Financial Times
JOBLESS FORECAST CUT BY MINISTERS
Ministers have revised their forecasts for the number of
long-term unemployed after a slower than expected rise in
benefit claimants and warned welfare-to-work providers of the
flagship Flexible New Deal to expect about 40 percent fewer
jobseekers. Some providers have already laid off staff before
the FND programme begins, but the reduced numbers are expected
to save 75 million pounds of public money. Employment Minister
Jim Knight said the government was not going to apologise for
fewer people being out of work than previously expected.
WHOLESALE GAS PRICES PUMP UP PROFITS FOR SUPPLIERS
According to consultants Energy Contract Company, profit
margins at gas suppliers are higher than at any time in the past
ten years because the plunge in wholesale prices has not been
matched by a drop in household bills. The level of profit
generated is reliant on the timing of the purchase of the gas,
and if bought during the summer, an estimated 20-30 percent of a
household bill could be profit. Garry Felgate, chief executive
of the Energy Retail Association, said suppliers purchased gas
well in advance to protect consumers against market volatility.
RECESSION SPURS RISE IN UNFAIR DISMISSAL CLAIMS
According to figures published by the Tribunals Service,
claims for unfair dismissal increased by 30 percent in the year
to the end of March. Complaints related to the failure to
consult on redundancies have more than doubled. Law firm
Eversheds said employers will this week face a "double whammy"
of an increase in statutory redundancy entitlements and unfair
dismissal compensation coupled with court recommendations for
increased discrimination rewards.
BLACKS POISED TO CONTACT LANDLORDS FOR LEASE EXITS
Blacks Leisure and its advisers KPMG are set to
contact its landlords in order to set up a company voluntary
agreement by November. Blacks is expected to offer landlords six
months' rent in exchange for allowing it to withdraw from the
leases on 89 stores it hopes to close. The company said: "The
majority of the stores to be closed have not traded profitably
for years." The plan is similar to those recently signed by JJB
Sports and Focus DIY. Blacks also announced it would
look to axe 50 jobs at its head office and has been consulting
staff in about 400 stores about further redundancies.
NEW INTERNATIONAL STRUCTURE HELPS E&Y WEATHER DOWNTURN
Ernst & Young has reported revenue growth of eight percent,
thanks to a new international structure that has helped it
survive the economic downturn. The professional services group
surpassed its sector peers by generating revenue of 1.38 billion
pounds for the year to June 30. Globally, E&Y's revenues dipped
0.2 percent in local currency terms, while revenue in the U.S.
dropped by 3.2 percent. Scott Halliday, managing partner for the
UK and Ireland, said E&Y's tie-up between 87 of its partnerships
across Europe, the Middle East, India and Africa had allowed it
to shift staff between countries as needed.
MANGANESE STARTS MORE JOB-CUT TALKS
Hackney cab manufacturer Manganese Bronze warned of
widening losses as it began consultations with workers over
further job cuts. The group recently extended its summer
shutdown amid falling demand and faltering sales, which gave
rise to predictions that full-year losses would be worse than
anticipated. Chief executive John Russell said the expected
run-rate of sales indicated the business would not reach its
break-even sales target of 2,000 vehicles a year. The company,
which has begun production of a cheaper version of its taxi
through a joint venture with Chinese carmaker Geely, hopes to
reduce production costs by sourcing cheaper components in the
country.
ASOS DISPLAYS CAUTION DESPITE SURGING SALES
Online fashion retailer Asos said extra costs
incurred in expanding its product offering meant profits would
be only slightly better than the same period last year, despite
surging sales. The company said the strong sales seen during the
recession had started to slow but that growth remained strong.
Asos said it would concentrate on expanding its overseas
business where sales rose 110 percent on the same period last
year. UK sales were up 47 percent.
TRAVIS PERKINS UPBEAT ON RAISING MARKET SHARE
Geoff Cooper, chief executive of Travis Perkins, is
confident that once the recovery takes hold the group can take
market share from recession hit rivals who have had to scale
down. This is despite the continuing struggles of the group's
trade arm. The group has closed only one site since the market's
2008 peak -- compared with 600 closures across the sector. Sales
at its retail division, which trades under the Wickes brand,
were buoyed by the collapse of rival MFI -- with showroom sales
rising 21 percent from the start of the year to September 26.
BA STILL HOPES TO CONCLUDE IBERIA DEAL
British Airways chief executive Willie Walsh has
said there is still a chance the airline could complete the
proposed merger with Spanish carrier Iberia before the
end of the year. Walsh said talks were progressing but also
restated his insistence that BA would accept no less than a 53
percent stake in the merged company. Walsh also said BA was
interested in making a "very credible" offer for BMI if its
majority owner Lufthansa decides to sell the loss-making
airline.
SMITHS COMBATS "TOUGH" YEAR WITH CUTS
Higher than forecast cost savings at engineering
conglomerate Smiths Group helped mitigate a sharp fall
in underlying profits. Chief executive Philip Bowman referred to
what he described as a "desperately tough year" but noted the
group was well positioned to benefit from the economic recovery.
Excluding exceptional items and the effect of exchange rate
changes, sales at the group fell seven percent and profits fell
21 percent.
Prepared for Reuters by Durrants
Keywords: PRESS DIGEST Financial Times Oct 1
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