Burger King takes a Brazilian turn

The $24-a-share deal, which sent shares in the chain soaring, is the first full acquisition by 3G and, given the faltering recovery in the US, is not without risk.
Famed for its Whopper burgers – the email addresses of employees at the fastfood giant end in @whopper.com – Burger King’s sales fell 1.4pc to $2.5bn in the last financial year as consumers ate at home or opted for cheaper rivals. By contrast, larger rival McDonald’s has managed to grow sales during the downturn, something analysts put down to an improved and broader menu.
In a brief statement, 3G emphasised that it believes that a brand which dates back to 1954 still holds great value. 3G’s managing partner Alex Behring, who used to head one of Brazil’s biggest railroads and will become co-chairman of Burger King, said that the investment company had a “strong track record of long-term investments in global consumer brands and retail companies”.
It is understood that Burger King’s new owners are fans of the company’s franchise model, which is used in more than 9,000 of its 12,174 outlets, and also plan to expand the brand more deeply into Asia and Latin America.
The high-profile deal is a sign that Brazilians are prepared to flex their increasing economic and financial muscle. Mr Lemann, who was a tennis champion in Brazil and is reported to have once played at Wimbledon, made his fortune in his native country through a mix of banks and brewing.
For Burger King, the deal is the latest chapter in a colourful history that began in Miami, where the company is still headquartered. Established by a couple of entrepreneurs, Burger King was sold to the Pillsbury company in 1967; it later became part of UK drinks conglomerate Diageo, via Grand Metropolitan.
The chain, which serves 11m customers each day, was acquired in 2002 by Bain Capital, TPG and Goldman Sachs before the companies then took it public in 2006. The three companies, which together still own a third of the chain, are expected to make a profit on the deal.
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Computer giant Hewlett-Packard to create 700 jobs in Scotland

By Mail Online ReporterLast updated at 3:15 PM on 25th August 2010

Technology group Hewlett-Packard (HP) has announced plans to set up an IT hub at its Scottish base, in a move that will create 700 jobs.
The global company will turn its Erskine site in Renfrewshire into a centre for delivering IT services to UK customers with the help of a £7million grant from government agency Scottish Enterprise.
The site currently houses Hewlett-Packard’s sales and customers support operations.

IT centre: Hewlett-Packard received £7million of government funding

The new jobs will come one year after the company axed some 700 manufacturing jobs at Erskine as part of a restructuring drive that led to the transfer of production to the Czech Republic.
Scotland’s First Minister Alex Salmond said the new posts highlighted Scotland’s strengths ‘as a first-class destination for technology’.
He added: ‘HP’s decision to make this investment at Erskine reflects the quality of Scotland’s skilled workforce to perform and deliver success.’ 
 

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Chrysler faces long drive to profitability, says Sergio Marchionne

Sergio Marchionne, the Fiat executive who has been running the Detroit company since it emerged from Chapter 11 bankruptcy last June, called 2010 a year of “transition and stabilisation” after it became the only major American marque to report a drop in sales in the first six months of the year.

However, he did say that the company could float in New York as soon as next year, allowing the US and Canadian governments to recoup some of the $15.5bn (£9.7bn) they invested to save Chrysler from total collapse.

Chrysler did, however, manage to stem its losses in the second three months of the year, reporting a second quarter loss of $172m against $197m in the same period in the three months to March.
The narrower loss was on the back of an 8.2pc increase in sales to $10.5bn in the second quarter.
The numbers came despite of reports from the Associated Press suggesting that although the US car industry saw an 11pc rise in sales in the first half of the year, Chrysler’s sales – many of which were to government and corporate fleets, which tend to be less profitable than individuals – fell by 21pc.
Fiat has been running Chrysler since last year, after its Chapter 11 filing, with its restructuring seeing the Italian car maker taking an initial 20pc stake in return for transferring billions of dollars of technology and ideas, as well as taking control of the business. To stave off failure, Chrysler also accepted $15.5bn from the US and Canadian governments while the United Auto Workers union received a 55pc stake in return for foregoing payments to its healthcare trust.
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Dow soars as US bellwethers Caterpillar, 3M and UPS deliver double-digit growth

UPS, the world’s largest parcel and freight company, delivered a 90pc increase
in profit in the quarter, rising to $845m (£554m) from $445m in the same
period last year. Shares in UPS rose 3.98 to $63.99, after sales rose 13pc
to $12.2bn.

The forecast-beating performance was the result of growth across UPS’s
business, in particular internationally.

Export volumes rose 15pc, driven by a 40pc increase in Asia, with
international package revenues up 23pc to $2.8bn and profitability in the
international business helped by a sharp rise in operating margins.

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WPP ‘to generate $1 bn in Far East’

However, revenues from Asia have been growing strongly, with emerging markets
contributing 27pc of WPP’s sales in 2009. China is the third largest economy
in the world, expanding by 10.3pc in the last quarter, and is the most
populated country. However, the advertising market has traditionally been
smaller than that in the more commercialised West.

At WPP’s annual meeting last month, Sir Martin said that like-for-like
revenues in South East Asia had grown by 13pc in May and during the first
five months in China were up by 7pc. This growth outstripped that in West,
where markets were dogged by economic concerns. In the US, revenues grew
5pc. In Europe growth was flat amid concerns about the economy and austerity
policies from governments. The US market has fought back strongly from
recession, but Sir Martin has warned of the effects of the end of Bush tax
cuts and rising taxes on company earnings as the Obama administration aims
to reduce national debt.

At Allen
& Co’s annual Sun Valley jamboree last week, he said: “The
poison is the uncertainty. It’s not that you see anything, or hear anything.”

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Primark powers on but parent AB Foods urges caution

“Shoppers in their twenties and thirties are shopping in a completely
different way to a generation ago,” he said.

However, Mr Bason warned that the austerity measures announced by the
Coalition Government in last month’s emergency Budget could hit consumer
confidence.

“You have got to be cautious about the consumer outlook. The thing that
Primark has going for it is that it has good volume growth. But we must be
cautious. Are we well placed? We are as well placed as we can be,” he
said.

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Carpetright sees signs of recovery as profits shoot up 64%

Last updated at 10:43 AM on 29th June 2010

Flooring firm Carpetright reported a 64 per cent rise in annual profits today after seeing a return to sales growth in the UK.Sales rose 3.1 per cent on a like-for-like basis across its 586 stores in the UK and Ireland.But underlying profits of £28.2million for the year to May 1 are still far short of the £62million made in 2008 and the group reiterated warnings over consumer spending outlook.

Chairman and chief executive Lord Harris (left) - a retail veteran with
more than 50 years in the business
Carpetright’s sales staged a marked recovery early last year -
reaching double digit growth before December - but this slipped to 1.5 per cent
in the fourth quarter.
Chairman and chief executive Lord Harris - a retail veteran with
more than 50 years in the business - said it would be a ‘very tough’
year for consumer spending amid Government cuts and tax hikes.
He said the group would push further to secure contracts with
insurance firms and with housebuilding groups to offset weak retail
conditions.

It is also striking deals in the public sector, offering discounts
to the police service and health workers in an attempt to tap into a
vast customer base.
Carpetright is likewise linking up with estate agency Countrywide to offer promotional schemes to customers.
‘It’s difficult and it’s challenging, but on the other side there’s opportunities,’ said Lord Harris.
The group hopes the impending VAT rise to 20 per cent next January
may drive sales at the end of 2010 as customers rush to make purchases
before the hike comes in.
It is also optimistic that Government austerity measures may be less
harsh on lower paid workers - the bulk of its customer base, with 60
per cent of Carpetright customers spending less than £100.
Today’s results come after Carpetright warned over profits in March following worse than expected sales.
The group did not provide any update on trading since the year end, saying only that consumer spending was ’subdued’.
Carpetright has 537 stores and 49 concessions across the UK and Ireland under the Carpetright, Storeys and Sleepright brands.
It also has 117 outlets in the Netherlands and Belgium, where
trading has been improving, with underlying operating profits up 10.3
per cent in the year to May.
The business recently pulled out of Poland after a review last autumn.
Shares in Carpetright slipped more than 5 per cent on the group’s cautious comments.
Singer Capital Markets analysts said the biggest risk facing Carpetright was the threat of another housing slump.
‘Although there are numerous initiatives to deliver growth, these risks could yet impact forecasts adversely,’ they said.

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Bellway confident despite buyers¿ worries over tax hikes

By
Daily Mail Reporter
Last updated at 3:31 PM on 15th June 2010

British housebuilder Bellway has issued an upbeat note for the nervous UK housing sector, saying that it will beat its target of matching last year’s sales. The Newcastle-based group said uncertainty over the coalition’s fiscal policy and fears over looming tax hikes have deterred potential homebuyers, prompting a ‘slight reduction’ in site visitor levels and weekly sales since May’s general election. But despite the drop in business levels, Bellway said it expects 200 more sales in the year to July 31 compared to the previous 12 months, adding that it has also secured 1,800 reservations for the next financial year.

Buoyant: Bellway expects to beat its goal of matching 2009’s house sales by 200 new deals

In the 18 weeks since February 1, the housebuilder maintained a
sales rate broadly in line with last year at around 100 sales a week. 

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Northern makes a meal of it

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INVESTORS who gobbled up shares in Northern Foods last autumn have probably
lost their appetite. Shares in the maker of Goodfella’s pizzas and Fox’s
biscuits have lost a third of their value during the period and are
languishing at 48½p.

In the past year Goodfella’s, one of its biggest brands, has lost 10% of its
market share, partly to rival pizza brand Chicago Town.

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Leak setback sends Lonmin shares down

Lonmin, the platinum miner in South Africa, warned today that the repairs of its troublesome main furnace had hit further problems.
The company’s shares, which fell 5p to £16.32 this morning, have lost 22 per cent of their value since 31 March when it revealed that it was having to shut the furnace after it leaked molten metal.
It said at the time that the repair would take up to 40 days. Today Lonmin reported that the furnace had sprung another leak during an attempt to restart it. The company said: “Our initial estimate is that commissioning will now take another 25 to 30 days.”
Lonmin has will continue to operate three smaller Pyromet furnaces to compensate for the leak, but they have only about 40 per cent of the capacity of the “Number One” furnace.

Lonmin said that it will have to pay other smelting companies to process its ore in order to meet this year’s sales target of 700,000 ounces of platinum.
The closure last month was the fifth such incident at the furnace since it was commissioned in 2004. Analysts have described the smelter as something of a “problem child”.
Analysts at Panmure Gordon said today that they expected the company to cut production this year to about 655,000 ounces in order to avoid weakening its profits.
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