'Mitsubishi, Direct Line, InterContinental: Business news in brief: Wednesday 3 August 2016' diff viewer (1/2)

This article is from the source 'independent' and was first published or seen on August 03, 2016 13:30 (UTC). It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.independent.co.uk/news/business/news/business-news-in-brief-wednesday-3-august-2016-a7168411.html

The article has changed 3 times. There is an RSS feed of changes available.

Previous version 1 2 Next version

Previous version 1 2 Next version

Version 1	Version 2
Mitsubishi, Direct Line, InterContinental: Business news in brief: Wednesday 3 August 2016	Mitsubishi, Direct Line, InterContinental: Business news in brief: Wednesday 3 August 2016
2016-09-08 03:05:06 UTC	2016-09-10 19:55:08 UTC (3 days later)
Poor communication, slack governance and pressure on resource-starved engineers to improve fuel efficiency at Mitsubishi were at the root of its mileage cheating scandal, an investigation concluded.	Poor communication, slack governance and pressure on resource-starved engineers to improve fuel efficiency at Mitsubishi were at the root of its mileage cheating scandal, an investigation concluded.
Investigators hired by Mitsubishi after the automaker admitted in April to overstating the fuel economy on its cars criticized the firm for “not having the manufacturing philosophy of an automaker”.	Investigators hired by Mitsubishi after the automaker admitted in April to overstating the fuel economy on its cars criticized the firm for “not having the manufacturing philosophy of an automaker”.
They also said in their report on Tuesday that Japan's sixth-largest automaker by vehicle sales had not rallied its workers to help get it back on track following previous scandals going back to 2000, when it revealed it had covered up customer complaints for more than two decades.	They also said in their report on Tuesday that Japan's sixth-largest automaker by vehicle sales had not rallied its workers to help get it back on track following previous scandals going back to 2000, when it revealed it had covered up customer complaints for more than two decades.
Rather, the investigators said the company had been more focused on cutting costs from 2004, when it admitted to conducting secret recalls, which squeezed the resources engine designers needed to keep the company competitive.	Rather, the investigators said the company had been more focused on cutting costs from 2004, when it admitted to conducting secret recalls, which squeezed the resources engine designers needed to keep the company competitive.
This meant testing engineers had an impossible task of tweaking existing engine designs to gain greater fuel efficiency, they said, adding that this led to a culture within the division where employees felt they could not speak up against unattainable targets.	This meant testing engineers had an impossible task of tweaking existing engine designs to gain greater fuel efficiency, they said, adding that this led to a culture within the division where employees felt they could not speak up against unattainable targets.
“That the company did not take a united, cooperative approach to developing cars was a key factor behind the falsifications,” Yoshiro Sakata, a member of the investigation team, said.	“That the company did not take a united, cooperative approach to developing cars was a key factor behind the falsifications,” Yoshiro Sakata, a member of the investigation team, said.
The probe was carried out by three former public prosecutors and an ex-director of Toyota after Mitsubishi admitted that two of its models and two models manufactured for Nissan had overstated fuel economy readings.	The probe was carried out by three former public prosecutors and an ex-director of Toyota after Mitsubishi admitted that two of its models and two models manufactured for Nissan had overstated fuel economy readings.
This led to a suspension of their sales for nearly three months while further revelations showed Mitsubishi used improper data to calculate mileage for other models, going back to 1991.	This led to a suspension of their sales for nearly three months while further revelations showed Mitsubishi used improper data to calculate mileage for other models, going back to 1991.
This caused a slump in Mitsubishi's market value and prompted the company to seek financial assistance from Nissan, which agreed to buy a controlling one-third stake in the company for $2.2bn (£1.65bn).	This caused a slump in Mitsubishi's market value and prompted the company to seek financial assistance from Nissan, which agreed to buy a controlling one-third stake in the company for $2.2bn (£1.65bn).
© Reuters	© Reuters
Direct Line, Britain's largest motor insurer, said its first-half profit was hurt by lower investment gains and the new Flood Re levy, but beat its own consensus estimates.	Direct Line, Britain's largest motor insurer, said its first-half profit was hurt by lower investment gains and the new Flood Re levy, but beat its own consensus estimates.
Despite the fall in profits, the company's shares were trading 12% higher on the London Stock Exchange as of 14.45pm, the biggest daily percentage gain ever. Though lower, the to £316.9m profits were well above the firm’s own consensus estimate of £263m.	Despite the fall in profits, the company's shares were trading 12% higher on the London Stock Exchange as of 14.45pm, the biggest daily percentage gain ever. Though lower, the to £316.9m profits were well above the firm’s own consensus estimate of £263m.
Direct Line, whose brands include Churchill, Green Flag and Privilege, said it would pay a special dividend of 10p per share and an interim dividend of 4.9p per share.	Direct Line, whose brands include Churchill, Green Flag and Privilege, said it would pay a special dividend of 10p per share and an interim dividend of 4.9p per share.
Direct Line retained its forecast to achieve a full-year combined operating ratio from continuing operations between 93 and 95 per cent, adding that if current trends continued, the ratio reported would be towards the lower end.	Direct Line retained its forecast to achieve a full-year combined operating ratio from continuing operations between 93 and 95 per cent, adding that if current trends continued, the ratio reported would be towards the lower end.
The company reported a levy of £24m from the Flood Re scheme, which was set up by the British government and industry to cut insurance costs for homes in flood-risk areas after severe flooding in recent years.	The company reported a levy of £24m from the Flood Re scheme, which was set up by the British government and industry to cut insurance costs for homes in flood-risk areas after severe flooding in recent years.
On the new European capital rules for insurers that came in January 2016, Direct Line said its capital ratio was 184 per cent.	On the new European capital rules for insurers that came in January 2016, Direct Line said its capital ratio was 184 per cent.
The new rules dictate the amount of capital an EU insurer must hold to reduce the risk of insolvency. The lower the ratio, the greater the chances of a company defaulting on its obligations.	The new rules dictate the amount of capital an EU insurer must hold to reduce the risk of insolvency. The lower the ratio, the greater the chances of a company defaulting on its obligations.
Direct Line said gross written premiums from ongoing operations rose 3.9 per cent to £1.61 bn in the period, with a 2.5 per cent rise in motor in-force policies.	Direct Line said gross written premiums from ongoing operations rose 3.9 per cent to £1.61 bn in the period, with a 2.5 per cent rise in motor in-force policies.
It was “business as usual” for day-to-day operations after Brexit, the insurer said, as it was a UK-based business that underwrites risks within the country.	It was “business as usual” for day-to-day operations after Brexit, the insurer said, as it was a UK-based business that underwrites risks within the country.
© Reuters	© Reuters

InterContinental Hotels, owner of the Holiday Inn brand, said first-half earnings rose as a resilient US market made up for slowdown in Europe, hit by terror attacks.	InterContinental Hotels, owner of the Holiday Inn brand, said first-half earnings rose as a resilient US market made up for slowdown in Europe, hit by terror attacks.
The England-based company, which makes most of its sales outside the UK, said Brexit would help it cut costs.	The England-based company, which makes most of its sales outside the UK, said Brexit would help it cut costs.
Operating profit before one-time items climbed 2.1 per cent, the company said in a statement on Tuesday. That beat a $332.9m (£250m) average estimate by seven analysts in a Bloomberg survey.	Operating profit before one-time items climbed 2.1 per cent, the company said in a statement on Tuesday. That beat a $332.9m (£250m) average estimate by seven analysts in a Bloomberg survey.
“Despite the uncertain environment in some markets, we remain confident in the outlook for the remainder of the year,” Richard Solomons, chief executive, said in the statement.	“Despite the uncertain environment in some markets, we remain confident in the outlook for the remainder of the year,” Richard Solomons, chief executive, said in the statement.
Demand for European hotel rooms has been hit by traveler uncertainty in the wake of terrorist attacks in France and an attempted coup in Turkey.	Demand for European hotel rooms has been hit by traveler uncertainty in the wake of terrorist attacks in France and an attempted coup in Turkey.
Accor, Europe’s biggest hotel operator, said last week that first-half profit fell 4 per cent partly due to its French business.	Accor, Europe’s biggest hotel operator, said last week that first-half profit fell 4 per cent partly due to its French business.
Revenue per room dropped 19.5 per cent in Paris hurt by the sale of the InterContinental Paris Le Grand last year.	Revenue per room dropped 19.5 per cent in Paris hurt by the sale of the InterContinental Paris Le Grand last year.
Revenues per room fell 8 per cent in the Middle East on the back of the continued low oil price, while the Americas region bucked the trend with profits up 6.1 per cent to $313m (£235m).	Revenues per room fell 8 per cent in the Middle East on the back of the continued low oil price, while the Americas region bucked the trend with profits up 6.1 per cent to $313m (£235m).
“Favourable economic fundamentals and historically modest levels of new supply in the US continue to support growth in our largest region, where demand continues to be at an all-time high,” InterContinental said.	“Favourable economic fundamentals and historically modest levels of new supply in the US continue to support growth in our largest region, where demand continues to be at an all-time high,” InterContinental said.
Brexit may help InterContinental achieve administrative savings, it said.	Brexit may help InterContinental achieve administrative savings, it said.
“With a substantial proportion of our central costs denominated in sterling, we would even benefit at a profit level if the post-referendum sterling exchange rate is maintained,” the company said, noting that only a small portion of its hotels are located in the UK.	“With a substantial proportion of our central costs denominated in sterling, we would even benefit at a profit level if the post-referendum sterling exchange rate is maintained,” the company said, noting that only a small portion of its hotels are located in the UK.
InterContinental, which has about 750,000 rooms in about 100 countries, lost its ranking as the world’s biggest hotel company after a wave of consolidation created increasingly large competitors.	InterContinental, which has about 750,000 rooms in about 100 countries, lost its ranking as the world’s biggest hotel company after a wave of consolidation created increasingly large competitors.
Marriott International completed its acquisition of Starwood Hotels this year, and Accor bought the owner of the upmarket Fairmont, Raffles and Swissotel brands.	Marriott International completed its acquisition of Starwood Hotels this year, and Accor bought the owner of the upmarket Fairmont, Raffles and Swissotel brands.
© Bloomberg	© Bloomberg
As the UK’s vote to leave the European Union wreaks havoc on the economy, deal-making momentum in the country’s pharmaceutical industry is showing no signs of letting up.	As the UK’s vote to leave the European Union wreaks havoc on the economy, deal-making momentum in the country’s pharmaceutical industry is showing no signs of letting up.
Health-care acquisitions in the UK have risen 21 per cent this year and was one of the strongest contributors to last year’s record-breaking $3.6trn of global M&A.	Health-care acquisitions in the UK have risen 21 per cent this year and was one of the strongest contributors to last year’s record-breaking $3.6trn of global M&A.
Much of the deal-making is happening with specialised companies that ship globally, like Martindale Pharma, which provides medicines used in accident A and E. That company is working with advisers to explore options, including a sale, which could fetch more than £200m, people familiar with the matter said. Martindale itself bought Viridian Pharma, another UK firm, in July.	Much of the deal-making is happening with specialised companies that ship globally, like Martindale Pharma, which provides medicines used in accident A and E. That company is working with advisers to explore options, including a sale, which could fetch more than £200m, people familiar with the matter said. Martindale itself bought Viridian Pharma, another UK firm, in July.