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Economics
UK economy: Manufacturing and service companies reported dismal trading
in the final quarter of last year, a survey from the British Chambers of
Commerce (BCC) shows. The gauge of sales, employment, investment intentions
and confidence for both sectors plunged to record lows, the BCC said. It
forecast that GDP will fall by 1.2 per cent between October and December.
Retail sales: Sales fell by 3.3 per cent in December, figures from the
British Retail Consortium suggest. The figures show that the value of
like-for-like sales fell by 2.7 per cent between October and December and
3.3 per cent year on year.
Home sales: The number of properties sold fell to a record low in
December, according to the Royal Institution of Chartered Surveyors (RICS).
RICS said that an average of 10.1 properties per surveyor changed hands in
the three months to December 2008, down from 10.6 in the three months to
November and the lowest number since it began compiling the survey in 1978.
Banking
& finance
Merrill Lynch: The investment bank and its new owner, Bank of America,
are preparing to cut about 1,900 staff in London — one of biggest single
staff reductions in the history of the City.
Citigroup: Sir Win Bischoff’s time as chairman of the bank may be
coming to an end, as Richard Parsons, the bank’s senior independent
director, reiterated the board’s confidence in Vikram Pandit, the chief
executive. Sir Win was criticised for failing to help Mr Pandit stabilise
the bank.
Madoff scandal: Bernard Madoff avoided being remanded in custody after
a federal court judge decided that the fund manager, who is alleged to have
defrauded investors of $50 billion, was unlikely to flee the US.
Lloyds TSB: The Government was looking at a £3 billion theoretical loss
on its latest bank investments after the Lloyds TSB and HBOS share offers
formally flopped, leaving it to write a cheque for £17 billion.
Amlin: The Lloyd’s of London insurer said insurance prices were higher
in January and should rise further, underpinned by US hurricanes and
insurers’ own capital constraints. Amlin said insurance prices were up by 4
per cent overall this month, compared with January 2007.
New Star Asset Management: The troubled fund manager has received
proposals from a number of companies and at least one possible offer for its
business but has refused to name any suitors. Reports suggested that
Schroders has made a bid to buy the group, which was founded by John
Duffield and has debts of £240 million.
Northern Rock: More than 150,000 shareholders will today claim that the
Government breached their human rights in setting up a compensation scheme
that left them penniless. In a test High Court case over the way the
Government nationalised the bank, shareholders will cite the Human Rights
Act to say that the total lack of compensation was unfair and unlawful.
JPMorgan Chase: Jamie Dimon, chief executive of the bank, admitted that
its earnings had been terrible as the company brought forward its
fourth-quarter figures to January 15 from January 21. Mr Dimon also said
that the US recession would last a minimum of two more quarters.
Private equity: The industry is heading for another showdown with the
Treasury Select Committee after it emerged that many of the firms that have
signed up to a voluntary industry code on transparency are not complying
with it.
Construction
& property
Ennstone: The construction materials group is to sell its former
natural stone works and quarry at Stainton in Co Durham to a group of local
businessmen for £1.33 million. Ennstone, which is based in Derby, said it
would put the money raised towards its capital requirments as it continues
to seek a solution to its financial situation.
Galliford Try: The Uxbridge-based construction company has put
housebuilding workers on a four-day week to cope with the slump in the
property market. Staff unanimously agreed to the temporary measure to limit
the impact of job cuts, the company said. Galliford has 4,200 staff after it
made 400 redundancies in the past year.
Capital & Regional: The property investor said key debt terms
linked to its multibillion-pound property fund portfolio were still intact
despite hefty falls in the underlying value of its funds. Capital &
Regional, which manages and co-invests in the £1.7 billion Mall Fund, said
covenants on its core debt continued to be met.
Consumer
goods
Findus: A Newcastle-based factory that produces food under licence for
Findus, famed for its fishfingers and Crispy Pancakes, has called in
administrators. The collapse of the company has jeopardised the jobs of the
company’s 430 employees. Sales of frozen food have been in decline for years
as the fashion for chilled foods and home-cooking has gathered pace, but the
downturn has boosted sales as consumers look for cheaper alternatives to
eating out.
Engineering
General Motors: The car company has been forced to ring-fence its
country operations to satisfy individual European governments that state aid
will be used only to protect jobs within each of their borders.
Bentley: One of the world’s most exclusive car brands said that if
demand continued to slump, it was prepared to cut production at its plant in
Crewe. Bentley, whose models start at £115,000 and rise to about £170,000,
said that while it had cut production in September and at Christmas, the
group “would have to look at it again if the market drops further. We expect
2009 to be a difficult year”.
Health
Abbott Laboratories: The healthcare company is to buy Advanced Medical
Optics for nearly $1.4 billion (£942 million), a move which should enable it
to expand into the market for eyecare products and laser vision.
GlaxoSmithKline: The drugs company has signed a three-year drug
discovery deal with privately held Biotica Technology, a British biotech
company, giving the drugmaker access to Biotica’s early-stage work in
inflammatory diseases. Biotica said it would receive an initial cash payment
and up to £86 million for each compound successfully developed. Glaxo has
also made an upfront equity investment in Biotica.
Industrials
Posco: The world’s fourth-biggest steelmaker may have to continue to
cut production through the current quarter, because it is unsure if steel
prices will recover.
Leisure
City Index: The spread betting and contracts for difference trader has
reappointed Martin Belsham as chief executive, replacing Clive Cooke, who
becomes deputy chairman. Mr Belsham has been managing director of Rank Group’s
Blue Square internet business since 1999, and was chief executive of City
Index between 1998 and 2002.
TCG Acquisitions: The pub company backed by Alchemy Partners has put 26
leasehold outlets up for sale through Christie & Co, ranging from the
Tun in Edinburgh to the Rat and Parrot in Woking.
Prima Hotels: The privately owned hotel operator has been handed a
management contract to operate Matfen Hall, the hotel, golf and spa resort
in Northumberland owned by Sir Hugh and Lady Blackett.
Real Hotel Group: The struggling operator of the budget Purple Hotels
chain issued its second profit warning in only four days, precipitating
crisis talks with its banks that could tip the business into administration.
Folio Hotels: The privately owned operator has been rescued from
administration in a deal that will see most of the group’s 36 hotels carved
up between existing management and Bespoke Hotels, its rival.
Media
BBC: Mark Thompson, the Director General of the BBC, is understood to
be pushing for a merger between Channel 4 and Five, to head off a political
raid on the licence fee or BBC Worldwide, the corporation’s commercial arm.
Natural
resources
Rio Tinto: The mining giant has postponed the $2.15 billion (£1.7
billion) expansion of its Brazilian iron ore mine as the global downturn
hits steel production. Rio Tinto is scrambling to cut costs and raise cash
to ensure it can meet payments later this year on nearly $40 billion of
debt.
Precious metals: Gold and silver trading shot up last year as the
credit crisis sent investors into safe havens. Gold turnover increased 58
per cent in 2008 to a record $20.2 trillion, while silver trading increased
39 per cent during the year to a record $2.6 trillion. The price of gold hit
a record high of $1,011 per ounce in March.
Alcoa: The aluminium company reported its first quarterly net loss in
six years after prices and demand for the metal plunged. Alcoa, which last
week announced massive job cuts, said its net loss for the fourth quarter
was $1.19 billion compared with income of $632 million a year earlier.
Sirius Exploration: The explorer and developer of mining projects said
it was in advanced talks to buy a significant stake in a US-based mining
company.
Retailing
Land of Leather: The furniture retailer has collapsed and put 1,060
jobs at risk as it joins the growing list of casualties of the worsening
downturn. The struggling furniture group has called in Deloitte, the
accountant, which will seek to sell the retailer as a going concern.
Inchcape: Shares in the car dealer fell after it confirmed it was in
talks with its bankers about a share issue designed to bolster finances amid
a sharp downturn in sales of new cars.
Wm Morrison: Britain’s fourth-biggest grocer said it would create more
than 5,000 jobs this year as part of its store expansion programme. The
group, which runs 382 stores and employs about 117,000 people, said the jobs
would include butchers, fishmongers and bakers.
Pawnbroker H&T: The group, which has 105 stores and is the UK’s
biggest pawnbroker by loan book, opened a record number of stores last year
and said turnover rose “significantly” in the second half of 2008. It said
like-for-like retail sales rose more than 3 per cent in December.
Tesco: The supermarket has appointed Patrick Cescau, the former
Unilever group chief executive, as non-executive director. Mr Cescau retired
from the consumer goods group on January 1 after 36 years with the company.
He starts at Tesco on February 1.
Support
Services
Graysons: The contract caterer set up last year by Sir Francis Mackay,
the former Compass chairman, has bought Midlands-based Duchy Catering,
adding £15 million of turnover and extending its reach into the North of
England, according to Caterer and Hotelkeeper.
Staffline Recruitment Group: The company said its pre-tax profit for
the year to December 31 would be in line with market expectations, helped by
cost-cutting measures and progress made by its OnSite business, which
provides an outsourced human resources service for companies. It said the
full benefit of the new OnSites opened during the year, mostly in the second
half of 2008, would be felt in 2009.
Technology
Wipro: India’s third-largest outsourcing company has admitted that it
had been blacklisted from bidding for contracts by the World Bank, a further
blow to the credibility of India’s corporate governance.
Satyam: Questions have been raised about the relationship between the
IT company and PricewaterhouseCoopers, its auditor. The company’s former
chief executive spent the weekend in jail after confessing to a $1 billion
(£673 million) fraud. Page 46
Tikit Group: The provider of consultancy and software services to law
firms said its full-year results would be broadly in line with market
expectations and ahead of last year as trading in the second half was
satisfactory despite the market turmoil. It expects the tougher trading
conditions to continue into 2009.
Telecoms
Ericsson: The telecom equipment maker has signed a deal with P&T in
Luxembourg to replace its WCDMA/HSPA network. Ericsson, the world’s biggest
mobile network maker, said the six-year contract included support services.
Transport
Alitalia: The Italian carrier has agreed to sell a 25 per cent stake to
Air France-KLM for more than €320 million (£288 million). The French airline
beat competition from Lufthansa to clinch the deal, which is expected to
deliver synergies worth about €720 million over the next three years.
National Express: The bus company has sold dot2dot, its airport
transfer coach service, to Corot for an undisclosed sum. About 170 staff
worked at the business, which ran between Heathrow, Central London and
Canary Wharf.
Utilities
RWE: Europe’s fifth-largest utility is to buy Dutch peer Essent’s
production and delivery assets for an agreed €8.2 billion (£7.3 billion), to
expand its gas and renewable energy operations. The deal is RWE’s biggest
acquisition to date.
Island Gas Resources: The company, which was set up to produce and mine
gas found in coal seams, said it was on track to demonstrate the viability
of producing onshore gas from coal bed methane. Generation equipment has
been installed and is ready for commisioning at its Doe Green site.
