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Why Domino’s Pizza sell-off was overcooked

Hungry bargain hunters gobbled up shares in Domino’s, correctly betting than an early slump was unfair.

After selling 12 pizzas every second on New Year’s Day, the rest of 2019 certainly hasn’t panned out in the same emphatic fashion for Domino’s Pizzaor its investors.

Shares slumped as much as 12 per cent in early deals, undoing all the rally of the past six weeks, as the company warned that its international operation would no longer break even this year. Its UK business of more than 1,100 stores also underwhelmed the City with like-for-like sales growth of 3.1 per cent in the quarter to March 31.

The fall-out from the first quarter update continues the poor run of form for the FTSE 250 stock, which had been testing the 400p barrier as recently as last summer.

Last week’s UK figures were distorted by tough comparatives from a year earlier after a £1.99 promotion helped to boost like-for-like sales by 7 per cent in Q1 2018. Volumes were down 2.7 per cent in the most recent period, despite that bumper New Year’s Day when 516,500 pizzas were sold.

Analysts at Numis are relaxed about the first quarter performance in the UK, particularly as like-for-like sales on a two-year basis continue the 10 per cent growth rate seen in Q4.

Numis left its forecast unchanged for UK trading this year, although it is cutting group pre-tax profits by 5 per cent to £95 million due to the weaker guidance for the international division following its £4.1 million loss last year.

Domino’s reported “persistently weak” system sales in all its international markets, with trading visibility also limited. New management teams in Norway, Sweden and Switzerland are attempting to improve the performance, but in the meantime the company is tightening its focus on costs and capital deployment.

Numis said the continued poor performance of a business accounting for 10% of trade will leave some investors to ask if Domino’s should be deploying capital into loss-making markets.

However, the broker still remains supportive of Domino’s and its highly cash generative business model. Trading on 15 times 2019 earnings, Numis said the shares were attractively valued and expected them to re-rate back towards 340p over time.

Canaccord Genuity has a price target of 310p, while UBS thinks the shares are worth 245p. UBS analyst Heidi Richardson said the lack of an update on discussions with UK franchisees was also disappointing given the limited visibility on future store openings.

Seven new UK stores were added in the year to date, compared with the 58 added in the previous financial year. Domino’s admitted in full-year results that there were likely to be fewer new stores this year given the ongoing discussions with franchisees on commercial terms.

 

The shares have ebbed away since then, even though Domino’s deserves credit for continuing to show resilience in the face of competition from the likes of Just Eat (LSE:JE.) and Deliveroo. It’s also had the distraction of an ongoing dispute with franchisees, some of whom are fighting for a bigger slice of profits.

 

Read More – www.cityam.com

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Microsoft to open first UK store in London

The tech giant’s first physical UK store will open in Regent Street on 11 July, just a one minute walk away from Apple’s London flagship branch.

The branch near Oxford Circus will feature “immersive video walls” throughout and an “answer deck”, offering tech support, training, repairs and advice.

Free tech, coding and Stem learning workshops and programmes will be offered at the store’s community theatre.

John Carter, who has been appointed Microsoft Store manager, said: “This will be more than just a store. Customers will have the chance to explore and get hands-on with technology.

“We’ve got a passionate group of store associates ready to bring the experience of tech alive for customers. Unique to any job in retail, there will be many ways for us to give back to our communities, help them build connections, and grow.”

Microsoft already runs three gaming studios in the UK, as well as startup hub Reactor London and a research lab in Cambridge.

This new flagship store builds upon Microsoft’s significant track record of investment in the UK,” said Cindy Rose from Microsoft UK.

“More importantly, located in the heart of central London it will serve as a vibrant hub – for both visitors to our great city as well as a variety of different local communities – to come and play, learn, create and discover.”

Read More – www.cityam.com

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Premier Foods chairman to step down

Mr Kipling maker Premier Foods has revealed that its chairman is set to retire from his role this summer less than two years after taking on the job.

Keith Hamill, who was appointed chair of the firm in August 2017, has told the board of his decision to retire later this year at the group’s annual general meeting (AGM) in July.

The departure comes six months after the firm was rocked by the exit of its chief executive Gavin Darby, who stepped down in the wake of pressure from an activist investor.

A full recruitment process for a permanent chairman is underway, led by Richard Hodgson, who has been appointed senior independent director today.

Pam Powell has also been made chair of the remuneration committee this morning. Both have been non-executive directors for several years.

The board of the St Albans-based business has faced sharp criticism from activist fund Oasis Management in recent years over its falling share price, which had plunged from 46p to 30p between July 2018 and January 2019.

The share price has since recovered some its losses, climbing to 36p, but the group is still facing pressure as it continues its hunt for a new chief executive.

Read More – www.cityam.com

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Boeing 737 Max won’t fly again before August

Plane grounded after two crashes likely to remain grounded into peak season.

The Boeing 737 Max aircraft will not return to the skies before August, according to the head of aviation’s main trade body.

The 737 Max was grounded by regulators in the wake of two crashes, and although manufacturer Boeing has been working on a fix to allay safety concerns, it is likely to remain out of service for another 10 to 12 weeks, into peak season for many airlines.

Alexandre de Juniac, the chief executive of the International Air Transport Association, said the timing would depend on regulators, but he hoped to see a unified global timetable for the model’s reintroduction.

The grounding of the 737 Max came first in China and then Europe before the US Federal Aviation Administration (FAA) eventually followed suit, after a crash in Ethiopia in March that killed all 157 people on board. It was the 737 Max’s second disaster in five months, after 189 people were killed in Indonesia in October.

Speaking in Seoul ahead of the association’s annual meeting, De Juniac said airlines were not expecting a return to service within the next 10 to 12 weeks: “But it is not our hands. That is in the hands of regulators.”

Iata is planning a summit meeting between airlines, regulators and Boeing in July to discuss a coordinated timeline to restore the 737 Max to commercial flying, De Juniac said. “We hope that [the regulators] will align their timeframe,” he said.

The 737 Max disasters have ignited tensions between regulators on either side of the Atlantic, amid concerns over the FAA’s relationship with Boeing, including the degree of self-certification.

Ethiopia chose to send the data recorders from the crash to safety investigators in Paris, and the European Union Aviation Safety Agency has indicated it would carry out its own assessment of the 737 fix, rather than rely on the FAA.

According to Reuters, sources at ICAO, the UN aviation agency, believe the FAA will approve the 737 Max again as soon as late June.

US operators United Airlines, American Airlines and Southwest Airlines, early customers of the model sold as a more fuel-efficient iteration of the 737 shorthaul workhorse, have removed the planes from their flight schedules until early to mid-August.

De Juniac said prolonged grounding was “taking its toll” on airlines. Although Iata expects its 290 airline members to be recording a 10th consecutive year of aggregate profit, he said the 737 was adding to headwinds including “rising costs, trade wars and other uncertainties [that] are likely to have an impact on the bottom line”.

Figures for air freight releasedon Wednesday by Iata showed a 4.7% year-on-year decline in April. De Juniac added: “It is clear that trade tensions are taking their toll on the cargo industry.”

 

Read More – www.theguardian.com

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Flybe boss announces resignation, boosting male domination of aviation

The airline, which competes for passengers with Europe’s two budget giants, easyJet and Ryanair, is shrinking its fleet and network in an attempt to restore profitability.

On a day when Flybe cancelled dozens of flights due to strikes in Amsterdam, the chief executive of the troubled airline announced she would stand down on 15 July.

Christine Ourmieres-Widener’s departure is expected to coincide with Connect Airways – a consortium of Virgin Atlantic, Stobart Air and a US investor – taking control of the Exeter-based regional airline.

She has been chief executive of the Exeter-based airline for two years.

Ms Ourmieres-Widener told staff in an internal email: “Together, we have been able to secure the jobs of our loyal Flybe employees with the sale to Connect Airways and provide our customers and the UK with the vital transport and travel infrastructure they rely on, while preparing Flybe for a bright future under its new ownership.”

In the official public announcement shortly afterwards, Flybe director Jonathan Peachey praised “her tireless efforts to safeguard the future for the customers and communities who rely on Flybe, as well as the company’s employees, its pension-fund members and its creditors”.

In a challenging environment which has seen several airlines collapse, Ms Ourmieres-Widener presided over a spell of heavy losses.

Read More – www.independent.co.uk

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Should cyber-security be more chameleon, less rhino?

Billions are being lost to cyber-crime each year, and the problem seems to be getting worse. So could we ever create unhackable computers beyond the reach of criminals and spies? Israeli researchers are coming up with some interesting solutions.

The key to stopping the hackers, explains Neatsun Ziv, vice president of cyber-security products at Tel Aviv-based Check Point Security Technologies, is to make hacking unprofitable.

“We’re currently tracking 150 hacking groups a week, and they’re making $100,000 a week each,” he tells the BBC.

“If we raise the bar, they lose money. They don’t want to lose money.”

This means making it difficult enough for hackers to break in that they choose easier targets.

And this has been the main principle governing the cyber-security industry ever since it was invented – surrounding businesses with enough armour plating to make it too time-consuming for hackers to drill through. The rhinoceros approach, you might call it.

But some think the industry needs to be less rhinoceros and more chameleon, camouflaging itself against attack.

“We need to bring prevention back into the game,” says Yuval Danieli, vice president of customer services at Israeli cyber-security firm Morphisec.

“Most of the world is busy with detection and remediation – threat hunting – instead of preventing the cyber-attack before it occurs.”

Morphisec – born out of research done at Ben-Gurion University – has developed what it calls “moving target security”. It’s a way of scrambling the names, locations and references of each file and software application in a computer’s memory to make it harder for malware to get its teeth stuck in to your system.

The mutation occurs each time the computer is turned on so the system is never configured the same way twice. The firm’s tech is used to protect the London Stock Exchange and Japanese industrial robotics firm Yaskawa, as well as bank and hotel chains.

But the most effective way to secure a computer is to isolate it from local networks and the internet completely – so-called air gapping. You would need to gain physical access to the computer to steal data.

 

Read More – www.bbc.co.uk

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Could aviation ever be less polluting?

The aviation industry is under pressure to reduce carbon emissions, yet air travel continues to grow in popularity around the world. Can technological innovation help square this circle, or should we simply fly less often?

Once a byword for innovation and progress, many people now view aviation as dirty and dangerous to the environment.

It contributes about 2% of the world’s global emissions, and this is set to rise.

IATA, the airline trade body, predicts that passenger numbers will double to 8.2 billion a year by 2037. Planemaker Boeing forecasts there will be demand for 42,700-plus new aircraft over the next 20 years. Airbus predicts much the same.

Yet by 2050, the European Union wants the industry to reduce emissions of CO2 of 75%, of nitrogen oxides by 90%, and noise by 65%. And a new Carbon Offsetting and Reduction Scheme for International Aviation, agreed by 70 countries, comes into force in 2020.

So what is the industry doing to meet these formidable challenges?

Rolls-Royce, one of the world’s major aero-engine makers, says its new-generation UltraFan, more than 10 years in development and scheduled to be ready for service in the middle of the next decade, will be 25% more fuel efficient than its first generation Trent engine.

Read More – www.bbc.co.uk

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Conjuring designs from thin air in a virtual world

Virtual Reality (VR) technology promised to make it possible for designers to ‘see’ new cars, factories and houses before they had been even built. With new high-quality headsets and software, that vision is closer to coming true.

Most designs used to start with an idea, a pen and some paper.

Now, imagine conjuring 3D shapes out of thin air and sharing your life-like designs in real time with people half way around the world.

The whole process of designing a new product becomes faster, cheaper and more effective. VR is finally beginning to fulfil its potential for business.

“You can walk around your sketches so you can see how your lines work in a 3D environment, and move freely in a room,” explains Jan Pflueger, augmented and virtual reality co-ordinator for German car firm Audi.

In the past, the technology – hardware, software, connectivity – simply wasn’t up to the job.

“Designers didn’t like using headsets because the image resolution was too low,” says Mr Pflueger.

Not only were the images poor quality, the headsets were heavy and uncomfortable to wear.

But now that processing speeds have increased and optics tech has improved, we’re reaching the stage where VR is coming close to the limits of what the human eye can perceive.

For example, Audi is working with Finnish start-up Varjo, which has recently starting selling a high-end (€5,995; £5,170) headset boasting “human eye resolution” using a technique called “foveated rendering”.

It uses eye-tracking technology to tell which part of the image you’re focusing on, then concentrates its processing power on that section to render it in high definition.

So you perceive the highest quality without having to process the entire image in high definition for every frame, which would require huge computing resources.

“In the beginning, designers hadn’t been able to view their designs properly, but now they can walk around cars or other objects in life size,” explains Niko Eiden, Varjo chief executive.

And because the image quality is so good, car designers can experiment with different materials for seats, dashboards and so on without having to make expensive physical models, says Mr Pflueger.

“This speeds up the design process because they can make decisions about how designs should be modified at a very early stage,” he adds.

 

Read More – www.bbc.co.uk

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How damaging is the Huawei row for the US and China?

The US is ramping up a conflict with China, putting their economies and their diplomatic relationship at risk.

It has moved to restrict Huawei’s ability to trade with US firms, shortly after reigniting the trade war with tariff hikes.

The latest blows to the Chinese telecoms giant mark a grave escalation in the US-China power struggle.

As the trade war broadens into a “technology cold war”, the prospect of a deal looks increasingly distant.

“The US action against Huawei is a watershed moment and a very significant escalation of tensions,” says Michael Hirson, Asia director at the Eurasia Group.

“A trade deal is not doomed but looks very unlikely, especially in the near term.”

The crackdown on Huawei has become a central part of relations between Washington and Beijing, which has primarily played out as a trade war over the past year.

While the US has justified its actions against Huawei based on the alleged risk it poses to national security, US President Donald Trump has also linked it to the trade row.

Only recently, Mr Trump said Huawei could be part of a trade deal between the world’s two largest economies.

Such comments risk reinforcing a view that the action against Huawei is about more than just security risks.

Some see it as an attempt by the US to contain a powerful Chinese firm, and by extension China’s growing importance in the world.

“The prospect of a US action hobbling one of China’s most prominent tech companies, and key to its global ambitions in 5G, is already evoking a surge of nationalist sentiment in China,” says Mr Hirson.

 

Read More – www.bbc.co.uk

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5G: Finally, it’s here in the UK – but so what?

After years of hype – and sometimes confusion – the UK finally has a 5G network.

BT’s EE subsidiary is the first to launch a service – and if you’re feeling wealthy enough and live in the right place, you can sign up.

The lowest-priced deal is £54 a month plus a one-off £170 fee for a compatible handset.

But bear in mind that buys you only 10GB of data a month, which you will be likely to chew through fairly quickly if you take advantage of the next-generation technology to download lots of media.

For many people, it may make sense to wait – and not just to take advantage of rival offers from Vodafone, which starts its own 5G service in about five weeks.

The two operators are launching in select cities only.

And even there, the connectivity will be patchy, sometimes offering only outdoor connectivity, sometimes none at all – so customers will probably default to a slower 4G signal much of the time.

Chip-maker Qualcomm has promised the first 5G phones will offer “all-day battery life” – but second- and third-generation modems will inevitably be more energy-efficient and thus allow handset-makers to offer either longer life between charges or thinner phones.

What’s more, many of the innovations that promise to make 5G truly disruptive have yet to arrive. But more on that in a bit.

How fast will it go?

The communications watchdog Ofcom suggests that in time 5G could offer speeds of 20Gbps.

That is fast enough to download an ultra-high definition 4K movie in less time than it takes to read its description.

But for now, you should temper your expectations.

To start with, the fibre lines EE is using to link each 5G site to its network have a total capacity of only 10Gbps, which must be shared around.

The network has suggested that, on average, users will achieve about 150-200Mbps downloads at launch, with lucky individuals hitting about 1Gbps at quiet times.

So, wait times for such big files will still be measured in minutes rather than seconds.

Even so, this would still be an improvement on the 29.6Mbps that OpenSignal said that EE typically provided via its 4G network.

Of course, there’s another way to measure speed and that is in terms of latency – the lag between sending a command and getting a response.

In time, 5G is supposed to provide latencies of one millisecond or less, compared with the 20-70 milliseconds on offer today.

That will make playing videos games powered by a cloud-based service a more responsive experience and will pave the way for new use cases – such as remote-controlled vehicles, surgical robots, and live-streamed virtual reality.

To start with, however, things won’t be close to that level.

EE says to expect latency of about 20 milliseconds at launch, falling to 10 milliseconds within the next decade.

Is it just about faster phones?

No – though that’s undoubtedly the short-term hook to attract subscribers.

One of the biggest long-term benefits of 5G will be the ability for mobile networks to provide more connections at once.

In theory, 5G will be able to simultaneously support more than a million devices per sq km (0.4 sq miles), a big jump over the 60,000-odd devices that 4G technology maxes out at.

But to make this possible, antennas will be needed all over the place – from lamp-posts to bus shelters, in addition to more of the rooftop masts we’re already used to.

These in turn will support hundreds of thousands of data-capturing sensors that will allow the authorities and businesses to gain deeper insights about behaviour and provide “smarter” services.

Futurists envisage benefits such as a customer’s smart-home automatically ordering the ingredients for meals that have been nutritionally tailored to their activities, while retailers make use of related data to ensure they have the right amount of stock to hand, thus minimising lost sales and goods going to waste.

 

Read More – www.bbc.co.uk