Boston Consulting makes £2m for advice to Dexeu about Brexit

Boston Consulting makes £2m for advice to Dexeu about Brexit

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The Department for Exiting the EU — Dexeu — has handed a £2million contract for Brexit advice to Boston Consulting Group.

That makes the American management consultancy one of the biggest beneficiaries of Whitehall’s Brexit spending, with five contracts totalling £4.7 million.

The Evening Standard has been campaigning for better disclosure of Brexit consultancy fees since many departments obfuscated or refused to reveal their spending after Freedom of Information requests lodged by the newspaper in January. 

Despite the Boston contract with Dexeu having commenced in December, it did not appear in responses to our FOI requests. 

The payment only came to light today as it appeared on the government contracts website and was highlighted by tenders researcher Tussell.

It is unclear what services Boston Consulting is providing the Brexit department because of heavy redactions in the paperwork, but the document refers to “support for the Cross Government Delivery Co-ordination of the EU Exit Programme”.

Another FOI unearthed that Dexeu took on three secondees from Boston Consulting on civil service salaries in October. KPMG, Oliver Wyman, McKinsey, Deloitte and PwC have lent it staff for nothing.

Hidden charges

Brexit work handed by civil servants to consultants so far totals £29 million. But more is thought to be “hidden” under other categories.

A DExEU spokesperson said: “The Government is utilising the skills of the brightest and best across the Civil Service as we prepare to exit the EU.

“It is also quite standard for a Government department to draw on the advice of external specialists. We will continue to bring in expertise from outside as appropriate.”

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May 19, 2018 |

Royal Wedding 'spending splurge' worth £1bn to shops and bars

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A “Super Saturday” spending splurge will provide a welcome boost to Britain’s suffering high streets tomorrow as the nation enjoys the back-to-back spectacles of the royal wedding and FA Cup Final.

Forecasters believe that the marriage of Prince Harry and Meghan Markle could add more than £1 billion to the coffers of shops, restaurants, hotels and bars over the course of the year.

The “Meghan effect” could easily exceed the impact of the wedding of Prince William and Kate Middleton seven years ago as it falls on a weekend so there will be no loss of productivity. Their Friday wedding was declared a Bank Holiday by then-prime minister David Cameron.

For Harry and Meghan’s big day, pubs and bars have been given permission by the Home Office to stay open late tonight and tomorrow in a move that will dramatically boost takings.

Meghan mania: the Windsor branch of M&S is renamed in honour of the bride (Samir Hussein)

Clive Watson, chairman of the City Pub Group, which runs 35 pubs across London and southern England, said: “On a normal weekend 30 million pints will be sold but with the royal wedding and FA Cup on the same day I predict a 20 per cent uplift. The pubs will be opening up early for the build-up and once we have celebrated Harry and Meghan’s wedding we can roll on to the FA Cup.”

Tourist chiefs said they expected the wedding to kickstart another bumper visitor season as images of Windsor in forecast sunshine are beamed to a vast global audience. As many as 50,000 US visitors are expected to travel to Windsor.

Helen Brocklebank, boss of luxury goods trade body Walpole, said: “It’s not only the anticipated weekend spike for hoteliers and for British luxury retailers, crucially it is the halo effect, lasting long after the wedding. The US is the single biggest market for British luxury and already brands like DeMellier, worn by Meghan Markle, have seen a huge uptick in online sales from US customers.”

Extra tourism spending will be welcomed after a dismal start to the economic year with growth of just 0.1 per cent in a snow-ravaged first quarter. Huge volumes of Meghan and Harry souvenirs have been sold and the World Cup, which starts next month, is expected to provide a further excuse for consumers to relax the purse strings. 


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May 19, 2018 |

Tech tracker round-up: Uber chief product officer leaves, PayPal buys iZettle

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Here the Evening Standard business team highlights all the major tech news today.

Top story sees Uber Technologies chief product officer Jeff Holden is leaving the ride-hailing company, an Uber spokesman said, the latest of more than a dozen senior executives to depart since last year.

Holden oversaw Uber Elevate, the company’s flying car operation, which is now headed by Eric Allison but declined to elaborate on the reason for his departure.

New chief executive officer Dara Khosrowshahi has been shaking up the company since taking over Last August aiming to improve Uber’s reputation after a string of scandals.

Uber, along with Lyft, scrapped mandatory arbitration to settle sexual harassment or assault claims earlier this week, giving victims several options to pursue their claims including public lawsuits.

Uber also launched a new app for its drivers last month, in an effort to improve an often contentious relationship.

Uber’s chief legal officer, Salle Yoo, and head of external affairs Dave Clark left the company in September.

Uber is also searching for a chief financial officer who can help take the company public in 2019. The CFO position has been vacant since 2015.

Elsewhere PayPal has agreed to buy Swedish financial technology startup iZettle for $2.2 billion.

The deal will allow the Californian company to expand into the retail payment terminals business in international markets, where it will compete with Silicon Valley firm Square founded by Twitter chief Jack Dorsey.

Stockholm-based iZettle, which had advanced plans to go public, offers small businesses a miniature credit card reader that turns smartphones or tablets into payment registers.

It is present in 12 countries in Europe and Latin America and offers other services for managing small businesses.

By joining forces with PayPal, which operates in 200 countries, iZettle will be able to accelerate its expansion, including into the United States, the companies said.

iZettle chief executive and co-founder Jacob de Greer and the company’s management team will continue to lead the business. This year the company expects to process $6 billion in payments, resulting in gross revenue of $165 million.

Finally London has cemented its position as a global tech hub.

The UK was in the top three countries for total capital investment in digital tech companies last year, behind only China and the US, according to the Tech Nation annual report.

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May 19, 2018 |

Food delivery firm Deliveroo spends £5 million dishing up own dining brands

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Deliveroo is to create a series of its own restaurant brands to snare hungry Britons with niche cuisines.

The food delivery firm is to use its Editions sites, the kitchens it runs which are not open to the public, to host chefs for new brands. Its first will be a Sicilian-style pizza brand, Nonna’s Square Pizzas, launching in Cambridge this month.

Currently, Deliveroo bikes existing restaurants’ food from their premises or from its 74 UK Editions satellite kitchens on unfashionable sites, allowing restaurants to effectively expand their footprint without opening a new site.

Deliveroo is spending £5 million on the initiative to develop new chefs, help existing restaurant partners and serve areas with cuisines, expected to be more niche than pizza, it knows there is local demand for. There is also the possibility that the sites will be used for collaborations with celebrity chefs.

The firm this month announced it is spending £10 million on free accident insurance for riders, and this week handed £10 million in share options for staff, fuelling speculation of a stock market float in the long term. 

Caleb Merkl, vice president of special projects at Deliveroo, said: “At a time when there are so many barriers for chefs wanting to turn their dream into reality, Deliveroo will use our expertise to help restaurants to expand and help budding chefs to have their first shot. For consumers this is nothing but good news, with more amazing, restaurant-quality food available more of the time.”

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May 18, 2018 |

Mothercare to pay for two top salaries as boss Mark Newton-Jones rejoins

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Ailing toy and baby-clothes seller Mothercare, which is looking to cut 800 jobs, will have two bosses on top salaries after the dramatic return yesterday of its sacked chief executive. 

Mark Newton-Jones, who was ousted by its then chairman Alan Parker last month, is now back, on a £480,000 salary a year. This is the same as he was due to be paid, but down on the £612,000 he earned last year. 

David Woods, brought in to succeed him, will now be managing director, earning £430,000 a year. Parker has since left the business. 

Mothercare, which has been struggling with changing shopping habits and rising costs, plans to close 50 stores and cut rent bills on a further 21.

The plans to slim down the business are tied to a complex £113.5 million refinancing deal. It made a pre-tax loss of £72.8 million on sales of £654.5 million for the year to March 24.

Mothercare said: “Mark has taken a significant pay cut. Mark has a major role as part of the team to return to Mothercare to a more stable footing.”

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May 18, 2018 |

Richemont hints at future M&A as it posts sales rise

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Luxury goods powerhouse Richemont, in the midst of a takeover of Yoox Net-a-Porter, on Friday hinted at sales and acquisitions activity as it revealed revenue growth.

Johann Rupert, chairman of Cartier parent Richemont, said that while its businesses are “well-positioned”, its long-term approach “does not preclude it from targeting strategic investments and divestments”.

The firm got the go-ahead a week ago to buy the rest of fashion retailer Yoox Net-a-Porter it does not already own for £2.7 billion. 

That deal was seen as a move to bat off competition, with some analysts last year saying Yoox could be targeted by rival retailers.

Richemont saw sales increase 3% to nearly €11 billion in the year to March. It noted good growth in the UK, and strong performances in China and Hong Kong.

However, the firm’s 5% growth in operating profit to €1.8 billion was less than analysts expected.

The company spent €203 million on inventory buybacks of watches.

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May 18, 2018 |

More gloom for Foxtons as London property sales dive

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London’s property market has become “very challenging” according to the latest gloomy update from Foxtons, the estate agent with offices in almost every district in the capital.

Foxtons said the sales pipeline was lower even than last year when it complained of sales hitting an historic low and 2018 had got off to a slow start in both sales and lettings.

Reporting ahead of its annual meeting, Foxtons said group revenue in the first quarter slid from £28.7 million last year to £24.5 million this year. 

Foxtons said the sales pipeline, hit by the early Easter, was showing some signs of improvement. The lettings business, which provides half of Foxtons’ revenue, began to pick up after Easter and has improved throughout April.

The company has said it will concentrate on building its lettings business while the London market’s doldrums continue.

Foxtons’ share price has almost halved over the last 12 months to 70p. However, the shares were flat today. 

In contrast, housebuilder Countryside Properties defied the housing slowdown.

Total group profit increased by 14% to £80.6m for the first 6 months, up from £71m last year.



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May 17, 2018 |

Britain's got to think big after Brexit, says billionaire Michael Spencer

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Michael Spencer, the billionaire City entrepreneur, has declared Britain must become far more competitive to thrive through Brexit.

The former Conservative party treasurer, who was not a  Brexiteer before the referendum, called on the Government to slash corporate tax and encourage new start-ups.

“We need to ensure that the UK does not become a little  protectionist country,” he told the Standard. “We need to be thoroughly focused on what will make this country attractive for inward investment.” 

Spencer is selling the final part of his broking empire NEX in a £3.9 billion deal to be voted through by investors tomorrow. 

Today, he said that he was no longer interested in running a plc, hinting that the red tape was not worth it. “I have run a public company for 20 years and doing that is less and less attractive now,” he said.

He added that the EU would be only 15% of global GDP when Britain leaves. 

“That means there is another 85% to go for afterwards, spread across the world. We can  prosper post-EU if we adopt a very pro-enterprise perspective. We must be bold and radical.”

Earlier this week he  complained that the debate around having quotas for women at the top of companies was a distraction for big  businesses. Spencer formed his ICAP broking business in 1986 with, as he described it, “four people in an office in Finsbury Circus.” It grew into a FTSE-100  company. The last part of it, NEX, is being sold to the Chicago Mercantile Exchange after tomorrow’s shareholder vote.

“CME is the best buyer of NEX,” he said. “Scale matters, and this is a very foresightful deal.” Spencer will receive  £650 million for his stake in the business.

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May 17, 2018 |

Tech tracker round-up: Under pressure Angry Birds maker Rovio posts profit

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Here the Evening Standard business team highlights all the major tech news today.

Top story sees Rovio Entertainment, the maker of the “Angry Birds” mobile games and movie, posted better than expected quarterly profit.

The Finnish company’s recent troubles have stemmed from tough competition and increased user-acquisition costs, as well as high dependency on the Angry Birds brand that was first launched as a mobile game in 2009.

However, adjusted operating profit in the first quarter of 2018 roughly doubled year on year to £8.8 million, with Rovio citing growth in its top games and lower marketing costs.

Shares in Rovio, which listed last September, rose 5.6% on the news, recovering a some of the 50% decline after the February profit warning.

Rovio reiterated the full-year outlook that had disappointed investors in February, when it said that sales could fall this year after jumping 55% in 2017.

In the past months Rovio has announced the departures of its head of games and its investor relations chief while cutting the pay of its chairman and vice chairman.

Rovio expects a movie sequel to boost business next year and the company has also stepped up investments in its spin-off company Hatch, which is building a Netflix-style streaming service for mobile games.

In London Experian shot to the top of the FTSE 100 leaderboard, after posting a 7.3% rise in full-year profits to $1.21 billion (£900 million).

Best known for running consumer credit checks for banks, landlords and retailers — the firm also said it expected this to be another bumper year.

The only blip was its consumer services unit, which saw a 5% decline.

Shares rose 52p to 1761p, and rival Micro Focus climbed 7p to 1354.5p after yesterday it announced a new $40 million licensing deal – giving it a much needed boost.

Meanwhile the fallout from huge ransomware attacks strengthened demand at cybersecurity firm Sophos last year.

The attacks by the WannaCry and NotPetya viruses, which hit NHS and businesses such as WPP and Reckitt Benckiser, triggered increased spending on cyber defences by Sophos customers.

The Oxfordshire-based business, founded more than 30 years ago, hailed “strong growth” for Intercept X, a piece of software that uses “deep learning” artificial intelligence to fend off attacks. 

Billings for flagship product Sophos Central were also up 112% to $186 million (£138 million) while EndUser, another top product, rose 30% to $382 million.

“Cybersecurity has never been more important for enterprises of all sizes, and the demand environment for our solutions has never been stronger,” chief executive Kris Hagerman said. “We have a massive market opportunity in front of us,

Customer numbers passed 300,000 at the end of March, against 260,000 last year. Total revenue increased by 21% to $641 million.

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May 17, 2018 |

Tech tracker round-up: Zuckerberg has "no plans" for UK visit, EOS crashes 40%

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Here the Evening Standard business team highlights all the major tech news today.

Top story sees Facebook confirm that Mark Zuckerberg ‘has no plans’ to meet with the Government despite 3million Facebook users being exposed in a new data leak.

British lawmakers had asked Facebook to fully answer 39 extra questions after the tech giant had not addressed all of its concerns during a parliamentary hearing. 

It comes after a popular personality app failed to provide adequate protection to the ‘anonymous’ data of participants, the latest of a string of security breaches.

The quiz, called myPersonality, collected highly sensitive data – including psychometric test results that reveal how neurotic or extrovert an individual may be.

In the wake of the Cambridge Analytica scandal, Facebook chief executive Mark Zuckerberg promised an audit of apps that may have accessed ‘large amounts of data’ on the site.

The investigation is ongoing but the site has confirmed hundreds of apps have so far been suspended, pending further analysis of their behaviour.

The audit will identify apps that had access to large amounts of information prior to a 2014 Facebook policy change and then investigate those whose behaviour raises concerns, Facebook said.

Facebook aside, top five cryptocurrency EOS has now crashed 40% since peaking last month at $21.

Traders said the crash in the price of the crypto built by blockchain developer was due to heavy bouts of profit taking from investors after a boom in April from $7, but added that concerns over a raid in South Korea last week on the country’s biggest crypto exchange, Upbit.

More than 10% of all EOS coin trading goes through Upbit, according to analysts.

EOS today fell a further 2% to $12.60.

EOS had surged in anticipation of June 1 when its year-long initial coin offering goes live and its blockchain is launched.

Read our crypto columnist Jay Nemesis’s view on EOS here. He reckons it’s still a raging buy.

Wes Nolte, another trader and Evening Standard columnist, who is an EOS investor, said: “I’m sceptical anyone can predict the future for any one crypto. The way to trade it is make sure you can afford to lose what you’re investing, buy into the big ones, plus maybe one or two of the smaller players, and hope you get a winner.”

Finally French startup Aircall has raised a founding round of $29 million for its cloud based call center solution. Draper Esprit led the round with NextWorld Capital, Balderton Capital and Newfund also participating. 

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May 16, 2018 |
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