Stock market round-up: CBI curse strikes again

He was previously chief executive of the company, and his tenure was marked by headline-grabbing growth rates, earning him the moniker ‘Mr Twenty Per Cent’.

However, the current board has decided that managing a business to hit targets harms long-term prospects. And the current chief executive, James Wilde, has admitted that the company will never return to such growth rates. Sir Clive is a former President of the Confederation of British Industry – various incumbents of this position have seen their personal business fortunes nosedive. Sir Iain Vallance was sacked at BT, while BA’s Lord Marshall endured ridicule over the airline’s ‘ethnic tailfins’.

There was much gnashing and wailing this week after Celltech, Britain’s biggest biotechnology company, was taken over by UCB, a Belgian chemicals and pharmaceuticals group, for £1.53bn. Celltech was seen as a flagship for the industry in this country, and its departure leaves a lot of smaller players, but no dominant ones.


But this analysis misses two points. One is that the merged company will be keeping all its research and development activities at Celltech’s existing headquarters. Another is that Celltech was not in such great shape anyway; it had only one potential blockbuster drug in development, with everything else in the pipeline at a relatively early stage. Shareholders are in any case unlikely to be joining in the commiserations; they got a pretty full price.

More evidence of a slowdown in consumer spending: furniture group MFI has reported that sales are falling steadily. Since Boxing Day, they are down 7% (excluding new store openings). It said Easter was particularly poor, as it lost out to rivals who spent more on advertising. DFS, the sofas group, had already started warning about a slower outlook, although view this caution as an attempt to talk the share price down and facilitate the chairman’s attempt to take the company private. Still, if spending on ‘big ticket’ items like sofas and kitchens is on the wane, it seems only a matter of time before the wild excesses of the housing market are tamed. Two bitter old rivals have buried the hatchet. Vodafone and BT have agreed a partnership whereby fixed-line and mobile calls will be diallable over a single handset – giving consumers mobile convenience, but without having to pay mobile call charges all the time. The agreement is be heralded as the start of ‘convergence’ and saves BT (which no longer operates a mobile network of its own) having to either rebuild one, or stand by and watch as mobile operators gradually steal its customers.

Related reading