Economics
London retail sales, on a like-for-like basis, bucked the grim UK trend
by jumping 6.2 per cent in the year to July, British Retail Consortium
figures showed. In June, sales rose by 9 per cent on a year earlier, against
a 0.4 per cent drop for the UK as a whole.
Consumers spent £31.68 billion on credit cards in this year’s second
quarter, up from £31.63 billion in its first quarter and £30.5 billion last
year, the UK payments association said. Debit card spending rose to £60.9
billion in the three months to June, from £55.6 billion in the same period
last year.
The housing market’s seizure is forcing would-be sellers to let their
homes and move to rented accommodation because they cannot sell their
properties, a survey from the Royal Institution of Chartered Surveyors
suggests.
Banking
& finance
Bradford & Bingley, the troubled mortgage bank, said that
shareholders had subscribed to 27.8 per cent of its £400 million rights
issue, leaving almost 73 per cent with the underwriters Citigroup and UBS.
Nationwide Building Society said that it planed to set up an operation
in the Republic of Ireland. Nationwide, Britain’s biggest mutual, intends
initially to offer savings products by post, by phone and online.
Lloyds TSB said that it was cutting its mortgage rates for the second
time in two weeks amid further signs of competition returning to the
mortgage market. The group, which also lends under the Cheltenham &
Gloucester brand, is reducing its mainstream fixed-rate mortgages by up to
0.31 per cent, with tracker deals cut by 0.1 per cent. It is also cutting
its two-year fixed-rate loan for people borrowing £50,000 to £250,000 by 0.5
per cent to 5.49 per cent, although borrowers will need a 25 per cent
deposit.
Hiscox, the insurer, brushed aside the turmoil in financial markets to
register record first-half profits of £109.2 million.
WH Ireland slipped to a first-half loss, saying that turbulent
financial markets had led to a 25 per cent fall in turnover and devaluation
of investments. Conditions have remained difficult since the period’s end,
it said.
Panmure Gordon, the stockbroker, is to increase co- operation with
EFG-Hermes, the Egyptian bank, which has bought a 9.97 per cent stake in it.
Libor, the three-month London inter-bank offered rate, which is the
cost of borrowing in the wholesale funding market, yesterday hit a two-month
high of 2.81 per cent.
Libertas Capital Group expects an improved performance in the second
half of 2008, depending on market conditions, with its pipeline of mandated
transactions remaining strong. The financial services company reiterated
that it experienced difficult trading conditions in the first half, to June
30, especially towards the latter part.
Construction
& property
CLS Holdings said that its Citadel Holdings had completed a sale of
three properties in France to SGAM, an asset management company and part of
the Société Générale group, for net consideration after costs and taxes of
€21.9 million (£17.2 million).
Consumer
goods
Belvedere, the French drinks group, said that sales had jumped by 24.5
per cent to €577.5 million (£455 million) in the first half, from €463.9
million a year ago, as volumes of raw alcohol doubled to 12.8 million
litres, from 6.4 million.
Engineering
Hamworthy said that it had secured a contract to supply liquid natural
gas reliquefaction systems on four dual fuel diesel electric-powered ships
and a contract for ethylene reliquefaction systems for two liquefied
ethylene gas carriers in Japan with a combined value of about £13 million.
Wagon said that current trading had stayed broadly in line with its
expectations and that its financial position had improved significantly
since the end of March. The European automotive components group also said
that it had completed a €34.5 million (£27.1 million) property
disposal and planned to use €30 million of proceeds to reduce revised
debt facilities to about €125 million.
Hill & Smith, the construction products company, said that its
strategy of selective acquisitions had paid off as half-year results beat
expectations, with a 45.5 per cent increase in its underlying pre-tax
profits to £21.2 million on revenue up by 50 per cent to £264.1 million.
Health
Care UK said that it had made good progress since the release of
first-half results on May 19 and that current trading and expectations for
the remainder of the financial year were in line with forecasts. In a
trading update, the health and social care provider said that it was
confident about the outlook for the full year.
Alliance Pharma said that it had bought the marketing rights to the
Pavacol-D brand from William Ransom & Son for £600,000. The speciality
pharmaceutical company said that the acquisition was expected to be earnings
enhancing in the current year. Pavacol-D, which has annualised sales of
about £400,000 in the UK market, is used to suppress dry, irritating coughs.
It is sugar-free and suitable for diabetics.
Industrials
Raymarine said that first-half pre-tax profits and sales had stayed
flat, but full-year sales were expected to exceed those of 2007 with
earnings in line with present market expectations and similar to those of
last year. The marine electronic products maker said that pre-tax profits
for the six months to end-June stood at £19.5 million.
Evraz Group, the Russian steelmaker, said that three people died in a
roof collapse at its Mine 12 in the Kemerovo region in Siberia.
Leisure
Domino’s Pizza, the American pizza delivery operator, is to start
selling oven-baked sandwiches, the latest move by the company to boost its
menu and pep up sluggish sales in the United States.
Brinker International, the American restaurant operator, unveiled plans
to sell a majority stake in its Romano’s Macaroni Grill chain to an
affiliate of the Golden Gate Capital private equity firm for $131.5 million
(£70.5 million). Brinker, which also owns the Chili’s Grill &
Bar chain, said that it would retain a 20 per cent interest in the brand.
Surinder Arora, the airport hotel entrepreneur, announced completion of
a deal to buy a property portfolio worth £236 million from the Airport
Property Partnership, a joint venture between BAA and Morley Fund
Management, through the Arora Family Trust. Further assets worth £73 million
are due for completion in autumn.
Media
WPP said that Ogilvy, its wholly owned operating company, had bought a
51 per cent stake in Yunes SMAA, an agency in Argentina.
Rightmove’s shares fell as the housing website said that British house
prices were falling farther. Rightmove’s shares closed down 4.5 per cent at
305¾p.
Vision Media Group said that it had deployed its “pods” and would
receive annual net revenue of £3.7 million from its 240 screens. The media
contractor said that 100 new double-sided pods had been ordered, which will
add 200 portrait advertising screens to its shopping centre network.
Natural
resources
BP is to scrap its nine-day fortnight for thousands of workers as part
of an efficiency drive.
BHP Billiton, the world’s largest mining company, unveiled a record
$15.4 billion profit, fuelled by high commodity prices and continued strong
demand from China. In February BHP launched a hostile $123 billion bid for
Rio Tinto, which, if it succeeds, would be the world’s second-largest
takeover.
Rio Tinto said that it had signed a memorandum of understanding with
NMDC, India’s state-run miner, to consider opportunities in India and
globally.
Cape Lambert Iron Ore said that it had stepped up evaluation of
potential new project acquisitions after the settlement of its A$400 million
(£186 million) transaction with MCC Mining (Western Australia), a subsidiary
of China Metallurgical Group.
Gulf Keystone Petroleum said that it and its joint venture partner MOL
Hungarian Oil and Gas had contracted a rig for at least two wells in Iraq’s
Kurdistan region. Gulf Keystone said that the first well, in the Shaikan
block, was expected to be drilled in early 2009. It said that there was an
option for three further wells.
Cape Diamonds said that its shares had resumed trading on AIM after
termination of the proposed acquisition of KMG Diamond Resources (Pty), the
operating subsidiary of KMG Diamond Resources. The toll treatment agreement
between the company and KMG’s subsidiary KMG Mining Services was also
terminated.
Retailing
Marks & Spencer plans to cut redundancy benefits for its 60,000
staff by up to 25 per cent in a move that has infuriated employees and
triggered fears of a cull of middle management.
Woolworths’s new chief executive Steve Johnson faces a stiff challenge
as its board is pressed to turn the business around.
Jumper, the Lancashire-based fashion chain, has gone into
administration. The company, owned by Brian Heilbron, the former Beatties
chief executive, is still trading. Bridge Business Recovery is the
administrator.
Magnit, the Russian retailer, said that seven-month net retail sales
had risen 39.62 per cent to 70 billion roubles (£1.5 billion). In dollar
terms, retail sales rose 52 per cent to $2.93 billion, it said. In the seven
months to July, Nagnit said, it opened 150 stores, taking its total of
stores to 2,347.
Support
services
Michael Page, the British staffing group that has rejected a bid
approach from Adecco, its Swiss rival, reported a 22 per cent rise in
first-half pre-tax profits. Michael Page said that the performance reflected
its strategy of diversifying.
Mears, the outsourcing company, has won two new London-based social
housing contracts worth £57 million, taking the total in the six months
since its full-year results to more than £400 million.
Camco International has agreed to sell Dallas Clean Energy, its
landfill gas recovery facility in Texas, to Clean Energy Fuels for $19.1
million (£10.2 million).
Technology
Dimension Data said that it remained confident of a strong full-year
performance. It said: “Despite continuing global economic uncertainty, the
outlook for the group remains favourable, supported by good order intake.”
Telecoms
Vodafone has announced plans to raise its minimum call charges. The
Newbury-based group, which has 18.4 million UK customers, is raising minimum
call charges by 25 per cent from September 1. The cost of calls that exceed
customers’ monthly bundle, or tariff, of calls will go up from 12p a minute
to 15p. Calling premium-rate and non-geographic numbers will also become 25
per cent more expensive. The move comes after price rises from the rivals O2
and T-Mobile.
Synchronica said that it had agreed to buy Axis Mobile, the only
operating subsidiary of AxisMobile, in an all-share deal, and added that it
planned to raise £5.1 million in two institutional placings to fund the
combined business. The provider of mobile e-mail and synchronisation
solutions said that the placings involved issuing 169.47 million shares at
3p. It said that its acquisition would be satisfied by the issue of 85.10
million shares.
T-Mobile is to launch a mobile phone powered by Google’s Android
software, making it the first operator to do so, posing a challenge to
Apple’s iPhone.
Turkcell, the Turkish mobile phone operator, has signed an agreement
with Apple to sell its third-generation iPhone in Turkey. Apple rolled out
the new iPhone in more than 20 countries in July.
Transport
BAA, the British airport operator that is part of Ferrovial, of Spain,
said that it had completed its long-awaited £13.3 billion refinancing. BAA
said that the deal, which had been in doubt because of the credit crunch,
would provide a stable, long-term financing platform for investment in its
airports over the coming decades.
Avation, the PLUS-listed group, said that it had bought a Fokker F100
aircraft for $6.4 million and would lease it to Skywest Airlines for
$106,000 a month plus maintenance reserves for 64 months. The company said
that now it had five Fokker F100s.
Utilities
Dee Valley Group, the water services group, said that industrial
activity for the period from April 1 to August 18 had slowed markedly
compared with last year and that the company expected a resulting reduction
in revenue of about £350,000 on a full-year basis.
