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Alistair Darling has livened up the afternoon by announcing that he has asked Ofcom to look into BSkyB’s purchase of a 17.9 per cent stake in ITV. Our media editor Andrew Edgecliffe-Johnson is checking but we think this will be the first time that a “public interest” test has been applied to a media investment and – most interestingly – the first time that the UK government has looked into whether Rupert Murdoch has too much influence over the British media. Seems a little hard to believe but we’ll see. Details on the FT.com homepage.
Also today, BSkyB warned there was a “real possibility” its deal with Virgin Media on basic channels will collapse before the current deal expires on Wednesday. It said this could cost it £15m-£20m between now and its June year end, implying a potential annualised impact on operating profits of £45m-£60m. The talks sound fraught.
Elsewhere, another company has unearthed accounting irregularities. This time it is at Alfred McAlpine. It says it uncovered “systematic misrepresentation of production volumes and sales for a number of years by a number of senior managers at the Slate subsidiary”. The company believes it may been the victim of fraud. The shares are off about 20 per cent, though this may also reflect investor surprise that this fancy support services company still owns Welsh slate.
And we have a crop of strong updates from companies. These include Persimmon, the country’s largest housebuilder, which reported annual profits in line with expectations and bumped up its dividend by 50 per cent. Profits at Old Mutual were better than expected and the figures in a trading statement from Associated British Foods were also strong (especially at Primark and at its sugar operations).
Hammerson saw its NAV rise more than 21 per cent last year and it forecast more strong rental growth. And Bunzl, one of the more easily-forgotten large companies around, reported stronger than expected profits and said it planned to make more acquisitions this year after buying 9 small companies last year.
Pearson expects further improvement in profit margins and growth ahead of its peers’ in 2007, it said this morning as it reported record operating profits, earnings and free cash flow for the year to December 31. The publisher of online teaching materials, Penguin books and the Financial Times reported double-digit profit increases in each of its main businesses.
Rumour of the day: Talk of a bid for Debenhams is back, despite apparently having been scotched on Friday. Paul Murphy (who doesn’t believe the rumour) and Neil Hume have picked through the story on FT Alphaville.