Asda, Yahoo, Eurozone: Business news in brief, Wednesday 22 February
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Version 0 of 1. Asda has posted another slump in quarterly sales, but the supermarket is showing signs that turnaround efforts under new boss Sean Clarke are beginning to bear fruit. The chain, owned by US giant Walmart, reported a 2.9 per cent fall in like-for-likes sales in its fourth quarter. The figures represent a 10th consecutive quarter of sales declines but mark an improvement from the previous two periods, which saw Asda post its worst ever sales falls of 7.5 per cent in August and a 5.8 per cent decline in November. Asda chief executive Mr Clarke said: “We are encouraged by the early signs of our customers responding positively to the hard work that's been happening in our stores throughout 2016, which saw us welcome over 140,000 customers back to Asda this last quarter. “We are putting customers first and have sharpened our prices, improved our ranges and availability, all with friendly service. “While we have a lot to do, it is great to see our colleagues, who really make the difference, engaged in this change in doing what's right for customers.” Asda announced in September it was lowering thousands of prices on everyday favourites by an average of 15 per cent, with items such as beef, chicken and sausages all becoming cheaper. The move, part of a new value campaign dubbed That's Better, has also seen Asda improve the quality of its own-brand ranges. The turnaround comes as Asda fights back having lost out recently in a brutal price war that has engulfed the sector. AP Yahoo is taking a $350m (£281m) hit on its previously announced $4.8bn sale to Verizon in a concession for security lapses that exposed personal information stored in more than 1bn Yahoo user accounts. The revised agreement announced Tuesday eases investor worries that Verizon Communications Inc. would demand a discount of at least $1bn or cancel the deal entirely. The hacking bombshells, disclosed after the two companies agreed on a sale, represent the two biggest security breaches in internet history. Under the amended deal, Yahoo will be responsible for 50 per cent of any cash liabilities incurred following the closing related to government investigations and lawsuits related to the breaches. Liabilities arising from shareholder lawsuits and SEC investigations will continue to be the responsibility of Yahoo. “The amended terms of the agreement provide a fair and favorable outcome for shareholders,” said Marni Walden, Verizon executive vice president and president of product innovation and new businesses. “It provides protections for both sides and delivers a clear path to close the transaction in the second quarter.” The security breaches raised concerns that people might decrease their usage of Yahoo email and other digital services that Verizon is buying. A smaller audience makes Yahoo's services less valuable because it reduces the opportunities to show ads — the main reason that Verizon struck the deal seven months ago. Yahoo has maintained that its users have remained loyal, despite any mistrust that might have been caused by its lax security and the lengthy delay in discovering and disclosing the hacks. The separate attacks occurred in 2013 and 2014; Yahoo disclosed them this past September and December. AP Economic growth in the 19-country eurozone accelerated in February to reach the strongest pace in nearly six years, a closely watched survey found Tuesday. In its monthly survey of economic activity across the region, financial information company IHS Markit also said job creation was the best for nine and a half years, as order books and business optimism continued to pick up. The firm's purchasing managers' composite output index — a broad gauge of economic activity — spiked to 56.0 points in February from 54.4 the previous month. The index now stands at its highest level since April 2011, which points to potentially robust quarterly growth of 0.6 per cent in the first three months of the year, if sustained in March. “The eurozone economy moved up a gear in February,” said Chris Williamson, the firm's chief business economist. “With inflows of new orders also surging and firms becoming even more optimistic about the year ahead, growth could even lift higher in coming months.” The big surprise within the survey was that France appears to be growing slightly faster than Germany for the first time since August 2012. Both, according to Williamson, are growing at rates of between 0.6 per cent and 0.7 per cent in the first quarter. “France's revival represents a much-needed broadening out of the region's recovery and bodes well for the eurozone's upturn to become more self-sustaining,” said Williamson. PA The head of Britain's biggest trade union Unite said on Tuesday he will seek assurances from the chief executive of PSA Carlos Tavares that it will maintain jobs and keep plants in Britain open during a meeting on Friday. Peugeot maker PSA is considering the buyout of General Motors' European operations, which include Vauxhall in Britain, and said on Tuesday it will respect existing labour agreements if a deal took place. “We’ll be seeking these very same assurances for our workers, plants and agreements when I meet with Mr Tavares on Friday,” Unite's General Secretary Len McCluskey said in an emailed statement. “UK car buyers want to buy Vauxhall because it is seen as a quintessential British brand, associated clearly with UK plants and jobs,” he added. Following talks with German unions on Tuesday, PSA Group said it will honour existing agreements and job guarantees in place at all Opel sites if its proposed acquisition goes through, PSA boss Carlos Tavares met Opel's German unions and gave a “commitment to respect the existing agreements in all European countries”, the maker of Peugeot and Citroen cars said. Reuters Citigroup Inc. agreed to pay a penalty of almost 70m rand (£4.35m) to settle a South African antitrust investigation that said the US bank participated in an alleged cartel to manipulate the value of the rand. Citigroup will make available witnesses to help prosecute other banks that participated in price fixing and market allocation in the trading of foreign-currency pairs involving the rand, the Pretoria-based commission said in an e-mailed statement on Monday. The agreement “was done to encourage speedy settlement and full disclosure to strengthen the evidence for prosecution of the other banks,” Commissioner Tembinkosi Bonakele said in the statement. The South African probe is the latest investigation into alleged rigging by the world’s biggest banks of the £4 trillion-pound-a-day market for products tied to foreign exchange, which has resulted in more than $10bn (£8bn) of penalties since Bloomberg first revealed manipulation in 2013. Former Citigroup trader Christopher Cummins and ex-BNP Paribas employee Jason Katz have pleaded guilty to allegations in the US for rigging emerging-market currencies. Both were identified in the Competition Commission investigation. Bloomberg Embattled Japanese electronics maker Toshiba Corp. is selling its stake in a medical equipment leasing company to Canon Inc. for 31.4bn yen (£223m). Toshiba said Tuesday it is selling its entire 65 per cent stake in Toshiba Medical Finance Co. to Canon, a Japanese camera maker, effective 31 March. Tokyo-based Toshiba has been in talks with Canon since late last year on the sale. Toshiba, which owns US nuclear company Westinghouse, is in deep trouble after suffering massive losses in its nuclear business. It has been selling off lucrative businesses such as its computer-chip operations. It is projecting a 712.5bn yen (£5bn) loss for its nuclear business, and has been unable to report April-December financial results. Its chairman has resigned to take responsibility for the mess. Toshiba has already sold part of its chip business, and its president has said it is thinking about selling all of it to get out of the massive red ink. It has also sold its household appliance unit to Midea of China, which is maintaining the Toshiba brand name. AP Britain's plan to free Royal Bank of Scotland from an obligation to sell more than 300 branches risks a clash with the European Commission weeks before the government is due to start formal talks to leave the trading bloc. European regulators originally told RBS to sell the branches by 2013 to prevent the state-backed bank, Britain's largest small-business lender, from having an unfair advantage. The sale was one of the conditions attached to RBS's 45.5 billion pound state bailout in the financial crisis. RBS has spent more than £1.5bn and seven years trying to spin-off the branches - which were to be branded Williams & Glyn - but has struggled to separate them from its IT system. Now Chancellor Philip Hammond is pushing for RBS to be let off the EU's demand to sell the branches in return for providing around £750m to help to boost competition in banking. For the plan to work, the EU would have to approve changes to the terms of RBS's government bailout, which included the sale of the branches and other divestments. The British government and the European Commission say they have had “constructive” discussions over the matter. Reuters European Union finance ministers have agreed to new rules aimed at preventing multinational companies from exploiting differences in tax rates between countries in the EU and those outside the bloc. At a meeting in Brussels, the 28 ministers backed the new rules, which will target various practices whereby large corporations can take advantage of loopholes between the tax systems of EU member states and non-EU countries in order to reduce their tax liability. Critics say these so-called “hybrid mismatches” have been used by many large companies, including the likes of Apple and McDonald's, to reduce their tax payments. EU member states will have until the end of 2019 to legislate Tuesday's agreement. By then, Britain will be out of the EU should the government's exit timetable go to plan. AP |