Ericsson’s profits tumble

Published: 8:27AM GMT 25 Jan 2010

The Swedish company saw net profits decline to 314m kronor ($43.4m) from
3.89bn kronor a year earlier. Analysts had expected profits of 2.5bn kronor,
according to Bloomberg.

Ericsson has seen its customers cut their spending on older networks without
speeding up spending on newer, high-capacity networks enough to plug the
gap. Shares in Ericsson fell 3pc in trading in Stockholm.

“It’s going to be challenging to both maintain market share and
secure healthy financial development, with Chinese equipment manufacturers
being so aggressive and the latest contracts likely having been signed on
cut-throat margins,” Fredrik Thoresen, an Oslo-based analyst with DnB
NOR Markets, told Bloomberg.

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Building society raises mortgage charges by £1,500 sparking fears hike may be first of many

By
Daily Mail Reporter
Last updated at 9:39 AM on 21st January 2010

Thousands of homeowners will pay £1,500 extra a year for their mortgage after a leading building society increased its standard variable rate.
Skipton Building Society will raise its SVR from 3.5 per cent to 4.95 per cent, despite the Bank of England keeping the base rate on hold since March last year.
The shock rise will leave many of its 125,000 borrowers scrabbling to find an extra £122 a month to meet repayments on a typical £150,000 loan.
Shock: Skipton Building Society will leave many of its borrowers scrabbling for an extra £122 a month to meet repayments
Fears are growing that hundreds of thousands of homeowners face similar rises because cash-strapped building societies cannot compete with the nationalised banks.
Ray Boulger, from broker John Charcol, says: ‘There’s a pretty good chance that we are going to see more building societies follow. ‘Historically low interest rates have left building societies with thousands of mortgages on low rates which are not making them any money.

‘On top of this, they cannot bring in money from savers because of the fierce competition in this market. ‘The only thing that they can move is their SVR and that is going to hurt their existing customers.’
The SVR is the rate customers revert to when their special deal, such as a two-year fix or three-year tracker, comes to an end.
Skipton chief executive David Cutter said the society would try to reintroduce a 3 per cent cap if the market improved.
The rate rises take effect from March 1.

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Housebuilder highlights wall of planning issues

Britain is unlikely to return quickly to the peak rate of housebuilding during the boom of the past decade, the chief executive of Taylor Wimpey has said.
Despite reporting a rise in demand for new homes that was better than expected — running at nearly a third higher than the dark days at the end of 2008 — Peter Redfern said that planning requirements would hold back a wholesale recovery in building volumes.
Mr Redfern said: “At the peak, the industry in the UK was building 170,000 units. That has halved and last year the industry completed around 85,000 to 90,000 units. It will be a very long time before we get back to those those high volumes because of the constraints on land availability and the planning system.
“It is very easy to throw stones at the planning system, but the industry is looking for change from a new government, whether that be Conservative or Labour. There are too many bodies involved in the planning system and we are looking for simplicity and greater clarity.”

The outlook from the loss-making Taylor Wimpey, which completed a £510 million rescue rights issue last year, echoes those of Barratt Developments and Persimmon, its rivals. Both companies have reported a rebound in the housing market, although one that marks a return to stability rather than a new boom.
Last year Taylor Wimpey completed 10,186 homes, about a quarter fewer than in 2008. Mr Redfern said: “Our order book is currently up 28 per cent compared with the end of 2008 and that is better than we originally thought. While there has been an improvement in the market in general, we have also made the best of it with improved margins.”
He added that the number of labourers on its building sites had halved during the recession and that the company was building far fewer apartments. The larger units it is constructing helped the business to report an average selling price of £160,000. While that was up on the £153,000 recorded in the first half of 2009, it was still down on the average £171,000 of 2008.
Taylor Wimpey’s net debt has more than halved to £750 million, helped by its rights issue, but Mr Redfern conceded that borrowing needed to be reduced further. He also said that bank lending fragility could still weigh heavily. Analysts expect the builder to report a full-year loss for 2009 of between £70 million and £145 million. Jeremy Withersgreen, at Cazenove, said: “The tone is cautiously optimistic, while being prudently cautious in relation to mortgage availability.”
Taylor Wimpey shares closed at 40¾p, down ¾p. Before the rights issue they had fallen as low as 3p.
• Smaller housebuilders weakened by the recession could be in the sights of Redrow, their larger rival. The company, led by Steve Morgan, the owner of Wolverhampton Wanderers Football Club, has appointed Barbara Richmond, a mergers and acquisition specialist, as its new finance director. Ms Richmond previously had worked for Inchcape with a remit to expand the car retailer before the group succumbed to a rights issue last year.
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Cadbury says its 2009 performance makes Kraft’s offer ‘even more unattractive’

Published: 7:50AM GMT 12 Jan 2010





Cadbury

The latest salvo in the war of words with Kraft, which wants to buy Cadbury
for £10.5bn, saw the UK company forecast dividend growth of 10 pc and
upgrade its performance for last year.

Roger Carr, Cadbury’s chairman, who alongside chief executive Todd Stitzer has
been spearheading Cadbury’s defence over the past three months, said that
the company’s performance in 2009 was “ahead of our previously upgraded
expectations and we have excellent momentum going into 2010.”

The battle for Cadbury has been the longest-running takeover story of the past
six months, with Warren Buffett, Kraft’s largest shareholder, members of the
Cadbury family and even Lord Mandelson, the business secretary, all voicing
their concerns over the outcome of the deal.

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Marks & Spencer delivers first sales rise in two years

Published: 8:09AM GMT 06 Jan 2010





Marks & Spencer Group

The retailer, which sees Marc Bolland arrive as its new chief executive later
this year, told
shareholders that its so-called like-for-like sales climbed 0.8pc in
the 13 weeks to Boxing Day.

That figure missed the 1.2pc pencilled in by City analysts. General
merchandise, which includes clothing, was up 1.2pc and food sales were up
0.4pc. M&S
shares opened down around 4pc.

The company said its struggling food business had its record day for sales on
December 23, and overall sold more than 36 million mince pies, a million
bottles of champagnes and more than 8 million jumpers and cardigans.
Analysts also expect the retailers’s margins to have benefitted because the
chain discounted less this year.

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Cadbury talks with Hershey take fight to Kraft

By Kamal Ahmed and Amy Wilson


Published: 11:07PM GMT 12 Dec 2009

With 24 hours to go before Cadbury’s publishes its defence document, market
sources have confirmed that Hershey is still looking at launching a bid but
does not want to enter a hostile auction battle with Kraft.

Last month Kraft announced a £9.8bn hostile move that valued Cadbury shares at
718p. Because of market changes this was a 4pc drop on a September offer
which had valued the shares at 745p.

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Sports Direct raises profits forecast

Thousands of employees of Sports Direct, the UK’s largest sporting retailer,
are in line for bonus payouts after the company today upgraded its profit
forecast for the year to April to “at least” £155 million after robust
first-half trading.

The upgraded earnings forecast meets the minimum level for a share bonus
scheme, introduced in July to motivate staff, to take effect. Up to 3,000
Sports Direct staff are set to receive about 25 per cent of base pay in
share options, which vest two years later, at a cost of about £40 million to
the company over four years.

Despite higher sales from its shops contributing to a 10 per cent rise in
revenue in the first half of the year, the group posted a drop in reported
pre-tax profits amid difficult trading conditions and unfavourable exchange
rates.

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Sports Direct scraps dividend as profits drop

Thousands of employees of Sports Direct, the UK’s largest sporting retailer,
are in line for bonus payouts after the company today upgraded its profit
forecast for the year to April to “at least” £155 million after robust
first-half trading.

The upgraded earnings forecast meets the minimum level for a share bonus
scheme, introduced in July to motivate staff, to take effect. Up to 3,000
Sports Direct staff are set to receive about 25 per cent of base pay in
share options, which vest two years later, at a cost of about £40 million to
the company over four years.

Despite higher sales from its shops contributing to a 10 per cent rise in
revenue in the first half of the year, the group posted a drop in reported
pre-tax profits amid difficult trading conditions and unfavourable exchange
rates.

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Treasury calls for banks to disclose all their lending charges

By Kamal Ahmed

Published: 7:25PM GMT 05 Dec 2009

The City minister, Lord Myners, is to call for UK banks to sign up to the same
code developed by Royal Bank of Scotland and Lloyds Banking Group, which
were required to bring forward new measures on lending transparency by the
Government.

The Treasury argued that the large public stakes in both banks made the
development vital in the battle to regain public trust.

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Lloyds grows in confidence as institutional investors jump at new CoCos

Lloyds Banking Group will price its mammoth £13.5 billion rights issue with
renewed confidence today after a pioneering new bond offer by the bank was
significantly oversubscribed by institutional investors.

Lloyds announced that it had raised a total of £9 billion in high-quality
capital, £1.5 billion more than envisaged, as bondholders flocked to convert
conventional Lloyds bonds into a higher-yielding but potentially riskier new
investment class known as CoCos, or contingent capital.

In one of the biggest and most ambitious capital-raisings, Lloyds will tap
almost three million shareholders, who have been badly bruised by the
collapse in its share price, for new money this week. The new shares are
expected to be priced at 36p each and for shareholders to be offered them in
the ratio of about three new shares for every one they own. This is
equivalent to a 38 per cent discount to the theoretical ex-rights issue
price.

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