US employment figures issued yesterday showed the first fall in jobs for 4½ years.Employers in the United States cut 17,000 jobs overall in January, compared with the average forecast by analysts of a 70,000 gain, as the sub-prime mortgage crisis fed directly into the building industry and had a knock-on effect on manufacturing, according to the US Labour Department.
US manufacturing grew in January, after contracting in December to the weakest since April 2003. The Institute for Supply Management said its index of national factory activity rose to 50.7 in January from 48.4 in December. A reading above 50 indicates expansion.
UK manufacturing growth slowed to a 2½year low in January. The CIPS/NTC Purchasing Managers’ Index, in which any figure over 50 represents expansion, fell to a lower than expected 50.6 last month, from 52.4 in December.
Insolvency levels in the UK fell by 3.9 per cent in the last three months of last year, a decrease of 16.4 per cent year on year. Figures from the Insolvency Service showed that corporate insolvencies rose by 0.3 per cent in the last quarter of last year compared to the previous quarter, but fell by 2.1 per cent year on year.
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Royal Bank of Scotland and Barclays have joined forces with six other banks to work on a $15 billion (£7.6 billion) rescue plan for the struggling US mortgage bond insurance industry. The consortium, which includes Citigroup, Soci?t? G?n?rale and UBS, is working with the New York Insurance Department to bail out bond insurers, who are in danger of sinking under the sub-prime mortgage crisis.
Soci?t? G?n?rale shares surged yesterday as Cr?dit Agricole, its rival French bank, sought advisers to examine how it might take part in a break-up bid. Cr?dit Agricole was in talks with Lazard, the investment bank, although no formal mandate had been signed.
Royal London Group, the mutual life and pensions company, said that like-for-like new life and pensions business fell 1 per cent to £1.9 billion in 2007. Royal London said group pensions declined by 15 per cent to £489 million because of a fall in single premiums and transfer values.
Anglo Irish Bank, the Dublin- listed lender, said it is on course to meet analysts’ expectation of 15 per cent growth in earnings per share for the year to September 30 2008, buoyed by “strong” trading in the four months to January 31.
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Credit Suisse has raised the UK real estate sector to “overweight” from “market weight”, saying that falling interest rates in the short to medium term would encourage buyers back into the market.
Worthington Nicholls Group, the air-conditioning company, said it expects first-half restructuring costs of about £1 million, adding that a review of its trading units has found poor budget and forecast standards across the group. The company said that until these issues are resolved, market guidance for the year to end-March 2009 is “not appropriate.”
Cranswick, the maker of sausages and other pork products, said that total sales in its third quarter to December 31 2007 were £158 million, an increase of 18 per cent compared with the same period last year after adjusting for the impact of the sale of its animal feeds business in May 2007. That was ahead of analysts’ forecasts.
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Heineken, the Dutch brewer, announced a joint venture with Turkey’s Efes Breweries International in Uzbekistan and Kazakhstan, sparking speculation that the two compnies could join forces in Russia to challenge Carlsberg’s dominant Baltic Beverages Holding business.
Airbus has started test flights for its super-jumbo A380 jet, with a natural gas-based jet fuel produced by a unit of Royal Dutch Shell, marking the first tests of the alternative fuel in a commercial aircraft.
FKI has confirmed that it has received an approach which may lead to an offer being made for the company. However the engineering firm said the approach is preliminary and there is no certainty that any offer will be forthcoming.
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ReNeuron Group is set to lobby the US Food and Drug Administration as part of its attempt to start human trials on its lead treatment for stroke, after arranging a crucial “Type A” meeting with the regulator on February 14. The meeting is a significant development for the UK-based stem-cell company as it hopes to use it to iron out the remaining concerns raised by the FDA over clinical trials for the therapy.
DS Smith, the international packaging maker and office products wholesaler, said that it will invest £104 million to produce lightweight corrugated case material at its prime UK paper mill at Kemsley in Kent. The company also said that it has agreed terms with M-Real Corp to acquire the adjacent New Thames Paper Mill, and buy the remainder of Grovehurst Energy not already owned by DS Smith, for £60 million cash.
Greene King, the pub operator and brewer, reported a 0.1 per cent decline in like-for-like sales in its managed pub division for the 38 weeks to January 20, and said that, despite the challenging trading environment, it was confident of meeting full-year profit forecasts.
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GPG, the investment firm bidding for Newbury Racecourse, said it planned to lift its stake to 29.9 per cent and gave warning that if its bid failed it intended to call a special meeting to require the board to seek shareholders’ approval for a controversial housing development on the site.
Mitchells & Butlers, the embattled pub operator at the centre of bid interest from suitors including Punch Taverns and several private equity firms, is preparing to appoint new advisers alongside its existing advisers at Citigroup.
Fuller, Smith & Turner, the London brewer and pub operator, reported a slowdown in trading in the second half of the year, although it remained confident its full-year profits would be “within the range of market expectations”.
Emap has completed the sale of its consumer media business to Germany’s Heinrich Bauer Verlag for £714.3 million. Emap said the sale of its 40.1 per cent stake in NextGen to Bauer for an additional £3.7 million has not yet been completed but is not a condition of the proposed acquisition of the company by Eden Bidco.
Chinalco and Alcoa dramatically waded into BHP’s bid for Rio Tinto yesterday, revealing that they had secretly bought a 12 per cent stake in Rio at a price of £60 per share, way above BHP’s offer. China’s state-controlled aluminium giant, Aluminium Corp of China, known as Chinalco, made the move just days before BHP’s deadline for making a firm bid or walkingaway.
Eni UK Holding, a unit of Eni, of Italy, said that its recommended offer for Burren Energy has been declared wholly unconditional after it received valid acceptances representing about 84.97 per cent or 119.91 million shares.
EnCore Oil has reported a much larger first-half pre-tax loss after being hit by higher costs, and said that it hopes to end 2008 with a smaller portfolio that is smaller but has greater overall value. The company’s loss for the six months to December 31 widened to £1.52 million from £415,871.
Rio Tinto said that it and its joint- venture partners have signed long-term contracts to supply more than 40 million tonnes of iron ore from the Pilbara region in northwestern Australia to Hyundai Steel over the next ten years.
BP said that it found more oil in the deepwater Block 31, offshore Angola, its 15th discovery in the area so far. The find, known as Portia, is 7 kilometres north of the Titania discovery. BP also said that, with its joint-venture partner Marathon, it has found oil in Block 204/23 of the North Sea, after drilling 190 kilometres west of the Shetland Islands.
The Works was forced into adminstration yesterday, with more than 1,600 jobs hanging in the balance. Kroll, the restructuring firm, said that it had been appointed to run The Works’s 317 stores in the UK after HSBC, its banker, pulled the plug.
John Lewis: Record bonuses of more than £2,000 look certain to be paid out to staff at John Lewis this spring after the group revealed a sales rise of nearly 5 per cent for the second half of its financial year. It said that demand for electricals, clothing and even furniture was continuing to climb at its 26 department stores and internet site. Sales in the past week, the last of the 26 weeks to January 26 rose 6.1 per cent, meaning that the average growth in the second half was 4.8 per cent.
Hitchens Group said that it has revised its current year sales forecasts and expects to reach profitability later than anticipated. Hitchens provides clearance outlets for surplus stocks of clothing, footwear and household goods.
Mitie Group said that it continues to perform in line with management expectations and is on track to complete another “successful” year, driven by the ongoing trend to outsource services in its chosen markets. Updating the market on four month trading to the end of Janu engineering services company said conditions remain “favourable” in all its chosen markets and “good” organic growth continues. Mitie added that its order book has continued to grow and it has secured 97 per cent of revenue for the year.
Microsoft has tabled a $44.6 billion (£22.7 billion) bid to buy Yahoo! in what would be one of the biggest takeovers in American corporate history. Microsoft announced the terms of the proposed acquisition and said that it was confident of delivering up to $1 billion in cost-savings.
BT Group said it has bought the e-commerce services group Fresca for an undisclosed sum. The telecoms incumbent said the acquisition, which will form part of the retail solutions division of the group, BT Expedite, will enable multi-channel shopping for retail customers.
Ericsson reported a weaker than expected fourth quarter pre-tax profit of SKr7.6 billion (£606 million), down 37 per cent year-on-year as margins contracted sharply, as it announced a cost and job cuts programme and issued a subdued 2008 forecast.
British Airways will launch the first business-only service from the Heathrow Airport in 2009, offering a door-to-door service to New York. The airline will operate a 32-seat, twice-daily service on Airbus A318 aircraft. For the first nine months of the year, revenues were up just 0.9 per cent in the period to December 31, some way short of its full year guidance of 3 to 3.5 per cent.
Aer Lingus will begin its new strategic partnership with JetBlue Airways of the US on April 3. The two airlines said that the alliance will enable Irish and US customers to book a single low fare reservation between Ireland and more than 40 continental US destinations.
ScottishPower is the latest British power supplier to announce a double-digit price increase. The company, which has 5.2 million customers and is owned by Iberdrola, the Spanish utility, said that electricity prices will rise by an average of 14 per cent and gas prices by 15 per cent.
RWE, the German utility, is to invest nearly €3 billion (£2.3 billion) in Germany’s high voltage power grids by 2017. RWE plans 800 kilometres of new lines and more than 25 transformer stations to expand its installations.