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Tuesday's news and tips

Created:

30 June 2009

Written by:

ShareCast

■ Antofagasta has achieved financial closing and satisfaction of conditions to borrowing for $1.05bn of project financing for the Esperanza copper-gold project in Chile.

■ Carpetright slashed its final dividend as profits tumbled by more than 70% last year, with the carpet retailer warning its sees no upturn for at least 12 months.

■ Music, DVD and games retailer HMV said against a difficult background it delivered sales and profit growth for the year, driven by good trading in HMV UK & Ireland.

■ BG has made a big push into the US shale gas market with the acquisition of a 50% stake in US firm Exco's fields in east Texas and north Louisiana.

■ Design and engineering consultancy Scott Wilson said pre-tax profit more than halved and while it does not expect growth in its UK business it does see further growth in its international markets.

■ Storage company Safestore saw an increase in revenue and underlying earnings in the first half of its financial year despite difficult market conditions (IC COMMENT).

Continues below...

■ Retail outlet operator Instore said full year pre-tax losses widened to £10.5m from a loss of £7.4m and said the present trading environment continues to be extremely challenging.

■ Management Consulting said revenue and underlying profit for the year will be below the same period last year and also warned full year figures could miss expectations.

■ Shariah Capital, which creates Islam-compliant financial products, saw net losses narrow for the year as it generated its first year of fee income.

■ Lloyds Banking announced it is axing another 2,100 jobs over the next three years as the part-nationalised lender continues to streamline the business following last year's takeover of rival HBOS.

■ Property group Brixton said it has let nine properties totalling 103,963 square feet in June. The lettings will generate £946,000 of annualised rental income.

■ Losses soared to £111m last year at pharmacy and GP services supplier Assura, as it took a massive hit on its property assets.

■ Wolseley chief executive Chip Hornsby has stepped down with immediate effect to let Ian Meakins take the helm at the troubled building supplies group.

■ Oil & gas facilities service provider Petrofac said it has had a good start to the year and is confident 2009 will be another year of strong growth.

■ Bus and train operator Arriva said results for the six months will reflect the lower revenue growth rates in CrossCountry but otherwise expected to be broadly in line with expectations.

■ Pub operator Pubs 'n' Bars reported a pre-tax loss after a 'particularly challenging trading period' and omitted a dividend payment for the year.

■ A consortium in which United Utilities has a 40% stake has won a new capital delivery contract with Southern Water worth £225m.

■ Yellow Pages publisher Yell has started talks with its banks over a comprehensive refinancing, adding that trading in the second quarter of this year took another lurch downwards.

■ Electrical firm Laird said underlying profit margin percentage, before interest and tax, in the first half is expected to be in mid single digits, below that in the first quarter.

■ Catlin has named Benjamin Meuli as its finance boss-in-waiting, although he won't replace Chris Stooke at the insurer and underwriter until the end of October.

■ Outdoor media contractor Vision Media lost more than half its value today after reporting a big full-year loss and talking of "extreme financial hardship".

■ Overall profitability has improved "significantly" in the first six months of 2009 at debt advice firm Fairpoint ahead of the seasonally stronger second half.

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 (30 JUNE 2009):

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

PRESS HEADLINES:

Neelie Kroes, the European Union competition commissioner, is on Tuesday set to warn UK banks for a second time within a week that they may have to make disposals as a condition for the granting of state aid.

Ms Kroes's tough message to the British Bankers' Association conference emphasises the hard line that the EU is ready to take with UK banks that have received state aid – notably Lloyds Banking Group and Royal Bank of Scotland, the FT reports.

The Organisation for Economic Co-operation and Development has waded into the pre-election war of words over the public finances, urging the Government to impose swingeing spending cuts. In its annual survey of the British economy, the Paris-based institution told the Government to slash the size of its deficit far more than it currently intends or face major problems in the coming years, the Telegraph writes.

Plans to inject capital into Royal Mail that would avoid the need to sell part of the postal group have been discussed by senior Labour MPs and ministers in recent weeks, The Times has learnt. The talks emerged as Lord Mandelson, the Business Secretary, cast more doubt over the timing of legislation that would mean a 30 per cent stake in the postal group being taken out of government hands.

Environmental groups have launched what could be a landmark lawsuit against the Treasury to force it to ensure that taxpayers' money invested in the Royal Bank of Scotland supports only projects that satisfy minimum green and human rights standards. The move is the latest sign of how the government's stakes in some of Britain's biggest commercial banks could affect the companies' operations. Three groups of environmentalists – the World Development Movement, Platform and People & Planet – are behind the case, which has been lodged at the High Court, the FT writes.

One of the most senior fund managers at Prudential has attacked hedge funds as selfish and devious and blasted derivatives as "the scourge of the modern age". Tom Dobell, who manages the £3bn Recovery Fund for M&G, the insurer's asset management unit, made the remarks in letters sent this month to the fund's 100,000 investors, the Times writes.

Candover, the private equity group, has been approached by a number of possible bidders for Ontex, its Belgian-based nappy maker, which people close to the company believe is worth about €950m (£808m). A sale of Ontex would generate capital for Candover Investments, the private equity group's troubled listed parent, which on Monday said it had broken off takeover talks with potential bidders for itself after shoring up its own finances, the FT reports.

Cheers erupted in the Manhattan federal courthouse on Monday as Bernard Madoff was sentenced to 150 years in prison, the maximum possible under law, for running a $65bn Ponzi scheme that has devastated thousands of investors around the world. The sentence came after an emotional hearing in which Mr Madoff, 71, conceded he could offer no excuses for decades-long fraud that may be the biggest in history, the FT reports.

The world's biggest miners were on Monday night locked in tense talks with Chinese steelmakers over a new iron ore supply deal, with Rio Tinto threatening to sell the ore into spot markets should no agreement be struck on Tuesday, the FT reports. Meanwhile, Chinalco, Rio Tinto's biggest shareholder, is widely expected to take up its full entitlement on Wednesday to new shares in the mining group's $15.2bn (£9.2bn) capital raising, the paper adds.

British Airways enters crunch talks with unions in an attempt to prevent strike action this summer, but accusations are already flying, even before the two sides face each other. Unite, the union that represents 27,000 BA employees, has accused Willie Walsh, the airline's chief executive, of damaging BA's reputation by stating that it was "fighting for its survival", the Times writes.

Rebuilding the financial system is likely to take "many more years" and result in the creation of an entirely different banking system, Britain's top banking experts have warned. Speaking at a summit on Global Leadership at the London Business School, Stephen Hester, chief executive of RBS, John Kingman, boss of UK Financial Investments, Anshu Jain of Deutshe Bank and Julian Franks, Professor of Finance at the LBS, all agreed that the financial system was a long way from healthy despite the recent recovery, the Telegraph writes.

FirstGroup, Britain's largest rail and bus company, insisted on the logic of combining with rival National Express to create the country's largest operator, despite its rival dismissing an initial approach. First, which is valued at £1.8bn on the stock market, has approached National Express, which is valued at £444m and is weighed down by £1.2bn of net debt and problems with the East Coast rail franchise, the Telegraph writes.