BHS, Balfour Beatty, BT: Business news in brief 17 August 2016

Retailer’s staff granted stay of execution; UK construction giant wins California high-speed rail contract; BT beats Sky on Premier League opening weekend

BHS (British Homes Stores) store - Some employees will be kept on as the retailer gets rid of its remaining stock (Getty)

Workers at 57 BHS stores given stay of execution

Thousands of BHS workers have been given a stay of execution after it emerged that the department store chain's remaining 57 shops will be kept open longer than planned.

Administrators to the retailer had put a deadline of 20 August for all outlets to close, but this has been provisionally extended to 28 August, with a chance that this date could also be pushed out.

Duff & Phelps and FRP Advisory will keep the stores open until stock has run out as they look to maximise returns. Workers will continue to be paid until the stores close, after which they will be made redundant.

The administrators have already overseen 106 closures over recent weeks, with the latest being BHS's flagship Oxford Street store on Saturday.

The firm's collapse in April has affected 11,000 jobs, 22,000 pensions, sparked a lengthy parliamentary inquiry and left its high-profile former owners potentially facing a criminal investigation.

Retail billionaire Sir Philip Green has borne the brunt of the public fallout, having been branded the “the unacceptable face of capitalism” by MPs.

Sir Philip owned BHS for 15 years before selling it to serial bankrupt Dominic Chappell for £1 in 2015. Sir Philip has come under fire for taking more than £400m in dividends from the chain, leaving it with a £571m pension deficit and for selling it to a man with no retail experience.

Veteran Labour MP Frank Field has asked the Serious Fraud Office (SFO) to launch a formal investigation into the pair to ascertain if any criminal wrongdoing occurred during the sale of the chain and throughout their respective ownerships.

PA

Balfour Beatty wins £524m California high-speed rail contract

Balfour Beatty said its experience of large raile projects such as Crossrail helped it to win the contract (Getty)

UK construction giant Balfour Beatty has won a $697m (£524m) contract to electrify a 52-mile stretch of California railway. The work, which represents the firm’s biggest ever contract in the US will pave the way for the much talked-about west coast high-speed rail between San Francisco and San Jose.

The line carries around 65,000 people per day and allows Californian commuters to avoid overcrowded highways. The work, which will employ 300 people, is due to start this autumn and take around four years.

Leo Quinn, chief executive, said of the contract: “Our extensive experience in managing complex rail projects leaves us well qualified to deliver this significant scheme. Caltrain builds on the back of the recent successful delivery of our part in the multi-billion dollar Eagle P3 Commuter Rail network in Denver, Colorado.

“We are pleased our unique capability has been recognised with this award which contributes to our strategy to increase our design-build rail market share across the US.”

The contract win represents the latest milestone in Balfour Beatty’s turnaround in fortunes after a torrid few years. Last year, the business won a major deal to build and finance 1,500 homes at the London Olympics venue in Stratford as part of the post-2012 Games redevelopment project.

Several contracts which have been a drag on profits for the company are set to finish over the next twelve month.

BT beats Sky with 515,000 viewers for Premier League opener

Manchester City v Sunderland drew a TV audience of 515,000 for BT Sport on the Premier League's opening day (Reuters)

Some 515,000 people tuned in to BT Sport on Saturday evening to watch Manchester City beat Sunderland 2-1 in an English Premier League opener. BT’s margin was more robust — it drew 39,500 more viewers than the Leicester City v Hull City game on Sky Sports earlier in the day.

The rivals’ soccer broadcasts will be watched closely this season, because BT for the first time outbid Sky for the Premier League’s popular late afternoon Saturday matches, which often draw bigger audiences than the 12:30pm games. BT began showing top-tier UK soccer in 2013 and added a £960m, three-year package starting this season.

“BT has definitely come of age,” said Ian Whittaker, an analyst at Liberum. “Football was always associated with Sky, but over time that idea has been slowly seeping away.”

Sky still has the lion’s share of TV rights for Premier League — 126 this season, compared with 42 for BT. In addition to Saturday games, it shows matches on Sundays, Mondays and, for the first time, Fridays. The Arsenal v Liverpool game on Sunday afternoon attracted more than 2 million viewers at its peak, Sky said.

“It has been a great first weekend of the Premier League season for Sky and our customers,” Barney Francis,Sky Sports managing director said. “The unpredictability of the competition has continued and we’ve had a strong response from customers.”

Reuters

UK should focus on US and China in post-Brexit trade deals say experts

Boris Johnson John Kerry meet in London in July as the UK seeks to reassure allies of its international role after Brexit (Reuters)

The UK should focus on nailing down post-Brexit trade deals with the US and China and not spend too much time negotiating with India, Canada or Australia, according to a study by Global Counsel.

Using a string of metrics, the London-based consultancy found that China, the US, Japan and Russia offer the greatest opportunities for commercial arrangements once Britain has left the European Union and so is able to liaise one-on-one with other countries.

India was not among the top ten nations and Canada ranked 23rd, behind Taiwan, Global Counsel said. Gulf countries such as Saudi Arabia are also not worth spending too much time on.

“UK trade policy will require ruthless prioritization,” Gregor Irwin, Global Counsel’s chief economist and a former UK government official, said.

The criteria used by the group to work out where to focus were the strength of economies, the height of trade barriers and whether UK investment already flowed there. How well British exporters already did was also taken into consideration.

The reduction of trade barriers and the attempt to catch up with EU peers are the main challenges facing the UK in China. Links with the US are already strong and worth intensifying, according to the report.

It is also worth trying to boost trade with Japan, South Korea and European countries outside of the EU such as Russia and Turkey, Global Counsel said.

Bloomberg

Jailed Barclays Libor traders appeal convictions

Former Barclays trader Jay Merchant is one of three who have appealed against their convictions for rigging interest rates (AFP/Getty)

Three former Barclays traders sentenced for as long as 6½ years over their roles in manipulating the Libor interest-rate benchmark are appealing their convictions.

Jay Merchant, 45, Alex Pabon, 38, and Jonathan Mathew, 35, all filed appeals against their convictions in recent weeks. Merchant is also appealing his 6½-year sentence.

The men were found guilty by a London jury in July after a three-month trial in which they were accused of conspiring with other Barclays employees to rig the London interbank offered rate between June 1, 2005, and August 31, 2007. Another ex-trader, Peter Johnson, 61, the main Libor submitter, pleaded guilty to manipulating the rate in October 2014 and received a 4-year sentence.

Mathew is appealing his conviction on the basis Johnson’s guilty plea shouldn’t have been put before the jury because it “manifestly will have changed the jury’s opinion,” his lawyer, Matthew Frankland, said on Tuesday.

A lawyer for Merchant declined to comment and Pabon’s lawyer didn’t immediately respond to a request for comment.

The men were convicted one year after former UBS trader Tom Hayes became the first person to go to jail over Libor-rigging. His initial 14-year sentence was reduced to 11 years on appeal, but his conviction was upheld.

Hayes’ case is currently being reviewed by the Criminal Cases Review Commission after an application to appeal to the Supreme Court was denied.

Bloomberg

ICE in hot water with Competition watchdog over Trayport takeover

Intercontinental Exchange may have to sell its latest acquisition (Reuters)

Financial and commodity markets operator Intercontinental Exchange should consider reversing its $650m takeover of commodities trading software house Trayport to avoid reducing competition in European energy trading markets, Britain's competition watchdog said on Tuesday.

ICE beat arch-rival the Chicago Mercantile Exchange to buy London-based Trayport in December last year but the Competition and Markets Authority (CMA) launched an in-depth investigation in May after deciding that the tie-up might be expected to result in a substantial lessening of competition.

On Tuesday the CMA said following the investigation it was still concerned that ICE could use its ownership of Trayport's platform to reduce competition between ICE and its rivals.

“This loss of constraint could lead to increased fees for execution and clearing, and worse terms offered to traders,” the CMA said in a statement.

“The merger could also result in a loss of competition between ICE and its rivals to launch new products, find innovative trading solutions and enter markets with new offerings.”

It set out possible “remedies” for public consultation before it makes a final ruling.

“If remedies are ultimately required, ICE is confident that they will be in line with how ICE intends to operate Trayport as an open and autonomous software provider,” ICE said in a statement.

At this stage the CMA said it considered that a “complete divestiture” of Trayport by ICE would be likely to be an effective remedy to the “adverse effects provisionally identified”.

Reuters

Unilever to Buy Blueair air filtering business

Unilever, which owns dozens of household name brands is moving into air purification (Getty)

Unilever plans to buy Sweden's Blueair, stepping into the air purification business, the company said on Tuesday.

Unilever, whose large brands include Dove soap, Lipton tea and Ben & Jerry's ice cream, has been very active on the acquisition front. Last month it announced a deal for Dollar Shave Club, following a string of smaller cosmetic and skin care deals including Dermalogica and Ren.

Blueair is a leading maker of premium air purifiers in markets including China, the United States, Japan, South Korea and India. It had annual turnover of $106m last year.

Unilever said the purchase will complement its water purification business. It did not disclose financial details.

Reuters

Antofagasta cuts cost to weather weak metals market

Chilean miner Antofagasta cheered investors with a rise in mid-year profit on Tuesday achieved mostly through cost cuts aimed at weathering a weak copper market it does not expect to rebound before 2018.

Majority-owned by Chile's wealthy Luksic family, Antofagasta cut capital expenditure by 42 per cent to $385m in the first half. Earnings rose 2.3 per cent to $571.6m for the six months to 30 June.

Iván Arriagada, who has been chief executive since April, said the company had no plans to change its shareholder payouts, unlike rivals BHP Billiton and Rio Tinto whose dividend policies have buckled under metal price pressure.

Copper prices hit a 6-1/2-year low in January on the back of weak Chinese demand.

Revenue fell 18.5 per cent to $1.4 billion on lower copper prices, sales volumes and the closure of its Michilla mine. Larger rival BHP on Tuesday posted a record $6.4 billion annual loss.

Reuters