Newsroom

Newsroom

We regularly use recent news stories and case studies in our training programmes. Here are some news items which caught our eye recently. Please check out our business simulations or business and finance training, or contact us for more information.

Worried outlook from the construction sector

The latest figures from the construction market, usually an early and reliable indicator of events in the rest of the economy, are pessimistic.

The Markit/CIPS construction purchasing managers' index fell to 46.0 in June, its lowest level since June 2009. It had been 51.2 in May. This reflected sentiment in the sector before the referendum, suggesting the next figure will be even worse.

The index, at 46, is in negative territory, whilst most analysts had expected a slight positive. They stalled a brief recovery on the stock market and sent housebuilders' shares, which had been recovering strongly, into sharp reverse again. The pound fell on the assumption that the stats will put even more pressure on Mark Carney, governor of the Bank of England, to cut rates. 4th July 2016

Marks and Spencer profits drop

Steve Rowe, the newly appointed chief executive of Marks & Spencer, steps into the City limelight today announcing full-year results two months after being promoted to the top job.

Retailer Marks and Spencer have reported profits of £488 million for the year, an 18 per cent fall on last year, and well below the £1 billion M&S made in 2008 when Steve Rowe joined the executive board. Sales are up 2.4 per cent on last year at £10.6 billion.

"Our results last year were mixed. We continued to outperform on food but we underperformed on clothing & home sales," says Mr Rowe. "M&S is a great business with a strong customer base and loyal employees and we have much to be proud of. We also know that we have lots of opportunities to improve and be better for our customers, our employees and our shareholders. We are putting customers right at the heart of our business."

Mr Rowe has also set out the first phase of a strategic plan, with a switch away from fashion-led trends to "wearable, contemporary style" promised. Mr Rowe is also pledging to "restore our price position". 25th May 2016

Ryanair cuts fares

Budget airline Ryanair has cut fares in an attempt to gain market share. It reported a 43% rise in profits today, but accompanied this with a warning that such growth will not continue, as European airlines are focusing on retaining market share via lower prices rather than increasing profits. Ryanair's fares ere expected to be about 7% lower this coming year. 23rd May 2016

AccorHotels fights back

AccorHotels is aiming to counter the threat of Airbnb by acquiring Onefinestay, an upmarket home rental website based in London, for €148 million. The French hotel group said it would invest a further €64 million to expand Onefinestay, which has 2,600 properties in London, New York, Paris, Los Angeles and Rome, to a further 40 cities over the next five years.

The company would continue to be run as an independent business unit by Greg Marsh, its chief executive and one of its co-founders.

Accor is acquiring the business from shareholders including Hyatt Hotels Corporation as well as venture capital firms, such as Intel Capital, Quadrant Capital Advisors, Canaan Partners and Index Ventures.

Onefinestay, a start-up in 2010, raised $40 million at the end of 2014, when Hyatt became an investor. It provides a personal welcome on arrival and a 24-hour on-call service. For homeowners it handles marketing, distribution and insurance, guest screening, cleaning and maintenance.

Sébastien Bazin, chairman and chief executive of Accor, which has about 3,900 hotels, said: “Onefinestay has successfully captured a sweet spot: a combination of needs that neither traditional hotels nor new actors of the sharing economy can meet.”

Under Mr Bazin, Accor has hit back at the new rivals. Last year he took on online travel agents by announcing that Accor would sell rooms for independent hotels. In February he took stakes in two Airbnb-type operations — Oasis Collections, based in Miami, and Squarebreak, a French start-up. 6th April 2016

Lufthansa benefits from lower fuel costs

German airline group Lufthansa has reported a 55% rise in underlying earnings to €1.8bn (£1.4bn), helped by lower fuel costs. This comes despite a series of strikes by pilots and cabin crew over changes to working conditions,

Lufthansa said it would resume dividend payments to shareholders and forecast higher profits for 2016, but warned that competition would continue to put pressure on ticket prices. Lufthansa resumed dividend payments of €0.50 per share for 2015 after halting them in 2014.

Lufthansa chief executive Carsten Spohr said that 2015 had been an "emotionally challenging year" following the Germanwings air crash, which killed 144 passengers and six crew members. Mr Spohr said lower fuel costs and efforts to reduce costs and the number of empty seats on flights had paid off. The airline is restructuring to compete with low-cost airlines across Europe and what it calls "government-subsidised" Gulf airlines. "The result also confirms that our focus on quality in both the premium and the point-to-point segment is the right approach” he added.

The airline group's net profit rose to €1.7bn from €55m a year earlier, while revenues were 6.8% higher at €32.1bn.

17th March 2016


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