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Daily News Roundup: Friday, 5th January 2018

Posted: 5th January 2018


Robey Warshaw partners collect £63m profit

Accounts filed by Robey Warshaw, a London-based advisory firm, have revealed that its partners split a £63.3m profit pool, including £37.3m for its highest paid member, thought to be Sir Simon Robey. The firm was founded four years ago by Simon Warshaw and Philip Apostolides and has rapidly become one of the biggest players in Britain for M&A, profiting from a shift away from big companies seeking advice from large investment banks. It advised Softbank on its £24bn takeover of Arm Holdings, the London Stock Exchange on its aborted merger with Deutsche Börse, and SAB Miller during its £79bn takeover by AB Inbev.

Investment banks earn $104bn in takeover advice fees

Investment banks earned a record of nearly $104bn (£76.7bn) in fees globally last year from work advising companies on more than $3.5tn worth of takeovers and mergers, according to data collated by Thomson Reuters. Bankers in the UK charged clients $5.8bn, a 17% increase on 2016 as the collapse in the value of the pound following the Brexit vote made British companies cheaper targets for overseas buyers.

Communities affected by bank closures

The Independent’s Chris Burn examines how the closure of two bank branches in the Yorkshire village of Wath-upon-Dearne has affected the local community. He notes that since the closures of the HSBC and Yorkshire Bank branches retailers have reported faltering trade, while locals believe that recent cuts to the bus routes serving the village have taken place because there are fewer people coming in to visit the banks.


British tech start-ups attract £3bn in investment

Data from Pitchbook, a company that analyses the venture capital industry, has revealed that early-stage businesses in the UK attracted about £3bn in investment last year, almost double the amount raised in 2016 and more than four times that secured by start-ups in France and Germany.

Toshiba offloads Westinghouse in $4.6bn deal

Toshiba’s troubled nuclear division, Westinghouse Electric, is set to be acquired by Brookfield Business Partners in a deal valued at $4.6bn (£3.4bn). Brookfield said it has signed a letter of intent to purchase Westinghouse’s global businesses, to be paid for with $1bn in equity and $3bn in debt financing.


ECB increases Deutsche Bank minimum capital requirements

Deutsche Bank has been forced by the European Central Bank to increase its capital holdings for 2018 slightly more than the average for lenders in Europe, and must now maintain a common equity tier one (CET1) ratio of 10.65% this year.


UK car sales fall

UK car sales fell in 2017 after growing rapidly in the five previous years, with the industry blaming the government for a collapse in consumer confidence over diesel cars. Vehicle sales for last year were 2.54m, a decline of 5.6% on 2016, with diesel sales dropping 17%. Mike Hawes, the CEO of the Society of Motor Manufacturers and Traders, said that British car manufacturers would look to implement Brexit “contingency plans” unless the government and the EU finalised a post-Brexit transition deal by the end of March.


EasyJet to increase fleet

EasyJet is to increase its fleet to 330 aeroplanes by the end of the year, from 280 now, of which 28 will be A321neo jets. The airline said the neo jets will help towards its strategy to decarbonise and quieten aviation, with the aircraft around 50% quieter than the jets they replace, and providing 15% savings in carbon dioxide emissions.


Euronext uses Brexit to earn Mifid reprieve

Euronext has been granted a waiver until July 2020 from having to comply with an “open access” rule under MiFID II, introduced on Wednesday. Under the new system aimed at increasing competition, an exchange would have to make available data from a derivatives transaction to any clearing house. Euronext said the waivers would ensure orderly markets as Britain, the region’s biggest derivatives trading center, leaves the EU next year.

Brexit raid on a British financial success story

The FT warns that attempts by Paris to claim a chunk of Britain’s £8tn asset management sector would be dangerously disruptive to the European financial system as a whole.


Crozier new Whitbread chairman

Adam Crozier, the former chief executive of ITV, is to take over as chairman of Whitbread from Richard Baker at the end of next month.


Mustard manufacturer leaves Norwich

Mustard maker Colman’s is set to leave its base in Norwich where the condiment has been produced for the past 160 years. Colman’s, which employs 113 people at its site in Norwich, said it would its production to Burton-on-Trent and Germany. The GMB union said 43 jobs would be transferred to the Burton site, with 20 moving to a new facility opening in Norwich for milling mustard seeds.


Zuckerberg vows to ‘fix’ Facebook

Facebook CEO Mark Zuckerberg has vowed to “fix” Facebook, in what he described as his personal challenge for 2018. In a post on his page on the social network, he said it was making too many errors enforcing policies and preventing misuse of its tools.


BoE reveals lift in mortgage approvals

Bank of England figures reveal that the number of mortgages approved for November rose to 65,139, from 64,887 in October. Experts had feared the number might fall below 64,000. The number of remortgages hit the highest for more than nine years, reaching 53,922. The BoE said net lending of £3.5bn was "broadly in line" with the average since 2016.


Debenhams’ Christmas sales suffer despite markdowns

In an unscheduled trading update, Debenhams has reported a fall in sales over the key Christmas trading quarter, amid a “volatile and competitive” market. Group like-for-like sales fell 1.3% in the 17 weeks to December 30th from a year earlier, and were down 2.6% in the UK, although it said tactical promotional action helped secure a stronger six-week Christmas period “against tough comparatives”, with like-for-like sales up 1.2% in constant currency terms, and digital growth of 15.1%. The larger markdowns introduced will have an impact on margins, Debenhams said, which are expected to be 150 basis points (1.5 percentage points) lower in the first half than the same time a year ago. Pre-tax profit is forecast to be between £55m-£65m for the 2018 financial year.

Shop prices fall at fastest rate since March

Shop prices fell at their fastest rate since March last month, according to figures from the British Retail Consortium. Overall shop prices were 0.6% cheaper last month than the same time last year, the deepest deflation since March and coming just after November's shallowest rate of deflation for four years at 0.1%. Non-food prices fell at their fastest rate since January last year, dropping 2.1% year-on-year compared with November's 1.1%.


Amazon eyeing Premier League rights?

Amazon has held talks over the UK rights to the Premier League, prompting speculation that it is considering challenging Sky and BT for coverage of England’s top flight, the world's richest league.


Services growth speeds up

The UK’s dominant services sector enjoyed faster growth in December. The purchasing managers’ index for the sector showed a balance of 54.2 in December, up from 53.8 in the previous month. Any balance above 50 represents growth. Although small, the monthly rise points to the economy having expanded by about 0.4% in the final quarter.

Consumer borrowing falls

November saw the rate of consumer borrowing in the UK continue to slow, after the Bank of England had previously sounded the alarm about a rise in consumer debt. Official figures from the Bank showed that unsecured consumer lending grew by 8.5% in November on an annualised three-month basis, down from 9.3% in the three months to October.


Confidence drops among UK small business owners

A survey by the Federation of Small Businesses has found that one in seven small business owners plan to downsize, close or sell their companies during the next three months. The FSB added that 31% of SMEs expect conditions to deteriorate in the next quarter while only 27% anticipate an improvement. Mike Cherry, national chairman of the FSB, said that domestic economic challenges need more attention at a time when Brexit negotiations are dominating the political agenda.

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