28/07/2016 BBC Business Live


Similar Content

Browse content similar to 28/07/2016. Check below for episodes and series from the same categories and more!



This is Business Live from BBC News with Aaron


With terror attacks across europe and a vote by the UK we look


at the state of the regions once booming tourism industry.


Live from London, that's our top story on Thursday the 28th of July.


It's an industry in turmoil and today Thomas Cook added


to the headache facing Europe's holiday business, saying that


Terrorism and Brexit would lead to a decrease in profits.


Were going to be looking at where next for the regions once


Also in the programme, we should learn later today


whether Britain's first new nuclear power plant in decades will actually


If confirmed - the new Hinkley Point plant will be


one of the biggest and most expensive energy projects ever


We will the markets, London opening flat, some of the Asian markets down


in the dumps. We will show you why. And we'll be getting


the inside track on the booze industry with the man behind brands


like Johnny Walker, Yes the head of Drinks Giant Diagio


will be in the studio as the firm We will actually be talking to him


live down the line. And a new report out today says that


sitting at your desk for eight hours Increasing the risk


of premature death by 60%. How long do you stay seated


for at work? And what do you do to try and stay


healthy in the office? Let us know using the


hashtag BBCBizLIVE. Thankfully he's not in the studio,


he would have brought props, you know what that means! Drinks early


in the morning. The global tourism industry


is going through a rough patch at the moment with terrorism,


Brexit and Zika all affecting Thomas Cook has just


released its third quarter results. The British travel company


cut its full-year profit target and saw a 5% reduction


in summer bookings. Safety and security concerns have


had a huge impact in tourism in locations such as France,


Egypt, Tunisia and Turkey, all of which have suffered deadly


terror attacks in recent times. As you can see from this map much


of the region is now considered to be under a 'high' level


of terrorist activity with the likes of Portugal and Italy having


an 'underlying threat' UK based travel firms have also had


to deal with the fall in the value That's made holidays abroad more


expensive for Brits and is having a knock impact on those countries


that rely on UK tourists. The Independent's travel editor


and all round tourism guru Aaron running us through numbers.


Europe's tourism industry seems to be in a terrible state. Turkey, down


50%. Tunisia, decimated. Is it too early to say it is in a state of


crisis? That depends where you are. On the fringes, Turkey, absolutely


dreadful. You go to the resorts and see almost nobody there. Down maybe


50%, largely because there is limited demand, I personally had a


vacation but in Turkey, the company said we're cancelling debt, there is


simply not the demand. Switching flights to the western


Mediterranean, Spain and Portugal. Spain will have a boom year, the


best year ever. Even that comes at a price. Pushing lots of marginal


accommodation into the mix. Simply because you have 10 million extra


tourists chasing beds. They are not necessarily gay did have a great


holiday, not getting the value in places like Turkey and Tunisia. Let


me ask you this. We spoke to Ryanair, Europe's largest carrier


number by passenger numbers. One luxury for them, it's an area takes


a downturn, they move the planes, focus of an area doing better. If


you owned hotels, bricks and mortar, you are screwed, excuse my French.


Those assets stay where you put them. That is the huge issue


affecting Turkey and Tunisia, also Egypt. Seeing a shortfall in travel.


The airlines are having a better time, not a brilliant time. An hour


ago, the chief executive Thomas Cook saying the German airline, Condor,


suffering because of the competition. All the planes pointing


towards Spain. If you have not yet but your summer location, they could


be bargains around. This year they have 90% of their summer holidays


but, up from 16 last year. Could put downward pressure on prices. A lotta


people choosing to stay at home. Something politicians have been


trumpeting. A drop in the pound, 10% drop. Great for the UK tourism


industry, is that true? The demand for foreign holidays, even when the


pound has been on par with the Euro, it continues to be strong. Quite a


lot of elasticity. The pound may sink by 10%, does not mean 10% fewer


people will go abroad. Even then people will go abroad. Even then


they won't necessarily, if they are feeling the pinch, uncertain about


what will happen with Brecht set, they were not necessarily spend that


on UK vacations. They made a stay at home. Not entirely good news. There


may be, hopefully in the next year or so an increase in overseas


visitors to the UK. If you see a decline in aviation, talking to


Ryanair, moving flights away from the UK, people cannot get there,


they will not be there spending money. Interesting, a nuanced


response under the headlines. Tuning to the BBC's Travel Show for the


latest. How to maximise your money. The Federal Reserve has kept


interest rates unchanged, maintaining the ultra-low level


they have been at The US central bank said "near-term


risks to the economic It is still expected to raise rates


twice this year. Investors expect the first


increase to come in autumn. Facebook posted quarterly


profit results yesterday which were above and beyond


what analysts were predicting. The social media giant posted a 59%


increase from a year ago. The huge boost has been attributed


to mobile ad revenue which is up 81% Investment in the new nuclear plant


to be built at Hinkley Point, Investment in the new nuclear plant


to be built at Hinkley Point, is set to get final approval today


from France's EDF. A third of the almost 24 billion


dollar project is being met It will be the UK's first nuclear


power plant in over 20 years and is expected to provide


7% of the UK's total For our UK audience we will be


bringing you more on this later. Let's take a look round the world


at what's business stories First, Strong smartphone sales have


helped Samsung Electronics post its best quarterly results


in more than two years. Look at you, hello. At the top end,


I said that in a nice way, by the way, at the top end, competition


from Apple, at the bottom end, they had competitors. It is the battle of


the smartphones, to a point, anyway. It is, in fact the world's bigger


smartphone maker. Profits up 8% from the beginning of the year to June.


That was in line with guidance. Tom Werner, mobiles. Profit jumping 57%


from one year earlier. Pretty impressive. Consumers keen on the


galaxies smartphones. You have to put this against the slowing


smartphone industry. You talked about the iPhone, just this week


Apple struggling to boost iPhone sales. The future for mobiles is not


Albright. They expect mobile profits to weaken in the second half, hoping


to offset that with strong demand from the various very lucrative


components they make. The shares ended down, just over 1% in a week


and market. Good on you, we will talk to you soon.


Asian stocks were mostly lower today as Chinese stocks


Japan's Nikkei fell more than 1% because of the stronger yen


and nerves before the Bank of Japan's monetary policy


All that said the Federal Reserve provided a positive assessment


of the US economy taking away some of the risk.


I will say that the dollar fell as some in the currency market had


hoped the Fed would give a clearer indication that it could raise


Europe opened flat, but remember yesterday on the FTSE


we saw the highest closing level in nearly a year,


with house builders among the top performers and mid-cap stocks


touching their best level since last month's shock Brexit vote.


OK, let's jump over the pond and see what'll be making the biz


In a week dominated by profit reports from the world's biggest


technology companies, Facebook's will be hard to top, reporting a


182% increase in net income. If anyone can challenge Facebook's


dominance in the digital advertising market, it is Google. They have


enjoyed rapid growth. The parent company Alphabet is expected to


announce a rise in profits after the stock market closes. Another tech


firm enjoying a banner year is Harmison, profits may be boosted by


the retail giant. The car-maker Ford, and credit card operator


MasterCard will both put out both their results first on Thursday.


Joining us is Richard Dunbar, Investment Director


We have had a raft of results coming in from various companies. One I


want to pick up on his Rolls-Royce. Posting an 80% drop in first-half


profit. That is a huge drop. Is it better than a lot of people are


expecting? They are poor on the face of it, a little better than the


market expected. The 80% fall reflects the mill they have been


through. Poor demand for aero engines and marine engines.


Rolls-Royce is not making enough profit from the sales of the after


service of the engines. They have gone through a massive restructuring


programme, that continues, cutting costs, doing things better,


restoring the company to the position it should be in. Results


slightly better than expected. The market expected a loss. Share price


up 15%. That reflects the views of the current management team are


doing something right. Confidence going forward. When we talk about


Rolls-Royce, people may think of a car, it is not the car company, they


make engines, big plane engines. Cracking new engines out at the


moment. In the next 20 years, Airbus and Boeing will say they need 20,000


plus new aircraft. One third of the plane to get some will have


Rolls-Royce on the side of the engine. One of Britain's's Best


companies. One of the best of three engine makers in the world.


Gradually getting back to the position it should have been in


before. You will stick around to take us through the business papers.


Some good stories. Who selected those?


Still to come: We'll be speaking to a world leading


The man behind brands like Johnnie Walker Scotch whisky,


and Guinness beer will joins us live to talk about the company's latest


results and why it's too early to say if Brexit is bad news


You're with Business Live from BBC News.


And now a look at some of the stories from around the UK.


Investment in the new nuclear plant to be built in Hinkley Point,


Somerset, is set to get final approval today.


Our very own Ben Thompson joins me now from The London Stock Exchange


Have you got any likes? It looks awfully dark. We will need that new


plant just do like you up! Yes, welcome to my new space age area at


the London stock exchange. It is a really big day for corporate news.


One of the biggest news items we are keeping our eye on is that. EDF will


tell us whether they will go ahead with that new nuclear power plant at


Hinkley Point in Somerset. There are similar plants being built at the


moment which are massively and long facing their opening. In northern


France it is 7 billion euros over and at Colston it is six years late.


The initial estimates say it will cost around ?18 billion, and if that


is the case, it would make it the most expensive nuclear power plant


ever built, but some say the costs could escalate as high as ?37


billion. Equally, there is a? Over the timing. When will it be built


and when will it "Makes it is designed to meet 7% of the UK's


energy needs but it is not due to open until 2025 and it could be


later. Way over budget. Another company is Lloyds, their pre-tax


profits have more than doubled but on this announcement it will cut


some 3000 jobs. We have seen the share price drop dramatically. It is


a bank in the eye of the Brexit storm. Yes, and a look at the share


price now, it is one of the biggest borders. 3000 more jobs on top of


the 9000 jobs it announced it would cut last year. It will also close


another 200 branches. That is about 400 branches which will disappear by


the end of the high street next year. They say that as a result of


changing habits in how we do our banking, but also the record low


interest rates which is squeezing the profit margins. They cannot


charge more and for the banks it means smaller profits. Thank you for


talking to us. The top stories the British travel


company Thomas Cook had its results today, the terror attacks, Brexit


and the failed coup in Turkey are all leading customers to cancel


their holidays. We have a raft of results coming out and the decision


by the US Federal Reserve to keep rates on hold. The European markets


have opened fairly flat. In the last couple of hours Diageo


reported a 2.8% increase in sales in the year 30 June -


enabling the company to return You may not have heard of the drinks


company, but you'll certainly have heard of some their


international drinks brands. Diageo owns Captain Morgan's rum,


Smirnoff vodka and Johnnie Walker Aaron is nodding. You are making me


thirsty! Although Europe and North America


accounts for the majority of the company's sales,


Diageo also has a large and growing The company has given investors


plenty to cheer about lately, since Britain took the decision


to leave the European Union, the company's share price


has risen around 16%. Let's speak to Ivan Menezes,


Chief Executive Officer of Diageo. Many thanks for joining us on the


programme. As I was just saying, your company has been, on the


surface of it, a beneficiary of the UK vote to leave the EU. We saw your


share price fall but article 50 is yet to be evoked. Are you concerned


about what will happen to your business, access to the single


market etc, if and when it is a vote? You know, Diageo is a global


business. We have about 6% of our business in the UK. Scotch whiskey


is 25%. It is one of the most healthy food and drink export


businesses the UK has. As it relates to Brexit and what happens, our


company is well positioned. If you look at the results we just


announced, we grew at 3%, expanded margins. North America is a very


important market, it is doing well. Europe is doing well and the


emerging markets are growing. I am confident we will work our way


through a post-Brexit world. What is most important to us is let's keep


Scotch Whisky healthy. This is a thriving, successful business to the


UK and my focus is ensuring we get the right conditions to continue to


be successful, because the runway for Scotch whiskey around the world


is very attractive, particularly in the emerging markets.


Ivan, I want to ask you this, you mentioned the United States, the US


accounts for nearly half of all your money, let's be frank, all the money


you rake in, and you have seen a big improvement in the US, and I wonder


what is behind that turnaround, why are the Americans drinking more? The


Americans are drinking better and they are moving to spirits better!


This works really well for Diageo. What we have done in the last few


years is really sharpened up our focus on the consumer, our marketing


is much better, and you know I love America, because to me, it is the


world's most attractive developing market. You have wonderful


demographics, a growing population, the multi-cultural shifts in


America, the growth of the U know and Asian consumer is very good for


us and it is profitable. Ed is about half our profits and it is the most


sustainable and exciting growth engine for the company and our


brands do really well. Our higher end brands like tequila and Bullet


bourbon are growing right now and it is all about the trend to drink


better and people love their cocktails. Indeed they do! One thing


I am interested in is do you think it is a good time to renegotiate


some of your trade deals, some of the tariffs out there which already


exist? The UK now has an opportunity to negotiate its own deals,


companies like India, given India in particular has huge tariffs, 150%,


as I'm aware of, of wines and spirits, do you see opportunities


now? I do. We as the UK need to get out aggressively and create the best


trade conditions around the world. You point to India. We have a


fabulous business in India in local spirits. It is our number two market


after the United States. Indians love whiskey and Scotch whiskey


still has very high tariffs. If the UK and India could get to a free


trade agreement, that would be very positive for Diageo and I think both


countries have a long connection and to me, this is what the new


government needs to be out doing, creating the conditions outside the


EU to create favourable trade agreements. OK, really good to talk


to you, thank you. Ivan Menezes, chief executive of Diageo. And


remember, we like props next time! He wants us to drink better.


I wonder if Donald Trump is making the Americans drink more?


In a moment we'll take a look through the Business Pages but first


here's a quick reminder of how to get in touch with us.


The Business Live page is where you can stay ahead with all the breaking


business news. We will keep you up-to-date with all the details and


analysis from the BBC's team right around the world. And we want to


hear from you as well. Get involved on the BBC live web page. And you


can find us on Twitter and Facebook. Richard Dunbar, Investment Director


at Aberdeen Asset Management Can we start with this first story?


I'm going off camera now. Sitting is not good. Apparently, it is as bad


as cigarette smoking. As someone who started work when you could smoke in


the office, I find it hard to believe this is the case but


nevertheless, Cambridge University have told us it is. They say if you


walk around for an hour, that is all you need to do. You do not need to


join the gym and standing up in itself is a good thing is so good


news for all of us who wish to cancel our gym


subscription! A scary statistic that sitting down for eight hours


straight increases the risk of premature death for 60%. In our


office there are buttons which raise the desk up so you could stand


instead of sit but sometimes it is like a field of sunflowers rising


and falling as people rise and fall at their computers but nevertheless,


it is positive for this kind of action. US real estate company


buying a big chunk of the UK? They are buying into Pinewood Studios. It


is a US investor taking advantage of a weaker sterling and still having


confidence in the UK real estate market. Some we were worried about


after the Brexit vote and it seems this company is less worried than


others. The fifth biggest economy in the world still standing strong!


Thank you. That is all we have time for.


There will be more business news throughout the day on the BBC Live


webpage and on World Business Report.


Download Subtitles