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US corporate results round-up

Thursday 17th May 2012, 12:55am

Deere & Co ups oulook
DEERE & Co posted higher quarterly earnings and sales that topped estimates, and raised its full-year profit outlook yesterday on rising global demand for farm equipment.

The US farm sector is booming on higher worldwide food demand and as biofuels help drive up crop production.

Companies like Deere are benefiting from record-high farm income that is spurring farmers to update their equipment.

The world’s largest farm equipment maker said fiscal second-quarter net income rose to $1.056bn (£627m), or $2.61 per share, from $904.3m, or $2.12 a share, a year ago. The results topped expectations of $2.53 per share. The firm also raised its forecast for net income to $3.35bn from $3.275bn for 2012.

Target raises forecasts
TARGET raised its annual forecast after posting a bigger-than-expected rise in quarterly profit yesterday despite spending more on opening stores in Canada, and having concerns about US shoppers’ ability to spend.

The discount chain expects economic uncertainty to continue for the rest of 2012, chairman and chief executive Gregg Steinhafel said.

Target earned $697m (£437m), or $1.04 per share, in the first quarter that ended in April, up from $689m, or 99 cents per share, a year earlier.

Target said it expects sales at stores open at least a year, or same-store sales, to rise about three per cent this quarter and three per cent or a little more for the full year. Some of the first-quarter strength came from warmer weather, which spurred clothing sales.

Staples disappoints
STAPLES, the office supply chain, reported lower-than-expected quarterly sales yesterday, hurt by weakness in markets such as Europe and Australia.

The company kept its 2012 outlook. Staples said it expects full-year sales to rise in the low single-digits, with earnings per share rising in the high single-digits from $1.37 last year.

First-quarter net income fell to $187.1m (£117m), or 27 cents per share, from $198.2m, or 28 cents per share, a year ago.

Total sales fell marginally to $6.1bn, missing analysts’ expectations of $6.18bn.

Sales at Staples’ international business, which makes up about 20 per cent of the company’s revenue, fell eight per cent, as same-store sales in Europe declined by six per cent, said the firm.

Deere & Co ups oulook
DEERE & Co posted higher quarterly earnings and sales that topped estimates, and raised its full-year profit outlook yesterday on rising global demand for farm equipment.

The US farm sector is booming on higher worldwide food demand and as biofuels help drive up crop production.

Companies like Deere are benefiting from record-high farm income that is spurring farmers to update their equipment.

The world’s largest farm equipment maker said fiscal second-quarter net income rose to $1.056bn (£627m), or $2.61 per share, from $904.3m, or $2.12 a share, a year ago. The results topped expectations of $2.53 per share. The firm also raised its forecast for net income to $3.35bn from $3.275bn for 2012.

Target raises forecasts
TARGET raised its annual forecast after posting a bigger-than-expected rise in quarterly profit yesterday despite spending more on opening stores in Canada, and having concerns about US shoppers’ ability to spend.

The discount chain expects economic uncertainty to continue for the rest of 2012, chairman and chief executive Gregg Steinhafel said.

Target earned $697m (£437m), or $1.04 per share, in the first quarter that ended in April, up from $689m, or 99 cents per share, a year earlier.

Target said it expects sales at stores open at least a year, or same-store sales, to rise about three per cent this quarter and three per cent or a little more for the full year. Some of the first-quarter strength came from warmer weather, which spurred clothing sales.

Staples disappoints
STAPLES, the office supply chain, reported lower-than-expected quarterly sales yesterday, hurt by weakness in markets such as Europe and Australia.

The company kept its 2012 outlook. Staples said it expects full-year sales to rise in the low single-digits, with earnings per share rising in the high single-digits from $1.37 last year.

First-quarter net income fell to $187.1m (£117m), or 27 cents per share, from $198.2m, or 28 cents per share, a year ago.

Total sales fell marginally to $6.1bn, missing analysts’ expectations of $6.18bn.

Sales at Staples’ international business, which makes up about 20 per cent of the company’s revenue, fell eight per cent, as same-store sales in Europe declined by six per cent, said the firm.

Outsourcer Xchanging says trading is stable but a quarter of investors reject pay deal

Thursday 17th May 2012, 12:55am

OUTSOURCING firm Xchanging yesterday said that trading in the first four months of the year was in line with expectations – but there were rumblings of shareholder discontent as a quarter of investors voted against the remuneration report at the firm’s AGM.

Some 24.7 per cent of votes cast were against the pay deal, which will see £1.45m shared by three directors for the year ending 2011.

“We have seen a steady start to the year as we pursue our agenda of building the foundations for growth,” said CEO Ken Lever.

“Our objectives in 2012 are to demonstrate that we can compete to win in our chosen markets and to achieve year-on-year improvement in financial performance.”

The firm has seen its share price grow by over 60 per cent since December but yesterday analysts at Seymour Pierce cut their rating to “sell” from “hold”, on the basis that the firm was trading at a prospective price-to-earnings ratio of 11.8, which it said was “steep for a company which still has a lot to prove”.

Shares in the firm closed yesterday off 2.6 per cent.

JAMES WATERSON

OUTSOURCING firm Xchanging yesterday said that trading in the first four months of the year was in line with expectations – but there were rumblings of shareholder discontent as a quarter of investors voted against the remuneration report at the firm’s AGM.

Some 24.7 per cent of votes cast were against the pay deal, which will see £1.45m shared by three directors for the year ending 2011.

“We have seen a steady start to the year as we pursue our agenda of building the foundations for growth,” said CEO Ken Lever.

“Our objectives in 2012 are to demonstrate that we can compete to win in our chosen markets and to achieve year-on-year improvement in financial performance.”

The firm has seen its share price grow by over 60 per cent since December but yesterday analysts at Seymour Pierce cut their rating to “sell” from “hold”, on the basis that the firm was trading at a prospective price-to-earnings ratio of 11.8, which it said was “steep for a company which still has a lot to prove”.

Shares in the firm closed yesterday off 2.6 per cent.

Weak sales in Europe for Abercrombie & Fitch

Thursday 17th May 2012, 12:54am

ABERCROMBIE & Fitch yesterday posted a sharp drop in profit pressured in part by weak sales in Europe. For the first quarter ended 28 April, Abercrombie earned $3.0m compared with $25.1m a year earlier. Same-store sales fell five per cent in the quarter.

ABERCROMBIE & Fitch yesterday posted a sharp drop in profit pressured in part by weak sales in Europe. For the first quarter ended 28 April, Abercrombie earned $3.0m compared with $25.1m a year earlier. Same-store sales fell five per cent in the quarter.

Pearson grows testing service with Certiport

Thursday 17th May 2012, 12:44am

PEARSON yesterday announced it has purchased Certiport, which provides testing and certification services for leading IT companies, for $140m (£87.6m) in cash from Spire Capital Partners.

Pearson, which owns the world’s biggest education business as well as the Financial Times and Penguin Books, said the move would expand the product range and geographical reach of its professional testing business.

US-based Certiport makes more than 60 per cent of its revenues outside North America and is particularly strong in Asia and the Middle East, in line with Pearson’s strategy of expansion in emerging markets.

Its top customers include Microsoft, Adobe and Hewlett-Packard, and it has a network of 12,000 testing centres in more than 150 countries.

Pearson administers millions of tests each year for the private and public sectors in areas ranging from construction to mathematics. The business is a key driver of its professional education unit, which increased its sales by 15 per cent to £382m last year, representing an estimated seven per cent of Pearson’s group sales.

HARRY BANKS

PEARSON yesterday announced it has purchased Certiport, which provides testing and certification services for leading IT companies, for $140m (£87.6m) in cash from Spire Capital Partners.

Pearson, which owns the world’s biggest education business as well as the Financial Times and Penguin Books, said the move would expand the product range and geographical reach of its professional testing business.

US-based Certiport makes more than 60 per cent of its revenues outside North America and is particularly strong in Asia and the Middle East, in line with Pearson’s strategy of expansion in emerging markets.

Its top customers include Microsoft, Adobe and Hewlett-Packard, and it has a network of 12,000 testing centres in more than 150 countries.

Pearson administers millions of tests each year for the private and public sectors in areas ranging from construction to mathematics. The business is a key driver of its professional education unit, which increased its sales by 15 per cent to £382m last year, representing an estimated seven per cent of Pearson’s group sales.

RICHEMONT BOSS SLAMS EUROPE AS ASIA BOOMS

Thursday 17th May 2012, 12:43am

EUROPE risks becoming little more than a tourist attraction for wealthy Chinese if it does not reform, the head of luxury goods group Richemont said yesterday as booming Asian demand helped offset weakness in Europe. “A few years ago, I said if people do not watch it Europe will become an open-air museum for travelling Chinese. Well, we are halfway there,” said Johann Rupert, as net profit for the year to 31 March rose 43 per cent to €1.54bn.

EUROPE risks becoming little more than a tourist attraction for wealthy Chinese if it does not reform, the head of luxury goods group Richemont said yesterday as booming Asian demand helped offset weakness in Europe. “A few years ago, I said if people do not watch it Europe will become an open-air museum for travelling Chinese. Well, we are halfway there,” said Johann Rupert, as net profit for the year to 31 March rose 43 per cent to €1.54bn.

Coty selects banks for planned IPO

Thursday 17th May 2012, 12:43am

Beauty company Coty has selected Bank of America Merrill Lynch and JPMorgan Chase & Co to be the lead underwriters for a planned initial public offering this autumn, a source close to the deal said last night. The IPO would value Coty at more than $7bn, the source said, adding that the company would file its S-1 prospectus “soon.” Coty declined to comment, as did Bank of America and JPMorgan.

Beauty company Coty has selected Bank of America Merrill Lynch and JPMorgan Chase & Co to be the lead underwriters for a planned initial public offering this autumn, a source close to the deal said last night. The IPO would value Coty at more than $7bn, the source said, adding that the company would file its S-1 prospectus “soon.” Coty declined to comment, as did Bank of America and JPMorgan.

Yell continues brand transition

Thursday 17th May 2012, 12:42am

Yell Group, the struggling publisher of the Yellow Pages, yesterday announced the acquisition of Moonfruit, an online shop and website builder. The £18m purchase is the latest step in Yell’s efforts to rebrand itself as a digital services provider. Moonfruit.com, valued at £4.8m, has created nearly five million websites and 230,000 online shops.

Yell Group, the struggling publisher of the Yellow Pages, yesterday announced the acquisition of Moonfruit, an online shop and website builder. The £18m purchase is the latest step in Yell’s efforts to rebrand itself as a digital services provider. Moonfruit.com, valued at £4.8m, has created nearly five million websites and 230,000 online shops.

C&C cautious on Olympic boost

Thursday 17th May 2012, 12:42am

Irish cider-maker C&C is uncertain whether a sales boost from this summer's Olympics and European football championships will be enough to grow its bottom line this year, its chief executive said yesterday. C&C, which sells cider under the Magners and Bulmers brands, posted a nine per cent rise in operating profit to €111m (£88.45m) for the year to February.

Irish cider-maker C&C is uncertain whether a sales boost from this summer's Olympics and European football championships will be enough to grow its bottom line this year, its chief executive said yesterday. C&C, which sells cider under the Magners and Bulmers brands, posted a nine per cent rise in operating profit to €111m (£88.45m) for the year to February.

BHP warns of cooling market in commodities

Thursday 17th May 2012, 12:41am

BHP BILLITON said yesterday it expects commodity markets to cool further and that investors have lost confidence in the longer-term health of the global economy, in the most cautious comments yet from the world’s biggest miner.

BHP also put the brakes on a plan announced by chief executive Marius Kloppers in 2011 to spend $80bn (£50.2bn) over five years to expand its iron ore, coal, energy and base metals divisions, banking on continuing high demand from its main market, China.

“It is all about appropriate allocation of capital. When Marius (Kloppers) talked about the $80bn, the environment was different,” chairman Jacques Nasser said yesterday.

“We should pause, take a deep breath and wait and see where the pieces fall around the world,” he said, stopping short of announcing a spending cut.

The company was re-thinking its expansion plans “every day,” he said.

Asked if BHP would spend $80bn over five years, he replied: “No.”

BHP made close to $10bn in first-half profit before exceptional items.

That was largely due to BHP’s profitable iron ore business, a strength that it shares with its main rival, Rio Tinto, which unveiled a $3.4bn expansion of its Australian iron ore mines in February.

Outside of iron ore, Nasser said plans to invest billions of dollars beefing up the company’s Olympic Dam copper and uranium mine in Australia were still subject to a board decision later this year.

HARRY BANKS

BHP BILLITON said yesterday it expects commodity markets to cool further and that investors have lost confidence in the longer-term health of the global economy, in the most cautious comments yet from the world’s biggest miner.

BHP also put the brakes on a plan announced by chief executive Marius Kloppers in 2011 to spend $80bn (£50.2bn) over five years to expand its iron ore, coal, energy and base metals divisions, banking on continuing high demand from its main market, China.

“It is all about appropriate allocation of capital. When Marius (Kloppers) talked about the $80bn, the environment was different,” chairman Jacques Nasser said yesterday.

“We should pause, take a deep breath and wait and see where the pieces fall around the world,” he said, stopping short of announcing a spending cut.

The company was re-thinking its expansion plans “every day,” he said.

Asked if BHP would spend $80bn over five years, he replied: “No.”

BHP made close to $10bn in first-half profit before exceptional items.

That was largely due to BHP’s profitable iron ore business, a strength that it shares with its main rival, Rio Tinto, which unveiled a $3.4bn expansion of its Australian iron ore mines in February.

Outside of iron ore, Nasser said plans to invest billions of dollars beefing up the company’s Olympic Dam copper and uranium mine in Australia were still subject to a board decision later this year.

E.ON sells European gas grid to Macquarie-led group for £2.6bn

Thursday 17th May 2012, 12:41am

E.ON, Germany’s largest utility, said yesterday it has sold its Open Grid Europe gas distribution network to a consortium led by Australian bank Macquarie for €3.2bn (£2.6bn), raising cash to pay down debt and fund expansion.

The deal brings E.ON’s tally of divestments to more than €12bn, well on its way toward its goal of selling assets worth €15bn by the end of 2013 to help offset the impact of Germany’s nuclear exit.

"With this deal E.ON is able to deleverage further without the loss of high earnings,” DZ Bank analyst Hasim Senguel said, adding the price was almost a third above expectations.

The consortium that won the bid comprises Macquarie’s European Infrastructure Fund 4, Infinity Investments, British Columbia Investment Management Corporation (bcIMC) and Munich Re’s asset management unit MEAG.

Macquarie was advised on the deal by Macquarie Capital and the Royal Bank of Canada.

CITY A.M. REPORTER

E.ON, Germany’s largest utility, said yesterday it has sold its Open Grid Europe gas distribution network to a consortium led by Australian bank Macquarie for €3.2bn (£2.6bn), raising cash to pay down debt and fund expansion.

The deal brings E.ON’s tally of divestments to more than €12bn, well on its way toward its goal of selling assets worth €15bn by the end of 2013 to help offset the impact of Germany’s nuclear exit.

"With this deal E.ON is able to deleverage further without the loss of high earnings,” DZ Bank analyst Hasim Senguel said, adding the price was almost a third above expectations.

The consortium that won the bid comprises Macquarie’s European Infrastructure Fund 4, Infinity Investments, British Columbia Investment Management Corporation (bcIMC) and Munich Re’s asset management unit MEAG.

Macquarie was advised on the deal by Macquarie Capital and the Royal Bank of Canada.

Production soaring at Soco

Thursday 17th May 2012, 12:40am

Soco International said yesterday that oil and gas production for the first quarter was soaring, averaging 11,690 barrels of oil equivalent per day (boepd). The total is three-and-a-half times higher than the amount produced in the same period last year. The company also said production at Te Giac Trang in Vietnam would begin ahead of schedule and ramp up to around 55,000 barrels of oil per day.

Soco International said yesterday that oil and gas production for the first quarter was soaring, averaging 11,690 barrels of oil equivalent per day (boepd). The total is three-and-a-half times higher than the amount produced in the same period last year. The company also said production at Te Giac Trang in Vietnam would begin ahead of schedule and ramp up to around 55,000 barrels of oil per day.

Total stops North Sea gas leak

Thursday 17th May 2012, 12:40am

Total has succeeded in plugging a well from its North Sea Elgin platform that has been leaking gas for more than seven weeks, the French oil group said yesterday. The leak, 240km off the coast of Scotland, has been costing Total around $3m a day in relief operations and lost net income.

Total has succeeded in plugging a well from its North Sea Elgin platform that has been leaking gas for more than seven weeks, the French oil group said yesterday. The leak, 240km off the coast of Scotland, has been costing Total around $3m a day in relief operations and lost net income.

Interserve sees boost from Asia

Thursday 17th May 2012, 12:40am

Interserve said yesterday that rising demand for equipment services in Australia and Asia was helping to balance out pressure on its construction unit, combining to give a stable outlook for 2012. The company said it had won £600m of work in the year to date.

Interserve said yesterday that rising demand for equipment services in Australia and Asia was helping to balance out pressure on its construction unit, combining to give a stable outlook for 2012. The company said it had won £600m of work in the year to date.

Miner NWR surprises with profit

Thursday 17th May 2012, 12:40am

Coal miner New World Resources (NWR) yesterday posted a more than 80 per cent rise in first-quarter net profit due to lower financial expenses, improved cost controls and a better product mix, surprising analysts who had expected a loss. Net profit rose to €6.2m (£4.9m) but revenue dropped 10 per cent year-on-year to €346.6m.

Coal miner New World Resources (NWR) yesterday posted a more than 80 per cent rise in first-quarter net profit due to lower financial expenses, improved cost controls and a better product mix, surprising analysts who had expected a loss. Net profit rose to €6.2m (£4.9m) but revenue dropped 10 per cent year-on-year to €346.6m.

Perform snaps up RunningBall for up to €120m

Thursday 17th May 2012, 12:37am

SPORTS MEDIA rights group Perform said yesterday it will pay up to €120m (£93m) in cash and shares to buy sports data company RunningBall, the largest acquisition it has made since floating last year.

RunningBall produces real-time data coverage of sporting events – covering more than 35,000 events last year including over 30,000 football games around the world, by using a network of 1,100 scouts who key in information live from venues.

It had revenue of €16.1m and made a pre-tax profit of €7.2m for 2011, up 20 per cent and 75 per cent respectively from the previous year.

The Swiss-based company is still owned and run by its founder, IT entrepreneur Hans Thomas Gross.

The deal was well received by Perform’s investors yesterday, sending the company’s shares up seven per cent. Analysts at Numis also applauded the deal, which is the latest in a series of acquisitions that Perform has made in recent months.

“We could not have designed a better business for Perform to have acquired. Of the five key elements in digital sports, Perform already has market-leading positions in four, while RunningBall adds the fifth,” said Paul Richards at Numis.

Perform will pay an initial consideration of €20m cash and €50m in new Perform shares to Runningball, plus a deferred consideration of €31m-€50m depending on 2012 results.

Perform raised less than expected when it floated last April, but has been raising its profile ever since, and earlier this month said it was track to deliver forecast revenue and profits.

MEET THE ADVISERS

CHRISTIAN LESUEUR
UBS

UBS acted as the sole sponsor to Perform on the sports media rights group’s acquisition of RunningBall, having helped the group as one of three bookrunners when it floated in April 2011. Following the listing the bank was appointed as one of Perform’s house brokers in June last year.

Leading the team at UBS was Christian Lesueur, head of EMEA media and telecoms investment banking.

Lesueur also led UBS’ work for Perform on its float, and just last month helped long-term client Vodafone secure its £1bn takeover of Cable & Wireless Worldwide with colleagues Simon Warshaw and Jonathan Rowley.

He was also part of the squad that advised Verizon Wireless on its $28.1bn acquisition of regional carrier Alltel Wireless back in 2009, and last year helped worldwide satellite communications services firm Vizada with its €673m sale to Astrium – the aerospace subsidiary of EADS.

Lesueur worked alongside a team from UBS comprising Jonathan Retter, Massimo Marinelli and Warren Stables.

Morgan Stanley was joint broker with UBS on the deal, led by Andrew Foster – part of the team that recently pitched for and won a place on Tullow Oil’s panel after it parted company with its long-standing corporate brokers, Bank of America Merrill Lynch and RBS Hoare Govett.

ELIZABETH FOURNIER

SPORTS MEDIA rights group Perform said yesterday it will pay up to €120m (£93m) in cash and shares to buy sports data company RunningBall, the largest acquisition it has made since floating last year.

RunningBall produces real-time data coverage of sporting events – covering more than 35,000 events last year including over 30,000 football games around the world, by using a network of 1,100 scouts who key in information live from venues.

It had revenue of €16.1m and made a pre-tax profit of €7.2m for 2011, up 20 per cent and 75 per cent respectively from the previous year.

The Swiss-based company is still owned and run by its founder, IT entrepreneur Hans Thomas Gross.

The deal was well received by Perform’s investors yesterday, sending the company’s shares up seven per cent. Analysts at Numis also applauded the deal, which is the latest in a series of acquisitions that Perform has made in recent months.

“We could not have designed a better business for Perform to have acquired. Of the five key elements in digital sports, Perform already has market-leading positions in four, while RunningBall adds the fifth,” said Paul Richards at Numis.

Perform will pay an initial consideration of €20m cash and €50m in new Perform shares to Runningball, plus a deferred consideration of €31m-€50m depending on 2012 results.

Perform raised less than expected when it floated last April, but has been raising its profile ever since, and earlier this month said it was track to deliver forecast revenue and profits.

MEET THE ADVISERS

CHRISTIAN LESUEUR
UBS

UBS acted as the sole sponsor to Perform on the sports media rights group’s acquisition of RunningBall, having helped the group as one of three bookrunners when it floated in April 2011. Following the listing the bank was appointed as one of Perform’s house brokers in June last year.

Leading the team at UBS was Christian Lesueur, head of EMEA media and telecoms investment banking.

Lesueur also led UBS’ work for Perform on its float, and just last month helped long-term client Vodafone secure its £1bn takeover of Cable & Wireless Worldwide with colleagues Simon Warshaw and Jonathan Rowley.

He was also part of the squad that advised Verizon Wireless on its $28.1bn acquisition of regional carrier Alltel Wireless back in 2009, and last year helped worldwide satellite communications services firm Vizada with its €673m sale to Astrium – the aerospace subsidiary of EADS.

Lesueur worked alongside a team from UBS comprising Jonathan Retter, Massimo Marinelli and Warren Stables.

Morgan Stanley was joint broker with UBS on the deal, led by Andrew Foster – part of the team that recently pitched for and won a place on Tullow Oil’s panel after it parted company with its long-standing corporate brokers, Bank of America Merrill Lynch and RBS Hoare Govett.

Betting firm Bwin.party ahead by a nose as revenues inch up

Thursday 17th May 2012, 12:36am

BETTING giant Bwin.party yesterday reported revenues of €215.9m (£172.5m) for the first quarter, up less than one per cent on the same period last year.

Shares in the firm fell by five per cent after it said growth in online casino games has been partially offset by reduced margins in sports betting.

“Trading performance overall in the first quarter has been as expected,” the firm said. “Casino has continued to perform well as has our sports business that saw strong growth in both player activity and amounts wagered, albeit at a lower margin compared with last year which was particularly strong.”

The Gibraltar-based online gambling company was formed last March following a merger between sports betting firm Bwin and casino specialist Party Gaming.

Investors have yet to reap the benefits of this merger but the co-CEOs said they “remain on-track to realise the €65m of merger synergies” which will help to “mitigate the impact of additional gaming taxes” that are due to come into force.

Bwin.party has struggled with the licensing situation in Germany but says it is set to win a license in the state of Schleswig Holstein, valid until 2018.

JAMES WATERSON

BETTING giant Bwin.party yesterday reported revenues of €215.9m (£172.5m) for the first quarter, up less than one per cent on the same period last year.

Shares in the firm fell by five per cent after it said growth in online casino games has been partially offset by reduced margins in sports betting.

“Trading performance overall in the first quarter has been as expected,” the firm said. “Casino has continued to perform well as has our sports business that saw strong growth in both player activity and amounts wagered, albeit at a lower margin compared with last year which was particularly strong.”

The Gibraltar-based online gambling company was formed last March following a merger between sports betting firm Bwin and casino specialist Party Gaming.

Investors have yet to reap the benefits of this merger but the co-CEOs said they “remain on-track to realise the €65m of merger synergies” which will help to “mitigate the impact of additional gaming taxes” that are due to come into force.

Bwin.party has struggled with the licensing situation in Germany but says it is set to win a license in the state of Schleswig Holstein, valid until 2018.

Samsung value drops $10bn on fear Apple has picked rival chip

Thursday 17th May 2012, 12:36am

SAMSUNG saw $10bn (£6.3bn) wiped off its market capitalisation on Tuesday following suggestions that Apple has placed a huge order for memory chips with a rival.

Shares in the South Korean electronics giant tumbled 6.2 per cent after Taiwanese site DigiTimes said Apple has bought half the capacity of a DRAM chip manufacturing plant operated by bankrupt Japanese firm Elpida.

SK hynix, another South Korean DRAM manufacturer, also saw its share price drop by nine per cent.

“It looks like Apple doesn’t want to see Samsung and Hynix dominate the chip market. Apple wants to maintain its bargaining power by keeping Elpida running,” said Choi Do-yeon, an analyst at LIG Investment & Securities.

There is a global over-supply of DRAM chips, partly due to changes in consumer purchasing habits.

PCs use around four times as many such chips as Apple’s iPad – and the tablet computer’s success has hit sales of traditional machines, reducing demand.

In recent years firms such as Elpida invested heavily to increase capacity but were caught off-guard when demand dropped.

Samsung met 53.8 per cent of DRAM demand at the end of 2011.

JAMES WATERSON

SAMSUNG saw $10bn (£6.3bn) wiped off its market capitalisation on Tuesday following suggestions that Apple has placed a huge order for memory chips with a rival.

Shares in the South Korean electronics giant tumbled 6.2 per cent after Taiwanese site DigiTimes said Apple has bought half the capacity of a DRAM chip manufacturing plant operated by bankrupt Japanese firm Elpida.

SK hynix, another South Korean DRAM manufacturer, also saw its share price drop by nine per cent.

“It looks like Apple doesn’t want to see Samsung and Hynix dominate the chip market. Apple wants to maintain its bargaining power by keeping Elpida running,” said Choi Do-yeon, an analyst at LIG Investment & Securities.

There is a global over-supply of DRAM chips, partly due to changes in consumer purchasing habits.

PCs use around four times as many such chips as Apple’s iPad – and the tablet computer’s success has hit sales of traditional machines, reducing demand.

In recent years firms such as Elpida invested heavily to increase capacity but were caught off-guard when demand dropped.

Samsung met 53.8 per cent of DRAM demand at the end of 2011.

Larger four inch screens set to feature on the iPhone 5 model

Thursday 17th May 2012, 12:35am

APPLE is said to have put in orders for the production of its next iPhone offering and changed the size of the device’s screen.

Sources say the fifth generation iPhone will sport a four inch screen when measured diagonally from cover to cover, compared to the current 3.5 inch display.

Early production of the popular smartphone has begun at three factories – Sharp, LG Display in Korea and Japan Display – meaning proper orders could be put in by Apple as soon as next month.

The Cupertino-based company was recently pipped to top spot in the smartphone stakes by Samsung, according to the IDC. The Korea-based rival launched its latest Galaxy phone earlier this month, with a 4.8 inch display.

Apple has not updated the physical design of its smartphone since the release of the iPhone 4 in 2010.

Sales of the iPhone now account for around half of Apple’s total sales. The latest iPhone 4S was introduced in October last year.

LAUREN DAVIDSON

APPLE is said to have put in orders for the production of its next iPhone offering and changed the size of the device’s screen.

Sources say the fifth generation iPhone will sport a four inch screen when measured diagonally from cover to cover, compared to the current 3.5 inch display.

Early production of the popular smartphone has begun at three factories – Sharp, LG Display in Korea and Japan Display – meaning proper orders could be put in by Apple as soon as next month.

The Cupertino-based company was recently pipped to top spot in the smartphone stakes by Samsung, according to the IDC. The Korea-based rival launched its latest Galaxy phone earlier this month, with a 4.8 inch display.

Apple has not updated the physical design of its smartphone since the release of the iPhone 4 in 2010.

Sales of the iPhone now account for around half of Apple’s total sales. The latest iPhone 4S was introduced in October last year.

Sepura buys Vienna-based 3T for £6.4m

Thursday 17th May 2012, 12:35am

SEPURA, a company involved in the design, development and supply of digital radios, yesterday announced the acquisition of Vienna-based 3T Communications.

The deal will cost Sepura initial cash consideration of €8m (£6.4m) with further contingent consideration of up to €5m payable dependent on 3T achieving certain targets over an earn-out period. 3T designs and implements small to mid size radio systems predominantly for the commercial sector, including enterprise customers such as Shell, RWE, Bayer and BMW.

Based in Vienna, Austria, 3T generated revenues of €12m for the year ended 31 December 2011, with adjusted Ebitda of €1.3m and profit before tax of €0.4m. 3T’s current revenue is derived primarily from Europe, giving Sepura the opportunity to generate significant incremental revenue by offering 3T’s products through the company’s comprehensive worldwide routes to market.

Sepura is backed by a team of investors headed by Henderson and Michael Sherwood of Goldman Sachs.

House broker Investec believes the deal is a good one for Sepura, saying: “Overall this looks like a great deal for Sepura – it’s accretive, is on-strategy, provides new market access for both parties and will increase Sepura’s earnings quality.”

DAVID HELLIER

SEPURA, a company involved in the design, development and supply of digital radios, yesterday announced the acquisition of Vienna-based 3T Communications.

The deal will cost Sepura initial cash consideration of €8m (£6.4m) with further contingent consideration of up to €5m payable dependent on 3T achieving certain targets over an earn-out period. 3T designs and implements small to mid size radio systems predominantly for the commercial sector, including enterprise customers such as Shell, RWE, Bayer and BMW.

Based in Vienna, Austria, 3T generated revenues of €12m for the year ended 31 December 2011, with adjusted Ebitda of €1.3m and profit before tax of €0.4m. 3T’s current revenue is derived primarily from Europe, giving Sepura the opportunity to generate significant incremental revenue by offering 3T’s products through the company’s comprehensive worldwide routes to market.

Sepura is backed by a team of investors headed by Henderson and Michael Sherwood of Goldman Sachs.

House broker Investec believes the deal is a good one for Sepura, saying: “Overall this looks like a great deal for Sepura – it’s accretive, is on-strategy, provides new market access for both parties and will increase Sepura’s earnings quality.”

SUPERHERO BOX OFFICE BOOST FOR CINEWORLD

Thursday 17th May 2012, 12:30am

CINEWORLD said yesterday that its revenue for the 19 weeks to 10 May was up 6.3 per cent due to higher box office sales. The UK’s only listed cinema chain also said it was confident that growth for the full-year would match market estimates. Box office revenue rose 8.6 per cent, boosted by big ticket releases such as The Avengers.

CINEWORLD said yesterday that its revenue for the 19 weeks to 10 May was up 6.3 per cent due to higher box office sales. The UK’s only listed cinema chain also said it was confident that growth for the full-year would match market estimates. Box office revenue rose 8.6 per cent, boosted by big ticket releases such as The Avengers.