Economics
Retail sales recovered slightly in June, CBI figures suggested. A
balance of 9 per cent of retailers reported weaker activity than a year ago,
down from 14 per cent in May. But the outlook for July deteriorated, with a
balance of 7 per cent of retailers expecting trading conditions to worsen.
The CBI’s figures come just a week after a 3.5 per cent rise in retail sales
volumes was recorded for May.
Norwegian interest rates Norway’s central bank surprised markets by
raising interest rates by a quarter point to 5.75 per cent and said it was
ready to increase rates again next year to halt inflation.
US sales of newly constructed homes fell by 2.5 per cent in May to a
512,000 annual rate — 40 per cent lower than a year ago. The inventory of
new homes available for sale in May fell by 1.7 per cent to 453,000 — the
thirteenth consecutive monthly decline.
US goods orders New orders for durable US manufactured goods were
unchanged in May after two consecutive months of decline, government data
showed. Orders fell by a revised 1 per cent in April, previously reported as
a 0.6 per cent decline. Non-defence capital goods orders, excluding
aircraft, fell by 0.8 per cent in May.
US interest rates The US Federal Reserve has kept interest rates at 2
per cent amid signs of continuing problems in the housing market and falling
consumer confidence.
Banking
& finance
Old Mutual, the FTSE 100 Anglo-South African insurance group, said it
anticipates a fall in operating profits because of “tougher markets” in the
United States and higher costs.
Independent Insurance KPMG and one of its accountants have been handed
a combined fine of £500,000 and a public rebuke for their role in the
downfall of Independent Insurance, the former FTSE 100 company whose
collapse in 2000 caused more than 1,000 job losses.
Barclays, the banking group, said that the $60 billion (£30.5 billion)
Qatar Investment Authority would spend £1.7 billion on a maximum 7.7 per
cent stake as part of the bank’s £4.5 billion capital raising.
HBOS, the banking group, did not give warning of an additional £1
billion in writedowns last week as we reported (Business, June 24). In fact
the bank had confirmed that its writedowns were flat at £2.8 billion.
Short-term loans Consumers are increasingly turning to short-term loans
charging more than 1,000 per cent interest. The number of such deals has
grown by more than 130 per cent since last August, figures from
Moneysupermarket, the price comparison website, show.
Bradford & Bingley Resolution, the insurance group, has raised the
pressure on Bradford & Bingley to open up its books after a revised
investment proposal was rejected by the mortgage lender. Talks broke down
amid concern that Resolution is seeking full control of the bank.
UBS, the Swiss bank which was the biggest victim of the credit crunch
in Europe, has hired Lazard, the US financial advisory group, to conduct a
review to help it to decide which of its businesses should be expanded and
which reduced. UBS has lost more than $37 billion in the past nine months.
The London Stock Exchange is to join forces with Lehman Brothers to
launch a pan-European equities trading platform.
Construction
& property
Invista Real Estate Investment Management Holdings said that it expects
to report first-half results in line with its forecasts, but added that the
outlook for investments in the UK commercial market remains poor and will
continue to hurt some of its funds under management.
Consumer
goods
Northern Foods suffered a fresh blow as Jez Maiden, its finance
director, announced plans to leave the group for National Express, the
transport company, just a month after the failure of new contract talks with
Marks & Spencer led the maker of ready meals to cut 730 jobs.
Engineering
Manganese Bronze, the maker of London’s black cabs, said that its
Chinese joint venture has produced the first prototype of its new taxi for
the Chinese market. Manganese, which is based in Coventry, said that LTI
Shanghai will start commercial production of the vehicles later this year.
Renold, the industrial chain maker, has reported a rise in full-year
pre-tax profits to £9.3 million and said that its Indian unit has entered
into an agreement to acquire the industrial chain business of LG
Balakrishnan, the Indian group, for an initial £5.7 million.
Health
Sanofi-Aventis, the French pharmaceuticals group, plans to invest €4
billion (£3.16 billion) between now and 2015 in vaccine activities, to
respond to growing world demand. It had already invested €1 billion between
2004 and 2008 in vaccine development.
Silence Therapeutics, the AIM-listed biotech group based in Cambridge,
said that the US Food and Drug Administration has approved an application
for its gene silencing technology, which is being developed by Quark
Pharmaceuticals, its US partner, for use in kidney transplants.
Sareum Holdings, the AIM- listed biotech group which is based in
Brussels, reiterated that it needs to undertake a strategic transaction and
fundraising after announcing that it has secured three repeat business
agreements with existing collaboration partners.
Industrials
Castings, the foundry and iron castings manufacturer, which is based in
Birmingham, reported higher full-year pre-tax profits of £14.7 million,
after £13.06 million last time, but cautioned that its first-half results
would be affected by a delay in recovering rapid price increases in
materials such as steel scrap and pig iron. The company also said that it
expects to see substantial increases in its energy costs.
Leisure
Bingo clubs The Government said that it will relax the limits on the
number of slot machines allowed in bingo clubs, giving a lift to the
industry after a number of clubs had closed. Gerry Sutcliffe, the Sports
Minister, whose responsibilities include gaming, said the maximum number of
£500 jackpot slot machines allowed in bingo clubs will be raised to eight,
from four previously.
The Real Hotel Company said that revenues from continuing operations
for the four months to the end of April are 7 per cent lower than last year,
as the decline seen in 2007 continued.
Media
Taylor Nelson Sofres, the market research group, said that underlying
revenue growth for the first five months to May 31 was about 6 per cent and
added that it sees similar growth for the full year. Donald Brydon, the
chairman, also told the company’s shareholders that its proposed merger with
GfK, its German rival, “provides a unique opportunity”.
Publicis, the French advertising group, has struck deals with Google,
Yahoo! and Microsoft to develop an open buying network for its agencies to
buy digital advertising campaigns.
Natural
resources
Anglo American, the London-listed mining group, said that it was
“reviewing all options surrounding the development” of its $400 million
(£202 million) platinum mine in Zimbabwe. The company’s decision to press
ahead with the Unki mine in central Zimbabwe has prompted criticism that it
will provide support to the regime of President Mugabe.
Cairn Energy said that its Cairn India unit expects operating cashflow
of $3 billion at crude oil prices of $100 a barrel from its Rajasthan fields
by the second half of 2010.
Roc Oil said that six wells in Bohai Bay, off China, have been brought
into production and are contributing 7,500 barrels per day.
BP, the UK oil and gas group, has been accused of working secretly with
the Kremlin to force its Russian joint-venture partners in TNK-BP to sell
their stake to Gazprom, the Russian energy group.
Expro investors will ask a judge for a lengthy delay in approving a
£1.8 billion takeover of the oil services provider by a private equity
consortium in an attempt to allow a rival suitor, Halliburton, the world’s
second-largest oilfield contractor, to rebid for the company.
Retailing
Tesco’s chief executive, Sir Terry Leahy, is being urged by Barack
Obama, the US presidential contender, to meet American trade unions and end
a dispute over workers’ rights at the British supermarket group’s fledgeling
Fresh & Easy chain in the US.
Ilva, the Danish furniture chain that vowed to take on Ikea when it
entered the UK two years ago, said that it had appointed Kroll, the
corporate recovery specialist, as administrator of its UK business in a move
that leaves 400 jobs in the balance. The business, which is based in
Reading, runs three out-of-town stores in Thurrock, Gateshead and
Manchester.
Marks & Spencer Pirc, the corporate governance watchdog, is calling
on its members to oppose the re-election of Sir Stuart Rose at the
forthcoming Marks & Spencer annual meeting in protest over his dual role
as executive chairman. It said that the role represented a “dangerous
concentration of power”.
Support
services
VT Group said that it has been named the preferred bidder to provide
initial flying training for all three armed services. The defence support
services company said that the programme is valued at up to £150 million in
total.
WS Atkins, the UK’s biggest engineering design services company,
reported a 31 per cent rise in its full-year pre-tax profits to £91.9
million. Total revenues were up by 11 per cent at £1.3 billion, in line with
analysts’ predictions.
Technology
Research in Motion (RIM), the Canadian owner of BlackBerry, the mobile
phone that lets users receive e-mails, unveiled doubled sales in the year’s
first quarter, adding 2.3 million subscribers. Shares in RIM fell 8 per cent
because the results fell short of expectations.
Imagination Technologies, the London-listed computer chips maker,
reported a full-year pre-tax profit of £1.9 million, compared with a £2.3
million loss last time, and said that it remains confident of making good
progress in the current financial year.
Flomerics Group, the simulation software company, which is based in
Surrey, said that its takeover talks with Autodesk have ended with the US
design software maker deciding not to make an offer at this stage. After
rejecting an offer at 104p per share from Mentor Graphics in May, Flomerics
had confirmed that it was in bid talks with Autodesk.
Telecoms
Ofcom’s chairman, Lord Currie of Marylebone, will step down as head of
the telecoms regulator next year after almost seven years. As its inaugural
chairman, Lord Currie oversaw Ofcom’s creation, helping to merge five
watchdogs into one converged communications “super-regulator”. Lord Currie
became chairman in June 2002.
BT, the telecoms group, has agreed with BSkyB, the satellite
broadcaster, to provide a wholesale voice service to support call services
to its 1.1 million Sky Talk customers over the next three years that could
be worth between £200 million and £300 million. News Corporation, parent
company of The Times, has a 39.1 per cent stake in BSkyB.
Transport
Stagecoach, the transport company, which part-owns Virgin Rail Group,
said there was a significant risk that Network Rail would not be able to
upgrade the West Coast Main Line in time for critical timetable changes due
in December. This is the first time the rail group has publicly stated that
it doubts Network Rail’s ability to upgrade the main line from London to
Glasgow since the intervention of the Office of the Rail Regulator, which in
January had vetted Network Rail’s plan of work.
Utilities
Scottish & Southern Energy Airtricity, the renewable division of
Scottish & Southern Energy, has entered into two joint ventures to
further its wind farm development plans in Portugal, totalling 400 megawatts
of potential capacity.
