Tuesday morning business bulletin

Jul 1 2008 By Karen Dent

Struggling housebuilder Barratt Developments is to strike a deal with its lenders to strengthen finances hit by the housing market downturn, it was reported today.

The company’s bankers - led by HSBC, Royal Bank of Scotland, Barclays and Lloyds TSB - have given initial approval for a refinancing deal, according to the Daily Telegraph.

Barratt is burdened by £1.7bn in debt which it used to buy rival Wilson Bowden last year at the top of the market.

But its shares have been hammered in recent months amid worries over its balance sheet and the prospects for the group as the housing market stalls.

The deal with the banks, reportedly negotiated by NM Rothschild and Deloitte, would see Barratt’s banking covenants on debt relaxed and also provide an extra £400m in bank debt to pay off a £600m short-term facility used in the Wilson Bowden deal, the Telegraph said.

Around 1,300 jobs have been safeguarded at a chilled goods distributor after the firm was bought out of administration by haulage giant Stobart Group, it was announced today.

Stobart - the owner of the famous haulier Eddie Stobart - has taken on Innovate Logistics’ chilled operation from BDO Stoy Hayward.

The deal - for an undisclosed sum - is set to boost Stobart’s workforce to more than 5,300 people, giving it an enlarged fleet of more than 1,800 trucks and 3,200 trailers.

Andrew Tinkler, chief executive of Stobart, said: "We are committed to safeguarding the jobs of 1,300 people who may otherwise have been unemployed and we look forward to welcoming them to the group."

Floor and carpets chain Carpetright reported a 7.6% rise in annual profits today, but its founder Lord Harris warned this year would be "one of the most difficult" in his career.

The group saw UK and Ireland like-for-like sales drop 2.7% in the year to May 3 as the consumer spending slowdown and housing market woes hit trading.

Chairman and chief executive Lord Harris of Peckham said the firm produced a "solid" result against the market difficulties, with underlying pre-tax profits of £62.1m marginally beating market expectations.

But Lord Harris added: "There is no doubt that the UK floor coverings market became more difficult, in line with other housing and DIY related sectors."

The pound at 9am was US$1.9986 compared to US$1.9910 at the previous close, while the euro at 9am was £0.7884  compared to £0.7910 at the previous close.