UFO Info Week-End

Long term our aim is for earnings growth in single figures he said

Long term our aim is for earnings growth in single figures,” he said.Smoking bans and tax increases have hitsales worldwide. Since a ban this year on smoking in public places in Italy, for example, BAT reported a 12 per cent decline in sales.BAT said it maintained market share despite the volume falls. One of the sharpest declines was in South Korea, which introduced a large rise in tax on cigarettes this year. Its tax bill fell 16 per cent to £166m, and the results translated into a 26 per cent rise in earnings a share.The group’s chief executive, Paul Adams, warned shareholders not to expect such strong tax boosts to the results from now on.

British American Tobacco, the owner of the Lucky Strike, Pall Mall and Dunhill cigarette brands, reported a 9 per cent growth in profits for the first quarter of 2005 as growth in Turkey, Russia and Pakistan made up for slowing demand for its cigarettes around the rest of the world.
Volumes declined 3 per cent across the group, from Australia to Argentina, to 159 billion cigarettes, with flat or falling volumes reported in all but one of its global regions – Africa and the Middle East. Revenues from its wholly owned subsidiaries fell 20 per cent across the quarter to £2.1bn, with the biggest declines in America Pacific (Japan and Canada), which slid 65 per cent, and Europe, where revenues fell 18 per cent.Operating profits from its wholly-owned divisions dropped 4 per cent to £582m, but its 42 per cent share in Reynolds American, created from the merger of BAT’s Brown & Williamson and RJ Reynolds, lifted its overall profits before tax to £624m for the quarter.New international financial reporting standards, which BAT adopted this quarter for the first time, also helped flatter the group’s figures. She said: “When times get tough, people are more likely to cancel their gym membership than their Sky subscription.”Sky said marketing costs for the first nine months of the year rose to £379m, up £80m in comparison with the previous year.. It pointed out that for the first nine months of its financial year, the average churn rate was 10.2 per cent, close to its aim of 10 per cent or less.Lorna Tilbian, at Numis Securities, said that even if the British consumer was suffering, Sky was a form of “cheap escapism” for the whole family.

Sky said there was no evidence of customers leaving for Freeview, the free digital television service.In the January to March quarter, the annualised rate of churn – customers cancelling their subscriptions – rose to 11.1 per cent, up from a rate of 9.5 per cent during the previous three months. James Murdoch, the chief executive, said: “We’re committed to the target of keeping [churn] at about 10 per cent.”The company said the churn rate fluctuated from quarter to quarter. There was a 49 per cent rise in underlying pre-tax profits for the nine months to £381m.There was some concern over a rise in the rate at which its subscribers left the service during Sky’s third quarter, with some suggesting it may reflect a broader slowdown in consumer spending. The legendary US corporate raider Kirk Kerkorian electrified Wall Street yesterday by launching a bid to acquire a near-9 per cent stake in General Motors, the world’s biggest car maker. But pre-tax profits fell 11 per cent to £56.2m after it wrote down the value of its investment in Lee Cooper by £27.3m. It is selling the jeans subsidiary to Emerisque Capital, a private equity group, although it has retained the right to stock and use the brand in the UK.Analysts said the downturn on the high street, which resulted in the worst April for retailers for 13 years, according to a survey, risks derailing Matalan’s recovery.But Mr King disputed that its turnaround was under threat.

“We’re more flexible and able to respond to a downturn in our top line and protect our bottom line than we were two years ago,” he said.. BSkyB reported a jump in the rate at which existing customers left the television service in the first three months of 2005, even though the company beat City expectations for the number of subscribers it added. The net figure, of 95,000 additional customers, was well ahead of forecasts, taking the total subscriber base to 7.7 million.Most of the figures in the results, which covered the third quarter and the first nine months of the financial year, were well received in the City. It said a further two non-executive directors would join its board, following the recent appointment of Carpetright’s Lord Harris.Geoff Brady, a former Superdrug director, Bill Shannon, a former executive director at Whitbread, and Martin Reavley, Kesa’s former finance director, are joining the board. John Westwood and Charles Thompson – neither of whom met the Higgs independence recommendations because of their historical links to the company – will leave the board at its annual meeting.The group reported a 31 per cent rise in profits before tax and exceptional items to £83.5m. Over the bank holiday weekend retailers such as Marks & Spencer used ruses such as free chickens and VAT-free purchases to try to kick-start sales.Matalan, which has long been criticised for its lack of independent directors, also announced a boardroom shake-up.

The discount retailer Matalan warned yesterday its profits would barely rise this year after a plunge in sales got its new financial year off to a dire start.
The alert came as the company announced a £50m share buy-back programme after finally clinching the sale of its Lee Cooper jeans subsidiary for £30m.Underlying sales in March and April fell 8.8 per cent, although gross margins improved by 2.1 percentage points. Its shares fell 5 per cent to 183.75p after analysts took a knife to their full-year forecasts. Merrill Lynch, the house broker, cut its profit target by 10 per cent to £85m, which was at the bottom of the previous range of expectations.John King, the chief executive, blamed “consumer apathy” for the group’s drop in sales, adding: “It’s almost as if spring/summer hasn’t started yet. People aren’t out there shopping in the way they were a year ago.”He said the company would sacrifice its margin gain to fund more promotional activity to lure people into its stores. “I believe there will be a lot more promoting and eventing on the high street for the rest of the year,” Mr King predicted.