Imperial Tobacco (IMT) Chief Executive Alison Cooper has got a tough task in trying to make up for falling cigarette sales in the West, The Sunday Times' Danny Fortson said. In his Inside the City column, he argued Cooper had yet to produce ideas to get Imperial moving. Cost cuts and premium brands have not made much difference and the big prize is more sales in developing markets. She will update investors on October 5th and analysts at Exane BNP Paribas forecast adjusted operating profit roughly unchanged at £3.1bn - about the same as in 2012. Not terrible but not exciting, Fortson argued (Last IC rating: Buy, 22 Aug).
Buy Merlin Entertainments when it floats later this month, the Mail on Sunday's Midas column advised. The owner of Legoland and Madame Tussauds has performed well in tough economic times with visitor numbers rising on average 11 per cent a year since 2008 and operating profit increasing 13 per cent last year to £346m. Now, 20 per cent of sales are in North America and 14 per cent are in Asia. The rest is from Europe, mainly Britain. Chief Executive Nick Varney wants the split to be a third each and the flotation will help the company expand. Existing management will keep large stakes, giving reassurance to new investors (Last IC rating: One to watch, 23 Oct).
Hold on to BT (BT.A) shares, which have risen as investors have backed its TV war with BSkyB, The Sunday Telegraph's Questor column argued. The early signs of its bet on giving away sports TV coverage to broadband customers are encouraging and there is scope for more cost cutting. Its retail business is enjoying its strongest growth for 10 years. BT has got itself into a good position but after doubling in the last two years the share price now reflects its prospects (Last IC rating: Hold, 13 May).
EnQuest (ENQ) is a boring company that may be getting more interesting, Danny Fortson said in The Sunday Times' Inside the City column. When it was spun off from Petrofac, Enquest was meant to consolidate North Sea oil fields but progress has been poor. Tax changes mean Enquest will no longer be liable for all the decommissioning costs of fields it wants to buy. One of the biggest obstacles to investment has been lowered and it may free Enquest to be more active (Last IC rating: Buy, 14 Aug).
Business press headlines:
A string of oil and gas firms is expected to float on the junior stock market in the coming months as they tap in to a growing appetite for initial public offerings (IPOs). Accountancy firm EY's latest report on the sector's smaller companies shows flotation activity has already propelled business confidence to its highest level in 18 months, although the feel-good factor is so far confined to a small number of players, The Scotsman explains.
BT (BT.A) is today accused of making profits of almost £5bn over and above the level deemed acceptable under regulator Ofcom's own rules. The damning accusation comes in a report written by research firm Frontier Economics and commissioned by Vodafone. It states that since 2005 British consumers and businesses have lost out as BT's returns for regulated services overall have been consistently above a benchmark rate, The Daily Mail says.
Britain's business leaders have raised their forecasts for the country's economic growth through to 2016 today, lending further weight to claims that the recovery is gaining momentum. On the eve of its annual conference, the Confederation of British Industry said it had upped its growth forecast for 2013 to 1.4 per cent, from 1.2 per cent in August, and expected output to build steadily. While growth is expected to slow in the fourth quarter of this year, the CBI said the economic recovery would gather pace over the next two years, upping its 2014 forecast to 2.4 per cent from 2.3 per cent in August, while predicting that growth would hit 2.6 per cent in 2015, according to The Daily Mail.
Public investment in the US has hit its lowest level since demobilisation after the Second World War because of Republican success in stymieing President Barack Obama's push for more spending on infrastructure, science and education. Gross capital investment by the public sector has dropped to just 3.6 per cent of US output compared with a postwar average of 5 per cent, according to figures compiled by the Financial Times, as austerity bites in the world's largest economy.
Britain's membership of the EU brings a net benefit of £3,000 a year to every household, employers' organisation the CBI will say on Monday as it begins a three-year campaign to stop the country sliding towards the exit. The largest business group, which is holding its annual conference in London, will attempt to rally corporate Britain around remaining in the EU and reforming it from within, the Financial Times explains.
The Co-operative Group will today detail a plan to inject hundreds of millions of pounds into its embattled bank as part of a £1.5bn rescue that means it will cede control of the lender to a group of American hedge funds. As part of a complex deal that has been weeks in negotiation, The Times understands that the hedge funds, known as LT2, will contribute a substantial amount of cash to the rescue as well as exchanging £500m of their bonds for shares.
Greece is set to resume talks with the men who hold the keys to its financial stability after international inspectors said they would return to the country in a move that ends days of drama over whether they would come at all. Mission heads representing the European Union, the European Central Bank and International Monetary Fund - the three bodies that have propped up the debt-stricken Greek economy since May 2010 - will meet government officials in Athens on Tuesday, The Guardian reports.
