Business headlines: Sainsbury’s; Airbus; Bombardier; The Weinstein Company; Rio Tinto; Flybe; Merlin Entertainments; Asos


It’s vital to be aware of the latest news in the industry you’re working in or applying to. Here are some headlines you might find interesting:

Sainsbury’s to cut 2,000 jobs
Supermarket chain Sainsbury’s will cut 2,000 jobs as it carries out plans to reduce costs. 1,400 human resources jobs will be lost, with most of the losses coming from within Sainsbury’s supermarket outlets. 600 other roles are also under threat, ranging from positions within the supermarket chain, its Argos chain and Sainsbury’s bank. Competition from other supermarkets as well as rising food costs are behind the company’s £500m savings push. Sainsbury’s stated it would offer staff hit by the redundancies alternative roles where possible, or redundancies packages.

Airbus to take majority stake in Bombardier’s C-Series
European aeronautics company Airbus is taking a 50.01% stake in Bombardier’s C-Series jet project. The deal is positive news for the 1,000 Bombardier workers in the purpose-built C-Series factory in Belfast, where the plane’s wings are manufactured. A recent dispute with Boeing, which accused Bombardier of anti-competitive practises, resulted in the latter being hit by a 300% import tariff by US authorities. The deal with Airbus means that by 2023, the firm will have the right to buy full control of the C-Series project. The deal was criticised by Boeing’s senior vice president of communications, while the UK government is still working to end the Bombardier-Boeing dispute.

Weinstein Company in talks over possible sale
Film production company The Weinstein Company has stated it’s in talks over a possible sale after the firm’s co-founder, Harvey Weinstein, was accused of numerous accounts of sexual assault. Weinstein was fired as chairman of the Weinstein Company last week and resigned from the company’s board this week. A number of the firm’s partners, including Goldman Sachs and Hachette Book group, have since distanced themselves from it. The production company is now in talks with US private equity firm Colony Capital, with which it said it had come to a preliminary deal.

Rio Tinto fined £27m by City watchdog
Australian-British mining giant Rio Tinto has been fined a record £27m by the Financial Conduct Authority (FCA) over a breach of rules for listed firms. The FCA investigated the company’s $3.7bn purchase of mining assets in Mozambique. The investigation found that when costs related to the purchase became higher than expected, Rio Tinto failed to carry out an impairment test or recognise a write-down in their August 2012 half year results. It only announced an impairment in January 2013. The FCA accused Rio Tinto of a breach of disclosure and transparency rules, stating their financial statements were misleading. The US Security and Exchange Commission (SEC) also charged the miner and two of its former top execs for fraud. Rio Tinto announced it would defend itself against the charges.

Profit warning causes Flybe shares to drop
Shares in Exeter-based airline Flybe dropped by 19% after the company issued a profit warning. Flybe stated its costs in the first half of its financial year turned out higher than expected due to maintenance costs. It said it was pushing to improve the reliability of its fleet, especially that of the Bombardier Q400 turboprop. The airline adjusted its expected pre-tax profits, which now fall within the range of £5m to £10m. Flybe reported a profit of £15.9m in the same period last year. Earlier this year, it announced plans to slow expansion in reaction to slow growth in consumer demand and increased competition.

Owner of Legoland and Alton Towers, Merlin Entertainments stated that recent terrorist attacks in the UK were the reason behind a slowed revenue growth of 0.3%, while higher costs as a result of UK employment law changes and bad weather also played a role.

Online fashion retailer Asos reported a jump in sales and profits as a result of the weaker pound, with pre-tax profits going up by 145% to £80m in the 12 months to 31 August, while sales surged by a third to £1.88bn.

Reference: HN Global