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Economics
Services conditions: The services sector, accounting for two thirds of
the UK economy excluding retailing, registered a second consecutive month of
renewed expansion in June, the latest CIPS/Markit purchasing managers’
survey showed. However, the CIPS headline index of activity fell slightly to
51.6 for last month, from 51.7, as new orders dipped again. Confidence among
services businesses still reached its highest since October 2007.
Equity repayments: Homeowners paid down a record net total of £8.1
billion in housing market equity in the first quarter, the Bank of England
reported. The figure includes repayments of mortgage debt, as well as cash
purchases of properties, and was the biggest net injection of equity into
residential property since 1970, rising from £7.76 billion in the final
quarter of last year.
Eurozone services: Services businesses in the eurozone reported that
the sector continued to contract, and at a faster pace, during last month.
Revised data from the Markit purchasing managers’ survey showed a headline
index of 44.7, down from 44.8 in May.
Eurozone retail sales: Sales at stores in the 16-nation eurozone
suffered a sharper than expected 0.4 per cent drop in May, leaving them 3.3
per cent down on levels a year earlier, official data reported.
Banking &
finance
Financial markets: Derivatives pose risks on financial markets that
central clearing of contracts would mitigate, the European Commission said.
Charlie McCreevy, the EU Internal Market Commissioner, opened an inquiry
into the sector in October, after the collapse of Lehman Brothers, a bank
heavily involved in the global $600 trillion (£367 trillion) off-exchange
derivatives market. In findings published yesterday, he said that
standardisation of contracts — a process already under way — was also
needed, as well as creation of a central data depository to store records of
trades.
Construction
&
property
Farm properties: Lifestyle buyers may have resumed their hunt for a
farmhouse in the English countryside after standing back during the housing
slump, according to figures from Knight Frank, the estate agent.
Balfour Beatty: The UK’s biggest builder said its order book is in line
with a £12.8 billion target and that it generated net cash of £200 million
in the first half of 2009.
Marshalls: The supplier to the construction and home improvement
markets, reported a 21 per cent drop in first-half revenue. Graham Holden,
chief executive, said that wider pressures on the economy would cancel out
positive effects of any seasonal boost in demand.
Grafton: Weak housing market conditions have severely hit profits of
the Irish building group, which reported a 31 per cent fall in first-half
turnover from €1.4 billion (£1.2 billion) to €990 million.
Consumer
goods
Unilever: The food and household products group’s business in Russia is
thriving, with the crisis a good time for the company to expand, a Unilever
executive said. “Our business is still very buoyant,” Antoine de
Saint-Affrique, executive vice-president, told Reuters Television. “The
crisis is actually a fantastic time for expansion. Crisis does not mean that
people are eating less or trying to be less beautiful, so it is an ideal
time to keep investing.”
Engineering
Rolls-Royce: The aerospace company has won a £288 million order from
Turkish Airlines for Trent engines to power seven aircraft. The company said
that the contract included long-term service support.
Baxi: The debt-troubled UK heating products maker has agreed to merge
with De Dietrich Remeha, its Dutch rival. Private equity-owned Baxi, which
had debt of £630 million at the end of 2008, said that the combined group
would have turnover of €1.8 billion (£1.5 billion) and employ 6,400. It will
be majority-owned by Remeha Group and be the third-biggest boiler maker in
Europe, after the German groups Vaillant and Robert Bosch.
Opel: Beijing Automotive, the Chinese state-owned carmaker, has
submitted an indicative, non-binding offer for General Motors’ German
carmaker, Opel, sources said. It planned to make a binding offer by
mid-July, they said. GM Europe declined to comment. Canada’s Magna is
front-runner to buy Opel. RHJ International is also in the running.
Piaggio: The Italian scooter maker, revised 2010 targets downwards in a
new three-year plan. The maker of Vespa scooters said it expected turnover
next year to be €1.605 billion, down from the €1.95 billion forecast in its
previous plan, before the financial crisis hit consumer demand.
Health
Sorin Group: The medical device group, a leader in treating
cardiovascular diseases, has announced Japan’s approval to market the Facil
and Reply families of dual-chamber and single-chamber rate-responsive
pacemakers.
Leisure
Punch Taverns: The pub company narrowly avoided embarrasment when
shareholders approved its £375 million equity issue by the slimmest of
margins. It will use the proceeds to reduce its £4.4 billion debt mountain.
Whitbread: The leisure group’s budget Premier Inn chain announced the
signing of 12 new deals, including four in London and one in Belfast’s new
Titanic Quarter waterfront development.
Gaming machines: The Gambling Commission’s review of high-jackpot
Category B gaming machines has found “very little consensus about the extent
to which gaming machines cause gamblers to become problem gamblers”. The
finding was seen as good for big bookmakers, which have thousands of these
machines.
Media
United Business Media: UBM has bought Iasist, based in Barcelona, from
Inflexion Private Equity for €6.4 million (£5.5 million) to boost its
CMPMedica healthcare division. Iasist provides benchmarking data and
software to health authorities and hospitals.
South China Morning Post: The Hong Kong newspaper has named a top Wall
Street Journal editor as it new editor-in-chief. Reginald Chua, 48, most
recently served as deputy managing editor of the Journal, based in
New York.
Natural
resources
BHP Billiton: The world’s biggest miner said it had agreed to sell an
Australian nickel refinery to Clive Palmer, an Australian businessman, for
an undisclosed sum. However the Anglo-Australian group added that it had
written down the value of the refinery in Queensland by about £413 million.
Gas: Three African countries have signed an accord to build a £6
billion trans-Saharan gas pipeline linking vast reserves in Nigeria to
Europe. The 4,000 kilometre (2,485 mile) pipeline will run from the Niger
Delta.
Retailing
JJB Sports: The sportswear retailer is planning to raise a significant
sum from shareholders, in the next four to six weeks, The Times has
learnt.
Tesco: The retailer suffered a bruising protest by investors when more
than 40 per cent of those voting at its annual meeting opposed a plan to
modify its share option scheme.
John Lewis: The department store chain’s sales fell 3.7 per cent to £51
million in the week to Saturday, after a rise of 2.2 per cent the previous
week. John Lewis said it had been a good week, given distractions from
tennis, rugby and the weather at the start of its summer sale on Saturday.
The weather had the opposite effect on Waitrose, the grocery arm of the John
Lewis Partnership, which reported a 10.1 per cent rise in sales in the week.
Sales of quiches rose 28 per cent against a year ago.
Coffee Republic: The core UK division was poised to be placed into
administration after its parent group said that it had lodged court
documents, asking that shares be suspended “pending clarification of the
financial position of certain subsidiaries”. Coffee Republic has 184 outlets
across Britain.
Support
services
Linklaters: The law firm disclosed record full-year revenues of £1.29
billion, edging past Freshfields Bruckhaus Deringer as Britain’s
highest-grossing law firm. Despite the strong result, pre-tax profits fell
by 9 per cent to £513.6 million as Linklaters absorbed restructuring costs.
Cosalt: Shares in Cosalt, the marine safety group in which David Ross,
the Carphone Warehouse co-founder, is a major shareholder, fell 12 per cent
after it announced a half-year loss and gave warning that it may breach
banking covenants. The company, bought by Mr Ross’s grandfather nearly 60
years ago, reported a £3.4 million half-year pre-tax loss, after a £777,000
profit a year ago. This was despite a 6.6 per cent rise in sales in the
period — to £52.8 million — and was mainly due to £3.9 million of one-off
costs.
Technology
Autonomy: has won a “multimillion-dollar” licensing agreement with a US
national law enforcement agency to use its software for investigative
purposes.
Innovision Research and Technology: The maker of mobile phone chips
said that it is raising £5.4 million to capitalise on market opportunities.
It is placing 30 million shares at 18p, a 34.5 per cent discount to
Thursday’s closing price of 27½p. The placing represents about 32.7 per cent
of the enlarged share capital.
Telecoms
BT: The telecoms group has come under scrutiny over lucrative executive
pay packages. The Association of British Insurers, the shareholder body, has
put an “amber top” rating on BT ahead of its annual meeting, and Pirc, the
consultancy, has branded the rewards on offer “potentially excessive”. Ian
Livingston, BT’s chief executive, could land an annual bonus of double his
£802,000 salary, a deferred share bonus worth the same sum and incentive
shares worth three times his basic pay.
Transport
British Airways: The airline is to cut spending by a fifth and reduce
capacity to preserve cash.
Ryanair: Europe’s largest airline by passenger numbers said that it had
carried 5.84 million passengers in June, 13 per cent more than a year
earlier. Load factor, a measure of how full its aircraft are, rose by one
percentage point to 85 per cent, compared with the same month in 2008, the
low-cost airline said.
Transport fuels: The EU is likely to achieve its target of generating
10 per cent of transport fuels from renewable sources by 2020 by blending
biofuels with fossil fuels, an EU researcher said. Most blending is likely
to use first-generation biofuels produced with food crops, Giovanni De
Santi, of the European Commission’s Joint Research Centre, said.
Utilities
E.ON: About 1.8 million E.ON customers will have their gas bills cut by
3.3 per cent, saving them about £25 a year, the energy group said. E.ON said
that the cut, which comes after a 9 per cent decrease in electricity tariffs
on March 31, would take effect today. It is also scrapping standing charges
for gas prepayment in a move affecting 200,000 meter customers.
Airtricity: Two hundred jobs will be created by Airtricity, a renewable
energy company based in Dublin, as it steps up an electricity price war.
