Stagecoach, the public transport operator, this week unveiled heavy goodwill write-offs and plans for major surgery on Coach USA, its struggling North American subsidiary. Coach USA has been under review by Brian Souter, Stagecoach’s founder, since the group’s previous chief executive quit in the summer. Mr Souter plans to amputate the worst performing parts – the charter and leisure-related business – and keep the stable commuter and contract services, which have been more resilient.
Recent trading updates from Barclays and Lloyds TSB suggest that banking conditions are getting tougher. Barclays not only highlighted flat income and rising provisions at wholesale unit Barclays Capital, but the bank surprised sector analysts with news that the apparently robust personal lending sector had delivered a fall in net interest income at the core personal financial services unit.
In contrast, Lloyds TSB said that personal loans and credit card lending had risen by 20 per cent. But the bank did warn of possible higher provisioning against corporate lending. Lloyds TSB also announced a £165m provision to cover the cost of redressing policyholders sold endowment products at its Abbey Life unit during the late 1980s and early 1990s.
Signs abound that consumer spending is slowing down. At its AGM this week, furniture retailer DFS said it had ‘experienced a softening of order intake in recent weeks, which will result in slower like-for-like sales growth in the latter part of the first half’.
Jewellery retailer Signet’s third-quarter results statement sounded remarkably similar. Both statements tally with the findings of the CBI’s distributive trends survey, also released this week. ‘Nobody expects to break any records this Christmas,’ said Alastair Eperon, chairman of the CBI’s Distributive Trades Panel, and a director of Boots. ‘The early build-up has been somewhat disappointing.’
Shire Pharmaceuticals stumbles from one crisis to the next. After losing chief executive Rolf Stahel in October, it must now contend with competition for its best-selling drug. Last week, Eli Lilly’s Strattera won US approval for the treatment of children and adults with attention deficit hyperactivity disorder (ADHD).
Strattera will compete directly with Shire’s Adderall when it goes on sale in January – three months earlier than expected. Strattera is easier and quicker to dispense, but experts say Adderall is a lot more effective.
AMEC, the construction and support services company, said profits will be lower than forecast this year and next because big clients are holding back from major projects. It said work worth over $500m has been postponed into next year in the US and Europe. Separately, the company said it will buy the remainder of SPIE, a French company in which it already has a 46 per cent stake, for £172m. The shares are unlikely to outperform in the short term.
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