays , 汇丰 , Lloyds Banking Group , NatWest and 渣打银行 – could post cumulative pre-tax profits of ￡37.4bn as they reveal their earnings for 2022, analysts at AJ Bell said. “If that forecast is accurate… then the quintet would put up a performance 4% higher than in 2021 and exceed the pre-financial crisis high of ￡35.7bn generated in 2007,” Russ Mould, investment director at AJ Bell.

ON THE UP

TUI sees strong summer bookings as travel recovery gains momentum - Holiday group TUI said it was seeing a positive travel recovery trend for the upcoming summer season as holidaymakers make plans to enjoy their breaks following a pandemic hiatus. TUI, one of the world's largest tour operators, said the number of guests in the first quarter was 3.3m, compared with 2.3m in fiscal 2022, while upcoming bookings for the 2023 winter and summer seasons hit 8.7m. First-quarter revenue reached €3.8bn, while its group loss before interest and taxes halved to €158.7m from €274m a year earlier.

Jet2.com and Jet2holidays overtakes Tui as UK’s largest operator - Latest Atol data published by the Civil Aviation Authority shows that Jet2holidays has increased its licence for 2023 by over 500,000 and is now licensed to carry 5.8m passengers, over half a million more than Tui, which has a licence for 5.3m.

Hermès sales lifted by robust growth in U.S., Asia - Birkin bag maker Hermes posted a 22.9% rise in fourth quarter sales, lifted by brisk business in the United States, and flagged "no fundamental change" in trends in China despite COVID-19 disruptions over the period. European luxury brands have benefited from a strong, post-pandemic rebound as shoppers drew on savings during lockdowns to treat themselves to designer label fashion.

NatWest reveals profits to ￡5.1bn last year and chief executive payment - Profits at 45% state-owned bank NatWest have risen to their highest since the global financial crash. The bank recorded profits of ￡5.1bn before tax in its 2022 full-year results, a high not seen since 2007 and an increase from the ￡3.8bn booked a year earlier. Also for the first time since the crash was the payment of a ￡5.25m bonus to its chief executive, Dame Alison Rose.

ALDI SüD to hire 6,000 new staff across the UK in 2023 - Discounter Aldi has pledged to recruit 6,000 new staff across the UK this year. The retailer said the new jobs would be created at its distribution centres, as well as in new stores in Norwich and Newcastle.

British Gas owner Centrica sees profits soar as energy bills rise - Centrica's full-year profits hit ￡3.3bn for 2022, more than triple the ￡948m it made the year before. Energy firms have seen record earnings since oil and gas prices jumped following Russia's invasion of Ukraine. The figures come after British Gas was criticised over its use of debt agents to force-fit prepayment meters in the homes of vulnerable customers.

可口可乐公司 HBC posts higher profit on price hike, cost-cut boost - Coca-Cola HBC reported a better-than-expected operating profit for 2022, helped by price hikes and cost-saving measures. The bottler, however, expects 2023 organic operating profit growth in the range of +3% to -3%. Coca-Cola HBC posted a fall of about 12% in its earnings for the year ended Dec. 31 at €703.8m, above the company-compiled analysts' consensus of €658.2m.

IN THE DOLDRUMS?

雀巢 sells fewer products after increasing prices - Nestlé took a hit to sales volumes in the final quarter of last year as its steepest price rises in decades prompted households to curb their spending on products from the maker of Nespresso pods, KitKat chocolate bars and Maggi noodles. Real internal growth, a measure of sales volumes and consumers’ product choices, declined 2.6%, as the world’s largest foodmaker pushed up prices by 10.1%?in the quarter.

Morrisons credit rating downgraded after drop in sales and profits - Morrisons has seen a downgrade in its credit rating after recording a dip in sales and profits. Credit rating agency Moody’s said the outlook for Morrisons’ ability to repay its ￡7.5bn of debts had changed to negative from stable. The grocer‘s existing junk rating knocked down by one point, from B1 to B2, implying higher risk.

Barclays profits tumble 8% as lender sets aside ￡500m for loan defaults - Barclays performed worse than expected in the final quarter of 2022 as higher expenses and an increase in bad loan provisions weighed on performance. In the fourth quarter operating expenses increased to ￡4.0bn, ￡200m more than analysts predicted. The bank also set aside ￡498m in impairment costs in case of bad loans. This compared to a release of ￡31m the year before.

Dunelm ’s profits dip as end of home improvement boom and high inflation eats into margins – The homewares retailer said its profits have dipped since the pandemic due to soaring inflation and the end of the Covid house improvement boom. The Leicestershire firm said higher prices and slower sales had caused its pre-tax profits to drop by 16.6 per cent to ￡117.4m. Dunelm’s results come as the amount of profit the homeware seller reaped on each sale fell from 52.8% in the final six months of 2021 to 51.1% in the last half of 2022.

Gucci sales slump in fourth quarter - Kering, the owner of Gucci did not achieve its “ambitions and potential” in posting its fourth quarter results, according to its chairman and CEO. Revenues were down 14% at Gucci while fellow brand Balenciaga had a "difficult" December, according to Kering results for the fourth quarter of the year ending 31 December. Fourth-quarter revenue at the French luxury-goods group fell 7% year-on-year on a comparable basis to €5.28bn (￡4.67bn).?

福特 to cut one in five jobs in the UK - Ford has announced plans to cut 1,300 jobs in the UK over the next two years, a fifth of its total workforce in the country. It is part of a major restructuring programme that will see the carmaker cut 3,800 jobs overall across Europe. Ford is cutting back on development staff as it faces an uncertain economic future and prepares for the transition to electric vehicles. Most of the UK cuts will be at its research site at Dunton in Essex.

UK pub closures in 2022 near to highest level in a decade - Pub and bar bankruptcies across the UK were near the highest level in a decade with more than 500 businesses folding last year, according to an analysis of official figures, as hospitality venues struggled with rising costs and tepid demand. Some 512 companies went out of business in 2022, up 56% from the previous year when pandemic-related business support stopped a wave of insolvencies, according to an analysis of Insolvency Service data by accountancy firm UHY Hacker Young .

ONES TO WATCH

Cath Kidston owner Hilco explores sale of retailer just 8 months after takeover - Hilco bought the brand last June and is now exploring a sale after lining up PwC to advise on a sale. It has already been approached by several interested bidders

Sandwich chain Subway explores sale of business - Global sandwich chain Subway says it is exploring a possible sale of the business after almost six decades of family ownership. The firm has been growing rapidly for years but is now facing tough soaring costs and increased competition. A sale of the company could value it at more than $10bn ($8.2bn), according to the Wall Street Journal, which first reported the story. Investment banking giant JP Morgan is advising Subway on the potential sale.

Serial ecommerce investor snaps up Sosandar stake - Bill Currie has bought a 3.5% stake in Sosandar following the fashion etailer‘s recent funding round. The move from William Currie Investment comes just a few months after it snapped up a 4% stake in In The Style. Currie also holds shares in Asos, Boohoo and THG.

Vue screens financial backers for blockbuster tilt at rival Cineworld Cinemas Ltd - Europe's biggest privately owned cinema operator has lined up financial backing from its new shareholders to help assemble a takeover tilt at Cineworld, its stricken rival. Funds managed by Barings and Farallon Capital Management have agreed to provide capital to Vue International to support strategic acquisitions. City sources said that Vue, with support from the two funds, would be among the bidders for Cineworld ahead of a deadline set by the latter's advisers later this week.

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