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Thursday's news and views

Created:

5 June 2008

Written by:

Tanya Malick

• Lloyds TSB said it has signed a three year deal with government-owned Northern Rock to offer its customers coming to the end of their fixed rate period a Lloyds TSB mortgage.

• Outsource giant Capita has emerged as the bidder for social housing software group IBS Opensystems with the two sides agreeing a £78m deal.

• Vodafone confirmed that its Verizon Wireless joint venture is in advanced discussions regarding the potential acquisition of Alltel.

• Housebuilder Bellway expects to sell between 10-15% less houses than last year with reservations down by 31% since February. The Midlands, Yorkshire and Northwest have been especially badly hit.

• Supermarket chain Wm Morrison like-for-like sales in the 13 weeks to 4 May rose 7% while its outlook for the current year remains unchanged despite rising commodity prices.

• Car parts and bicycles retailer Halfords said pre-tax annual profit rose as it opened new stores and saw strong demand in car maintenance and cycling.

• Platinum specialist Johnson Matthey predicted another strong year ahead as bumper prices for the precious metal helped profits last year rise 16%.

• Pennon, the group behind South West Water, posted a 14.1% rise in annual pre-tax profit on the back of higher water prices and following a good performance at its waste business.

• Severn Trent said it is close to resolving legacy issues from the previous regime after pre-tax profits were depressed by exceptional charges that included provision for the £35.8m fines imposed by Ofwat.

• Electronics distributor Premier Farnell reported a 37% rise in first-quarter pre-tax profit and said it is confident of further progress this year.

• WH Smith saw like-for-like sales in the first 13 weeks of the second half drop by 2% but the retailer said it is confident about the outcome for the full year.

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PRESS SUMMARY:

The Financial Services Authority is investigating potential insider trading in Bradford & Bingley stock in the days leading up to the buy-to-let lender's shock profits warning, says the Telegraph.

Bradford & Bingley's specialist mortgage loan book has a high proportion of home loans taken out by borrowers who have relatively little equity in the property, the Financial Times has learnt.

Vodafone is in the final stages of completing a deal worth nearly $30 billion (£15.5 billion) that will see it overtake AT&T to become the biggest mobile phone company in America, reports the Times.

The chief of BP's Russian oil venture was on Wednesday summoned for questioning by the interior ministry as part of a criminal investigation into possible large-scale tax evasion, writes the FT.

Many of Britain's biggest housebuilders could be forced into deeply discounted emergency rights issues before the end of the year, City analysts are warning, amid unprecedented gloom about the prospects for the sector. More than £300m was wiped off the value of the country's six largest housebuilders yesterday, with investors panicked into a sell-off by a doom-laden report on the sector from investors at UBS, according to the Independent.

The UK economy is heading for a worse slowdown than expected, the Organisation for Economic Co-operation and Development (OECD) warned yesterday, cutting its predictions for growth and attacking government policy. The international body slashed its forecasts for UK growth from 2 to 1.8 per cent for this year and from 2.4 to 1.4 per cent in 2009, says the Independent.

Crédit Agricole, one of France's largest banking groups, will this week launch a discounted rights issue to raise €5.9bn (£4.66bn), as it becomes the latest European bank to turn to its shareholders for cash, following the onset of the credit crunch, writes the Independent.

British Airways chief executive Willie Walsh faces his next big test today when the airline moves a further 30 daily flights to Terminal 5 at Heathrow, including its flagship service to New York JFK, according to the Telegraph.

The European Commission is pushing for Northern Rock, the nationalised mortgage lender, to downsize more aggressively, potentially leading to thousands more job cuts, says the Times.

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