Business headlines: Sainsbury’s; Glencore; KPMG; Conviviality; Bombardier; Hitachi; HTC; Sirtex

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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 price cuts lead to slowed sales growth
Sainsbury’s has experienced a continued drop in like-for-like sales growth in the first quarter after cutting food prices. Sales in the supermarket’s grocery division rose by 0.5%, compared to 2.1% in the fourth quarter and 3% in the same period last year. Sainsbury’s has cut prices of fresh meat, fruit and vegetables since March, while also reviewing 51 of its ranges. In total, it invested £150m in lowering its prices. The price cuts are a result of the supermarket’s drive to compete with rivals. Sainsbury’s is in talks with Asda over a potential merger, which, according to Chief Executive Mike Coupe, will improve the company’s resilience and adaptability.

Shares in Glencore drop on money laundering probe
Anglo-Swiss miner Glencore has seen its shares drop as much as 12% after receiving a subpoena by the US Department of Justice. The company is being investigated over its business dealings in Nigeria, Venezuela and Democratic Republic of Congo from 2007 onward. The court order compels Glencore to produce physical evidence of its dealings. The US Department of Justice will then investigate whether or not Glencore’s actions have been in compliance with the Foreign Corrupt Practices Act and money laundering laws. Glencore has stated it is reviewing the subpoena.

KPMG faces probe into audit of Conviviality
The Financial Reporting Council has started an investigation into KMPG’s audit of Conviviality, a drinks firm that went into administration in April. The watchdog said that it will be looking at KPMG’s preparation of Conviviality’s financial statements for the year to April 2017. The drinks company issues a profit warning in March, at which time its chief executive also resigned. In the same month the firm discovered it owed a £30m tax bill and announced that an effort to raise £125M from shareholders had failed, leading to it falling into administration. The probe comes after the FRC stated that it would be inspecting 25% of KMPG’s audits in the 2018-2019 financial year. The watchdog criticised the firm for an ‘unacceptable deterioration’ in the quality of its audits. KMPG stated that it was disappointed and was taking steps to improve audit quality.

Ofwat claims water companies have damaged trust
The Water Services Regulation Authority (Ofwat) has said that water companies have damaged customer trust by making high levels of payments to investors and bosses. Ofwat is introducing new rules which will force firms to prioritise customer’s interest and to explain the connections between executive pay and performance. Chief Executive of Ofwat. Rachel Fletcher, said the move was crucial in companies putting customer’s interests first in the future.

Bombardier and Hitachi partner up for UK high-speed train contract bid
Train manufacturers Bombardier and Hitachi have revealed they will be making a joint bid for a £2.75bn contract to build high-speed trains in the UK. The trains will be used on the new HS2 railway which will link London and Birmingham from December 2026, as well as serving destinations outside of the core HS2 network such as Glasgow, Edinburgh, Newcastle and York. The Canadian and Japanese firms previously submitted separate bids for the contract. The tendering process will start later this year and the winner is expected to be announced in late 2019. If the companies win the bid, manufacturing is expected to be shared between Bombardier’s plant in Derby and Hitachi’s in Newton Aycliffe.

Taiwanese mobile phone-maker HTC has announced it is cutting 1,500 jobs in the country as part of its restructuring plans.

Australian liver cancer treatment maker Sirtex has been given the green light by Australia’s Foreign Investment Review Board (FIRB) to go ahead with a $1.4bn buyout by Beijng-based CHD Investments and its partner China Grand Pharmaceutical and Healthcare Holdings.

Source: HN Global