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We have a full newslist today, led by sterling flirting with a 14-year high against the dollar.
I haven’t heard back from Tom Griggs yet, who is covering Wolseley’s downbeat trading statement today but the company, which is heavily exposed to the US, is bound to have things to say about the impact of the falling dollar.
And the dollar’s weakness won’t help Compass, whose annual results today were weaker than expected. The caterer said it would sell its European vending operation, withdraw from a number of countries and steer clear of acquisitions. The great clean-up continues under the new management. They’re on the right track but have lots more to do.
We’re also doing more on the bid from Ireland’s Riverdeep for Houghton Mifflin, a US educational publisher. The headline number for the deal is $5bn although I’m not clear yet on how much of this is debt, how much is equity, what is deferred etc. Riverdeep is a great Irish entrepreneurial success story so we might devote some space to it today. Also, it’s the only way any of us are going to get that song out of our heads.
The companies which own most of the UK’s trains look set to face a full competition commission inquiry after the Office of Rail Regulation said rolling stock leasing companies were making excess profits in some areas of the market. The hardest-hit companies, if the commission takes action, would be the three Roscos, which own nearly all Britain’s passenger and freight trains. These include RBS’s Angel Trains, HSBC Leasing and Porterbrook Leasing, owned by Abbey, now a subsidiary of Spain’s Santander.
3i has hired three big hitters to invest in publicly-traded companies, which is quite a departure for the private equity group. The three are Bruce Carnegie-Brown, a former JP Morgan banker and ex-head of Marsh UK; Richard Segal, the former CEO of PartyGaming who quit unexpectedly because he didn’t want to relocate to Gibraltar, where the company is based; and Stephen Hill, once chief executive of the Financial Times and more recently chief executive of Betfair, which he left last year. The press release says Hill was once “a chief executive in residence” at Permira, which makes him sound like a poet at a minor university. Anyway, they claim they will “apply private equity management skills” to small and mid-cap listed companies. Presumably, to do that, they’ll need to take quite significant stakes.
Great full-year figures from Sage, Britain’s biggest software group.
Corus says stronger market conditions helped it to lift underlying profits by 63 per cent in the third quarter compared with the equivalent period last year. No news on the competing bids from Tata and CSN.
Profit warning from Umbro, the UK sportswear maker, which said “tough” trading conditions in its core home market would hit profits for the full year. The company, which has a long tie-up with the Football Association and supplies the England team kit, saw its shares fall more than 7 per cent in early trading.
Mitchells & Butlers, which owns the All Bar One and O’Neill’s chains, said higher food sales drove profits last year. However, the group, which in May rejected a takeover bid by property investor Robert Tchenguiz, warned that although consumer demand had been better than expected this year, it might not continue at this pace.
Finally, I’m sure there’ll be more to do later on EMI, as well, so stay posted.