Business

Air con fault and delays taint new train launch

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Commuters were left frustrated after the Bristol to London train was held up for 41 minutes this morning, and to make matters worse, passengers also reported a leak from an air conditioning unit.

Transport Secretary Chris Grayling was on board the maiden Great Western Railway service along with industry bosses.

According to rail website Realtime Trains, it was due to leave Bristol Temple Meads at 6am but did not depart until about 6.25am.

Commuter Craig McCrum, 38, said “water was pouring out” of the air conditioning system but said he was “not surprised” as he insisted “GWR is a complete shambles”.

He said: “I can deal with water pouring down if they can get me to work on time.

“I’m late probably 50% of the week. I get a train that gets me into London 45 minutes earlier than I should be just to allow for delays every day.”

Chris Grayling, left, and Wales Secretary Alun Cairns after arriving 41 minutes late at Paddington Station, London
Image:Chris Grayling, left, and Wales Secretary Alun Cairns after arriving 41 minutes late at Paddington Station, London

A GWR spokesman said Hitachi would be investigating any issues.

He added: “Unfortunately, the train was delayed this morning due to a minor technical matter that was quickly resolved at the depot.

“These trains have been running successfully on UK tracks for over two years and recently passed the industry standard 5,000 miles running without a fault.”

In a statement, Hitachi apologised for the “technical challenges”.

It added: “We are of course disappointed with an issue with this train’s air conditioning and water ingress in one of the carriages.

“We are investigating this as a matter of priority and will restore the train back into passenger service once fully rectified.”

The first British-built Intercity Express train which was unveiled in December, last year
Image:The first British-built Intercity Express train which was unveiled in December, last year

The disrupted service comes as about 122 of the new Class 800 Hitachi trains are set to replace the Intercity 125 fleet on GWR and Virgin Trains East Coast service by 2020.

The new trains can travel at 140mph but will be limited to 125mph without tracks being upgraded.

There will be more than 4,000 extra seats into London Paddington during peak hours from next year, and 12,000 more seats into London King’s Cross by the end of 2020.

Mr Grayling said the Government was committed to modernising the railways and having “faster, more comfortable” trains.

He added: “These new state-of-the-art trains show our commitment to put passengers at the heart of everything that we do.”

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Lidl to create 500 jobs in regional expansion

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The country’s fastest-growing supermarket chain said it was to build a 754,000 square foot distribution centre outside Peterborough – the sixth such site to be announced within a year as it continues its expansion.

It will bring the number of warehouses used by the German-owned company to 15 and forms part of a £1.5bn investment over the next year.

Lidl and discount rival Aldi have been the big success story in the UK grocery sector since the end of the financial crisis, with industry figures from Kantar Worldpanel showing they now rake in almost £1 in every £8 spent in supermarkets.

:: Aldi sales soar but profits slip amid price war

It was £1 in every £25 a decade ago.

They have continued to grow their respective market shares, though the so-called big four chains – Tesco, Sainsbury’s, Asda and Morrisons – have made progress this year in stemming the outflow of customers.

:: Lidl is UK’s seventh-largest supermarket chain

A fierce industry price war has been raging for years and appears set to continue amid a new squeeze on household budgets – with stores reluctant to pass on Brexit-linked price increases for fear of losing ground to rivals.

Lidl’s head of warehouse expansion, Adrienne Howells, said: “Our expansion across the UK is progressing rapidly, and it’s important we have the right supply chain infrastructure to support this.

“Peterborough is ideally located and we’re pleased to be bringing more jobs to the local community.”

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Thousands stranded as Monarch repatriation ends

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The Civil Aviation Authority (CAA) chartered flights for a two-week period in a £60m operation after the carrier went into administration, to cover the return trips.

But anyone who was not due to return home in that period was not included in the programme.

The CAA said around 1,000 still abroad whose flights were covered by the industry’s ATOL guarantee will be contacted to arrange alternatives.

But administrators KPMG said a total of 4,000 remained overseas, including some who had gone away for planned lengthy stays abroad.

Despite the 24-hour extension, Monarch is not out of the woods yet

Video:860,000 passengers hit as Monarch collapses

That figure suggested 3,000 are not covered by the guarantee and will have to arrange their own way home.

The collapse of Monarch, the UK’s fifth biggest airline, prompted what was described as the UK’s “biggest peacetime repatriation” with 110,000 expected to be flown back.

In the end, less than 85,000 passengers were involved, on 576 flights.

Sam Jones explains how his mum's wedding was affected by the Monarch closure

Video:Holidays ruined by Monarch closure

The CAA said that was partly because some chose to make their own arrangements to return to the UK, while in other cases tour companies brought back their own passengers.

A third group were not eligible for repatriation because they had travelled out after 2 October – the day Monarch went into administration.

The CAA said the two-week programme ended when a flight from Tel Aviv landed at Luton Airport at 3.30am on Monday.

In all, more than 60 aircraft from 27 global airlines were involved, bring passengers from more than 30 destinations in 14 countries to six airports in the UK.

CAA chief executive Andrew Haines said: “This was not a job that any of us wanted to do but we are pleased to have all played our part in Britain’s largest peacetime repatriation.”

Nearly 2,000 people were made redundant after Monarch’s collapse while 750,000 people yet to travel had their trips cancelled.

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Oil prices rise amid Iraq tensions

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Oil pumpImage copyrightReuters

Concern over oil supplies from Iraq has pushed crude prices higher as the country’s government continues its move against Kurdish forces.

The price of Brent crude rose 1.6% to $58.12 a barrel, while US West Texas Crude climbed 1.4% to $52.16.

Iraq has the second largest output in the Opec oil producers’ cartel.

Iraqi officials say they have seized oil installations near the disputed city of Kirkuk, but Kurdish officials deny this.

The country’s oil ministry said oil and natural gas production in the region remained normal and that there was “an agreement with some Kurdish leaders that the oil and gas facilities should stay out of the conflict”.

The military operation was launched on Sunday amid growing tensions after people living under Kurdish control voted overwhelmingly for independence in a referendum last month.

Opinions among analysts were mixed, but Neil Wilson at ETX Capital said Brent prices might struggle to push significantly higher than $60 a barrel because clashes were “unlikely to spark wider disruption to supplies from the Middle East”.

Concerns over potential US sanctions against Iran also helped to push up oil prices after Donald Trump said on Friday he would not certify that Iran is complying with a nuclear accord agreed under the Obama administration in 2015.

Under US law, Congress now has 60 days to decide if fresh sanctions should be imposed against Tehran.

Around one million barrels a day were cut off from global markets during previous sanctions against Iran, according to Reuters.

However, the US is the only signatory of the deal to express hostility towards it leading some analysts to predict any future sanctions would have a comparatively low impact on oil prices.

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Why investors are smashing some top stocks

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Convatec, which apart from products to deal with incontinence also makes wound dressings and skincare treatments, came to the market just under a year ago.

The Reading-based company, which employs 8,500 people in more than 100 countries around the world, raised nearly £1.5bn in an issue which valued it at £4.4bn.

That made it the biggest flotation on the London Stock Exchange in 2016 and the issue, months after the Brexit vote, came as a considerable fillip to the City at a time when a lot of companies, including the waste management firm Biffa and the fitness chain Pure Gym, were deciding against coming to market.

Chaired by Sir Christopher Gent, the highly respected former chief executive of Vodafone, there was a willing market for the shares.

The flotation, which had been priced conservatively, was oversubscribed – that is to say, there were more buyers for the shares than there were shares available – and two months later, the company was admitted to the ranks of the FTSE-100.

Things went swimmingly to begin with. Convatec’s first results as a listed company, released in March, disclosed a 2.3% rise in annual sales with full-year earnings before interest, taxation, depreciation and amortisation (ebitda) rising by 7.1% to a better than expected $508m.

And there appeared to be a good investment story for shareholders to get behind. Paul Moraviec, the chief executive, spoke about how the company aimed to be “the innovative global leader in medical devices for chronic care” by launching new products into existing markets and by entering new markets.

At the results presentation that day, he told investors: “Our chronic care space sits at the sweet spot of global healthcare trends. Our markets are large, growing and structurally strong.

“We enjoy high degrees of recurring revenues. And our research and development process is highly efficient, as we don’t require high cost, high risk trials.

“We’re looking forward, where we see lots of opportunity, with a strong pipeline of new products and still plenty to come from our margin-improvement programme. So we’re confident about the year ahead.”

Accordingly, the shares, priced at 225p each in the flotation, rose to as high as 349.1p in June this year – valuing the company at £6.8bn.

On Monday, though, the picture looked quite messy.

Convatec warned that sales will now grow this year by between 1-2%, rather than the previously expected 4%, thanks to a combination of factors.

These include production backlogs created by moving two manufacturing lines from Greensboro in North Carolina to the Dominican Republic; a loss of orders resulting from a failure to clear a previous backlog, partly due to hurricanes in the Caribbean and lower-than-expected sales of new products.

Shares of Convatec have fallen 21% on the news, a huge fall for a Footsie company in a single day, taking them below the flotation price.

As Michael Jungling, an analyst at investment bank Morgan Stanley, put it: “(This) somewhat undermines the equity story set out at the time of the IPO last year.”

But the violence of the share price reaction tells you something else. Stock markets this autumn have been very strong.

The three main US indices – the S&P500, the Dow Jones Industrial Average and the Nasdaq – have regularly been hitting new records. So too, last week, did the FTSE 100 in Britain and the DAX in Germany. Even the Nikkei in Japan has just hit its highest level for 21 years.

Yet a lot of professional investors are wary of the rally. Interest rates are already rising in the US and are likely to in Britain before too long.

Even the European Central Bank may begin to tighten monetary policy before long. This means that, with the era of cheap money coming to an end, equity valuations are going to be have to be underpinned more than ever by strong company earnings.

And so when a company disappoints on earnings unexpectedly, as Convatec did on Monday and the engineering group GKN – a fellow Footsie member – did on Friday, their share price is going to get smashed.

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Ex-BP boss Hayward close to Colombian oil deal

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Sky News has learnt that Mr Hayward and Carlyle, the private equity firm, are in detailed talks about a deal in the Latin American country that is thought to be worth hundreds of millions of dollars.

Mr Hayward, who stepped down as BP’s chief executive after the Gulf of Mexico oil disaster in 2010, is said to be planning to travel to Colombia in the coming days to pursue a transaction, further details of which were unclear on Monday.

If completed, the deal would come a year after Mr Hayward – whose wife is Colombian – began working with Carlyle to identify prospective oil and gas purchases in the region.

Bob Maguire, a managing director at Carlyle International Energy Partners, is understood to be closely involved in the potential acquisition.

Mr Hayward has had an indifferent track record since leaving BP, bringing an Indonesian coal venture – Bumi Resources – and a Kurdistan-focused oil business – Genel Energy – to the London stock market.

Both companies significantly underperformed in terms of their financial returns, and Mr Hayward is no longer involved with either.

He continues to chair Glencore, the commodities trading giant and mining group, which has recovered from a balance sheet crisis and is now back on the acquisition trail.

Mr Hayward has become one of the most prominent figures in corporate Britain as a result of his tenure at BP.

He left the company soon after the Deepwater Horizon oil spill seven-and-a-half years ago, with Bob Dudley installed as his successor.

Mr Hayward’s year-long search for oil assets in Latin America is not the only quest to invest in the industry in which Carlyle has been involved.

Alongside CVC Capital Partners, the firm has also agreed to back Neptune Oil and Gas, a company established by the former Centrica chief executive Sam Laidlaw – a friend of Mr Hayward’s.

A string of vehicles have been set up to buy oil assets on the cheap, but many have struggled to gain traction because of a reluctance among oil majors to dispose of them at the bottom of the cycle.

Carlyle declined to comment, while Mr Hayward could not be reached.

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FTSE 100 slips as Convatec slumps

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Market trader (file picture)Image copyrightGetty Images

The London market edged higher as trading got under way but shares in Convatec slumped after the medical technology company cut its revenue growth forecast.

Convatec shares dropped 13.6% after it cut its target for full-year organic revenue growth to 1%-2% from its previous estimate of 4%.

The company said it had been “severely” affected by supply issues.

Despite Convatec’s slide, the FTSE 100 rose 6.67 points to 7,542.11.

Shares in GKN slid a further 1.1% after Societe Generale cut its rating on the engineering company to “hold”.

On Friday. GKN shares had fallen by nearly 10% after it issued a profit warning.

The FTSE 100 was supported by mining shares, which were boosted by positive economic news from China. Among the miners, Rio Tinto, Anglo American, BHP Billiton and Glencore were all up by more than 2%.

On the currency markets, the pound rose 0.1% against the dollar to $1.3300 and was 0.4% higher against the euro at €1.1282.

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Holiday loan hell

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Jessica Malolepszy took out a loan for a holiday, which then meant she needed a loan to pay her rent, which resulted in her signing up for credit cards – which left her being chased by creditors.

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Vauxhall: Union calls for support to protect jobs

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Ellesmere Port production lineImage copyrightVauxhall

The government should give “a clear signal” that it will support the automotive industry through Brexit to protect jobs at Vauxhall’s Ellesmere Port plant, the Unite union says.

The union is calling for reassurance from the plant’s French owners, PSA Group, that they will continue to invest in the facility.

But Unite said the government also needed to provide more certainty.

PSA Group has announced 400 job losses in Ellesmere Port due to falling sales.

“We ask that ministers give PSA and other manufacturers a clear signal that government will do all it needs to do to support this crucial sector through the Brexit process,” said Unite general secretary Len McCluskey.

Unite described the job losses as a “major blow” and another “huge loss” to the economy in the north of the UK, coming just days after BAE Systems announced it was cutting nearly 2,000 jobs, predominantly at sites in Yorkshire and Lancashire.

The union said it was seeking high level meetings with the UK government and PSA executives to discuss the future of the Ellesmere Port plant, which makes Vauxhall’s Astra models.

Announcing the job losses, PSA Group, which owns the Peugeot, Citroen and Opel brands, said that manufacturing costs at Ellesmere were higher than other “benchmark plants” in the group.

Ellesmere Port will move staff from two production shifts to one in early 2018.

Vauxhall employs about 4,500 people in the UK, with about 1,800 at Ellesmere Port. The company also has a factory at Luton, which makes vans.

When PSA bought Vauxhall from General Motors earlier this year, UK Prime Minister Theresa May personally sought assurances from the French company’s chief executive that investment in the UK plants would be maintained.

But last month, Mr Tavares said it was hard to decide upon the group’s strategy for Vauxhall given a lack of clarity over the UK’s plans to leave the European Union.

Media playback is unsupported on your device
Media captionPSA boss Carlos Tavares was asked last month about guarantees for Vauxhall-Opel workers

However, a Vauxhall spokesman said the move from two shifts to one was nothing to do with Brexit uncertainty, but was about maintaining competitiveness in a changing industry.

He pointed out that sales of so-called sports utility vehicles (SUVs) have grown rapidly across Europe, while the type of five-door estates and saloons made at Ellesmere Port have fallen.

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Wi-fi security flaw ‘puts devices at risk of hacks’

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Mobile phonesImage copyrightGetty Images
Image caption Most wi-fi devices could be at risk

The wi-fi connections of businesses and homes around the world are at risk, according to researchers who have revealed a major flaw dubbed Krack.

It concerns an authentication system which is widely used to secure wireless connections.

Experts said it could leave “the majority” of connections at risk until they are patched.

The researchers added the attack method was “exceptionally devastating” for Android 6.0 or above and Linux.

A Google spokesperson said: “We’re aware of the issue, and we will be patching any affected devices in the coming weeks.”

The US Computer Emergency Readiness Team (Cert) has issued a warning on the flaw.

“US-Cert has become aware of several key management vulnerabilities in the four-way handshake of wi-fi protected access II (WPA2) security protocol,” it said.

“Most or all correct implementations of the standard will be affected.”

Computer security expert from the University of Surrey Prof Alan Woodward said: “This is a flaw in the standard, so potentially there is a high risk to every single wi-fi connection out there, corporate and domestic.

“The risk will depend on a number of factors including the time it takes to launch an attack and whether you need to be connected to the network to launch one, but the paper suggests that an attack is relatively easy to launch.

“It will leave the majority of wi-fi connections at risk until vendors of routers can issue patches.”

Security handshake

The vulnerability was discovered by researchers led by Mathy Vanhoef, from Belgian university, KU Leuven.

According to his paper, the issue centres around a system of random number generation known as nonce (a number that can only be used once), which can in fact be reused to allow an attacker to enter a network and snoop on the data being sent in it.

“All protected wi-fi networks use the four-way handshake to generate a fresh session key and so far this 14-year-old handshake has remained free from attacks, he writes in the paper describing Krack (key reinstallation attacks).

“Every wi-fi device is vulnerable to some variants of our attacks. Our attack is exceptionally devastating against Android 6.0: it forces the client into using a predictable all-zero encryption key.”

Dr Steven Murdoch from University College, London said there were two mitigating factors to what he agreed was a “huge vulnerability”.

“The attacker has to be physically nearby and if there is encryption on the web browser, it is harder to exploit.”

More details can be found at this website.


Krack explained

Prof Alan Woodward explained the issue to the BBC.

When any device uses wi-fi to connect to, say, a router it does what is known as a “handshake”: it goes through a four-step dialogue, whereby the two devices agree a key to use to secure the data being passed (a “session key”).

This attack begins by tricking a victim into reinstalling the live key by replaying a modified version of the original handshake. In doing this a number of important set-up values can be reset which can, for example, render certain elements of the encryption much weaker.

This attacks appears to work on all wi-fis tested – prior to the patches currently being issued.

In some it is possible to decrypt and inject data, enabling an attacker to hijack a connection. In others it is even worse as it is possible to forge a connection, which, as the researchers note, is “catastrophic”.

The people this could be most problematic for are the internet service providers who have millions of routers in customers’ homes. How will they make sure all of them are secure?

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