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Tuesday's news and tips

Created:

2 September 2008

Written by:

Tanya Malick

• Recruitment specialist Hays reported a better than expected 25% rise in full year pre-tax profit, after strong demand from its international business offset weakness in the UK, but warned that its markets are likely to be challenging in the short term.

• Food sales are easing the pain at pub group and brewer Greene King as traditional community pubs feel the effects of the squeeze on consumer spending.

• Self storage firm Big Yellow said it has signed a £325m revolving 5-year core banking facility with HSH Nordbank.

• Shares in European online gamer Gaming VC tumbled as the potential bidder who approached the group in April walked away from a deal.

• Shares in West African focused oil firm Bowleven shot up after it said it expects to upwardly revise existing resources at the Isongo discoveries.

Continues below...

• Lonmin still thinks Xstrata's unsolicited £5bn bid approach fundamentally undervalues the platinum miner, but is willing to talk with its Swiss-based rival.

• Finsbury Foods' chief executive Dave Brooks is to step down from the cake maker at the end of the month to be replaced by Martin Lightbody, group strategic development director.

• Lottery and game play product provider GamingKing has returned from suspension after announcing details of a reverse takeover.

• Pensions consultant Mattioli Woods expects a boost to its business from the current economic downturn as more people to turn to it for advice on how to protect their retirement funds.

• Veterinary pharmaceuticals distributor Dechra said development of its own brand line of pharmaceuticals is on schedule, as it announced pre-tax profits in-line with market expectations.

• Energy efficiency solutions provider Eaga is confident of making substantial progress in the current financial year.

• Lower finance costs and solid underlying growth helped US-focused plant hire group Ashtead raise profits by a quarter in its first quarter.

• A hefty one-off charge kept semiconductor wafers specialist IQE in the red at the half year despite a big underlying improvement.

• Civil engineer Scott Wilson is trading in line with expectations, with the order book remaining at a high level.

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

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NEWSPAPER SHARE TIPS (2 SEPTEMBER 2008)

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

PRESS SUMMARY:

Business leaders accused Alistair Darling of talking Britain into a recession as the pound fell to a record low yesterday.

The Chancellor's warning that Britain is facing its biggest economic challenge for 60 years was described as a "self-fulfilling prophesy". His words threaten to overshadow the first day of Gordon Brown's long-awaited political fightback. The Prime Minister will announce measures to help first-time buyers and homeowners facing repossession. A second set of initiatives on fuel is expected within a week, writes the Times.

Meanwhile, the pound dropped to a record low against the euro on Monday, as money markets digested warnings from Alistair Darling that the economic times the UK faces "are arguably the worst they've been in 60 years". The pound's fall, which was exacerbated by more weak economic data, came as traders said that sterling was set increasingly to bear the brunt of the UK's economic slowdown, reports the FT.

Google is to release its own internet browser in what amounts to its most direct attack yet on Microsoft's dominance of PC software. The launch of the browser, known as Google Chrome, will pit the internet company against Microsoft's dominant Internet Explorer browser, which is used by an estimated three-quarters of all internet users, reports the FT.

Families will be able to inherit £2m tax free from their parents under Tory plans to raise the Inheritance Tax threshold, the Daily Telegraph says. The £2m limit for the amount married couples can leave to their relatives is more than three times the current threshold for the unpopular duty.

Sir Richard Branson, the Virgin tycoon, is planning to wade into the break-up of BAA by tabling a bid for Gatwick Airport that could cost more than £2bn, The Daily Telegraph has learned. "We are open to being courted by anyone who is interested in bidding," said Sir Richard, the president of Virgin Atlantic.

China's central bank has acquired a secret stake in Drax, the owner of the UK's biggest coal-fired power station. The People's Bank of China is understood to have been building its stake in Drax for about a year and now owns just over 0.7% of the company says the Telegraph.

Ryanair, Europe's largest airline, plans to revive a €1 billion (£800m) bid for Aer Lingus as part of a wave of consolidation in European aviation. The budget carrier said that the worsening economic climate and high fuel costs could force European competition regulators to adopt a more flexible attitude towards mergers, writes the Times.

British banks soon could be scrambling for short-term funding once more amid reports that supplies from Threadneedle Street and from Frankfurt may be drying up. The Bank of England explicitly ruled out extending its Special Liquidity Scheme (SLS), while the European Central Bank is reportedly considering tightening its lending criteria, writes the Times.

Britain's major companies are expected to generate more cash than previously forecast in the next three years despite the worsening economy. Analysts expect companies in the FTSE 350 index to produce a cash surplus of about £302bn, according to the KPMG Cash Counter survey. The figure is 52% higher than forecasts, reports the Independent.

Woolworths' new chief executive, Steve Johnson, has admitted that an improved take-over offer for its retail division by Iceland's boss could hinder his efforts to turn it around. Mr Johnson, who took the helm yesterday, said: "These things are always a distraction," reports the Independent.

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