PRESS DIGEST - British business - April 21
Wednesday April 21 2010
The Daily Telegraph
ASOS IN FASHION
Online fashion retailer ASOS ASC.L said that profits are likely to meet the 20 million pounds ($32.09 million) expected by analysts after total sales rose 35 percent to 223 million pounds for the year to the end of March. The company said that sales in the 19 days to April 19 had seen trading up 56 percent, with international sales particularly strong. Chief executive Nick Robertson said that the company had enjoyed "another excellent year" and is "approaching this year with considerably more confidence."
TUI TRAVEL RAISES 500 MILLION POUNDS AS VOLCANO BILL.
Tui Travel (TT.L) has raised 500 million pounds of fresh financing. The holiday operator warned yesterday that it was losing up to six million pounds a day due to travel disruption caused by the volcanic ash cloud. The company said the new finance would be used to "exploit its strong pipeline of attractive acquisition opportunities". Analysts said the finance would also allow Tui Travel to repay a 600 million pound loan from Tui AG, the German travel group that owns 54.9 percent of Tui Travel.
TORIES LINE UP NEXT CHIEF WOLFSON FOR SEAT IN THE LORDS
Concerns have been raised over Simon Wolfson's future as chief executive of Next (NXT.L) after Wolfson's name was included on a list of proposed peers put forward by the Conservative party. JCB founder Sir Anthony Bamford is also thought to be on the list, the publication of which is expected imminently. Both figures are leading donors to the Conservative party, and opposition politicians suggested that Wolfson and Bamford were being rewarded for lending their support to a Tory campaign against a rise in National Insurance.
LIB DEMS TO OFFER REGIONAL BOURSES IN CITY SHAKE-UP
Liberal Democrat proposals would see the establishment of a series of regional stock exchanges across Britain. The party said that the RSEs would "act as regional platforms, matching local investors with growing small businesses to provide cost-effective access to equity." Britain was home to 22 regional stock exchanges until 1973, when they were merged in to the London Stock Exchange (LSE.L). The Lib Dems said the funding needs of smaller regional companies are not properly met by the LSE. The party also promised to break up banks and to increase taxes on bank profits.
DESIRE PLANS FOR MORE DRILLING IN FALKLANDS
UK oil explorer Desire Petroleum DES.L intends to resume drilling in the Falkland Islands during the third quarter of this year. Desire's Liz well last month became the first in a decade to be drilled in the Falklands. An initial update suggested that the reservoir at the well was of poor quality, but the company is expected to use detailed analysis from the Liz well to determine prime locations for further drilling. Desire chairman Stephen Phipps said that company management "remain upbeat" about the islands' potential.
FirstGroup (FGP.L) (Buy)
Tesco (TSCO.L) (Buy)
PREMIER LEAGUE LIFTS TROPHY FOR SUCCESS IN SELLING FOOTBALL
The English football Premier League is to receive a Queen's Award for Enterprise in recognition of its success in marketing itself around the world. The Premier League is the most popular and lucrative football league in the world.
CRISIS HAS MADE BANKS EVEN MORE POWERFUL, IMF WARNS
The International Monetary Fund has said governments must act to curb the increasing power of banks following the financial crisis. The IMF called for cooperation from governments in setting out its future financial regulatory reform agenda, stressing that some too-big-to-fail institutions had been made even larger by the financial crisis. It also warned that large government deficits run-up during the financial crisis could pose a risk of starting a second credit crunch. The IMF Global Financial Stability Review reported that "concerns about sovereign risks could undermine stability gains".
IMF DELIVERS SURPRISE DOUBLE TAX BLOW TO THE BANKS
The International Monetary Fund has proposed two new taxes on banks in order to raise funds to pay for potential future bailouts and to penalise excess profit-making. UK Chancellor Alistair Darling welcomed the proposal, saying: "The recognition that banks should make a contribution to the society in which they operate is right." The British Bankers' Association said that it had been expecting a tax or levy, but that these proposals appear "wider than expected", according to chief executive Angela Knight.
SABMiller (SAB.L) (Hold)
Cove Energy (A risky buy)
Associated British Foods (ABF.L) (Hold on)
SHARP INFLATION RISE MAY FORCE BANK TO RAISE INTEREST RATES
A steep rise in the prices of petrol, gas and food has increased inflation beyond predicted levels. The increase has caused concern that the Bank of England may be forced to increase interest rates sooner than anticipated. The Office for National Statistics yesterday announced that the Consumer Price Index had risen by 3.4 percent in the year to March, up from 3 percent in the year to February. The retail prices index rose by 4.4 percent in the year to March, pushing it to an 18-month high.
PIRC URGES INVESTORS TO SAY NO TO BARCLAYS PAY
Corporate governance consultant Pirc yesterday advised its clients to vote against British bank Barclays' (BARC.L) pay report. The alert from Pirc warned that the bank's pay package was "potentially excessive", highlighting in particular the large amount of remuneration received by Barclays' chief executive Bob Diamond. Of the chief executive's performance bonus, the alert said that it considered "the performance conditions to be insufficiently stretching given the level of award". Barclays's annual meeting is to be held on 30th April.
Burberry (BRBY.L) (Hold)
SABMiller (SAB.L) (Hold)
Cove Energy (Buy) ($1=.6233 Pound)
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