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Economics
Budget deficit: Public sector net borrowing was £8.991 billion last
month, official figures showed. The current budget deficit was £1.8 billion,
compared with a surplus of £4.6 billion in February 2008, and was the first
February deficit in the current budget since records began in April 1998.
Total borrowing for the 11 months of this fiscal year reached a record £75.2
billion — three times higher than at the same point in the previous fiscal
year.
Gross mortgage lending: Figures from the Council of Mortgage Lenders
showed that gross mortgage lending fell at an annual rate of 60 per cent in
February to £9.9 billion, the lowest since February 2001 and down by 15 per
cent from January’s gross mortgage lending of £11.7 billion.
Factory orders: The CBI said the index of manufacturers’ orders fell to
minus 58 in March, from minus 56 in February. Analysts had forecast minus
55. Companies said they expected to cut output in the coming months with
this index falling to minus 48, from minus 44, the lowest since September
1980.
Monetary Policy Committee: David Miles, who led a 2003 government
review of the home loans market, has been appointed to the Bank of England’s
Monetary Policy Committee. He will replace David Blanchflower.
Corporate bonds: The Bank of England will start buying corporate bonds
as part of its £75 billion quantitative easing programme to boost the
economy. The Bank has already bought £7 billion of government bonds over the
past two weeks, helping to push gilt yields to record lows.
German economy: The Ifo economic research institute said that the
German economy would contract by more than 4 per cent this year. It added
that the world economic slowdown had weighed so heavily on German orders and
exports that the institute would revise down its December forecast for the
German economy to contract by 2.2 per cent this year.
US unemployment: The number of US workers claiming state unemployment
benefits rose to 5.47 million people in the week ending March 7, up from
5.29 million in the previous week and the highest on record.
World economy: The International Monetary Fund forecast that the world
economy would contract at an annual rate of between 0.5 per cent and 1 per
cent in 2009, reducing its forecast for 0.5 per cent growth made only two
months ago. This would be the first global economic contraction since the
Second World War.
Banking
& finance
Prudential: The life insurance group said that Mark Tucker, its chief
executive for the past four years, would be replaced by Tidjane Thiam, the
chief financial officer. The company also reported that its full-year
pre-tax profits, on the embedded value basis used by insurers, had risen by
17 per cent to £3 billion.
Fannie Mae: The US state-controlled mortgage lender and guarantor said
it would pay its top executives retention bonuses of up to $611,000
(£419,000) this year.
Blue Oar Securities: The stockbroker lost a third of its market value
after a planned £16.2 million takeover by WH Ireland, its rival, fell apart.
It is understood that this was because of doubts by Evolve Capital, the
investment group that owns 64.9 per cent of Blue Oar.
Construction
& property
Quintain Estates & Development: The property group said that it
aimed to reduce a £95 million credit facility with Barclays to £35 million,
subject to meeting a covenant that limits its debt to a maximum of 110 per
cent of equity at the end of March. It had said this week that it was
considering a share capital increase to strengthen its balance sheet.
Consumer
goods
Diageo: The drinks group is considering closing its global headquarters
in Central London as part of a £100 million cost-cutting programme and was
consulting staff about a move to offices in Park Royal, the site of its
former Guinness brewery in West London.
Smallbone: The AIM-listed maker of luxury kitchens, based in Wiltshire,
has been sold by PricewaterhouseCoopers, the administrator, to Canburg, the
investment group, saving more than 400 jobs.
Engineering
Society of Motor Manufacturers and Traders: The industry body said that
next year’s British Motor Show had been cancelled in response to the
downturn in the car industry, which had made it impossible for carmakers to
commit to the event. The biennial show had been the country’s largest
consumer exhibition.
Domino Printing Sciences: The bar code printer, based in Cambridge,
said that trading in the first four months of the current fiscal year was
lower than last time as companies cut back on their investment plans.
US car parts suppliers: The US Treasury Department has pledged up to $5
billion (£3.4 billion) in support to car parts suppliers to help them to
survive the downturn in car sales. Government guarantees will be given to
suppliers to ensure that they will receive payment for products shipped, no
matter what happens to the recipient carmaker.
Health
Consort Medical: The London-listed inhaled drug device specialist,
based in Buckinghamshire, said that markets for its products had remained
resilient and it was comfortable with the current market consensus for the
full year.
Roche: The Swiss pharmaceuticals group has submitted its Tarceva lung
cancer treatment to the European Medicines Agency.
Industrials
Clariant: The Swiss speciality chemicals company said that it would
split up its textile, leather and paper business units by the end of the
year, raising the prospect of a possible sale of the units.
Leisure
Playtech: The online gaming software group said that it had “so far
been unaffected by the global macroeconomic downturn” as it reported
full-year adjusted net profits up by 79 per cent to €78.6 million (£74
million) and recommended a 49 per cent increase in its final dividend. It
added that its recently finalised sports betting deal with William Hill
Online would “offer transformational benefits” to its 2009 earnings.
Arena Leisure: The racecourse operator said that it had stabilised its
trading performance after last April’s profit warning and reported a 4.1 per
cent decline in like-for-like attendances last year, compared with an 8.2
per cent fall for the wider racing industry.
Holidaybreak: The travel group’s Eurocamp division is to offer camping
holidays at nine sites in Britain to cash in on stay-at-home holidaymakers.
The group most recently operated UK sites 15 years ago.
Thomas Cook: The tour operator said that bookings for this summer had
improved over the past four weeks despite rising unemployment and it
remained confident of meeting its full-year forecasts.
Media
The Guardian: The newspaper has lost its appeal against an emergency
gagging order that banned it from publishing documents that allegedly showed
details of tax avoidance schemes at Barclays, the banking group. The
documents detail complex transactions through which the bank’s structured
capital markets division reportedly made more than £1 billion by exploiting
tax loopholes.
Aegis: The London-listed media and marketing group said that it
expected to defend its share of a more difficult market this year and had
held no talks about a merger with Havas, its French rival.
BBC: Mark Thompson, Director-General of the BBC, has warned that the public
broadcaster would have to make £400 million of cutbacks over the next three
years to ensure that it stayed within its existing overdraft limits.
Natural
resources
De Beers: The world’s biggest producer of rough diamonds said that it
was still keen to sell its Namaqualand mine in South Africa when the market
improved. An earlier attempt to sell it had fallen through because of the
downturn in the commodities market in the wake of the global financial
crisis, leading to a sharp fall in demand for diamonds.
Hardy Oil & Gas: The explorer, which has operations in India and
Nigeria, said that its drilling in the Krishna Godavari basin in India could
result in a step change in its business next year, boosting its shares, as
it reported a 17 per cent rise in full-year profits.
Chinalco: The Chinese aluminium group will gain extensive powers to
influence the investment policy and strategic direction of Rio Tinto’s core
iron ore, copper and aluminium businesses, according to special side
agreements relating to last month’s deal in which Chinalco agreed to buy a
strategic stake in Rio.
Retailing
Inchcape: The London-listed car dealer confirmed plans to raise £232
million in a heavily discounted rights issue to pay down debt as it reported
a 55 per cent fall in full-year profits and said that it would not pay a
final dividend this year. It added that trading conditions would remain
extremely challenging throughout 2009 and in the first half of 2010.
Support
Services
Casper: The airline and wholesale catering supply group has been placed
in administration. WK Thomas and Industrial Supplies, two of the company’s
subsidiaries, have been sold to Bunzl, the distribution group, by Deloitte,
the administrator. But the contractual business of its King company could
not be sold and 320 staff have been made redundant.
Premier Farnell: The electronic components distributor reported a 3 per
cent rise in full-year underlying pre-tax profits to £72.5 million, on sales
1 per cent higher at £804.4 million. It added that its fourth-quarter sales
and volumes had slowed, sending its shares down.
Technology
Imagination Technologies: The London-listed semiconductor group, based
in Hertfordshire, said that it expected its unit volume to grow by at least
60 per cent this year and added that it had concluded a “significant”
licence deal with a leading consumer electronics company in November.
Telecoms
China Mobile: The world’s largest mobile carrier by users missed
forecasts with an 11 per cent rise in quarterly earnings as subscription and
usage growth slowed faster than expected and it warned of difficult times
ahead. Analysts said that its growth would slow even more as its rivalry
with China Unicom and China Telecom increases and the country’s economy
loses steam amid the financial crisis.
Transport
BAA: The Competition Commission has ruled that the airports operator
must sell Gatwick and Stansted, as well as either Edinburgh or Glasgow. It
also stipulated that BAA, owned by Ferrovial, the Spanish conglomerate, must
sell the airports in sequence, starting with Gatwick, they must be sold to
different buyers and must be approved by the commission.
FirstGroup: The train and bus group said that it was planning to cut
costs by more than £200 million in its businesses in the UK and North
America. The operator of the First Great Western and First Capital Connect
franchises is already implementing cost-reduction measures at its UK bus and
train arms, but has not detailed how many jobs have been lost.
Utilities
French electricity production: Energy workers cut off 10,000 megawatts
of French electricity production capacity, including 9,000 MW, or 14 per
cent, of nuclear capacity in 11 plants, the CGT union said.
