News

An about turn by the US authorities on the plan to buy up toxic assets as part of the $700bn Troubled Assets Relief Programme (TARP) has put financials on the back foot in London.

US Treasury Secretary said that buying up troubled assets through a reverse auction process is now deemed not the most efficient means of using the money set aside for the financial sector bail-out.

Royal Bank of Scotland, HBOS and Barclays all react badly to the development, as does insurer Prudential.

London Stock Exchange dropped despite saying that it has delivered 'good' first half results as pre-tax profits jumped 30% thanks to a hike in revenue. Profit before tax for the period was £127m from £97.8m in the same period last year on revenue that jumped 70% to £345.5m. The share price was undercut, however, by the company's decision to abandon the £500m share buy-back programme. Inter-dealer broker ICAP falls in sympathy.

BT is this morning's strongest riser after the group announced the loss of 10,000 jobs alongside an 11% fall in second quarter profit, slightly better than forecast.

Around 10,000 jobs will go by the end of the current financial year as part of ongoing efficiency programmes, said the group. The cull will mostly affect indirect labour, including agency, contractors, subcontractors and offshore workers.

Reed Elsevier also gained after the publisher reaffirmed that it is on track to deliver on its full-year goals of good revenue growth, margin improvement and strong growth in adjusted earnings per share. Thomson Reuters moves higher hanging on to the coat-tails of Reed.

Brewer SABMiller warned that cost pressures and the strength of the US dollar are expected to adversely affect results as it reported a 5% rise in first-half pre-tax profit. "The deterioration in global economic conditions is causing weakening consumer demand in many of our markets," said the group.

Property search website Rightmove continues to have confidence in meeting its expectations for the current year and said its business is proving more robust than other forms of property advertising in this challenging environment.

Bookmaker Ladbrokes upped profit for the four months ended 31 October, excluding Telephone High Rollers, by 10% and brushed off a string of poor football and horse race results at the end of the period.

Irish peer Paddy Power is still on course to report operating profit for 2008 of about €75m, in line with lowered estimates published in August, assuming a "normal run" of sporting results over the rest of the year.

Support services firm Serco said it is on track to deliver on expectations for 2008 and is confident of delivering double-digit revenue growth for the foreseeable future. "We continue to expect, through management of our contract portfolio, our efficiency programmes and selective bidding for higher value contracts, an increase in our Adjusted PBT margin for the current business of 30 basis points in each of 2008 and 2009," it added.

Engineering specialist Keller expects to report "record results" for the current year as a whole, around the top end of market expectations. Trading from July to November has remained strong, said the group, with continued organic growth, particularly in Eastern Europe, Middle East and Australia.

Newspaper publisher Trinity Mirror said it is cautious about its prospects for the remainder of 2008 and for 2009 as trading conditions continued to deteriorate since the half year.

Aircraft services company BBA anticipates performance in the second half will be broadly similar to the first half and in line with its expectations.

Central European focused coffee bar operator Coffeeheaven International trading results for the first half of the financial year to 31 March 2009 have been robust. Like for like group sales growth came in at 16%. Poland and Latvia saw particularly strong growth while like for like sales in its Czech market fell 2%.

Terrestrial broadcaster ITV is up on revived bid talk.