Economics
UK factory gate prices fell by 0.6 per cent in August, the biggest drop
in 22 years. This cut the annual factory gate inflation rate to 9.7 per
cent, from 10.3 per cent the month before. Input prices fell 2 per cent, but
are still nearly a third higher than a year earlier.
Like-for-like retail sales fell by 1 per cent last month, against
August last year, data from the British Retail Consortium show. This comes
after a 0.9 per cent fall in July and is the fifth month in the past six
months that the value of sales reported by UK retailers has fallen. Total
retail sales rose 1.4 per cent, after rising 1.7 per cent in July.
UK firms’ recruitment plans are at their weakest for more than a
decade, according to a report from Manpower. Its employment outlook index
fell to -1 for the final three months of the year, from 7 in the third
quarter and the lowest since the first quarter of 1995.
The US job market deteriorated in August and will probably continue to
struggle well into next year, the Conference Board, a private research
group, said. Its employment trends index fell to 110.8 in August, from a
revised 111.4 in July, first reported as 112.1.
Banking
& finance
Alistair Darling is preparing to intervene to stimulate Britain’s
dormant housing finance market, government officials say.
Nationwide confirmed that it is taking over the Derbyshire and the
Cheshire building societies, two smaller rivals forced into loss by the
credit crunch. The need to shore up the balance sheets of the two means that
their members will not receive a windfall.
Washington Mutual, one of America’s biggest savings and loan providers,
has ousted Kerry Killinger as chief executive, making him the latest
casualty of the credit crunch, according to reports. His departure comes
after the mutural had to disclose losses of $19 billion (£10.7 billion) and
seek a $7 billion capital injection led by TPG, the private equity group.
The Government faced fresh controversy over Northern Rock as it
appointed an independent valuer for the stricken mortgage bank and agreed to
pay a one-off fee of £4.5 million.
The Financial Services Authority fined a former hedge fund manager at
Moore Europe Capital Management £52,500 for market abuse. Steven Harrison
also agreed not to trade for 12 months.
Hardy Underwriting Bermuda, the Lloyd’s underwriter, has begun
underwriting a book of Japanese “kyosai”, or mutual cooperative, business.
It is underwritten on a reinsurance basis with an initial estimated gross
annual income, after commissions, of £10 million for 2009 and is mainly
household, with some personal accident.
Davenham Group, a lender to companies, reported a 13 per cent rise in
underlying full-year profits, but cut its final dividend as it said that it
expected the economic downturn to reduce profitability.
Construction
& property
The Local Shopping REIT said it has agreed a £60 million debt facility
with HSBC. It supersedes a £75 million facility that was required to be
fully drawn by April 2009. The new facility consists of a £25 million term
loan and a £35 million revolving credit facility, both expiring in October
2016.
ING UK Real Estate Income Trust said it has sold a London retail
property for £10.5 million to Waitrose, to help to complete repayment of
outstanding nonsecuritised borrowings by the end of 2008. The
Guernsey-registered closed-ended investment company said that the price
reflects a net initial yield of 3.57 per cent.
Consumer
goods
Glisten, the snacks group, said it hoped that continued demand for
“affordable treats” would help to see it through an economic down-turn. The
Yorkshire company lifted pretax profits 18 per cent to £6.7 million in the
year to June 30 despite surging raw material bills.
Imperial Tobaccosaid proposals by the Government to tighten antismoking
laws do not meet principles of good regulation. It added: “This is
particularly true of the proposal to prohibit the display of tobacco
products and the suggestion that tobacco products should only be available
in plain packaging as a means of reducing consumption.”
Associated British Foods said that the worst of food inflation may be
over. The group also said that growth in its clothing retailer, Primark,
will help to offset falling sugar profits and higher debt costs. ABF expects
higher annual operating profits after Primark enjoyed like-for-like
second-half sales growth of 2 per cent and opened eight stores. However,
ABF, which is to announce full-year results in November, said it will be
squeezed by debt from acquisitions.
Altria, the US cigarette group, has bought UST, the American chewing
tobacco company.
Engineering
Meggitt said that its companies Meggitt Fluid Controls and Meggitt
Aircraft Braking Systems have each won a multimillion-dollar contract for
Embraer’s new Legacy 450 and Legacy 500 executive jet programmes.
Metalrax reported a wider first-half pretax loss because of good-will
impairment and exceptional items, and said it expects current-year results
to be broadly in line with market expectations. For its half year to June
30, the supplier of engineering and consumer durable products, had a £5.3
million pretax loss, against a £436,000 loss a year earlier.
Solid State said that profits and sales fell during the year to
end-March, with the distribution market contracting further as more
production facilities moved offshore. However, the electronic components
maker said that the new year has started strongly and that although it
expects the UK economy to have a disappointing year, it is confident that
the group is well placed to increase its market share in key trading areas.
Fenner, the world’s biggest maker of heavyweight conveyor belts, is
expecting results for the year to August 31 to be at the “top end” of
expectations. The group said that it had seen healthy trading and good order
levels despite pressure from higher raw material costs.
Halma, the hazard protection and sensor group is buying Fiberguide, the
US optical fibre maker, for an initial $14.5 million (£8.2 million).
Health
GW Pharmaceuticals said that a study of Sativex, its cannabis-based
painkiller, has shown long-term efficacy in the treatment of neuropathic
pain from multiple sclerosis. It is the first time that the drug’s long-term
effectiveness had been demonstrated in a test against a dummy drug.
Concateno swung to a first-half profit, after completing integration of
seven companies acquired in 2006 and 2007 to form the largest drug-abuse
testing company in Europe. For the six months to June 30, Concateno reported
pretax profits of about £700,000, after a pro forma loss of £1.2 million
year earlier.
Industrials
HaiKe Chemical Group, of China, said it has won a production contract
worth 230 million yuan (£19 million) from Sinopec Shandong Petroleum Branch
(SSP), part of China Petroleum & Chemical. HaiKe will produce refined
diesel and petrol products for SSP before September 30, using crude oil
bought under an agreement that HaiKe signed with a subsidiary of China
National Offshore Oil on August 11.
Leisure
The BII, the professional body for the licensed retail sector, and the
Federation of Licensed Victuallers Associations attacked the Government’s
proposed ban on cigarette vending machines, saying it would exacerbate the
devasting effect on pubs of the smoking ban. man after he disagreed with its
plans to raise funds for expansion.
PartyGaming, the internet gaming operator, has launched a 60-day
consultation with its 320-strong workforce in Gibraltar that is expected to
lead to job cuts. The company is tipped to name Jon Salmon, managing
director of a gaming marketing agency, as its chief marketing officer.
Amusement machines in categories C and D could be allowed higher stakes
and payouts under proposals published by the Department of Culture, a move
welcomed by seaside arcade operators.
Leon, the restaurant company backed by Gavyn Davies, a former Chairman
of the BBC, has suffered the loss of James Horler as chairman after he
disagreed with its plans to raise funds for expansion.
Media
Thomson Intermediasaid it continues to make good progress, with trading
in line with expectations. The group said that interim results for the half
year to October will reflect the significant planned investment made in the
first half on projects from which the benefit is expected in the second
half.
Natural
resources
Dubai is studying plans to build a £114 billion mega-canal that would
let oil tankers bypass the Strait of Hormuz and reduce Iran’s influence on
the flow of oil.
Opec is being urged by Iran and Libya to consider curbing production of
oil after a 27 per cent slide in the price of crude since its high on July
11.
BG Group’s hope of completing a bid for Origin Energy, of Australia,
has been dealt a blow after its target struck a lucrative deal with
America’s ConocoPhilips.
Desire Petroleum said it has completed the benthic sampling programme
on three tranches in North Falkland basin. The exploration company said
that, once analysed, the results will allow it to complete its environmental
impact assessment ahead of drilling.
Oilex said it has begun the second phase of a drilling programme in
Oman, with the spudding of the Sarha-2 well – the first of the four wells in
the Block 56 area – on September 5. Oil production rates in the range of 300
to 700 barrels a day are expected from this well.
Retailing
Signet Group, the world’s largest speciality retail jeweller, said it
has received court approval to change its domicile to Bermuda and move its
primary stock market listing from the London Stock Exchange to the New York
Stock Exchange.
Myhome International, the failed home-cleaning company based in Esher,
said that administrators from Ernst & Young are considering strategic
options for it. Myhome engaged E&Y last week after Lloyds TSB called in
debts.
Support
services
Velosi said that its Saudi Arabian unit has won a five-year general
inspection services contract from Saudi Aramco. There is an option for a
three-year extension.
Technology
Autonomy has entered a multi-million-dollar software licensing
agreement with AT&T, the American telecoms group.
Manpower Software said it has added ten NHS Trust customers in the
first quarter for its MAPS Healthroster workforce planning, staff scheduling
and resource optimisation software, compared with 23 for the entire previous
year.
Sinosoft Technology, the software maker, reported a 7.6 per cent rise
in first-half profits, aided by a 46 per cent increase in sales, and said
that it is well positioned to achieve second-half growth in e-government and
information integration. For its half year to June 30, the China-based
company’s profits rose to $1.43 million (£816,000), from $1.33 million a
year earlier.
Telecoms
Eckoh said it has won a three-year multimillion-pound contract from a
global financial services company to provide an automated telephony
self-service platform for handling customer inquiries across Europe. The
UK-based provider of hosted speech recognition services said that the
contract is expected to start generating revenue by the fourth quarter of
the current financial year, and to reach full run rate well in excess of £1
million a year in the first half of the next financial year.
Telefónica , the Spanish telecom group, has not changed its
relationship with Telecom Italia and has invested in its Italian peer for
the long term, according to local reports.
Transport
Air France-KLM, the world’s biggest airline by revenue, yesterday said
it plans to move into high-speed passenger rail transport in a venture with
Veolia, the French transport, waste and water group. Air France said that it
and Veolia were studying such a venture for when European rail passenger
traffic is liberalised in 2010.
Flybe, the regional airline, shrugged off the misery gripping the
sector with a 14 per cent rise in first-quarter profits. Despite “undoubted
challenges”, the carrier said it had performed strongly because its
fuel-efficient fleet and its hedging strategy protected it from surging oil
prices. Lower reliance on leisure travel – with 80 per cent of its capacity
aimed at business and regular travellers – also helped to insulate it.
Utilities
Novera Energy has received approval for a Scottish wind farm. The
Scottish Borders council approved Novera’s 11-turbine Glen-kerie wind farm.
Novera expects to start building it next year, with production to start in
2010.
