Business Breakfast RECAP: Newcastle housebuilder Bellway breaks earnings record as revenues rise 16%

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Newcastle pub the Unions Rooms set for big changes under new operators

Hotly-tipped Gateshead firm Flame Heating Group to double workforce

All-female judging panel selected for major North East business awards

Zapatista Burrito Bar is coming to Durham

An expanding Mexican street food chain is opening a new burrito bar in Durham, creating a host of new jobs.

Zapatista Burrito Bar is opening its third restaurant in the region following a deal sealed by Newcastle-based Naylors’ retail department.

The growing food firm has signed a
15-year lease on a new base at 87 Elvet Bridge, Durham, which will be the chain’s first site outside of Newcastle city centre.

The North East-owned business opened its first restaurant at Ridley Place in Newcastle in 2012 before going on to acquire a second base in Grainger Street four years ago.

The company currently employs 40 staff and is expecting to create around 15 new jobs as a result of its Durham opening.

The premises are currently undergoing major refurbishment to make way for a
modern takeaway and restaurant in keeping with the style of Zapatista’s existing sites in Newcastle.

The team behind the restaurant chain, which is investing more than £250,000 in its new
Durham site, has also suggested there may be more acquisitions to come.

A spokesman for Zapatista said: “Prior to securing these premises, we had been looking for the right site in Durham for a lengthy period of time.

“Elvet Bridge is exactly the type of building which is well suited to housing our brand, old with real character, which is in keeping with our other units in Newcastle.

“We have several other locations in mind that are of particular interest to us and we hope to make more announcements in the future regarding new openings.”

Glencore profits rise but shares fall amid anti-money laundering probe

Glencore has posted a rise in earnings for the half-year, but remained tight-lipped on an ongoing money-laundering probe by the US Department of Justice. The mining giant said its adjusted earnings before interest, tax, depreciation and amortisation rose 23% to $8.3bn (£6.4bn) in the first half, up from $6.7bn (£5.2bn) during the same period last year.

However this was lower than the $8.5bn US dollars analysts were expecting.

Glencore, which is currently involved in an anti-money laundering probe by the US Department of Justice (DOJ), said market conditions would “remain volatile”.

Glencore’s shares were down 7.1p or 2.1% to 319.2p in early trading.

ScS full year growth impacted by good - and bad - weather

Sunderland sofa specialist ScS says its full year growth will be affected by the extreme winter and summer weather conditions.

The firm issued an update saying it is trading in line with expectations, having expected softer trading conditions to follow the adverse weather at the start of the year.

The firm, one of the UK’s largest retailers of upholstered furniture and floorings, said it has seen overall order growth of 1.3%.

In the interim results update on 21 March 2018, the group reported like-for-like order intake growth for the first half of the year of 2.2% and also highlighted the impact of the adverse weather conditions in the week commencing February 25.

The firm said it expected trading to remain challenging and that the continued softer trading environment, coupled with extremely warm weather in June and July, has resulted in like-for-like order intake in the second half of the year declining by 2.6%.

For the full year, the group has therefore achieved an overall like-for-like order intake increase of 0.2%.

The value of its partnership with House of Fraser was also laid bare in the update, which said House of Fraser concessions contributed 7.2% of group order intake in the year.

David Knight, Chief Executive Officer of ScS, commented: “I am pleased to announce that the group has traded in line with the board’s expectations for the year, an encouraging result given the challenging retail environment.

“We believe this demonstrates the increasingly resilient nature of our business and the success of our value proposition.

“We remain focused on continuing to deliver our growth strategy and providing excellent choice, value and quality for our customers.”

KFC and Kellogg's ads banned for promoting junk food to children

Ads for food giants KFC and Kellogg’s have been banned for promoting junk food to children, one outside a school and the other during a television cartoon programme.

The Advertising Standards Authority (ASA) banned the poster for KFC’s Mars Krushems drink after it appeared in July on a telephone box a short distance from the entrance to a primary school.

The ASA said it was “highly likely” that the ad’s location meant that it broke rules that no medium should be used to advertise products high in fat, salt or sugar (HFSS) if more than 25% of its audience was under the age of 16.

The watchdog also banned a television ad for Kellogg’s Coco Pops Granola that appeared in January between episodes of the Mr Bean cartoon during programming specifically dedicated to children under 16.

It agreed with Kellogg’s argument that the granola was not an HFSS product, but said the branding was synonymous with the original Coco Pops and therefore had the effect of promoting a high-sugar cereal.

Both bans followed complaints from the Obesity Health Alliance that the ads were for HFSS products and directed at children. KFC confirmed that its ad was for an HFSS product and said it was mistakenly placed within 100 metres of the school.

They said the ad’s placement was an error, which came about after its media agency mistakenly selected the phone kiosk as a site for the ad.

A KFC spokesman said: “This was a total mistake, and we’re really sorry for it. It was the result of human error at one of our media agencies, which the ASA has accepted, and we made sure the advert was taken down as soon as we found out.” Kellogg’s said: “We are disappointed with this decision as we ensured throughout the advert that we were only promoting the Coco Pops Granola product, a cereal that can be advertised in children’s airtime.

Crunch talks over Sainsbury's 'sign or be sacked' contract row

Talks will take place today between unions and supermarket Sainsbury’s over a “sign or be sacked” contract row.

Sainsbury’s is increasing hourly pay for thousands of its staff from £8 to £9.20 but other parts of the deal - including the loss of overtime, Sunday pay and breaks - have been criticised by the Unite union.

Unite says some staff will be worse off after the changes and that its members have been issued with a “sign or be sacked” ultimatum by September 23.

Sainsbury’s insists no-one will be worse off with the new conditions and that the new deal is “industry leading”.

Unite national officer for the food industry Joe Clarke said: “This is an issue of fairness which puts Sainsbury’s with its so-called progressive employment practices under the media spotlight.

“We accept that the new contracts may be an improvement for a large number of Sainsbury’s employees; however, many of the longest serving and older staff may be worse off – that’s the position we are fighting to avoid.

“Many of our members have lodged individual grievances about their pay and conditions under the new contract which have now been rolled into a collective grievance and will be the subject of Wednesday’s talks.”

Companies urged to do more to tackle mental health issues at work

Firms are being urged to pay closer attention to the wellbeing of their employees after a study found that almost a third of businesses have seen an increase in the number of workers taking time off for mental health reasons.

The British Chambers of Commerce (BCC) said its research also showed an increase in the length of time staff are taking off.

A survey of 1,000 business leaders suggested that firms are more aware of mental health concerns and the topic is less taboo in the office.

Some employers are reviewing workloads and flexible working options, offering counselling for staff and training for managers. But half of those polled admitted they did not access occupational health support for their staff.

Adam Marshall, BCC director general, said: “As the world of work changes, it is absolutely crucial for business leaders to pay ever closer attention to the health and wellbeing of their employees, especially at a time when firms are facing severe challenges finding and retaining the skilled staff they need. “While legions of firms are now more aware of mental health concerns and acting accordingly, far too many businesses are still turning a blind eye to this issue, which saps productivity, morale and individual wellbeing. “Our message today is that it is no longer acceptable for firms to ignore mental health in the workplace, and all companies need to step up their game.” Dr Doug Wright, medical director at insurance firm Aviva, which helped with the study, added: “It is worrying to see almost a third of businesses have seen an increase in people taking time off for mental health reasons and whilst some of this increase may be down to staff feeling more able to discuss the issue of mental health which is, in itself, good news, it also suggests that more can be done to help”

Tesla shares rocket after Elon Musk says he may take it private

Tesla CEO Elon Musk has announced that he is considering taking the electric car maker private, causing the company’s stock to soar.

In typical unorthodox style, Mr Musk made the out-of-the blue announcement in a terse tweet, which has since been retweeted 13,000 times.

His tweet came hours after the Financial Times reported that Saudi Arabia’s sovereign wealth fund had built a significant stake in Tesla, but it was unclear if that was the funding Mr Musk was referring to.

The Financial Times said Saudi Arabia’s Public Investment Fund had built a stake of between 3-5% of Telsa’s shares.

Tesla did not immediate respond to requests for comment. The company’s shares currently sit at $379.

It is highly unusual for the head of a major company make a significant announcement in such casual manner and the tweet prompted questions about how serious Mr Musk’s intentions were.

He followed up his original tweet with responding tweets, saying his “hope is *all* current investors remain with Tesla even if we’re private. Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity’s SpaceX investment.”

“Am super appreciative of Tesla shareholders. Will ensure their prosperity in any scenario.”

His asking price of $420 would be up 22% of Monday’s closing share price, and nearly 9% above the stock’s all-time closing high of $385.

Mr Musk’s tweet came two weeks after Tesla revealed it had burned through $739.5m (£571m) in cash on its way to a record $717.5m (£554m) net loss in the second quarter, as it cranked out more electric cars.

Tesla has spent millions as it reached a goal of producing 5,000 Model 3 sedans per week by the end of June.

North East doing best to survive 'vicious cycle' of pub closures

The British pub sector is continuing to struggle with around 18 pubs closing a week - but the North East is doing the best to weather the storm.

According to the Campaign for Real Ale (Camra) 471 pubs closed across England, Scotland and Wales during the first six months of the year. The figures found that 13 more closures had happened compared with the last six months of 2017.

Four out of five people in the UK have experienced a local pub closure in the last five years, with 21% of the public witnessing the demise of five or more, according to a YouGov survey,

But the North East has avoided the worst of the industry’s crisis and has the lowest pub closure rate in England at just 0.7%.

Only 13 pubs closed in the North East during the six month period, leaving the region with 1,882.

London and the East Midlands had the highest closure rate at 1.3%. A total of 54 pubs closed in London while 47 closed in the East Midlands.

Paddy Power Betfair's earning to be impacted by extra Australian taxes

Paddy Power Betfair has lifted sales and profits, but warned investors that its full-year earnings would be knocked by extra taxes in Australia and losses from its fantasy sports business.

The betting group trimmed its earnings before interest, tax, depreciation and amortisation guidance, saying the figure would come in between £460 million and £480m this year.

Paddy Power Betfair has reported a 5% increase in revenues for the six months ended June 30, up from £827m to £867m.

Profit before tax at the betting group was up 4% year on year to £106m.

Chief executive Peter Jackson said: “It has been a busy and successful few months for Paddy Power Betfair.

“We have made substantial progress against our strategic priorities and trading in the second quarter was good, with all brands and operating divisions contributing to the group’s double-digit revenue growth.”

The figures come after the FTSE 100 company announced plans to merge its US business with fantasy sports firm FanDuel.

However, the inclusion of FanDuel’s operations is expected to knock earnings this year, the firm has said. In addition, the company took an £8m hit from changes to betting taxes implemented in Australia last year.

Booming Newcastle housebuilder Bellway breaks earnings record

Newcastle housebuilder Bellway is toasting an impressive year’s trading after breaking through the 10,000 homes barrier for the first time in its history.

The firm, headquartered at Seaton Burn, has issued a trading update for the year ended July 31 2018 ahead of its preliminary results announcement in October, detailing the sale of 10,307 new residential dwellings, an increase of 6.9%.

It said it saw substantial revenue growth of around 16% to almost £3bn and that, together with an anticipated operating margin of around 22%, this should lead to another year of significant earnings growth.

Looking ahead it has booked a sizeable order book of 4,841 homes, up on last year’s 4,749 homes, and said that there remains an underlying requirement for additional, good quality and affordably priced new housing, which is being supported by the availability of Help to Buy and an environment of low interest rates, which despite the recent Bank of England decision, remain close to a historically low level.

Jason Honeyman, Chief Executive, said:

Bellway has responded positively to the favourable market conditions, completing the sale of over 10,000 new homes for the first time in its history, whilst retaining a clear focus on quality and customer care.

In doing so, the Group has set a new earnings record and yet, having invested significantly in land, has ended the year with a strong net cash position. Trading has been robust and notwithstanding wider political and economic uncertainty in the UK, Bellway has both the financial and operational strength to respond opportunistically to future changes in market conditions.

Mr Honeyman took over the chief executive position last month after it was announced that Ted Ayres, who has been on a leave of absence since last year due to ill health, was to retire.

Mr Ayres has worked for Bellway for 16 years, the last five of them as chief executive.