Editor: Pat Williams. E-mail pwilliams@creditman.co.uk
John Arnold. E-mail jarnold@creditman.co.uk
Site: Business Credit Management UK
URL: http://www.creditman.co.uk
Issue: Vol 4 Issue 31
Dated: 6 August 2000
Welcome to the Business Credit News UK.
In this weeks edition you will find the following topics.
We are taking a break for our summer holiday. Please note next weeks news will be the last until 9th September.
UKCBI BACKS DECISION TO KEEP INTEREST RATES ON HOLD
The Confederation of British Industry last Thursday backed the decision to keep interest rates on hold.
Kate Barker, CBI Chief Economist, said: "This will help soothe fears that manufacturing could slip back into a downturn. But companies across the economy will need longer term respite as they struggle to compete in tough foreign markets.
"The outlook for inflation is favourable, with the housing market more stable, earnings growth slowing and sterling keeping up the competitive heat. We should no longer assume that the next interest rate move will be up."
BANK RIGHT TO SIT ON ITS HANDS, SAY CHAMBERS
Reacting to last Thursday's decision by the Bank of England's Monetary Policy Committee to hold interest rates at six per cent, Dr Ian Peters, Deputy Director General of the British Chambers of Commerce (BCC) said:
''The Bank is right to sit on its hands for the time being. Sterling remains too high for our exporters but, along with recent cooling in average earnings and the housing market, is keeping the inflation outlook benign.
''Recent business surveys, including the BCC's, show that manufacturers remain in a fragile position, with no signs that their sales or profitability are recovering. The prospect of a sustained downturn in manufacturing holds the danger of damaging knock-on effects across the economy as a whole.''
''The Bank must keep a close watch on the impact of the Chancellor's spending plans, but resist further rate rises unless there is clear evidence of significant inflationary pressures.''
RETAIL SALES PICKED UP IN JULY, SAYS CBI
Retail sales volumes picked up in July following weak growth in June but the pace of growth has cooled since the Spring, according to a survey by the Confederation of British Industry.
The CBI's latest monthly Distributive Trades Survey, out last Wednesday, compares sales from 5 to 26 July with the same period a year ago. Forty-seven per cent of retailers reported increased sales volumes while 23 per cent reported falls. This gives a balance of plus 24 per cent, an improvement on June's plus 15 per cent but below the growth in April and May. The three-monthly average, which smooths out monthly fluctuations, dipped slightly.
Durable household goods, footwear and leather retailers and grocers reported the sharpest increases in sales compared with a year ago. Booksellers reported a marked rise in sales volumes and most sectors showed some increase in annual sales volumes with the exception of specialist food retailers and chemists.
Kate Barker, the CBI's Chief Economic Adviser, said: "Retailers will be relieved to have fulfilled their expectations of a moderate improvement in sales growth. However, not all sectors experienced a sharp increase in sales. Clothing, furniture, carpets and hardware, china and DIY reported only slight growth. The latest data suggests that the pace of retail sales growth is cooling. It strengthens our view that the MPC should leave interest rates on hold."
Retailers reported that sales volumes in July were average for the time of year, despite expectations of above-average sales. They expect business to remain average in August.
Orders placed with suppliers rose at a slightly lower rate than in June but broadly in line with expectations. Orders in the year to August are expected to grow at a similar rate to July. Stocks were run down slightly over the past month and a further run-down is expected in August.
Wholesalers' sales rose in the year to July, but at a slightly lower rate than expected. Firms now anticipate a fall in sales volumes in August - the most significantly negative expectation since February. Companies say business is well below average for the time of year. Expectations of a significant rise in orders in July were not met. Orders are expected to fall slightly in the year to August.
Motor traders said annual sales volumes declined to a greater extent than expected in July. They anticipate a further sharper fall in the year to August.
BYERS ACTS TO REDUCE CAR PRICES
Measures to cut the average price of a car by £1,100 and save private car buyers around £1 billion a year will come into force from next month, Trade and Industry Secretary Stephen Byers announced last week.
A new legal Order being tabled will bring about greater competition in the supply and sale of cars.
All the provisions of the Order will come into force on 1 September, the date of the next number plate change. Suppliers must make their first offer of volume-related discounts to dealers within three months of that date.
Mr Byers said:
"These moves will mean a better deal for car buyers.
"A new car is the second most expensive purchase for most private buyers. In their report the Competition Commission found that buyers are paying about 10% - or £1,100 - too much for their cars. The Director General of Fair Trading estimated that private car buyers could be paying around £1 billion a year too much.
"We could not ignore this clear and unequivocal finding and have taken quick and decisive action which will ensure that consumers get a fair deal when they buy a new car.
"The Order that I am publishing will establish a fair framework for supply to dealers and more effective competition in the new car market including measures to enable dealers to buy cars outright at cheaper prices.
"It is up to suppliers and dealers to deliver more competitive prices to consumers and to convince them that they are offering good value for money. This is the way to restore consumer confidence.
"I have set the industry a demanding timetable. All the provisions of the Order will come into force on 1 September.
"While I appreciate that the car manufacturers need time to prepare so that they can comply with the Order, I believe it is more important for the industry to bring prices down quickly and give consumers the confidence to buy.
"I am pleased that prices have fallen recently and a number of special offers are available. But I believe we need to make sure that prices come down and stay down across the board.
"It was clear that the car market was not operating effectively. Greater competition will also bring about a healthier industry."
The Order will:
The Director General of Fair Trading will continue to monitor the market and compliance with the Order. If it is found that the measures in the Order need to be reinforced, the Secretary of State will consider what changes, if any, are necessary, including a ban on recommended retail prices.
Contributed by Stephen Cowan, Yuill & Kyle, Debt Recovery Lawyers, Scotland
In the case of Montgomery Litho v John Maxwell, heard before the Court of Session in Edinburgh on appeal, it was held Mr. Maxwell was not personally liable a debt due by his now liquidated company.
Maxwell signed an application for credit on behalf of his company in connection with the supply of printing services, which provided:
"I have read and accepted the company's standard terms and conditions…. All transactions are subject to Standard Condition 7".
Standard Condition 7 then provided:" In the case of a limited company the director responsible for opening a credit account with the printer and who signs the application shall be jointly and severally liable for any and all payments that become due to the printer".
The printer then sued Maxwell for the cost of printing services provided to the company.
The court decided that it was distinctly unusual for a director to sign an obligation guaranteeing the company's liability under the guise of these terms and conditions. Whilst it was possible to incorporate a personal guarantee of the type envisaged, to be effective it would have to be expressed in terms so as to give the director fair notice as to the importance of the obligation he was taking on.
The court said for the director to be personally liable it would be essential to show the director he actually intended to take on board the company's liabilities. It was not clear from the form this was evident. The court stressed the importance of such conditions to be brought to the attention of the obligant fairly and reasonably where the undertaking was onerous or unusual. The court were satisfied the imposition of the personal guarantee is something unusual to be found within terms and conditions and whilst a personal guarantee may not of itself be unusual it was odd to find one hidden within terms and conditions of sale.
The lesson to be learnt is obvious. If you want to incorporate a personal guarantee this should either be done as a separate agreement, or, alternatively, if it is to be within the same form it must be stated as clear as crystal the fact the director will be personally bound in the event of the company failing to satisfy the company's debts.
ECGD APPOINTS FIRST DIRECTOR OF STRATEGY AND COMMUNICATIONS
ECGD on the 1 August 2000 announced the appointment of its first Director of Strategy and Communications.
John Ormerod will take up his new post on 14 August and become an additional member of ECGD's Management Board.
Mr Ormerod has extensive experience in investment strategy and corporate affairs/government relations, having specialised in emerging markets and transitional economies. He worked for United Distillers plc for over ten years before moving to BT ("British telecommunications plc").
Vivian Brown, ECGD's Chief Executive, said:
"I am delighted that John is joining the ECGD Management Board as our Director of Strategy and Communications. He will be bringing a wealth of experience both to this new post and the Board. This will be of great value to ECGD, particularly as we now move towards implementing our new Mission Statement."
The need to enhance external communications was a key feature of the Review of ECGD'S Mission and Status published on 25 July.
Statistics showing insolvencies in the second quarter 2000 are published on the 4 August by the Department of Trade and Industry.
COMPANY INSOLVENCIES
There were 3,426 company insolvencies in England and Wales in the second quarter of 2000 on a seasonally adjusted basis. This was an increase of 0.9% on the previous quarter, and a decrease of 6.3% on the same period a year ago.
1.1% of active companies became insolvent in the twelve months ended Q2 2000, the same as the previous quarter and slightly down on the corresponding quarter in 1999.
INDIVIDUAL INSOLVENCIES
There were 7,655 individual insolvencies in England and Wales in the second quarter of 2000 on a seasonally adjusted basis. This was an increase of 0.1% on the previous quarter and an increase of 6.1% on the same period a year ago.
Number of Insolvencies in England and Wales (seasonally adjusted)
p = provisional, r = revised
The Official Insolvency Statistics are the most comprehensive record of the number of insolvencies and bankruptcies and provide a more accurate picture for analysing business conditions. The figures include businesses and individuals, with a breakdown by type of insolvency procedure. The figures treat Scotland separately (as insolvencies are defined differently in Scotland) and give an industrial analysis (for which the figures for England & Wales are published one quarter in arrears).
The statistics are derived from administrative records of the DTI Insolvency Service and Companies House Executive Agencies. The figures for company insolvencies are made up of compulsory liquidations (winding-up orders made by the courts) and creditors' voluntary liquidations registered at Companies House. Figures for individual insolvencies comprise bankruptcy orders and individual voluntary arrangements under the Insolvency Act 1986 and deeds of arrangement under the Deeds of Arrangement Act 1914.
COMPANY WINDING UP AND BANKRUPTCY PETITION STATISTICS SECOND QUARTER 2000
The Lord Chancellor's Department on the 4 August 2000 published statistics for company winding up, and creditors' and debtors' bankruptcy petitions issued in the High Court and county courts of England and Wales during the second quarter of 2000.
In the second quarter of 2000 the following number of petitions were issued:
Table 1 shows the number of company windings up, and creditors' and debtors' bankruptcy petitions issued for each year by quarter, since 1995.
Figures on insolvency petitions are published on a quarterly basis. The publication date for the figures covering the third quarter of 2000 will be Friday 3 November 2000.
The 2000 figures are provisional and liable to revision to take account of any late amendments.
No assumption can be made from these statistics about the number of companies that go into liquidation, or the number of individuals made bankrupt. This information is published quarterly by the Department of Trade and Industry.
INSOLVENCY
A company or individual with debts that they are unable to pay is said to be 'insolvent'.
COMPANY WINDING UP
When it becomes necessary to terminate a company's existence, whether owing to insolvency or for some other reason, the process is called 'winding up'.
There is a restriction on proceeding that may be commenced in county courts which is based on the paid-up capital of the company. Well over half of winding up proceedings are commenced and handled in the Chancery Division of the High Court at the Royal Courts of Justice in London and at the eight provincial High Court centres.
Company winding up proceedings will normally be commenced at the court centre local to the registered office of the company, which will not necessarily be situated in the same geographical area as the company's base or operational area. The relative regional levels of winding-up activity do not therefore necessarily reflect the geographical distribution of the companies involved.
INDIVIDUAL BANKRUPTCY
For individuals the term bankrupt is used to indicate insolvency.
Proceedings for bankruptcy can be commenced at county courts with the appropriate jurisdiction, or in the Chancery Division of the High Court, either by a creditor (the person to whom the debt is owed) or by a debtor (the person who owes the debt).
INSOLVENCY AND BANKRUPTCY PETITIONS FILED
Table 1
Quarter Year Creditors Debtors
Companies bankruptcy bankruptcy
1995 winding-up petitions petitions
petitions
1 3 684 6 797 2 774
2 3 074 6 095 2 434
3 3 020 5 658 2 504
4 2 979 5 215 2 427
--------------------------------
12 757 23 765 10 139
--------------------------------
1996
1 3 094 5 603 3 030
2 2 865 5 314 2 617
3 3 025 5 269 2 614
4 2 996 5 082 2 428
--------------------------------
11 980 21 268 10 689
--------------------------------
1997
1 2 998 5 209 2 613
2 2 724 5 231 2 431
3 2 695 4 812 2 380
4 2 741 4 291 2 212
-----------------------------
11 158 19 543 9 636
------------------------------
1998
1 3 122 4 157 2 665
2 2 849 4 616 2 500
3 2 840 4 562 2 522
4 2 960 4 420 2 693
----------------------------
11 771 17 755 10 380
-----------------------------
1999
1 3 294 4 748 3 230
2 2 748 4 433 3 221
3 2 748 4 466 3 006
4 2 525 3 849 2 936
----------------------------
11 315 17 496 12 393
----------------------------
2000
1 2 940 2 560 4 546
2 4 166 3 314 3 074
WINDING-UP ORDERS MADE ON EBA CONSULTANCY SERVICES LIMITED AND CLAY INVESTMENTS LIMITEDWinding-up Orders were made against the above companies in the High Court last week.
On 9 May 2000 the Secretary of State for Trade and Industry presented petitions to wind the companies up in the public interest. The petitions followed investigations under Section 447 of the Companies Act 1985 (as amended).
The companies offered training and membership of a network to unemployed executives who wanted to offer their services as consultants.
Clay Investments Limited is registered in the Turks & Cacois and has no connection with a company registered in the UK with a similar name. The place of business was an accommodation address at Lyons House, Station Road, Frimley, Surrey GU16 5HF.
EBA Consultancy Services Limited is registered in the UK. Its registered office is at 4 Reidon Hill, Riseley, Surrey GU21 2SQ and it traded from Craven House, The Lansbury Estate, Lower Guildford Road, Knaphill, Surrey GU21 2EP.
The petitions were presented under S 124A of the Insolvency Act 1986.
All public enquiries concerning the companies should be made to:
The Official Receiver
Public Interest Branch
21 Bloomsbury Street
London WC1B 3SS
*** Forthcoming Creditors Meetings ***
Contributed byhttp://www.insolvency.co.uk
For more detailed information and ALL the British Isles insolvency's (liquidation's, receiverships, administrations, dividends, creditors) please visit http://www.insolvency.co.uk
From 31/07/2000 to 10/08/2000 Number of Creditor meetings : 153 Section Company Venue Liquidator 138 Scotland - Interim Liquidator calling Creditors Meeting 31/07/2000 Thomas Murison Ltd Peterhead Meston Reid & Co 03/08/2000 M D Designs Ltd Glasgow Findlay Anderson Metpower Ltd Glasgow Moore Stephens 08/08/2000 CSC (Crisps) Ltd Glasgow PricewaterhouseCoop Fordell Construction (Scotland) Ltd T Hunter Thompson & 10/08/2000 PIA Developments Ltd Glasgow W D Robb 23 Administrator Calling a meeting of Creditors 04/08/2000 Stakehill International Ltd Bury Downham Train 07/08/2000 Karavale Enterprises Ltd Homestead Deloitte & Touche 48 Receiver calling unsecured Creditors Meeting 01/08/2000 Carripak Containers Ltd London Ian Francis Synchromatic Ltd Leicester KPMG Venture Projects (UK) Ltd Chatham Moore Stephens 02/08/2000 Abbey Cool Ltd Birmingham BDO Stoy Hayward Rising Sun (Bamford) Ltd - The Sheffield Poppleton & Appleby 03/08/2000 Elmore Projects Ltd Bristol Mazars Neville Sensible Motoring Ltd Reading KPMG 10/08/2000 Speedex (Engineering) Ltd Leeds PricewaterhouseCoop 84 N. Ireland - Creditors Voluntary Liquidation 31/07/2000 Global Stone Co Ltd - The Belfast McClure Watters 95 Members converting to Creditors Voluntary Liquidation 02/08/2000 Nucleus Creative Services Ltd North Cheam Morgan Insolvency 98 Creditors Voluntary Liquidations 31/07/2000 AMC Civil Contracts Ltd London Jeffreys Henry Alcroft 2000 Ltd Peterborough Geoffrey Martin & Ball Construction Ltd Manchester A H Tomlinson & Co Bijou Systems Ltd Worthing Levy Gee Brengrange Ltd Barnsley Fisher Curtis Centaur Equestrian Supplies Ltd Barnsley Gibson Booth City Info (UK) Plc London Harris Lipman Creekside Scanning & Imaging Ltd London Geoffrey Martin & Eagle Electrical Engineers Ltd Leeds Begbies Traynor Femagold Ltd London Kakouris & Ferana Ltd London Kallis & Co Frances Polden & Co Ltd London Geoffrey Martin & G R Millward (Auto Electrical Serv) Lt Barber Harrison & Gardale Management Ltd Manchester Stephen Conn & Co Gold Centre Group Ltd Birmingham Casson Beckman & J R Caulswell & Sons Ltd Derby PricewaterhouseCoop Lithart Productions Ltd Leeds Wilson Pitts Mainline Motors Ltd Birmingham BKR Haines Watts Marwil Ltd Derby PricewaterhouseCoop Maymarts Ltd Taunton Begbies Traynor Nationwide Vending Ltd Leeds Bowers & Co Nursling Trading Co Ltd Southampton Stringer & Co PCS Marketing & Computing Ltd Slough Oury Clark Pegasus Property Care Ltd London Valentine & Co Poroplan Ltd Manchester Hodgsons Protek (Europe) Ltd Taunton BN Jackson Norton R D M Ltd Hockley Heath Sanderlings Red Brand Packaging Ltd London Berley Springstep (UK) Ltd London Begbies Traynor 01/08/2000 Acsis Direct Maintenance Ltd Bolton Ratcliffe & Co Aqua 1 Ltd Bury Downham Train Castle Construction (UK) Ltd Bristol Bishop Fleming Collyer Ensign Ltd Crawley Benedict Mackenzie Focus Manufacturing Co Ltd Leicester HKM Harlow Khandhia Goldtique Collections Ltd Leicester HKM Harlow Khandhia Greentech Services Industrial Ltd London Phillips & Co Holbey Ltd London Bartfield & Co J S E (Paper Converters) Ltd Sunderland Jennings Johnson Kids-Stuff (Europe) Ltd London BBK Kingdom Business Systems (Midlands) Lt Moore Stephens Leymar Organisation Ltd Manchester Hacker Young Mali Designs Ltd London A Segal & Co Marrome Ltd Altrincham Lines Henry Mercian Chemical Supplies Ltd Lichfield Dains N W P Express Ltd Stockport Mazars Neville Orange Vehicle Management Ltd Bristol HLB Kidsons Priviledge Properties Ltd Preston Begbies Traynor Process Design & Management Ltd Tyne & Wear Marlor Walls & Co Qualstone Ltd London Valentine & Co RTR Leisure Ltd Birmingham Poppleton & Appleby Roadrunners (Personnel) Ltd Halesowen Mayfields SCM Corrugator Rolls Ltd Manchester Begbies Traynor Shelana (Fashions) Ltd London Ian Francis Simon Jeffrey Plc London Ian Francis Tyre Technology Engineering Ltd Newcastle-u-Lyme 02/08/2000 Absolute Control Systems Ltd Cambridge P A Beck Allied Designs Ltd Manchester Clarke Bell Bespoke Joinery Co Ltd London Sorskys Business Chain Ltd Cradley Heath Moore Stephens Clive Grover Ltd West Byfleet Gibson Hewitt Contracting Services Ltd Leicester KPMG East London Business Equipment LtdLondon Jeffreys Henry Eastern Hydraulics Ltd Lincoln Fastcom Ltd Cambridge P A Beck Grove Developments Ltd Altrincham Lines Henry Hillside Carpets Ltd Manchester HLB Kidsons Kingsley Fashions Ltd London Kallis & Co Lanico Ltd London PricewaterhouseCoop Manhattan Design Ltd Manchester HLB Kidsons Metal Finishings (North Wales) LtdLiverpool Huntington Moore Olympian Home Improvements Ltd Portsmouth WWW Resourcing Ltd London Begbies Traynor Wills Computing Services Ltd Hove Morley & Scott 03/08/2000 Bellini (Roma) Clothing Co Ltd London Fisher Curtis Burley Knitwear Ltd Leicester Casson Beckman & Clokes Brasserie & Emporium Ltd Epsom Morgan Insolvency Essex Loft Conversions Ltd London Langley & Partners Exek Clothing Ltd Lutterworth F A Simms & Flex Sportswear Ltd Whitley Bay Ratcliffe & Co Four Js Development Tools (UK) LtdLondon Fisher Curtis GSS Refinishing Ltd West Sussex Sorskys H C Construction Ltd Brighton Jeremy Knight & Co Juice-Up Ltd Leeds Wilson Pitts Nobility Builders Ltd London Panos Eliades Oswestry Homecare Ltd Oswestry Lines Henry Polar Thermal Products Ltd Bristol J W Lewis & Co Seafever Ltd London Geoffrey Pollard & Zincway Developments Ltd London Valentine & Co 04/08/2000 Aegis Group Security Services Ltd Great Sutton Gallagher & Co B F T Freight Services Ltd Southampton Radfords Camburn Computing Ltd London A Segal & Co Carbug Plc London BDO Stoy Hayward G M G K Consultancy Ltd London David Rubin & Co Hortons Beers & Minerals Ltd London Langley & Partners Joinfast Ltd London Panos Eliades K M A Associates Ltd London Begbies Traynor M J Hawkridge & Co Ltd Bately O'Hara & Co Nois Thai Restaurant Ltd London Valentine & Co Prime Upholstery Ltd Corsham 3iP Safety Management Services Ltd London Casson Beckman & Scaffolding Engineering Ltd Swansea Stones & Co Stores West Communications Ltd Sutton Mervyn E Smith & Co Swinton Vehicle Management Ltd Sheffield Poppleton & Appleby THB Transport Services Ltd Sheffield BDO Stoy Hayward Three Arches Garage Ltd Cardiff KTS Dewey Wills & Co (Display) Ltd Leicester Elwell Watchorn & 07/08/2000 Corringham Sofa Warehouse Ltd Southend-on-Sea Manufacturing Services (F V) Ltd Manchester HLB Kidsons Promat Engineering Supplies Ltd Lytham St Annes Supreme Meal Management (UK) Ltd Hornchurch Redhead French 08/08/2000 Alexander Bell Recruitment Ltd London Langley & Partners Association of H E A T Contractors Ltd HLB Kidsons Commercial Trailer Repairs Ltd Widnes Mitchell First Class Management Services Ltd Mayfields Giulios Restaurant (Bolton) Ltd Manchester HLB Kidsons Henly Partnership Ltd - The Leicester Panos Eliades Laserglide Ltd London F A Simms & Minimould Design Consultants Ltd Oxford Bridgers Online Vehicle Contracts Plc Lutterworth F A Simms & Primrose Path Ltd Hull Lines Henry RCS Computer Systems Ltd Marlow Morley & Scott 09/08/2000 Century Litho (Horsham) Ltd Bristol Ernst & Young Daniel Green Mantelpieces Ltd Abingdon Peter Edwards & Co Durham Fluid Power Ltd Wakefield Jacksons Jolliffe Easypark Ltd London Valentine & Co Leographics (UK) Ltd Leicester Elwell Watchorn & Media Partnership Ltd - The Manchester HLB Kidsons Millennium Web Offset Plc Bristol Ernst & Young S G (Builders) Ltd London Sorskys 10/08/2000 Cabtec Ltd Halesowen Mayfields Euro Engines Ltd Kingston-u-Thames Euro Process & Controls Ltd Manchester Levy Gee Penn Textiles Ltd Stoke-on-TrentPannell Kerr Realgame Ltd London Begbies Traynor Rockcell Ltd London Begbies Traynor
TW LW TW LW
USA 1.49 1.51 Canada 2.22 2.23
Austria 22.50 22.36 Portugal 327.92 325.77
France 10.72 10.65 Belgium 65.98 65.55
Finland 9.72 9.66 Italy 3167.07 3146.39
Germany 3.19 3.17 Sweden 13.84 13.69
Holland 3.60 3.58 Switzerland 2.52 2.52
Spain 272.15 270.37 Ireland 1.28 1.27
Australia 2.59 2.59 Denmark 12.19 12.22
Hong Kong 11.66 11.83 Euro 1.63 1.62
Sth Africa 10.48 10.48 Saudi Arabia 5.60 5.69
India 67.78 68.26 Malaysia 5.68 5.76
Singapore 2.58 2.65 Norway 13.39 13.30
Japan 163.10 165.25
TW This week LW Last week.
GKN, the engineering group, announced pre-tax profits of 308 million pounds, after exceptional credit, on turnover of 2,481 million, for the six months ending 1st July 2000. Earnings per share stand at 29.4p.
Jardine Lloyd Thompson, the insurance broker, announced pre-tax profits of 35.4 million pounds, on turnover of 137.9 million, for the six months ending 30th June 2000. Earnings per share stand at 12.7p.
Rotork, the engineering group, announced pre-tax profits of 10 million pounds, on turnover of 52 million, for the six months ending 30th June 2000. Earnings per share stand at 7.6p.
Shire Pharmaceuticals announced pre-tax profits of 26.6 million pounds on turnover of 156.2 million, for the six months ending 30th June 2000. Earnings per share stand at 9.8p on increased capital.
TDG, formerly the Transport Development Group, announced pre-tax profits of 9.36 million pounds, on turnover of 213.7 million, for the six months ending 30th June 2000. Earnings per share stand at 8.4p.
Pearson, a British media company that is the world's biggest educational publisher (and owner of 50% of The Economist), announced a heavily discounted rights issue to raise 1.7 billion pounds ($2.5 billion). The issue, Britain's biggest ever, will help pay for the $2.5 billion purchase of National Computer Systems, an American education-services firm, as Pearson switches emphasis from entertainment to education.
Source - The Economist
Ford became the latest car company hoping to bring a multimedia experience to its vehicles through a joint venture with Qualcomm, an American telecoms company. Features will include in-car phones and access to the Internet for entertainment and navigation. Safety features could include a device that calls the emergency services, garages and insurers in the event of a (car) crash.
Source - The Economist
Fujitsu, a Japanese technology company, suspended indefinitely a planned flotation of its British computer subsidiary, ICL. Poor market conditions and ICL's bad financial results were given the blame. ICL's chief executive, Keith Todd, resigned.
Source - The Economist
UK's Royal Bank of Scotland seems to be reaping benefits from its acquisition of National Westminster in March. It announced unexpectedly good first-half profits of 1.5 billion pounds ($2.4 billion), up by 11% on a year ago.
Source - The Economist
HSBC, the world's second-biggest bank, announced that pre-tax profits had risen by 28% to $5.2 billion in the first half of 2000. It said that it would concentrate on consolidating its mergers with recently acquired American and French banks.
Source - The Economist
Barclays Bank, which claims more Internet customers than any other UK bank, was forced temporarily to shut down its online service after it emerged that account-holders could access details of other people's accounts. Barclays blamed a software upgrade.
Source - The Economist
Herbert Smith, a British law firm, announced an alliance with Gleiss Lutz, a German counterpart. This is the fifth big Anglo-German law tie-up this year. Increasing European cross-border deals, a change in German law which will encourage mergers there and prospective expansion of the EU eastwards make German law firms attractive to ambitious British firms.
Source - The Economist
MERGER CLEARANCE
The Secretary of State for Trade and Industry has decided, on the information at present before him, and in accordance with the recommendation of the Director General of Fair Trading, not to refer the following merger to the Monopolies and Mergers Commission under the provisions of the Fair Trading Act 1973:Proposed acquisition by QBE Corporate Capital Holdings Plc of Limit Plc
PROPOSED ACQUISITION BY INTERBREW SA OF BASS HOLDINGS LTD
Stephen Byers, Secretary of State for Trade and Industry, has decided, in accordance with the advice of the Director General of Fair Trading, to request the European Commission to refer to the UK authorities the proposed acquisition by Interbrew SA of Bass Holdings Ltd under Article 9 of the EC Merger Regulation. This is currently being considered under the EC Merger Regulation.
Stephen Byers said:
"The Director General of Fair Trading has advised that the proposed merger raises competition concerns in a distinct market in the UK which warrant further investigation. I agree and am therefore requesting the European Commission to refer the case to the UK."
If the Commission refers this merger to the UK authorities, it will be considered under the merger provisions of the Fair Trading Act.
The proposed merger between Interbrew SA and Bass Holdings Ltd was notified to the European Commission on 6 July 2000 under the terms of the EC Merger regulation (Council Regulation 4064/89 as amended). In accordance with Article 19 of the Regulation, the UK received a copy of the notification on 10 July 2000.
Under Article 9(2)(a) of the EC Merger Regulation a Member State may inform the European Commission that a merger threatens to create or strengthen a dominant position as a result of which effective competition will be significantly impeded on a market within that Member State which presents all the characteristics of a distinct market.
If the Commission agrees with the Member State's assessment it can either:
(a) deal with the case itself in order to restore effective competition on the market concerned; or (b) refer the whole or part of the case to the Member State in question with a view to the application of the Member State's competition law.
On 25 May 2000 Interbrew completed the acquisition of the UK brewing business of Whitbread plc. That transaction gives rise to a merger situation under the merger provisions of the Fair Trading Act 1973 and is still under consideration by the UK authorities.
The UK has previously made eight Article 9 requests to the Commission for a case to be referred to the UK authorities. These requests were in the cases of Nabisco Group Holdings Corp/United Biscuits (Holdings) plc/Horizon Biscuit Company Ltd (2000), Hanson plc/Pioneer International Ltd (2000), Anglo American plc/Tarmac plc (1999), Exxon Corporation/Mobil Corporation (1999), Electricite de France/London Electricity plc (1999), Redland plc/Lafarge SA (1997), GEHE/Lloyds (1996) and Tarmac/Steetley (1992).
WESTERN POWER DISTRIBUTION LIMITED/HYDER PLC
Stephen Byers, Secretary of State for Trade and Industry, last week announced that, based on the advice of the Director General of Fair Trading (DGFT), he has concluded that the arrangements by which Western Power Distribution (WPD) proposes to procure certain water services from United Utilities does not constitute a merger. The arrangements will not, therefore, be the subject of a mandatory reference to the Competition Commission.
Mr Byers said:
"The DGFT has advised me that the arrangement under which WPD proposes to procure water services from United Utilities do not meet the criteria for mandatory reference to the Competition Commission under the Water Industry Act 1991. I am satisfied that the proposed agreement between WPD and United Utilities will not, actually or potentially, give United Utilities material influence over the policy of Dwr Cymru. I have concluded therefore that there is no merger situation in this case which would give rise to a mandatory reference to the Competition Commission."
Western Power Distribution's bid for Hyder was notified to the European Commission on 13 June 2000 under the terms of the EC Merger Regulation. The bid was cleared by the European Commission on 14 July. The proposed arrangements between WPD and United Utilities were not notified to the EC.
Under the provisions of the Water Industry Act 1991, the Secretary of State for Trade and Industry has a duty to make a merger reference to the Competition Commission if it appears to him that it is or may be the fact that arrangements are in progress which, if carried into effect, will result in a merger of any two or more water enterprises.
- but the internet is fast becoming a strong influence -
The 'grapevine' is still the most powerful influencer of purchasing behaviour, according to new research from KPMG Consulting. Advance findings from the report*, "Customer Management – Who Manages Whom?", out next Thursday show that talking to friends was a more important source of information than looking at advertising or brochures, calling the company or surfing the Net. 59% of respondents would talk to friends when thinking of changing telephone company and 54% when considering changing supermarket. However the internet is fast becoming a major influence in gaining information, with 17% of respondents claiming they would surf the Net when considering changing utility company and 12% for information on phone companies.
When making a major purchase, such as a car or holiday, talking to friends was again extremely important - 84% stated they would talk to friends when thinking about booking a holiday and 73% would discuss buying a car with friends. Here, the internet was also showing signs of increasing use, with 36% of respondents stating they would search for holiday information on the Net and over a quarter would search for car details online.
Other main findings include:
Youngsters are also more likely to purchase goods via the internet - nearly a third of respondents aged between 16 and 34 had purchased goods online, as opposed to 10% of those aged over 55
The main advantages of using the internet to make purchases were seen as convenience ( 36%), wider choice ( 24%) and speed ( 18%). Price was relatively unimportant - coming joint fourth on the list of reasons given.
Companies have one chance to get it right - when asked what they would do if an internet transaction fulfilment fails, the most popular option was ‘cancel and refund’
The Net has made significant inroads as a shopping channel, with one in five respondents stating they have made an internet purchase in the last twelve months. The most popular purchase made online in the last year was books - bought by 7% of respondents, 6% had purchased music or video products and just 1% of respondents had bought financial services.
Louise Fletcher, Partner in charge of Customer Management at KPMG Consulting commented: "Clearly, word of mouth is a vital way for companies to attract new customers. While conventional marketing still has an important role to play in raising awareness and building a brand among customers, companies need to pay attention to the importance of ‘talking to friends’ as a key influence on changing supplier. Companies need to consider this hidden channel and how they can harness this influence, looking, for example, at creating advocates within their customer base.
James Rodger, principal consultant at KPMG Consulting commented: "In addition, the web can be used to encourage interaction between friends and web communities. For example, companies could make more use of online chat rooms or customer forums, especially by incorporating these onto their own web site, in order to provide the 'human contact' that customers obviously rely on and trust. Companies are then able to provide all the information that a customer might require before making a purchasing decision - from suppliers' specifications to customers' actual experiences - through one easy 'customer portal'. And, by making this information available through one easy interface, it is possible to better position the internet as a true influencer of customers."
* Research was carried out by Simpson Carpenter during May 2000 among adults in the UK. 750 people answered a range of questions about their dealings with companies in the following sectors: utilities (gas and electricity), telecoms (including mobiles), banking and grocery retail.
Tuesday 3 October 2000 ICM Credit Scotland 2000 (Conference and Exhibition) Hampden Park Football Stadium, Glasgow Anyone interested in attending (or exhibiting) should contact David Ancliffe on (0131 200 8686). Friday 6 October 2000 Swindon Branch of the Institute of Credit Management Seminar Telephone Collection Techniques Credit Scoring and Vetting Procedures Receiverships/Liquidations Prioritise Your Workload Cost 85.00 members, 95.00 non-members Lunch included and Refreshments Contact Barry Parkin on 01793-766471 during working hours Friday 20 October 2000 Millennium Annual Dinner of the ICM Drapers Hall, City of London.
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