Economics
The economy is set to shrink over the next year in the first full-year
fall in national income since 1991, according to Capital Economics, the
forecasting group. It projects a full-year drop of 0.2 per cent in GDP over
2009 because of a bank lending drought and the effect on exports from a
recession in the eurozone.
Pay pressures rose in the three months to the end of July, a report
from Incomes Data Services, the consultancy, shows. Its scrutiny of 57
recent wage settlements covering 1.63 million employees shows that almost
half were worth 4 per cent or more, and a tenth were for 5 per cent or
above.
Unemployment fears are spreading as the downturn deepens, a YouGov poll
for the TUC suggests. The poll shows that more than 3.3 million workers are
not confident that they will still be in their jobs in a year’s time.
German inflation On “harmonised” European Union figures, the annual
rate of inflation in Germany fell in August to 3.3 per cent, from 3.5 per
cent in July, according to early estimates.
US durable goods orders rose by 1.3 per cent in July, after June’s rise
was revised up to 1.3 per cent from an initial estimate of 0.8 per cent.
Analysts had expected July orders to remain unchanged.
Banking
& finance
Royal Bank of Scotland John McFarlane, former chief executive of ANZ
Bank, emerged as a frontrunner to succeed Sir Tom McKillop as chairman of
Royal Bank of Scotland when he was named as one of three new non-executive
directors at the bank in the wake of its credit crunch losses.
Hargreaves Lansdown, the stockbroker and fund manager, said that
full-year underlying profits had risen by 42 per cent to £57.8 million,
thanks to higher recurring revenues and stronger margins.
Brit Insurance, the Lloyd’s of London underwriter, will decide in the
next six months whether to quit the UK as its tax headquarters, increasing
pressure on the Government to stem a potential wave of corporate departures.
US accounting standards The US Securities and Exchange Commission said
that American companies could be required to use international accounting
standards by 2014.
Pakistani stock exchange authorities have set a floor of 9,144 points
for the Karachi stock exchange index after heavy losses in recent days.
Construction
& property
Taylor Wimpey, the embattled housebuilder, said that it was still
locked in talks with its bankers about revising the terms of its debt
covenants after reporting a £1.5 billion net loss in first-half profits.
Costain, the construction group based in Berkshire, reported a 26 per
cent rise in first-half pre-tax profits to £10.1 million, thanks to its
public sector work, and revealed a record order book.
Westfield, the property developer, said that its White City shopping
centre development in West London was 96 per cent let with ten weeks to go
before it opens.
Consumer
goods
Heineken, the Dutch brewer which recently bought Scottish &
Newcastle with Carlsberg, its Danish rival, said that first-half earnings
had fallen by 1.5 per cent to €540 million (£341 million), hit by financing
costs and exchange rate movements.
Mattel, the American manufacturer of Barbie dolls, has been awarded
$100 million (£54.4 million) in a legal battle against MGA Entertainment,
which produces the popular Bratz toys.
Engineering
Spirax-Sarco Engineering, which makes pumps and boilers for processes
using steam, reported a 27 per cent rise in first-half pre-tax profits to
£41.9 million and said that its trading performance has been maintained.
TT Electronics the provider of sensor and electronic component
technology, reported a lower first-half pre-tax profit of £15 million, from
£16 million last year, and said it expected that trading conditions would be
difficult amid weaker demand.
Health
Novartis, the Swiss pharmaceuticals group, said that its Gleevec drug
had been granted priority review status by the US Food and Drug
Administration for the treatment of intestinal cancer.
Industrials
Yule Catto, the speciality chemicals producer, reported a 14.4 per cent
first-half underlying pre-tax profit of £18.3 million, from £15.9 million
last time, and said that it expected underlying profits for the full year to
show a modest improvement on its 2007 results.
Leisure
Paddy Power, the bookmaker, lowered its full-year earnings guidance,
saying that trading had deteriorated since its last update. It expects to
make a full-year operating profit of €75 million (£60 million), compared
with its previous guidance of €82 million.
Media
Taylor Nelson Sofres Cedar Rock Capital, the largest shareholder in
Taylor Nelson Sofres, the market research group, with a 9.4 per cent stake,
is understood to have voted against the £1.1 billion hostile offer from WPP,
the advertising group.
Johnston Press, the regional newspaper group, revealed that advertising
revenues in July and the first three weeks of August had fallen by 21 per
cent.
Natural
resources
Petrofac, the British oil services group, reported first-half net
profits up by 57 per cent to $121.2 million (£66 million), from a year ago.
Antofagasta, the London-listed Chilean miner, reported an 8.8 per cent
rise in first-half earnings per share as higher copper output and prices
outweighed rising costs.
Oil prices Tropical Storm Gustav, which was expected to be upgraded to
a hurricane, appeared set to hit oil rigs in the Gulf of Mexico, sending
crude oil up by $2.98 to $119.25.
Retailing
Esprit, the fashion retailer, said that would hold off from any
acquisitions because of the uncertainty over global economic growth. It
added that half-year net profits had risen by 12.5 per cent to
HK$3.15billion (£220 million).
Moss Bros Roland Gee, a member of one of the founding families at Moss
Bros, has stepped down as a non-executive director at the menswear retailer.
Mr Gee had opposed a takeover bid by Baugur, the Icelandic investor, this
summer.
Marks & Spencer A worker at Marks & Spencer, who “blew the
whistle” on the high street retailer’s plans to cut redundancy terms for
more than 60,000 staff, has been suspended and faces a disciplinary hearing.
Lookers, the Manchester-based car dealership, said that first-half
like-for-like new and used car sales were down by 6.5 per cent and 5 per
cent respectively, with trade deteriorating during May and June.
Support
services
Adecco, the Swiss recruitment agency, has been set a deadline of
September 30 to decide whether to make a formal offer for Michael Page, its
British rival.
Serco, the support services group, reported a 21 per cent rise in
first-half profits to £62.8 million, from £52 million last time, and said
that it was buying SI International, the US government services provider,
for $423 million (£230 million).
Technology
Blinkx, the video search engine provider, said that it had formed a
multimedia partnership with Getty Images. Under the deal, Blinkx will use
its AdHoc platform to place advertising against Getty Images’s multimedia
and the two will share the advertising revenue.
Telecoms
Cable & Wireless, the telecoms group, has received 48.6 per cent
valid acceptances for shares in Thus, the Glasgow-based telecoms company,
and has extended the offer until September 9.
Transport
James Fisher & Sons, the marine service provider, said that
first-half pre-tax profits had risen to £11 million, compared with £9.5
million last year, thanks to strong organic growth from its marine support
divisions.
Forth Ports said that the City of Edinburgh Council had cleared its
Leith Docks outline planning application, which is expected to create almost
12,000 jobs in Edinburgh. The phased regeneration is forecast to take up to
30 years to complete.
BAA has been appointed as a security adviser to the Olympic Delivery
Authority, organiser of the London 2012 Games, in a move that has been
ridiculed by airlines, which have criticised the airports operator for long
security queues and poor service.
Utilities
E.ON, Europe’s second-largest utility group, confirmed a report that it
plans to cut 1,800 jobs as it separates its energy grid businesses from its
other units because of regulatory demands.
