Angela Monaghan of The Guardian News reported News of Interserve’s troubles early this Friday.
Earlier on Friday, the companies Shares dropped 7% after the government contractor said debts this year would be more than what was expected. This act reignited investors jitters about the financial situation of the firm. The company said their debts would be between £625 million and £650 million by the end of the year. This statement was in contradiction to the earlier issued one when it said debts would be between £575 million and £600 million. The company which is famous for carrying out building work and provision of services such as cleaning is on the brink of incurring the highest debt figure if nothing is done.
This was revealed a week after the firm was forced to comment on its state of finance. The firm’s shares tumbled to a thirty-year low over these fears. Interserve was forced to reveal this after the company was in the danger of heading the same way as Carillion. Carillion was the biggest rival to Interserve which collapsed in January.
The slide was prompted by an update from Renew: waste to the product manufacturer. Renew said Interserve had missed a deadline on a joint venture in Derby that is aiming at producing energy from waste. The update raised speculations that Interserve may be forced to set aside more cash to compensate for delays in their service delivery.
Debbie White, Interserve Chief Executive said for the first nine months this year, the firm was focused on reducing debts, getting its finances in order and leaving its energy from waster business. This she said in a trading update.
She stated “The Board remains focused on positioning the group for long-term, sustainable success. To his end, we will announce a deleveraging plan for the group early in 2019. Interserve has significant opportunities as a best-in-class partner to the public and private sector, and we are working with all stakeholders to put in place the right standards, services, governance and financing to deliver a stronger future for Interserve’s customers and our 74,000 people.”
The net cash inflow was lowered from the forecasted 32 million pounds to 15 million pounds due to the delays in the third quarter. The company was expected to make improvements in operating profit in 2018, in accordance with statements issued and previous expectations.
Investors are no reassured because early trading after the update shares slid to just 32p, the lowest since 1984. Investment director at AJ Bell, Russ Mould said debt piles keep on to add weight on shares. “Chief executive Debbie White and her team are clearly doing their best to steady the Ship at Interserve but the admission that net debt will end the year higher than expected, not helped by how the cash inflow from the troubled energy from waste business will be lower than hope, means the company has yet to reassure shareholders and potential investors about the key issues that face it.”
In March, a £300 million rescue plan was agreed on by the firm which provides a range of services for schools, hospitals and government departments across the United Kingdom. This happened at a time in which pressure was at its peak on the outsourcing sector and in the wake of Carillion’s collapse under a hill of debt.
Russ Mould said that some investors would wonder why Interserve is waiting till 2019 to reveal a new plan which is designed to decrease debt. When the share price slide suggests the company’s situation remain acute. He went on to say: “The lower the share price goes, the more shares Interserve will have to issue and the more dilution shareholders may suffer, should management decide that an equity raising is required to buffer the company’s finances.”
These revelations come as a shock as the firm had denied reports of being on the brink of collapse earlier on this month. in the statement it was said that “Interserve notes recent press commentary surrounding the Group and the movement in its share price, Interserve confirms that the implementation of the Group’s strategy and the fit for Growth transformation program remains on track and the Group continues to expect a significant operating profit improvement in 2018 in line with management’s expectations.”
This year has proven to be a difficult one for the company as it recorded a loss of £6 million in the first half of the year ending on June 30 compared to the profit of about £25 million made in the same period a year earlier.
Months after months, reports have issued this news. Interserve has found a way to not collapse, let’s hope they find a solution as 74,000 unemployed workers won’t boost the economy.
On Friday Sead Fadilpasic of ITProPortal reported that “GCHQ warns on Black Friday Cyber Threats.”This news remained in circulation as it was also reported by Cybersecurity Insiders and Edinburgh Evening News on the same day.
Black Friday is an amazing time to lay your hands on some cheap hardware but this comes with the risk of being targeted by online hackers. They are either trying to scam people out of their hard earned money or they try to get their hands on customer data. The customer data proves to be much more useful to them as it can be used for other scamming schemes.
A warning was issued by the UK’s National Intelligence and Security organization GCHQ to shoppers about recurring cyber-attacks. The Government Communication Headquarters’ cyber wing, National Cyber Security Centre (NSCS) provided some top tips for staying safe online. These tips would help while shopping online and on Cyber Monday especially.
Dr Ian Levy, the technical director of NCSC said “We know that cybersecurity can present itself as a daunting subject, however sharing knowledge today will protect your loved ones tomorrow. Staying safe online doesn’t require deep and immense technical knowledge. We want the whole country to know that the NCSC speaks the same language as these scammers. It is the vital knowledge that is shared and that is why we are encouraging everybody to have a cyber-chat. With so many of the UK’S shopping online we want to see these tips shared from classrooms and scout groups to family dinner tables and old people’s homes.”
Ian added that NSCS has been involved in tackling more than 600 significant cyber incidents in the past one year. Out of all the over 600 incidents, 380 were observed to be on the government’s critical infrastructure. This statistic shows that they are always on the lookout for loopholes individuals internet use.
The amount of money spent during this period is usually high and sometimes record-breaking. NSCS estimates that across so-called “Cyber Weekend 2018” people spend about £10,000 per second, in total the amount spent is about £3.5 billion.
Sian John MBE, Microsoft’s Chief security said: “Whilst searching for those Black Friday and Cyber weekend bargains it is important that we all take a few simple precautions so that we do not end up being a gift for cybercriminals.”
To stay safe, you don’t need immense technical knowledge said, Mr. Levy. This he said after issuing advice to shoppers on how to reduce the risk of cybercrime. The following advice was given in order to reduce the risk of cyber-crime:
- Always make use of strong passwords which consists of alphanumeric, special characters and upper case letters.
- Install the latest application updates and software.
- Don’t attempt to click on email links and always type in the shopping website’s name in the browser.
- Be on the lookout for “HTTPS mark at the beginning of the payment webpage link in the browser.”
- Do not overshare any information with shops like saving card details and disclosing your one-time password (OTP).
- Keep an eye on your bank account statement at least once a month.
- Do not panic if you become a victim of a cyber scam and report it to the law enforcement agencies through proper channel as it helps others in alerting on time.
The agency’s chief executive, Ciaran Martin, Recently told a meeting of business leaders of a “serious and suctioned” threat including from “elite hackers” in other countries. “It is not speculation and it is not scare-mongering,” said Mr Martin. “Large-scale criminal cyber-activity is, sadly ubiquitous.”
This could include the “theft of millions from retailers and attacks on financial networks on which shops depend. A data breach had an average cost of £3 million and there were estimates that the WannaCry cyber-attack last year had cost the United States £3.5 billion. he said.”
The NotPetya was another cyber-attack that cost one firm in the United States about £250 million including the cost of replacing IT equipment.
Security adviser to the retailers’ organization, James Martin said “With more and more shoppers looking to get the best deals online, retailers continue to invest significantly in developing the right tools and expertise to protect against cyber-threats.” He referred to the effect of cyber-crime as “Post-Christmas Headache.”
“Thinking you can handle the threats without putting forward defensive mechanisms to their offensive ways would be “a foolish way” to dive into black Friday. These guys are everywhere, they act like they are normal but what they want, we won’t give them. We would equip ourselves and ensure other shoppers do too,” said an observer at the announcement of these tips.
The chairman of Nissan has just been sacked after the board voted against his continued rule and recent public scandals. Justin McCurry of The Guardian news reported on Thursday that “Nissan Board sacks Chairman Carlos Ghosn after serious misconduct.”
The seven-member board at the Japanese carmaker have voted unanimously to dismiss Carlos Ghosn. Although he received credit for saving the car company from bankruptcy two decades ago. He did this by forging a strong alliance with Mitsubishi Motors and Renault. Mitsubishi motors partnered with the Renault-Nissan alliance after negotiations with Mr Ghosn.
Recently the 64-year-old has been accused of under-reporting £35 million in income between 2011 and 2015. Greg Kelly, a senior executive of NISSAN was also been sacked. Both leaders have since been taken into custody in Tokyo. No one has been charged, but under the law, suspects can be detained for 20 days without an indictment. The ultimate penalty upon conviction for the violation of finance and exchange laws could be 10 years’ imprisonment, a 10 million yen (£69,000) fine or a combination of both.
Auto analyst for CLSA Securities Japan, Christopher Richter said “I’d be surprised if it impacts car sales very much. Consumers are discerning enough to say: this car, the wheels might fall off so I’m not going to buy it. This car company, the executive might have done something kind of dodgy, but I do like the car or not.”
On Monday of this week, Renault voted to keep him as their Chief executive, although Thierry Bollore was appointed as the interim chief. “Mr Ghosn, temporarily incapacitated, remains chairman and chief executive officer, to preserve the interests of the group and the continuity of its operations” a statement from Renault’s board.
A meeting is set to take place in which the future of the pair will be discussed. It will be determined if they will remain on the NISSAN board or not, although the final decision is up to the shareholders. In a statement issued by the company, NISSAN said the decision of the board was taken to “minimize the impact and confusion on the day-to-day cooperation among the alliance partners.”
Allegations against the Nissan chairman include misuse of the company’s assets for personal gain. Ghosn is suspected of using luxury homes purchased by the car making giant in four different countries without paying a dime as part of his alleged financial misconduct.
The Asahi Shimbun newspaper quoted unnamed sources as saying that Ghosn ordered Kelly by email to make false statements on his remuneration. Starting in 2002, Ghosn instructed that $100,000 be paid to his sister annually for a non-existent advisory role. The emails have been seized by prosecutors according to a report in Japan times.
Kyodo, Japanese news agency reported that Nissan’s Chief executive Hiroto Saikawa will take over as interim chairman. Earlier this week he promised that Nissan would try to “stabilize the situation, and normalize day-to-day operations” for staff and business partners.
It was also reported by Broadcaster NHK naming several anonymous sources that NISSAN spent millions of dollars on these homes without legitimate justifications for business purposes. “Millions of dollars had been spent to purchase and renovate the homes in Lebanon, France, Brazil and the Netherlands, NHK said.
All alliances forged under his leadership, however, remains intact when Nissan said in a statement that the board “acknowledged the significance of the matter and confirmed that the long-standing alliance partnership with Renault remains unchanged…”
A special committee is said to be created and it would be led by the three independent directors of the company including Keiko Ihara. This committee would take advice from third-party experts on how to improve the governance and management system of director’s pay. This committee would oversee the appointment of Mr Carlos Ghosn’s successor as chairman.
According to Financial Times, Ghosn’s fall from grace was as a result of working on a full-blown merger between Nissan and Renault. This was at the French government’s urging, despite strong reservations among some of the car making giant’s executive.
“For me, the future of the alliance is the bigger deal. It’s obvious that in this age we need to do things together. To part would be impossible,” a senior Nissan official told reporters on Wednesday when asked about Ghosn’s arrest.
Although not charged, Carlos Ghosn and his alleged accomplice Greg Kelly remain in custody in a facility in Tokyo. The facility is said to be in contradiction to his lavish lifestyle.
Prosecutors are awaiting more evidence before proceeding with charges against the pair. It is not known at the moment if others are under investigation.
Robin Johnson of DerbyshireLive news announced in a release that “Boss of Derby’s Rolls-Royce believes Theresa May’s Brexit deal is better than no deal.”
Politicians must look for a “practical plan” for Brexit, the boss of engineering giant Rolls-Royce has said. Parliamentarians have got to put aside personal ideologies and definitely, career ambitions said the Iceland boss. This was done in a bid to urge politicians that any deal was better than leaving the European Union without an agreement. The Engineering giant’s chief executive Warren East speaking on BBC Radio 4’s on this day said he backed the Brexit draft plan put forward by the Prime Minister Theresa May on Wednesday.
Rolls-Royce has its civil aerospace and defence businesses in Derby and is also Derby’s largest private sector employer with more than 20,000 staff. They exist among a number of British businesses that have supply chains that rely on the smooth “just-in-time” delivery of parts from mainland Europe.
A few months ago, the Rolls-Royce boss called for “as little change as possible” from Brexit to minimize the impact on the business. He said the firm will stockpile parts to protect against the risk of a no-deal Brexit that might interrupt the movement of supplies across borders. Rolls-Royce would continue to continue to pursue those contingency plans to ensure it could keep operating after 29 March.
Warren East has however set aside talks from earlier this year and said “The time for the referendum seems to have gone remarkably quickly. We are essentially still having a discussion we could have had the morning after the referendum.” This he said in 4’s Today program on BBC Radio. He went ahead saying “Time isn’t a considerable factor and I would like to see leaders on opposing sides of the deal move on and provide a practical deal that is conducive for business.”
Mrs May’s draft Brexit plan is, however, is backed by many business leaders. They have stepped forward and rallied behind her following a conference call between executives and the Chancellor, Philip Hammond. The aim of this was to rally support within the business community and with most business leaders in support, it’s a mission accomplished.
On Thursday as investors worried that Mrs Mays would not get the backing of parliament and that the stability of her government was at stake after a string of ministerial resignations. The pound came under pressure. The effect was seen on Friday trading in Asia as the pound was slightly above against the dollar at about $1.28.
A range of scenarios back up plan has however evolved among executives. This is because uncertainty has grown around whether the draft deal will pass through parliament or whether the UK will fail to reach a deal at all. It is uncertain whether further political upheaval will result in a general election.
Speaking last month at a forum organized by the Society of Motor Manufacturers and Traders (SMMT) at pride park stadium. Marvin Cooke, managing director of Toyota Manufacturing UK, said: “We have always said that free and frictionless trade with the EU is vital for the future competitiveness of the UK motor industry. We want to see a hard Brexit avoided at all costs. If it is a hard Brexit then in the short term we would be concerned about interruptions to our “just-in-time” supply chain. We don’t know how long those interruptions would be. In the longer term, anything that can be done to mitigate the impact of controls on exports would be welcomed. As a “positive step towards the right direction”, the draft document became well accepted by the car-making BMW. They also confirmed the carmaker would continue to prepare for “the worst-case scenario, which is what a no-deal Brexit would represent.”
Mrs May’s proposed deal would mean the UK would maintain the same rough trading relationship with the EU. This will continue until at least the end of 2020, while a more permanent arrangement is negotiated. That prospect is attractive to businesses eager to maintain trade without increased friction from border check or tariff.
In discussions with the BBC, Sir Roger Carr, chairman of BAE systems said “Most business people ultimately are pragmatists. This is about playing cards we have been dealt rather than wishing for a better hand.”
The business group welcomed the agreement as progress but the IOD said more detail was needed for firms to assess how they will be impacted. Stephen Martin, IOD director general urged ministers to think “long and hard” about how they react to the first-stage agreement. “Leaving the European Union without a deal is a very bad outcome for businesses, workers, and consumers. This is simply an indisputable risk that comes with voting down any withdrawal deal,” he said.
Chief executive of the British Retail Consortium, Helen Dickinson said the political uncertainty would harm UK consumers. A fraction of these leaders believe the decision should be made open to the public for votes to be received and help in the decision making process.
Leading consumer groups in Britain have called on banks to justify the closure of almost 13,000 banks in the country.
The closure of these banks has left a large population of the nation struggling to access important financial services nationwide. In a just-concluded survey by the Consumer Charity; Two-thirds of the bank and its building society branches have been closed over the past 30 years. 20,583 closures were recorded in 1988 up to the 7,586 we have today.
However, the effect of these closures is felt hugely by the citizens of the country. The loss of those sites has left 19% of the population more than nearly 2 miles away from their nearest branch. Although 8% of the population has to travel more than three miles, the Scottish communities are the most affected by these closures. Scotland accounts for 70 out of the communities farthest from a branch even though less densely populated. The south-west and east of England are believed to be disproportionately affected due to the size of the regional population.
Popular money editor, Ceri Stanaway said: “The true scale of bank branch closures in recent decades is staggering and has left millions of people struggling to access the vital financial services and cash that they need. There is simply no substitute for a dedicated branch that has been closed affecting many people. The number of services it offers, and now the customers are faced with having to travel long distances if they are to maintain a good bank-customer relationship.”
These closures have rendered some communities “bank-less”. Among the villages and towns now lacking a single bank branch are Lymm in Cheshire, Sturminster Newton in Dorset, Fishguard in Pembrokeshire and Broseley in Shropshire.
Banks like RBS, Barclays, HSBC, and Lloyds have reduced the number of branches at their disposal in recent years. This was done in a bid to cut cost amid a digital banking demand by a larger populace. This has caused the lenders and all bank users to turn to the Post Offices banking service. The post office banking service is an inefficient scheme towards handling the situation. Inefficient because of the long queues. Also, a lack of privacy to deal with financial affairs and concerns about a lack of financial expertise. Customers are definitely not in favour of this method with 60% preferring to deal directly with their bank in a just-concluded survey.
The post offices are also restricted in the services they can offer. Customers cannot open or shut accounts through the post office banking service. Transferring money between accounts is not feasible. You cannot request a debit card substitute or make a complaint about their bank. There is a need for a constant bank-consumer relationship, one which cannot be satisfied by post offices.
Stanaway further acting as “the voice for the people” said: “We want to see banks properly justifying the reasons for closure. Banks who take into account their customers’ needs before shutting their doors and their customers out.”
The post office mentioned in a statement that “it took its responsibility seriously and was uniquely placed to bring vital services to local communities right across the country.” This stands contrary to the belief of Mike Cherry; national chairman of the Federation of small businesses when he said: “the post office should be doing more about the betterment of its small business banking offer and create an awareness of it among firms.” He added that bank branches were still important to owners of small business. Most especially, in areas where internet services were considered poor or whose customers preferred to pay with the greenback.
“Bank Branch closures damage high street footfall. Restricting cash flow in local economies and leaving business owners with no choice than to waste time travelling to and from their next nearest branch which could be miles away. Yes, small business owners need to consider alternative ways to bank, but the sheer pace of bank branch closures is frightening and firms need time to adjust.”
The bank opened branches, to make services available to its customers. Now, the closures are just the same as going against their purpose. In the press release by the Newpaper24, it was stated that “Are Hong Kong’s banks doing sufficient to assist their disabled or aged clients?”
The closure of these bank branches is adding to the rate of unemployment in the country, as people are laid off every time branches are closed. The British banks are however urged by the large populace to make justice to the current situation. While the closures go on, people are forced into a tight corner. They have to make a decision between two difficult ones: whether to trust and use post offices banking services or opt for the long distance travel to keep the bank-consumer relationship at its peak.
BBC news among many other sources has recently been reporting on Brexit with the BBC leading with the headline “UK shares remain fragile amid Brexit turmoil.”
Theresa May’s Brexit plan has caused political fallout, which in turn has caused the UK stock market to slip lower. Shares in UK-focused stocks including construction companies and banks continue to slide. As a result of this, the financial stock times exchange 100 index ended 0.3% lower at 7,013.38.
The only good and admirable fact from these figures is the stabilization of the pound. The pound which fell its biggest in two years has seen stabilization on Thursday. The pound maintains good figures as it was up 0.6% against the dollar at $1.2846. Although the sterling slipped 0.2% against the Euro to €1.1258, the pound becomes volatile again.
On Wednesday, November 14, the Prime Minister announced that she had secured cabinet backing for the draft Brexit agreement with Brussels. Alongside this comes the resignation of Brexit secretary Dominic Raab. On Thursday, Esther McVey’s resignation also rattled the markets. Back then in June 2016, when the referendum was made known, the pound fell 1.7% against the dollar and 1.9% against the euro. Since then the volatility recorded on Thursday was its highest. Since there was no further resignation the pound stabilized, analysts have however said that this stability achieved may not last.
Brexit and the Sterling
A foreign exchange strategist at Commerzbank, Ulrich Leutchtmanan said: “As long as no deal remains as likely as it is, there is a risk of a sterling depreciation spiral that appears to be self-intensifying.” Ulrich further explained: “The pound’s volatility has woken up from its 100-year slumber and is likely to remain reactive.”
The pound is seen as a barometer for the prospects possessed by the UK economy said, a senior analyst at Hargreaves Lansdown; Laith Khalaf. Mr Laith said: “Every time we see a likelihood of a bad Brexit risk, the currency sells off.
The fall observed in the pound on Thursday, was the largest percentage fall since the referendum in June 2016. The sterling slumped by 9.1% against the greenback. This was even greater compared to the recession provoking facts of October 2008. Mervyn King, the then governor of the Bank of England said: “the financial crisis meant the UK economy was on the verge of heading into a recession.”
The chief investment officer at the Canadian Civil Liberties Association Investment Management, James Bevan told the BBC 4’s Today program: “there are some interesting fundamentals affecting the pound at the present.” Among those factors are the slower economic growth in the UK than the EU and the United States. This means that the rate at which interest rates would rise in the UK would be slower compared to neighbouring countries. Thus conferring a disgusting sight of the pound to investors.
Earlier, it was mentioned that the FTSE 100 Share index dropped on Friday. Also, the FTSE 250 popularly referred to as a close measuring scale of the UK economy dropped 0.4% to 18,589.09. “If you look at the headline performance of the market, the benchmark index, it hasn’t really moved. For instance, the biggest companies in the index, Shell and HSBC both have large operations overseas that generate revenues in currencies such as dollars and euros which are worth more as the pound fell.”
The wider impact of Brexit
We cannot but note the effect of this turmoil on individual share prices. Companies heavily exposed to UK economy experienced the biggest falls in shares. Most especially, the house builders and banks. Royal Bank of Scotland recorded 3% fall, compared to the over 2% and 1% recorded by Persimmon and Taylor Wimpey respectively. The least was recorded by the Barratt development who recorded just 0.5% loss.
These companies were called the “Brexit beasts” by Mr Khalaf; ones which are more closely related to the UK economy. Mr Khalaf cited the case of Lloyds Banking Group, making a loss in 2011 now earning billions of pounds although trading at lower share prices.
The big-guns have however been in support of the Brexit draft plan published on Wednesday. The CBI Chair’s committee, Steve Murrells and Warren East of Rolls-Royce, have all voiced out on their intentions.
Steve talking about fresh food, told BBC Radio 5 live that stockpiling wasn’t an option, because they have not enough chilled capacity to do that. Companies dealing in just-in-time are however favoured by this scheme as was previously announced by Warren East. He said The company was just going to stockpile parts to avoid delay in production come 29 March.
The Brexit agreement has two essential economic benefits that must be achieved. It must avoid a no deal cliff edge by providing a transition. It must also open a new route to a good long-term trade deal. Without these, the implications on people and regions across the UK are what really matters. A practical way out must be provided and UK consumers and business owners must be offered a form of protection.