PERSIMMON SUFFERS AS HOMEBUYERS ARE FORCED TO WALK AWAY IN MORTGAGE CR
As market conditions scare off perspective buyers, cancellation rates at the housebuilder Persimmon have risen to 35 percent. 'The availability of mortgages has continued to be very restricted and cancellation rates have increased to about 35 percent over recent weeks due to these market uncertainties,' the company said, adding it was writing off 600 million pounds of the value of its land. The housebuilder predicted that in the second half of 2008 sale prices on its houses would fall by around 10 percent -- worse than earlier forecasts.
GKN JOBS AND OUTPUT CUT AS MOTOR INDUSTRY TIGHTENS
One of the UK's biggest automotive parts groups, the Midlands engineering group GKN, is cutting all of its 1,400 temporary staff immediately and cutting output at most factories after sharp contractions in its markets. As it attempts to reduce production in line with where it expects the market to be next year, the group will announce further cuts from its worldwide workforce of 42,000 over the next few weeks. 'In the space of a few months we have gone from really good growth to a position that our business has never seen before,' said chief executive Kevin Smith. GKN expects fourth quarter profits for its automotive division to be around 30 percent of those recorded for the same quarter last year. Shares lost 9.8 percent at 106 pence.
COSALT OFFLOADS HOLIDAY HOMES UNIT
The marine safety group Cosalt has offloaded its Holiday Homes division to Endless Group for a nominal cash payment. Chief executive Mark Lejman said the firm will now focus on services and products in the marine and offshore personal safety and protection industry.
HENDRY ATTACKS BAN ON SHORT SELLING
Hedge fund manager Hugh Hendry, whose funds have bucked the industry's gloomy trend this year, has blamed the dramatic decline in the stock market on the government's ban on short-selling. 'Until the Thursday in September when short selling was banned we had not seen the stock market crash. Since then, we have seen some of the biggest one-day falls in stock market history,' said Hendry, who has described short selling as the 'pursuit of truth'.
REED WILL SUGAR VENDOR PACKAGE TO SEAL RBI SALE
In an attempt to overcome challenging markets and complete a deal, sources close to Reed Elsevier said the exhibitions-to-magazines group is willing to be 'more flexible' and sweeten its one billion pound auction of Reed Business Information by increasing its vendor financing package. The vendor financing offered by Reed comes as the credit crisis has made financing of large leveraged buy-outs difficult, and therefore curtailing the ability of private equity firms to invest money.
RECKITT BENCKISER BEATS SLUMP WITH 12 PERCENT RISE IN PROFITS
Reckitt Benckiser has underlined its resilience to the economic downturn by posting a 12 percent increase in third-quarter net profits to 727 million pounds and increasing revenue forecasts. In the three months to the end of September, the Nurofen-to-Strepsils maker increased like-for-like revenues excluding acquisitions, disposal and currency movements by 10 percent. 'The company continues to defy the weak and weakening consumer environment,' said Andrew Wood, analyst at Sanford Bernstein. The company's 17 powder brands, which include Vanish and Cillit Bang, improved by 16 percent, while new product launches and marketing helped offset any effects from the consumer downturn.
BAHRAIN'S BLACK CAB ORDER BOOSTS MANGANESE BRONZE
The Bahrain Economic Development Board on Monday agreed to buy 200 London black taxis from manufacturer Manganese Bronze for about six million pounds. Shares in Manganese Bronze initially jumped five percent on the news but closed one pence down at 127.5 pence.
BROKERAGE CLSA ASKS 500 STAFF TO TAKE PAY CUTS
About 500 senior employees at brokerage firm CLSA have been asked to consider a voluntary pay cut of up to 25 percent to offset the need for job cuts. The financial crisis has deepened across Asia in the past few weeks and CLSA Asia-Pacific Markets, the regional brokerage unit of Credit Agricole, is among many financial firms trying deal with the crisis without shedding staff. CLSA participants will receive money back if monthly cost targets are met when the new salary goes into effect in 2009.
OCADO TAPS SHAREHOLDERS FOR UP TO 40 MILLION POUNDS IN RIGHTS ISSUE
Ocado is to attempt to pay down some of its net debt of more than 100 million pounds with a rights issue. The online grocer, which was founded in 2000 and delivers the groceries of the John Lewis Partnership owned supermarket Waitrose, said it would not complete the rights issue unless it could reach 'at least' 15 million pounds, and that it was in the 'best interests of the business' to raise funding of up to 40 million pounds. Ocado has reportedly raised 277 million pounds of equity since its foundation, but has never made a pre-tax profit.
CARD ACCOUNT DELAY THREATENS POST OFFICES
If the tender for the successor to the Post Office card account (POCA) is not awarded to the Post Office, another 3,000 branch closures could ensue, according to George Thomson, general secretary of the National Federation of SubPostmasters. Four million people use the card account to collect pensions and benefits, and the Department of Work and Pensions is understood to have received three bids for the contract for the POCA, including one from the Post Office. The DWP said: 'We are going to make a decision as soon as possible.'
Prepared for Reuters by Durrants
Keywords: PRESS DIGEST British business Oct 28
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