Industry news

Birmingham Airport has called for greater UK flight links outside of London, in order to support the country’s economy and transport capability.

Birmingham has highlighted how London is currently the focus of the majority of UK flight links, and that this disproportionate focus on the capital compared to the rest of the country, limits economic activity outside of London.

The call for increased flight link comes as Birmingham airport launches a public campaign for increased long-haul airports outside of London.

Airport chief executive, Paul Kehoe, said: “a surprisingly high proportion of the country's potential demand for business air travel comes from Birmingham airport's catchment area. But rather than flying from their local airport, we have ended up with an illogical situation where these businesses have to slog down the M1 or M40 to get to Heathrow”.

The public campaign comes as Birmingham airport prepares for a report from Sir Howard Davies’ commission into aviation capacity in June 2015, which will look at the UK’s future expansion of airports and flight link capability.

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An increased price rise of 6 percent during December 2012 led to boosted profits for British Gas, with a long winter seeing rising energy consumption levels delivering £602 million in profit.

The long periods of low temperature saw customers consume on average 18 percent more year-on-year during the first four months of 2013 compared to 2012, with the price increase coming into place just before the long winter.

British gas owners Centrica, said in a statement that: “Against a background of sustained cold weather and periods of higher commodity prices, Centrica has performed well in the year to date."

Overall profits were slightly reduced on last year’s total, however profits managed to deliver on-line with expectations, based on rising costs and the impact of the European recession.

The company has said that its ability to offer competitive energy prices has contributed strongly to the success in meeting overall profit expectations.

The energy giant has said that it will use the increased profits generated from the winter period to help to “hold prices for as long as possible."

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Britain’s largest coal mining businesses, UK Coal may return to public ownership, as ministers discuss a plan designed to support the company’s struggling pension scheme.

Currently 6,800 pension scheme members are threatened by the potential collapse of UK Coal, with a collapse potentially devaluing £360 million from the pension pot.

UK Coal is facing significant uncertainty following the closure of the Daw Mill deep-pit in Warkshire due to a fire, which represented the largest deep-pit project for the company.

The loss of the single largest UK deep-pit resulted in 650 job losses and a further loss of £260 million from equipment damage and coal stock destruction.

Government ministers have met with union officials and company officials to discuss the potential nationalisation of the company in a bid to prevent damage to pension scheme, which would place the resulting pension deficient on the Pension Protection Fund (PPF).

Ministers are now looking at the possibility of moving assets and the operations of the Daw Mill pit to the government run Coal Authority.

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Global security outsourcer G4S has successfully won the contract to provide security for the G8 summit.

The contract will see G4S provide 450 staff to provide security for the 2013 G8 meeting, taking place in Northern Ireland in June.

The security service will be provided alongside police and armed force personal. G4S has had previous experience with working alongside the armed forces, after the army was drafted in to supplement Olympic security staff, when G4S was unable to meet staffing numbers.

Secretary of state for Northern Ireland, Theresa Villiers, sought to downplay concerns regarding G4S’ past performance, saying: “The G8 is considerably less than the numbers that were required for the mammoth operation at the Olympics”.

Security challenges facing the event involving leaders from around the world include thousands of protestors expected to be present at the event, and the threat of action by dissident republicans.

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British Airways continues to suffer under IAG (International Airlines Group) as the group reports operating losses of £531 million for the first quarter.

Losses at Spanish carrier Iberia have led to a net quarterly loss of €630 million (£531 million), as the Spanish business struggles to recover from the impact of the Eurozone crisis and increased competition from rival firms.

Despite the first quarter losses from the impact of the Iberia acquisition, IAG have announced total passenger revenue increases of 3.9 percent.

Chief executive Willie Walsh admitted that there was: “more work to be done".

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BT have posted greater than expected end of year profits, ending 31st March, with a yearly profit of £2.5 billion.

Despite a fall in sales in the fourth quarter and the expectations of a slowdown in profit from the impact of an on-going improvement programme and pension deficit, BT has been able to offer shareholders a full year share dividend increase of 14 percent.

In 2013 BT has moved forward with its superfast broadband distribution programme, successfully winning the majority of broadband contracts as part of the broadband Delivery UK (BDUK) procurement processes.

The telecoms giant has also moved to competitively compete against Sky, including the offering of new television premiership football packages.

Ian Livingston, BT chief executive, said: "we are investing in our future and delivering growth in profits and dividends.”

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Sainsbury’s has moved to outsource all retail functions of Sainsbury’s Bank, as it takes full ownership of the businesses, in a £248 million buyout of Lloyds bank’s 50 percent stake.

The outsourcing program will see Sainsbury’s transfer all retail services to FIS Global in a £90 million migration scheme over a 42 month period.

FIS Global will be involved in delivering back office processes, credit card systems, mobile banking including internet, telephone and call centre services.

In a statement, Sainsbury’s said: "Call centre services will be provided in-house by the bank and banking platforms will be delivered by FIS. FIS has a proven track record in successfully delivering similar types of outsourced services. All parties have been working together for a number of months to agree a detailed transition plan."

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UK based Civica, who specialise in BPO software focused on the public sector, have been acquired by Canadian based OMERS Private Equity.

OMERS have purchased the controlling stake in the business for £380 million, with Civica management continuing to retain shares in the company.

The acquisition comes as Civica enjoys growth from UK government business, increased by the pressure to reduce department budgets, with Civica seeing an 11 percent increase in revenues in 2012.

Civica currently provides services to a majority of UK local authorities and services including the NHS, education facilities and the UK police forces.

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Mark & Spencer’s have acknowledged that it had ‘under-invested’ in ecommerce services, with the UK retailer falling behind rivals in the online marketplace.

M&S have now moved to expand online platforms, including the construction of a new 900,000 square foot facility to process ecommerce orders, able to handle one million transactions a day.

The new facility will also help to increase the distribution time of goods, decreasing the time it takes to move goods between ports and stores by 70 percent.

M&S currently sells 15 percent of its cloths and home ware items through online platforms, rivals such a Next sell close to 35 percent of stock through web based services. Factors such as the average age range of customers are also likely to have accounted for the difference.

M&S are now in the process of developing their independent website, moving away from their current Amazon based offering, which has acted as a barrier to foreign markets.

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G4S shares have fallen by 11 percent after the outsourcing giant revealed that overall profit margins would be lower than expected in 2013.

G4S brought its trading forecast forward, to reveal that margins would be 0.6 percent down by the end of March, with the likelihood that margins would stay at a low level throughout the rest of the year.

The impact of the Eurozone crisis has reduced profit margins from business, as well as reducing the available work, as public sectors cut back on outsourced contracts alongside public services.

G4S said that turbulent conditions in Europe, along with client non-payment and public service contraction had resulted in poor performance and negative expectations for the year.

The security giant has also seen performance impacted by the lasting effects of the public failure of the Olympic games, with G4S having to pay £88 million in compensation for failing to deliver enough staff.

A statement from G4S detailed: "For all of these reasons, and despite ongoing business improvement plans, the first quarter margin trends are expected to continue for the full year”.

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