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Tuesday's company news

Created:
13 May 2008
Written by:
Tanya Malick

• Alliance & Leicester's said mortgage lending was down sharply in the first four months of the year as it wrote down £388m in impairment charges. (IC COMMENT)

• Defence and support service firm VT Group reported a 20% rise in underlying pre-tax profits and said it remains confident for the current year and beyond. (IC COMMENT)

• Italian restaurant chain Carluccio's delivered a 19% rise in interim pre-tax profit as it warned that trading conditions will remain challenging. (IC COMMENT)

• Engineering specialist Keller said trading in the first four months of 2008 has remained strong, with revenue, operating profit and orders ahead of the comparable period last year and in-line with expectations. (IC COMMENT)

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• Housebuilder Redrow has warned the conditions in the housing market have worsened faster than it expected with reservations down 50 per cent on this time last year due to a lack of mortgage availability.

• Problems in its housebuilding division will mean Galliford Try's profits this year coming in well short of market forecasts.

• Northern Foods is to shut its Fenland Foods plant in Grantham after failing to agree a new contract with Marks & Spencer for the supply of ready meals.

• Shares in marketing services firm Cagney slumped after it announced the resignation of its chief executive.

• Stockbroker Jarvis Securities rejected an unsolicited bid approach but said it is considering its options, which could include the sale of the company.

• Aerospace and defence firm Cobham has agreed to buy the radio frequency components and sub-systems business of M/A-COM from Tyco Electronics.

• Tour operator TUI Travel narrowed underlying pre-tax losses in the first half, thanks to strong trading in the UK and Nordics and a 'significant' turnaround in France.

• Defence and engineering contractor Babcock International hailed an "extremely successful year" and bumped up its full-year dividend 43%.

• Bid target Enodis saw interim profits reduced as a result of restructuring charges, but the food equipment maker said it is on track to meet expectations for the full year.

• High street bakery Greggs said like-for-like sales in the 19 weeks to 10 May 2008 rose by 4.7% and is confident about its prospects.

• Oil and gas exploration group Tullow Oil said today that results from the Tatai-1 exploration well in Uganda have been positive.

• Security firm G4S said its underlying performance is running slightly ahead of overall management expectations, aided by a small benefit from recent euro strength.

• Pub operator Enterprise Inns served up an 11% decline in first-half profit, in-line with expectations, as it warned of a tough trading environment.

• Builders merchant Travis Perkins reported a 6.8% rise in turnover in the first four months of 2008, but said it expects markets to weaken further as the year progresses.

• Support services group Serco said its increased pipeline of opportunities and strong performance so far in 2008 leaves it confident of delivering double-digit revenue growth for the foreseeable future.

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PRESS SUMMARY:

The Treasury has succumbed to sustained pressure from big business and agreed to water down controversial proposals to change the UK corporate tax regime, reports the Times.

Several big multinational British companies had said that they were prepared to move their headquarters from the UK amid concerns that the Treasury was preparing to tax the profits they derived overseas. A Treasury spokesman confirmed yesterday that the department had drawn up a new set of tax plans after extensive consultation with UK companies. The move will be seen as another embarrassing government climb-down.

Knight Vinke, the activist investor, launched a fresh attack on HSBC yesterday, accusing Europe's biggest bank of flattering its US sub-prime losses by failing to write down $30bn worth of mortgage assets. The broadside came as HSBC revealed a $3.2bn first-quarter write-down on loans by its US business to poor Americans, reports the Times.

The legal battle between Tesco and the Guardian newspaper has intensified - with the retailer demanding a front-page apology. The supermarket chain's latest demands follow a string of articles that ran alongside a "correction and clarification" published by the Guardian 10 days ago, reports the Telegraph.

Carphone Warehouse is understood to have failed to make it on to a shortlist of second round bidders for Tiscali, the Italian broadband operator. Vodafone and BSkyB are thought to be among about six companies who will be given access to Tiscali’s books. After a board meeting last night, Tiscali, which has a market value of €1.43bn, said that it had received an "unspecified number" of bids, says the Times.

Hewlett-Packard was close to a deal yesterday worth up to $13bn (£6.6bn) to buy Electronic Data Systems, one of the world's biggest IT services companies. The deal would mark an attempt by Mark Hurd, HP's chief executive, to challenge IBM's dominance in IT services, of one of the technology industry's most lucrative markets. HP and EDS confirmed that they were in "advanced discussions", but cautioned a deal might still not be consummated, reports the FT.

A record number of surveyors reported a drop in house prices and property transactions last month, new figures show. The balance of surveyors reporting that house prices had fallen rather than risen increased to 95.1% last month, up from 79.4% in March, figures from the Royal Institution of Chartered Surveyors (RICS) show. This is the biggest margin since the figures were first compiled in, reports the Times.

Britain's biggest pension funds are to sue the Government for refunds of hundreds of millions of pounds worth of value added tax (VAT) they claim to have been illegally charged on investment management fees. The National Association of Pension Funds (NAPF) and Wheels Common Investment Fund, an £8bn car industry scheme, unveiled the legal challenge yesterday, reports the Independent.

The mining industry could top last year's record number of mergers and acquisitions with more than $250bn worth of takeovers this year as demand from an industrialising Asia inspires an unprecedented land-grab in the sector. Michael Lynch-Bell, head of the metals and mining team at Ernst & Young, the accountancy firm, predicted that there could be at least three $50bn-plus transactions done this year, reports the Independent.

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