Economics
Interest rates The Bank of England fulfilled expectations and kept
interest rates on hold yesterday in the wake of February’s quarter-point
cut.
House prices fell by 0.3 per cent last month, according to the latest
survey from Halifax, the leading mortgage lender. The February drop came
after prices stalled in January, according to Halifax data. Its gauge of the
annual rate of house price inflation fell to 4.2 per cent, the lowest since
October 2005.
Shares remained under pressure in London amid fears over a US recession
and a global downturn. The FTSE 100 index lost a further 1.5 per cent, or
87.1 points, to close at 5,766.4. The bluechip index has lost nearly 11 per
cent in the year so far.
Eurozone interest rates The European Central Bank held eurozone
interest rates again at 4 per cent and raised its forecasts for inflation in
2008 to 2.9 per cent, from 2.5 per cent, and in 2009 from 1.8 per cent to an
above- target 2.1 per cent.
The euro With the dollar remaining under intense pressure in currency
markets, the euro rose to an all-time high of $1.5372. The pound also gained
against the dollar, breaching $2 for the first time this year, to hit
$2.0066.
US wealth The US Federal Reserve said that the net worth of American
households dipped to $57.72 trillion (£28.8 trillion) in the last quarter of
2007, from a revised $58.25 trillion in the third quarter.
US home loans The US Mortgage Bankers’ Association said that a record
0.83 per cent of US home loans were entering the foreclosure process in the
last three months of 2007, compared with 0.54 per cent at the same time in
2006.
Banking
& finance
Carlyle Capital Corporation, the Dutch-listed affiliate of The Carlyle
Group that owns $22 billion (£11.08 billion) of mortgage-backed investments,
was in emergency restructuring talks with its banks after failing to meet
repayment requests.
F&C Asset Management, the fund manager, cast doubt on a key profits
target in the wake of the markets downturn and the decision by Friends
Provident, its majority owner, to consider selling its 52 per cent stake.
Thornburg, the American lender that specialises in mortgages of more
than $417,000, was approaching bankruptcy as JPMorgan, the investment bank
and a key creditor, demanded that it liquidate assets. Thornburg had been
unable to meet a $28 million margin call.
Lehman Brothers, the US investment bank, said that it had suspended two
London equities traders after identifying “issues” with some of their
trades.
Banking regulations Britain’s standing as a leading financial centre is
in danger of being undermined by ill-thought-out changes to tax and
regulation, according to the CBI and the Association of British Insurers.
Construction
& property
Taylor Wimpey, the housebuilder that was formed almost a year ago with
the £5.5 billion merger of Taylor Woodrow and George Wimpey, said that a
£405.5 million pre-tax profit in 2006 had turned into a £19.5 million loss
last year. George Wimpey last reported a loss 15 years ago.
Rok, the construction group, reported a 42 per cent rise in full-year
pre-tax profits of £31.7 million and said that it had a confirmed order book
for 2008 of £610 million, up 17 per cent on 2007.
Consumer
goods
Galiform, the kitchen furniture maker, reported a 39.5 per cent
increase in full-year profits, boosted by a string of new products. The
group, which sold the MFI chain two years ago for £1, said that its
full-year profits had risen to £79.8 million, compared with £57.2 million
last time.
Engineering
Cobham, the aerospace engineer, reported a 12.9 per cent increase in
underlying full-year pre-tax profits and said that it would generate more
than half its revenue in the US for the first time this year.
Health
Biocompatibles, the specialist drug devices company, said that
full-year operating losses had narrowed £6.2 million and predicted that its
revenues this year would increase by about 48 per cent.
Industrials
Nippon Steel, the Japanese steelmaker, said that soaring costs would
cut its profits for the year to March, its first dip in full-year profits
for six years, and added that the next six months would also be tough as the
industry would be facing high freight rates and tight coal supplies.
Leisure
Tragus Group Graham Turner, the chief executive of Tragus Group, owner
of the Café Rouge and Strada restaurant chains, was named best individual at
the Retailers’ Retailer of the Year Awards organised by William Reed
Business Media.
Mandarin Oriental’s Hyde Park Hotel in Central London said that it had
lifted its occupancy rate from 85 per cent to 88 per cent last year, while
the average room rate was 12 per cent higher.
Regent Inns, the Walkabout Bars operator, saw its shares rise by 2p to
18½p — a rise of 12.3 per cent – amid rumours that Brook
Leisure, its rival, was keen to agree terms on a takeover.
Gala Coral SVG Capital, the private equity investor, said it had
written down the value of its minority investment in Gala Coral, the
gambling operator, from £42.9 million to £22.8 million after the sharp fall
in valuations of quoted rivals.
Hilton Hotels Corporation, the hotel operator controlled by Blackstone,
the US private equity group, has promoted Ian Carter, the British head of
its international operations, to the new role of president, global
operations.
Media
Reuters, the information provider, said that it had begun the year with
9 per cent growth, its fastest in a decade, despite the effect of the credit
crunch on its banking clients.
YouGov, the market research group, plans to form a hedge fund venture
that will use its opinion poll findings to help to make investment
decisions.
ITV, the commercial broadcaster, has sold its Carlton Screen
Advertising unit for £500,000 to Digital Cinema Media, an advertising joint
venture between Cineworld Group and Odeon Cinemas.
HIT Entertainment Bruce Steinberg, the chief executive of HIT
Entertainment, owner of Thomas the Tank Engine, has resigned after full-year
profits dropped on the back of poor US sales. He will be replaced by Jeffrey
Dunn, formerly of Nickelodeon Networks, the US children’s broadcaster.
Virgin Media, the cable TV company, named Neil Berkett chief executive,
a position he has held on an interim basis since August.
Natural
resources
Royal Dutch Shell has agreed to pay $80 million (£40.3 million) to
settle an American class-action lawsuit related to a 2004 downgrade to the
Anglo-Dutch oil giant’s oil reserves. The litigation began after accusations
that Shell had misled investors for years by overstating its reserves of oil
and gas.
Retailing
John Lewis, the department store group, reported record full-year
profits and the biggest staff bonus for a decade but added that trading had
taken a marked turn for the worse in recent weeks.
Carrefour, the world’s second-biggest retailer, said it may raise £995
million this year by selling shares in its property business and open its
first supermarkets in Russia. Full-year net profits rose by 1.3 per cent to
£1.75 billion.
Support
services
Aggreko, the London-listed company that rents out power generators,
reported a 51 per cent increase in full-year pre-tax profits and said that
strong demand in international power projects would more than outweigh a
potential slowdown in the US.
Mouchel, the consulting and business services group, said that it had
acquired Hedra, the consultancy group, for £50 million.
Tata Consultancy Services, the Indian IT outsourcing group, has been
hit by two large contract cancellations from Wall Street banks.
Technology
Google, the US internet search engine, is expected to receive approval
from European Union regulators next week for its $3.1 billion (£1.5 billion)
takeover of DoubleClick, the internet advertising company.
Telecoms
Inmarsat, the FTSE 250 telecoms group, reported a 39 per cent increase
in full-year pre-tax profits and said that it should deliver continued
growth in 2008.
Transport
British Airways said its fuel costs would rise by £450 million, or
about 20 per cent, to £2.5 billion in its next financial year, sending its
shares down more than 4 per cent.
Arriva, the bus and train operator, said it was pursuing further
acquisitions and contract tenders as it revealed a 5 per cent rise in
full-year pre-tax profits on continuing operations to £115.8 million.
Alitalia Air France-KLM apparently will present its final binding offer
for Alitalia soon. Any acquisition of Alitalia would need the agreement of
the Italian Government, EU antitrust authorities and the Italian airline’s
unions.
Utilities
Ofgem, the energy watchdog, has begun an investigation into the way gas
and electricity networks are regulated in the UK.
International Power, the utility, reported a 17 per cent rise in
full-year operating profit to £904 million, from £773 million last time,
mainly thanks to new acquisitions in Europe and the US.
United Utilities, the water group, is the worst of the UK’s largest
public companies at paying its suppliers, according to the Institute of
Credit Management.
