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Thursday's news and tips

Created:

19 June 2008

Written by:

Tanya Malick

• Bank HBOS said trading continues to be in-line with expectations but expects first-half writedowns to reach £1bn and the UK economy to slow with house prices deteriorating further. (IC COMMENT)

• Sibir Energy's Siberian joint venture with oil major Shell has ramped up production to a new record of more than 125,000 barrels of oil per day (bopd). (IC COMMENT)

• Shares in recruitment firm Harvey Nash found friends after it said trading continued in-line with company expectations and overall, businesses in the US, UK and Europe are trading ahead of budget from the previous year. (IC COMMENT)

• Struggling sofa retailer Land of Leather has announced details of its emergency fund raising. (IC COMMENT)

• Mobile phone colossus Vodafone has reportedly pulled out of the auction for internet service provider Tiscali.

• Oil giant Royal Dutch Shell said an armed attack has prompted it to suspend production at its Bonga offshore oilfield.

• Engineer Renishaw said it has begun legal proceedings against Tesa SA and Hexagon Metrology over alleged patent infringements in the US.

• Norcros, the firm behind Triton showers, reported a 75.5% rise in full year pre-tax profit despite difficult trading conditions in both its main markets.

• Shares in Loanmakers, formerly D ebtmatters, plunged after the group slipped to a full-year pre-tax loss and said it is unlikely to see a material improvement in trading volumes during 2008.

• Anglo-Dutch household goods giant Unilever is to offload its oils business and plantation interests in Cote Ivoire.

• Automotive and building products focused holding company Tomkins has sold Stant Corporation to US private equity group HIG Capital for an undisclosed amount.

• British Gas owner Centrica said it continues to trade in-line with guidance provided in its interim statement last month.

• Confectioner Cadbury said for the first half of 2008 it expects revenue growth to be above the top end of its 4%-6% goal range with margin growth of at least 150 basis points.

• Specialist lender Cattles said it has applied tighter credit criteria to new business, which has resulted in lower receivables growth in its Welcome Finance unit.

• Bus and train operator Go-Ahead said it expects to surpass last year's record earnings after a strong performance at its main divisions.

• Workforce management software developer WorkPlace Systems swung to a full-year pre-tax profit and said its outlook remains 'cautiously optimistic'.

• Luxury fashion brand Mulberry revealed a decline in pre-tax annual profit after it was hit by extra costs from opening new stores and increased advertising spending.

• Nanomaterials group Oxonica said, excluding the sales to Petrol Ofisi in the prior year, its revenues to date in 2008 are significantly higher than the same period last year.

FOR A SUMMARY OF LATEST MOVEMENTS IN EQUITY, COMMODITY AND CURRENCY MARKETS, SEE THE 'MARKETS' PAGE

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NEWSPAPER SHARE TIPS:

Full round-up of newspaper share tips (sourced from Sharecast).

PRESS SUMMARY:

Alistair Darling and Mervyn King delivered the bleakest official assessments of economic prospects for 15 years yesterday, in what the Bank of England governor said was "the most challenging period" since 1997, says the FT.

Again warning households to prepare for "average real take-home pay [to] stagnate this year", Mr King used his annual Mansion House speech to City grandees to predict that "the squeeze on real income growth is likely to mean that both house prices and consumer spending weaken together".

Sir John Gieve, the Deputy Governor of the Bank of England who was accused of lack of vigilance in the Northern Rock affair, is to stand down, it emerged last night. Sir John was responsible for maintaining the stability of financial markets, writes the Times.

The airline industry will be hit by a downturn far worse than even the most tumultuous periods in recent memory – the post- 9/11 years and the early Nineties recession – new research predicts, reports the Independent. Morgan Stanley slashed its earnings forecasts yesterday for several major European carriers, including British Airways and easyJet, in the latest of a flurry of gloomy assessments of the industry.

Woolworths' chairman, Richard North, maintained that its retail division can robustly grow its profits yesterday as the group parted company with its chief executive, according to the Independent.

Britain's bosses have been warned that they will become targets of future probes by the Financial Services Authority as the watchdog seeks to crack down on market abuse. The FSA's director of enforcement, Margaret Cole, said the regulator would switch its focus from companies to individuals as it believed it would be a more effective deterrent against wrongdoing, says the Telegraph.

Morgan Stanley on Wednesday became the latest financial group to be hit by the actions of a suspected rogue trader after revealing that a London-based credit derivatives trader had incorrectly valued his positions, forcing the company to take a $120m revenue hit, writes the FT.

Pleas by ministers for pay restraint have been met with contempt by the unions, emboldened by the Shell tanker drivers' 14 per cent rise over two years, way above the latest rate of inflation of 3.3 per cent and a remarkable result for the Unite union, reports the Independent.

London's status as a major world business centre is under threat, according to a survey of leading British companies. Senior executives from some of the country's biggest businesses fear the capital is becoming less competitive as companies struggle to raise money and feel the pinch of the credit crunch, according to the Telegraph.

The City regulator has rushed to change its emergency rules on disclosure of short-selling during rights issues after discovering a loophole that would have let hedge funds avoid stating their holdings. The Financial Services Authority reversed its position on how to take options into account when calculating the size of positions, according to Darren Fox, partner at Simmons & Simmons, legal adviser to many of London's biggest funds, says the FT.

The double threat of soaring petrol prices and strict emissions targets has forced Jaguar Land Rover to hire 600 engineers and technical staff in a desperate effort to increase the efficiency of its gas-guzzling vehicles, reports the Independent.

News International, the UK's largest publisher of national newspapers, is planning to merge the back offices that support the Sun and the Times. The group is likely to dismantle the two separate management teams behind its main UK titles in a move designed to reduce costs and improve efficiencies, writes the Telegraph.

Ron Sandler, the executive chairman of Northern Rock, is examining the conduct of the troubled bank's former board to see if they could be sued for compensation. Adam Applegarth, the bank's former chief executive, was widely blamed for the flawed business model that brought the Rock down, according to the Times.

Olivant, the investment boutique headed by Luqman Arnold, has raised the stakes in its campaign for change at UBS by increasing its holding so that it is now one of the Swiss bank's largest shareholders, says the Telegraph.

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