The Financial Reporting Council (FRC) announced on Monday that it has concluded its investigation into Tesco’s accounts, after investigating three years worth of auditing by accounting firm PwC.
The investigations have been ongoing for two and a half years, after the grocery giant overstated its profits by £326 million in 2014. The FRC, an independent disciplinary body for accountants and actuaries, had been looking into PwC’s auditing for the years 2012, 2013 and 2014.
However, on Monday it concluded there was “not a realistic prospect” that PwC would be found guilty of misconduct.
In a statement on the matter, PwC said it had “co-operated fully during the FRC’s thorough investigation and are pleased that the FRC has closed it without any further action.”
The investigation stems from Tesco overstating profits by £326 million in 2014, after it incorrectly booked payments from its suppliers. In March this year Tesco was fined £129 million.
Shares in Tesco (LON:TSCO) rose on the news, currently trading up 0.44 percent at 183.35 (1203GMT).
Business activity for the Eurozone remained strong in May, despite a mounting backdrop of economic insecurity.
According to the latest figures from IHS Markit, the purchasing managers’ index figure (PMI) for the 19-country bloc was 56.8 in May, unchanged from April. Anything above 50 marks expansion.
Chris Williamson, chief economist at IHS Markit, said:
“The outlook for the eurozone economy seems to be tilting to the upside, and it seems likely that we’ll start to see many forecasters’ expectations for 2017 growth revised higher.”
IHS is forecasting GDP growth of 0.7% for the eurozone in the second quarter, higher than previous forecasts of 0.5%.
FTSE 100 slips
However, the PMI figure for the UK’s services sector slipped in April, falling to 54.5 in May after a figure of 55.9 in April caused by uncertainty over the General Election. The FTSE 100 slipped on the disappointing data, which undershot second-quarter growth expectations.
Employees at the Bank of England begun voting on whether to take industrial action on Thursday, after a pays increases were seen as “derisory” by the Unite union.
The Unite union has called the bank “arrogant” and “out of touch” after offering staff a below-inflation pay increase of around 1 percent.
Unite regional officer Mercedes Sanchez said: “The bank’s disgraceful snub of low-paid staff stinks of arrogance and represents an organisation thoroughly out of touch with the reality of the pressure staff face meeting their costs of living.
“It is a source of shame that an iconic symbol of financial services in the UK is choosing to ride roughshod over the concerns of its dedicated and hardworking staff and impose this derisory pay deal.”
The Bank of England’s 3,600 staff will vote today on whether to support the action, and the Bank of England has declined to comment.
PPG Industries has confirmed that it will not will not make a formal bid for Dulux owner Akzo Nobel (AMS:AKZA), after weeks of takeover speculation.
In a statement on Thursday, the US paint maker said too many informal bids had been rejected by Akzo and that it would not be making another. Originally PPG has proposed a takeover deal worth around 26 billion euros.
At the beginning of May, Akzo’s board decided that PPG’s informal offer of $29 billion was insufficient and that the third bid did not value the company highly enough. Under Dutch takeover law, PPG cannot now approach Akzo for six months.
Akzo shares are currently trading down 1.15 percent at 73.6 (1136GMT).
The world’s largest meatpacking company has agreed to pay a record fine for their role in a corruption scandal in Brazil, after the owners gave testimony against the Brazilian President under a plea bargain.
The fine will be paid by the controlling shareholder of JBS, J&F Investimentos, to the tune of 10.3 billion real. J&F Investimentos agreed to pay the sum after investigation in two corruption scandals.
The scandals may well topped the presidency of Michel Temer, after J&F’s owners, Joesley and Wesley Batista, gave evidence under a plea bargain. Though the pair have since resigned, they admitted to spending 600m real to bribe around 1,900 politicians.
The payments will be effective as of December and J&F will have 25 years to make them.
The fine is shocking in its size, bigger than the recent $2.6 billion fine agreed by Brazil’s engineering giant Odebrecht after a scandal involving Brazilian oil giant Petrobras.
Just over a year after their last crowdfunding campaign, London-based craft brewers Redchurch Brewery are taking to Crowdcube again to fund further expansion plans.
The business started from its humble roots in an archway in Bethnal Green just six years ago, the brainchild of current Managing Director Gary Ward. Working full-time commercial solicitor, Ward started brewing craft beer on the side – before taking the plunge and making Redchurch Brewery his main focus.
Source: Redchurch
In those six years, Redchurch has come a long way. Back in January of last year the brewery raised £500,000 in its first crowdfunding campaign, investing the money to expand to two arches and acquire a 30 barrel brew house in Harlow.
When Ward started the business, Redchurch was one of only five craft brewers in London – over the past couple of years however, consumers’ appetite for artisan beer has soared. Whilst current estimates put the number of active small-scale craft breweries in the UK at over 1000 and growing, potential investors can take heart; Redchurch always been ahead of the pack.
The now-renowned craft brewery sells beer nationally into Marks and Spencer, Waitrose, a range of bars and restaurants including Byron, as well as exporting beers around the world.
Redchurch’s beers are staying true to their roots, taking their names from famous location in east London such as ‘Brick Lane Lager’, ‘Hoxton Stout’ and ‘Bethnal Pale Ale’.
When Ward began the business, he worked alone carrying out all of the brewing, bottling, packaging and deliveries himself. Now, the business employs 12 full time and six part time staff to keep up with consumer demand.
Redchurch’s sales have grown substantially since 2012 when they posted £177k in sales. The brewery is projecting a jump to £1.7m revenue in 2016 after £710k in 2016.
Source: Redchurch Brewery
Now the business is looking to crowdfund again to take the business to the next level. Ward has plans to add further fermentation vessels, increasing production capacity to more than 1.3 million litres annually, improve the speed and efficiency of the packaging process and employing more brewers and delivery drivers.
Redchurch’s craft beer is tapping into an ever growing market which is already threatening more established brands. In 2015 over 532 million pints were produced by members of the Society for Independent Brewers, up 13% from 2013.
Redchurch Brewery’s crowdfunding campaign is currently live on Crowdcube, with the aim of raising £400,000. So far, investors have poured in over half the amount needed, with another two weeks to go.
You can see more details about Redchurch’s campaign on Crowdcube here.
Strategists at JP Morgan have today released a note to the media suggesting that a coalition led by Labour may actually cause the pound to rally.
This goes against conventional market thinking which has been pricing a ‘strong and stable’ conservative government as the best outcome for sterling.
JP Morgan FX Strategist, Paul Meggyesi said:
“The wake-up call for markets was a YouGov poll released on Thursday– this shows a halving in the Conservative lead to only 5pts compared to an average of polls at the start of the week.”
“A hung parliament would in more normal circumstances be viewed as quite negative for sterling – that was very much the experience of the 2015 election when sterling was braced for one of a myriad of potential coalition permutations only for sterling to jump by 3pc once David Cameron secured an improbable narrow majority.”
Meggyesi suggests that a coalition would remove the risk of a ‘Hard-Brexit’ or ‘no-deal’ with the EU being touted by Theresa May if she doesn’t get her way in negotiations.
“In the post-referendum world, all political developments need to be viewed through a Brexit prism and an argument can be made that a hung parliament which delivered or held out the prospect of a softer-Brexit coalition of the left-of-centre parties (Labour/Lib Dems/SNP) might actually be sterling positive.”
Shares in mining company Minco (LON:MIO) fell over 2 percent on Tuesday, after the company confirmed it had recorded no revenue for the three month period to the end of March 2017.
In a statement Minco said it had recorded a loss of $219,000 in the first quarter of 2017, compared to a loss of $426,000 for the same period ended March 31 2016.
The loss for the three-month period ended 31 March 2017 included a foreign exchange loss of $32,000 compared to a foreign exchange loss of $159,000 for the same period ended 31 March 2016.
Minco is a United Kingdom-based mineral exploration and development company focused on exploration in Canada, Ireland and the United Kingdom, and indirectly on base metal and silver projects in Mexico.
Shares in Minco are currently trading down 2.12 percent at 2.08 (0925GMT).
Budget airline Ryanair (LON:RYA) reported a record full year profit on Tuesday, despite expectations that it would be hit by the effects of terrorist attacks and the fallout from Brexit.
Full year net profits rose 6 percent to 1.316 billion euros, with fares cut by 13 percent and an ‘industry leading’ 94 percent load factor.
Ryanair’s CEO Michael O’Leary said:
“We are pleased to report a 6 percent increase in profit after tax to 1.316 billion euros, despite difficult trading conditions in 2017 caused by a series of security events at European cities, a switch of charter capacity from North Africa, Turkey and Egypt to mainland Europe, and a sharp decline in Sterling following the June 2016 Brexit vote. We reacted to these challenges by improving our customer experience, and stimulating growth with lower fares.”
However, looking forward O’Leary added:
“Investors should be wary of the risk of negative Brexit developments, or any repeat of last year’s security events at European cities, which could damage consumer confidence, close-in bookings and this FY18 guidance”.
Ryanair shares are currently trading down 1.22 percent at 17.79 (0907GMT).
The FTSE 100 hit a new record high in mid-morning trading on Friday, pushed up by a fall in the Pound.
The pound fell after the latest General Election poll found the Conservative Party’s lead over Labour had narrowed substantially, with less than two weeks to go before Britain votes.
Despite the Conservatives starting the campaign with a strong lead, the Labour Party has since increase its projected vote share by five points to 38 percent, with the Conservatives saw theirs drop to 43%, a fall of one point.
The pound is currently trading down 0.68 percent against the dollar at $1.28, and 1.15 against the euro.
Michael Hewson of CMC Markets commented:
“If you look at European markets, they’re lower by a considerable amount. The weaker pound is certainly not hindering the FTSE’s rise,” he says.
The FTSE is currently up 0.15 percent at 7528.62 (12013GMT).
