Round-up of Wednesday's business pages
LONDON (Reuters) - Here is a summary of the main stories in Wednesday's business pages.
Financial Times
MORTGAGE MARKET UNLIKELY TO RECOVER SOON
In an interim report produced with the Treasury, the former chairman of HBOS HBOS.L, Sir James Crosby, said the capacity of lenders to make mortgage advances was "severely constrained", and warned that the mortgage market was unlikely to recover in the next three years.
The mortgage market could be improved by new issuance of wholesale mortgage-based securities, however, Crosby said he found no quick fixes to address the market problems.
The report coincided with figures from the Bank of England revealing a fall in the number of mortgage approvals for those moving home in June to 36,000 from 41,000 in May, the lowest since comparable figures were first released in 1993.
8 ARRESTED IN FSA INSIDER DEALING PROBE
In a sign of a tougher approach to a problem the regulator believes is rife in the Square Mile and a threat to the integrity of the markets, officials from the Financial Services Authority, along with City of London Police, arrested eight people and raided premises in London and the South East.
Those arrested include workers at Swiss bank UBS (UBSN.VX) and JPMorgan Cazenove in what the FSA described as a "major ongoing investigation into insider dealing rings".
Cazenove said the arrested individual was a subcontractor employed by another company, while UBS confirmed that a "junior member of UBS's support staff in London" had been arrested.
INVESTORS PROPOSE CODE FOR RIGHTS ISSUE
The UK's biggest shareholders have proposed a shake-up in how rights issues are carried out to try to limit the kind of difficulties endured by banks in recent troubled fund-raisings.
The proposals, outlined in a letter to the FT from the heads of several leading UK fund managers, include a code of best practice that would require investors to cease betting on falls in the share price of companies going through rights issues if they act as sub-underwriters to the fund-raisings.
It would also provide limits to short-selling and stock lending. Led by Keith Skeoch, chief executive of Standard Life Investments, and Peter Chambers, chief executive of Legal & General Investment Management, the investors stated that the code would prevent sub-underwriters from selling borrowed shares during an offer period in anticipation of a fall in shares.
HEALTHCARE SPEND BOLSTERS CRODA
The cosmetic ingredients maker, Croda (CRDA.L), announced a sharp rise in profits on the back of higher glycerine prices and cost savings from the Uniqema acquisition.
More healthcare spending, a significant rise in demand from environmentally friendly healthcare products and an ageing population seeking younger looks have been driving forces in the strong growth in consumer health markets.
In the six months to June, pre-tax profits jumped to 52.9 million pounds on revenues improved from 402.9 million pounds to 488.7 million pounds.
DIGNITY BUCKS FALLING DEATH RATE
Despite the falling death rate, acquisitions of local family-run businesses helped Dignity (DTY.L) achieve growth, with pre-tax profits in the six months to June 27 climbing from 18.3 million pounds to 22.1 million on revenue of 90.6 million.
After spending 16.9 million pounds buying nine funeral parlours and a crematorium so far this year, Dignity now operates 548 funeral parlours and 23 crematoria.
ST JAMES'S PLACE UNAWARE OF ANY PLANS BY HBOS TO DISPOSE OF 60 PERCENT STAKE
Mike Wilson, chairman of St James's Place (SJP.L), said on Tuesday he was not aware of any plans by HBOS HBOS.L to offload its 60 percent stake in the wealth manager.
"We are not aware of any discussions taking place on the disposal of St James's Place, and we are sure we would be made aware if indeed discussions were taking place," he said.
Wilson's statement comes in the light of speculation over potential interest in the firm and the possibility that HBOS may look to sell its stake to shore up its own balance sheet.
GMG RETHINKS REGIONALS
Speaking ahead of the release on Wednesday of Guardian Media Group's full-year results on Wednesday, chief executive Carolyn McCall has said that regional newspaper businesses will have to be "financially recalibrated" as they will have substantially smaller margins in the future.
McCall added that local newspapers are "good businesses, with potentially good profits, but the margins are going to come down".
GMG is expected to reveal an 8.7 percent improved turnover to 438 million pounds for the year to the end of March 2008.
Heavy investment in the main Guardian News & Media operation turned last year's 97.7 million pound pre-tax profit into a loss of 28.4 million pounds after stripping out a 334 million pound gain on the partial sale of Trader Media Group.
WOOLWORTHS ISSUES PROFITS WARNING
Shares in Woolworths WLW.L lost 0.94 pence at 5.55 pence on Tuesday as the company issued a profit warning.
In the past six weeks, like-for-like sales in the stores of the variety retailer and wholesaler declined by 6.7 percent, after losing 2.2 percent in the previous 19 weeks, with the gross margin for the first-half now expected to be 125 basis points behind the same period last year.
In the 25 weeks to July 26, group sales fell 3.1 percent, with the company blaming poor weather for weak sales of outdoor goods and clothing.
The failure of Woolworths to effectively exploit its 2entertainment joint venture with the BBC, which publishes titles such as the Blue Planet, was criticised by Panmure Gordon analyst Philip Dorgan.
FRUITY GELS LIFT CUSSONS
Shares in PZ Cussons (PZC.L) gained 19.75 pence at 189.5 pence as the maker of Imperial Leather reported a 13 percent increase in pre-tax profits for the year to May at 76.5 million pounds on revenues 14 percent ahead at 660.9 million pounds.
The total dividend for the year will be 10 percent more than last year at 4.7 pence.
"All our brands performed well and the big question is whether we are seeing any effect from the downturn -- and at the moment we're not," said finance director Brandon Leigh.
The company makes 64 percent of its turnover in Africa and Asia, with Nigeria being its biggest foreign market.
INVESTORS KEEP CLEAR OF CAPE
Shares in Cape lost 1.4 percent to a three-month low of 237.25 pence as bearish research from Panmure Gordon weighed against the provider of support to the energy and mining sectors.
"Cape's financial gearing and its recent acquisition activity ensure that we remain cautious. The world has moved on in the past month, and the rosy outlook attached to the hydrocarbon and the mining universe is now less predictable," said Panmure's Oliver Wynne-James.
Panmure set a 220 pence target price for Cape shares and repeated "sell".
British business
The Times
RECORD SECOND-QUARTER PROFITS UNDERLINE IMPORTANCE OF RUSSIAN JOINT VENTURE TO BP
BP (BP.L) has announced record second-quarter profits of 4.74 billion pounds, helped by a doubling of the returns from its Russian joint venture and the soaring cost of oil.
The results cast new light on the importance of TNK-BP to the British oil giant, and are a 28 percent improvement on the previous year. BP's share of net profits from the venture rocketed from $686 million to $1.35 billion, and represents 14 percent of total group income.
BP's chief executive, Tony Hayward, said: "In many respects TNK-BP is having its best year ever."
MEDIA
Contentfilm (CFL.L) revealed that it has renewed and extended its senior secured revolving loan facility to $45 million. The move is an increase from $32 million earlier.
The media rights owner plans to utilise these funds in its film and television operations.
SHADOWS LOOM OVER BATEMAN
Bateman Litwin BNLN.L issued a profit warning on Tuesday to prove that not everything is as rosy as it may first appear in the booming energy services sector.
The company has revised its annual operating profit expectations downwards after its new chief executive, David Lamont, carried out a review of the business.
However, the company also unveiled four new contract wins, including 78.7 million pounds of work at a waste-to-energy plant in Ireland. Despite this its shares fell nearly 36 percent to 84 pence.
The Daily Telegraph
BUOYANT ABBEY BECOMES UK'S BIGGEST LENDER
Abbey (ANL_p.L) wrote one third of all new mortgages in the three months to June, propelling it above HBOS HBOS.L to become Britain's largest mortgage lender in the first half of the year.
The lender more than doubled net lending to 8.3 billion pounds in the six months to June, from 3.6 billion last year.
It wrote 25.6 percent of net new mortgage lending for the half-year as a whole. Against the backdrop of a shrinking mortgage market, Abbey warned that house prices would fall between 5 percent and 7 percent this year.
WHITE STUFF RIDING ON CREST OF A WAVE AS SALES RISE 15 PERCENT
According to White Stuff, well-to-do young mothers have not let the consumer downturn get in the way of their spending.
Like-for-like sales at the company soared 15 percent in the quarter to the end of July as Sally Bailey, chief executive, revealed that it had called off its search for a strategic investor.
White Stuff's web sales were up 78 percent in the quarter, and the position of its stores also helped to drive growth. Ms Bailey said: "We position ourselves as a local shop so we are not being hit by higher petrol prices."
WOOLWORTHS' SALES DECLINE BLAMED ON SLOWDOWN
Woolworths WLW.L, which last month ousted chief executive Trevor Bish-Jones, has revealed a sharp drop in sales.
The news prompted one analyst to forecast the company's "long lingering death" and sent the retailer's share price tumbling.
Richard North, chairman, believes the company's problems are down to the consumer slowdown. Mr North said: "I don't think this is worse than anything else on the high street. I definitely don't think this is a Woolworths problem."
Its shares are down 14 percent at 5.55 pence.
The Independent
INFORMA SHARES RISE AFTER SECOND APPROACH
Informa (INF.L) said on Tuesday that it had received a second approach, and the news sent its shares soaring 13 percent to 437.25 pence.
The publishing and events group has been in negotiations since July with a private equity consortium about a 506 pence indicative offer that values it at 2.15 billion pounds.
The company also revealed an 18 percent increase in interim revenues to 628 million pounds. Its pre-tax profits, however, dropped 32 percent to 60 million pounds due to an amortisation charge for its acquisition of Datamonitor.
CHIPMAKER WOLFSON WARNS OF SALES DIP
Wolfson Microelectronics (WLF.L), the Scottish chipmaker, has warned that reduced demand for consumer electronics would hit third quarter sales. The company revealed that costs and jobs would be slashed to fight the downturn.
Wolfson Microelectronics, which makes chips for products including Apple iPhone, announced third quarter revenue would come in at a lower-than-expected $56 million to $62 million.
PERSIMMON TAKES A HIT ON MORE HOUSING PAIN
Persimmon (PSN.L) took the brunt of Tuesday's share price falls by losing 22 pence at one stage. It ended the session 1.5 pence lower at 311.5 pence after Panmure Gordon (PMR.L) reduced its recommendation from hold to sell.
Over the last year the company's shares have lost 71 percent of their value, and the broker said its shares had jumped too far too soon from their recent lows. It added this was especially the case as the market is likely to stay depressed for the foreseeable future.
The Guardian
GUARDIAN MEDIA GROUP PROFITS TOP 300 MILLION POUNDS AFTER AUTO TRADER SALE
Guardian Media Group saw its annual profits climb by the sale of a 49.9 percent stake in Trader Media Group, the owner of Auto Trader. However, it also warned that uncertainty in the UK economy will hit revenues in the coming year.
CMG, owned by the Scott Trust, said pre-tax profits increased to 306.4 million pounds in the year to the end of March, compared with 97.7 million pounds the previous year.
Paul Myners, chairman, said: "We expect the uncertainty within the UK economy to have an impact on the number of the group's revenue streams in the coming year."
MAGAZINES GROUP SEES 4 PERCENT RISE IN AD REVENUE
Future, the magazine publisher, bucked the trend of gloomy media company revenue performance to report a 4 percent rise in ad income over the past nine months, boosted by digital growth.
The increase in advertising revenue masked a 2 percent drop in print advertising, which was offset by a 39 percent increase in online advertising. Future saw overall revenue climb 1 percent, and online made up 19 percent of Future's advertising revenue during the period.
INCHCAPE TO KEEP JAGUAR AND LAND ROVER OUTLETS
On Tuesday, Inchcape (INCH.L), the car dealership, announced it would retain its Jaguar and Land Rover retail centres in Britain.
The news follows the establishment of stable ownership of the marques through their acquisition by Tata, the Indian group.
Inchcape said it was outperforming the market, but described UK conditions as challenging. The company revealed sales up 5.1 percent to 3.3 billion pounds in the first half, helped by a strong performance in emerging markets such as Russia and the Baltic states. Its pre-tax profit climbed 4.4 percent to reach 130.3 million pounds.
Prepared for Reuters by Durrants
