This weeks news includes; Barclays sued by $2 billion hedge find, EY fined £2.75 million for audit failings, UberEats to make revenues for $3 billion and Sainsbury’s to cut 2000 jobs.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- Business Insider looks at the effects of a no-deal Brexit.
- BBC News asks Is it the right time raise interest rates?
- City A.M explains why the construction industry needs to join the tech revolution.
1. BARCLAYS SUED BY $2 BILLION HEDGE FUND
Barclays has been sued by Red Kite Management over accusations of copper market rigging. Red Kite is the largest metals hedge fund in the world and is worth $2 billion. The lawsuit alleges that Barclays allowed employees to share confidential information about Red Kites positions with its traders on the London Metal Exchange between 2010 and 2013.
Red Kite alleges that Barclays profited from this manipulation at the expense of the fund and is suing the bank for £650 million in losses which it claims it suffered.
Read The Independent’s report for more information.
2. EY FINED £2.75 MILLION
EY has been fined £2.75 million by the FRC over serious auditing failings. The FRC found serious failures in EY’s audit of Tech Data for the year ending January 2012. The investigation showed conduct “fell significantly short” of audit standards and requirements
EY shall receive a reprimand as well as the responsible partner, Julian Gray, although he no longer works for EY. The firm and Mr Gray will have their fines reduced due to mitigating factors so therefore EY will pay £1.8 million while Mr Gray will pay £59,000 instead of £90,000.
Read The Telegraph’s report for more information.
3. FOOTYASYLUM IPO
It has emerged that sports retailer Footasylum will be launching its initial public offering on the London Stock Exchange. The company could be valued at £150 million and it will initially list on London’s AIM market.
Footasylum target market is primarily young shoppers and it has been growing steadily over the past few years. The firm posted revenues of nearly £150 million, with profits of £11 million.
Read Business Reporter’s analysis for more about the IPO.
4. UK FINTECHS ON TRACK FOR BEST YEAR EVER
Fintech firms in the UK are set to have a record year in terms of investment. Over £760 million has been invested into UK technology firms so far this year and the current record set in 2015 is roughly £880 million. This news certainly signifies a vote of confidence in the UK despite the substantial business uncertainty caused by Brexit. Across Europe it is predicted that investment could break the $2 billion barrier for the first time.
City A.M looks closer investment statistics for tech start ups in Europe and Asia.
5. UBER EATS ON TRACK TO MAKE 3 BILLION IN REVENUE
UberEats is set to have 2017 sales of over $3 billion, according to a leaked source. This is just its second year operating and marks a significant positive for Uber in year inundated with challenges. Uber itself firm has been shrouded in scandals, which culminated in the resignation of its CEO Travis Kalanick. It is currently appealing TfL’s decision not to renew its private hire license in London.
UberEats currently operates in 108 cities with 40 in the UK and it hopes to double this by the end of the year. Despite this rapid expansion, only 27 cities of the 108 are profitable.
Business Insider looks closer at the leaked figures.
6. RBS SELLS STAKE IN EUROCLEAR
The Royal Bank of Scotland has announced that it will be selling its share in clearing-house Euroclear. RBS hopes to make tens of millions of pounds from the sale of its 5% holding. It is still 70% owned by the government
Euroclear is one of the largest clearing firms and settled the equivalent of £584 trillion worth of transactions last year. Clearing houses are an essential component of financial markets as they settle transactions after the pledge to pay has been made.
Read City A.M’s report for more information on the sale.
7. UK UNEMPLOYMENT FIGURES
Unemployment in the UK has hit its lowest level since 1975. In the 3 months to August, unemployment fell by 52,000 to 1.4 million. The employment rate rose by 0.6% to 75.1%, while the unemployed people fell by 215,000 compared to the same time last year.
Despite this, wages have failed to rise at an equal pace, crawling behind inflation at 2.1%. This lack of real wage growth is likely to further encourage the Bank of England to raise interest rates, after they gave strong indicators that rates would soon rise.
8. SAINSBURY’S TO CUT 2000 JOBS
Sainsbury’s has announced that it will be cutting nearly 2,000 jobs aiming to make £500m in savings. Sainsbury’s has been struggling overall in recent months primarily due to growing competition from Lidl and Aldi but also due to the fall in the value of sterling. The fall in the pound led to rising costs of food imports and most supermarkets have absorbed these extra costs instead of passing them on to consumers.
Most of the jobs to be cut will be HR and administrative staff. 1400 HR clerks and pay clerks will be made redundant and 600 roles across the supermarket are currently being consulted on about the future.
Fortunately for Sainsbury’s its £1.3 billion acquisition of Argos has paid off as the retailer is currently one of the best performing arms of the group. The supermarket however, recently put its acquisition of Nisa convenience stores on hold after concerns about breaching competition law.
For more information, read BBC News’ analysis the supermarket industry.
9. UK GOVERNMENT BORROWING AT LOWEST LEVEL IN 10 YEARS
The UK government borrowed £32.5 billion in this financial year, the lowest since 2007. The government has reduced the amount it borrowed by £2.5 billion and this will be positive reading for them, particular with the upcoming autumn budget.
The government has been aiming to reduce their borrowing to levels much lower than this as the UK currently borrows more than £150 million every day. Despite this, the government faces increasing pressure to end its unpopular policy of austerity due to the huge strain on public services.
City A.M looks closer at the issue of public sector borrowing.
10. ASOS FINANCIALS
ASOS’ financials made good reading for investors as it posted pre-tax profits of £80 million for the year end to the end of August. The online retailer fought off stiff competition from rivals such as BooHoo and saw a rise in revenues of 33% to £1.92 billion. The highest rise in sales was in ASOS’s international sales which rose by 36%. ASOS’s share prices rose by 1.3% in response to news.
For more information read City A.M’s analysis.
