Published: 29 April 2021
By Suzanne Evans, Director, Political Insight
Less than 48 hours after a trial against two of Serco’s former directors collapsed at Southwark Crown Court, evidence published by the Serious Fraud Office (SFO) shows Serco staff were defrauding the taxpayer by fabricating invoices worth £500,000 a month to “soak up” excess profits made from the offender tagging contract at the centre of the court case. Excess profits should have been returned to the Ministry of Justice under a “value for money” clause, but instead false charges amounting to almost £15m between August 2011 and January 2013 avoided triggering the clause and kept the money within the Serco group. A Statement of Facts originally lodged with the Crown Court in 2019 by the SFO, but restricted from publication until now, revealed that Serco was making excess profits from an early point in the contract. The Telegraph reports that Serco agreed to a deferred prosecution agreement two years ago after paying a £19.2m fine and SFO costs of £3.7m.
Bloomberg reports that BT Group Plc is in talks to sell a stake in its sports-broadcast division, BT Sport, possibly to a U.S.-based media or tech giant, according to anonymous sources within the company. They say Lazard Ltd. is advising on the process. BT pushed into sports broadcasting in 2013, launching an expensive surprise attack against the UK’s best-known sports broadcaster, Sky, by bidding for Premier League soccer rights. The move continues to divide opinion. BT declined to comment on the rumours.
Reuters reports WH Smith Plc’s announcement yesterday that it risks breaching its covenant tests next year after it slumped to a first-half loss. "If this situation prevailed, the group would engage its lending banks in advance of this date to secure a further covenant amendment," the firm said. However, the newsagent also announced it had secured £325 million in convertible bonds, as well as a £250 million credit facility to finance the opening of 100 new travel stores and potentially invest in up to 300 new stores in hospitals. The company's network of airport, train station and workplace kiosks has been hit hard by lockdowns: the health crisis forced the 200-year-old company, founded as a news vendor in London, to announce up to 1,500 job cuts last year.
Sainsbury's has slumped to a £261m end-year loss, despite like-for-like sales rising 8.1%. The supermarket blames a spend of £485m on Covid costs "to help keep our colleagues and customers safe," costs which include paying colleagues that were required to shield or needed to self-isolate. The supermarket also paid back business rates relief on its stores in line with rivals.
Nestlé is to close its factory in Fawdon, Newcastle, towards the end of 2023, with the loss of around 475 jobs. The Swiss firm will also make a further 98 job cuts in York, as it moves some production to Europe. The company employs around 8,000 people in the UK.
After touting its "very strong online growth" which saw online revenue more than double to over £4.5bn for the year, Dixons Carphone has decided to pay back the government all the money it borrowed for its furlough scheme. However, it will also shut down its airport stores. Dixon’s Shares plunged 5% on the news.
Shares in Lloyds Bank surged to a one-year high yesterday after the it beat forecasts for quarterly performance thanks to a UK mortgage boom. Lloyds reported a pre-tax profit of £1.9bn on net income of £3.7bn in the first three months of 2021.
Boeing posted a sixth consecutive quarterly loss yesterday, but stated it still expects to turn a profit in 2021. The aircraft manufacturer had a net loss of $561m for the first three months of 2021, partly due to a $318.0m pre-tax charge related to issues with an Air Force One supplier. The company has struggled as a result of the Covid-19 pandemic's impact on travel and jetliner demand, as well as the extended grounding of its best-selling 737 Max aircraft following two fatal crashes that killed 346 people. However demand for new planes had ticked higher early on in 2021 amid a rebound in travel, Boeing said, and reiterated its guidance to increase production of its 737 Max plane to 31 a month in early 2022.
Uswitch, a comparison website for home services switching, surveyed 2,009 UK energy bill-payers in April and found that 45% of households – some 13 million - are due a refund from their energy provider. Uswitch said the average amount households were in credit was £142.33, bringing total money owed by suppliers to about £1.8bn. The survey comes as energy regulator Ofgem is pushing for reforms to stop utility companies and suppliers using customers' credit balances to "fund unsustainable business practices" by initiating an “auto-refund" policy requiring suppliers to refund credit balances to customers paying fixed direct debit annually on their contract start date.
There are 92 areas of Britain where house prices have climbed by more than the average net annual salary in the last year, Yahoo Finance UK reports. Estate agent comparison website GetAgent analysed Land Registry data and found that Bath and North East Somerset had the highest-earning bricks and mortar, with house prices up £61,931 year-on-year, which equates to 2.6 times the average annual net earnings of those living in the area, which is about £23,784. Overall in the country, where the average net annual income is about £25,246, the average property has made the equivalent of 80% of the average salary, says GetAgent.
Elon Musk has done it again: He tweeted "The Dogefather" to his 52 million followers on Twitter ahead of his appearance on US comedy show SNL yesterday, and the price of cryptocurrency Dogecoin surged as much as 20%, rising from $0.26 to $0.32 and pushing it back to the record highs it enjoyed two weeks ago. The cryptocurrency, which first started up as a joke in 2013, now has a market cap of more than $50bn (£36bn), higher than Barclays bank.
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