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September 13: This summer’s UK security alerts plus terrorist attacks in Jordan and Turkey have hit profits and bookings at MyTravel. This is a great opportunity for us to assess what other companies (BA, Easyjet, BAA, Diageo etc.) have said about the impact of terrorism on their business. MyTravel, which came close to collapse four years ago after a series of accounting errors and profit warnings, also said it would make its first pre-tax profit since 2001 this year after cutting costs.
BAE Systems, which published first half results today, seems to be benefiting from the wars in Iraq and Afghanistan. The mood coming out of today’s press conference was interesting: there seem still to be significant tensions with the Ministry of Defence, not least over what to do about shipyard consolidation. Also, chief executive Mike Turner had more to say about his decision to sell BAE’s stake in Airbus despite it being worth much less than originally thought. He thinks Airbus will need a cash call on its investors in the not-too-distant future, which he doesn’t want a part in. He also expects yet more delays to the A380 (spotters should follow this link for pics, a quiz and to read comments from other spotters). Some of the bloggers seems preoccupied with the possibility of BAE designing a hijack-proof plane. Check out the Ministry of Tech site and Scott Allan’s World.
We’ll do plenty today on the Treasury’s decision to introduce legislation which will protect the light-touch regulatory regime that applies to the London Stock Exchange. With the LSE facing the possibility of a bid from Nasdaq, this is both significant and welcome. You can read Ed Balls’s speech on the Treasury website. Also, we are checking out the interesting line in today’s Daily Mail, which said the LSE had approached private equity houses to see if they might act as white knight bidders. Later today on FT.com we have video of NYSE chief executive John Thain commenting on the news and making a bold prediction.
Next, the UK’s third-biggest clothing retailer, reported interim results at the top end of expectations with profits rising by 3.6 per cent. However, it gave no indication that the coming months would bring a significant recovery in comparable sales. And I know this is in line with expectations but it is astonishing that Next saw like-for-like sales for the half drop by 7.5 per cent. At the very least, the retailer seems to have mis-timed its sale. Chief executive Simon Wolfson is not looking as smart as he sometimes does.
SMG reported a 38 per cent rise in interim pre-tax profits but said the outlook was challenging. It is also selling its cinema advertising business, Pearl & Dean, and Primesight, which does outdoor advertising. The group also said it was willing to talk to UTV but no stunning updates on that front yet.
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