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Tuesday's news and tips

Created:

27 July 2010

Written by:

ShareCast

■ Oil giant BP has confirmed Tony Hayward is to step down as chief executive of the group on October 1 to be succeeded by fellow executive director Bob Dudley. The troubled oil group has also taken a £$32.2bn charge in respect of the Gulf of Mexico oil spill, including the $20bn it has already committed to putting in escrow (IC COMMENT).

■ Revenues and profits continued soaring at ARM in the second quarter as the chip-designer continued to see strong demand for its technology from makers of mobile 'phones and other must-have gadgets'.

■ Higher production and a rising gold price sent half-year net income at miner African Barrick Gold up by 217 per cent to $99m (IC COMMENT).

■ Software group Misys has reduced the number of shares it will sell in the proposed disposal of its healthcare division Allscripts (IC COMMENT).

■ Business publisher Informa managed to squeeze out a rise in profit in the half year to June 30 despite lower revenues as it adjusted the size of its business to levels of activity (IC COMMENT).

■ International consumer products group PZ Cussons saw profitable growth last year in all three of its operating regions (IC COMMENT).

■ Record results at its two main divisions helped speciality chemicals supplier Croda double half year pre-tax profit, with strong trading trickling into the first weeks of the second half (IC COMMENT).

■ Fantasy war games group Games Workshop saw sluggish sales in the year to May 30, but managed to lift profits as it cut back on costs (IC COMMENT).

■ Flat interim profits and a cautious outlook for the rest of the year sent shares in doorstep lender Provident Financial lower (IC COMMENT).

■ E-learning specialist Promethean World's first half revenues are up 35 per cent with strong sales of both systems and handsets.

■ Car parts and bicycles retailer Halfords drove through a 9.6 per cent rise in group revenue from 3 April to 26 July, helped by its acquisition of Nationwide Autocentres in February, but it issued a cautionary stance on the economic environment.

■ Diversified mining group Xstrata saw a small decline in copper production in the first half of 2010 but ferrochrome output rebounded strongly.

■ Newspaper publisher and exhibitions group Daily Mail & General Trust traded ahead of expectations in the second quarter of 2010.

■ Shares in sweetener maker PureCircle slumped 19 per cent after it warned full-year profitability will be below levels seen in 2009.

■ Engineer Tomkins' board has backed the 325p per share cash offer from Onex and Canada Pension Plan Investment Board.

■ A rebel shareholder at Turbotec Products has withdrawn its demand for a general meeting following a compromise with the US-based heat exchanger tubing and components maker.

■ Shares in Clipper Windpower dropped after the wind turbine blade maker said it expects to report an operating loss for the first half.

■ Tullow Oil is officially the proud owner of Heritage Oil's 50 per cent interest in Blocks 1 and 3A in Uganda after months of uncertainty.

■ Consumer groups today claimed a major victory as Lloyds Banking became the first high street bank giant to stop selling payment protection insurance (PPI).

■ Lloyds Banking is selling its Ecuadorian branch assets and liabilities to Banco Pichincha for up to $25m in cash.

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NEWSPAPER SHARE TIPS (27 JULY 2010):

PRESS HEADLINES:

Tony Hayward is to be offered a non-executive role on the board of BP's highly profitable Russian joint venture as part of an exit package that includes early entitlement to a £600,000-a-year pension.

A meeting of the oil giant's board broke up last night after discussions about the future of the company, as the group prepared to approve the appointment of Robert Dudley to replace Mr Hayward as chief executive. Hayward, 53, who is expected to qualify for payments from his £10.8m pension pot when he leaves in November, will also be offered a lucrative role at TNK-BP, Russia's third-biggest oil producer, the Times reports.

BP's billionaire partners in Russia indicated they are willing to back their old adversary Bob Dudley as its new chief executive, as the oil giant's board met on Monday night to finalise a radical shake-up. The endorsement will be a boost to BP, as it attempts to draw a line under its Gulf of Mexico oil spill by on Tuesday announcing the departure of chief executive Tony Hayward and revealing hefty impairment charges of up to $25bn (£16bn), the Telegraph reports.

The Parliamentary Ombudsman weighed into the row about compensation for victims of the Equitable Life scandal yesterday, saying she could not support the findings of a Government-backed inquiry published last week. Ann Abraham said that proposals in Sir John Chadwick's report, to which the Government has lent its support, "seem to me to be an unsafe and unsound basis on which to proceed", the Independent reports.

The National Audit Office has called for a project-by-project review of future Private Finance Initiative contracts amid concerns about a rise in bank lending rates. An NAO report said that higher rates charged by private sector lenders meant that the PFI was less likely to represent value for money in future. Deals entered into during the credit crunch locked in an extra £500m to £1bn of financing costs because of higher bank charges, the NAO report found, the Times reports.

Europe's stress tests for banks have greatly reduced pressure on Spanish lenders but have so far done little to ease broader strains in the interbank credit markets. Three-month Euribor rates have crept up to a one-year high of 0.889pc. The "Libor-OIS spread", watched as a key gauge of stress in the system, also nudged up to 26 basis points, the Telegraph reports.

The directors of the agency set up to manage the Government's stakes in Britain's part-nationalised banks have agreed to take a 5 per cent pay cut as public-sector spending is slashed. Sir David Cooksey, the chairman of UK Financial Investments (UKFI), said it was focusing hard on cutting its costs, which would be "substantially below" the targets in its business plan, the Independent reports.

EU regulators have begun two investigations into IBM, the world's largest computer services firm, following accusations the American company has been abusing its dominant position in the market for mainframe computers. The European market for mainframe computers and software was worth €3bn (£2.5bn) last year, the Guardian reports.