Industry news

British Airways continues to suffer under IAG (International Airlines Group) as the group reports operating losses of £531 million for the first quarter.

Losses at Spanish carrier Iberia have led to a net quarterly loss of €630 million (£531 million), as the Spanish business struggles to recover from the impact of the Eurozone crisis and increased competition from rival firms.

Despite the first quarter losses from the impact of the Iberia acquisition, IAG have announced total passenger revenue increases of 3.9 percent.

Chief executive Willie Walsh admitted that there was: “more work to be done".

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BT have posted greater than expected end of year profits, ending 31st March, with a yearly profit of £2.5 billion.

Despite a fall in sales in the fourth quarter and the expectations of a slowdown in profit from the impact of an on-going improvement programme and pension deficit, BT has been able to offer shareholders a full year share dividend increase of 14 percent.

In 2013 BT has moved forward with its superfast broadband distribution programme, successfully winning the majority of broadband contracts as part of the broadband Delivery UK (BDUK) procurement processes.

The telecoms giant has also moved to competitively compete against Sky, including the offering of new television premiership football packages.

Ian Livingston, BT chief executive, said: "we are investing in our future and delivering growth in profits and dividends.”

BT to create 1,000 new jobs and UK focuses on broadband roll-out

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Sainsbury’s has moved to outsource all retail functions of Sainsbury’s Bank, as it takes full ownership of the businesses, in a £248 million buyout of Lloyds bank’s 50 percent stake.

The outsourcing program will see Sainsbury’s transfer all retail services to FIS Global in a £90 million migration scheme over a 42 month period.

FIS Global will be involved in delivering back office processes, credit card systems, mobile banking including internet, telephone and call centre services.

In a statement, Sainsbury’s said: "Call centre services will be provided in-house by the bank and banking platforms will be delivered by FIS. FIS has a proven track record in successfully delivering similar types of outsourced services. All parties have been working together for a number of months to agree a detailed transition plan."

Sainsbury’s have reported record-breaking sales

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UK based Civica, who specialise in BPO software focused on the public sector, have been acquired by Canadian based OMERS Private Equity.

OMERS have purchased the controlling stake in the business for £380 million, with Civica management continuing to retain shares in the company.

The acquisition comes as Civica enjoys growth from UK government business, increased by the pressure to reduce department budgets, with Civica seeing an 11 percent increase in revenues in 2012.

Civica currently provides services to a majority of UK local authorities and services including the NHS, education facilities and the UK police forces.

UK government cuts see borrowing drop

UK prepares for 2013 budget

Mark & Spencer’s have acknowledged that it had ‘under-invested’ in ecommerce services, with the UK retailer falling behind rivals in the online marketplace.

M&S have now moved to expand online platforms, including the construction of a new 900,000 square foot facility to process ecommerce orders, able to handle one million transactions a day.

The new facility will also help to increase the distribution time of goods, decreasing the time it takes to move goods between ports and stores by 70 percent.

M&S currently sells 15 percent of its cloths and home ware items through online platforms, rivals such a Next sell close to 35 percent of stock through web based services. Factors such as the average age range of customers are also likely to have accounted for the difference.

M&S are now in the process of developing their independent website, moving away from their current Amazon based offering, which has acted as a barrier to foreign markets.

M&S saves £185 million through sustainability plan

G4S shares have fallen by 11 percent after the outsourcing giant revealed that overall profit margins would be lower than expected in 2013.

G4S brought its trading forecast forward, to reveal that margins would be 0.6 percent down by the end of March, with the likelihood that margins would stay at a low level throughout the rest of the year.

The impact of the Eurozone crisis has reduced profit margins from business, as well as reducing the available work, as public sectors cut back on outsourced contracts alongside public services.

G4S said that turbulent conditions in Europe, along with client non-payment and public service contraction had resulted in poor performance and negative expectations for the year.

The security giant has also seen performance impacted by the lasting effects of the public failure of the Olympic games, with G4S having to pay £88 million in compensation for failing to deliver enough staff.

A statement from G4S detailed: "For all of these reasons, and despite ongoing business improvement plans, the first quarter margin trends are expected to continue for the full year”.

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G4S to sell U.S. government division

BMC Software has agreed on a deal, which will see the management software provider being acquired by a consortium, in a deal valued at $6.9 billion.

The move to privatisation comes as the software provider looks to develop its offering and expand services. Despite the company’s success in increasing its revenue over recent years, with total revenue at the end of March 2013 of $2.2 billion, BMC has struggled in an increasingly competitive marketplace.

The company has struggle to branch out from its core management software, despite efforts to provide new cloud services, while competitors including specialist and global technology businesses have reduced overall business.

The move to privatisation is aimed at providing capital for future product investment and innovation.

The consortium buyers including Bain and Golden Gate Capital now have to wait for the conformation of BMC Software shareholder approval.

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Bain Capital to invest in 30 percent stake of Genpact

GlaxoSmithKline has released an open platform for clinical trial publication in a bid to display increased transparency.

Scientists will be able to request anonymised drug trial data, with the request being judged by a panel, which will give approval on a cases by case basis.

The move to provide data, regardless of the trial’s success or failure, combats repeated criticism made against the pharmaceutical sector, including artificially skewering results by only publishing successful trials.

GSK CEO Andrew Witty, said back in October 2012, when the scheme was first announced: “We hear from the scientific community that making this information available for valid scientific purposes will be incredibly helpful”.

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The achievement of the £1 billion landmark is a positive sign for public sector departments, as the UK seeks to meet targets set by the European Commission, to have all department purchases made through online procurement processes by June 2016.

Service provider Procserve have announced the crossing of the £1 billion transaction mark for thetotal value of processed public sector purchases carried out online.

Procserve’s Commerce Network hosted the transactions, with more than 3.4 million transactions being processed in the past five years, and 46% of those in the last six months.

The eProcurement service so far has delivered over £50 million in savings.

Launched in May 2007 to support the Government eMarketplace, Procserve’s technology has seen strong year-on-year growth in the volume of transactions as public services seek to increase flexibility and the employment of shared services.

Nigel Clifford, CEO of Procserve, said: “the £1 billion milestone is proof that, with the right partnership approach, the UK can lead the way when it comes to using technology to streamline processes and save money.”

Government eMarketplace sees a 90 percent jump in transactions

Procserve wins Department for Work and Pensions award for innovation

Global IT giant Cognizant has posted strong results with first quarter growth of 18.1 percent year-on-year.

Cognizant's UK growth outperformed performance in the U.S., with a faster rate of growth compared to its overseas division.

Overall quarterly revenues reached more than $2 billion, with strong sales from mobile, cloud and analytic services driving overall growth.

Francisco D'Souza, Chief Executive Officer, said: “We are encouraged by the healthy demand for our broad range of services".

Cognizant's UK success is likely to compete successfully against U.S. growth as employee immigration limits imposed in the states. come into effect, impacting overseas IT businesses.

Cognizant beats quarterly profit predictions