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Economics
UK manufacturing: British industry suffered a bleak November, with
output from factories plummeting by 2.9 per cent in the month to stand 7.4
per cent down on a year earlier, its sharpest annual fall since 1981. Output
is back to levels last seen in 1995, official figures showed. The broader
measure of industrial production, which includes the extractive and
utilities industries, fell by 2.3 per cent in November and was down by 6.9
per cent on a year earlier.
Producer price inflation: The cost of goods leaving factories was
unchanged last month, according to worse than expected figures that
confounded City forecasts for a further 0.7 per cent fall. Output prices
were left 4.7 per cent up year-on-year, although this was still the lowest
rate of increase since December 2007. Input costs for raw materials,
components and fuel fell by 2 per cent last month, cutting their annual rate
of increase to 4.3 per cent, the weakest since August 2007.
UK GDP estimates: Output across the economy as a whole is likely to
have slumped by 1.5 per cent in the final quarter of last year, falling at
almost three times the 0.6 per cent pace of decline registered in the third
quarter, the National Institute of Economic and Social Research said.
Eurozone manufacturing: Industry across the 16-nation eurozone suffered
a brutal slump during November, much worse than expected, figures revealed.
German industrial output sank by 3.1 per cent in the month to a level 10 per
cent lower year-on-year, which is the steepest annual drop since 1993.
Output also fell sharply in France, Sweden and Spain.
US jobs market: A total of 2.6 million Americans lost their jobs last
year, in the worst rise in unemployment since the Second World War, official
figures showed. About 524,000 jobs were lost last month alone, lifting the
US unemployment rate to 7.2 per cent, a 15-year high.
Banking
& finance
Citigroup: The US bank was in talks last night to sell a majority stake
in Smith Barney, the brokerage firm, to Morgan Stanley in a deal that would
create the world’s biggest wealth manager. Under the terms of the deal being
discussed, 51 per cent of Smith Barney will be sold to Morgan Stanley with
an option to buy the remainder of the business within five years. The
negotiations emerged as Robert Rubin, the former US Treasury Secretary,
resigned from Citigroup after criticism for his role in leading the bank,
which was once the world’s largest, to the brink of collapse.
UBS: The Swiss bank is closing all the offshore accounts of its US
clients, it said yesterday, as it comes under pressure from US tax
authorities. UBS decided in July last year to stop offering offshore
accounts to US citizens after it was targeted by a tax investigation. US
prosecutors have alleged that UBS helped clients to hide $18 billion of
untaxed American money in undeclared accounts.
Lloyds forfeits $350m: Lloyds TSB has agreed to forfeit $350 million
(£230 million) to the US Government in connection with charges that it faked
records so clients from abroad could use the US banking system. The Justice
Department said Lloyds removed names and addresses so wire transfers would
not be flagged and blocked as improper.
Friends Provident: The UK’s sixth-largest life insurer has kicked off
the 2009 bonus season with “a bloodbath” by slashing rates on many of its
1.2 million with-profits policies. Other insurers are expected to follow
suit, after a disastrous year in 2008. In its flagship fund, which has more
than a million policies, Friends Provident is cutting the annual bonus on
its ten-year unitised with-profits bond from 0.75 per cent to 0.5 per cent.
London Stock Exchange: During 2008 the total number of trades on the
equity order books of the London Stock Exchange reached £263 million, an
increase of 25 per cent on 2007. However, year-on-year falls of 16 per cent
and 31 per cent in the average value of the FTSE 100 and MIB indices
affected the value traded on the group’s equity order books. Total value
traded across the year was £2,900 billion in 2008, an 11 per cent decrease
on 2007.
Construction
& property
Bovis Homes: The UK housebuilder announced that it was cutting an extra
200 jobs and would scrap its final dividend to cope with a steep downturn in
the housing market. Bovis revealed plans to cut a total of 600 staff from
its 1,000-strong workforce as it struggles to maintain profitability. The
company had already announced plans last July to cut 400 jobs.
Terrace Hill: The UK-based property developer said that its joint
venture with Doughty Hanson, the European real estate fund manager, secured
detailed planning consent for a new office and residential project in
London.
Consumer
goods
Anheuser-Busch Inbev: The newly merged brewing group, which announced
plans this week to close the Stag Brewery in London with the loss of up to
182 jobs, admitted that total job cuts in the UK could reach 300 after a
review of its on-trade sales.
Waterford Wedgwood: The Wedgwood family is preparing a last stand to
stop the sale of the business founded in 1759 by Josiah Wedgwood to an
American vulture fund. Deloitte, the administrators of Waterford Wedgwood,
has agreed an in-principle deal to sell the china business, which was merged
with Waterford Crystal in 1987, to KPS Capital, a specialist US distressed
investor.
Uniq: The Marks & Spencer food supplier offset a sharp fall in UK
sales by revealing that it had negotiated new credit facilities with Lloyds
TSB. The group, which supplies sandwiches, ready meals and desserts to
grocery groups and airline caterers, said that the new terms provided it
with sufficient working capital to complete a restructuring plan undertaken
in 2006.
Engineering
BMW: The world’s biggest premium carmaker said that vehicle sales fell
4.3 per cent to just over 1.4 million units last year as a 5.8 per cent
decline in BMW brand deliveries offset record numbers for its Mini and
Rolls-Royce brands. Group sales in December alone plunged 26.4 per cent year
on year to 112,423 vehicles. It gave no outlook for this year.
Health
Avacta: The UK biophysics company launched an all-share bid for
Curidium Medical, the diagnostics specialist, in the latest example of
companies in the sector joining forces amid the financial crisis.
Silence Therapeutics: The European biopharmaceutical company that
specialises in RNA interference, which focuses on gene activity, said that
the European Patent Office had granted it a patent that covers Atu027, the
company’s lead product candidate.
Industrials
Arsenal Capital Partners: The US private equity firm won permission
from European Union competition authorities to buy the special products
business of Royal DSM, the Dutch chemicals group, subject to conditions. The
European Commission, which regulates competition in the 27-nation EU, said
that Arsenal Capital had agreed to divest the whole of its liquid and solid
benzoic acid production in Europe.
Leisure
Gordon Ramsay Holdings: The upmarket restaurant company is to make its
debut in Africa in May when it opens a Maze restaurant at the One & Only
Resort in Cape Town. It already has two Maze eateries in London and outlets
in New York and Prague, with a fifth to follow in Melbourne, Australia, in
February 2010.
Scottish & Newcastle Pub Enterprises: Royal Bank of Scotland is
understood to be sounding out potential purchasers of its estate of about
1,000 pubs that are managed by S&NPE. The leased and tenanted pubs are
estimated to be worth more than £600 million.
Folio Hotels: Administrators at MCR were finalising a rescue plan for
the group’s 36 hotels that will entail management, led by Matthew Welbourn,
the managing director, taking back leases on up to 20 hotels and the Folio
name, and Bespoke Hotels taking on the management of 13 hotels.
Media
Centaur Media: The UK publisher expects first-half profit to meet its
estimates as it saved costs, but reiterated a warning on poor visibility for
the future. Centaur Media, which had a 16 per cent fall in revenue in the
first four months to October 31, said that trading in November and December
had deteriorated. The company’s warning on visibility is in line with media
companies and brokers.
Natural
resources
BP: The UK oil group conceded more ground as part of a peace deal with
its Russian joint-venture partners. German Khan and Viktor Vekselberg, two
of the four billionaires that own half of the TNK-BP partnership, will
remain on the company’s board. BP had previously said that it would be
inappropriate for both to remain.
Schlumberger: Hundreds of jobs in Britain’s North Sea oil industry are
under threat after Schlumberger, the world’s largest oil services company,
announced plans to cut its global workforce. The company, which employs
4,000 people in the UK out of a global workforce of 84,000, confirmed late
on Thursday that it was cutting 5 per cent of its US workforce, or 1,000
jobs, and was seeking cuts elsewhere.
Addax Petroleum: The oil exploration and production company announced
the successful appraisal and development of the Ebouri field in the Etame
Marin license area offshore Gabon, in which it has a 31.36 per cent
non-operated interest. This is its latest positive step in its Gabon
exploration programme, with additional drilling planned in the Etame Marin
field and in the neighbouring Gryphon Marin licence area.
Retailing
John Lewis: The department store chain brought some seasonal cheer to
the high street after revealing a 27.4 per cent surge in weekly sales,
driven by its policy of matching the same prices on goods as its rivals. The
group reported strong trade in fashion and claimed that demand for
electrical goods and home technology resulted in record takings. In the week
to January 3, John Lewis sales rose from £61.73 million year-on-year to
£78.61 million.
JD Sports Fashion: The sports and footwear retailer said that it would
post better than expected annual profits after a strong Christmas at its
stores. Like-for-like sales at the chain over the five weeks to January 3
rose by 2.8 per cent on the previous year, despite the group holding off its
Christmas sale until Boxing Day. The group also faced tough comparatives,
given it posted a 9.6 per cent rise in sales last Christmas.
Support
Services
Johnson Service Group: The dry-cleaning and clothes-hire company, said
that it expected its underlying pre-tax profit for 2008 to be
“satisfactory”, but said that trading conditions for 2009 remained
challenging. Johnson added that divisional contributions varied from earlier
expectations. Johnsons Apparelmaster, its textile rental division, reported
higher profits in 2008.
Technology
Eidos: The computer games developer warned that it may have to enter
discussions with lenders about its bank covenants after it was forced to
revise full-year profits and sales forecasts. The company has lowered its
full-year revenue expectations by £20 million after demand for its new Tomb
Raider computer game, starring Lara Croft, was lower than expected, selling
only 1.5 million units.
Misys: The software group said that it had a positive first half, with
higher sales for all business units, and it expected to report an increased
adjusted operating profit for the period. The company, which supplies
software to the banking sectors and to doctors in the United States through
its Allscripts-Misys joint venture, said that its solutions were in demand
from companies wanting to control costs and mitigate risks.
Skype: The company that brought cheap and free phone calls to the
internet has unveiled software for mobile phones. The mobile version of
Skype can be downloaded free to more than 100 models of Java-enabled mobile
phones, including LG, Motorola, Nokia, Samsung and Sony Ericsson models, or
those using Google’s Android operating system, an open and free mobile
platform.
B. Ramalinga Raju: The IT mogul behind India’s largest corporate fraud
was arrested on charges of cheating and forgery, according to an Andhra
Pradesh state police chief. Mr Raju was arrested with his brother and
co-founder, B. Rama Raju, on charges of criminal breach of trust, criminal
conspiracy, cheating, falsification of records and forgery. Mr Raju will
appear before the country’s market regulator today.
Psion: The specialist technology equipment provider appointed Fraser
Park as its new chief financial officer with immediate effect. Mr Park was
previously the CFO of Tandberg Television, the Oslo-listed communications
technology company.
Telecoms
China Mobile: The world’s largest wireless carrier plans to launch a 3G
handset built on the Android platform in the first quarter, according to
local reports. The “OPhone” will be the first phone in China that features
Google’s Android system and will use China’s homegrown 3G network.
Transport
Air Berlin: The German airline said that Len Blavatnik, the US
billionaire, has sold his 18.9 per cent stake in the carrier, leaving market
participants guessing who bought the holding. Recorded trading volumes
showed that Mr Blavatnik did not sell his Air Berlin stake via the stock
market.
Utilities
Novera Energy: The wind and landfill gas company said that it expected
full-year revenue to grow by 3 per cent, reflecting the higher price it
received for production through its long-term contracts. The company said
that it expected unaudited revenue of £35.5 million for the 12 months ended
December 31, up from £34.4 million in 2007, as trading and operational
performance were broadly in line with its view.
