Thursday lunchtime business bulletin

Oct 9 2008 By Karen Dent

HBOS and Royal Bank of Scotland continued to recover lost ground today as markets steadied after the global moves to tackle the financial crisis.

The FTSE 100 Index rose more than 100 points at one stage before settling 62.9 points higher at 4429.6 by mid-morning. It tumbled 5% yesterday during the latest bout of turmoil, but upward momentum was provided by overnight gains for Asian markets including Hong Kong’s Hang Seng, which rose more than 3%.

HBOS was the top Footsie riser, up 30%, or 35.1p to 152.1p, with its proposed merger partner Lloyds TSB up 20.5p to 230.5p.

NatWest owner RBS cheered more than 15%, or 14.2p to 104.9p. But Barclays, which fell heavily yesterday, was still on the back foot, down 15.75p to 262.5p.

All the banks will be able to tap the Government for billions of pounds of extra capital if they need it under the massive bail-out scheme announced yesterday.

Newcastle-based bakery chain Greggs has blamed weather-hit sales and rising costs for its decision to cut £3m from full-year profit forecasts.

Greggs, which has 1,400 outlets in the UK, said increases in energy and ingredient costs were not passed on in full to customers.

It said poor weather throughout August and early September caused like-for-like sales growth to slow to 3.9% in the 16 weeks to October 4, although sales since mid-September picked up to show growth of 5.7%.

Analysts had been expecting a pre-tax profits haul of around £48m for the year to the end of December.

A strong performance at its motorway, airport and station stores helped WH Smith report a 15% hike in underlying full-year profits today.

The group posted a surplus of £76m for the year to August 31, which was marginally better than expected in the City.

Sales at its 449 store travel portfolio rose 3% on a like-for-like basis excluding tobacco, helping offset a 3% decline in comparable sales within the high street business.

WH Smith said it had also met cost cutting targets, saving £8m over the year, with another £10m due to be trimmed.

The pound at midday was US$1.7290 compared to US$1.7300 at the previous close, while the euro at midday was £0.7916 compared to £0.7905 at the previous close.