Wednesday morning business bulletin

Jul 2 2008 By Andrew Mernin

A rushed-out profits warning for Marks & Spencer saw its shares dive nearly 20% in a retail bloodbath for the London market today.

The high street giant warned consumer confidence ``deteriorated markedly" in the first three months of its financial year, sending rivals such as Sainsbury’s down 6% and B&Q owner Kingfisher down 5%.

M&S was far and away the Footsie’s top faller, slumping 19%, or 60.5p to 257.5p. The retailer said like-for-like sales fell 5.3% in the 13 weeks to June 28. Rival Sainsbury’s was down 18.25p to 292p, with Kingfisher down 4.4p to 102.1p.

Embattled housebuilder Taylor Wimpey today confirmed it was axing 900 jobs to help cope with a ``significant downturn" in business.

The company - which is Britain’s biggest housebuilder - said it was closing 13 regional offices and reducing general staffing levels after suffering a ``sharp" decline in reservations since April.

Net reservations for private housing during the six months to June 29 were 45% lower than prior year, the firm said.

Taylor Wimpey - which is in the process of trying to raise a reported £500m to help shore up its finances - said it was now concentrating on reducing costs and cutting the prices of built homes to improve cashflow.

The firm said: ``Our major markets are experiencing a significant downturn, characterised by significantly lower weekly sales rates and lower average selling prices than in recent years. We expect that the UK housing market will remain weak at least through 2008 and we do not anticipate any recovery in the short-term."

Taylor Wimpey also revealed that group finance director Peter Johnson was stepping down at the end of this year.

Water regulator Ofwat confirmed today that it was fining Severn Trent Water a total of £35.8m for deliberately providing false information and poor customer service.

Ofwat proposed the fine - the biggest ever levied by the regulator - in April after ruling that customers had paid higher bills than necessary because of the failings.

Regulators have spent three months consulting on the fine, and said today that it was being upheld after representations were received from two parties - the Consumer Council for Water and Severn Trent Water.

Ofwat has stipulated the cost of the fine will be borne by shareholders. ``It will not be passed on to its customers," the regulator said.

The announcement comes a day after Severn Trent - which has 3.7 million household and business customers - was fined another £2m for lying about water leaks.

The pound at 9am was US$1.9903 compared to US$1.9930 at the previous close while the euro at 9am was £0.7952  compared to £0.7916 at the previous close.