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Economics
Manufacturing output: The CIPS/Markit purchasing managers’ index rose
to 47 during June, from 45.4 in May, the highest reading since May 2008. The
gauge of manufacturing output rose to 52.1 — the first increase in output in
15 months. Any figure above 50 indicates that activity is rising rather than
falling.
Corporate profitability: The net rate of return on investment by
non-financial companies fell to 12.3 per cent in the first three months of
the year, official figures show. This was down from 13.1 per cent in the
final quarter of last year and the lowest since autumn 2003. Profitability
in the services sector fell to 13.8 per cent, the lowest since 1993, while
that in manufacturing declined to 6.8 per cent, from 13.9 per cent, the
lowest since 1992.
Services sector: Output in the services sector fell by 0.1 per cent in
April, after a decline of 0.2 per cent in March. In the three months to
April, output fell by 1.2 per cent after a decrease of 1.6 per cent in the
three months to March, the slowest rate of decline since December.
Productivity: Measured by output per worker, productivity in the
economy fell further in the first quarter, dropping by 2 per cent to stand
4.2 per cent down on levels reported a year ago, hit by slumping output.
Eurozone manufacturing: The Markit eurozone manufacturing purchasing
managers’ index rose to 42.6 in June, from 40.7 in May, its highest since
last September and above the flash estimate of 42.4. But this is still below
the 50 mark that divides growth from contraction.
Irish unemployment: Official data showed that Ireland’s unemployment
rate rose to 11.9 per cent in June, the highest level since April 1996.
US manufacturing activity: The Institute for Supply Management’s
monthly index of US manufacturing activity rose to 44.8 in June, the highest
reading since August 2008. Economists had expected a reading of 44.5.
US housing sector: Pending US home sales rose in May for the fourth
consecutive month, increasing by 0.1 per cent. This followed a 7.1 per cent
jump in April.
US construction spending: Official figures showed that construction
spending in the United States had dropped by 0.9 per cent during May, nearly
double the decline of 0.5 per cent that economists had expected.
US unemployment: ADP, the payrolls company, said that the US private
sector had shed 473,000 jobs during June, more than the 395,000 expected by
most analysts but lower than 485,000 drop reported in May. Monthly
employment losses in April, May and June averaged 492,000, an improvement
over the first three months of the year, when monthly losses had averaged
691,000.
Banking &
finance
Cattles: The struggling doorstep lender said that it had dismissed
seven senior directors after an investigation into a “breakdown” in its
internal controls. The findings from the investigations have been passed to
the Financial Services Authority, the City regulator.
Fraud: BDO Stoy Hayward, the accountancy group, said that fraud during
the six months to the end of June had already reached £960 million, whereas
the total for last year had been £1.2 billion. BDO said that the figure
would reach a total of £3 billion this year.
US shareholders: The US Securities and Exchange Commission will propose
new regulations giving American shareholders a non-binding vote on executive
pay, as well as new rules for companies about the disclosure of compensation
and issues such as the backgrounds and qualifications of directors.
Construction
&
property
Countrywide Property Auctions: About 79 per cent of properties that
went under the hammer with Countrywide Property Auctions between May 28 and
June 12 had sold, compared with 49 per cent a year ago.
Shaftesbury: The real estate investment trust announced a 98.17 per
cent take-up of its £150 million rights issue. The two-for-three issue of
90.4 million shares was designed to fund the regeneration of Berwick Street
in the West End of London and to acquire property bargains.
Consumer
goods
Diageo: The world’s biggest drinks group has launched a £120 million
restructuring that will cost about 900 jobs in Scotland as it closes a
packaging plant and a distillery. The overhaul, which will save an estimated
£40 million in 2012, will involve the closure of its grain spirit distillery
at Port Dundas, Glasgow, and a packaging plant at Kilmarnock, Ayrshire. Page
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Edrington Group: The privately owned maker of The Famous Grouse and
Macallan whiskies has reported a 30 per cent jump in its full-year pre-tax
profits before exceptionals to £94.8 million, on turnover up by 44 per cent
to £419.9 million, despite a softening of demand in the second half.
SABMiller: The brewer will satisfy its black empowerment requirements
in South Africa through an equity issue of about 10 per cent of its South
African Breweries subsidiary worth $750 million (£456 million) to black
employees, partners and customers. The move, which will enable the new
investors to exchange their holdings for SABMiller shares after ten years,
will cost the group about $220 million.
Anheuser-Busch InBev: The brewer of Stella Artois and Budweiser will
reduce its debt by selling four metal can manufacturing plants in America to
Ball Corporation for $577 million.
Engineering
General Motors: The American carmaker has taken the unusual step of
urging investors to stop trading in its shares, warning them that the stock,
at present trading “in excess of $1”, was likely to be worthless very soon.
Separately, RHJ International, the Belgian holding company, reported that
its full-year losses had more than doubled to €1 billion (£857 million),
along with a 43 per cent fall in the value of its portfolio, raising doubts
about its bid for Opel, the European unit of GM.
General Motors China: The joint venture said that sales in the country
had risen by 38 per cent so far this year, in contrast to the difficulties
that General Motors had experienced elsewhere.
Ford: The carmaker reported a drop in sales of 10.7 per cent in June to
154,873 vehicles, describing it as “steady progress”. It was the company’s
smallest monthly sales decline since July 2008 and came after a ten-month
run of sales falls in excess of 20 per cent.
Gaz: Russia’s second-largest carmaker said that it would cut 7,000 jobs
this month amid plummeting sales. The company, described as the
fastest-growing in the world before the economic crisis, has shrunk by
almost half this year.
Oshkosh: The Pentagon said that the American truck maker had been
picked to build the next generation of mine-resistant off-road vehicles for
US Armed Forces in Afghanistan, The deal is worth about $1.06 billion (£641
million).
Health
US Food and Drug Administration: The American regulator said that
prescription painkillers that include acetaminophen should be removed from
the US market because they can make it too easy for patients to take
dangerously high doses.
Industrials
Dow Chemical: The American group said that it would close three plants
in Louisiana and cut 2,500 jobs as part of a restructuring that came with
the acquisition of Rohm & Haas, its rival.
BASF: The German chemicals group said that tentative signs of an
economic recovery were being misunderstood and it believed that the slump
was likely to persist. It said that sales volumes in some units were
dropping by as much as 40 per cent.
Leisure
Bingo clubs: A demonstration by hundreds of bingo players and club
employees has been held outside Parliament to protest at the rise in bingo
duty from 15 per cent to 22 per cent announced in the last Budget.
Cineworld: The UK’s second- biggest cinema chain reported that it had
enjoyed a “healthy” first half thanks to a strong line-up of films, with box
office sales up by 17.9 per cent. It said that trading in its core business
was ahead of forecasts, but this had been partially offset by a “softening”
in advertising income and higher utility bills.
Betfair: A Belgian court of appeal has dismissed claims by football
clubs, including Juventus, Porto and PSV Eindhoven, that the betting
exchange operator was infringing the intellectual property rights of the
clubs and their players by using their names on different types of bets.
Russian casinos: Thousands of casinos, slot-machine parlours and
betting halls across Russia have shut down to comply with sweeping new
restrictions that require all gambling businesses to relocate to four remote
regions of the country. The law is estimated to put more than 400,000 people
out of work, including more than 40,000 workers at Moscow’s 30 leading
casinos and some 500 gaming halls and slot-machine parlours.
Punch Taverns: The pub company has sold four tenanted pubs in Cornwall
and Devon to St Austell Brewery, lifting the purchaser’s pub estate to 173
outlets.
Media
Gannett: The biggest American newspaper chain, which owns USA Today,
will eliminate more than 1,000 jobs at its local newspapers. The job cuts
will offset a continuing decline in revenues, according to The Wall
Street Journal, which reported that the number of jobs likely to be cut
would be fewer than 2,000.
Natural
resources
China Iron and Steel Association: After holding out all year for a more
than 40 per cent price cut from last year’s levels, the China Iron and Steel
Association is prepared to accept a price reduction only slightly deeper
than the 33 per cent cut which has been agreed by other Asian mills,
according to a source.
Retailing
Marks & Spencer: Sir Stuart Rose, chairman and chief executive of
the high street chain, reported sales that were better than expected after
seeing an “improving trend” in the retailer’s performance. The company
revealed a drop in UK like-for-like sales of 1.4 per cent in the 13 weeks to
June 27, better than the previous quarter and lower than the 2.5 per cent
decline forecast by City analysts. Sir Stuart said that consumer confidence
appeared to be stabilising, but he remained cautious about the outlook.
Support
services
WSP: The London-listed environmental consultancy said that its
first-half trading had been in line with its expectations as its business
from the public sector remained stable.
Clifford Chance: The London law firm disclosed a 37 per cent plunge in
full-year profits as it absorbed the cost of a radical shake-up that will
lead to about 100 partners losing their jobs. It also lost its spot as the
world’s biggest law firm by revenue as its turnover slid by 5 per cent to
£1.26 billion.
Technology
Sony: The Japanese inventor of the Sony Walkman, launched 30 years ago,
reported a full-year loss of 98.9 billion yen (£618 million), its first loss
in 14 years.
Telecoms
Text messages: After a new European Union price cap came into force,
phone users will now pay a maximum of 11 euro cents for sending text
messages from another EU nation, down from an average cost of 28 cents.
These prices do not include VAT.
Transport
Lufthansa: The German airline has named Stefan Lauer, its personnel
director, as board chairman at bmi, the British carrier, which Lufthansa is
progressively taking over. Michael Bishop, the founder of bmi, has agreed to
sell his dominant holding in the airline. Lufthansa now owns 30 per cent of
the carrier but will raise that to 80 per cent.
British Airways: The carrier has called in Acas, the conciliation
service, after failing to reach agreement with unions over job losses and
pay cuts as it seeks to avoid a damaging summer of strikes.
National Express: Lord Adonis, the Transport Secretary, condemned the
company for walking away from its contract to operate the East Coast Main
Line, saying that it was unlikely to be allowed to bid for any more
franchises. He added that he might exercise his powers to strip the company
of its two other franchises: East Anglia and c2c for London, Tilbury and
Southend.
Utilities
British Gas: The utility said that it was creating 2,600 jobs as it
prepares for the launch of its smart meter technology. The announcement came
as the company opened its Energy Academy in Leicester, which will train the
engineers who will be responsible for installing the meters. Earlier this
year it had announced the creation of 1,500 green jobs.
