PRESS DIGEST - Financial Times - April 29
DEVELOPERS FEEL THE PINCH AS SPENDING SLOWS
According to the British Retail Consortium, UK retail sales last month fell by 1.6 percent compared with March 2007. The reported decrease in consumer spending is, according to Greg Styles, head of retail at property agent Colliers CRE, is making retailers more choosey in terms of the retail space they acquire. This is coupled with the difficulties faced by developers in securing financial backing for retail schemes, states Mr Styles. ING Real Estate has postponed a 300 million pound project in Chester, partly as a result of the changing conditions in funding for retail projects. "The issues facing the credit markets, commercial and construction price inflation and market condition continue to prevail," argues development director David Alker. With Land Securities(LAND.L) expected to say in its trading statement in May that Cabot Circus, its Bristol retail project with Hammerson(HMSO.L), is more than 80 percent let, the outlook, however, is not altogether bleak.
WARNING OF HERITAGE SKILLS SHORTAGE
A report by the National Heritage Training Group has warned that the upkeep of some of the country's oldest buildings remains under threat due to a serious shortage of traditional building skills. The report adds, however, that the shortage of workers with traditional craft skills had decreased from almost 6,600 to nearly 3,600 since its publication of a similar report in 2005. The improved situation was attributed to better recruitment, improved careers marketing, staff retention, retraining and the arrival of skilled migrant workers from eastern and central Europe. However, there are still shortages in certain skills, and serious deficiency in the available number of construction professionals, such as architects, engineers and surveyors, with suitable knowledge and experience of conservation.
OFT FOCUSES ON BEVERAGES IN PRICE-FIX PROBE
As part of its latest probe into alleged price-fixing between supermarkets and their suppliers, the Office of Fair Trading is additionally looking into beverages. Requests for information have been sent to Coca-Cola Enterprises and Britvic, with the former confirming that it had been required to provide information to the OFT. The requests for information come in the light of co-ordinated visits last Thursday to the big four supermarkets- Tesco(TSCO.L), J Sainsbury(SBRY.L), Asda and Wm Morrisons(MRW.L), in addition to Procter & Gamble(PG.N). The latest investigation follows last week's OFT report alleging price-fixing in the cigarette market in the UK between 2002-03. The latest probe will not contribute to an easing of the growing tensions between supermarkets and the watchdog, with the former displeased by the OFT's strategy of mounting high-profile investigations into sectors that resonate with consumers.
WHITE CITY STRUGGLES TO LURE LUXURY
Apart from Louis Vitton(LVMH.PA), the Australian developer Westfield has failed to enrol any other luxury brand to take up retail units at the luxury zone of White City, the new west London retail park. With the company succeeding in letting the main areas of the retail centre, one person involved with White City registered his doubts over the viability of the site for luxury brands: "I don't think the site is right for a luxury brand - it's too close to Sloane Street, Knightsbridge and Bond Street. Why would the brands go there?" Westfield stated that it was "making excellent progress" at leasing the other retail units and that the luxury zone, The Village, would open together with rest of the centre on October 30.
UNIQ SET TO CLOSE DEVON FACTORY
Shares Uniq, the maker of ready meals for Marks and Spencer (MKS.L), closed 4.25 pence lower at 105.25 pence on Monday as the company announced a 90 day consultation process over the closure of its factory in Paignton, Devon, and shift production to the company's large plant at Minsterley in Shropshire. The plan would take 18 months to complete and would cost Uniq 20 million pounds in restructuring costs and investment in new equipment at Minsterley. Numis Securities analyst Ian Kellett reduced his profit forecast for the group for 2008 by three million pounds to 6.3 million pounds, with the move to Minsterley leaving room for upgrades in the longer term.
DAWNAY DAY CARPATHIAN NEARS FULL INVESTMENT OF ITS FUNDS
The property investment company Dawnay Day Carpathian achieved an eight percent rise in its net asset value per a share in 2007 as it approached full investment of its funds. "We have now largely completed the acquisition phase of our business plan and as a result we have entered the next phase of working on consolidating the portfolio and progressing our development projects," said chairman Rupert Cottrell. The specialist in central and eastern Europe property, which now owns 55 property assets across central and eastern Europe, saw net rental and related income increase from 12.7 million pounds in 2006 to 24.3 million pounds in 2007, while adjusted profit improved by 18.5 percent to 11.5 million pounds. Separately, News International is in talks to sell its Wapping headquarters to the private property developer Marcus Cooper for more than 200 million pounds.
SALES RESTRICT LOK'N STORE
Shares in Lok'n Store closed four pence ahead at 181.5 pence on Monday as the self-storage company reported an increase in turnover for the six months to January 31 from 5.3 million pounds to 5.5 million pounds, while like-for-like sales increased by 13 percent. Pre-tax profits declined to 216,000 pounds from 317,000 pounds, while operating profits decreased from 770,000 pounds to 749,000 pounds. Interim results were helped by the sale of two of the company's mature self-storage warehouses last year, with chief executive, Andrew Jacobs, commenting that he was pleased to have replenished earnings after the sale of the two stores.
POLYFUEL SEES BRIGHT FUTURE
Polyfuel, the aim-listed California-based company with the patent for a membrane for methanol powered fuel cells, has stated that it believes that it is "positioned to be the leader in providing the industry with the products, tools and designs necessary to commercialise portable fuel cell technology". The reinstatement of a grant from the US Department of Energy, increasing from 185,000 dollars to 1.4 million dollars, helped bolster the company's total revenues for last year. The firm is also to receive a two million dollar award from the US National Institute of Standards and Technology's advance technology programme to develop the next generation of membranes. At the end of the year, the company's net cash and short-term investments stood at 13.7 million dollars, a sufficient amount to last two years at the present burn rate.
CONTRACT WINS BOLSTER NASSTAR
With contract wins from EasyGroup and Pinnacle Staffing helping Nasstar reduce first-half losses, shares in the online computing services group gained more than ten percent. Subscription to the company's Hosted Exchange service, which enables users to access all of the applications on their desktop over the internet, almost doubled to 7,000, leading to earnings of 100,000 pounds, before interest, tax, depreciation and amortisation, compared with losses of 109,000 pounds a year ago. For the six months to March 31, turnover improved by 100 percent to one million pounds, while pre-tax losses declined from 243,000 pounds to 117,000 pounds. Shares closed four pence ahead at 39 pence.
PERIMETER AD GROWTH FOR ESSENTIALLY
The stadia perimeter advertising company Sportseen is to be bought by Essentially, the sports marketing agency, for nine million pounds comprising of 6.3 million pounds in cash and the issue of shares worth 2.7 million pounds. With 5.1 million pounds in revenues and 970,000 pounds in pre-tax profits in the year to June 30, Sportseen provides fixed, LED and scrolling boards for all UK international rugby matches as well as seven Premier League clubs and four football associations. With a view to repaying debt and funding working capital, Essentially will announce on Tuesday the successful raising of six million pounds through a share issue.
Prepared for Reuters by Durrants.
