Premium travellers boost BA group

29 July 2011 Last updated at 08:46 GMT International Airlines Group CEO Willie Walsh: "It's good to be back in the black"

International Airlines Group (IAG), formed by the merger of BA and Iberia, has swung to a first-half profit of 39m euros (?34m), boosted by a rise in premium travellers.

That compared with a 419m-euro loss made in the same period a year earlier.

But it said fuel costs had risen 34.8% to 2.4bn euros in the six-month period and said that fuel was still a "significant issue".

The company expects its annual fuel bill to total 5.2bn euros.

BA and Iberia completed their merger in January this year.

'Significant growth'

Revenues for the half-year rose 17.9% to 7.8bn euros.

The company also reduced its net debt by almost a half to 480m euros.

IAG said it had seen "continued strength in premium markets", adding that while its long-haul business was stable, the short-haul European market remained "highly competitive".

"We expect significant growth in operating profit this year, with improvements in both our unit revenue and unit cost performance versus 2010 and are on track to reach our synergy targets," IAG said.

But it said it expected the earthquake and tsunami in Japan and the political unrest in North Africa and the Middle East to reduce its operating profit for the year by 90-100m euros.

Charles Stanley analyst Douglas McNeill said: "These are good results at the upper end of expectations but the year-ago period was depressed by the ash cloud crisis and strikes at BA."

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Pub dining boost for Greene King

30 June 2011 Last updated at 10:26 GMT Greene King says it sees a tough year ahead despite its strong results Greene King has reported a jump in profits and sales, driven by a rising demand for pub meals.

Total revenues rose 6% to top the ?1bn mark for the first time in the pub owner and brewery's 212-year history, according to its annual results.

That helped it to a 14% rise in pre-tax profits to ?140m.

Despite the positive figures, and plans to add to its almost 2,500 pubs and restaurants, the Suffolk-based firm warned of another tough year ahead.

"The UK economy continues to face inflationary pressures, impacting on both our customers' spending power and our cost base, and the impact of the government's cutbacks is still to take full effect," said Greene King's chief executive, Rooney Anand.

Food sales, which now account for 60% of its business, led the strong results, rising 8% on a like-for-like basis in the year.

The numbers were widely anticipated by the markets.

The company's share price fell 6% in by late morning trading in London following the announcement, almost entirely retracing a rally in the week leading up to the announcement.

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New orders boost UK construction

2 June 2011 Last updated at 09:09 GMT Growth in the house-building sector in May improved after slowing in April Growth in the UK construction industry accelerated slightly in May after slowing in April, thanks largely to a rise in new orders, a survey suggests.

The Purchasing Managers' Index (PMI) for construction rose to 54.0 from 53.3 the previous month. Any reading above 50 indicates growth in the sector.

Employment also increased after a 10-month run of cuts.

On Tuesday, research suggested the number of construction firms going bust in the UK had increased sharply.

Accountancy firm Wilkins Kennedy said that almost 1,000 companies went into insolvency in the first three months of the year, a rise of 19% from the previous quarter. The increase was down to public sector spending cuts, the firm said.

'Positive sentiment'

However, the latest PMI survey suggested construction firms were seeing a "marked expansion" in new orders.

New contract wins led to an overall increase in employment, although Markit - the firm that carried out the survey - said that the rate of job creation "remained modest".

It added that house building activity had improved after slowing in April, although the rate of increase was below the long-term trend.

The month also saw a "considerable rise" in input prices, mainly in the form of higher raw material prices.

"Positive sentiment regarding future business activity rose to a one-year high, although concerns over public sector spending cuts continue to weigh on confidence," said Sarah Ledger at Markit.

On Wednesday, PMI data showed that the UK's manufacturing sector grew at its weakest pace in 20 months in May.

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American boost

23 May 2011 Last updated at 23:02 GMT By Will Smale Business reporter, BBC News UK small firms are benefiting from higher demand from American companies Two years ago Ken Wickham was thinking of closing down his small manufacturing company in the face of the global recession.

"Trade was so quiet, the phone was ringing just once every two weeks," he says.

"Things were very difficult. We survived in the end because we had a very good client base, but a lot of other companies I know went to the wall."

Mr Wickham is owner of Wickham Engineering, which has been in business for more than 25 years.

Based in Southend, Essex, it makes highly specialised milling machines, some the size of houses.

Supplying food, chemical and paint companies around the world, exports account for 75% of its business, with the US being its main overseas market.

Fast-forward to today, and Mr Wickham says export demand is now very strong again.

"The orders are all coming from the US," he says. "About 18 months ago we started to get more interest from America, which has really increased over the past six months.

"We aren't back to pre-global-recession levels of orders from the US, but things have certainly picked up again."

Demand 'unabated' Ken Wickham says his strong client base kept the company going

Mr Wickham's experience appears to have been replicated at small manufacturers across the UK.

A recent study by the CBI business organisation said small manufacturers had seen demand for their goods rise at its fastest rate for 16 years during the first quarter of 2011. The majority of this increase had come from exports.

This was backed up by a separate report from manufacturing organisation EEF. It said UK manufacturers of all sizes were "taking advantage of export-led demand, which shows no signs of abating".

And official figures from the Office for National Statistics showed that the wider manufacturing sector continues to be strong, with output expanding by 1.1% from January to March, the same as during the last three months of 2010.

Stimulus boost

Another small manufacturer that says it has seen a big increase in exports is Oxford Optronix, which specialises in hi-tech medical-testing equipment.

Like Wickham Engineering, it says demand is being led by exports, and again, specifically from the US.

"We saw a massive upswing in demand and orders from the US during the second half of last year, and things have continued to look pretty good," says sales director Dr Michael Rau.

Oxford Optronix saw US orders grow last year

"We have increased our presence in emerging markets, such as China and India, which is very interesting, but our single biggest market has always been the US."

A look at the most recent US economic data shows why British small manufacturers have been enjoying increased orders.

While US unemployment remains stubbornly high - 9% in April - the US economy is continuing to grow.

Buoyed by the global economy gathering pace, and the continuing boost from President Obama's $800bn (?494bn) stimulus spending, 2011 has so far seen US manufacturing output increasing at its fastest rate in seven years, while US exports have risen to an all time high.

Dr Rau says: "It may very well be that we have been benefiting from the Obama stimulus spending, as some of that money has been injected into science.

"And the weakness of the pound in recent years has also done wonders for our competitive position."

'Pessimistic'

But while UK small manufacturers are enjoying higher demand from American companies, how is trade in the US for those small UK manufacturers who target American shoppers?

Dr Rau also highlights sterling's dollar weakness in recent years

The economic data coming out of the US suggests they are still finding trade a lot harder to come by, as consumer spending - while continuing to rise - remains weak in the face of higher energy bills.

James Stewart, who owns Northern Ireland-based clock-maker James Stewart & Sons, says this is the case for his company.

Manufacturing grandfather clocks that can cost as much as ?13,000, the Omagh company's main overseas market for luxury products is the US.

"The US has picked up marginally, but it is nothing to get excited about," says Mr Stewart.

"Talking to our sales team over there, they remain pessimistic. Trade will pick up again, but it is going to take time.

"Our problem is that we make a luxury product, so if people are nervous about the economy, we are going to be the last thing on their shopping list, whether in the US, or back in the UK and Republic of Ireland."

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Boost to parental leave proposed

16 May 2011 Last updated at 13:39 GMT The proposals aim to make it easier for parents to share childcare Business Secretary Vince Cable has launched a consultation on plans to increase the amount of leave for new parents in England, Scotland and Wales.

The proposals would extend parental leave by four weeks and enable the mother and father to split it between them in a number of blocks.

Currently mothers can take 52 weeks, some of which can be shared by fathers, who can also take two weeks themselves.

Business leaders have expressed concerns about the potential costs.

Six of the 52 weeks currently offered are paid at 90% of the parent's salary. Another 33 are paid at a standard rate of ?128.73, which also applies to the additional two weeks offered to fathers.

Since April 2011, fathers and mothers have been able to share some of the 52 weeks' leave, with the father able to take up to six months beginning after the baby is 20 weeks old.

However, this can only be taken as a single block - as can the leave the mother takes.

'Fairer for fathers'

Under the the proposed scheme, which the government says would begin in 2015 at the earliest, the mother would be allowed to take up to 18 weeks straight after the birth, but a following 30 weeks could be split between the parents, and, at their request, broken down into smaller blocks of a few weeks or months.

Of these 30 weeks, 17 would be paid at the standard rate.

However, employers would retain the right to demand the leave was taken in a continuous block, "depending on business needs", the Department for Business, Innovation and Skills said.

In addition, both parents would be entitled to an additional four weeks' leave each, and the father would still be offered two weeks' paternity leave straight after the birth, as now.

"These measures are fairer for fathers and maintain the existing entitlements for mothers - but crucially give parents much greater choice over how to balance their work and family commitments," said Mr Cable.

He said the need to minimise costs and bureaucracy had been "at the forefront" of his mind when developing the plans.

"But I'm also confident that we have a good case to make on the wider benefits to business - not least from a motivated and flexible workforce," he said.

Cost fears

Katja Hall, policy director of the Confederation of British Industry, said the organisation was "concerned" about the total increase in parental leave, "given the UK already offers some of the most generous provisions in the world".

The Federation of Small Businesses said the changes would hit small companies "hard" and make administration of parental leave more complicated.

However, Trades Union Congress general secretary Brendan Barber welcomed the reforms.

"The extra month of parental leave for dads only builds on reforms brought in by the last government and will encourage more fathers to take time off," he said.

The shadow business secretary, John Denham, said the announcement built on "great strides" that had been made under Labour.

But the government had also "delayed the extension of flexible working to parents with children under 17, removed new employment rights to workers in micro-businesses and are making cuts to vital services such as Sure Start", he said.

Parental leave is a devolved issue Northern Ireland, but current entitlements are similar to those in the rest of the UK. The Northern Ireland Assembly said it was "looking closely" at the new proposals.

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