Business
SMES STUCK IN CONFIDENCE TRAP

- Eight in ten are not confident about the steady recovery of the economy.
- Over half expect business to remain static over the next year.
- Two fifths lack knowledge about alternative finance.
The majority of SME leaders (79 per cent) are not confident in the steady recovery of the economy, according to new research released from Close Brothers Invoice Finance, the independent asset based lender.
The research, which combines the views of 700 SME owners and managers, shows that a fifth (21 per cent) believe that business is tougher than ever before, and as a result, more than half (53 per cent) expect their business to stay the same over the next year.
The findings also highlight how nearly half (49 per cent) do not have plans to raise finance, and of those that do, 36 per cent plan to use a bank overdraft or loan.
David Thomson, CEO of Close Brothers Invoice Finance, comments:
“SMEs are clearly still worried about the state of the economic recovery, resulting in a lack of confidence about growth. Now that the economy is starting to recover, the finance industry needs to inspire businesses about the possibilities and opportunities in this improving environment.”
Barriers to growth
The research also looks at the main barriers to growth for SMEs, with cash flow and late payments at the core. Nearly a fifth (19 per cent) of business leaders state that cash flow is their main business concern, and 18 per cent argue that restricted cash flow is the main barrier to growth.
Additionally, four in ten (40 per cent) business leaders feel that late payments are a problem.
Of those business leaders that admitted this, almost six in ten (58 per cent) believe that it makes cashflow difficult to manage, and worryingly, 15 per cent admit that it seriously threatens the business’s ability to trade.
David Thomson, comments:
“While the economy is on the up, SMEs still face challenges. The ever present scourge of late payments is an important hurdle that they must overcome.”
The study also found that two fifths of SME leaders (40 per cent) don’t know enough about alternative finance, such as invoice finance, to choose it as a method of funding growth. Nearly three fifths (57 per cent) of business leaders in the North East agreed, closely followed by East Anglia (54 per cent).
David Thomson, comments:
“Evidently confidence is low, but as the economy shows further signs of improvement it’s important that SMEs know about all of the opportunities that are available to them for funding growth.”
Business
Audi aims to sell one million cars in China in 2023

BEIJING (Reuters) – German premium automaker Audi aims to sell 1 million vehicles in China in 2023, versus 726,000 vehicles in 2020, the brand’s China chief Werner Eichhorn said on Wednesday.
Audi, which is making cars in the world’s biggest auto market with FAW Group, will also add more products in China, Eichhorn said. Audi’s rivals include Daimler and BMW.
(Reporting by Yilei Sun and Brenda Goh; Editing by Himani Sarka
Business
Netflix forecasts an end to borrowing binge, shares surge

By Lisa Richwine and Eva Mathews
(Reuters) – Netflix Inc said on Tuesday its global subscriber rolls crossed 200 million at the end of 2020 and projected it will no longer need to borrow billions of dollars to finance its broad slate of TV shows and movies.
Shares of Netflix rose nearly 13% in extended trading as the financial milestone validated the company’s strategy of going into debt to take on big Hollywood studios with a flood of its own programming in multiple languages.
The world’s largest streaming service had raised $15 billion through debt in less than a decade. On Tuesday, the company said it expected free cash flow to break even in 2021, adding in a letter to shareholders, “We believe we no longer have a need to raise external financing for our day-to-day operations.”
Netflix said it will explore returning excess cash to shareholders via share buybacks. It plans to maintain $10 billion to $15 billion in gross debt.
“This is in sharp contrast to Disney and many other new entrants into the streaming market who expect to lose money on streaming for the next few years,” said eMarketer analyst Eric Haggstrom.
From October to December, Netflix signed up 8.5 million new paying streaming customers as it debuted widely praised series “The Queen’s Gambit” and “Bridgerton,” a new season of “The Crown” and the George Clooney film “The Midnight Sky.”
The additions topped Wall Street estimates of 6.1 million, according to Refinitiv data, despite increased competition and a U.S. price increase. Fourth-quarter earnings per share of $1.19 missed analyst expectations of $1.39.
With the new customers, Netflix’s worldwide membership reached 203.7 million. The company that pioneered streaming in 2007 added more subscribers in 2020 than in any other year, boosted by viewers who stayed home to fight the coronavirus pandemic.
COMPETITION HEATS UP
Now, Netflix is working to add customers around the globe as big media companies amp up competition. Walt Disney Co in December unveiled a hefty slate of new programming for Disney+, while AT&T Inc’s Warner Bros scrapped the traditional Hollywood playbook by announcing it would send all 2021 movies straight to HBO Max alongside theaters.
Disney said in December it had already signed up 86.8 million subscribers to Disney+ in just over a year.
“It’s super-impressive what Disney’s done,” Netflix Co-Chief Executive Reed Hastings said in a post-earnings analyst interview. Disney’s success, he added, “gets us fired up about increasing our membership, increasing our content budget.”
Netflix said most of its growth last year – 83% of new customers – came from outside the United States and Canada. Forty-one percent joined from Europe, the Middle East and Africa.
For January through March, Netflix projected it would sign up 6 million more global subscribers, behind analyst expectations of roughly 8 million.
Revenue for the fourth quarter rose to $6.64 billion compared with $5.47 billion a year ago, edging past estimates of $6.63 billion.
Net income fell to $542.2 million, or $1.19 per share, from $587 million, or $1.30 per share, a year earlier.
Netflix shares jumped 12.5% to $564.32 in extended trading on Tuesday.
(Reporting by Eva Mathews in Bengaluru and Lisa Richwine in Los Angeles; Editing by Sriraj Kalluvila and Matthew Lewis)
Business
MGM Resorts drops takeover plan for Ladbrokes-owner Entain

By Tanishaa Nadkar
(Reuters) – Casino operator MGM Resorts International on Tuesday ditched plans to buy Ladbrokes owner Entain after the British company rejected an $11 billion takeover approach this month, sending Entain’s shares down nearly 12%.
The United States is seen as the next big growth market for sports betting, spawning a series of transatlantic partnerships tapping in to European technology and expertise. These include Caesars Entertainment agreeing last September to buy William Hill in a 2.9 billion-pound deal.
MGM said it would not submit a revised proposal or make a firm offer for Entain, which had said the approach announced two weeks ago significantly undervalued its business.
Entain shares closed down 11.9% at around 12.44 pounds in London. MGM shares were up 2.5% at $30.54 in New York trading late on Tuesday afternoon.
“We look forward to continuing to work closely with MGM to drive further success in the United States through the BetMGM joint venture,” Entain said in a statement.
Online betting firms have benefited during the COVID-19 pandemic-led lockdowns, as customers took to playing from home when casinos and betting shops were off-limits.
MGM had previously said a merger with the British bookmaker would be compelling and believed a deal would help expand BetMGM, which the two have operated since 2018.
The proposal, on the basis of 0.6 MGM share for each Entain share, was also backed by billionaire Barry Diller’s IAC. It valued Entain shares at 13.83 pence each when it was first announced.
Complicating matters, Entain Chief Executive Officer Shay Segev decided to step down just seven months into the role and in the middle of negotiations with MGM to take a job with sports streaming service DAZN.
Segev’s departure, as well as limited engagement in talks shown by Entain and a difference in price expectations between the two sides, led MGM to decide to walk away from the deal, according to a person familiar with the matter.
Entain, previously known as GVC, has itself expanded rapidly through a series of acquisitions and owns the bwin, Coral and Eurobet brands, operating traditional British high street betting shops as well as offering online gambling.
“While we are genuinely surprised MGM didn’t up its consideration … we don’t think this changes MGM’s ability to secure equity value enhancing benefits from the attractively growing US sports betting and iGaming pie,” JP Morgan analysts said.
The brokerage said it would not rule out further discussions with Entain depending on how the company shareholders reacted, adding it would be tough for someone else to buy Entain given so much potential equity value coming from the 50/50 BetMGM joint venture.
(Reporting by Tanishaa Nadkar in Bengaluru; Additional reporting by Joshua Franklin in Miami; Editing by Keith Weir and Matthew Lewis)