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Wednesday's news and tips

Created:

7 January 2009

Written by:

Tanya Malick

■ High Street giant Marks & Spencer said it plans to cut 1,230 jobs as it announced a 7.1% drop in UK like-for-like sales. (IC COMMENT)

■ Sub-prime lender Cattles is to slash 1,000 jobs and drastically reduce the amount of new business it writes this year to conserve its cash. (IC COMMENT)

■ Outdoor clothing and equipment retailer Blacks Leisure said it expects operating profits to be below market forecasts due to the weak performance of its boardwear business.

■ No frills airline easyJet said passenger numbers and the load factor both rose in December.

■ Oil and gas company Soco International said the application for two appraisal areas in a block in which it has an interest has been approved by PetroVietnam

■ Utility group Scottish and Southern Energy is to shore up its balance sheet through a massive placing of shares.

■ Aer Lingus has rejected Ryanair's €750m offer once again after meeting with the Irish no-frills airline yesterday.

■ Data search specialist Autonomy has announced its fourth contract win in three days with a top accountancy firm.

Continues below...

■ Ryanair Holdings has extended its jet fuel hedging position to 50% of its requirements for the first three quarters of fiscal 2009/10.

■ Another Anglo Irish executive has left the property-focused bank following the resignation of chairman Sean Fitzpatrick and chief executive David Drumm last month.

■ Shares in investment company Z Group jumped by a third after news that it will be acquiring business strategy group Avisen for an undisclosed fee.

■ Car dealer HR Owen disposed its Volvo dealerships to Regent Automotive Limited, a management buy-out company headed by Tracey Perry and Frank Fisher.

■ Sport Media Group, the publisher of the Sunday and Daily Sport tabloid newspapers, is in breach of one of its banking covenants and has so far failed to agree revised facility terms.

■ Takeaway pizza specialists Domino's Pizza said it is confident it will deliver full year 2008 profits ahead of current expectations.

■ Bakery chain Greggs increased like-for-like sales during the four-week Christmas trading period by 5.3%.

■ Confectioner Thorntons said total sales over the Christmas period declined 2.3% with its branded stores the worst hit.

■ Support services group Cape's strong top line performance has continued over the second half of the year and results for 2008 will be in line with management expectations.

■ A slight improvement in trading in December will mean fashion retailer Alexon's full year profits coming slightly better than expected.

■ Irish builders merchants and DIY group Grafton expects that earnings before exceptional costs for the full year ended 31 December will be towards the lower end of market forecasts.

■ Fruit importer and distributor Fyffes expects 2008 earnings to be at the upper end of its expectations, with further improvement forecast for 2009 despite adverse currency movements.

■ Profit for the half year almost halved at Best of the Best, which displays luxury cars as competition prizes in airport terminals, but says trading conditions have now stabilised.

FOR A SUMMARY OF LATEST MOVEMENTS IN EQUITY, COMMODITY AND CURRENCY MARKETS, SEE FT.COM'S MARKETS PAGE.

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NEWSPAPER SHARE TIPS (07 JANUARY 2009)

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

PRESS HEADLINES:

Marks and Spencer plans to close a number of its Simply Food stores, marking a shift in its aggressive expansion of the chain in recent years.

M&S has been quietly gauging appetite among rival chains to see if they might want to take over some of its Simply Food sites, say industry insiders. The retailer will close more than 10 stores. But this will represent less 10% of its 370-strong chain, according to people familiar with the matter, reports the FT.

The Times adds that fears that unemployment will soar in 2009 intensified yesterday as Marks & Spencer laid plans to shed 1,000 staff and other big companies prepared to send out P45s with January results. A swath of companies most affected by the consumer downturn, including retailers, food manufacturers, housebuilders and pub groups, will report trading figures in the next two weeks. Two - InterContinental Hotels Group and Bellway Homes - will announce job cuts.

Alcoa, the US aluminium group, said on Tuesday that it would cut 13,500 jobs, or 13% of its workforce, and curb production to reduce costs in the face of the economic downturn. The worldwide cuts will be completed by the end of 2009. An extra 1,700 contract employees will be fired and the company has introduced a salary and hiring freeze, reports the FT.

Northern Rock's biggest former investor will argue in court next week that the bank's shareholders were "punished" by the Government for being the first lender hit by market turmoil. SRM Global is leading an action in the High Court in London seeking to overturn the Government's terms for compensating shareholders for February's nationalisation of the bank, reports the Independent.

The British car industry will suffer a fresh blow today when new figures are expected to show that sales fell by more than 20% last month. The sharp drop coincides with mounting concern over whether the Government will deliver an aid package that had been expected before Christmas. Worries are increasing over the future of components makers that are thought to have been hit badly by the lack of bank lending, writes the Times.

Iceland has decided to sue the British Government through the European Court of Human Rights for using "wrongful and unjustified" anti-terrorist legislation to freeze the assets of collapsed bank Landsbanki. The Icelandic Government, led by Prime Minister Geir Haarde, said it would use "any and all possibilities" to seek redress for the damage caused to the country, reports the Telegraph.

America's central bank indicated that the current recession could continue much further into this year than had previously been. Minutes of the December meeting of the Federal Reserve's influential interest rate-setting committee disclosed that the Fed has once again "sharply" revised its near-term economic growth forecast downwards, reports the Telegraph.

British Airways' chairman has warned that failure to win approval for a transatlantic tie-up with American Airlines could spell the end of Oneworld, the alliance central to the UK flag-carrier's strategy. Martin Broughton said gaining anti-trust approval for a revenue-sharing deal with American was a higher priority than an all-share merger with Spain's Iberia. "The most important deal is the American deal," Mr Broughton said. "It's worth a lot of money – hundreds of millions – and it prevents the break-up of Oneworld," the Telegraph reports.

HSBC was embroiled in growing controversy last night over the fees that it charged for its involvement in a controversial restructuring plan at Hirco Developments, the AIM-listed property investment vehicle. Laxey Partners, the activist investor that is leading a shareholder revolt at Hirco, said that HSBC had damaged its reputation by associating itself with a plan that it described as "astonishing" and "shoddy," reports the Times.

Apple is offering millions of songs free of copy protection on its iTunes digital music store, allowing buyers to play the music they purchase on all devices, not only Apple products. Apple has finally made agreements with the big music labels, ending the last bastion of digital rights management (DRM), the anti-piracy lock-and-key system used by the music industry, reports the Times.

Our press headlines summary is sourced from www.Sharecast.com