Economics
UK bankruptcies The number of businesses seeking bankruptcy rose by 12
per cent in the first quarter of this year compared with the previous three
months, but fell compared with early 2007. From January to March, the number
of businesses filing for bankruptcy rose from 11,674 in the previous three
months to 13,080, while petitions filed by creditors rose from 4,583 to
4,851.
The Japanese economy grew by 0.8 per cent in the first three months of
this year, taking the annual rate of GDP growth to 3.3 per cent, above
market expectations of a 2.5 per cent rise.
US housing starts rose by a surprisingly strong 8.2 per cent in April
and applications for new building permits rose for the first time in five
months. Construction starts in April rose to an annual rate of 1.032 million
units, up from 954,000 in March. Permits rose by 4.9 per cent to 978,000 a
year, from 932,000 in March.
US consumer confidence tumbled to its lowest in 28 years this month.
The Reuters/University of Michigan Surveys of Consumers said that its
preliminary index of confidence fell to 59.5 in May, its lowest since June
1980. In April it was 62.6.
Banking
& finance
Financial services jobs More people were looking for jobs last month in
London’s financial services industry than at any time in the past 3½ years.
About 11,840 people were looking for banking jobs in April, up 20 per cent
from March, outnumbering the 8,946 finance jobs advertised, figures from
Morgan McKinley, the recruitment consultant, showed.
Carlyle Group has agreed its biggest buyout since the credit crunch
took hold after directors of Booz Allen Hamilton, the consultancy group,
recommended a $2.5 billion (£1.3 billion) sale of its US government business
to the private equity firm. Under the deal, Booz Allen will split in two.
Carlyle will take the unit that offers consultancy services to clients such
as the US Military and the Department of Homeland Security and the World
Bank.
Cenkos Securities, the stockbroker, has confirmed that it has ended
offer talks with Arden Partners about a potential combination of the two
businesses. Arden Partners said that it has had preliminary approaches from
other parties.
Construction
& property
Kier, one of Britain’s biggest construction and housebuilding
companies, gave warning of a slowdown in public sector spending across the
country. John Dodds, chief executive, said that the spending slowdown has
hit the multibillion-pound market for new schools, hospitals and roads.
Humberts Trading was suspended yesterday in shares in Humberts, one of
England’s largest chains of estate agents, over doubts about its financial
viability. The loss-making company, which has 80 offices and about 700
staff, said in a statement to the London Stock Exchange that the request to
suspend its shares was made “pending clarification of its financial
position”. The chain said that it was “investigating a potential
restructuring”.
HBOS has sold its entire 13.1 per cent shareholding in Rightmove, weeks
after the property website gave warning that rising estate agent closures
would have an “adverse impact” on the business. HBOS is one of the four
founding shareholders in Rightmove alongside Countrywide, Connells and Royal &
SunAlliance.
Consumer
goods
Rice shortage The United States and Japan are poised to strike a deal
to release an estimated 1.5 million tonnes of high-grade American rice that
is sitting in Japanese silos. It comes amid rice export restrictions by some
of the world’s biggest suppliers and rioting in countries where people
cannot afford the price increases.
Engineering
Charter said that the full-year outcome will be ahead of expectations,
largely because of positive effects of currency translation. The company’s
largest division, ESAB, which makes welding consumables and cutting
products, continued to trade well, with revenue and operating profit well
ahead of same period last year.
Health
Southern Cross Healthcare Group has opened three new residential care
facilities from its “expanding” development pipeline in England, Scotland
and Northern Ireland, thereby adding a further 176 beds to its portfolio.
The healthcare services provider said that the Tor-na-Dee care centre in
Aberdeen will be operated in a long-term partnership with NHS Grampian.
Sanofi-Aventis French health authorities have ordered the withdrawal of
11 batches of Lovenox, Sanofi-Aventis’s anti-clotting drug, as a
precautionary measure amid concern about contaminants in the treatment.
Industrials
ThyssenKrupp, the German steel group, said that it expects to-raise
steel prices substantially in the third and fourth quarters of its business
year, which ends September 30, to offset spiralling raw material costs. The
company’s steel unit increased steel prices by up to €100 per tonne on April
1 and expects the next round to exceed these increases by between €20 and
€30.
Leisure
Mitchells & Butlers (M&B), the pub operator, is expected to
tell shareholders next week that talks about the sale of a stake of up to
29.9 per cent to private equity have been put on the backburner. The All Bar
One and Harvester operator has been in discussions for several weeks with
Bain Capital, Permira and Blackstone/CVC Capital Partners over the sale of a
stake at a material premium to the current share price.
Regent Inns, the pub company, said that it is still considering a
number of bids after sales fell by 11 per cent this year. Companies whose
names have been linked to a bid include Brook Leisure, the British nightclub
operator, Sun Capital Partners, the US buyout firm, Novus Leisure, which
owns the Tiger Tiger bar chain, and Laurel Pub Company, which is backed by
Robert Tchenguiz, the property entrepreneur.
Ladbrokes said that a gripping end to the football season had driven
four-month profit up 13 per cent, helping the bookmaker to calm fears that
punters may bet less as the economic climate worsens.
Avis Europe, the car rental company, said that it expects continued
good volume growth, albeit with slower growth in Spain for the rest of the
year, adding that its expectations for the full-year outcome remain
unchanged.
Media
Indian film industry Britain is to offer the Indian film industry tax
breaks and grants in an effort to entice more Bollywood projects to British
locations. British trade representatives had talks this week to pave the way
for a new UK-India film co-production agreement.
Bloomsbury Publishing said that current operating performance since the
start of the year has been encouraging and is in line with management’s
expectations. The publisher behind the blockbuster Harry Potter series said
that its strong balance sheet positions it well to take advantages of
acquisition opportunities.
UTV Media said that its revenues for the first four months to April 30
grew by 7 per cent driven by the performance of its radio businesses and
added that its expectations for the year are unchanged.
Natural
resources
Petrofac, the oil and gas facilities service provider, said that it
expects net profits for 2008 to be at the top end of market expectations,
with analysts forecasting net profits of up to $243.6 million (£124.6
million). The company said that it had made a good start to the year and
that its order backlog had increased to $4.9 billion.
BG Group, the natural gas producer, said that it had ordered two
liquefied natural gas ships with a cargo capacity of 170,000 cubic metres
from South Korea’s Samsung Heavy Industries, which is scheduled to be
delivered in 2010.
Dana Petroleum said that group production for 2008 is expected to
average between 40,000 and 45,000 barrels of oil, which is equivalent per
day, representing more than a 30 per cent growth over 2007. The oil and gas
company also said that up to 17 exploration wells are scheduled to be
drilled in 2008.
Retailing
John Lewis Partnership, the employee-owned retailer, said that sales in
the week to May 10 at its 26 department stores fell 4.3 per cent
year-on-year to £47 million, held back by hot weather. The sales downturn at
John Lewis’s department stores was offset by a strong performance at its 187
Waitrose supermarkets, where sales rose 7.8 per cent on the year to £78.4
million, making total partnership sales for the week £125.4 million, up by
2.9 per cent on the same period last year.
Support
services
Amec, the oil services group, has completed acquisition of Bower
Damberger Rolseth Engineering, a specialist oil sands business, from its
owner-managers for C$45 million (£23 million) in cash. The company will pay
a further C$35 million in five years depending on performance.
Technology
Computacenter, the IT services company, said that difficult trading in
the UK and France could cause first-half pre-tax profits to be lower than
last year. Its UK like-for-like sales fell by 1.5 per cent in the first
three months of 2008, while non-UK sales were down 7.1 per cent in local
currency to ¤because of weak sales in France.
Telecoms
Qualcomm, the US wireless technology developer, has bought L-band
spectrum from Ofcom, the communications regulator, for £8.3 million.
Orange, a subsidiary of France Telecom, has announced a deal to bring
the Apple iPhone to more than a dozen countries in Europe, Africa, the
Middle East and the Caribbean.
Transport
British Airways The board of British Airways has been forced to assess
the impact of a possible £900 million reduction in profits this year, caused
by the rising price of oil. Martin Broughton, BA’s chairman, admitted that
the board had debated what would happen if the airline were in a “break-even
position” by the end of this financial year, having just revealed record
operating profits of £875 million last year. BA also said Mr Walsh will not
take his £625,000 bonus after the chaotic opening of Heathrow’s Terminal 5
in March.
Utilities
British Energy A battle for control of British Energy gained momentum
as the company received two more preliminary proposals, one valuing it at
almost £11 billion. The power company has received takeover or other
approaches from EDF, the French utility, and two other groups including the
German and Spanish utilities RWE and Iberdrola, which submitted a tentative
joint proposal this week.
