Thursday morning business bulletin

Oct 9 2008 By Karen Dent

Bakery chain Greggs today 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.

Greggs said: "As a consequence of the period of slower sales growth and temporary margin impact from higher costs we are reducing our expectations of operating profit for the current financial year by some £3m."

The London market was in better shape today after yesterday’s global action to tackle the global financial crisis.

Some of the UK’s battered bank stocks including HBOS and Royal Bank of Scotland led the recovery, helping the FTSE 100 Index rise more than 2%, or 102.5 points to 4469.2 after the first hour of trading.

The blue-chip index plunged more than 5% yesterday during the latest bout of turmoil, but upward momentum was provided today by overnight gains for Asian markets including Hong Kong’s Hang Seng, which rose more than 3%.

HBOS was the top Footsie riser, up 25%, or 29.3p to 146.3pm, with its proposed merger partner Lloyds TSB up 25.5p to 235.5p.

NatWest owner RBS cheered nearly 18%, or 16p to 106.7p. But Barclays, which fell heavily yesterday, was still on the back foot, down 0.5p to 277.75p.

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.

The boss of Magners cider maker C&C today announced he is to stand down after failing to turn the business around in the face of "clear trading difficulties".

Maurice Pratt - chief executive for seven years - said his revival plans "had not met the expectations he had set for the business" over the past two years as the group reported a further plunge in sales.

The Dublin-based company posted a 12% fall in cider sales in the six months to August 31, with interim group underlying operating profits down 0.7% at 66.5m euros (£52.9m).

The pound at 9am was US$1.7279 compared to US$1.7300 at the previous close, while the euro at 9am was £0.7949 compared to £0.7905 at the previous close.