Thursday, 28 February 2008

Record fines for Microsoft

Yet again, Microsoft was fined, but this time a record €899 million (£683 million) by the European Commission yesterday. This came as Microsoft received its third financial penalty for failing to comply with a landmark antitrust ruling issued four years ago.

As the battle between the American software giant and European regulators enters its tenth year, Microsoft has now been fined almost €1.7 billion (£1.28 billion) for abusing its dominance of PC operating systems through its Windows software. Microsoft had unfairly tied its web browser, Internet Explorer, to its Windows operating system, and was making it difficult for competitors to work with Windows by not disclosing sufficient interoperability information.

Under the ruling of March 2004, Microsoft was instructed to make complete and accurate interoperability information available on reasonable terms to competitors so that they could develop their own operating systems for servers.

The fine is based on a 15-month period of non-compliance and is considerably larger than the original €497 million (£376 million) penalty the company initially received.

Microsoft said that it would review the decision. If it decides not to appeal, a line will have been drawn under the original Commission ruling. However, Microsoft will have to update the interoperability data it makes available continuously and licensees may lodge complaints if they believe that they are being unfairly treated.

Microsoft Fines:
March 2004 Abusing its dominant position: €497 million
July 2006 Failure to comply with March decision: €280.5 million
Feb 2008 Charging rivals unreasonable fees: €899 million (source: Timesonline)

Royal Bank of Scotland unveiled profits of £10.3 billion. Underlying profits at the UK's second biggest bank were 9% higher than the previous year. This is inline with City forecasts.

Losses at Royal Bank of Scotland due to the credit crunch totalled £1.6 billion. UK business banking also lifted operating profits 11% to almost £2 billion, offsetting the decline in earnings from investment banking.

Chief executive Sir Fred Goodwin said prospects for 2008 were "difficult as ever to predict but there was good momentum behind the enlarged bank following the acquisition of ABN Amro.”

The bank added today that its capital remained within target ranges and also cheered investors with a 10% hike in the annual dividend. (source: The Independent)

Wednesday, 27 February 2008

Egg dumps millionaires

Egg, the online bank, who dumped 161 000 customers last month has also dumped at least three millionaires as Egg considered them a bad credit risk. Egg purged its books of people it feared might fail to pay their bills.

AA correspondent said that one of the millionaires’ gross income last year was £1.1million and that he had worked for one of Britain's 50 largest companies for 26 years. The millionaire said “My credit rating is excellent and I even happen to have shares worth £180,000 in a Citigroup account. I find it outrageous that this bank can make these statements and get away with it.”

Egg, which was set up by Prudential, the UK insurer, was bought by Citigroup, the US banking giant, last May. Egg said that Citigroup immediately began combing through its 2.3 million customer base for bad credit risks. The bank wrote to 161,000 customers last month to tell them that their cards would be cancelled in 35 days' time because they presented a “higher than acceptable risk profile”.

A spokesman for Egg said yesterday that it did not look solely at credit histories when deciding whether to cut off customers. “Some customers may be up-to-date with payments and have a good record with the credit agencies but our models might show them to pose a higher future risk than we're comfortable with,” the spokesman said.

The spokesman denied that Egg had shed customers who paid off their card every month because they were not profitable. “Profitability is not a factor in our decision,” he said. Egg does not receive interest from these customers but it does receive a fee from every transaction.

Customers aged between 34 and 49 are most likely to have their credit limits cut or their cards cancelled, the website found, while borrowers younger than 25 who have very little credit history and no property are more likely to have their limits extended. (source: Timesonline)

Google, the internet giant, suffered a 7% decline in adverts viewed in January, compared with the month before. Google shares have fallen nearly 19% in the past three months. Analysts said yesterday that despite this fall, web searches had increased 10% in the same period.

Benjamin Schachter, a UBS analyst, cut his 12-month target on Google shares from $650 to $590, a new low among Wall Street analysts. He said that international growth, including in Britain, Google’s second-largest market, was a concern. Shares in Google tumbled as low as $446.85 (£231), down $39.59 (£20.5), or 8.1%, in early trading on Nasdaq, but recovered later to close at $464.19 (£240.5), a fall of $22.25 (£11.5), or 4.57%.

Nevertheless, 29 brokers are still advising investors to continue to buy Google shares, while only four rate it as a “hold”. (source: Timesonline)

Friday, 22 February 2008

£50 Million windfall for two co-founders

The two co-founders of Pret A Manger in 1986, Julian Metcalfe & Sinclair Beecham, are expected to pocket at least £50 million from the sale of the business to Bridgepoint Capital in a £350 million deal.

However, the two co-founders are thought to be leaving a similar amount in the company in a complex earnout deal, which, depending on performance, could boost the headline price closer to the £400 million they had hoped for.

McDonald's, is understood to be selling its entire 33% holding it bought a few years ago in Pret A Manger to Bridgepoint. The management team, led by Larry Billet, the chairman, and Clive Schlee, the chief executive, will stay with the business and with the co-founders will have a 25% stake.

Bridgepoint, which beat off competition from the rival private equity firms Advent International and Morgan Stanley Private Equity, has secured debt funding from Rabobank worth an estimated £175 million.

The acquisition of Pret by Bridgepoint, which is being advised by Goldman Sachs, bolsters a portfolio of consumer-facing brands that includes Pets at Home, Fat Face, Molton Brown and Virgin Active.

Mr Metcalfe and Mr Beecham, who were college friends, opened the first Pret outlet in 1986 to sell freshly prepared sandwiches using only natural, preservative-free ingredients. The chain has about 180 shops in Britain, 14 in New York , 10 in Hong Kong and a single outlet in Singapore. (source: Timesonline) - PRET to be sold

Wednesday, 20 February 2008

Microsoft not intending to raise its stake in Yahoo!

Microsoft is not intending to raise its offer on the original $42 billion (£21.5 billion) cash-and-shares offer for Yahoo!, the software group’s chairman said yesterday. Bill Gates said that Microsoft’s bid was “full and fair” and insisted that there had been no confidential negotiations between the two sides to try to agree a deal after Yahoo! rejected his group’s original bid this month.

It is not sure what the next step would be for Mr Bill Gates as he declined to spell out what he planned to do next. The expectation is that Microsoft aims to test the opinion of Yahoo! shareholders by nominating alternative directors to challenge the Yahoo! board. The deadline for filing is March 13.

Mr Bill Gates said: “We can afford to make big investments in the engineering and marketing that needs to get done. We will do that with or without Yahoo! But we also see that we’d get there faster if the great engineering work that Yahoo! has done and the great engineers in Microsoft were part of the common effort.”

Separately, there were signs yesterday that Alibaba, Yahoo!’s Chinese partner, was trying to exert some influence in the deal. Yahoo! owns 39 per cent of Alibaba, which runs an internet marketplace. The business is controlled by Jack Ma, its founder, who wants to retain a similar level of autonomy under any new ownership.

Last night it was reported that Yahoo! plans to offer its employees enhanced severance benefits in the event of their jobs being cut after a change in control of the company. (source: Timesonline)

Alliance & Leicester's suffered a $360.4 million (£185 million) writedown on its exposure to risky assets. Britain’s seventh-biggest bank, reported a 2007 pretax profit of £399 million down from £569 million in 2006. Underlying core operating profit rose 3% from 2006 to £602 million.

Alliance & Leicester warned three weeks ago that its writedown on holdings of structured investment vehicles (SIVs) and other products tarnished by the US subprime housing crisis had more than tripled from a previous estimate to £185 million. Profit was also knocked by a £10 million loss on ineffective hedges and £8 million of redundancy costs.

Alliance & Leicester calmed worries about funding problems in November by saying it had agreed medium-term financing facilities, and said it had funding to see it through to the first quarter of 2009. (source: The Independent)

8 Reason why it is better to buy a business for your road to financial independence (by Richard Parker):

When done right, buying a business lets you achieve returns of 25% to 33% on your cash investment. Try getting that consistently in the stock market.

Unlike a job, there is no limit to how much money you can make.

There are enormous tax benefits when you own a company that you cannot take advantage of as an employee.

As you grow your business, the value of your investment will build exponentially.

Since you will be inheriting an infrastructure, you can take as much vacation as you would like. Try doing that with a job!

For every dollar of growth that you generate, you will get back three times or more when the time comes to sell the company.

You can acquire additional assets that complement your business - such as commercial real estate - and cover all the costs from the cash flow of the business.

From a tax perspective, the bulk of the business’ appreciated value can be taxed at favourable capital gains rates when you ultimately sell the business.

Tuesday, 19 February 2008

British Billionaire buys 7% stake in Ladbrokes

The Bahamas-based British Billionaire ranked 16th on the Sunday Times Richlist, Joe Lewis, has bought a near 7% stake in Ladbrokes, the UK's biggest bookmaker. Mr Lewis believed that Ladbrokes shares are undervalued and he is thought to be keen to acquire more blocks if and when they become available. His holding is worth £300 million.

Speculation has swirled in recent weeks as to the identity of the buyer after Citigroup disclosed in a series of statements that it was holding shares as “contracts for difference” on behalf of one of its clients.

Mr Lewis recently paid $860 million (£440 million) for a 7% stake in Bear Stearns, the American bank, which has been hit hard by the US sub-prime mortgage meltdown. He has since increased his holding to 8%. He also owns a stake in Tottenham Hotspur Football Club and has in the past tried to acquire Victor Chandler, the betting group.

Any bid could also involve a tie-up with Apax Partners, the British private equity group, which is known to have approached Ladbrokes in 2006 when it was demerged from Hilton Group. Mr Lewis, who is involved with Betdaq, the betting exchange, has recently been linked to stake-building at Rank Group, the embattled casino and bingo club operator. Analysts believe that, in the event of a bid for Ladbrokes, he may consider turning his sights on Rank with a view to merging the two companies and creating a gambling conglomerate to rival Gala Coral. (source: Timesonline)

Anyone who splashed out £450 on a state of the art HD-DVD high definition player could soon be counting the cost. Comprehensively outsold by the Sony-developed rival Blu-ray, the Toshiba player may soon be irrelevant, amid growing expectation that its Japanese manufacturer will abandon the technology within days.

An estimated 50,000 HD-DVD players have been sold in Britain — although Toshiba will say that sales across Europe total 200,000 and almost 275 000 films. Blu-ray, though, has built up an unassailable lead, with a little over 800,000 films sold in Britain since both technologies were launched.

Toshiba insisted yesterday that “no decision had been taken,” although private briefings in Japan indicated that the cave-in would come later this week. In Tokyo, Toshiba shares increased by 6%, in the hope that it can save $450 million (£220 million) by walking away from its white elephant.

Five Hollywood studios back Blu-ray, after Warner Brothers said it would switch to the format at the beginning of the year, leaving HD-DVD owners only with films from Universal, the King Kong studio, and Paramount.

Blu-ray won because Sony built the player into the PlayStation3 games console. Although Toshiba had support from Sony’s games rival Microsoft, HD-DVD was not built into the Xbox 360, meaning that it was not a default purchase. In America, Blu-ray films are outselling HD-DVD releases by at least four to one; most weeks two thirds of players sold were Blu-ray devices. Blu-ray has built up a similar lead in Japan. (source: Timesonline)

Friday, 15 February 2008

Virgin's Bid to be blocked

Northern Rock’s leading shareholders are preparing to vote down a rescue proposal from Sir Richard Branson's Virgin Group despite the looming threat that the beleaguered mortgage bank will be nationalised if a deal fails. Virgin’s offer will be opposed by RAB Capital and SRM Global, the two hedge funds that are the Rock’s largest investors, who between them hold a 19.68% stake in the bank.

Legal & General Investment Management is the third-largest owner of Rock shares, with a stake of 4.79%. Together, the three investors are within a whisker of owning the 25% required to block a Virgin-led rescue. The only way the Government could bypass a Northern Rock shareholder vote would be to force the bank into administration, but that would be a legal minefield.

A final government decision on its future could come as early as this weekend. SRM has taken legal advice that has concluded that if the Government nationalises Northern Rock, it must pay shareholders the book value of the bank, estimated to be 400p a share. This runs counter to the Government’s legal advice, which states that shareholders should receive the market value of the bank, less the value of support so far offered through emergency loans from the Bank of England.

The Bank has lent about £26 billion so far and has taken an estimated £91 billion in liabilities on to its balance sheet. (source: Timesonline)

British Airways will pay $140 million (£71 million) in compensation to passengers affected by the carrier’s fixing of ticket prices after settling a class-action lawsuit in the United States. The settlement brings British Airways’ total pay-outs for conspiring to fix fuel surcharges to £338 million.

The lawsuit was brought by a US law firm on behalf of passengers who lost out as a result of British Airways and Virgin Atlantic conspiring to set the level of fuel surcharges, a supplemental fee added to air fares to cover rising oil prices.

Virgin’s action saved it from censure but British Airways was fined £121.5 million by the Office of Fair Trading for breaching competition law. The US Department of Justice fined the airline a further $300 million (£150 million) for passenger and cargo price fixing.

Virgin is thought to be paying $60 million (£30 million), but British Airways will have to pay triple damages because it did not expose the conspiracy. The size of the British Airways settlement may force it to put aside more money to pay further penalties. The airline is under investigation by European authorities for fixing cargo rates and may face a class-action suit from haulage firms.

Fifteen airlines have admitted they are part of the EU’s investigation into cargo price fixing, which also relates to the setting of fuel surcharge rates. (source: Timesonline)

Warren Buffett, the world’s second richest man, has built up an 8.6% stake in Kraft Foods, worth $4.32 billion (£2.2 billion), making him its largest individual shareholder. These shares were bought last year. It was revealed that Mr Buffett has spent $76 million (£39.37 million) on shares in UK drugs firm GlaxoSmithKline.

His investment in Kraft is being seen as a vote of confidence in the firm, which only last month posted a 6% decline in quarterly profits after it was hit by higher raw material costs. Kraft's best-known products include its eponymous cheese, Maxwell House coffee and Oreo cookies.

Mr Buffett bought the shares through his Berkshire Hathaway investment vehicle. (source: BBC News)

Tuesday, 12 February 2008

Yahoo! rejects Microsoft offer

Microsoft is not planning to give and vowed to pursue Yahoo! after the internet search engine formally rejected a $41 billion (£21 billion) approach. Microsoft said that it reserved the right to “pursue all necessary steps” to ensure that Yahoo! shareholders have a chance to gain from Microsoft’s interest, hinting that it may seek to oust the Yahoo! board by launching a proxy fight using its Yahoo! shares.

Microsoft’s insistence that it is to chase Yahoo! came as it emerged that Google has become reluctant to act as a white knight for Yahoo!. Google, the world’s biggest internet company, has gone cold on the idea of helping its online search rival to reject Microsoft’s advances.

It is understood that Google has studied regulatory implications of a cooperation deal with Yahoo! and is reluctant to attract unnecessary attention from anticartel groups, particularly as it has been so vocal against Microsoft’s dominance elsewhere in the software market.

Yesterday, Wall Street traders indicated they expected Yahoo! to fall to a Microsoft offer as shares in the search engine closed at $29.87 (£15.47) in New York, up 67 cents and just shy of the $31 (£16.06) proposed by Microsoft.

Yahoo! has suffered eight consecutive quarters of falling profits and a declining share of the internet advertising market, estimated to be worth about $40 billion (£20.72 billion) a year and expected to double within two years.

Yahoo! said it was rejecting the offer, which had valued its shares at a 62% premium to their closing price the day before the offer was made public, because it “substantially undervalues Yahoo! including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential as well as our substantial unconsolidated investments”. (source: Timesonline)

Monday, 11 February 2008

Yahoo! and AOL continue merger talks

Yahoo! and AOL are restarting merger talks as a means of defending itself against the $45 billion (£23 billion) hostile bid approach from Microsoft. It is understood that Yahoo! and its team of advisers from Goldman Sachs and Lehman Brothers, the US investment banks, have spent the past week evaluating possible tie-ups with media and technology firms that would save it from being swallowed by Microsoft.

Yahoo! and AOL previously failed to join forces because of differences over price. It is however hoped that the urgency created by an unwelcome approach from Microsoft and an impending economic downturn will spur the two into new talks. Google, which offered support to Yahoo! when the Microsoft approach was made public, also has a 5% stake in AOL.

Jerry Yang, co-founder of Yahoo!, will today tell Wall Street that his board has rejected the software giant’s cash-and-shares proposal because it significantly undervalues the company. It is believed that the Yahoo! board will not even consider starting talks with Microsoft unless the suitor group offers at least $12 billion (£6 billion) more, representing a share price value of more than $40 (£20).

Currently, Microsoft has proposed paying $31 (£15) in cash and shares, valuing Yahoo! at just under $45 billion (£23 billion). Microsoft had proposed to pay Yahoo! shareholders up to half in cash and the rest with Microsoft shares.

Yahoo! has suffered eight consecutive quarters of profit decline. Critically, it has also lost part of its share of the $40 billion (£20 billion) online advertising market to Google, its dominant rival. Microsoft is desperate to take over Yahoo! because of the threat that Google’s dominance of the online search advertising market poses to the computer company’s future. Last year, after long discussions about a merger between the two, Yahoo! declared that it was not for sale. However, it did agree to draw up proposals about how the two could co-operate to fight Google more effectively. (source: Timesonline)

Under the new Open Skies regime that throws transatlantic routes open to full competition for the first time from the end of March, a raft of airlines have unveiled plans for new Heathrow services. According to aviation industry sources, all but US Airways have signed deals with companies to refuel their planes at the world's busiest airport. This is because of BBAs inability to secure fuel supplies for a new service it plans to launch next month from the world’s busiest airport and is threatening to launch legal action against BAA.

A US Airways spokesman said: "We are working every possible angle to acquire fuel at Heathrow and have been ever since we announced our start-up last November. This situation continues despite the fact that the BAA and [airlines trade body] IATA have brokered a deal among all of the airlines to allocate fuel among themselves to ensure everyone, including the new entrants to the market, have adequate fuel."

BAA has appealed to several other airlines to make some of their supplies available to US Airways. None has agreed to do so. A source at one rival airline said: "They spoke to us about it but of course we said no. They are competitors. No one has been willing to take them on."

A BAA spokeswoman said: "We are confident there will be sufficient fuel, and we have contingency plans in place." (source: The Independent)

Thursday, 7 February 2008

EasyJet on track with profits

EasyJet, the low-cost airline, continues to expand faster than it can fill seats but the carrier said yesterday that its profit forecast was unaltered. Easyjet reported that it carried 9.1 million passengers in the three months to the end of December, which is up 12.4% on the same period a year before.

EasyJet, however, is in the middle of a rapid expansion after spending $4 billion (£2 billion) on 104 new Airbus aircraft and available seat kilometres. The industry measure of total capacity grew faster than passenger numbers at 17.7% and this resulted in emptier aircraft and the carrier’s load factor fell a percentage point to 80.8%.

The load factor in January, which easyJet also released today, was even worse, down 2.9 percentage points on the same period last year. However, easyJet has rejected the gloomy predictions for the sector made by its rival Ryanair this week. (source: Timesonline)

Wednesday, 6 February 2008

Don't give up

Don't dwell so much on a problem that you've exhausted yourself before you can even entertain a solution. It just doesn't make sense. It takes brainpower and energy to think positively and creatively -- and to see creatively and positively. Going negative is the easy way, the lazy way. Use your brainpower to focus on positives and solutions and your own mindset will create your own luck.

Shakespeare put it this way, in a famous quote from Julius Caesar: "The fault is not in our stars, dear Brutus, but in ourselves."

That's a clear message. We are responsible for ourselves. We are responsible for our own luck. What an empowering thought! If you see responsibility as a bum deal, then you are not seeing it for what it really is -- a great opportunity.

Let's say you're facing some big challenge today. I can tell you right now you've got a lot of company. What will separate you from the complaining crowd will be how you choose to look at your situation. If you believe you are in control of it -- and you are -- you will know exactly who to look for when you need help: yourself. You could be your greatest discovery yet for success, luck, power, and happiness.

When I encountered enormous financial challenges back in the 1990s, I was mature enough to assume responsibility and know that the problem was mine. I knew it wouldn't do any good to blame other people. That would be a waste of time, and that's one kind of loss I don't like. Time is something that cannot be replaced. If you find yourself slipping into the blaming others mode, get out of it quickly.

Give luck the chance it needs to play itself out in your life. No one can do it for you. As soon as you discover that luck is yours to create, you'll be thinking and seeing things in a whole new way. So work hard, have fun - and good luck!

Today’s article is adapted from Donald J. Trump’s newest book, Trump: Never Give Up: How I Turned My Challenges into Success, published by John Wiley & Sons.

Tuesday, 5 February 2008

Olivant withdrew bid

Britain's plans to extricate itself from the collapse of mortgage bank Northern Rock stumbled as it faced the prospect of an auction with only two bidders, unless it changes the terms of the sale. The Virgin Group and an "in-house" management team have made rescue offers. The Government has indicated that it is keen on a private sector solution after a four-month crisis has added to a slump in Prime Minister Gordon Brown's popularity.

The investment firm, Olivant, quit the race yesterday 15min before the deadline, but would consider re-entering if the government was willing to reconsider the terms. Olivant, headed by former Abbey CEO Luqman Arnold said: “Olivant was unable to put together a proposal that met its investment criteria and that of other stakeholders. It wanted to repay a £25 billion loan from the government over five years, whereas the government wants to be repaid within three years.” (source: Reuters)

It seems like News Corporation, has shrugged off the writers’ strike to double profits to a better than expected 24% growth in operating profits. That gain to $1.4 billion (£709 million), was dragged down, however, by a $299 million (£149.5 million) write down on the investment made by News Corporation’s affiliate, British satellite broadcaster, BSkyB, on its holding in ITV. Net profits, after the charge, were up $10 million (£5million) to $832 million (£416 million).

News Corporation has also ruled out a counter bid for Yahoo!. Rupert Murdoch, the chief executive, said: “We are definitely not going to make a bid for Yahoo!.” Profits at Fox Television, and the company’s other network television operations jumped to $245 million (£122 million) from $112 million (£56 million), as the company benefited from resilient prime-time ratings at a time when rivals suffered amid a writers’ strike that has affected popular programmes and led to declining audiences. The network was also helped by the $250 million (£125 million) generated in advertising from broadcasting the Super Bowl at the weekend after the financial quarter ended.

Elsewhere, a weaker release slate meant that film profits were down 14% to $403 million (£201.5 million), while Sky Italia posted a $62 million (£31 million) profit compared to a $12 million (£6 million) loss a year ago. (source: Timesonline)

Monday, 4 February 2008

Microsoft serious about takeover & Businessman of the Month

It is understood that Microsoft is threatening to launch a boardroom coup at Yahoo! within six weeks if the internet search engine fails to accept its $45 billion (£23 billion) hostile takeover proposal. The plan to oust Yahoo! executives came, as it emerged that the search engine was considering the feasibility of a tie-up with Google, its bigger rival, to fight off the approach from Microsoft.

While any tie-up between the two would trigger a cartel investigation — a combination of Yahoo! and Google would have more than 80% of the UK’s internet searches alone — Yahoo! is thought to be considering options such as turning to Google as its search provider.

David Drummond, Google’s chief legal officer, said in a blog that a combination of Microsoft and Yahoo! could undermine the open competition that has fuelled more than a decade of innovation on the web. He said: “Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors’ e-mail, IM and web-based services?”

Although it is understood that Microsoft would much prefer a takeover to be amicable and not resort to ousting Yahoo! directors, the software company has become increasingly frustrated that the lack of a tie-up between the two groups has helped Google, the world’s biggest internet company, to grow even stronger. So anxious are Microsoft executives about Google’s dominance that they are prepared to remove the Yahoo! board.

Some analysts say that although a bid valuing Yahoo! at a 62% premium is hard to reject, Yahoo! may consider a tie-up with another media group, such as News Corporation, parent company of The Times and Times Online, or Disney, or a telecoms group, such as AT&T. (source: Bloomberg)

Rising airport charges at Stanstead and tougher operating conditions was blamed by Ryanair, Europe's largest airline, today blamed for the 27% slump in third-quarter profits.

The company also gave warning that the worsening economic environment in Europe could hammer next year's results, predicting that profits might fall 50% to €235 million (£176 million) in a worst-case scenario.

Ryanair said that the high oil price, combined with longer routes and an increased number of flights, would lead to significantly higher costs. Its best-case scenario for 2008-09 was a 6% increase in profits to about €500 million (£375.94 million), but the airline also said that there could be a 50% fall in profits if oil stayed high and consumer spending declined.

In the three months to the end of December, Ryanair reported a fall in income from €48 million (£36 million) to €35 million (£26 million) despite a 21% increase in passenger numbers and a 16% rise in revenue.

Ryanair carried 12.4 million passengers during the third quarter and ancillary revenues — money raised from extra charges — rose 30% to €111 million (£83 million). Overall revenue was €569 million (£427.81 million). The company had a one-off gain of €12.1 million (£9.09 million) from the disposal of five aircraft. The low-cost carrier now expects to see net income of €470 million (£353.38 million) for the full year — roughly in line with analyst forecasts.

Despite the worsening profit figures, Ryanair announced a €200 million (£150.37 million) share buyback, equivalent to 3% of the company's stock. This is in addition to the €300 million (£225.56 million) buyback announced last year. (source: Timesonline)

Businessman for February – Johann Rupert

Johann Peter Rupert was born 1 June 1950 and is the eldest son of the late business tycoon Anton Rupert, the founder of the Rembrandt Group. He is the chairman of the Swiss-based luxury-goods company Richemont, the owners of brands such as Cartier & Mont Blanc, as well as the chairman of the South Africa-based companies VenFin and Remgro.

He attended the University of Stellenbosch, studying economics and company law but he dropped out of university to pursue a career in business. Rupert served his business apprenticeship in New York, where he worked for Chase Manhattan for two years and for Lazard Freres for three years. He then returned to South Africa in 1979 and founded Rand Merchant Bank of which he was CEO. He started the Small Business Development Corporation in same year (+/- 500,000 jobs created since inception). In 1984 Rupert merged Rand Merchant Bank and Rand Consolidated Investments, and left to join his father's company, the Rembrandt Group.

Friday, 1 February 2008

Healthy profits for British Airways

Despite rising fuel costs and consumer slowdown, British Airways has still reported healthy profits for the last nine months of 2007, with pre-tax profits at £788 million, up 34.9% from the same period of 2006.

Fuel costs in the first six months of the period fell by £36 million, however fuel costs rose for the last three months to £72 million. The figures come less than two months before the opening of Heathrow's new Terminal 5, which BA hopes will improve punctuality and baggage performance.

British Airways reported strong pre-tax profits for the last three months of 2007 at £195 million, which is 72.6% up from £113 million in the same period of 2006.

British Airways Chief Executive, Mr Willie Walsh, said "This is another good set of results despite soaring fuel costs and difficulties in the market. The opening of Terminal 5 is now less than two months away and the public trials and previews for our Executive Club members have been very successful."

British Airways added that the weakening US dollar had contributed to a £101 million fall in its costs over the nine months. (source: BBC News)

Google reported disappointing profits in the last quarter with profits up at only 17% to $1.21 billion (£608 million) for the three months to the end of December. Some analysts had been hoping for stronger profit growth and its shares fell sharply in after hours trading, which brings the total to more than 18% so far this year. This is prove that Google is not immune to an economic slowdown in the US. Google's sales for the quarter were $3.39 billion (£1.7 billion), up 52% but not as much as were hoping for. (source: BBC News)