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Lastminute Owner Eyes Sale Of UK Dotcom Icon

Written By iwan Jundaedi on Senin, 18 Agustus 2014 | 11.46

By Mark Kleinman, City Editor

Lastminute.com, one of the icons of the original dotcom boom, is being put up for sale nearly a decade after its takeover by an American technology giant.

Sky News has learnt that Sabre Holdings, which is listed in New York, is exploring plans to offload Lastminute.

Sabre has appointed bankers at Houlihan Lokey, an advisory firm, to oversee an auction, and has already begun sounding out potential buyers.

A sale of Lastminute could still be aborted if the terms of a deal are not sufficiently attractive to Sabre, but sources said on Saturday that the US company was prepared to accept a substantial loss on the roughly £600m it paid in 2005.

Prospective buyers could include private equity firms or rival online travel groups such as Expedia.

Sabre has itself listed on the public markets, floating on Nasdaq in April with a valuation of nearly $4bn.

It has four main divisions, with Lastminute operating as a subsidiary of Travelocity, Sabre's group of travel e-commerce businesses.

Lastminute was one of the darlings of the early UK internet industry, floating in 2000 two years after being founded by Brent Hoberman and Martha - now Baroness - Lane Fox.

However, Lastminute's performance has been underwhelming, despite it continuing to spend substantial sums on marketing and advertising.

Its biggest market shares are in the UK and France but it has struggled to make an impact elsewhere in Europe.

Analysts say that Travelocity failed to integrate Lastminute effectively or to build the network of hotels or other partners to which it has access during a period when some rivals have expanded aggressively.

Mr Hoberman has also criticised Sabre's exploitation of the Lastminute brand, calling it "an under-utilized asset" last year.

A Sabre spokeswoman said in a statement: "We are always reviewing options to make our technology company as successful, relevant and innovative as possible.

"If we have news to share, we commit to doing so quickly and transparently."


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Wall Street Giants Swoop On Sub-Prime Lender

By Mark Kleinman, City Editor

Two giants of Wall Street are in advanced talks to acquire Kensington, one of the UK's biggest sub-prime mortgage lenders.

Sky News has learnt that divisions of Blackstone and TPG, the US-based private equity groups, are close to securing a takeover of Kensington, which is owned by the Anglo-South African financial services provider Investec.

The sale of Kensington has not yet been finalised and could yet fall apart, but insiders said a deal was likely to be announced this week.

If completed, it will involve the business being taken over by Blackstone's Tactical Opportunities unit and TPG's TSSP special situations and credit platform.

Blackstone Group Blackstone are thought to have seen off three other bidders

The two firms are understood to see significant opportunities to grow Kensington's business and are expected to make substantial amounts of capital available for it to do so.

They are said to have lined up a new management team to take the helm once the deal completes.

Investec's £283m takeover of Kensington in the summer of 2007 proved to be an ill-timed foray into the market for sub-prime mortgage lending, coming just as financial markets began to seize up.

Kensington was previously a publicly-listed company whose former chief executives include John Maltby, who is now leading an investment consortium which is buying a stake in 315 Royal Bank of Scotland branches.

Investec, which is the main sponsor of the England cricket team, signalled its intention to sell Kensington in February.

Blackstone and TPG are understood to have seen off competition from at least three other bidders for the business, one of which was said to be Lonestar, a specialist US property investor.

"With the ongoing recovery in mortgage lending and wholesale funding markets we believe that Kensington is now well placed to continue growing and that this growth potential may be better realised under different ownership," Stephen Koseff, chief executive of Investec, said at the start of the auction process.

Analysts say the bank should recoup the majority of its initial outlay, with Kensington's recent performance aided by the strength of the UK housing market.

The auction of Kensington, which is being handled by Fenchurch Advisory, comes amid increasing signs of an overheating housing market in London and the south-east.

Some of the UK's biggest banks have imposed fresh limits on mortgage lending in the capital in recent months.

Blackstone, TPG and Investec declined to comment.


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UK Growth Hits Fastest Annual Pace Since 2007

Written By iwan Jundaedi on Minggu, 17 Agustus 2014 | 11.46

The annual rate of UK economic growth has been revised upwards to 3.2% - its fastest pace since the end of 2007.

The announcement was made by the Office for National Statistics (ONS) as it confirmed GDP growth of 0.8% in the second quarter of the year.

While that figure represented no change on its original estimate, the ONS said it had measured a stronger performance in the construction sector than previously calculated in its wider revisions.

It confirmed that the service sector - which makes up more than 75% of GDP - remained the main driver of Britain's economy between April and June, expanding by 1%.

Much of this has been attributed to consumer spending despite huge pressure on budgets because of weak wage growth - a situation that had been tipped to ease during 2014 but has worsened again in recent months.

The ONS confirmed on Wednesday that wages shrank at an annual rate of 0.2% in the second quarter while the main measure of inflation rose to 1.9%, meaning the gap between wages and price rises was widening further.

The Bank of England has now made the weak pay issue a core factor in its discussions over the timing of an interest rate rise.

The UK's resilient GDP growth is in sharp contrast to economic fortunes in the euro area.

It was confirmed on Thursday that Germany's GDP was in decline and French growth was stagnating.

Chief UK economist at Citigroup, Michael Saunders, told Sky News he was not overly concerned that the woes being experienced by the country's biggest trading partners would damage the UK's recovery.

He said the suro had been "in economic terms, something of a zombie for a number of years now" and backed calls from France for the European Central Bank (ECB) to provide stimulus.

"The ECB will eventually get around to QE (quantitative easing) - five years too late - I think they're going to do it in the next couple of quarters and that will give some boost but it really is a sad story of multiple policy failures in the euro area," he said.

"Even if it gets a bit better I don't think it will get a lot better in the euro area."


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Lastminute Owner Eyes Sale Of UK Dotcom Icon

By Mark Kleinman, City Editor

Lastminute.com, one of the icons of the original dotcom boom, is being put up for sale nearly a decade after its takeover by an American technology giant.

Sky News has learnt that Sabre Holdings, which is listed in New York, is exploring plans to offload Lastminute.

Sabre has appointed bankers at Houlihan Lokey, an advisory firm, to oversee an auction, and has already begun sounding out potential buyers.

A sale of Lastminute could still be aborted if the terms of a deal are not sufficiently attractive to Sabre, but sources said on Saturday that the US company was prepared to accept a substantial loss on the roughly £600m it paid in 2005.

Prospective buyers could include private equity firms or rival online travel groups such as Expedia.

Sabre has itself listed on the public markets, floating on Nasdaq in April with a valuation of nearly $4bn.

It has four main divisions, with Lastminute operating as a subsidiary of Travelocity, Sabre's group of travel e-commerce businesses.

Lastminute was one of the darlings of the early UK internet industry, floating in 2000 two years after being founded by Brent Hoberman and Martha - now Baroness - Lane Fox.

However, Lastminute's performance has been underwhelming, despite it continuing to spend substantial sums on marketing and advertising.

Its biggest market shares are in the UK and France but it has struggled to make an impact elsewhere in Europe.

Analysts say that Travelocity failed to integrate Lastminute effectively or to build the network of hotels or other partners to which it has access during a period when some rivals have expanded aggressively.

Mr Hoberman has also criticised Sabre's exploitation of the Lastminute brand, calling it "an under-utilized asset" last year.

A Sabre spokeswoman said in a statement: "We are always reviewing options to make our technology company as successful, relevant and innovative as possible.

"If we have news to share, we commit to doing so quickly and transparently."


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New Rules To Boost Home-Based Businesses

Written By iwan Jundaedi on Sabtu, 16 Agustus 2014 | 11.46

Entrepreneurs will have more freedom to begin a business from home under new measures to be announced by the Government.

They include legislation which will make it simpler to run a company from a rented property and new guidance on business rates.

There will also be updates to planning guidance to make it clear that planning permission will not normally be required to run a home-based business.

Business minister Matthew Hancock said: "It's this spirit of personal endeavour and self-determination that is driving our economic recovery.

"But home businesses don't just fire up the economic engines and create jobs, they turn dormitory towns into living communities, they keep our streets safer, and by driving down car emissions, cleaner too.

"We'll give people the confidence they need to run a business from a rented home, making sure that the majority of home businesses are exempt from business rates and our aspiring entrepreneurs have the information they need to start up and grow."

Under the measures a new model tenancy agreement will be made available to landlords.

The law will also be changed so landlords can be confident that agreeing to a business within their property will not undermine their tenancy agreement.

Liz Peace, chief executive of the British Property Federation, said it firmly supported the removal of "unnecessary barriers" to setting up at home.

"At least some of the kitchen table businesses of today will expand and become the commercial property space-seekers of tomorrow," she said.

"We therefore have an interest in ensuring that the law and our sector is adapting to modern business practice and supporting UK entrepreneurs at every stage of their business development."


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UK Growth Hits Fastest Annual Pace Since 2007

The annual rate of UK economic growth has been revised upwards to 3.2% - its fastest pace since the end of 2007.

The announcement was made by the Office for National Statistics (ONS) as it confirmed GDP growth of 0.8% in the second quarter of the year.

While that figure represented no change on its original estimate, the ONS said it had measured a stronger performance in the construction sector than previously calculated in its wider revisions.

It confirmed that the service sector - which makes up more than 75% of GDP - remained the main driver of Britain's economy between April and June, expanding by 1%.

Much of this has been attributed to consumer spending despite huge pressure on budgets because of weak wage growth - a situation that had been tipped to ease during 2014 but has worsened again in recent months.

The ONS confirmed on Wednesday that wages shrank at an annual rate of 0.2% in the second quarter while the main measure of inflation rose to 1.9%, meaning the gap between wages and price rises was widening further.

The Bank of England has now made the weak pay issue a core factor in its discussions over the timing of an interest rate rise.

The UK's resilient GDP growth is in sharp contrast to economic fortunes in the euro area.

It was confirmed on Thursday that Germany's GDP was in decline and French growth was stagnating.

Chief UK economist at Citigroup, Michael Saunders, told Sky News he was not overly concerned that the woes being experienced by the country's biggest trading partners would damage the UK's recovery.

He said the suro had been "in economic terms, something of a zombie for a number of years now" and backed calls from France for the European Central Bank (ECB) to provide stimulus.

"The ECB will eventually get around to QE (quantitative easing) - five years too late - I think they're going to do it in the next couple of quarters and that will give some boost but it really is a sad story of multiple policy failures in the euro area," he said.

"Even if it gets a bit better I don't think it will get a lot better in the euro area."


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Npower's Profit Plummets By Almost 40%

Written By iwan Jundaedi on Jumat, 15 Agustus 2014 | 11.46

Npower has become the latest of the so-called big six energy suppliers to announce a double-digit drop in profits.

The company reported a pre-tax profit of £109m for the first half of the year, dropping 38% from £176m for the same period in 2013.

Npower said it represented a profit of just £14 per customer account in the six months to June and the fall was due to its investment in energy efficiency and increased costs in improving customer service levels.

It comes after consumer group Which? revealed that Npower received the most amount of complaints of the 'Big Six' in the first quarter of the year with 83 complaints per 1,000 customers during the period.

Npower was deluged with complaints relating to a new billing system - a situation it has repeatedly said it is putting right.

Last month the energy Ombudsman said complaints about energy companies had soared to their highest ever level in the first half of the year.

On releasing its financial results Npower said: "Since the end of last year the company has substantially cut the number of customers who are billed late, and is now billing 96% of its customers on time.

"Total number of complaints received by Npower in Q2 2014 has been reduced by over 18% compared to Q1."

As well as increased spending on customer services, Npower said investments around the Energy Companies Obligation (ECO) strategy, had also cost the company.

The ECO was introduced by the Government last year to reduce the UK's energy consumption.

Npower said it had spent millions of pounds installing energy efficiency measures in homes across Britain and saw higher costs in the first half of 2014 compared to the same period in 2013.

It said it has invested a total of £324m into Britain so far this year, predominantly into renewable energy projects.

Npower is not alone in reporting falls in first half profits.

On Wednesday, E.ON UK announced its pre-tax profit for the period fell by 31%, while Owner of British Gas, Centrica, last month revealed it saw a 26% decrease in its profit.


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New Rules To Boost Home-Based Businesses

Entrepreneurs will have more freedom to begin a business from home under new measures to be announced by the Government.

The measures include legislation which will make it simpler to run a company from a rented property and new guidance on business rates.

There will also be updates to planning guidance to make it clear that planning permission will not normally be required to run a home-based business.

Business minister Matthew Hancock said: "It's this spirit of personal endeavour and self-determination that is driving our economic recovery.

"But home businesses don't just fire up the economic engines and create jobs, they turn dormitory towns into living communities, they keep our streets safer, and by driving down car emissions, cleaner too.

"We'll give people the confidence they need to run a business from a rented home, making sure that the majority of home businesses are exempt from business rates and our aspiring entrepreneurs have the information they need to start up and grow."

Under the measures a new model tenancy agreement will be made available to landlords.

The law will also be changed so landlords can be confident that agreeing to a business within their property will not undermine their tenancy agreement.

Liz Peace, chief executive of the British Property Federation, said it firmly supported the removal of "unnecessary barriers" to setting up at home.

"At least some of the kitchen table businesses of today will expand and become the commercial property space-seekers of tomorrow," she said.

"We therefore have an interest in ensuring that the law and our sector is adapting to modern business practice and supporting UK entrepreneurs at every stage of their business development."


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Bank Gives Latest Signal On Rate Rise Timing

Written By iwan Jundaedi on Kamis, 14 Agustus 2014 | 11.46

The governor of the Bank of England has said that weak wage growth will be more closely watched in relation to the timing of interest rate rises.

At a news conference to outline the Bank's quarterly Inflation Report, Mark Carney insisted that rises in bank rate - when they began - would be limited and gradual and he believed the financial markets broadly shared that timetable.

Economists and markets are expecting the first increase - from its historic low of 0.5% - either late this year or in early 2015.

A key factor in the decision-making timetable will be the public's ability to absorb interest rate rises, given current weak wage growth

Just an hour after it was confirmed that pay including bonuses slipped 0.2% in the second quarter compared to a year ago, the Bank announced it had slashed its forecast for wage growth in 2014 from 2.5% to a below-inflation 1.25%.

The Report signalled that the Monetary Policy Committee (MPC), which sets bank rate, would place an increasing emphasis on the weak pay data in deciding when to raise interest rates.

Mr Carney refused to go further, insisting there would not be a "magic number" for wage growth that would prompt a hike.

The Bank's predictions for the wider economy were better, with UK growth figures upgraded from 3.4% to 3.5% for 2014 and unemployment was expected to drop more quickly, falling below a rate of 6% this year.

One factor supporting those who would argue for an earlier rate rise was a quicker-than-expected narrowing in the key measure of wasteful spare capacity - or slack - in the economy.

Mr Carney said it had fallen to around 1% of GDP, despite the fall in real wages, due to strong employment numbers.

He told reporters: "In light of the heightened uncertainty about the current degree of slack, the committee will be placing particular importance on the prospective paths for wages and unit labour costs."

Sterling fell more than 1.5% against the dollar in the wake of the governor's comments.


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Wages Fall For First Time In Five Years

British workers earned less between April and June than they did in the same period last year, deepening the cost of living squeeze.

The Office for National Statistics (ONS) charted average weekly earnings, including bonuses, fell by a yearly 0.2% over the three months.

The change marks the first time wage growth has been negative since the recession of 2009.

When the effects of bonus payments were stripped out, pay rises remained weak and still well below the 1.9% rate of CPI inflation.

It showed growth at an annual rate of just 0.6% between April and June - the lowest growth in regular pay since records began in 2001.

Commenting on the negative earnings figure, the ONS said it continued to reflect a cut in income tax in April 2013, which prompted many firms to delay bonus payments.

In its quarterly inflation report, the Bank of England halved its forecast for wage growth in 2014, from 2.5% to a below-inflation 1.25%.

The Bank has in the past cited weak wage growth as a reason for keeping interest rates at their historic low of 0.5%.

Secretary of State for Work and Pensions Iain Duncan Smith, speaking to Sky News, blamed the fall in wage growth on bonuses in the financial sector and pointed to wage rises of over 1% in sectors such as manufacturing and retail.

Adam Corlett, economic analyst at the Resolution Foundation, said that unless there is an unprecedented surge in wages over the next six months it will be "almost impossible for average real pay in 2014 as a whole to exceed last year's".

The ONS also published data on the unemployment rate over the same period. It fell as expected to 6.4%, down from 6.5% a year earlier.

Between April and June, there were 30.6 million people in work, 167,000 more than for January to March and 820,000 more than a year earlier.

There were 2.08 million unemployed people, 132,000 fewer than for January to March 2014 and 437,000 fewer than a year earlier.

Mr Duncan Smith welcomed the fall in unemployment and told Sky News the youth unemployment rate had fallen at its fastest rate for 30 years.

Shadow Employment Minister Stephen Timms instead said: "While today's fall in overall unemployment is welcome, it's extremely worrying that the figures have shown pay falling far behind inflation, and the change in regular pay being the lowest ever on record".

In a separate report, the ONS also said that there were 153,000 Romanians and Bulgarians employed in the UK between April and June, an increase of 13,000 from 140,000 in the previous three months.


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