Economics
High street sales The headline gauge of sales from a CBI survey showed
that a net balance of minus 14 per cent of retailers said that sales fell in
May, up from minus 26 per cent for April. The survey also found that high
street pricing pressures were at their greatest for 16 years.
House prices fell in May by a further 2.5 per cent, Nationwide Building
Society said, the largest monthly drop in its survey’s 17-year history and
the seventh monthly fall in property values. Nationwide’s figures show
prices down 4.4 per cent from a year ago, the sharpest annual fall since
December 1992.
Consumer confidence The headline index of consumer confidence from GfK
NOP, the pollster, showed a fall of a further five points in May to minus
29, its worst since November 1990.
German unemployment fell to 7.8 per cent in May, from 8.1 per cent in
April. This is the first time unemployment has been under 8 per cent since
1993.
Spanish inflation hit a record high of 4.7 per cent in May, up from 4.2
per cent in April, as retail sales fell by 3.4 per cent. Analysts had
forecast that inflation would rise to 4.5 per cent.
US GDP growth in the first quarter was revised up to show an annual
pace of expansion of 0.9 per cent, from the 0.6 per cent estimated. US
imports were estimated to have fallen in the quarter by 2.6 per cent,
against a 2.5 per cent rise previously reported.
US corporate profits suffered further year-on-year falls in the first
quarter, according to the GDP figures, with profits on US companies’
domestic activities down by 6.2 per cent from a year earlier, although
overall profits rose compared with the final quarter of last year.
World food prices will remain well above the average levels of the past
decade for at least ten years, the United Nations Food and Agriculture
Organisation and the Organisation for Economic Co-operation and Development
said in a joint report.
Banking
& finance
Man Group said Stanley Fink is retiring from the fund of fund managers
that he helped to shape over the past 21 years. Mr Fink leaves as the
world’s largest listed hedge fund manager reported full-year profits up by
60 per cent to $2 billion (£1.01 billion), against the $1.95 billion
forecast by analysts.
Financial Services Authority Lord Turner, former Director- General of
the CBI, has been confirmed as the new chairman of the Financial Services
Authority, the City watchdog, when Sir Callum McCarthy steps down.
HSBC Knight Vinke, the activist investor, vowed to remain a thorn in
HSBC’s side as it prepared to confront executives at the banking group’s
annual meeting with fresh demands for reforms of pay and strategy.
Construction
& property
Dawnay, Day Sirius, the property investment group, which is focused on
Germany, said that it had bought the Siemens Gewer-bepark portfolio of five
business parks for €98 million (£77 million) and had also bought two
business parks in Kassel and Pfungstadt for €17.9 million.
Low & Bonar, the textile and contract flooring maker, said that it
had continued to trade in line with its expectations and expected continued
progress.
Consumer
goods
HJ Heinz, the American food group, said that sales of Heinz branded
products and price increases had helped to boost its fourth-quarter earnings
by more than 7 per cent to $194.1 million (£98.3 million), compared with
$181 million last time.
Engineering
Tata Motors Shares in Tata Motors, the new owner of Jaguar and Land
Rover, the British marques, fell by 8 per cent after the Indian company
unveiled three shock rights issues to fund the acquisition. Tata plans to
raise $1.7 billion (£861 million) from the differentiated rights issues.
EADS Noël Forgeard, the former chief executive of EADS, the European
aerospace group, was due to be questioned by a French magistrate as
investigators signalled their determination to pursue claims of insider
trading.
General Motors, the American carmaker, said that about 19,000 of its US
workers who are paid by the hour, about a quarter of its workforce, are
taking the company’s latest redundancy offers, opening the door for new
employees who will earn less money.
Health
Renovo, the biopharmaceutical company that focuses on scar prevention
treatments, reported a narrower first-half pre-tax loss of £7.35 million,
compared with a £12.43 million loss last time, due in part to a decline in
research and development expenses.
Antisoma, the London-based biotech group, said that it had received a
milestone payment of $25 million (£12.6 million) from Novartis, the Swiss
drugs maker, triggered by the start of a Phase III trial of its ASA404
treatment for lung cancer.
Industrials
Europe Steel, the London-based group, said that it had reached an
agreement for a recommended offer by Ferrous Metal Company for about £6.36
million. The offer represents a premium of about 150 per cent over the
closing price of Europe Steel’s shares.
Leisure
Young’s, the London pub operator, said it expected the
challenging trading environment to reduce competition for pub acquisitions
and it was ready to use its £150 million war chest to pursue deals. It also
reported a 4.7 per cent rise in full-year like-for-like sales.
Ladbrokes, the bookmaker, has recruited David Ginola, the former
football player, to star in a £4 million television advertising campaign
during the Euro 2008 championships.
Sportingbet, the internet gambling operator, said that two of its
UK-based employees had been detained by the Turkish authorities.
Genting, the Malaysian conglomerate, reported a fall in gaming revenues
and profits because of the hit on its Genting Stanley casino operations in
the UK from lower business volumes and higher bad debt write-offs.
Media
Adventis, the AIM-listed advertising group, said that revenues and
profits in the first four months were slightly below its expectations but
ahead of last year, as it gave warning that 2008 was proving to be
“challenging”.
Independent News & Media Denis O’Brien, the Irish businessman, said
that he had increased his stake in Independent News & Media, the
newspaper group, to 23.61 per cent, or 196.2 million shares. Mr O’Brien has
been branded a “dissident shareholder” by the group and has been rumoured to
be plotting a takeover bid.
Natural
resources
Rio Tinto, the Anglo-Australian mining group, said it expected compound
annual production growth to be 8.6 per cent through to 2015 and that it was
well placed to take advantage of an expected doubling of world demand for
its metals and minerals by 2022. It is still fending off a hostile bid from
BHP Billiton, its larger rival.
BG Group, the oil and gas producer that is based in Reading, is
expected to win agreement for its takeover of Origin Energy, Australia’s
second-biggest energy retailer and a coal seam gas producer, after raising
its bid to A$13 billion (£6.2 billion).
Retailing
Jessops, the troubled photographic retailer, took a step towards
securing its future when it agreed a £49 million banking facility.
Blacks Leisure, the outdoor clothing retailer, has halved its
end-of-year dividend and added that like-for-like sales had fallen by 4.1
per cent in the past 12 weeks.
Support
services
Shanks, the waste disposal group, reported a 10 per cent fall in
full-year pre-tax profits to £41.3 million on the back of higher finance
charges, but said that it expected a good overall performance this year.
Imprint The battle for control of Imprint, the recruitment group, came
to an end as Premier, its Irish rival, completed its £45.2 million
acquisition.
Clifford Chance, the law firm, announced full-year revenue of £1.33
billion, in defiance of predictions of a downturn in the legal sector.
Profits also rose, with equity partners earning an average of £1.15 million,
up 13 per cent on last time.
Technology
Pace, the set-top box maker based near Bradford, saw its shares rise by
as much as 12 per cent after it announced a deal to supply a low-cost
digital to analogue converter product for the US cable TV market.
Telecoms
France Télécom has approached banks seeking to arrange a €10
billion (£7.8 billion) loan facility to finance an unspecified acquisition,
according to local reports, suggesting that the funds would be used to
finance a bid for TeliaSonera, the Nordic telephone company that is based in
Stockholm.
Cable & Wireless, the London-listed telecoms group, has signed a
five-year £100 million partnership contract with Tesco to create a telecoms
network for the supermarket group.
Transport
British Airways announced that it was increasing its fuel surcharge for
all tickets issued from June 3 because of high oil prices.
Wincanton, the logistical and distribution group, announced that it had
acquired Product Support, the provider of logistics solutions to the defence
and aerospace markets, for £27 million.
Silverjet, the business-class airline that flies out of Luton, said
that talks were continuing with a potential investor to provide the
necessary finance to enable it to continue operating, but added that all its
services were running as scheduled.
Utilities
National Grid A rescue plan to avert blackouts that hit 500,000 homes
this week was undermined by demands of E.ON, the German energy group, that
National Grid should pay double the usual price for an emergency electricity
boost.
Scottish & Southern, the utility group, has predicted sharp rises
in household energy bills after it said that it could not commit to
maintaining prices for the rest of the year. The company also reported
full-year underlying pre-tax profits of £1.2 billion.
