Serco is the subject of a probe into its biggest Government contracts, the Sunday Times reported. The deals include a 1.5bn pound contract to manage the Atomic Weapons Establishment, a 55m pound school inspections contract with Ofsted and services for the Child Maintenance Group. About a quarter of Serco's annual revenue comes from work commissioned by the Government with 45 per cent of sales from wider public sector work. UK and Europe boss Jeremy Stafford is likely to leave the group, which is under pressure over alleged overcharging for tagging criminals in a Government contract.
Tesco is under pressure from investors to cut prices in the UK more aggressively to pursue its turnaround plan in the core British market, the Sunday Telegraph said. A top-10 investor said Tesco "will continue to lose market share without investment" and the Chief Executive Philip Clarke should sacrifice some margin to boost performance. The paper reported the investor said Clarke was "running out of time" to prove his worth to shareholders.
Investors in Tesco are increasingly impatient about the performance of the supermarket group's Turkish business, the Sunday Times reported. Tesco either has to come up with a revamp plan or sell its Kipa chain, where sales dropped 12.8% in the first half of the year. David Herro of Harris Associates, which holds 1.89% of Tesco said Chief Executive Philip Clarke should improve profitability or sell for a "premium price".
The North of England fuelled consumer spending as shoppers went back to high streets and online shopping in September, the Mail on Sunday reported. Figures from Barclaycard showed spending in North England rising by up to 4% - ahead of inflation at 2.7%. Nationwide, fashion retailers' sales rose 2.4%, boosted by online sales up by more than a third. The housing market revival sent spending at hardware stores up 5.8%. Spending in restaurants rose 11% from a year earlier but cinema and theatre tickets' 0.7% growth was the lowest rate this year.
Johnston Press, the owner of the Scotsman and Yorkshire Post papers, is preparing for talks with banks over its £300m debt, the Sunday Times said. It has hired Rothschild to lead discussions with Barclays and Royal Bank of Scotland among others. Johnston, which expanded too fast in the credit boom, has warned recently that it could breach its loan agreements. The talks, due to start soon, could lead to banks taking warrants in the company that could let them buy shares
Royal Mail is set to pay no tax in Britain for up to 10 years because it has a backlog of £2.8bn in tax credits, the Sunday Times said. The news is controversial but it will benefit those who sign up for Royal Mail's initial public offering. The tax break, covered by long-established norms, is revealed in Royal Mail's flotation document.
Pension Corporation is considering a £1.2bn flotation to raise capital for future growth, the Sunday Telegraph said. The specialist insurer for defined benefit pension schemes, discussed a stock market listing with investor last week. Chief Executive John Coomber told the paper an IPO was under discussion but the company has yet to appoint investment bankers to advise on a share sale.
The government shutdown in the US has pushed back expectations for UK interest rate rises, the Sunday Times said. Markets now expect the next rate rise to be in May 2015, closer to the Bank of England's expectations for unemployment falling to Governor Mark Carney's threshold of 7% in late 2016. Markets had previously priced in a rate rise in 2014.
Associated British Foods' Primark clothing chain is considering expansion in the US. The low-cost fashion chain is in the early stages of examining international expansion, with the US an option. Transatlantic forays have damaged Tesco and Marks & Spencer in the past but Sir Philip Green's Topshop has been successful, the Sunday Times reported.