Economics
Sterling slid against the dollar for an eleventh successive day in the
longest decline since 1975 as concern grew over Britain’s faltering economy.
The pound hit a two-year low of $1.8514, a level not seen since July 2006,
before rallying slightly to $1.8686.
Repossessions ordered by courts in England and Wales in this year’s
second quarter exceeded those for any quarter since the housing market crash
of the early 1990s, in a further sign that the economic slowdown is hitting
households hard. The Ministry of Justice reported an annual jump in orders
for mortgage repossessions in England and Wales of 24 per cent in the second
quarter to 28,658 — the most since 1992’s third quarter, when 30,587 orders
were made.
Bankruptcy petitions rose to 19,158 in the three months to June. More
than 15,300 people petitioned for bankruptcy while creditors sought to force
a further 5,625 into insolvency. The total of petitions was 5 per cent
higher than in the same period last year.
US consumer sentiment improved slightly in early August. The
Reuters/University of Michigan Surveys of Consumers said that its index of
confidence edged up to 61.7 in early August, from 61.2 in late July. The
one-year inflation expectations gauge fell to 4.8 per cent, from July’s 5.1
per cent, the biggest one-month drop since September 2006.
Banking
& finance
Standard Life has cut payouts for 800,000 mortgage and savings
endowment policyholders by as much as 9 per cent.
Bradford & Bingley investors may have bought more than a fifth of
new shares available in a rights issue aimed at raising £400 million.
Lehman Brothers, the US bank, is understood to be in talks to sell its
entire real estate portfolio to stem losses incurred during one of the worst
property slumps since the Great Depression.
Merrill Lynch’s investment woes will hit the UK. A regulatory filing by
the US bank indicated that Britain will bear a large portion of its recent
losses — in the form of lost tax revenue — at the same time as an internal
memo warned staff that it had embarked on a hiring freeze across the group.
HSBC has found itself at the centre of conflict eight weeks after
opening an operation in Georgia.
Imperial Innovations Group said that three of its portfolio companies
were to receive investments from the Technology Strategy Board (TSB) for
collaborative research projects. BioCeramic Therapeutics will receive
£375,000 for leading a £1.3 million project to design an implant promoting
tissue regeneration in knee injuries. NovaCem, an engineering company, will
receive £272,000 to lead a £1.47 million project to develop carbon-negative
construction goods. PolyTherics, a biopharma company, has secured two
investments from the TSB. Imperial has also formed a capital markets
subsidiary authorised by the Financial Services Authority.
Infrastructure India said that it had acquired, for £11.9 million, a 26
per cent stake in a 125 km toll road in central India. Tolling operations on
the road, a four-lane government-sponsored project, are expected to begin in
2010.
Addworth, the AIM-listed investment company, said it expected to report
a loss of about £560,000 for the first half, against a £19,108 profit last
year, citing challenging market conditions. Also, it said that, after the
first half, it disposed of one of its investments, realising a book loss of
about £350,000.
Construction
& property
Styles & Wood, the shopfitter, said that Paul Bell, a shareholder,
had further raised his stake to 5.8 million shares, or 9.1 per cent. He has
built his stake over the past six weeks, having first disclosed a 3.26 per
cent holding on July 1.
Consumer
goods
Swatch, the Swiss watch maker, said that it was confident of hitting
targets for the year despite a fall in its half-year profits. The group,
whose Omega brand is the official timekeeper at the Olympic Games, said that
demand in Asian markets was buoyant. One-off costs reduced first-half
profits by 9 per cent to £202 million.
MHP SA, the Ukrainian agro-industrial group, said that in the first
half of 2008, its poultry production facilities operated at full capacity
and that it was confident that financial results for the period would meet
its expectations.
Engineering
Turbo Power Systems reported a wider second-quarter loss, but said that
the terms of a loan note had been amended to allow “sufficient cash
resources to enable the business to achieve profitability and positive
cashflow”. It said that terms of the £3 million loan note, which was entered
into on June 19, had been amended to allow a further drawdown of £1.5
million, which it said was necessary to enable the company to continue
operating as a going concern.
Trifast said that it made a satisfactory start to the year, that
current trading remained broadly in line with market expectations and that
it was cautiously optimistic about full-year prospects. The maker and
distributor of industrial fasteners and components also said that its
financial position remained robust, with good operational cashflow in the
period.
600 Group said its trading from March 30 to August 14 was in line with
its expectations, and that it had maintained order book levels. The company
said its gross margin for the period remained in line with expectations,
with cost controls being maintained while net cash balances were reduced, as
expected, because of seasonal factors and increased activity levels.
Health
Antisoma, the developer of cancer-treatment products, said that there
was evidence of activity in new data from an ASA404 prostate cancer trial.
The company said that Novartis, its partner, was considering what the next
steps should be in prostate cancer as part of analysis of potential
indications for development.
Oxford Biomedica, the gene therapy company, confirmed that it had
rejected US-based GeneThera’s revised proposal for an all-share offer for
the company. Oxford said that it initially rejected GeneThera’s approach on
July 31, because it felt that GeneThera was not a credible bidder.
Industrials
Accsys Technologies said it had made a good start to its financial
year, with continuing strong momentum despite the economic climate, and
added that first-quarter performance had been in line with its expectations.
The environmental science group said that “very positive” talks with
prospective licensees for production of accoya wood were under way.
Leisure
Travelzest, the tour operator, confirmed being in early-stage
discussions with a suitor, understood to be TUI Travel, over a bid worth
115p a share, or about £24 million.
Lo-Q said that its first-half profits soared, boosted by the
strengthening US dollar, but that it was mindful that the economic climate
could slow its progress. For the six months to June 30, the theme park
operator’s pre-tax profits rose to £182,281, from £14,327 a year earlier,
while revenue rose to £4.1 million, from £2.7 million.
Media
Chrysalis, the music group, said it would end the year in the red, and
blamed the faltering economy, a lack of hits in summer, the Hollywood
writers’ strike, and an abortive sale process for its difficulties. The
company, which manages copyrights to songs from acts ranging from Blondie to
the folk star Laura Marling, said that it would make an operating loss of
about £1.2 million in the 13 months to September 30 — the same level of loss
reported in the first seven months of its financial year.
Natural
resources
Opec has cut its forecast for global oil demand growth in 2008 and said
that production was more than adequate, signalling a more comfortable supply
and demand balance. The 13-member group, the source of two in every five
barrels of oil, also said that higher Opec production, easing political
tension and a stronger US dollar indicated a weaker outlook for the oil
market.
BP and its Russian joint venture partners are set to discuss a partial
float of TNK-BP at a board meeting next month.
New Britain Palm Oil said that it had varied the terms of its offer for
the entire capital of Papua New Guinea-listed Ramu Agri Industries in which
it does not have a relevant interest, by extending the expiry period of the
offer from August 30 until September 14.
Lonrho Mining, which is part-owned by Lonrho, has signed an exclusive
option agreement to sell its 80 per cent stake in the Schmidtsdrift diamond
mine in South Africa to New African Mining for $13.35 million (£7.2
million). Lonrho Mining said that, on completion, it would retain about $6
million of proceeds from the deal, which will be used to develop its Lulo
diamond project in Angola.
Frontera Resources reported a wider first-half net loss even as
revenues from oil sales rose compared with last year. For the first half to
June 30, the group’s net loss widened to $11.65 million (£6.25 million),
from $7.53 million last year. Revenue from crude oil sales rose to $2.87
million, from $1.88 million.
Oilex said that it had increased its working interest in the West
Kampar PSC (Production Sharing Contract) in Sumatra, Indonesia, to 60 per
cent, from 45 per cent, after entering an agreement to acquire an additional
15 per cent working interest from PT Sumatera Persada Energi (SPE).
Petmin, the South Africa-based miner, said that talks that, if
successfully concluded, may have a material effect on the price of its
securities were still in progress.
Retailing
Tesco has cut the price of milk by nearly 7 per cent to 99p for a two-
litre bottle after Asda pledged to sell a pint for only 25p. Britain’s
biggest retailer insisted that farmers would not lose out.
Faith, the footwear retailer, is for sale. Its management team has
appointed Baker Tilly, the corporate finance house, to find a buyer. Steve
Swaby, the brand director, told Drapers, the fashion magazine: “The business
needs a further injection of funds.”
Homebase, the DIY chain, is drawing up plans in which staff could be
offered shorter working hours or redundancy.
The John Lewis Partnership said that shoppers remained nervous about
the economy despite recording a 9.3 per cent sales rise in its John Lewis
department stores last week. Its Waitrose supermarket chain recorded its
worst weekly sales for four months — despite a surge in demand for soups
amid cool weather — with sales up only 0.8 per cent.
Hennes & Mauritz, the Swedish fashion group, reported better than
expected sales figures for July, defying an economic slowdown, as
cost-conscious shoppers appeared to favour its moderately priced clothes. H&M,
the world’s third-biggest retailer by sales, said that turnover in
established stores was up 3 per cent, exceeding forecasts of a 2.1 per cent
gain.
Support
services
Michael Page, the recruitment specialist, said it had halted talks with
Adecco, the Swiss recruiter, over a £1.3 billion bid for Page. Britain’s
second-largest recruitment agency said that two separate bids from Adecco
undervalued the company.
Deloitte’s UK senior partner, John Connolly, cemented his position as
Britain’s highest-paid accountant when his £5.7 million pay package was
revealed in the firm’s annual results.
DCC, the Irish business services group, said that it would buy
Chevron’s UK oil distribution business for €27.5 million (£21.6 million), in
a move that analysts saw as an attractive way to boost earnings. DCC said
that the Chevron distributor, which trades under the Texa-co brand, sells
about 1 billion litres of oil a year in England and Wales. DCC’s British
unit, GB Oils, has sales of 3.2 billion litres, giving it a market share of
10 per cent.
Billing Services Group reported slightly reduced first-half pre-tax
profits from continuing operations of $2.91 million (£1.55 million), down
from $2.98 million last year, on higher operating costs, even as revenues
rose by 2 per cent.
Technology
Yahoo! has added two executives picked by Carl Icahn, the activist
investor, to its board of directors, fulfilling a condition of a truce it
struck with the corporate raider. The internet giant selected Frank Biondi,
former chief executive of Viacom, and John Chapple, former head of Nextel,
from a list of nine nominees from Mr Icahn.
Nokia, the world’s top mobile phone maker, has appointed Esko Aho, the
former Finnish Prime Minister, as its head of corporate relations, to start
early next year.
Telecoms
Vodafone is in talks with TDC, the Danish telecoms operator, to buy
part of TDC’s stake in Polkomtel, the Polish mobile carrier. Vodafone, the
world’s biggest mobile telecoms group by sales, already owns 19.6 per cent
of Polkomtel and hopes to buy a further 4.8 per cent from TDC as it pushes
into emerging markets to offset slowing growth in more mature European
economies.
Transport
EasyJet is being taken to court by its founder, Sir Stelios Haji-
Ioannou, in an attempt to limit the airline’s ability to make money from
activities that may clash with his other ventures.
Airport users at Gatwick and Stansted face delays over the August Bank
Holiday weekend after more than 300 baggage and check-in staff voted to
strike over pay. Staff plan to walk out on the August 25 Bank Holiday and
again on August 29 after rejecting a pay offer from Swissport, the airline
services business owned by Ferrovial, of Spain, the owner of BAA.
Utilities
Vestas, of Denmark, the world’s biggest maker of wind turbines,
reported a 2 per cent rise in second-quarter operating profit and maintained
its full-year profit forecast.
