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Economics
Manufacturing profitability: Official figures showed that the
profitability of British companies slipped to 13.9 per cent in the third
quarter of last year, down from 14 per cent in the previous quarter. The net
rate of return for manufacturers fell to 4.4 per cent, down from 4.6 per
cent, while service companies saw their net rate of return fall to 15.5 per
cent, down from 15.7 per cent. However, oil and gas companies saw their
profitability rise to 74.4 per cent, from 70.4 per cent.
Eurozone factory output: Industrial production in the eurozone fell
during November by 1.6 per cent from October’s figures. Production was down
by 7.7 per cent year-on-year, the steepest annual drop since records started
in 1990.
The German economy: The German federal statistics office estimated that
output fell by between 1.5 per cent and 2 per cent in the final three months
of last year, although official figures will not be released until February.
It said the German economy grew by 1.3 per cent last year, but economists
expect output to drop this year.
US retail sales: Official figures showed that US retail sales dropped
by 2.7 per cent during December in the sixth consecutive monthly fall. Total
retail sales dropped to a seasonally adjusted $343.2 billion (£235.4
billion). Sales are down by a record 9.8 per cent, compared with the same
period a year ago.
Stock markets: In London, the FTSE 100 index closed down by 5.4 per
cent in its sixth consecutive day of losses, while leading bourses in Europe
lost more than 4.5 per cent. In New York, the Dow Jones industrial average
and the broader-based S&P 500 index had both lost more than 3 per cent
by early afternoon.
Banking
& finance
Barclays: The banking group confirmed that it would cut another 2,100
jobs from its retail and commercial business. The announcement come a day
after Barclays said it was cutting 2,100 staff at its investment banking
business and a week after it cut 400 IT staff.
Polar Capital: The fund manager said that Julian Barnett, who manages
about one third of the company’s assets through Polar Capital Paragon Fund,
has resigned. He will continue to manage the fund until it is wound down and
assets returned to investors.
Deutsche Bank: A surprise profit warning was issued by the largest
German bank after it revealed losses of about €4.8 billion (£4.3 billion) in
the fourth quarter. The group expects to report an annual loss of €3.9
billion.
Man Group: The world’s largest listed hedge fund said it would take
legal action over its exposure to the $50 billion (£34.3 billion) fraud
allegedly perpetrated by Bernard Madoff, the American financier. The
British-based fund was one of the first businesses to admit exposure to the
fraud.
Lehman Brothers: It will take up to two years to wind down the
remaining pieces of Lehman Brothers, the US investment bank that collapsed
in September, according to Alvarez & Marsal, the bank’s liquidators.
Equitable Life: Campaigners claimed that the Government was trying to
avoid a firm commitment to compensate policyholders in full for their £4
billion of losses in the former mutual group.
HSBC: The banking group has introduced its lowest mortgage rate on
record at 2.99 per cent, but has been criticised for offering it only to its
wealthiest customers.
Construction
& property
Balfour Beatty: The construction group said that its order book had
increased to £12.5 billion, from £12.1 billion, in the last six months of
2008 and it was eyeing a “number of further significant prospects” this
year.
Redrow: The housebuilder, based in Flintshire, said that its
second-half sales had fallen by 49 per cent to 853 homes, with forward sales
standing 40 per cent lower than last time.
SG Pearce: The Bristol-based subsidiary of Interior Services, the
construction group, said it has secured about £140 million of work this year
from supermarket groups.
Laing O’Rourke: The construction group’s legal dispute with John
Magnier, the Irish tycoon, is set to intensify. The pair had agreed in 2006
to develop 30 luxury villas on a seafront- facing plot of land in the
Spanish resort of Marbella.
Consumer
goods
Diageo: The drinks group has lodged an appeal against a demand from
South Korea’s customs agency for 206.4 billion won (£105 million) in unpaid
taxes after it allegedly misrepresented its import prices. Diageo is South
Korea’s biggest supplier of Scotch whisky.
Coca-Cola Great Britain: The soft drinks group confirmed that Duffy,
the singer, will star in its new diet Coke European advertising campaign
which will be launched soon across Europe.
Engineering
Fenner: The conveyor belt maker, based in East Yorkshire, said its
first-quarter trading had been satisfactory but it was cutting 290 jobs
because deteriorating conditions had forced it to review its costs. Its
general industrial markets had seen reduced volumes and increased margin
pressure in continental Europe and the Americas.
Jaguar Land Rover: The premium carmaker owned by Tata Motors, the
Indian group, announced the loss of 450 jobs, 300 of which are management
positions. Tata, which bought Jaguar Land Rover from Ford last year for $2.3
billion (£1.5 billion), has asked the UK Government for financial support.
Health
Hikma Pharmaceuticals: The generic drugs maker, based in Jordan,
confirmed that it expected its full-year sales to be up by about 30 per
cent, compared with last time, with an operating performance in line with
its expectations.
Industrials
Filtrona: The Milton Keynes-based plastics and fibres company said that
its provisional revenues had risen by 6.5 per cent in 2008 thanks to the
dollar’s strength against the pound. Filtrona, which is the world’s biggest
maker of cigarette filters, said trading was in line with expectations.
Chinese steel: China vowed to stop its steel mills from expanding
further as industry figures showed the sector carrying massive overcapacity
which risks swamping domestic and foreign markets. The Chinese State Council
said it would allow no new steel capacity expansion projects and would adopt
a flexible tax policy on steel exports to “stabilise” the country’s share of
the global steel market.
Leisure
Punch Taverns: Shares in Britain’s biggest pub company fell by more
than 30 per cent to a record low after a gloomy trading update prompted
analysts to cut profit forecasts. However, Giles Thorley, chief executive,
insisted that the company was well placed to ride out the recession and
avoid defaulting on its loans.
Mitchells & Butlers: The All Bar One and Harvester operator has
sold the Holiday Inn Express, Crawley, through Colliers Robert Barry to
Sojourn Hotels, the privately owned budget hotel operator, for about £8
million.
Amano: The café operator has collapsed into administration after a
decline in trading and three of its five units have been closed, according
to M&C Report.
Daniel Thwaites: The Lancashire brewer and pub operator is reviewing
almost 100 jobs in response to what it described as “unprecedented pressures
on profitability” caused by the economic climate. It will also convert 37 of
its managed pubs to tenancies.
Goals Soccer Centres: The London-listed group, based in East Kilbride,
which runs five-a-side football pitches, said slower growth in recent months
had produced a marginal profit shortfall for 2008, against market
expectations.
Media
ESPN: The television network of the Walt Disney company is interested
in acquiring sporting rights if they fit with its business, including the
English Premier League, according to local reports.
HMV: The music group has proposed buying Mama, the AIM-listed concert
venue owner. The 50-50 joint venture would be funded by a share placement
worth up to 5 per cent of HMV, which is expected to raise about £20 million.
Natural
resources
Rio Tinto: Paul Skinner is to step down as chairman of Rio Tinto, the
Anglo-Australian miner, amid speculation that he will move to head the board
of BP later this year. His replacement at Rio will be Jim Leng, chairman of
Corus, the steelmaker, since 2003. Separately, Rio Tinto has started to
mothball mining projects as part of a planned $5 billion reduction in
capital expenditure this year. Among these projects will be a $1.5 billion
(£1.03 billion) extension to the Argyle diamond mine in Western Australia.
About 220 jobs will go as work on a shaft at the mine is halted.
Fresnillo: The world’s biggest producer of primary silver, which is
based in Mexico, reported a 2.4 per cent fall in fourth-quarter silver
output and said that it would trim capital expenditure this year by about 8
per cent because of weak markets.
Gulf Keystone Petroleum: The AIM-listed oil and gas explorer said the
testing of the sixth and final appraisal well on the Hassi Ba Hamou permit
in Algeria had been successful. During a 48-hour production test, the HBH-6
appraisal well achieved a stabilised flow rate of 15,345 cubic metres per
hour, or 12.97 million standard cubic feet of gas per day.
Retailing
JJB Sports: The sportswear group announced a 6.8 per cent fall in sales
over Christmas and said that it expected to make a loss of between £5
million and £10 million this year. On Tuesday Chris Ronnie, chief executive
of JJB, had acknowledged that he no longer owned his 27.5 per cent stake in
the business.
Zavvi: Administrators for the music, DVD and games retailer have closed
another 18 stores with the loss of 353 jobs. The list of stores closing with
immediate effect includes the chain’s flagship store in Piccadilly, Central
London, where 110 people are employed. Ernst & Young said that the
remaining 74 stores will continue to trade with a view to finding a buyer
for all or part of the business.
Booker: The cash-and-carry company, based in Northamptonshire, said
like-for-like sales had risen by 2.7 per cent in the 16 weeks to January 2,
in line with management expectations. It has also extended its banking
facilities until 2012.
Support
Services
Amec: The FTSE 100-listed energy services and project manager said that
its full-year profits will be above £200 million, at the upper end of City
forecasts. It added that it views its prospects with “measured confidence”
and expects to make some selective acquisitions this year.
Interserve: The London-listed project services group, based in
Berkshire, said that its full-year results would meet market expectations,
helped by lengthy UK public-sector contracts and continued growth in the
Middle East. It added that it had already secured two thirds of its 2009
revenues.
Workspace: The London-listed group, which lets office space to small
and medium-sized businesses, may issue new share capital in a bid to bolster
its finances as conditions in the UK property market worsen. The company
also said it was in discussions with lenders about increasing the
flexibility of some of its debt facilities.
Technology
Nortel Networks: North America’s biggest telephone equipment
manufacturer and one of the leading sponsors of the 2012 London Olympics,
has filed for Chapter 11 bankruptcy protection in a Delaware court. The
Toronto-based company has been hit by plummeting demand for its equipment.
Its shares hit a $900 high during the dot-com boom, but it was warned last
month by the New York Stock Exchange that it would be delisted if it did not
bring its share price above the $1 minimum within six months.
Satyam: Senior executives at the Indian computer group sold an
unusually large number of shares before the company was revealed to be at
the centre of India’s largest corporate fraud, it has emerged.
Telecoms
T-Mobile: Jim Hyde, the managing director of T-Mobile UK, will leave
the company by the end of March to join Ntelos, the American communications
provider, as president and chief operating officer. Mr Hyde had joined
T-Mobile UK in January 2006 from T-Mobile USA, where he had been
vice-president of sales and operations.
Transport
FirstGroup: Shares in the London-listed bus and train group, based in
Aberdeen, were under pressure after it said that its US Greyhound bus arm
had suffered a poor festive season and growth rates in British train travel
were showing signs of strain. The company reported disappointing demand in
North America over the Thanksgiving and Christmas holidays, resulting in
Greyhound’s like-for-like revenues falling by 4.5 per cent from the start of
October to December 31.
Gatwick: Global Infrastructure Partners, the owner of London City
Airport, is to join the list of bidders for Gatwick when submissions are
made on Monday. Global Infrastructure is a $5.6 billion (£3.8 billion) fund
part-owned by Credit Suisse and General Electric. It is understood to have
formed a consortium that will bid £2 billion for the airport. Indicative
bids are due on January 19 after a decision last year by BAA, the airports
operator, to put Gatwick up for sale.
Utilities
E.ON: The German utility, along with RWE, its rival, are set to
announce the creation of a joint venture to build at least four nuclear
reactors in the UK at a cost of about £20 billion.
