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“Strategic options through which Cineworld may achieve its restructuring objectives include a possible voluntary Chapter 11 filing in the United States,” the company said.

Cineworld is approximately $5 billion in debt and has struggled to recover from the Covid-19 lockdowns which saw the chain close its doors for several months. Analysts say that, while recent films such as the Top Gun, Thor, and James Bond releases have performed well, there haven’t been enough of these big titles to lure enough customers back to the big screen. 

On Friday, Cineworld shares dropped 60% amid increasing speculation that bankruptcy was likely. 

Cineworld has 750 sites in the UK and employs more than 28,000 people across 10 countries.

The cinema chain has warned of what its latest plans could mean for investors.

In a Monday statement, the company said: “Cineworld would expect to maintain its operations in the ordinary course until and following any filing and ultimately to continue its business over the longer term with no significant impact upon its employees. As previously announced, any deleveraging transaction would, however, result in very significant dilution of existing equity interests in Cineworld.”

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The company revealed that first-quarter sales dipped 35% in China a vital market for its clothing. Before the onset of the pandemic in early 2020, around one-third of the global luxury industry relied on Chinese spending, both at home and as tourists aboard. 

Excluding China, Burberry’s sales rose 16% globally, but when included, sales were up just 1%. The company said that EMEIA sales were up 47% compared with the first quarter of last year which was heavily impacted by lockdowns and global restrictions. 

Burberry Chief Executive Jonathan Akeroyd commented: “Our performance in the quarter continued to be impacted by lockdowns in mainland China but I was pleased to see our more localised approach drive recovery in EMEIA (Europe, the Middle East, India and Africa), where spending by local clients was above pre-pandemic levels.”

“Our focus categories, leather goods and outerwear continued to perform well outside of mainland China and our programme of brand activations boosted customer engagement.”

“While the current macroeconomic environment creates some near-term uncertainty, we are confident we can build on our platform for growth,” Akeroyd continued.  

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At the beginning of the pandemic, Congress formed several new programmes to support the millions of people who lost their jobs due to the introduction of lockdowns and the onset of economic uncertainty. These programmes, which officially ended last September, worked together to increase weekly benefits, extend their duration, and make more people eligible to receive them. 

Over this period, the federal government issued nearly $873 billion in total unemployment payments, with the Labor Department also revealing that criminals were able to defraud the system due to programme weaknesses. 

“The unprecedented infusion of federal funds into the UI program during the pandemic gave individuals and organized criminal groups a high-value target to exploit. That, combined with easily attainable stolen personally identifiable information and continuing UI program weaknesses identified by the OIG over the last several years, created a perfect storm that allowed criminals to defraud the system,” the agency’s report said. 

“Applying the 18.71 percent to the estimated $872.5 billion in pandemic UI payments,36 at least $163 billion in pandemic UI benefits could have been paid improperly, with a significant portion attributable to fraud. Based on the OIG’s audit and investigative work, the improper payment rate for pandemic UI programs is likely higher than 18.71 percent.”

The drop has sent the retailer’s shares down 2%. 

Across the board, companies in the United States have been struggling with higher costs due to supply chain disruptions, worsened by the ongoing conflict in Ukraine and renewed Covid-19 lockdowns in China.

Costco plans to up prices in certain areas to combat record-high inflation. But, despite this challenge, the retailer still succeeded in posting quarterly profit and revenue that topped estimates. In the quarter which ended May 8, Costco’s total revenue increased 16% to $52.60 billion, compared with estimates of $51.71 billion. 

Additionally, Costco’s efforts to keep gas prices several cents lower than the national average have boosted sales and memberships. 

Klarna CEO and co-founder, Sebastian Siemiatkowski, made the announcement to his workforce via a pre-recorded video message on Monday. While most Klarna employees won’t be impacted by the cuts, Siemiatkowski said some will be informed that Klarna can no longer offer them a role. 

“When we set our business plans for 2022 in the autumn of last year, it was a very different world than the one we are in today,” Siemiatkowski said.

“Since then, we have seen a tragic and unnecessary war in Ukraine unfold, a shift in consumer sentiment, a steep increase in inflation, a highly volatile stock market and a likely recession.”

Klarna currently has over 6,500 employees worldwide.

Buy now pay later companies, such as Klarna, which allow consumers to spread the cost of purchases over a series of interest-free instalments, became exceedingly popular over the Covid-19 pandemic as consumers spent more on material items. 

However, a potential recession would undoubtedly see the popularity of such services decline as consumers look to cut down on non-essential spending.

It’s not hard to imagine why equal access to opportunity is still a major concern for women across the industry. Consider the boardrooms and executive leadership teams of major companies, and ask yourself: Who is often seen seated at the table?

Bridging the gender divide in 2022

The reality is that the number of women in the most senior roles has only marginally improved. To put this into perspective, a 2021 report by the Fintech Diversity Radar, commissioned by London-based data and analytics company Findable, revealed that women make up only 11% of all board members globally. Added to this, just 5.6% of all fintech CEOs are women, and less than 4% of women hold the C-level roles of chief innovation or technology officer. 

So, what practical steps can our industry take to break the bias in 2022 and drive greater change? First, it’s important to explore and address the subtle biases that exist, identifying where and what they are. This is especially important in traditionally male-skewed functions, such as Risk, Technology, and Finance as well as key leadership roles, where significant gender gaps are common. 

Across the industry, work is being done to raise awareness of where disparities exist. This includes addressing what is termed ‘affinity bias’, hiring or promoting people who are more like ourselves in appearance, beliefs and background, as well as ‘benevolence bias’, limiting an individual’s autonomy by presuming what’s best for them, even if it’s done in an effort to be kind. 

An example of this might be a conscious decision made by unconscious assumptions about motherhood which could result in a working mother receiving less encouragement and support to get to the next level in her career compared to a male colleague. 

To reduce the risk of unconscious bias, we need to recognise it exists and pursue proactive strategies to challenge the assumptions behind them. An obvious place to start is to look at how we’re structuring our recruitment framework and the processes for selecting new talent. Hiring systems are flawed and biases can pose an issue across the entire talent funnel. It’s important to consider all aspects of the talent management process and not only how to attract, develop, promote and retain female talent but also how to bring line managers along on the journey. 

Gender equity in the time of COVID-19

While the flexibility to work from home has been a great benefit to most, mandatory lockdown orders issued to mitigate the spread of the pandemic have also exacerbated deeply ingrained gender inequality as responsibilities for family well-being amid a global health crisis disproportionately fell upon women. Suddenly, many women and caregivers were catapulted into a scenario where they were forced to juggle the demands of their work alongside the additional tasks of caring for their children during school and nursery closures.

Now, with the restrictions of COVID-19 lifting, it is important we ensure that the pandemic does not leave behind a long-term negative legacy on the career trajectory of working women. As companies look to implement hybrid working models, they must also invest in opportunities for those who may find it less convenient to be in the office to ensure all employees remain visible.

Making time spent in the office more meaningful is key. We need to create more purposeful in-person opportunities that allow for those experiences that are less effective through on-screen interactions. These include networking events, informal coffee-break mentoring, and developing support networks among colleagues with similar challenges

Closing the entitlement gap

Overall, companies need to think openly about how they’re ushering in and achieving a balance between flexibility and visibility while establishing clear pathways for career advancement that are equal to their male counterparts. 

Initiatives rooted in supporting diversity, equity and inclusion and celebrations such as International Women’s Day do a great job of shining a spotlight on not only the wins but also drawing attention to the biases and specific challenges that women in the payments industry still experience today. 

The latest research from London-based women’s empowerment organisation The Female Lead indicates that the gender entitlement gap often stymies career progression among women in the workforce, particularly within the payments industry. The report draws attention to the fact that many women feel less entitled to ask for pay raises, promotions, professional support, and the ability to set healthy boundaries between work and home life, regardless of how well they are performing in their roles. 

Understanding that there is an entitlement gap is the first step. Closing the gap is about sharing stories and being bold enough to call out potential biases that this can create, including institutional policies and informal practices that perpetuate pay disparities and career outcomes for women. 

There is no overnight fix, but we can all advocate for more fundamental, enduring change. Payments is an incredibly exciting industry that continues to employ and attract a growing list of amazing female talent and leaders, but we have a long way to go. By coming together to recognise and talk about the reasons for the lack of representation, we can put more energy behind breaking through some of the barriers and creating an environment for women to thrive and transform the industry.

About the author: Paulette Rowe has led Paysafe’s Ecommerce & Integrated Solutions IES) division as its chief executive officer since January 2020. She has over 20 years of experience in the payments and financial services industries, and her leadership includes Facebook, Barclaycard, and Royal Bank of Scotland. 

Michael Kamerman, CEO of Skilling, shares his opinion on what stock you should watch this week.

Amazon

This week we are seeing Q1 earning results from 175 of the S&P 500 companies including big tech results from Microsoft, Google and Meta. Companies like Apple have thrived in the new year and reached all-time record earnings this quarter, continuing to make them an attractive investment for traders.

One to watch will be Amazon’s earnings report. Much like any other online-based service provider and seller, Amazon saw a boost in sales during the last two years due to Covid and lockdown affecting consumer behaviour. However, now that things have settled, recent UK sales reports are showing online sales falling noticeably across the board.

AMZN is currently down 23% from its November 2021 high and investors are keen to see whether their earnings show that things are picking up or slowing down. 

Amazon’s 18% stake in electric vehicle maker Rivian last quarter helped “juice” their gains, however, Rivian’s recent struggles surrounding botched price hikes and supply chain issues may affect the big tech’s profitability, as Rivian is now consequently trading at near all-time lows.

Additionally, Amazon’s fuel and inflation surcharge come into effect on April 28th to combat rising prices. Alongside the unionisation situation, it has had to deal with in Alabama and now New York, this may likely affect stock prices.

On the offset, Amazon Web Services has been a key profit driver for Amazon in the last quarter with Amazon’s cloud sales growth hitting 40%.

In any case, investors will need to closely consider Amazon’s earnings in comparison to the other big tech giants to make a decision on their trading. 

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There is reported to have been a ‘staycation boom’ in the UK during the pandemic. This would make sense; after all, international travel has been fraught with additional complexity and cost, if not being rendered completely impossible for long periods over the past two years.

Indeed, it was recently reported that 39% of Britons would be more inclined to holiday in the UK post-pandemic. But the appetite for staycations was already well established before we had ever heard of Covid-19. A quick glance back to 2019 reveals that while 93 million Britons jetted overseas, whilst 123 million chose to holiday in the UK, suggesting that the ‘boom’ is simply an uptick in a stable domestic tourism industry – one that is worth over £1.6 trillion.

The strength of this industry, which is expected to grow further, has naturally impacted the property investment sector. Namely, more investors – particularly buy-to-let investors – are now considering holiday lets as a means of diversifying their portfolios. For those who fall into this camp, it is important to first understand the suitability of investing in holiday lets, including both the potential pitfalls and benefits that such an investment entails.

Reasons to be wary

Profitability – landlords acquiring a new property that they intend to use as a holiday let are likely to have paid an inflated price. Location is a very important factor in the success of a holiday let, and increased tourism in the last two years have pushed property prices up in tourist hotspots. Further, many properties will need furnishing and renovation to qualify as a holiday let. So, an initial outlay is common before income from holidaymakers starts to filter through; this could pose a potential barrier to some investors.

Running costs – with the cost of cleaning, energy and maintenance falling under the landlord’s remit, the regular turnover of guests creates some significant outgoing costs that can limit the money made on a property. Investors should also be aware that letting agents can charge between 20-30%, a necessary cost if they would prefer not to carry out the day-to-day management of the property. All these costs will eat into an investor’s yield. 

Lack of guests – unfortunately, the old adage ‘build it and they will come’ is not a guarantee in the holiday let market. Despite sites like Airbnb creating easier platforms to market holiday lets, it is unlikely that properties will ever be at full capacity all year round. As holiday lets must be let for a minimum of 105 days to earn their potential tax benefits (more on this below), failure to attract guests could be disastrous to a property’s profitability. 

Threat of regulation – with London capping short-term lets to just 90 nights a year unless planning permission is acquired, regulation in the holiday let industry is likely to increase. Areas like Cornwall and Bournemouth have seen incidents of 'over-tourism', and local councils may bring further regulation in to compensate.

Difficulty in finding finance – the relative insecurity of short-term lets makes borrowing from high street lenders difficult. As such, landlords could look for alternative financial backers. In doing so, lenders who underwrite on a case-by-case basis are essential to securing the best deal. Despite high-interest rates, variable discount rates and large down payments, investors and their brokers could consider their financial options as they hunt for the property itself in order to secure a deal that is most beneficial to their needs.

The benefits to be had

Those are the challenges, of which there are plenty. But that ought not to overshadow the potential upsides – again, there are numerous. 

As many experts suggest, investment in different markets can maximise returns as each asset will react differently to market fluctuations. While it certainly does not guarantee against loss, diversification can reduce risk. The potential benefits listed below reflect why many landlords regard holiday lets as an increasingly interesting way to diversify their portfolios.

Tax benefits – if a property qualifies as a Furnished Holiday Let (as defined by HMRC), landlords are able to claim Small Business Rate Relief, thus avoiding council tax or business rates on their property and increasing the potential for profit. Furthermore, landlords can offset energy, cleaning and maintenance bills against their profits, reducing their tax bill further. If they choose to sell, they can even claim some capital gains reliefs, increasing the value of a holiday let as an asset.

Yields – as a result of these tax reliefs, and a rental price increase of 41% since 2020, holiday lets can make 30% more yield than a BTL property. With most aiming for a return of 8% annually and an average profit target of 30% (rising to 50% on properties without mortgages and letting fees), holiday lets begin to look like a credible alternative to an established portfolio. 

Holiday home – the potential benefit that might have intrigued landlords the most during the pandemic is the opportunity to use a holiday let as a personal holiday home. To qualify for tax reliefs, holiday lets must be available to let for at least 210 days leaving landlords 22 weeks a year to use it themselves if they choose. With restrictions on international travel and a working from home order in place, the option to travel to a second home for free makes a holiday let an even more intriguing alternative to landlords.

Final thoughts

As restrictions ease and international travel continues its revival, it will be fascinating to see whether staycations remain as prominent, both in the media and with holidaymakers. For landlords considering a holiday let, they should weigh up whether they are capable of navigating the various pitfalls of the market. Those who are successful could certainly start to reap the attractive benefits a holiday let has to offer.

About the author: Paresh Raja is the founder and CEO of Market Financial Solutions (MFS) – a London-based bridging loan provider. Prior to establishing MFS in 2006, Paresh worked as a senior professional consultant in one of the top five management consultancy firms, and also set up an independent investment group.

The announcement follows the publication of the department’s most recent verdict on the Autumn Budget and Spending Review 2021. The committee’s report surveys the current UK tax burden, changes to the health and social care levy, as well as the pre-briefing of budget measures.  

During the last budget in late October, Chancellor of the Exchequer Rishi Sunak announced substantial increases in departmental spending alongside various tax hikes. 

Taxes are rising to their highest level as a percentage of GDP since the 1950s. I don’t like it, but I cannot apologise for it,” Sunak said in OctoberIt’s the result of the unprecedented crisis we faced and the extraordinary action we took in response.”

The committee has warned that if the chancellor wishes to cut taxes while simultaneously meeting his fiscal rules, he may have to identify departmental spending areas where he can reduce spending in real terms, even in the face of heightened demand. 

In particular, the committee criticised underspending in education. Following the most recent budget, school funding per head has only now returned to levels seen in 2010.

The figure is by far the highest tally since the census bureau began to survey employee sicknesses in April 2020. The most recent survey, conducted between December 29 and January 10, includes employees who called in sick after testing positive for Covid-19 as well as those who have had to take time off to care for others infected with the virus.  

The previous record high was recorded in January 2021, when 6.6 million Americans called in sick from coronavirus before vaccines were made widely available. 

Omicron’s impact on the US labour market comes at a time when employers are struggling to find staff across all sectors. On top of this, “The Great Resignation” has continued to maintain a steady pace with an increasing number of employees feeling dissatisfied with their current roles. In November 2021, 4.5 million people quit their jobs in the US the highest number on record. 

In recent weeks, labour shortages have severely impacted a number of industries including trucking, air travel, food sales, and essential services such as policing and waste collection. 

Dr Henry Balani, Head of Industry & Regulatory Affairs for Encompass Corporation, explains how embracing technology can ease the burden on financial regulators.

Money laundering in the UK, specifically, is far more complicated than people may first anticipate, with thousands of complex relationships between finance professionals and international criminals contributing to money laundering and the wider financial crime economy. Despite increased levels of financial crime since the start of the pandemic, analysis shows that penalties against regulated firms, specifically for money laundering, decreased significantly last year. This does not, however, signal weaker enforcement. Rather regulatory and enforcement agencies have prosecuted other areas of financial crime, primarily in pandemic fraud scams related to unemployment assistance schemes. 

One illicit method we have seen during the pandemic has been Covid bounce back loans which saw the government lend millions of pounds to small businesses. These loans did not include sufficient credit checks or verification. As a result, we have seen examples such as two men being jailed in December last year for running a £70 million money laundering scheme involving £10 million from Covid loans.

By November 2021, the government stated that they had lost over £5 billion from pandemic fraud scams against these schemes with perpetrators targeting the Coronavirus pandemic in an attempt to stay ahead of regulators, resulting in greater focus being placed on this area. As a result, there has been a lesser concentration on money laundering and subsequently lesser and fewer penalties issued, contributing to the decline in penalties against global financial institutions.  

It is also worth noting that while 2021 represents a current peak, it is still the third-highest year on record after 2020 and 2014 where AML fines reached US$2.9 billion. The peaks and valleys over the years are not necessarily surprising as financial crime investigations are comprehensive and can take a long time to prosecute. It would be not surprising to see a large backlog of cases that will come to fruition in 2022.

Complacency is not an option

Financial crime has been a long-standing issue in Britain, and in London in particular, due to colonial ties to offshore tax havens in places such as the Caribbean, Cayman Islands and Jersey which by law encourage the registration of offshore trusts as a business service which have become hubs for money laundering and tax avoidance. Financial institutions cannot become complacent in their efforts to bolster their defences against money laundering, especially as current geopolitical events indicate increased criminal activity as highlighted in the Pandora Papers and possible increased sanctions against Russia and threats from Iran and North Korea.

The International Consortium of Investigative Journalists (ICJJ) coordinated and published findings from a series of leaked documents outlining the inner workings of offshore companies used to limit company ownership identification. And, it was uncovered that there were 956 companies in offshore havens connected to 336 politicians and public officials with the majority of companies set up in offshore hotspots in the British Virgin Islands. This serves as a reminder that money laundering is still occurring at an alarming rate, and will, unfortunately, almost certainly persist over the coming year.

Technological advances

Technology, specifically RegTech, enables organisations to implement more effective processes to identify, mitigate and investigate financial crime. It is heartening to note that regulators, both in the UK and the USA, continue to encourage dialogue with RegTech firms to ensure legislation encourages and supports the adoption of new technologies for improved compliance, more effective investigations, and bolster defences against financial crime. 

In response to the evolving Covid-19 world, now more than ever, technology must be utilised to our advantage, and embracing new technologies is a clear route forward for all possible factions that are complicit in or impacted by financial crime, such as the institutions themselves. 

Due-diligence and compliance technologies represent examples of RegTech which can help to increase the effectiveness of investigations to stop financial criminals in their tracks, and hopefully dissuade future money laundering crimes being committed. We are also seeing evolving modes of money laundering through criminals using more complex means to hide illicit gains, such as cryptocurrency. Further technological innovation is occurring in this area to ensure regulators have access to the best solutions available to combat new forms of financial crimes. We are now seeing blockchain analytics technology being used to ‘track and trace’ ransomware and other illicit activity using cryptocurrency. It will not be surprising to see greater amounts of prosecutions and money laundering penalties due to illicit use of cryptocurrency as a trend going forward on top of money laundering through traditional fiat currency.

We must also see greater proactivity and cooperation from firms and financial professionals to ensure this criminal behaviour is sufficiently identified and prevented. As the global pandemic subsides, more professionals will return to physical offices, presumably resulting in greater collaboration and efficiencies in identifying potential illicit criminal activities in their customer portfolios. Adoption of new technologies, including the use of artificial intelligence and automated process analysis tools, combined with greater action from these firms and professionals will refine reporting activity. This will subsequently help ease the burden on regulators by ensuring suspicious activity reports are accurately filed with their respective financial intelligence units. 

The positive dialogue between RegTech firms and regulators is welcome with the new technologies set to take centre stage in money laundering regulation moving forwards, and with these developing technological innovations alongside greater preventative involvement and due diligence from finance professionals, regulators and enforcers will be able to maximise their efforts in identifying, preventing and punishing financial crime.

The US bank’s latest move makes it the first major Wall Street institution to follow through with a strict Covid-19 vaccine mandate, having announced intentions to do so back in October. 

Citigroup’s decision comes as the financial industry struggles with how to return employees to offices safely amid rapidly rising cases of the Omicron variant of the virus. Other major Wall Street banks, including JPMorgan Chase & Co, Morgan Stanley, and Goldman Sachs & Co, have told unvaccinated staff to work remotely, but have not yet gone as far as firing employees. 

So far, over 90% of Citigroup employees have complied with the mandate. While Citigroup is the first Wall Street bank to enforce such a strict vaccine mandate, other major US companies, such as Google and United Airlines, have also introduced “no jab, no job” policies. 

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