The Times - UK (2020-08-07)

the times | Friday August 7 2020 2GM 39

Business

Uber Technologies reported another
big loss last night as demand for its ride-
hailing app fell sharply during the
lockdown but orders for its food
delivery service more than doubled in
the second quarter.
The California-based company re-
ported a net loss of $1.8 billion, far
smaller than a year ago when one-time
costs from its initial public offering led
to its largest three-month loss. The lat-
est loss includes charges related to the
laying off of 23 per cent of its workforce.
The number of active platform users
across the 69 countries in which Uber
operates nearly halved year-on-year to
55 million. Gross bookings for rides fell
75 per cent in the three months to
June 30 compared with a year ago and
72 per cent from the previous quarter.
Uber, which was founded in 2009
and is valued at $60 billion, owns the
world’s most popular taxi-hailing app. It
has interests in food delivery, logistics,
bike-sharing services and self-driving

the bank’s annual results for the year

ending November 30, 2019, Ms Boden

said that “Starling is the fastest-grow-

ing SME bank in Europe and now holds

a more than 3 per cent share of the UK’s

SME banking market”.

The mobile app-based service was

founded by Ms Boden, a former Allied

Irish Banks executive, in 2014. It has 1.5

million accounts, including 200,000 for

small and medium-sized companies.

Last year’s accounts show that pre-

tax losses rose to £53.6 million, up from

£24.9 million the previous year. Turn-

over rose from £3.1million to £17million.

In a trading update, Starling said that it

generated £6.7 million of sales in July,

an annualised turnover “run rate” of

£80 million.

Spending on its cards dropped by

close to 20 per cent during the lock-

down but the bank said it had recovered

well in recent weeks. At the end of July,

deposits stood at £3.05 billion.

The new boss at Aviva has taken an

implicit dig at the approach of her

predecessors, promised an urgent

shake-up of the organisation and

signalled a retreat from continental

Europe and the Far East.

Amanda Blanc, who has been in the

role for a month, repeatedly stressed

that difficult decisions would have to be

made to drag the company out of its

decades-long underperformance.

“Not withstanding Covid-19, it is

imperative that Aviva focuses on

unlocking value for our shareholders.

For too long this has proven elusive and

meaningful change is required,” Ms

Blanc, who describes herself as “not a

business-as-usual person”, said.

Aviva reported a “solid” first half with

operating profit falling 12 per cent to

£1.23 billion, after booking pandemic-

related net losses in general insurance

of £165 million.

It also announced the restoration of a

small dividend with a 6p per share in-

terim payout in respect of 2019. In April

it cancelled a 21.4p final dividend worth

£839 million under pressure from

regulators concerned about the impact

of the virus on general insurers.

One of Ms Blanc’s first decisions

appears likely to be rebasing the

continuing dividend to a lower level, as

she announced a review to make it

more sustainable and to reduce debt.

She ruled out a complete break-

up of the company, rejecting one

view that its general insurance

arm should be separated from

life assurance.

The company’s focus would

be on the UK, Ireland and

Canada, she added.

“Where we cannot meet our

strategic objectives, we will take

action and we will

withdraw capital,” she

said. “Ultimately there

Aviva needs a

shake-up, says

its new boss

Patrick Hosking Financial Editor

Uber $1.8bn in red as public stay home

Robert Miller cars. Its aim is to offer a full suite of
transport and delivery services.
Total quarterly revenue fell 29 per
cent in the quarter to $2.24 billion while
gross bookings were down 35 per cent
year-over-year at $10.22 billion.
Revenue at Uber Eats doubled to
$1.2 billion, boosted by demand for
deliveries as Americans largely stayed

at home. Last month Uber expanded its

reach with the acquisition of Postmates

for $2.65 billion to expand the business

of supplying everyday goods.

The company said that it was sticking

to its goal of being profitable on an ad-

justed basis before the end of next year.

Uber recorded an adjusted loss in earn-

ings before interest, taxes, depreciation

and amortisation of $837 million in the

second quarter.

Dara Khosrowshahi, its chief execu-

tive, had vowed to make Uber profitable

on an adjusted ebitda basis before the

end of the year but withdrew that fore-

cast in April because of the health crisis.

Last night the company reaffirmed its

hope to reach that milestone next year.

Uber introduced measures in May to

save more than $1 billion. The company

booked $382 million in restructuring

costs in the second quarter.

“We are fortunate to have such a

natural hedge across our two core

segments — as people stay closer to

home, more people are ordering from

Uber Eats than ever before,” Mr

Khosrowshahi, 51, said.

Dan Ives, an analyst at Wedbush Se-

curities, an investment firm, said that

Uber could be boosted by travellers

wary of taking public transport, a “con-

sumer dynamic” that was becoming

commonplace internationally.

Shares fell $1.06, or 3.3 per cent, to

$33.33 in late trading on Wall Street.

RONALD NIAL BRADSHAW/USAF

Starling gets bounce from

lockdown business loans

James Hurley

Emergency Covid-19 lending has

helped Starling Bank to become the

fastest-growing small business bank in

Europe, according to Anne Boden, its

founder and chief executive.

Ms Boden revealed the dramatic

impact that government-backed loans

had had on the digital bank as it pub-

lished its 2019 results, which showed

that pre-tax losses more than doubled.

She said the rapid growth the bank is

enjoying in 2020 should allow it to

break even by the end of the year.

Starling’s ability to provide taxpayer-

backed loans to help companies survive

the fallout of the pandemic has resulted

in lending growing from £100 million to

£1 billion. Some £673 million was pro-

vided via a single programme, the

bounce-back loan scheme, to more

than 25,000 companies.

In a statement published alongside

Amanda Blanc ruled

out a full break-up

of the business

may be better owners for these busi-

nesses.”

Aviva’s businesses in Italy, France,

Poland and Singapore could be sold,

analysts said, which could raise as

much as £4 billion. A recent attempt to

sell in Singapore was aborted after it

failed to fetch an acceptable price.

Ms Blanc also promised progress in

operations, focusing on efficiencies,

customer experience, pricing and risk

management. Aviva is two thirds of the

way through a previously announced

programme to cut 1,800 jobs.

Analysts at Keefe, Bruyette & Woods

said the decision against a full break-up

was “disappointing”. However, market

reaction was generally positive with the

shares up 13¼p, or 4.6 per cent, to 297½p.

Aviva is Britain’s biggest composite

insurer, offering life assurance and

savings products as well as household,

motor and pet insurance. It has 33 mil-

lion customers and is valued at

£11.5 billion. Its share price is a third of

the level of 20 years ago.

Ms Blanc, 53, who previously held

senior roles at Axa and Zurich Insur-

ance, was promoted to chief executive

last month after Maurice Tulloch, 51,

resigned because of a family illness.

“We’re going to shake up the

organisation,” she promised. There has

already been one high-level departure

in recent weeks. Erica Arnold, the chief

operating officer, left last month.

“From this moment, we must

deliver. Nothing else will do,” Ms

Blanc said, adding that she ex-

pected people to be cynical

about her ability to turn Aviva

around after its poor progress

in the past. “Judge me on my

delivery,” she said.

The investment platform AJ

Bell said retrenchment over-

seas looked certain. It

added that while the

ordinary dividend

looked likely to be

cut, the probable

asset sales raised

the prospect of

special dividends.

75%

Fall in ride bookings in three months to

June 30 compared with previous year

Source: Uber Technologies

placing equivalent to £450 million,
or 20 per cent of its £2.3 billion
stock market capitalisation, left
shares down 4.3 per cent yesterday
to 282½p, off 60 per cent this year.
Meggitt is at the centre of the
storm in the aerospace industry,
with aircraft manufacturers and
enginemakers cutting production
rates by as much as 50 per cent
after demand for new aircraft, parts
and maintenance collapsed during
the pandemic.
The company produces high-
strength composite parts, sensors,
landing gear components and

polymer seals for Boeing and Airbus.

It works for the enginemakers Rolls-

Royce, GE, Pratt & Whitney and

Safran; the business jet manufacturers

Bombardier, Embraer, Gulfstream

and Dassault; and is on the military

programmes for the BAE Systems

Typhoon and Lockheed Martin F-35

fighters, above.

Meggitt said in response to the

reports on Bloomberg: “While

there have been initial signs of a

recovery in the civil aerospace

sector, considerable uncertainty

remains in relation to Covid-19.

“The group continues to review a

range of trading scenarios and

associated actions to mitigate any

material adverse change to the

industry outlook.”

It said that on borrowing facilities

of £1.7 billion, it had access to

£856 million of funds, adding that it

could yet access Bank of England

pandemic emergency loans.

In an effort to recover large cash

outflows during the pandemic, the

company is aiming to cut costs by at

least £400 million, which will mean

that 2,500 of its 12,000-strong

workforce will be laid off. It

employs 2,500 people in the UK.