Takeover speculation surrounding Abbey National has receded after the bank appointed Luqman Arnold as chief executive. Mr Arnold was credited with turning around UBS in the late 1990s after its difficult merger with Swiss Bank Corporation, but was ousted last year after a boardroom bust-up. Bank of Ireland has meanwhile dropped its bid for Abbey National, which is now best viewed as a long-term recovery play.
Problems with American subsidiary, Coach USA, prompted yet another profit warning from transport group Stagecoach. Analysts now expect heavy write-offs with the full-year results. The company had already warned of a dividend cut. The shares slumped to all-time lows, prompting speculation that co-founder Brian Souter will take the group private.
Safeway’s like-for-like sales grew by 1.1% in the second quarter, compared with growth of 3% in the first quarter. Both Tesco and Sainsbury’s are growing sales faster, but Safeway says they are increasing sales by offering ‘buy-one-get-one-free’ deals. The shares are cheap, but the strategy will take time to work.
Pub group SFI’s ambitious expansion programme has left it with a huge debt hangover. Management had promised that strong cash flow and the sale of its lap-dancing clubs would bring debt down, but business in its bars – which include Slug & Lettuce and The Litten Tree – has recently taken a turn for the worse.
That’s left SFI in breach of banking covenants, forced it to abandon its dividend, and left executives with egg on their faces.
Eidos management has performed little better. The next version of its all-important Tomb Raider game won’t now be out until next February, missing Christmas in what may turn out to be the peak year of the games cycle. Eidos has a history of missing deadlines but, after installing a new management team, those days were supposed to be behind it. If Tomb Raider is a good game it could still sell millions, but after letting down shareholders yet again, Eidos is only for gamblers.
PowderJect Pharmaceuticals, the UK vaccines manufacturer, confirmed rumours it has received a bid approach. Keen to bolster its vaccines business, US-based Chiron has made a verbal offer of 500p a share, though a formal bid has yet to be tabled. PowderJect’s shares shot up 70% on the news. PowderJect has world-class manufacturing facilities and a leading position in the exciting field of DNA vaccines, but the soaring share price now reflects all that.
Marconi has come up with a wheeze to avoid missing sales targets. It now uses ‘sensitised financial projections’, or forecasts which vary depending on market conditions. But on-target or not, the second-quarter sales announced this week, down 40% year-on-year and 6% on the previous quarter, make grim reading. More big write-downs are on the way. Get out.
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
Accountancy watchdog the FRC has dropped its investigation into the former chief financial officer of Tesco, nearly two years after the supermarket was engulfed in an accounting scandal
Colin imagines how Apple's logo might change in the wake of the EC's ruling over its Irish tax arrangements