Economics
Manufacturers reported a sharp drop in orders this month. The
Confederation of British Industry’s monthly industrial survey showed that
the the balance of firms reporting stronger order books dipped from plus 7
per cent in March to minus 20 per cent in April. The export order book
balance was minus 12 per cent, down from plus 3 per cent in March; business
optimism fell to minus 23 per cent in the first three months of the year,
from minus 17 per cent in the three months to January.
Retail sales have fallen at the fastest pace for more than a year,
decreasing by 0.4 per cent in March from February. But total sales in the
first three months of the year were 5.6 per cent higher than in the same
period last year.
German business confidence fell more sharply than expected in April. A
closely watched survey by Ifo, the economic research institute, dropped to
102.4 points after rising to 104.8 in March.
US durable goods orders fell for the third month in a row in March.
Orders declined by 0.3 per cent, after a 0.9 per cent fall in February. New
orders, excluding transportation, rose by 1.5 per cent. Orders for motor
vehicles fell by 4.6 per cent, after a 3.2 per cent fall in February.
US unemployment The number of US workers claiming unemployment benefits
fell by 33,000 last week. Some 342,000 people applied for benefits, down
from 375,000 in the previous week.
US new homes sales fell to a 17-year low in March despite hefty
declines in house prices. Last month’s new home sales fell by 8.5 per cent
to an annual pace of 526,000 units. February’s figure was also revised down
from 590,000 to 575,000.
Banking
& finance
Credit Suisse, the Swiss investment bank, has reported its first
quarterly loss for nearly five years, after asset writedowns reached $5.2
billion (£2.63 billion). Switzerland’s second-largest bank said that losses
for the first quarter had been SwFr2.5 billion (£1.2 billion), compared with
a SwFr3.5 billion profit last time.
Barclays held open the possibility of a rights issue but hinted that it
was seeking other ways of beefing up its balance sheet. The bank has been
fighting off speculation of a rights issue since Royal Bank of Scotland held
a £12 billion capital raising earlier this week.
Overdraft charges High street banks have lost a landmark test case at
the High Court over unauthorised overdraft charges.
Amlin, the Lloyd’s insurance group, said that it expects 2008 to be a
more challenging year, but added that it has the confidence to continue to
deliver “acceptable” returns for its shareholders.
Schroders, the asset manager, said first-quarter pre-tax profits had
declined to £42.2 million, from £93.2 million last time.
Shanghai stocks surged more than 9 per cent after a government
cut in stamp tax, aimed at ending a bear market where share prices had
halved in six months.
Pay inequality between men and women is greater in the private sector
and widest for employees aged between 35 and 44, according to PayWizard, an
internet-based salary survey set up by the WageIndicator Foundation, Incomes
Data Services and the TUC.
Morgan Stanley, the Wall Street investment bank that managed some of
the money belonging to James Brown, the “Godfather of Soul”, has been sued
in a South Carolina court for failing to manage his account properly.
Société Générale Jérôme Kerviel, the rogue trader
who was accused of losing almost €5 billion (£3.97 billion) at Société
Générale, the French bank, is back in work — although not in a trading room.
Construction
& property
Persimmon, the housebuilder, said that it will stop building homes on
new sites until mortgage conditions improved, after its sales in the first
four months of the year fell by 24 per cent.
Consumer
goods
Fyffes, the fruit distributor, said that its trading performance for
the first four months of the year, particularly in continental Europe, has
been well ahead of the same period in 2007.
Reckitt Benckiser, the FTSE 100 cleaning products group, said that a
near £200 million global advertising push had helped to generate an 11 per
cent rise in like-for-like sales for the three months to March 31. Total
revenue was 20 per cent higher than a year ago to £1.5 billion.
Engineering
Meggitt, the Dorset-based engineering group, said trading was in line
with its expectations, with its order book increasing by 7 per cent since
the start of the year.
Ford, the US carmaker, predicted further job cuts even as it reported a
first-quarter profit of $100 million (£50.7 million) in a surprise
turnaround for the group. It added that it expected to show a full-year loss
“equal to or better” than its 2007 deficit of $2.7 billion.
Health
AstraZeneca, the Anglo-Swedish drugs maker, reported first-quarter
pre-tax profits down to $2.143 billion (£1.087 billion), compared with
$2.267 billion at the same time last year. Profits were hit by a fall in the
sales of Nexium, its blockbuster heartburn treatment, and the cost of
cutting jobs.
Industrials
BASF, the German chemicals group, said first-quarter net profits had
risen by 13 per cent to ¤1 billion last year, driven by higher sales of
chemicals and fossil fuels.
Elementis, the London-based speciality chemicals group, said it had
made a positive start to 2008, with trading in its three main businesses
ahead of the same period last year.
Leisure
Punch Taverns, Britain’s biggest pub company, reported a 1 per cent
increase in half-year profits to £133 million, but damped down lingering
hopes of a deal with Mitchells & Butlers.
William Hill, the bookmaker, said that it had seen no evidence of any
impact from the consumer spending slowdown as it reported a 5 per cent rise
in gross win in the first 16 weeks, although it admitted that costs were
rising ahead of the gross win increase.
Domino’s Pizza UK & Ireland, the AIM-listed pizza delivery
operator, achieved like-for-like sales growth of 13.3 per cent in the 16
weeks to April 20, and said that it expected its sponsorship of ITV1’s
Britain’s Got Talent to drive continued growth.
Wendy’s International, the US restaurant group, has agreed to be
bought by Triarc Companies, the investment arm of Nelson Peltz, the
billionaire investor, in a deal that would bring Triarc’s Arby’s restaurant
chain and Wendy’s under one umbrella.
Massive Pub Company, which operates 33 pubs under such brands as Tup
and Thomas & Carter, has been rescued from administration by Bridgehouse
Capital, the private equity group, in a deal worth an estimated £8 million.
Media
Mama Group, which owns the Hammersmith Apollo music venue in West
London, has reported a sharply lower first-half pre-tax profit in a period
of restructuring that also saw significant acquisitions. However, it added
that it expects a strong second half and continued growth in revenues and
profits in the coming months.
RDF Media, the AIM-listed independent television producer, said that it
has received a takeover bid from an unnamed consortium that includes the
company’s management team. Its shares rose by 32 per cent to 126p as the
market tried to guess the likely level of the bid.
Natural
resources
Rio Tinto, the Anglo-Australian mining group, dismissed criticism that
it had been slow to recognise the China boom and suggestions that its
argument over relative value to BHP Billiton, its suitor, was losing
momentum.
BP, the oil and gas giant, is moving into the plantation business,
taking a half-share in a billion-dollar venture to produce ethanol from
Brazilian sugarcane. It is joining forces with Santelisa Vale and Maeda
Group, the Brazilian agribusiness groups.
Retailing
JJB Sports The GMB trade union is launching a £3.4 million legal claim
against JJB Sports over its plans to cut 800 jobs. The union claims that the
sports retailer has breached employment law by giving staff only 30 days’
notice instead of agreeing to a 90-day consultation.
Amazon The head of Amazon UK said that he had yet to see any signs of
an economic slowdown after the online retailer reported a 36 per cent rise
in first-quarter profits. Brian McBride said that although the high street
was struggling, Amazon’s customers were continuing to spend.
Sports Direct, the sportswear retailer which is controlled by Mike
Ashley, owner of the Newcastle United football club, insisted that it was on
track to hit full-year profit expectations of £148 million, despite
challenging market conditions.
Matalan, the discount clothing chain, has set aside £20 million to
overhaul its entire store network in the coming year in a bid to claw back
market share and capitalise on the demise of some of its value rivals,
according to Drapers, the fashion industry magazine.
Support
services
Smiths News, the news and magazine distributor, reported a 5.9 per cent
increase in half-year pre-tax profits to £16.1 million, after it had
controlled its costs in a challenging market.
Technology
Autonomy, the data search company which is based in Cambridge, reported
above-consensus first-quarter sales of $105.1 million (£53.3 million),
compared with $65.4 million last time.
Wolfson Microelectronics, the Edinburgh-based group, said first-quarter
sales of its computer chips for portable players such as iPods had fallen by
46 per cent. Revenues were affected by lower demand from manufacturers.
First-quarter pre-tax profits fell to $3.1 million, from $4.3 million last
time.
Micrsoft, the world’s biggest software maker, reported an 11 per cent
drop in its third-quarter profit to $4.39 billion and gave a cautious
outlook sending shares down by 4.5 per cent in after-hours trading. It said
that net income in the three months to March 31 fell to 47 cents a share,
from 50 cents the year before, as revenues rose slightly from $14.39 to
$14.45 billion. The shares fell $1.43 to $30.37 in extended trading at
$31.80 at on the Nasdaq Stock Market, as investors reacted to Microsoft’s
outlook for this quarter.
Telecoms
Reliance Globalcom, a subsidiary of Reliance Communications, India’s
largest integrated telecoms operator, has acquired a 90 per cent controlling
stake in eWave World, the private UK company that develops wireless
equipment, for an undisclosed sum.
Transport
Alitalia Ryanair, the low-cost airline, asked the European Commission
to stop Alitalia, the embattled Italian airline, receiving a further €300
million (£238.7 million) in state aid from the Italian Government. Ryanair
claims that Alitalia has already received more than €5 billion in “unlawful”
state aid, adding that without it the carrier would have gone bankrupt years
ago.
Utilities
Gaz de France, the utility group, reported 15 per cent growth in its
first-quarter sales to €10.4 billion (£8.27 billion), boosted by colder
weather compared with last year and a rise in regulated tariffs.
