Economics
High street sales volumes fell by 0.2 per cent in April, matching the
drop registered in March, according to official figures and marking the
first back-to-back monthly declines in sales volumes for more than two
years. But the data clashed with gloomier surveys and its accuracy faced
challenges from economists.
Business investment suffered its first fall since the end of 2005,
official data indicated. Overall capital investment across the public and
private sectors in the first quarter dropped by 1.4 per cent while
investment spending by private businesses alone fell by 0.9 per cent, its
steepest decline for more than three years.
Price pressures in industry climbed higher, according to the latest CBI
industrial trends survey. It reported that manufacturers were planning to
raise their prices to a greater extent than at any time for 12 years,
despite the survey also showing orders falling for the second month, while
manufacturers expected their output growth to stall in coming months.
Eurozone industrial orders were weaker than expected in March, dropping
by 1 per cent from February and by 2.5 per cent from a year earlier.
US house prices The Office of Federal Housing Enterprise Oversight, the
US house price index, said prices fell by 3.1 per cent in the first quarter,
against last year, the sharpest quarterly decline in the index’s 17-year
history.
Banking
& finance
Nationwide halved its mortgage lending last year and revealed a £102.2
million impairment charge from its exposure to six structured investment
vehicles.
London Stock Exchange came under pressure on its own market as fears
over its prospects amid increased competition overshadowed a 45 per cent
rise in full-year pre-tax profits to £234.7 million.
UBS, the Swiss bank, unveiled a near SwFr16 billion (£8.03 billion)
rights issue as it moved to repair its balance sheet.
Bank customers may have to wait years to reclaim overdraft fees after
the banks said they would appeal against a High Court test case on penalty
charges.
Construction
& property
Defaults The number of commercial property loans in default has climbed
by 400 per cent in 12 months, according to a report by De Montfort
University. Nearly 400 loans slipped into default, up from fewer than 80 in
2006. The report also shows that lending to the commercial property market
slowed from 19.5 per cent to 3 per cent.
Invista European Real Estate Trust, the London-listed European
commercial property company, is in talks to refinance a €460 million (£364.9
million) two-year loan facility with Bank of Scotland.
CRH, the Irish building materials group, has appointed Myles Lee, its
finance director, as chief executive when Liam O’Mahony retires at the end
of this year.
Grainger, the residential housing developer, raised its interim
dividend by 10 per cent to 2.27p a share after a 26 per cent rise in
half-year operating profits to £48.2 million.
Harcourt The European Commission and Parliament have bought the former
London headquarters of the Conservative Party at 32 Smith Square from
Harcourt, the Irish developer, for £20 million.
Consumer
goods
Lion Capital, the private equity company, is to acquire a majority
stake in Russian Alcohol Group, the producer of Green Mark, Russia’s largest
vodka brand by volume, in a deal valuing its equity at about $390 million
(£196.9 million).
Tate & Lyle, the sugars and ingredients group, said that a “year of
transition” had seen an 11 per cent fall in full-year underlying pre-tax
profits to £244 million.
Anheuser-Busch, the American brewer behind Budweiser and Bud Light, was
the subject of fresh bid speculation, with Belgian traders reheating
previous speculation about a merger with InBev, the maker of Stella Artois
and Beck’s.
Engineering
Ford Motor, the US carmaker, said that it no longer expected to return
to profitability in North America next year as the rising cost of raw
materials and petrol took their toll.
Smiths Group, the engineering company, said it was confident of meeting
expectations for the full year, adding that trading for the first nine
months is in line with management’s forecasts at reported exchange rates.
Health
Fulcrum Pharma, the drug development and regulatory services company,
reported a 53 per cent increase in first-half sales to £7.4 million, driven
by a combination of organic growth and mergers and acquisitions activity.
Industrials
PPG Industries, the American paint, chemicals and glass maker, plans to
build an automotive coatings and industrial coatings plant in Russia, saying
that the new plant will help it to improve its service to the rapidly
growing Russian market.
Leisure
Rank, the embattled gaming group, stands to recoup £36.3 million in
overpaid VAT after a tribunal ruled that Britain’s tax treatment of interval
games in bingo clubs was inconsistent with European Union rules. HM Revenue &
Customs, which also faces a claim from Gala Bingo, has until July 10 to
lodge an appeal.
Wagamama, the privately owned noodle bar operator, has secured its
third site in America — and its first in Washington — as it seeks to step up
its ambitious international expansion plans.
InterContinental Hotels Group, which accommodated the Manchester United
team in its Crowne Plaza Moscow World Trade Centre hotel for the Champions
League final, is calling on the Russian authorities to relax entry visa
restrictions after its successful fast-tracking of fans from Britain for the
match.
Media
GCap chief executive, Fru Hazlitt, and the media company’s chairman,
Richard Eyre, will step down on June 6 when Global Radio’s £375 million
takeover of the group is due to be completed.
Daily Mail and General Trust said that its national newspaper titles
were “holding up well” in the tougher economic climate as the company
reported half-year pre-tax profits of £144 million, up by 7 per cent on last
year, but added that advertising revenues at its regional newspapers were
deteriorating month by month as the economy slowed.
Natural
resources
Royal Dutch Shell, the Anglo-Dutch oil group, said that the record high
oil prices are because of market sentiment rather than a shortage of supply.
Braemore Resources, the AIM-listed mining group, said that along with
Mintek, the South African minerals and metallurgical technology specialist,
it was planning to double the throughput of the ConRoast smelter at Mintek,
after seven months of operations.
Retailing
Moss Bros Rebel shareholders in Moss Bros are calling for Keith Hamill,
chairman of the menswear retailer, to step down because of the continued
uncertainty over whether Baugur, the Icelandic group, will bid for the
business.
Mothercare, the specialist retail chain, reported a 71 per cent rise in
full-year underlying pre-tax profits to £38.6 million.
Woolworths is preparing to announce £10 million of price cuts covering
1,000 products from plant food to DVD players. The high street chain said it
was taking on the supermarkets with some prices at their lowest for five
years.
Au Naturale More than 550 jobs have been saved after Elaine McPherson,
former chief executive of MK One, bought 46 Au Naturale stores, the
homewares chain, from administrators.
Asda, the supermarket group, is to start selling mortgages by the end
of the year and is in talks with three national brokers to secure the
cheapest loans.
JJB Sports, the retail chain, has bought the 22-store Qube Footwear
from a private equity group run by Sir Tom Hunter, the Scottish billionaire,
for a nominal £1.
Gap, the fashion chain, reported a 40 per cent rise in first-quarter
net profits to $249 million (£125.9 million), from $178 million last time,
helped by tighter inventories and fewer markdowns.
Support
services
De La Rue, the world’s largest commercial security printer and paper
maker, reported a 23.7 per cent increase in full-year profits to £126.7
million and said that it had put its cash systems division up for sale after
a strategic review.
Technology
Yahoo! sought to buy more time for its discussions with Microsoft by
postponing its annual meeting from July 3 to “around the end of July”,
citing a planned proxy fight by Carl Icahn.
Manpower Software said that it had won a contract to provide its MAPS
Healthroster software to the South West London and St George’s Mental Health
NHS Trust to help workforce planning across five London boroughs.
Telecoms
Cable & Wireless said a demerger of its UK and international
divisions may take place this financial year after the telecoms group beat
forecasts with a 23 per cent rise in underlying earnings.
Telecom Plus reported a 45 per cent increase in full-year pre-tax
profits to £16.8 million, boosted by a 49 per cent rise in its business club
membership, an increase in customer numbers and growth in the number of its
distributors.
Transport
British Airways The British Airline Pilots’ Association has dropped its
High Court bid to secure the right to take industrial action over the
proposed OpenSkies service by British Airways.
Air France-KLM, the Franco-Dutch airline, said profits would fall by a
third under the weight of rising fuel costs. Its shares fell by 10 per cent
to €16.74.
Utilities
Gaz de France The European Commission said that it has begun an
anti-trust inquiry into Gaz de France over alleged supply restrictions.
