THE ECONOMIC MONITOR - U.K.
Kingfisher H1 profits rise on improved margins
U.K. home-improvement retailer
today reported an increaseof 24 percent in its first-half net profit. The company declared a netprofit of 250 million pounds ($391 million), and fall in sales by 0.9percent to 5.45 billion pounds. The company left its interim dividendunchanged at 1.925 pence a share. The group's like-for-like sales rose1.4 percent in its French arm, but reported a fall of 3.7 percent in theU.K. and Ireland on fall in consumer demand. Margins improved acrossthe business on its cost-cutting program and a decision to limit the useof store-wide promotions.
Kesa sales rise on strong sales
reported a rise in comparable sales in the threemonths to the end of July by 4.3 percent and total sales rose 8.2percent, boosted by strong TV sales during soccer World Cup. Thecompany's comparable sales at Darty stores in France were up 5.1percent and at its U.K. Comet stores they were up 4.3 percent. Theincreased TV sales had a negative impact on gross margin, which fellhalf a percentage point. After a positive first quarter the company seesmarkets to remain challenging for the remainder of this financial year.
Mercedes and Scandia under probe
are under theprobe by the
Office of Fair Trading (OFT)
whichis investigating potential price-fixing by some of
Europe’s leading truck manufacturers. If found
guilty of price-fixing, the companies could faceheavy fines which could be as much as 10% of their annual revenues. Executives of thecompanies could also be prosecuted.
John Lewis reports 28% profit rise
John Lewis Partnership
has reported a 28% increase in pre-taxprofit to £110.5 million in the H1 ending in July 2010. Revenues grewfrom £3.1 billion to £3.43 billion. Sales in john Lewis stores grew by14.5%. Gross sales are 10% higher in the first six weeks of the secondhalf. John Lewis has benefited from sales of televisions prior to theWorld Cup and strong online sales.
BlueBay almost back to pre-crisis levels
Fixed income fund manager
is back to pre-crisis highs as theprofit before tax and exceptional items for the year to June grew 183%to £49.7 million from £17.5 million in 2009 as total fee revenue jumped36% to £137.4 million following record net inflows of $10.2 billion. Costcontrols and a big hike in revenue have pushed margins andprofitability for the fund manager.
Assets under management
(AuM)grew by 41% to $34.3 billion, net management fee income was up 32%to £109 million and performance fees hit £28.4 million compared with£18.5 million last time.
Kier profits grow
Housebuilder and contractor
reported better performance as thenet cash at the end of June stood at a record level of £175.2 million, upfrom £92.5 million a year earlier. Underlying profit before tax, before theamortisation of intangible assets and exceptional items, grew 10.6% to£58.4 million in the year to end-June from £52.8 million the year before,although revenue easing to £2,056 million from £2,112 million.
OFT to investigate truck-makers
Office of Fair Trading
has launched probe into suspectedcommercial vehicle manufacturers. Volvo said its Truck division andRenault Trucks divisions have received letters from the OFT and theywill cooperate with the investigation. Premises of Daimler's Mercedes-Benz truck unit had been visited by regulators for the investigation andthe Financial Times reported that Scania, MAN SE and Fiat subsidiaryIveco were all also aware of the probe and would cooperate with theOFT.
NICE rejects Glaxo's drug Arzerra
U.K regulators have rejected
's leukemia drug Arzerra,licensed from Denmark's Genmab. The
National Institute for Health andClinical Excellence (NICE)
, in a draftguidance has said that it could notrecommend the drug for reimbursementon the publicly-funded National HealthService because the medicine's benefitsdidn't justify the extra costs compared withthe currently approved treatment. NICE isexpected to make a final decision later thisyear.
Retail Sales decline, first time since January
U.K. retail sales fell in August, on slow consumer demand ahead of speeding cuts by government. According to thefigures from
Office for National Statistics
salesfell 0.5 percent from July. Economists hadexpected an increase of 0.3 percent. It is the firstdecline since January this year. Sales at foodstores fell 0.5 percent in August from July. Salesat other stores, including sports shops, bookstores, pharmacies and personal- computerstores, dropped 2.1 percent, the most in seven months. Only Sales atdepartment stores recorded a rise of 0.9 percent, while internet andmail-order retailers, which rose 2.1 percent.ONS also revised downJuly's monthly growth to 0.8 percent from the 1.1 percent initiallyreported.
U.K. inflation expectation rises for next year: BOE
Citizens of Britain expects an inflation rate of 3.4 percent for the comingnext twelve months, which is the highest since two years according tothe
Bank of England's quarterly survey
. It has risen from 3.3 expectedin May. The median forecast was the highest since August 2008.
Deputy PM Clegg defends planned cuts
Cuts to welfare spending are inevitable as part of coalition plans totackle a record budget deficit, Deputy Prime Minister
said,admitting reform will mean some are left worse off. Liberal Democratleader Clegg said the welfare system needed to be "an engine of mobility rather than a giant cheque written by the state to compensatethe poor for their predicament." "In this tough fiscal climate, cuts to thewelfare budget are unavoidable," Clegg said. "Welfare reform is noteasy and bringing a semblance of sanity to the system inevitablycreates losers as well as winners."