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Zoom sales have more than doubled. Business, Media & Marketing News London.

   News / 02 Jun 2021

Published: 02 June 2021

By Suzanne Evans, Director, Political Insight

Eurozone inflation rose sharply last month to 2% - just above the European Central Bank's target – fuelled by a very strong rise in energy prices. Inflation is now at its highest level since October 2018. The increase is bound to fuel concern about whether inflation could become a serious problem as economies recover from the pandemic-driven downturn. In the US, the Federal Reserve reported inflation of 3.6% last month, nearly double its 2% target. Inflation in the UK is still below the Bank of England 2% target, at 1.5%.
UK manufacturing activity continued its upward trajectory in May. IHS Markit's purchasing managers' index (PMI) scored 65.6 in May — a record high in the near-three decades the UK index has been published. The PMI has signalled improvement in each of the past 12 months. A score over 50 indicates growth.
The British Retail Consortium is warning that shopping bills are likely to rise in the autumn because of increased costs associated with global supply disruption and Brexit red tape. Global food prices have already hit their highest for seven years; shipping costs have risen threefold since 2019; and commodity prices are climbing. "Retailers may be forced to pass on some costs onto their customers," said BRC chief Helen Dickinson. "We will likely see the costs filter through in the second half of this year."
Guarantor lender Amigo Holdings is facing bankruptcy after the High Court rejected a rescue plan to see its compensation payments for mis-selling capped, despite the plan having the approval of a clear majority of creditors. The Financial Conduct Authority opposed the scheme, arguing it was unfair and "placed a disproportionate burden on customers, as opposed to shareholders and bondholders, to keep the company afloat". Amigo chief executive Gary Jennison said: "Without a scheme, Amigo faces insolvency as it will be unable to satisfy its customer compensation claims as well as meeting the legally binding funding obligations owed to its secured creditors.”  The company, which was charging a representative APR of around 50%, has confirmed it will not appeal the judgment. Amigo said compensation payments remain on hold and that its full-year results will be delayed.
British Gas owner Centrica has agreed to sell its Peterborough site to Whitetower Holdings UK Limited, an affiliate of Rockland Capital, for £20m. The site comprises freehold land, the 245MW Peterborough open cycle gas turbine and the 49MW reciprocating gas engine. The deal is expected to complete before the end of September. "The sale is consistent with Centrica's strategy to become a simpler, leaner group focused on delivering for its customers and its target to be net zero by 2045," the company said in a statement.
Jammie Dodgers and Wagon Wheels are set to get a new owner. A Ferrero-related company, CTH, announced yesterday that it will buy Burton's Biscuit Company from current owner the Ontario Teachers' Pension Plan Board. The purchase increases CTH’s reach in the biscuit market - the firm has already purchased Biscuits Delacre, Kelsen Group and Fox's. Burton's employs around 2,000 people across six factories in the UK and generated sales of over £275m during the preceding 12 months.
The newly-merged Virgin Media O2 has hinted it could support BT’s ultrafast broadband rollout plans to upgrade another 5 million homes and businesses by 2026, igniting competition concerns. Vodafone has already begun the process of linking up with BT infrastructure provider Openreach to hit the new target. The £31bn merger between cable network Virgin and mobile operator O2 creates a telecoms giant with £11bn in revenue and 47m customers. Jointly owned by Telefonica and Liberty Global, the company plans to invest £10bn over the next five years to support the Government's drive to roll out superfast broadband to 85pc of the UK by 2025.
Vodafone's Italian unit has secured conditional approval from Rome to use equipment made by China's Huawei in its 5G radio access network, according to Reuters, which says it has had confirmation of the deal from two anonymous insiders. Italy has adopted a tougher stance on Huawei within the past year but has not banned it entirely from 5G infrastructure, and one of the two sources says the deal was authorised by Prime Minister Mario Draghi on May 20. However, the Italian government also imposed a set of prescriptions including restrictions on remote intervention by Huawei to fix technical glitches and an extremely high security threshold. Vodafone and Huawei declined to comment.
BP has bought a pipeline of US solar farms from US solar developer 7X Energy, capable of powering more than 1.7m homes, for more than $220m (£155m) as part of its long-term plans to distance itself from the fossil fuel industry, The Guardian reports. The projects will be developed in 12 US states by Lightsource BP, the British solar startup which formed a 50:50 joint venture with BP in 2017. The deal means Lightsource now has projects in Greece, Portugal, and the US.  
The US Supreme Court refused yesterday to hear an appeal launched by Johnson & Johnson to overturn a $2.12bn damages award to women who blamed their ovarian cancer on asbestos in the company's baby powder and other talc products. This leaves in place a Missouri state court ruling in litigation brought by 22 women whose claims were heard together in one trial. J&J will now have to make a payment of $2.5 billion this month including accrued interest. The pharma giant faces more than 19,000 similar claims. "The matters that were before the court are related to legal procedure, and not safety. Decades of independent scientific evaluations confirm Johnson's Baby Powder is safe, does not contain asbestos, and does not cause cancer," the company said, adding that unresolved legal issues will continue to be litigated.
Zoom sales have more than doubled after a "very strong" start to the year, despite employees return to the office. Profits reached $956m in the three months to 30 April, up from $328m the same period a year earlier, and up from only $27m in the first quarter of 2020. Annual revenues are now set to reach up to $3.99bn, up from its previous estimate of up to $3.76bn.
Australia's economy has recovered from lockdown-imposed recession and grown larger than it was before the pandemic. Official figures show GDP rose by 1.8% in the first quarter, spurred by rising household spending, investment by businesses, and higher prices of iron ore and gas exports, according to the Australian Bureau of Statistics.

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