Five in court over Imperial collapse
Five men have appeared at Lincoln District Magistrates Court charged with conspiracy to defraud over the collapse in 2002 of Imperial Consolidated, an investment company that owed more than £100 million. Five former directors of companies in the group — Jared Brook, 36, Lincoln Fraser, 35, William Godley, 58, Nicholas Fraser, 33, and Robert Raven, 46 — each paid bail of £150,000 and will appear at Lincoln Crown Court next week.
Float delayed
The proposed £275 million flotation of Southern Cross Healthcare, the UK’s biggest nursing home group, has been delayed because of current volatility in the stock market. Blackstone, its US private equity owner, had been due to begin its investor roadshow next week. Morgan Stanley and UBS are advising.
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Arcelor ‘no’ vote
The second-biggest investor in Arcelor is to vote against the steelmaker’s share buyback plan on the ground that it was likely to decrease “significantly” the value of Arcelor shares. Carlo Tassara International, which holds a 5 per cent stake, will tender its vote at an extraordinary general meeting on June 21.
Woolies waits for Christmas
Analysts cut an average 4 per cent from profits forecasts for Woolworths yesterday as the high street retailer revealed a slump in sales. Consensus profit forecasts dipped to £42.3 million. Woolworths said that underlying sales had dived 6.7 per cent in the 19 weeks to June 10.
Trevor Bish-Jones, the chief executive, gave warning that the football World Cup would “pull people out of the shops” over the next month, but he was more confident about the prospects for Christmas. A generally weak market for music and DVDs, plus increased competition, had
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had a significant impact on sales in these areas this spring, while clothing had also not sold well until the recent warm weather.
Sales performance was also affected by a strategic decision to buy fewer Easter eggs and focus on full-price sales, a move that increased profits in that area by “several hundred thousand pounds,” according to Mr Bish-Jones.
John Stevenson, an analyst at Shore Capital, cut his profit forecast by 10 per cent to £41.6 million: “We cannot help but feel Woolworths remains a hamster in a wheel, running faster and faster but unable to progress forwards.”
Weather to blame
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House of Fraser blamed the recent warm weather and fewer promotions for its slower sales growth this spring.
The department store revealed a 2.4 per cent drop in underlying sales in the 19 weeks to June 10, compared to a 1.3 per cent drop in the first seven weeks of that period.
However, shares stayed firm at 135p as analysts said that the deterioration was unlikely to affect a planned takeover by Baugur, the Icelandic investment firm. The company refused to comment on its discussions with Baugur, which is examining HoF’s books with a view to putting forward a 148p-a-share bid.
Analysts said that it was unlikely that the deterioration in trading would affect Baugur’s offer.
Tesco shares slip
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Tesco, Britain’s largest supermarket group, admitted that a more competitive market was partly responsible for solid rather than spectacular trading figures.
Shares in the group slipped 2½p to 327¼p yesterday as Tesco said that underlying sales in the UK had risen by
4.5 per cent in the 13 weeks to May 27, at the bottom end of market expectations. The disappointment came despite a lower rate of price deflation of 1.4 per cent against the 1.5 to 2 per cent that Tesco seen before Christmas.
Andrew Higginson, Tesco’s finance director, said that Tesco was “pleased” with its sales performance. He described it as a “strong start to the year”.