Economics
German producer price inflation accelerated in May to its highest level
since July 2006. Prices increased by 1 per cent month-on-month and by 6 per
cent over the year, fuelled by a sharp rise in energy costs. In April,
prices were up 1.1 per cent on the month and 5.2 per cent on the year.
French economic growth will slow to 1.6 per cent this year because of
surging energy prices, the global economic slowdown and a strong euro,
INSEE, the French statistics office, said. INSEE said that French economic
growth would slow to just 0.2 per cent in the second quarter and come to a
standstill in the third quarter before picking up to 0.2 per cent in the
fourth quarter.
Crude oil prices climbed yesterday despite hopes that an 18 per cent
rise in petrol and diesel prices in China would cut demand for fuel and lead
to lower prices globally.
The UK’s rising cost of living is hitting middle-class wallets
harder than all other sectors of society, Times analysis suggests, with the
cost of public schools and private healthcare rising far more quickly than
the official rate of inflation.
Banking
& finance
The US Government is preparing to make hundreds more arrests in its
attack on mortgage fraud after indicting 400 people in relation to the
credit crunch.
Japan’s financial institutions have received official blessing
for a new mood of aggression as they turn their sights on deals with the
outside world.
Barclays has secured a cash injection from one of Japan’s biggest
financial groups as part of the British bank’s plan to raise more than £4
billion to bolster its balance sheet. Barclays is in the final stages of
negotiating an investment by Sumitomo Mitsui Banking Corporation thought to
be worth £480 million.
HBOS’s shares yesterday fell below the bank’s rights issue price
despite the Financial Services Authority’s crackdown on short-selling.
HSBC, the bank, will open its inaugural operations in Georgia on
Monday, with a six-storey branch and head office in Tbilisi, the capital.
HSBC, which is launching the business with an initial 44-strong workforce,
said that Georgia is one of the most dynamic economies of the former Soviet
Union, with real GDP growth of 12.4 per cent last year.
Lloyds TSB yesterday appointed Martin Scicluna, the former chairman of
Deloitte UK, to its board as a non-executive director, starting in
September. Mr Scicluna has been with Deloitte, the accounting firm, since
1973 and was its chairman from 1995 to May this year.
Credit Suisse is cutting about 75 jobs in its investment bank and
support services in Britain, the latest sign that market conditions are
affecting City jobs.
John Redwood, the Conservative MP, is behind a new asset management
venture that is aimed at super-rich investors. He has set up Pan-Asset with
Robert Brown, former chief executive of Sarasin Chiswell, the fund manager.
Construction
& property
Barratt Developments’ shares leapt 25 per cent yesterday after reports
that the embattled housebuilder had reached a deal with banks to put its
finances on a firmer footing. Page 61
Land Securities’ five-man executive team in charge of the UK’s largest
commercial property company, have been awarded annual pay packages and
incentives worth a total of £10.3 million. The company turned in a full-year
pre-tax loss of £888.8 million.
MJ Gleeson, the housing and property development group, has announced
office closures and a sweeping restructure as it battles against
“exceptionally difficult” trading conditions. It said it was scaling down
its Hampshire headquarters, closing its Sheffield office and winding down
operations in southern England as part of a restructuring of its
Regeneration and Homes business. About 170 people work in the division and
it is understood that about a third of its jobs will be cut. Gleeson
currently employs 450 people.
Balfour Beatty has acquired Schreck-Mieves, a German rail engineering
group, for €36 million. It said that Schreck-Mieves would add volume through
market share growth and geographical expansion within Germany.
Schreck-Mieves also has operations in Holland and Russia.
Battersea Power Station’s new owner has unveiled plans to build a 300m
(980ft) “eco-dome” next to the London landmark as part of a conversion of
the entire site that will cost £4 billion and take 12 years. Real Estate
Opportunities (REO), the AIM-quoted owner of the power station, is proposing
that the complex include homes, hotel and offices. REO also plans to use two
of the landmark’s four white chimneys, which have lain dormant for a quarter
of a century, to help to power the new riverside flats through an
energy-efficient electricity generator installed in the station’s basement.
Consumer
goods
Unilever offices have been raided by EU officials in a price-fixing
investigation. Offices of the Anglo-Dutch consumer goods group in the
Netherlands, Spain, Belgium and Austria were visited by antitrust
inspectors.
Antichi Pellettieri Bags (APB) is to have 3i Group as a major investor.
The British investment company has signed a binding offer to buy a 49 per
cent stake in the bags and accessories division of Italy’s Antichi
Pellettieri for up to €128 million. APB owns brands such as Coccinelle and
Braccialini. 3i is paying €118 million on closing the deal and up to €10
million based on performance.
Engineering
Ford, the carmaker, has given warning that the high oil price and
anxieties about the American economy will plunge the carmaker even deeper
into the red as it cuts production by a quarter.
Alstom and its consortium partners Besix and Sercoa have formally
signed a contract for the first phase of the Al Safooh tram network in Dubai
with an option for the second phase. The first phase is worth more than €550
million (£435 million), of which nearly €300 million will go to Alstom. The
project, to go into commercial service in 2011, will initially include 11
trams, a 10km (six-mile) line and 13 stations.
Health
Nestor Healthcare Group said that results for the first five months of
the year are line with expectations and that there has been no change in the
financial position of the company since it issued an interim statement on
May 19. It added that it has not received any further approaches for the
company.
Industrials
Haike Chemical Group, the China-based petrochemicals company, said that
the latest increase in the guideline selling prices for petrol and diesel
from the People’s Republic of China National Development and Reform
Commission would enhance the company’s ability to generate further revenue
and profits, helping to offset the reduction in petrochemical margins and
profit.
Leisure
Mitchells & Butlers, the pub operator, confirmed that Roger Carr
has stepped down as chairman and nonexecutive director and that Drummond
Hall has been made nonexecutive chairman. M&B also confirmed that Aaron
Brown and Tim Smalley have been made nonexecutive directors.
Rank Group, the UK casino and bingo company, now has Asia-based Guoco
Group as a 14.15 per cent shareholder after it raised its stake. Guoco has
been gradually building its stake since January, when it held about 4 per
cent.
Travelzest, the travel group, has bought The Cruise Professionals, a
Canadian luxury cruise retailer, for an initial sum of £6.5 million from its
owner, Mary Jean Tully. The acquisition is the biggest provider of luxury
cruises in North America and in the year to April 30 had turnover of C$33.7
million (£16.9 million).
Media
The BBC will on Monday make an unprecedented proposal to cooperate with
commercial broad-casters. Mark Thompson, its Director-General, will suggest
that the BBC help commercial rivals by offering to exploit their programmes
internationally and by sharing new technologies.
St Ives, which prints the Harry Potter books for Bloomsbury, the
publisher, reported underlying sales up 1.6 per cent in the 43 weeks to May
30, but said that conditions had been tougher than expected.
Aegis, the marketing company, has acquired Globlet, a Thai search
specialist. Aegis said that its Isobar unit will rebrand Globlet as
iProspect Thailand. The deal comes after acquisitions of search businesses
in Belgium, the Netherlands and Germany this year, as Isobar continues a
global rollout of iProspect offices.
Britain’s computer games industry has given warning that it could
wither and die if the 10,000 people who develop the games are not supported
with tax breaks and relevant degree courses.
Rambler Media has bought the remaining 49 per cent of Price Express,
the Russian product-comparison internet service. The transaction is expected
to be completed in July upon regulatory approval. Price Express operates
Price.ru, the second-largest price comparison site in Russia and generated
revenues of $3.2 million (£1.6 million) last year.
Live Nation, the world’s biggest live music company, has been hit by a
boardroom dispute that has resulted in Michael Cohl, the chairman,
negotiating his exit.
Natural
resources
BG Group, the natural gas group, has signed an agreement with Castle
Peak Power Company in Hong Kong to supply one million tonnes of liquefied
natural gas a year for up to 20 years. Initial deliveries are expected to
begin in 2013.
Antofagasta said it had received environmental approval for its
Esperanza copper-gold project in Chile. The approval will allow construction
of the project to progress as planned, with first production expected at the
end of 2010. The company estimates the project’s cost at $1.9 billion (£961
million).
Gazprom Neft’s president, Alex-ander Dyukov, said that his company will
within the next six weeks take a decision on whether to develop a block of
oilfields in Iran. Gazprom’s oil production unit has already obtained the
terms of the projects and it is examining them.
GCM Resources said it is not aware of any developments in its business
or expectations to account for recent moves in its share price, adding that
it is still working to gain approval from the Government of Bangladesh for
the Phulbari Coal project. GCM noted press reports that the coal policy is
being finalised, but said it had not been notified of this.
Retailing
Moss Bros said that its chairman, Keith Hamill, has retired with
imediate effect. The menswear retailer said that Mr Hamill had announced his
planned retirement in November 2007 but deferred it in early April because
of a potential bid from a consortium led by the Icelandic Baugur Group.
John Lewis, the department store chain, suffered a 4.4 per cent fall in
sales last week as concern about the Shell tanker drivers’ strike deterred
already cost-conscious customers from driving to out-of-town stores. Only
three of a total 23 John Lewis stores have reported an increase in sales
over the past 20 weeks.
Halfords Group, the car parts and bicycle retailer, has appointed David
Wild as chief executive to succeed Ian McLeod. Mr Wild is currently senior
vice-president for new business development for Wal-Mart, the American
supermarket group, and previously worked for Tesco.
J Sainsbury yesterday claimed to have received a record number of
online orders on its home shopping website after finally resolving a
technical glitch that forced it to suspend the service for two days.
Support
services
White Young Green confirmed that it has received an approach about a
possible offer for the planning and construction consultancy company. It
said that there could be no certainty that an offer would be made and
advised shareholders not to take any action at this time.
Technology
Mobile WiMax, the latest phase of next-generation on-the-go web
surfing, is to be trialled in Maidstone, Kent.
Lombard Risk Management said that the overall profit in its second half
was not sufficient to outweigh first-half losses, and so it would report an
overall loss for its year, although it would be “substantially below” last
year’s loss.
Telecoms
T-Mobile is cutting roaming rates by up to 80 per cent for internet
access and mobile broadband usage across Europe. The cost of sending a text
within Europe will be cut by 38 per cent, from 40p to 25p. The move comes
five months after Ed Richards, head of Ofcom, the regulator, urged mobile
operators to reduce roaming rates.
Belgacom said that it is considering acquisitions worth up to €10
billion (£7.9 billion), most probably in the high-speed fixed-line internet
or convergent market.
Transport
Stobart Group, the haulier that owns the famous Eddie Stobart lorries,
is managing to pass soaring diesel prices on to its customers. The company,
which has not joined in recent fuel protests against the fuel escalator tax,
passes increases in fuel costs straight through to customers each week. It
added that it had made a good start to the year and, despite continued
speculation of an economic slowdown and rising fuel prices, it continued to
trade in line with management expectations.
Utilities
Suez’s Suez Energy South America Participaes (SESA) said that nearly 51
per cent of Econergy International’s shareholders had accepted its £39.2
million, or 45p-a-share, cash bid for the company.
