Economics
Interest rate prospects remained uncertain after Charles Bean, the Bank
of England’s Deputy Governor, said that the latest trends suggested that
inflation was stronger, but growth was weaker, than in the Bank’s May
forecasts.
Retail sales volumes fell 3.9 per cent in June, after a record surge in
May, official data showed. Last month’s drop was the biggest since records
began in January 1986 and cut year-on-year sales growth to 2.2 per cent,
from 7.9 per cent in May, to the lowest for almost two-and-a-half years.
Eurozone economy The RBS/Markit purchasing managers’ index of the
eurozone services sector fell to 48.3 in July, from 49.1 in June. Any figure
under 50 indicates contraction. The index for manufacturing dropped to 47.5,
from 49.2 in June.
German business confidence tumbled in July to 97.5, from 101.2 in June,
the biggest fall since September 2001, figures from the Ifo institute
suggest. Analysts had expected a fall to 100.
Spanish economy Spain’s Government cut its growth forecasts for this
year and next as the country’s unemployment rose to its highest for three
years. It predicted 2008 growth of 1.6 per cent, down from the 2.3 per cent
it previously expected, and 2009 growth of 1 per cent, from 2.3 per cent.
US existing home sales fell to a ten-year low in June to an annualised
figure of 4.86 million, from 4.99 million in May, and 15.5 per cent lower
than in June 2007.
World trade talks in Geneva aimed at salvaging a global free trade
agreement have begun another negotiating session with India, a key player,
warning that it had little new to put on the table.
Banking
& finance
Credit Suisse The investment banking division of Credit Suisse turned a
first-quarter pre-tax loss of SwFr3.5 billion (£1.7 billion) into pre-tax
profits of SwFr281 million for the three months to the end of June, sending
the shares up by more than 5 per cent and valuing Switzerland’s
second-largest bank at SwFr61.3 billion.
Cazenove A former partner at Cazenove, the stockbroker, has been
charged with insider dealing by the Financial Services Authority in the City
regulator’s second criminal prosecution.
Construction
& property
Balfour Beatty, the construction group, said that Balfour Beatty
Communities, its US public- private partnership concession arm, has been
awarded the Air Mobility Command West military housing privatisation project
by the US Air Force, worth more than $410 million (£208 million).
Consumer
goods
Pernod Ricard, the French drinks group, said that after completion of
the €5.69 billion (£4.5 billion) acquisition of Vin & Sprit (V&S),
the maker of Absolut vodka, it would cut its debt by selling €1 billion of
assets, including V&S’s Star Gin and Dry Anis brands and its own Serkova
Vodka. It reported full-year organic sales growth of 8.7 per cent and lifted
its current-year profit growth guidance from 12 to 13 per cent.
Hasbro, the US toy maker, said it had filed a lawsuit in New York
against the creators of the online game Scrabulous, saying it infringes on
Hasbro’s Scrabble intellectual property rights.
English Wines Group, the AIM-listed Kent winemaker, has teamed up with
Richard Phillips, chef-patron of the Michelin-starred Thackeray’s in
Tunbridge Wells, to launch a restaurant at its Chapel Down winery.
Engineering
Rolls-Royce, the engine maker, said that its order book had grown by 17
per cent to £53.5 billion, and half-year underlying profits before taxation
were up by 8 per cent to £410 million.
Torotrak, the car engine transmission maker based in Lancashire, said
first-quarter trading had been in line with market expectations and had
started the new year with a strong engineering order book.
Ford the US carmaker, reported second-quarter losses of nearly $9
billion (£4.52 billion), hit by the slump in the market for US trucks and
bigger vehicles.
Health
SSL International, the company behind Durex condoms, said that its
first-quarter trading is in line with expectations with good underlying
revenue growth.
Synergy Healthcare, the provider of sterilisation and infection control
products, said that its first-quarter sales were up by 29.9 per cent at
£66.2 million and were 14.7 per cent higher excluding the acquisition of
Vernon Carus, the healthcare group.
Industrials
Evraz Group, the Russian steelmaker, is discussing a merger with
Ukraine’s Industrial Union of Donbass to create one of the world’s top five
steelmakers. The combined company would be worth $50 billion (£25.4
billion).
ArcelorMittal, the steelmaker, plans to boost the output of iron ore
from its mines to 80 per cent of its total needs by 2014, spending $6
billion on related acquisitions.
Leisure
Probability, the AIM-listed mobile phone gambling operator, reported a
70 per cent reduction in full-year losses to £1.17 million, helped by a 152
per cent jump in net gaming revenues.
Travelzest, the travel group that caters mainly to older, more affluent
customers, reported strong first-half underlying profit growth but said it
expected its prices to rise by between 5 per cent and 15 per cent next year
because of fuel costs and the strong euro.
Dawnay Shore Hotels, the four-star hotel operator in which Dawnay, Day
has an 8 per cent stake, has distanced itself from the financial group’s
woes by changing its name to Puma Hotels and appointing Shore Capital to
replace Dawnay, Day as asset manager.
Millennium & Copthorne Hotels has been confirmed as the operator of
a £50 million hotel in Southampton’s Ocean Village marina, for which revised
planning consent has just been granted.
Thomas Cook, the tour operator, has named Nigel Northridge, formerly
chief executive of Gallaher, the tobacco group, as a non-executive director.
Media
The New York Times reported a drop in second-quarter profits as the
slowing US economy continued to hit print advertising. The publisher of The
New York Times and The Boston Globe said that income from continuing
operations — excluding its television station group, which was sold last
year — declined by 5.5 per cent to $20.9 million (£10.6 million).
Yell Group, the Yellow Pages publisher, saw its shares rise by 16 per
cent after it announced that it had increased its quarterly earnings and was
trading within its banking covenants.
Natural
resources
African Diamonds has declared a dispute with De Beers after it refused
to accept the terms of the mining licence on the AK6 diamond deposit from
the Botswanan Government, adding that De Beers wishes to delay the project
citing power supply problems. African Diamonds has offered to purchase the
De Beers stake in AK6.
Polyus Gold, the Russian gold producer, said it had launched a pilot
plant at Natalka mine in the Magadan region to test core technical decisions
for the projected Natalka mill. This would be the largest mill in Russia
with the capacity of 30 million tonnes of ore per annum and planned
production of 40 tonnes of gold per annum.
John Wood Group, the energy services company, said that it had secured
a contract with BP to design and install a gas processing plant at the oil
group’s Sullom Voe terminal in the Shetland Islands.
BG Group, the natural gas producer, reported forecast-beating
second-quarter earnings, bolstered by high oil and gas prices and production
and a robust liquefied natural gas business.
BP The future of BP’s investment in Russia hung in the balance after
Robert Dudley, chief executive of TNK-BP, its Russian joint venture, decided
to leave the country.
Anglo American, the FTSE 100 mining group, said that it expects Kumba
Iron Ore, its African unit, to report first-half adjusted underlying
earnings of $247 million (£125.4 million).
Retailing
Marks & Spencer Local authority pension funds plan to file a
shareholder resolution at Marks & Spencer’s annual meeting next year if
the high street retailer continues to breach corporate governance best
practice over the dual role of Sir Stuart Rose, the executive chairman.
Kingfisher, owner of the B&Q DIY chain, saw its shares rise as
warmer weather helped to lift UK revenue on rising sales of outdoor
furniture and barbecues. Like-for-like sales, which strips out gains from
new stores opened in the period, rose by 0.2 per cent during the ten weeks
to July 12.
JJB Sports, the retail group, said that its new store concept would
help it to strengthen its trading position, despite a difficult retail
environment.
Support
services
Capita, the outsourcing group, said the difficult economic environment
was encouraging companies to outsource more of their business, lengthening
its potential client list. It added that it had gained contracts worth £626
million in the first half to the end of June and another £187 million so far
in July.
De La Rue, the world’s largest bank note printer and passport maker,
said that trading since April 1 has been in line with internal expectations,
boosted by strong banknote demand.
Scott Wilson, the design and engineering consultancy, said that it has
acquired Benaim Enterprise (Holdings), the Mauritius-based consultancy
group, for a maximum of £5.5 million.
Moneysupermarket.com The Ontario Teachers’ Pension Plan, one of
Canada’s largest pension funds, has admitted that it had made an approach to
moneysupermarket.com, but its proposal had been rejected by the price
comparison website.
Latchways, the designer and maker of engineered fall protection safety
systems, said its business remains unaffected by market conditions as the
order intake from its UK installer business is ahead of last year.
Technology
Misys, the banking and healthcare software group, boosted its full-year
operating profits by 37 per cent to £81 million, adding that the
requirements of many banks and institutions had been unaffected, despite the
credit crunch.
ARM Holdings, the computer chip designer, said its second-quarter
normalised pre-tax profit had narrowed by 6 per cent to £21.1 million
because of challenging market conditions, but added that it reiterates its
full-year guidance given in February and April.
Qualcomm, the computer chip maker, saw its shares rise by more than 20
per cent after it announced that it had settled a long-running legal dispute
with Nokia, the mobile phone maker.
Telecoms
COLT Telecom, the London- listed telecoms services provider which is
based in Luxembourg, said it expected improved full-year results after it
reported a forecast-beating 12.7 per cent rise in second-quarter core
earnings, sending its shares up.
Transport
EasyJet, the low-cost airline, warned investors that it expects its
full-year profits to slide by as much as 43 per cent to between £110 million
and £120 million, compared with £191 million last year, because of record
high prices for aviation fuel. The slump in profits is worse than the £138
million that analysts had expected.
Continental Airlines, Members of the Star Alliance airlines have filed
an application with the US Department of Transportation for Continental
Airlines to join the group of nine carriers that already hold antitrust
immunity. Approval would enable the carriers to work together to deliver
competitive flight schedules, fares and service.
Wincanton, the distribution and logistics group based in Wiltshire,
said it expects its new financial year to be “challenging” as the economic
slowdown affects many of its customers and markets.
Utilities
Scottish & Southern Energy, the utility group, has issued a warning
that its first-half profits will be substantially lower than in previous
years. Ian Marchant, chief executive, said that it was becoming increasingly
difficult to keep retail energy prices down as wholesale prices soar.
Novera Energy, the wind farm developer, reported a wider first-half
pre-tax loss of £2.2 million, and said it plans to raise £14.4 million to
fund its wind development programme.
