Financial Times
DARLING IN CLAMPDOWN ON RISKIEST BANKS
Chancellor of the Exchequer Alistair Darling will present a
White Paper on Wednesday that will instruct the Financial
Services Authority to implement new rules to ensure banks and
financial institutions posing the greatest threat to the
financial system will be subjected to increased capital and
liquidity standards. The new regulatory regime could force banks
to split into smaller, less risky operations, but Darling is
expected to insist retail and investment banks run their
businesses in such a manner that the authorities could wind them
down over the course of a weekend.
DATA SHOW SHARP DECLINE IN OUTPUT
According to the National Institute for Economic and Social
Research, a decline in manufacturing output resulted in the
economy contracting by 0.4 percent in the second quarter,
leading the think-tank's director, Martin Weale, to conclude the
economy is stagnating and not in a sharp decline. The weakness
in the manufacturing sector has increased expectation that the
Bank of England will extend its quantitative easing programme
when its monetary policy committee meets on Thursday. The
British Chamber of Commerce said talk of a recovery was
premature due to a continued fall in sales in the manufacturing
and services sectors.
DOWNTURN IN JOBS MARKET GIVES SIGN OF EASING
According to a survey of 400 recruitment firms by the
Recruitment and Employment Confederation and KPMG, June's fall
in job appointments for permanent staff was the weakest for 13
months, an indication there are "signs of life" in the
employment market. The REC's chief executive, Kevin Green, said
if the labour market continues to improve, some employers might
resort to "strategic hiring" to meet specific skills gaps. Green
said that while the public sector continued to recruit, it was
vital that demand returned to the private sector in order to
negate potential public expenditure constraints which could
hinder a full jobs market recovery.
CROWN ESTATE SEES ONE BILLION POUNDS WIPED OFF VALUE OF
ASSETS
An increased slump in the real estate market has forced the
Crown Estate to write off more than one billion pounds from the
value of its assets. It will reveal on Wednesday that the
capital value of its holdings has fallen by 18 percent to six
billion pounds, but it still managed to generate a net income
surplus of 226.5 million pounds for the year ending March 31
2009, a 6.1 percent increase on 2008. The Crown Estate's marine
business is set to be a focus for future growth due to the
potential of wind and wave power.
COFFEE REPUBLIC EYES INSTANT SALE
KPMG Restructuring, the administrator to Coffee Republic , plans to complete the sale of the chain by the end of
next week. KPMG's Richard Hill said he had received expressions
of interest from numerous interested parties, including some
"well-known names". Hill said most interest in the brand, its
outlets and franchise operation came from existing coffee bar
operators. A preferred buyer will be selected by Wednesday, with
completion due on Friday. Shares in the company were suspended
on Aim on Friday "pending clarification of the financial
position of certain subsidiaries".
FOUR SEASONS IS SET TO BE SOLD
UK care homes group Four Seasons Healthcare is set to be
sold after its lenders failed to agree on a restructuring
programme. The decision to sell was made on Monday night, when
the required number of the company's lenders failed to agree to
a debt-for-equity swap that would have restructured 1.5 billion
pounds of debt. The move comes at the end of lengthy
negotiations complicated by the company's complex capital
structure that involves 11 tranches of debt held by several
institutions. The group has been in a precarious state ever
since it became clear last summer that it could not meet its 1.5
billion pound debt repayment deadline.
ECOFIN BUCKS TREND WITH 140 MILLION POUND RIGHTS ISSUE
Ecofin Water & Power Opportunities has defied the trend for
investment company fund-raising by staging the sector's biggest
mainstream issuance of the year. The investment trust said it
had received commitments for a placing of 140 million pounds in
a combination of convertible subordinated unsecured loan stock
and zero-dividend preference shares. The issuance, which is 20
million pounds above target, is part of a restructuring that
came about after income and capital shares reached the end of
their life in March. The group said demand from private client
brokers was high as zeros are subject to capital gains tax that
is lower than income tax.
JACQUES VERT SEES SOME GREEN SHOOTS
Fashion retailer Jacques Vert has reported an
improving trend in like-for-like sales. The group said that
although like-for-like sales fell by 4.7 percent, this
represented an improvement on the 6.8 percent drop reported in
the first half. The current year has seen the decline decrease
to 3.4 percent in the past ten weeks. The group attributed the
slowing rate of decline to the performance of its Jacques Vert,
Planet and Precis Petite brands. Sales were also driven by
increased discounting in the final quarter of 2008 and early
2009, although gross margins dropped to 61.5 percent, compared
with last year's 63 percent. Nevertheless, the first ten weeks
of the year saw gross margins rise from 63.9 percent to 64.7
percent.
REED SELLS TRAVEL PUBLISHER
Reed Elsevier is selling part of Reed
Business Information amid poor trading conditions and the trade
magazine's reduced valuation. Clive Jacobs, the former vice
chairman of lastminute.com, is buying TWgroup, RBI's travel
publishing unit in a sale that one analyst predicts will mark
the beginning of RBI's break up and suggests that Reed is open
to offers. The acquisition includes all TWGroup brands,
including Travel Weekly, Gazetteers.com and Travolution. A
Credit Suisse analyst estimated that the revenue of TWGroup is
"a little more than one to two percent of RBI revenues".
CLAPHAM HOUSE COUNTS COST OF TOOTSIES
Despite good performance at Gourmet Burger Kitchen, pre-tax
profits at Clapham House still dropped from five million
pounds to 4.1 million pounds before goodwill and other charges.
The results were also hit by the 24.2 million pound goodwill
impairment charge on Tootsies restaurants. The latter was the
main contributor to the group's 26.2 million pound pre-tax loss
for the year to March 29. Executive chairman David Page was
downbeat about consumer confidence and said the main issues
facing the group were the necessity of discounting to sustain
revenues and the increase in minimum wage due in October.
Prepared for Reuters by Durrants
Keywords: PRESS DIGEST Financial Times July 8
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
