Wm Morrison, Britain’s fourth-biggest supermarket chain, promised today to open more small stores as it confirmed that its new chief executive, Dalton Philips, would take up his role on March 29.

Mr Philips, who was poached from the Canadian retailer Loblaw, succeeds Marc Bolland, who quit in November to take over from Sir Stuart Rose at Marks & Spencer.

The news came as Morrisons, which has opened 45 stores during the past year, reported a 30 per cent rise in full year pre-tax profits to £858 million as turnover rose by 6 per cent to £15.4 billion.

On an underlying basis, stripping out the impact of property disposals and a one-off credit of £91 million to the company pension scheme, pre-tax profits rose by 21 per cent to £767 million.

This was better than the consensus forecast of £757 million predicted by a range of City analysts.

Sir Ian Gibson, the non-executive chairman of Morrison, said that the company had raised its market share during the year, with both more customers visiting its stores and existing customers spending more. (more…)

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Staff at John Lewis Partnership are to share a bonus payment of £151.3 million, after the retail group reported a 9.7 per cent rise in full year pre-tax profits to £306.6 million.

It means that “partners”, as staff at the retailer are designated, will receive payouts equivalent to 15 per cent of their annual salary, or nearly eight weeks’ pay.

Charlie Mayfield, chairman of the John Lewis Partnership, said that, in all, about 70,000 partners would receive payouts.

He said: “Partners have shown tremendous commitment during changing times. I am therefore delighted that our partners will share fairly in the financial rewards of a successful year.” (more…)

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Energy company Npower is to cut domestic gas bills by 7% from 26 March, following price cuts by other suppliers.

The company has become the fourth of the “big six” energy suppliers to announce a reduction in prices.

Customers will see an average fall of £50 on their annual bill as a result of the change, the company said.

Wholesale gas prices have fallen over the last year, prompting the latest flurry of cuts in domestic bills.

“We always aim to offer competitive prices to our customers and we have lowered our gas prices although our profits halved in 2009,” said Kevin Miles, chief executive of Npower Retail. (more…)

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Whitbread, the Premier Inn and Costa coffee operator, surprised the City today by appointing Andy Harrison from easyJet as its next chief executive.

Mr Harrison, who announced in December that he would be stepping down from the budget airline by the end of June, will succeed Alan Parker, chief executive at Whitbread since June 2004.

The succession will surprise the market which had been heavily tipping Carl Leaver, former international director of Marks & Spencer and a one-time Whitbread executive.

Chris Rogers, the Whitbread finance director, had been cited as the leading internal candidate, while Patrick Dempsey, managing director of its hotels and restaurants division, had also been tipped as an outside chance.

Mr Parker’s retirement, predicted by The Times in January, comes the day before the leisure company issues a full-year trading update that is expected to demonstrate the resilience of the group’s businesses, with trading in the fourth quarter showing signs of recovery.

The sailing enthusiast, who recently bought a new boat to occupy him in his retirement, will step down from the company on his 64th birthday at the end of November.

Mr Harrison, who had also been approached about the chief executive’s position at Ladbrokes, the bookmaker, will join the company at the beginning of September as chief executive designate.

The 52-year-old has been chief executive at easyJet since 2005, having previously spent nine years as chief executive of the RAC motoring group.

He is said to have quit the airline over a protracted row with Sir Stelios Haji-Ioannou, the founder and 38 per cent shareholder. In 2008, Sir Stelios refused to sign off easyJet’s accounts in a spat with executives that lasted months.

Anthony Habgood, the Whitbread chairman, said: “We conducted a thorough international search and selection process and had a number of high quality candidates. Andy has 14 years proven experience as a successful leader of two significant consumer facing public companies.”

He added: “Whitbread has substantial opportunities for further growth, both in the UK and through developing our international presence. We believe that Andy’s skills and experience are ideally suited to lead Whitbread in taking advantage of these opportunities.”

Mr Habgood also paid tribute to Mr Parker for his “invaluable contribution to the growth and development of Whitbread” during his six years as chief executive.

“Under his leadership Whitbread has grown to become the UK’s leading hospitality company with a strong focus on value for money brands. Andy is joining a company in good health and with excellent prospects for future growth.”

Mr Harrison said: “I am delighted to be joining Whitbread. It is the ideal next step for me. Whitbread has a great history and strong culture with an exciting future ahead.

“Alan and his colleagues have done an outstanding job and I look forward to working with the team to build on their achievements.”

Source : The Times

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One of Leicestershires major employers is to shut its operation with the loss of almost 1,200 jobs.

Managers at AstraZeneca’s research facility on the outskirts of Loughborough met staff to discuss their future on Tuesday.

The firm announced 8,000 worldwide redundancies in January, following more than 12,000 posts going as part of earlier efficiency plans.

Over the past 10 years more than £100m has been spent developing the site.

In a statement, the company said it had “shared with its employees further details of proposals designed to improve the productivity of its global research and development organisation.”

The Loughborough site is expected to close by the end of 2011.

A smaller facility in Cambridge is also to close, the company said.

Pharmaceutical development work will cease at its Avlon base near Bristol with some work being transferred to Cheshire.

The firm announced 8,000 worldwide redundancies in January, following more than 12,000 posts going as part of earlier efficiency plans.

January’s announcement said restructuring would include 3,500 research and development posts being cut worldwide.

‘Desperately sad news’

Linda McCulloch, Unite the union’s national officer for the chemical and pharmaceutical industry, said: “This is a devastating blow to the workforce at Loughborough.

“The closure of this site will damage the UK’s pharmaceutical research and development capabilities.

“Unions will be in formal discussions with the company and will do everything possible to minimise the impact of this announcement.”

Leader of Leicestershire County Council David Parsons said: “I want to speak to AstraZeneca as soon as possible, to understand exactly what is being proposed and to see if there is any possibility of the plant remaining open.”

Councillor Mike Preston leader of Charnwood Borough Council said; “We are clearly very concerned about the loss of employment and the futures of all the staff affected, as well as the effects on the local economy.”

Nick Carter, chairman of Prospect Leicestershire, the regional economic development company, said: “This is desperately sad news for the workers of AstraZeneca and a grim day for Loughborough.

“We will be working with Charnwood Borough Council, other organisations and local Mps to see what can be done to minimise the impact on the local economy and to find new ways of bringing employment to the area.”

An employee leaving the site, who did not want to be named, said staff were, “Absolutely stunned at the sheer stupidity of the decision”.

Source : BBC News

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Politicians today rounded on Royal Bank of Scotland (RBS), the state-owned lender, over its decision to pay up to £1.7 billion in bonuses to bankers despite making a £3.6 billion loss during 2009.

The bank announced today it will pay investments bankers from a £1.3 billion bonus pool while other staff will share in a £400 million reward.

George Osborne, the Shadow Chancellor, said bankers’ pay had now reached “ridiculous levels”, adding: “We have just got to look at the whole banking sector and try to bring this pay down.”

RBS’ loss for the 12 months to December 31 is less than the £5 billion expected and far below the £24.3 billion loss that RBS reported for 2008, a record for any British company.

But Vince Cable, the Liberal Democrat Treasury spokesman, said: “RBS rewarding individual bankers is like a football team paying their striker for scoring when they’ve just been relegated.”

RBS is now 84 per cent owned by the British taxpayer after receiving billions of pounds worth of rescue funds from the state during the recession to save it from collapse.

The UKFI, the body set up by the Government to manage the state’s investment in British banks, yesterday granted RBS permission to pay the bonuses.

It said: “The revenue pay-out ratio in the investment bank is the lowest of any such reported ratio for other major investment banks in 2009.” Barclays’ equivalent ratio was 38 per cent.

Stephen Hester, the chief executive of RBS, who replaced Sir Fred Goodwin, said that he was obliged to pay out commercially competitive bonuses to retain staff, adding that the “thousands of best-performing people” who left last year could have increased the banks’ profits by £1 billion.

“We will continue to lose staff because of the tightrope we are walking. Retention of staff is my single biggest problem,” he said, adding that the levels of media scrutiny the bank’s commercial decisions received were his and his staff’s “crosses to bear”.

Mr Osborne did not deny that a Conservative government would also have given the green light to the RBS bonuses.

He said the bank should not be singled out and he recognised the bank’s argument that important staff would leave if pay was not competitive.

Almost all of the bonuses will be performance-related and paid in shares, and will be deferred over a three year period.

The earliest payments will be in June this year, but executive directors have deferred their entire bonuses until 2012.

Staff who earn less than £39,000 will be able to receive their bonuses immediately and in cash, up to a maximum of £2,000.

Executive directors have deferred their 2009 bonuses until 2012, and all 2009 bonuses awarded to those earning over £39,000 will be paid in three tranches over the period to June 2012.

Some of the investment bank’s highest earners will be paid in shares held for five years.

Mr Hester announced this week that he would give up his £1.6 million bonus, followed by Eric Daniels, the boss of Lloyds Banking Group, which has also received billions of pounds in state funds when it acquired HBOS.

Last week, John Varley, the chief executive of Barclays, and Bob Diamond, the president of the bank, said that they would not accept a bonus this year.

Sir Philip Hampton, the chairman of RBS, said: “We share the public’s concerns and we understand that it is impossible to defend some of the historic pay practices of the industry.”

The company’s underlying core business posted operating profits of £8.3 billion, up 89 per cent on 2008.

However, £5.7 billion of these were from the investment bank arm, global banking and markets. The investment bank made a £1.8 billion loss in the previous year.

RBS is the second big UK bank to report 2009 results, after Barclays announced record profits of £11.6 billion.

RBS said today that impairment charges on bad debt “rose sharply” to £13.9 billion from £7.4 billion in 2008, but noted that they “now appear likely to have peaked”.

Bruce Van Saun, the group finance director, added that recent declines in impairment charges in the last two quarters of the year were encouraging.

Mr Hester said that he was “cautiously positive” about 2010 but that the bank would still probably make a loss.

But he added that if the UK were to suffer another quarter of negative growth it would not necessarily affect his targets for the year.

RBS shares led the FTSE 100, up 2.3p, or 6.37 per cent, at 38.39p.

Source : Business Times Online.

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British Gas operating profits leapt 58% last year to to £595m – up from £379m in 2008, parent company Centrica has announced.

The news will further fuel anger over energy bills, following accusations that utility firms were not quick enough to pass on falls in wholesale gas prices last year.

However, Centrica said British Gas profits rose due to the addition of 141,000 gas and electricity customers and following operational improvements.

“The numbers look big, but remember we’re looking after one in two homes in Britain,” British Gas managing director Phil Bentley told Sky News.

“It’s actually only about £3 profit per household per month after tax.”

Industry watchdog Ofgem said this week that energy firms had boosted margins by £30 for each typical dual-fuel customer in the last three months as wholesale energy costs fell.

However, British Gas was the first of the big six energy providers to cut prices last year and also led the way recently with a 7% reduction in gas bills.

“The gas we’re burning today to heat our homes we bought nearly two years ago, when prices were much higher, so there’s a time lag,” Mr Bentley said.

“Secondly our profits are up on where they were in 2008, which was a massively volatile year.”

Mr Bentley added that the winter had been much colder than expected – adding to the firm’s earnings.

Centrica said it realised 2009 was a “difficult year for many of our customers” and said it aimed to help people manage and reduce energy use in their homes.

Philip Cullum, deputy chief executive of Consumer Focus, called for an immediate price cut following the announcement of the British Gas profits.

“Energy companies have taken advantage this winter, while more than six million UK households live in fuel poverty and face a desperate struggle to keep warm,” he said.

“That British Gas has been the only major energy supplier to cut standard prices over the past seven months demonstrates a market largely devoid of competitive pressure.

“Energy companies seem not to care about providing value for money.”

As a whole, Centrica’s operating profit was down 7% on 2008 at £1.86bn, with a fall in wholesale gas prices slashing returns from its upstream production business.

Centrica has warned that wholesale prices are forecast to rise again during 2010, although not to levels seen during the oil price bubble in 2008.

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Source : Yahoo News.

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Hundreds of new jobs are to be created under a £100 million investment in a new wind turbine research centre, it was announced.

Mitsubishi said it was looking at a number of sites in north east England to carry out research into building the world’s biggest turbine blades.

The Government is supporting the development with grants of up to £30 million.

Up to 200 skilled jobs will be created over the next few years but business secretary Lord Mandelson said the move could lead to the creation of up to 1,500 jobs in the future.

Lord Mandelson and Climate Change Secretary Ed Miliband signed a memorandum of understanding with Mitsubishi executives at the Business Secretary’s London offices to mark the investment.

Mitsubishi chief executive Akio Fukui said the firm was looking at a number of locations in the North East where a factory will be built for the research to be carried out.

A prototype turbine will be built within three years and the first full-scale production will start after four years.

The turbines will be for offshore wind farms and will be offered for sale in overseas markets such as Germany, the United States and China as well as the UK.

Lord Mandelson said the announcement was a “real opportunity” for the UK to become a world leader, adding: “No country makes offshore wind turbines of the size we are talking about today on a commercial scale. Twenty years ago the UK was a leading centre for onshore wind technology, but we failed to capitalise on that by not providing the right climate for growth.

“We are determined not to let that happen again. We are creating the largest market in the world for offshore wind and we intend to build and support the industry.”

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Source : Yahoo News.

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Banking giant Barclays has seen its full-year profits increase by 92% to £11.6bn ($18.2bn) in 2009.

The figure was boosted by the sale of its BGI fund management arm to US firm BlackRock last year.

Stripping this out, profits were £5.6bn compared with £1.6bn in 2008, though that figure included hefty write-downs.

The bank, which did not take any direct state help during the financial crisis, said its total bonus payouts for staff had been reined in to £2.7bn.

It will pay £1.5bn in bonuses for 2009 and a further £1.2bn to be paid over three years.

Most of these bonuses go to staff at its Barclays Capital investment banking arm – which made £2.5bn.

Some 22,000 investment banking staff are receiving £191,000 each on average in salary and bonuses – of which £95,000 is discretionary bonus.

But the bank said that chief executive John Varley and president Bob Diamond had turned down bonuses for the second consecutive year, given “intense public interest and concern” about bankers’ pay.

The large profits enjoyed by bankers have prompted widespread public anger because the banking sector was widely perceived to have taken dangerous risks which led to the global recession.

Banks defended

Barclays opted not to join the UK government’s bail-out scheme for banks, instead opting to rebuild its finances using funds from the Middle East.

However, BBC business editor Robert Peston said some would argue it had benefited indirectly “from a windfall generated by the emergency rescue of the global economy undertaken by governments and central banks, an emergency rescue that was needed in large part because of the havoc wreaked by the excessive risk-taking of banks”. Last week, Mr Varley defended the role of big banks in the global financial system.

Appearing in front of the Commons Treasury Committee, he said that big banks were not necessarily riskier than small banks.

Barclays said it had loaned about £35bn to businesses and households in the UK in 2009, having promised in April to lend at least £11bn.

The willingness for banks to lend is seen as an important factor for economic recovery.

However, a report by the Institute of Directors suggested that almost 60% of businesses seeking bank finance in the past year had been rejected – with some saying they had been forced to borrow on their credit cards.

Shares in Barclays were up by more than 6% in Tuesday morning trading.

Richard Hunter, of Hargreaves Lansdown stockbrokers, said the results were “further proof that Barclays has skilfully woven its way through the recessionary minefield”.

“With or without the sale of BGI, the figures are extremely impressive,” he added.

“Today’s announcement reiterates Barclays’ position as a major global force, whilst also setting the standard in kicking off the UK banking reporting season.”

Source : BBC News

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Cadbury’s new owner, Kraft, says it plans to close the company’s Somerdale factory in Keynsham, near Bristol.

Just last week it said it would keep it open. The shutdown would mean the loss of 400 jobs.

Cadbury had earmarked the plant for closure but Kraft’s takeover had raised hopes of a reprieve.

The move comes just weeks after Cadbury’s chairman told the BBC that job losses were an “inevitability” after the takeover by the US giant.

In a statement, Kraft said it would stick to the plans put in place by Cadbury in 2007 to close the plant and transfer the work to Poland.

‘Unrealistic’

Kraft Foods said that after what it called “extensive talks” with senior management at Cadbury, it found that Cadbury’s plans to close Somerdale were so far advanced that it would be “unrealistic” to reverse them.

It added that it had become clear that the investment required to reverse the closure programme “would be so significant that alternative plans were not viable”.

The company pointed out that Cadbury had already invested more than £100m in building new production facilities in Poland and the majority of the lines have, or are about to be, transferred by the middle of this year.

Irene Rosenfeld, chairman and chief executive of Kraft Foods, said: “It became clear that it is unrealistic to reverse the closure programme, despite our original intent to do so. While this is a difficult decision, we have moved quickly to end any further uncertainty.”

She said the planned £30m investment plans for the Bournville site remained in place.

The company has said that it will honour Cadbury’s previous undertakings to Somerdale employees concerning the terms and conditions of the closure and a commitment to rebuild the Fry Club on the Somerdale site.

Staff at the Somerdale factory in Keynsham were told the news at a meeting on Tuesday afternoon.

One worker told the BBC a statement by Kraft that the factory might stay open had been “a big fat lie”.

He said: “Apparently the plans to move to Poland were too far gone to save the factory so unfortunately, we’re still up for the chop.”

Keynsham resident Amoree Radford, of the Save Cadbury’s Campaign said the company [Kraft] was “absolutely despicable”.

She said: “We were taken in by Kraft. I really thought they were sincere.”

‘Deliberately misled’

The union Unite reacted angrily to the decision and said it sent the “worst possible message” to 6,000 other Cadbury workers in the UK and Ireland.

Jennie Formby, Unite national officer for the food and drinks sector, said the US firm had “deliberately misled many hundreds of decent men and women”.

Business Secretary Lord Mandelson, who met Ms Rosenfeld after the takeover was sealed, said: “This will confirm the fears of those who felt the takeover would result in job losses. Kraft gave me no indication of this announcement when we met last week.”

He added: “It is for the company now to prove the worth of their other statements about investing in the UK.”

The Somerdale plant is in Keynsham, near Bristol and Bath, and was originally built by the Fry family. It merged with Cadbury Brothers in 1919.

Products made at Somerdale include Fry’s Chocolate Cream, the Double Decker, Dairy Milk, Chocolate Buttons, Creme Eggs and Mini Eggs, Cadbury’s Fudge, Chomp and the Crunchie.

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Source : BBC News

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