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Wednesday's news and tips

Created:

23 July 2008

Written by:

Tanya Malick

• Bike and car spares chain Halfords has defied the consumer downturn with both sales and profits ahead of expectations in the first quarter. (IC COMMENT)

• Short breaks holiday specialist Holidaybreak has seen revenue growth across all of its divisions, although the hotel division has recently experienced a slow-down in the UK. (IC COMMENT)

• SSP Holdings has agreed to be taken over by H&F Bidco, a special vehicle of buyout firm Hellman & Friedman, for about £161.6m in cash. (IC COMMENT)

• IT staffing group Parity has announced the disposal of Parity Training Limited to Xpertise for £4.775m. (IC COMMENT)

• Recycling products and services group Straight said interim profits will be lower than expected because of losses at its retail division. (IC COMMENT)

• Vodafone has introduced a £1bn share buy back programme with immediate effect in reaction to yesterday's badly received sales warning.

• Centrica is to increase its stake in Belgium's second largest power generation company SPE to a controlling 51% at a cost of over €½bn.

Continues below...

• Moneysupermarket.com said its chief executive Simon Nixon, a 54% shareholder, has rejected an unsolicited takeover approach for the price comparison site.

• Oil and gas facilities service provider Petrofac said it has not been awarded the LNG contract in Algeria it had provisionally won last week.

• Drugs giant GlaxoSmithkline outlined three new strategic priorities today, as it seeks to grow a diversified global business, deliver more products of value and simplify its operating model.

• Gary Hoffman, the vice chairman of Barclays, has been named chief executive of nationalised mortgage lender Northern Rock.

• Diamond miner De Beers, 45% owned by Anglo American, reported underlying earnings growth of 8% in the first half of 2008.

• Defence and support services firm VT Group continues to trade in-line with management expectations, with the order book running at record levels.

• Mining giant BHP Billiton said seven out of 14 commodity classes enjoyed record production levels in the year to end-June.

• Third quarter revenue rose at newspaper group Daily Mail and General Trust despite weakening advertising conditions in the newspaper business.

• Profits held steady in the three months to end-June at sugar refiner and sweeteners firm Tate & Lyle, in-line with management expectations.

• Credit lender International Personal Finance, demerged from Provident Financial last year, saw first half profits jump a better than forecast 39% to £22.1m and said credit quality remained stable.

• Joinery group Galiform saw a solid underlying performance in the first six months of 2008, but sales slowed towards the end of the half and that trend has continued.

• Renishaw added ground midweek as the engineer reported a record set of full year results, with business in the Far East and Europe going especially well.

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

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NEWSPAPER SHARE TIPS (23 JULY)

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

PRESS SUMMARY:

TPG Capital, the US private equity group, is considering a bid for Paragon, a specialist mortgage lender, less than three weeks after it infuriated the City by pulling out of a £179m capital injection for Bradford & Bingley.

Paragon's shares rose 31% to 110p on Tuesday after the company said it had received a number of approaches and was exploring various options. Blackstone is one interested party, reports the FT.

Water companies are pressing the government to give them more powers to tackle unpaid water bills amid fears that bad debt will rise as the economic situation worsens. They want the government to use the forthcoming Floods and Water Bill to make it easier for companies to pursue customers who refuse to pay their bills. Some in the industry suspect that customers deliberately avoid payment as they know that they cannot be disconnected, reports the Times.

The Independent adds that Severn Trent warned yesterday that Britons would find it increasingly hard to pay their water bills as the credit crunch heaps pressure on consumers. The Midlands-based water company said that the state of the economy had driven it to monitor "our customer debt and cash collection performance".

Vodafone's shares fell almost 14% yesterday, the biggest one-day fall in the company's history, after the UK mobile phone operator shocked investors by issuing a sales warning. Vodafone has scaled back its revenue forecast for 2008-09 to £39.8bn after admitting the economic downturn was hurting its mobile businesses in Spain and the UK, reports the FT.

A surge in tax avoidance by multinationals could drain the exchequer of up to £1.1bn a year if the Treasury bows to their request for a "no strings" tax break on foreign profits. The Treasury has laid bare its fears in a technical note that exposes the disagreements with business that have dogged attempts to forge a new foreign profits regime, reports the FT.

Jon Moulto n, one of the best-known figures in private equity, suffered a setback yesterday when a company he invested in just 18 months ago called in the administrators after sales collapsed. Alchemy Partners, a private equity vehicle founded by Mr Moulton, backed the £52m management buyout of Floors-2-Go, Britain's biggest wood and laminates flooring retailer, in December 2006, reports the Times.

The taxman believes up to 60,000 Britons could be caught by its ongoing offshore bank account probe. HM Revenue & Customs (HMRC) said yesterday that around 300 wealthy Britons who have hidden money in the tiny European tax haven of Liechtenstein are facing investigation and criminal prosecution, but that those individuals represent only a tiny proportion of those who could be charged, writes the Telegraph.

Aldi and Lidl, the German discount supermarkets, increased their market shares to record levels in the three months to July 13, as customers "traded down" in order to preserve their hard-pressed household budgets. According to TNS Worldpanel, discount retailers now account for 5.9% of all grocery spending. Aldi grew its market share by 19.5% to 2.9% over the period, while Lidl's share rose by 14.3% to 2.4%, writes the Telegraph.

A mortgage lender is offering a discount of 8% to homeowners who repay their mortgage early in a new sign of the turmoil gripping the mortgage market. Edeus, a sub-prime lender, is waiving all exit fees and early redemption penalties for some borrowers who pay off their mortgage, as well as accepting between 92 and 99% of the original loan as full payment, reports the Times.

Embattled internet group Yahoo! admitted that net profits during the second quarter of the year had fallen by almost 19% to $131m, while total revenue increased 6% to $1.79bn. Net revenue increased 8% to $1.35bn, just shy of Wall Street expectations of $1.37bn, reports the Times.

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