This week’s news includes; Debenhams falls into administration, Uber launches its IPO, EY steps further into legal sector, Disney to launch streaming service
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:
City A.M – Are MPs right that the UK needs an independent watchdog to regulate internet sites?
Bloomberg – A Brexit Delay? Time to Head to the Shops
City A.M – Death of the High Street? Why we’re still backing UK retail
1. BREXIT DELAY
Brexit has been delayed, again. The EU has granted the UK a six-month extension to Article 50, lasting until 31 October 2019. The UK will have the option to leave earlier if a deal is reached earlier. Theresa May had sought for a shorter delay but the EU rejected this. The UK will now have to engage in EU Parliament elections or leave on 1 June without a deal. The long extension means that Theresa May will again attempt her withdrawal agreement back to Parliament, with further clarity on the future relationship. The EU has made it clear that withdrawal agreement cannot be renegotiated.
The full agreement for the extension is available here.
Debenhams has fallen into administration, rejecting Mike Ashley’s last-ditch takeover bids. The company is now under the control of its lenders. Ashley’s Sport Direct offered a £150m cash injection in return for Ashley being made CEO. On Tuesday, the Debenhams appointed FTI Consulting as administrators and the PLC part of Debenhams was immediately sold and its shares were delisted. This means all Debenhams’s shareholders lost their entire equity. This means however, that the business side can remain operational. All 165 stores will remain open as normal for now. Mike Ashley claims that the administration is a national scandal and is considering taking legal action against the board.
For more on the collapse check out the Retail Gazettes report.
3. UBER IPO
Uber has officially filed for its IPO. The ride-hailing company will float in May 2019. The company aims to raise $10 billion and could be valued at up to $120 billion. The company did however, post losses of $3 billion in 2018. Uber is yet to post a profit and there is concern that it may never be profitable. Analysts argue that Uber’s future will turn on its driverless vehicle investment. Uber’s main competitor Lyft, launched its IPO last month. Despite a strong debut, it is now down nearly 20%.
4. JUMIA IPO
Jumia, Africa’s largest e-commerce company has launched its IPO on the New York stock market. Headquartered in Lagos, Nigeria, the company is known as “Africa’s Amazon”. It operates in 14 countries across Africa and is the first African tech company to float on the New York Stock Exchange.
The IPO aims to raise nearly $200 million and is valued at over $1 billion. Like many tech unicorns however, it is not profitable and has incurred $1 billion in losses since its founding in 2012 . Sales have been on the rise as the firm posted $147.3 million in revenue for 2018.
5. EY LEGAL ACQUISITION
EY has taken further steps into the legal field. It has acquired legal outsourcing Pangea3 from Thomson Reuter for an undisclosed figure. Earlier this year, EY also acquired Riverview Law.
Since EY Gained its ABS license in 2014, it has invested heavily in legal services and is set to become a significant disruptor. The firm now boasts 2000 lawyers across the globe. EY was the second of the big four after PwC to gain its ABS license.
6. DISNEY TO LAUNCH STREAMING SERVICE
Disney has announced that it will launching its streaming service later this year. The Disney + service will cost $6.99 per month or $69.99 per year. The service will launch in North America in November 2019 however, no date has been set for its release outside North America.
Disney has to reclaim the rights to its own content which was previously sold to other platforms. This process is not easy. The platform will host media from numerous heavyweight franchises such as Pixar, Marvel and National Geographic. It is also seeking to include content from recently acquired 20th Century Fox. For example, the first 30 seasons of The Simpsons will be included on the platform
Netflix is the dominant force in the streaming sector but its competitors are now putting up a fight. Apple also unveiled its own streaming service to compete. BBC News looks closer at Disney’s
Check out our company watch page for more Netflix.
7. LONDON ULTRA LOW EMISSIONS
London has introduced an ultra low emissions zone in a bid to clean up London’s air. Drivers whose vehicle emission standards are below certain levels, will face a £12.50 daily charge to enter the ULEZ, 24/7. This charge is on top of the £11.50 congestion charge zone. Non-compliant lorries, buses and coaches face a £100 daily fee. The proportion of vehicles not compliant with the required emissions standards fell from 61 per cent in February 2017 to 39 per cent last month.
Some companies have had to close down as the charges make business unsustainable. These companies run on tight margins so new vehicles or retrofits are too expensive and the daily costs are too high. When the zone expands to the North and South Circulars in 2021. Whether this move will have any significant impact on the toxic air that fills London’s roads remains to be seen.
Cryptocurrency platform Coinbase has launched a crypto Visa debit card. Users can spend cryptocurrency within their account in stores using contactless and chip and pin. Customers can also spend online.
Coinbase will convert the cryptocurrency into pounds at the point of transactions. Customers can track spending within the app.
The card will only be available and only function in the UK. The card will cost £4.95, except for the first 1000 joiners. Cryptocurrency prices are still a far cry from their December 2017 highs but overall it has enjoyed some stability. Bitcoin recently reached its yearly high of $5000.
9. JLR BEGINS BREXIT SHUTDOWN
Jaguar Land Rover undertook its Brexit related shut down last week. It affected its Castle Bromwich, Solihull and Wolverhampton plants. The shut down took place between Monday and Friday. Another closure will take place in Easter.
JLR has been a vocal warner about the consequences of a no-deal Brexit. The company has even said it would cost over £1.2 billion in profit per year. JLR heavily relies on the seamless flow of import and exports. The uncertainty and risk posed by Brexit has created great concern for the company. Aside from Brexit, JLR has been struggling with declining demand for diesel cars and a slow down in the Chinese economy. JLR employs 39,000 people but has cut thousands f jobs over the past two years.
10. ASOS PROFITS DECLINE
ASOS’ pre-tax profits have crashed 87%, despite a rise in sales. The company post £4 million in pre-tax profits, in the six months to February, down from over £30 million. This hit to profits is largely due to significant investment and heavy discounting over the half year. The company also warned of challenging conditions in the European continent. Overall sales did however, rise by 14% to £1.31 billion and the firm is confident that it can do better. The online fashion sector is becoming increasingly competitive and is growing rapidly. The sector is now worth of £220 billion a year.