Economics
The FTSE 100 slid more than 2 per cent yesterday, for its biggest
weekly drop in six years, as banks and commodity stocks fell amid global
economic worries. The index was off 121.4 at 5,240.7, for a weekly loss of
almost 7 per cent — its biggest such fall since July 2002. It is down nearly
19 per cent so far this year.
The US unemployment rate rose unexpectedly to 6.1 per cent in August,
its highest in more than four years. The Labour Department said 84,000 jobs
were lost in August. July’s job losses were revised up to 60,000 and June’s up
to 100,000, from a previously reported 51,000 for each month.
German industrial output fell by 1.8 per cent in July, taking its
annual decline to 0.6 per cent, the first yearly fall in nearly five years.
Banking
& finance
RSA Insurance’s shares surged on talk of bid interest from Allianz,
which agreed this week to sell Dresdner Bank to Commerzbank. Speculation has
swirled around RSA of late, with talk of bid interest from Zurich Financial
Services.
Bradford & Bingley, the troubled lender, said that Mark Stevens,
39, its sales director, had resigned from the board. The former management
consultant joined it last year. B&B recently declared a half-year loss
nearing £27 million and rising arrears on buy-to-let loans.
Bank of America said it is ready to settle federal and state inquiries
into the marketing of auction-rate securities, joining eight companies that
reached deals. The bank said it has been in talks with the US Securities and
Exchange Commission and regulators in New York and Massachusetts about a
resolution that would bring “liquidity relief” to clients hurt when the $330
billion (£186 billion) market seized up in February.
Valartis, the Swiss financial services group, has bought Anglo Irish
Bank (Austria) from Anglo Irish Bank.
Construction
& property
Regional development agencies, whose role is to boost business and
infrastructure, are being forced to help to fund the Government’s housing
rescue scheme.
Summit Germany, the AIM-listed German commercial property investment
company, has signed a new triple-net lease for an eight-year period for one
of its properties, which will contribute an average net rental income of
€300,000 (£242,000) a year.
Consumer
goods
Food prices have risen 8.3 per cent since January, with fish up by
nearly a quarter and some products up by half, a new study shows. A 125g
pack of ham is now 45.4 per cent more expensive, according to
mysupermarket.com, the price comparison site. Overall, meat and fish rose
22.9 per cent between January and August. The figures tally with data this
week from the British Retail Consortium.
Carr’s Milling Industries, the agriculture, food and engineering
group, said it expects full-year pre-tax profits to more than double to at
least £12.5 million, on revenue of about £350 million, after “very strong
trading” across all divisions.
Altria, the American cigarette group, is in advanced talks to buy UST,
maker of Skoal and Copenhagen smokeless tobacco, a source close to
discussions said. The New York Times reported that a deal at more than $10
billion could be imminent. Shares in UST ended 25 per cent higher in New
York.
Engineering
Airbus, the European aircraft maker, said that it had orders for 754
aircraft at the end of August.
Daimler, the German carmaker, and RWE, the utility, plan to open
recharging stations for electric cars in Berlin from the end of next year.
Daimler plans a limited production run of electric Smart minicars equipped
with lithium-ion batteries from late 2009, with serial production to start
by 2012.
Health
Lombard Medical Technologies said that the operating and clinical
performance of its lead product, Aorfix. remains in line with expectations,
and added that a fall in its share price amid significant turnover in shares
is not a reflection of any change in its outlook.
Industrials
Oxonica, the nanomaterials company, said that the High Court in London
has ruled that royalties are payable to Neuftec on Envirox under the licence
agreement when it was in force, adding that it may appeal. There is to be a
further hearing on royalties payable, costs and permission to appeal, the
company said. Oxonica said that it had previously provided for £408,000
based on its estimate of Envirox royalties that may be payable.
Bluewater Bio International said it has signed a memorandum with the
Czech Republic-based water operator Vodny A Kanalizace Karlovy Vary, to
develop a pilot plant for automated wastewater treatment. The wastewater
treatment group said it is setting up a wholly owned subsidiary in the Czech
Republic. David Paul is to lead the unit, Bluewater Bio CEE.
Leisure
J D Wetherspoon, the pub operator, said that full-year pre-tax profits
fell by nearly 13 per cent after food and labour costs rose and the smoking
ban discouraged some drinkers from going out. Like-for-like sales, which
exclude turnover from new pubs opened in the period, fell by 1.1 per cent,
with bar takings down 4.3 per cent.
Media
SMG, the Scottish media group, is planning to buy back as much as £30
million in stock through a tender offer. The company, which recently sold
Virgin Radio to Times of India, also confirmed plans to change its name to
STV Group. SMG, which has a market value of £94.7 million after a 70
per cent fall in its shares in the past year, is concentrating on developing
its core television business after the sale of its radio and outdoor
advertising operations.
Informa’s rejection of a £1.9 billion takeover proposal by a private
equity alliance led by Providence Equity is disappointing Provident said. It
said that it would make a further announcement about the academic publisher
in due course.
TMN, the online marketing group, reported a 10 per cent rise, to £3.6
million, in underlying pre-tax profits for its year to April 30. Revenues
rose by 40 per cent to £22.5 million. TMN said it had begun the current
financial year well.
Natural
resources
Kalahari Minerals said that it has agreed to buy Australia’s Extract
Resources. Kalahari, which holds 39.1 per cent of the Australian company,
said that it will pay 1.6 of its shares per Extract share. Kalahari said the
offer values Extract shares at A$0.99, a 4.2 per cent premium to the
volume-weighted average price in the month to Tuesday. The company said that
the deal is a reverse takeover, with the new entity to be listed on AIM and
the Australian Securities Exchange.
BHP Billiton is to continue development work at a Philippine nickel
project despite a dispute with its local partner, the minister for mining
said. BHP, the world’s biggest miner, has been in disagreement with the
unlisted Asiaticus Management since late last year over when to start
commercial production at the Pujada site.
Xstrata, the Anglo-Swiss mining group, said it was raising to just
below 20 per cent its stake in the Australian-listed prospector Indophil
Resources. Shares in Xstrata slid amid lack of confidence in a competing
bid. Xstrata, which had been in a bid battle for Indophil, said that it had
bought a 17.8 per cent stake in the company for A$1.17 a share or A$82
million (£37.5 million) from Lion Selection, the largest shareholder.
Roc Oil said that it and its joint- venture partners have settled their
dispute with Pioneer Natural Resources over Block H, off Equatorial Guinea.
Pioneer will pay Roc, Atlas Petroleum International and Osborne Resources
$5.5 million in the settlement. Pioneer will also hand 50 per cent of its
interest to the three companies, giving Roc a 37.5 per cent stake. In
addition, Pioneer will allow Roc to use a rig to drill the proposed Aleta-1
well.
Hallin Marine Subsea International said it plans to invest $15.3
million (£8.6 million) to add seven new remote operated vehicles to its
fleet. The group said it will make three of the vehicles itself and buy the
other four. Hallin said that it will use its resources and bank funding,
which has been secured, to pay for the investment.
Retailing
HMV, the music and movies seller, has reported a 50 per cent jump in
game sales as consumers turn to home entertainment to beat tough economic
conditions. The group’s like-for-like sales in the 18 weeks to August 30,
rose 1.3 per cent, with like-for-like sales at its HMV stores up 4.1 per
cent. Sales at its Waterstone’s bookshops were off 4.3 per cent against a
strong 2007, when the last Harry Potter book came out. Robert Swannell, 57,
is to be non-executive chairman, succeeding Carl Symon, who has retired. Mr
Swannell is Citigroup’s European vice-chairman.
Marks & Spencer was in a war of words with the GMB union after it
emerged that the worker sacked after “blowing the whistle” on its new
redundancy terms is to hold a press conference.
John Lewis, the department store chain, said sales rose 1.6 per cent
after a strong week for its electricals and home-technology department. The
group, which this week opened its 27th store, in Leicester, reported total
revenues of £50.4 million for the seven days to last Saturday. The group had
been in line for a more substantial increase, but said that the sunny
weather on Saturday had tempted customers away from shopping.
Support
services
CPL Resources, the Irish employment services group, has reported a 7.1
per cent increase in full-year pretax profits to €20.7 million (£16.7
million). It said that it is prepared for a “difficult” 2009, after a slow
start to the first quarter, with activity below that of last year.
Technology
Plasmon, the British electronic data storage company, confirmed that it
has had an approach from a US-based technology private equity firm at an
investment value of about $25 million (£14 million), and said that its
first-quarter sales were about 20 per cent below its expectations. Plasmon
said that the approach was at a net price of at least ¼p a share, payable in
cash at yesterday’s dollar exchange rate.
Samsung, the South Korean electronics group, is mulling over an offer
for SanDisk that could spark an international bidding war for the US
chipmaker and shake up the $15 billion global memory market. A tussle over
SanDisk could see Samsung vying for control of it with suitors in the US and
Japan, according to analysts.
Nokia, the world’s largest maker of mobile phones, said that it was
being undercut by rivals seeking a bigger slice of a weak global market. Its
share price fell by nearly 10 per cent.
Telecoms
Telecom Plus, the utility accounts repackager, said that full-year
results would be “significantly ahead” of market expectations as more
consumers looked to swap phone contracts.
Transport
Go-Ahead, the rail and bus group, reported pre-tax profits up by a
fifth as credit crunch-hit commuters switch to public transport. The group,
which carries 30 per cent of the UK’s rail passengers, said that people were
turning to buses or trains as the price of petrol has soared.
British Airways has entered into takeover talks with Brussels Airlines
in a move that could see Sir Richard Branson selling out to his fiercest
rival.
EasyJet said that it carried nearly 900,000 more passengers in August
than a year ago. Its aircraft flew 4.59 million customers in August, a rise
of 24 per cent, after the Luton company benefited from its acquisition of GB
Airways from British Airways, as well as promotions and sales. EasyJet’s
planes were also fuller, with its load factor up by four points to 91.3 per
cent.
Utilities
British Energy has received regulatory approval for boiler repairs done
at its Hartlepool and Heysham 1 nuclear power stations and plans to restart
them before the end of the year.
It's nice to see that R&D minnows Neuftec had the guts and self belief to take on Oxonica, along with their multi millionaire TV celebrity chairman & backer, Richard Farleigh. David and Goliath battles are rare these days due to the prohibitive costs of litigation.
Thomas Hayter, London, UK