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Economics
UK housing: UK home prices achieved their first annual gain in 19
months in October as low interest rates and improved confidence encouraged
buyers, according to the Nationwide Building Society. The average cost of a
home rose 0.4 per cent to £162,038, month-on-month, and 2.0 per cent from
the year earlier.
EU: European Union leaders at the 27-nation summit in Brussels
yesterday said that it was too soon to withdraw emergency measures enacted
to counter the recession.
Germany: Retail sales in Germany unexpectedly fell for a second month
in September after companies shortened working hours, leaving people with
less pay to spend. Sales, adjusted for inflation and seasonal swings, fell
0.5 per cent from August, when they dropped 1.8 per cent, according to the
Federal Statistics Office.
Banking
&
finance
Royal Bank of Scotland: The bank may be radically shrunk and overseas
operations and major assets could be sold as part of the agreement with the
Government over use of the state insurance scheme for toxic assets.
Nationwide: Fitch, the ratings agency, said that a “challenging”
economic climate would dent the building society’s loan book. Fitch, which
cut its outlook on Britain’s biggest mutual from “stable” to “negative”,
said that pressure on profits would intensify over the next year. Andrea
Jaehne, a Fitch director, said: “Fitch believes the society’s asset quality
is likely to show modest signs of weakening from its robust position given
the agency’s moderate economic outlook for the UK.”
F&C Asset Management: The group said its funds under management had
jumped 12.3 per cent to £99.2 billion in the three months to the end of
September after it gained from recovering investment markets and mandate
wins. Alain Grisay, chief executive, said F&C had a pipeline of mandates
worth £1.4 billion that had been won but not yet allocated.
Construction
&
property
Your Space: The serviced office provider, has drawn up plans for a
company voluntary arrangement (CVA) to avoid administration. The AIM-listed
company said that it was asking unsecured creditors that were owed £5.5
million to compromise on some payment claims. Your Space has suffered from a
fall in demand from occupiers.
Valuations: Mortgage lenders are using “no win, no fee” solicitors to
threaten property surveyors with negligence claims for valuations on homes
that have since suffered steep falls in value and been repossessed.
The “confetti letters” are being sent to valuers, on behalf of lenders,
after solicitors contacted banks and offered to investigate valuations’
accuracy.
Consumer
goods
Estée Lauder: The upmarket cosmetics company reported a higher
than expected jump in quarterly profits and raised its 2010 forecast after
retailers stocked up on new products and the cosmetics maker cut back on
spending. Estée Lauder earned $140.7 million (£85.5 million) in its first
quarter, up from $51 million a year earlier.
Sony: The consumer electronics company reported a smaller than expected
26.3 billion yen quarterly loss as cost cuts — plus strong sales of
PlayStation 3 game consoles and Michael Jackson hits — helped it to inch
toward recovery. The Japanese electronics and entertainment giant has been
hit by the global slowdown, sliding prices of gadgets and failure to produce
new blockbuster consumer products. It is now forecasting a 95 billion yen
(£640 million) loss for the year, after an initial projection of a 120
billion yen loss.
Samsung Electronics: The consumer electronics group said third-quarter
net profit tripled to a record amid higher prices for computer memory chips
and increased sales of consumer products from flat-screen televisions to
mobile phones. South Korea’s biggest corporation earned 3.72 trillion won
(£1.9 billion) in the three months to September 30, up from net profits of
1.22 trillion won a year earlier. The previous record profit was 3.14
trillion won in 2004’s first quarter. Sales rose by 29 per cent to a record
24.86 trillion won in the quarter, from 19.3 trillion won a year earlier.
Engineering
Airbus: The planemaker may delay until January delivery of one or two
of the 13 superjumbo A380s scheduled for this year. Airbus said delivery
would depend on airlines’ ability to take them into their fleets in a
traditionally quiet period for aviation. The comments were made as Airbus
delivered its first A380 to Air France-KLM.
Rolls-Royce: The engine manufacturer has won a $720 million (£438
million) deal to supply Trent 700 engines for ten aircraft bought by Virgin
Atlantic. Deliveries are to start in 2011, with Rolls-Royce powering six new
Airbus A330s. The remaining orders will be fitted to four aircraft Virgin is
leasing from AerCap.
Lookers: The car dealership said it is “very confident” about the full
year after strong used-car sales and the Government’s scrappage scheme
boosted performance. It said trading during the third quarter to September
30 had stayed strong and was “significantly ahead” of budget. Robust
used-car sales volumes offset a weaker new car market in the financial
year’s first nine months, it said.
Audi: The German carmaker said that operating income fell 54 per cent
in the third quarter as the global downturn affected demand in most regions
and costs rose because of new launches. Audi reported an operating income of
€348 million (£311 million), down from €760 million in 2008’s July-September
period. Audi generated revenue of about €7.2 billion between July and
September, after €8.4 billion a year earlier, a fall of nearly 15 per cent.
Health
Shire Pharmaceuticals: The company swung to a net profit in the third
quarter, despite a 74 per cent fall in sales of its Adderall XR drug after
the hyperactivity pill was opened to generic competition.
Leisure
Merlin Entertainments Group: The Madame Tussauds and Alton Towers
operator has won planning consent to build a 254-room Lego-themed hotel at
its Legoland park in Carlsbad, California.
Rank Group: The Mecca Bingo and G Casinos operator urged the Treasury
to cut bingo duty to 15 per cent and not to raise further the tax on
amusement machines.
Media
WPP: Sir Martin Sorrell, head of WPP, the advertising group, offered a
new term to describe prospects for the world economy as he predicted a
“LUV”-shaped recovery. He said it would be L-shape for Western Europe,
U-shape for North America and V-shape for Brazil, Russia, India and China.
WPP’s revenue was £2.01 billion from July to September, up 6.7 per cent on a
year earlier.
Natural
resources
BP: The oil group has been fined $87 million (£53 million) for safety
violations at the Texas refinery where an explosion killed 15 people in
2005.
Rio Tinto: The miner has doubled its planned 2010 capital spending to
at least $5 billion (£3 billion) after cutting debt and seeing signs of
economic recovery. Rio’s capital spending in 2010 was due to be cut to $2.5
billion, just enough to sustain its mines, but current plans are for $5
billion to $6 billion.
Retailing
John Lewis: The retailer said that furniture sales were the “crowning
glory” of a strong week for homewares at its department stores. Sales of
beds and bedroom furniture were the highest ever, except in clearance
periods, in the week to October 24. The 11.5 per cent rise in home division
sales was in comparison with a very weak period last year amid the financial
crisis. The firm opened a smaller-format store during the week in Poole. The
“John Lewis at home” sells home and electrical goods and has a coffee bar.
Threshers: The collapse of Threshers and sister off-licences will lead
to closure of up to 600 shops, with the possible loss of 3,000 jobs,
administrators to First Quench Retailing said.
Support
services
White Young Green: The environmental consultancy reported a full-year
pre-tax loss of about £128.9 million because of tough market conditions. It
said that trading in its current year is in line with expectations and that
it had agreed a capital restructuring.
Technology
Facebook: The social networking site was awarded damages of $711
million (£431 million) against a spam boss who accessed users’ accounts and
posted fake messages. Facebook declared “an important victory” against
online junk mailers after declaring in a blog that it had successfully sued
Sanford Wallace in a Californian court. The internet marketer, known as the
“Spam King”, was referred by the judge to the US Attorney’s Office with a
request that he be prosecuted for criminal contempt. Facebook’s blog said:
“While we don’t expect to receive the vast majority of the award, we hope
that this will act as a continued deterrent.”
Telecoms
IPhone: Apple’s iPhone made its formal debut in China, the world’s most
populous mobile phone market, at higher prices than widely available black
market models. Apple’s partner, China Unicom, hopes the sleek smartphone
will give it an edge against its rival China Mobile. Unicom began selling
iPhones equipped for third-generation service at 2,000 stores. Unicom’s
first iPhones lack wi-fi, a possible handicap with sophisticated, demanding
Chinese buyers.
Transport
British Airways: The dispute between the airline and its 14,000 cabin
crew worsened as Unite, the union, said that it is to seek an injunction to
prevent the company imposing contract changes.
National Express: The board of National Express was under growing
pressure last night to resume takeover talks with Stagecoach after the
beleaguered transport group’s largest investor, the Cosmen family of Spain,
which holds 18.6 per cent of National Express, publicly berated it for
rejecting Stagecoach’s approach.
Air France: The airline yesterday took delivery of its first Airbus
A380 superjumbo and will become the first European carrier to fly the
double-decker when it uses it on its Paris-New York route from November 20.
The first of 12 A380s Air France ordered was handed over at a ceremony at
Airbus’s plant at Hamburg, Germany.
Utilities
Edison: The Italian energy group’s net profits fell 30 per cent in the
third quarter, but earnings were stable despite a tough nine months to
September, it said. The electricity and gas group said that net profits in
the quarter fell to €81 million (£72 million), citing a weakening market
this year. Sales were off 16 per cent at €1.9 billion, but pre-tax earnings
were stable at €396 million in the quarter. Over the first nine months of
2009, net profit was down by 7.3 per cent at €203 million.
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