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Economics
High street: The value of total retail sales edged upwards last month
from levels a year before, but struggled to match a surge in trading
reported for Easter, according to the British Retail Consortium. Total sales
rose by 0.8 per cent last month from a year before, while like-for-like
sales, which strip out changes in retailers’ floor space, fell by 0.8 per
cent.
Housing market: The slump in the residential property market continued
to abate last month, the Royal Institution of Chartered Surveyors said. It
found that inquiries from prospective homebuyers rose for a seventh month in
a row, the levels of sales increased and the pace of decline in house prices
continued to ease.
Corporate financing: The Bank of England moved to appease critics
protesting that its asset purchases of government and corporate IOUs have
failed to ease the financial stress afflicting Britain’s companies. It said
that it would create a new Secured Commercial Paper Facility to buy more
corporate debt and try to ease financing strains.
Tax shortfall: The Committee of Public Accounts criticised HM Revenue &
Customs for being lax in collecting outstanding taxes owed to the Treasury.
It said that a third of all tax payments were now late and that the value of
“tax debts” owed to the Revenue in 2008-09 stood at £17 billion, up by 22
per cent over the previous financial year.
Ireland downgrade: Standard & Poor’s (S&P) , the ratings
agency, cut its credit rating on Ireland’s sovereign debt for a second time
in three months and warned that the rating could fall further amid concern
about the soaring cost of bailing out the country’s banking sector. S&P
cut its rating for Ireland to AA, with a negative outlook, from AA plus.
Ireland was rated triple A only three months ago.
German manufacturing orders: New orders for factories in Europe’s
largest economy were at an unchanged level in April, after jumping by 3.7
per cent in March, preliminary official data showed.
Latvian crisis: The Government and coalition partners agreed to cut the
Baltic state’s budget by 500 million lats (£611 million), in a move that
could help it to secure more emergency loan funds and stave off pressure to
devalue its currency. It came as Standard & Poor’s placed Latvia’s
government debt, already classed as “junk” with a credit rating of BB-plus
on watch for a potential downgrade.
Banking
& finance
Keydata Investment Services: More than 80,000 individual investors
holding £700 million worth of policies are facing huge uncertainty after the
independent fund manager was forced into administration by the Financial
Services Authority.
EcoSecurities: The carbon credits group looked set to become the
subject of a bidding war after it received its second takeover approach in
four days. EDF Trading, the trading unit of the French energy group , said
that it was considering making an offer of 75p per share. On Friday,
Guanabara, a group fronted by Pedro Moura Costa, one of EcoSecurities
founders, said that it was weighing up a 60p-a-share bid.
Aviva: Three convicted fraudsters who successfully conned five
directors at the insurer out of a combined £638,000 have been sent to jail.
Two were sentenced for 4½ years and another for 18 months. They used
publicly available information from Companies House and false bank accounts
to trick call centre operators to hand over details of the director’s life
assurance policies.
PKO BP: Poland’s top bank by assets is seeking as much as $5 billion
(£3.12 billion) from shareholders in what could be the country’s biggest
cash call yet. The state-controlled lender said it would hand back more than
90 per cent of its 2008 profit in the form of a 2.9 billion zlotys (£550
million) dividend.
Citigroup: The bank will later this week launch the exchange of as much
as $27.5 billion (£17.1 billion) worth of preference shares for common
stock. The Government has promised to convert up to $25 billion, giving
taxpayers a stake of as much as 36 per cent in the bank.
Correction: The photograph in yesterday’s business big shot was Steve
Schwartzman of Blackstone and not, as incorrectly captioned, Larry Fink of
BlackRock. We apologise for this error.
Construction
& property
Workspace Group: The British small business landlord reported a
full-year pre-tax loss of £360.4 million, compared with a loss of £37
million in the previous year as commercial property values fell. Shares rose
as much as 9 per cent as net asset value per share was ahead of market
estimates.
Consumer
goods
AG Barr: The maker of Irn-Bru said that sales had risen 22.5 per cent
because of recent warm weather and the addition of Rubicon, the exotic fruit
drink brand. Stripping out last year’s acquisition of Rubicon, the company
said that like-for-like sales had risen 7.9 per cent in the period between
February 1 and May 29. It was also helped by recent investment in core
brands, such as Strathmore water, St Clements and Tizer.
Lactalis McLelland: The maker of Seriously Strong Cheddar has bought a
cheese plant from the failed Dairy Farmers of Britain co-operative in a deal
set to safeguard jobs and milk supply. Lubborn Cheese, based in Somerset,
employs about 95 staff at the creamery in Cricket St Thomas.
Tyco: The US Supreme Court has refused to hear an appeal by Dennis
Kozlowski, the former Tyco International chief executive, and Mark Swartz,
the former chief financial officer, against their convictions for fraud and
other crimes. The men were convicted in 2005 of securities fraud,
conspiracy, grand larceny and falsifying business records.
Engineering
LDV: Weststar, the Malaysian company that made a failed rescue bid for
the vanmaker last month, has emerged as one of three potential buyers for
the Birmingham-based company, which was placed in administration yesterday.
Chrysler: The US Supreme Court has granted a request to delay the sale
of the carmaker to a group led by Fiat, the Italian carmaker. The sale could
now be held up for weeks or even months, dramatically delaying the US
company’s exit from Chapter 11 bankruptcy protection. Lawyers for Chrysler
had warned that if the sale did not go ahead by June 15, Fiat could walk
away from the deal, leaving Chrysler to be broken up.
Car sales: Audi, BMW and Daimler, the German luxury carmakers, unveiled
weak sales figures. Sales of BMW’s brands, which include Mini and
Rolls-Royce, shed 18.3 per cent in May on a 12-month basis, better than
April’s 24 per cent drop. Daimler’s Mercedes-Benz division said May sales
were off by 12.4 per cent, but that was almost half the loss of nearly 24
per cent reported in April. Audi’s sales fell 6 per cent.
Health
Aileron Therapeutics: GlaxoSmithKline, Novartis, Roche and Eli Lilly
are all investing in a $40 million (£25.1 million) fundraising by the
American biotechnology company based in Cambridge, Massachusetts.
Industrials
Tata Steel: Moody’s Investors Service has cut the rating of Tata Steel,
of India, by one notch to Ba3, citing a weak outlook for the steel industry.
The company’s European operations face significant challenges, an analyst at
the agency said. Moody’s has a stable outlook on Tata Steel.
Leisure
Rank Group: The High Court upheld the gaming operator’s £59.1 million
claim for overpaid VAT on games of interval bingo and a further claim of up
to £26 million on VAT paid on gaming machines. Deloitte, Rank’s tax adviser,
estimated the rulings could spawn claims totalling £500 million from
operators of bingo clubs, casinos, pubs, betting shops and amusement
arcades, although HM Revenue & Customs has until the end of the month to
submit an appeal.
McDonald’s: The fast food behemoth announced a 5.1 per cent
increase in like-for-like sales in May, with trading in the UK broadly in
line with the 7.6 per cent rise reported by its European division. It said
that its UK business had served 23 million customers in the last week of the
month, its second-busiest week on record.
PartyGaming: The online gaming operator has signed a
business-to-business deal with Channel 5 Broadcasting to create a bingo and
casino service carrying the Five branding.
West Ham United FC: CB Holding, a division of Straumur-Burdaras, a
government-controlled Icelandic bank, has bought West Ham, the English
Premier League club, for an undisclosed sum, the club said. The takeover
comes after the collapse of the business empire of Bjorgolfur Gudmundsson,
who bought West Ham in 2006 for about £85 million and who had borrowed
heavily from the Icelandic bank.
Media
Setanta: The sports broadcaster came close to falling into
administration yesterday, but was able to negotiate a last-minute breathing
space. Setanta remains on the verge of collapse as shareholders battle over
whether to invest an extra £50 million. A source close to the talks said
that the group’s future would be decided “in a matter of days rather than
weeks”.
Natural
resources
Royal Dutch Shell: The oil group will pay $15.5 million (£9.6 million)
to settle a lawsuit that accused it of colluding with Nigeria’s former
military regime to torture and kill peaceful antioil protesters, including
Ken Saro-Wiwa.
OZ Minerals: The Australian miner will stick with a plan to sell most
of its assets to Minmetals, of China, and reject a proposal that would have
scuppered the deal, reports said. OZ Minerals has declined a $1.2 billion
(£749 million) refinancing proposal from Royal Bank of Canada and RFC Group.
The Minmetals proposal will go to a shareholder vote on Thursday.
Retailing
JD Sports Fashion: The retailer said that it would sell its 10 per cent
stake in JJB Sports, its rival. The disclosure came as it said that
like-for-like sales were up 1.7 per cent in the financial year to date,
compared with the rate of 0.3 per cent seen in early April. It said that
margins were under pressure but added that it remained confident of meeting
internal forecasts for the year to February.
Alliance Boots: Andy Hornby, the former chief executive of HBOS, has
been confirmed as the next chief executive of Alliance Boots, the UK’s
biggest pharmacy chain.
Support
Services
Hyder Consulting: The provider of design consultancy on infrastructure
projects reported an 8 per cent rise in underlying full year pre-tax profits
to £15.6 million and said that it was comfortable with analysts’ revenue and
profit expectations for the current year.
BPP: Europe’s largest accountancy training company and the operator of
one of the UK’s leading law schools has agreed a £303.5 million cash
takeover offer from Apollo Global, an American education group.
Technology
China: Beijing wants personal computers sold in China to carry software
that blocks online pornography and other websites. The software, Green
Dam-Youth Escort, prevents computers from accessing sites with pornographic
pictures or language, Zhang Chenmin, general manager of Jinhui Computer
System Engineering, the developer, said. The company was compiling a
database of sites to block. The software could also be used to block other
websites.
Telecoms
Telenor: Russian bailiffs have threatened to sell Telenor’s stake in
VimpelCom, the mobile phone company, to cover a $1.7 billion (£1.05 billion)
fine. The lawsuit that led to the fine was brought by Farimex, a tiny
shareholder that alleged Telenor had hindered the Russian carrier’s progress
in Ukraine. Alfa, which also has a stake in VimpelCom, has repeatedly denied
claims it has corporate links with Farimex.
Transport
British Airways: The airline has told its cabin crew that want to cut
2,000 jobs, raising fears that holidaymakers may face a summer of strikes.
It is understood that British Airways’ management is already working on
contingency plans to deal with possible industrial action during the busy
holiday period.
Airline losses: The world’s airlines will collectively lose $9 billion
(£5.6 billion) this year — nearly double the previous projections — and face
a slow recovery, according to the International Air Transport Association,
an industry body that represents 230 airlines worldwide.
Ryanair: Michael O’Leary, the budget airline’s chief executive, has
sold five million shares in the airline, collecting €18.75 million (£16.5
million). Mr O’Leary still owns 60 million shares, or 4 per cent of the
company.
Utilities
Sellafield: A 250 hectare parcel of land next to the main site at
Sellafield — Europe’s most heavily contaminated industrial site — in West
Cumbria was put up for sale yesterday. Iberdrola, the Spanish energy group
that owns ScottishPower, is expected to be among the bidders.
SunPower: The solar power company has signed a contract with Jabil
Circuit to build solar panels in Mexico from the second half of 2009. Solar
companies have struggled as financing for clean power systems dried up,
forcing them to sharply cut prices for the photovoltaic systems that turn
sunlight into electricity.
