Economics
Inflation risks A renewed warning that inflation-busting pay deals will
force the Bank of England to keep interest rates higher for longer has been
issued by Tim Besley, the most hardline member of the Bank’s rate-setting
committee.
Credit crunch dangers The global financial crisis could trigger the
failure of a large bank in the United States within months, according to
Kenneth Rogoff, a former chief economist of the International Monetary Fund.
German producer prices, for the cost of goods leaving factories,
registered their sharpest monthly increase since 1974, rising by 2 per cent.
The rise lifted their annual pace of increase to a 27-year high of 8.9 per
cent.
German business climate The ZEW economics institute’s gauge of German
investor expectations, based on a poll of 297 analysts and investors, rose
to minus 55.5 for August, from a July reading of minus 63.9.
US producer price inflation climbed in July to a 27-year high of 9.8
per cent as the cost of goods leaving American factories rose by 1.2 per
cent, more than double the expected monthly increase.
Banking
& finance
Libertas Capital, the financial services group, said that it had closed
its Swedish office and cut staff in its Los Angeles office by two thirds. In
July it said that it would incur a first-half loss because of difficult
trading conditions and that its revenues were unlikely to rise above £4
million.
Alliance & Leicester The chief executive of Alliance &
Leicester will receive a bonus of up to £750,000 if he stays with the lender
after it is taken over by Santander, the Spanish bank that is planning to
buy it for £1.3 billion.
Construction
& property
Brixton, the owner of industrial and warehouse space, reported a
half-year loss of £236.7 million, compared with a £192.3 million profit a
year ago, and said that a lack of sales had led to “confusion and denial”
over commercial property prices.
Wienerberger, the world’s biggest brickmaker, which is based in
Austria, has blamed a sharp downturn in its profits on the collapse of
construction markets in Britain, the United States and Germany. Full-year
pretax profits have fallen by 31 per cent to €118 million (£93.1 million) as
construction sites in the company’s three biggest markets have come to a
standstill.
Consumer
goods
Greencore, the biggest sandwich supplier to supermarket chains,
reported that it remained on track to meet its full-year targets despite the
difficult trading environment. The group, which uncovered an accounting
discrepancy at its Scottish mineral water division in June, added that it
had replaced PricewaterhouseCoopers as its auditor.
Engineering
Hampson Industries, the engineering group based in the West Midlands,
said that its American unit had received a letter of intent from Airbus, the
European aircraft maker, to supply initial wing and fuselage curing tools
for the Airbus A350 programme.
Royal OrdnanceThe Ministry of Defence has agreed a £2 billion contract
to secure the future of Royal Ordnance in a deal that could lead to a sale
of the historic ammunition factories. BAE Systems, the defence company, owns
Royal Ordnance.
Health
Bayer, the German pharmaceuticals and chemicals group, said that its
VEGF Trap-Eye injection, developed jointly with Regeneron Pharmaceuticals,
had been shown to improve vision in patients with wet age-related macular
degeneration when used over one year.
Industrials
Ciba, the Swiss chemicals group, reported a first-half net loss of
SwFr569 million (£279.7 million), compared with a SwFr103 million profit
last time. The company’s loss was because of a goodwill impairment of
SwFr595 million in its water and paper treatment unit, which the company
said that it may sell, along with its publication inks business.
Crown Paints Endless, the private equity group, is buying Crown Paints,
the Lancashire-based paint supplier, for £70 million. Akzo Nobel has been
forced to sell Crown Paints after its £8 billion takeover of ICI at the end
of last year also gave it ownership of Dulux paints and a 50 per cent share
of the market.
Leisure
Gala Coral, the privately owned gambling operator, has launched an
employee consultation process at the Gala Casino in Piccadilly which could
result in the closure of the Central London venue.
Hotel deals The value of hotel deals in Europe, the Middle East and
Africa fell by 62 per cent to $6.4 billion (£3.4 billion) during the first
half of the year, with Middle Eastern investors accounting for 30 per cent
of volumes, according to a report by Jones Lang LaSalle Hotels.
Media
Galleon Holdings, which specialises in intellectual property rights,
said that it had signed its first distribution agreement in the United
States for the Skunk fu! toyline with Zizzle Toys.
Natural
resources
BG Group The war of words between BG Group, the British oil and gas
explorer, and Origin Energy, the Australian coal seam gas producer, flared
up again as the two energy companies disputed the value of BG’s £6.55
billion cash bid for Origin.
Fresnillo, the Mexican silver producer, reported a 56 per cent rise in
first-half profits to $141 million (£75.7 million), thanks to strong metals
prices, and said that costs may fall in the second half.
Wellstream Holdings, the oil services group based in Newcastle upon
Tyne, said that it had won a four-year framework agreement from Petroleo
Brasileiro worth more than £600 million. Ascent Resources, the
AIM-listed oil and gas exploration company, said that the production of gas
from the PEN104 well in the Penzlek area of Hungary had reached a stabilised
average rate of 88,200 cubic metres per day, or 520 barrels of oil
equivalent.
Retailing
Online retail sales rose during July by 15.2 per cent to £4.8 billion,
in contrast to the slowdown seen on the high street. IMRG, the web monitor,
said that the sharpest increases had come in the clothing and lingerie
sectors, which were up by 22.8 per cent and 39.1 per cent respectively.
Signet Group, the London-listed jeweller, said that its shareholders
had approved its proposal to move its parent company’s primary listing to
the New York Stock Exchange and its domicile to the tax haven of Bermuda.
Halfords, the car parts retailer, said that Richard Pym, its chairman,
had resigned from the company, having agreed to join the board of Bradford &
Bingley as chief executive. Nigel Wilson, the senior independent director,
will stand in as chairman while it searches for a successor.
Findel, the home shopping group based in West Yorkshire, said that
sales to August 15 were 2 per cent higher than a year earlier, with bad debt
levels falling from the peak seen in March. It added that it expected a
satisfactory outcome for the year to March 31.
Marks & Spencer’s share of the food market has fallen again,
despite heavy discounting and the decision to sell branded products for the
first time in 50 years. Industry-wide figures estimate that food sales at
the high street retailer fell by 1.4 per cent in the four weeks to August
12.
Support
services
Office2office, the Norwich-based business supplies and managed services
company, reported slightly higher six-month pretax profits of £5.6 million.
It added that its withdrawal from a Ministry of Defence supply arrangement
and the challenging economic conditions had been offset by the positive
impact of a business restructuring and two recent acquisitions.
Aggreko, the temporary power provider, has bolstered its presence in
the oil and gas sector by acquiring Power Plus, of Canada, for a maximum of
£19.5 million. The Edmonton-based company provides equipment to businesses
in the Athabasca oil sands in Alberta and Saskatchewan.
Tribal Group, which inspects about a third of Britain’s secondary
schools for Ofsted, the regulator, said that its business was showing
resilience in the tough economic conditions after it reported a 38 per cent
rise in first-half pretax profits to £9.1 million.
Vp, the equipment rental specialist based in North Yorkshire, said that
its business had made a good start to the new financial year and added that
it was confident of delivering further progress in the current financial
year, despite a challenging business environment.
Mears, the social housing and care group, was bullish over its
prospects after recording a 25 per cent rise in first-half profits. The
group also boasted a record £1.7 billion order book after winning £430
million of new work this year and said that it was “in good shape to achieve
further growth”.
Technology
Innovation Group, the software company based in Hampshire, said that
integration expenses would lead to a reduction of about £1 million in
adjusted profit, but it added that it expected to be in a positive net cash
position at the end of its financial year and looked forward to 2009 and
beyond with confidence.
RM, the education technology group based in Oxfordshire, said it had
agreed a £24.5 million five-year contract to provide managed ICT services to
the London Borough of Haringey’s Building Schools for the Future programme.
Apple, the technology group, has released a software update to rectify
problems with its new iPhone 3G after complaints from users. This is the
second glitch experienced by the company since the 3G was launched in July.
Hewlett-Packard, the US computer maker, reported third-quarter profits
up by 14 per cent to $2.03 billion (£1.09 billion), thanks to strong demand
for laptop computers and robust sales overseas.
Telecoms
Inmarsat, the international telecoms group listed in London, confirmed
the launch of the third Inmarsat-4 satellite on a Proton Breeze M rocket
from the Baikonur Cosmodrome in Kazakhstan.
Transport
Virgin Atlantic confirmed that it was considering selling its 49 per
cent stake in Virgin Nigeria which is in dispute with the Nigerian
Government over the the location of the carrier’s domestic operations. Sir
Richard Branson, president of Virgin Atlantic, denied that it had anything
to do with the dispute.
Silverjet The Serious Fraud Office (SFO), the City watchdog, may launch
an investigation into the collapse of Silverjet, the business-class airline.
A complaint is understood to have been lodged with the SFO after Viceroy
Holdings, an investment fund in the United Arab Emirates, withdrew
Silverjet’s rescue package at the last minute. Silverjet went into
administration at the end of May.
Utilities
E.ON UK plans to power more than 200,000 homes in the South West by
generating power through burning wood. The British unit of the German
utility said that it would invest £300 million to build a 150-megawatt
biomass power plant at the Port of Bristol.
