Wednesday morning business bulletin

May 14 2008 By Andrew Mernin

Barratt Developments said today it expected its number of sites to decline as it responds to a "significant" deterioration in market conditions.

The group said new projects were only being started on a highly selective basis and where it has clear visibility of demand and work-in-progress can be tightly controlled.

In a trading update, Barratt said its forward order book currently stood at around £1.56bn, compared with £2.1bn seen a year earlier. It said it was seeing greater pricing pressure across all regions and that sales incentives were being required to stimulate demand.

Barratt added: "Current market conditions are impacting to varying degrees on regional performance, with the Midlands and West worst affected, whilst the London and South East markets are proving to be relatively more resilient.

``The group continues to benefit from a broad geographic and product mix and a targeted exposure to the London market."

Barratt briefly became the UK’s biggest housebuilder following last year’s £2.2bn acquisition of Wilson Bowden, but dropped out of the FTSE 100 Index in December as its shares were hit by the credit crunch.

Grocery giant Tesco unveiled its biggest ever deal today after agreeing to spend nearly £1bn on beefing up its hypermarket presence in South Korea.

The retailer has bought 36 Homever hypermarkets in the country for £958m, extending the number of outlets in the country by a quarter.

It will see Tesco, which operates in South Korea as Samsung Tesco, rebrand most of the stores to its Homeplus format over the next 12 months. Most of the stores acquired were formerly operated as Carrefour premises.

Tesco has been operating in South Korea since 1999. As well as the stores just bought, it has 66 Homeplus hypermarkets and 72 Homeplus Express stores in the country, employing nearly 13,000 people. Sales in the year to February 2008 were £2.7bn.

Twenty of the new hypermarkets are in the Greater Seoul and Gyeonggi metropolitan area, which has a population of around 11 million people.

Mortgage bank Bradford & Bingley today asked shareholders for £300m in a bid to bolster its balance sheet.

The rights issue, which will see shares offered at a 48% discount to the company’s share price last night, follows similar moves by larger banking groups Royal Bank of Scotland and Halifax Bank of Scotland.

Bradford & Bingley denied as recently as last month that it was planning to carry out a cash call. However, it said today that the move would reinforce its position as one of the UK’s "better capitalised" banks.

The pound at 9am was US$1.9401 compared to US$1.9461 at the previous close while the euro at 9am was £0.7944  compared to £0.7971 at the previous close.