LONDON: Annual profits of Kesa Electricals Plc., owners of consumer electronics chain Comet and French market leader Darty, slumped 19 per cent as its sales were affected both in Britain and France. The company said its net income for the year ended 31 January stood at 94.2 million pounds against 115.7 million pounds a year earlier.

Annual sales grew 3.6 per cent to 4.1 billion pounds, it said.

Kesa Electricals had on 14 March rejected a takeover bid from an unnamed private equity fund for 1.72 billion pounds in cash. The company had been facing price deflation, and its Comet chain had been struggling to ward off competition from supermarkets and online retailers.

The company, however, maintained that overall trading since the end of 2005 has improved, through it is too early to predict whether the trend will continue.

Chief executive Jean-Noel Labroue said the sales have been led by increasing demand for new technologies, particularly flat screen televisions, MP3 players and DVD recorders, while sales of high-margin goods like refrigerators remained weak. The sales mix had a negative impact on profit, he said, in spite of cost control measures and margin management by category.

Profit at Comet saw a 21.4 per cent slump, while at Darty it fell 7.3 per cent and at the BUT furniture and electricals chain in France 17.6 per cent. BUT faced intense competition from rivals like Ikea and PPR SA’s Conforama unit.

During the fiscal, the company reduced its debt by 44.4 million pounds to 166.3 million pounds.

Kesa is raising its dividend by 10 per cent to 12.1 pence a share.

The company’s shares closed at 325 pence Tuesday valuing the company at 1.72 billion pounds.

LONDON: Regulator the Office of Fair Trading has given approval for a code of practice governing the estate agency industry, designed to ensure that homebuyers and sellers get a fair deal and the consumers get protection beyond the basic provisions of the law.

The code, prepared by the Ombudsman for Estate Agents Company (OEA), is the first such code to be approved by the OFT. The estate agents can use the code as best practice when valuing property and when things go wrong provide access the aggrieved customer to free resolution of the dispute through the Ombudsman scheme.

The OEA has powers to award compensation to property buyers or sellers if it finds that they have been badly treated.

Agents who are members of the OEA (nearly 40 per cent of all estate agents are members and in April members of the National Association of Estate Agents are set to join it) will be required to sign up to the code.

John Fingleton, OFT chief executive described the establishment of the code as a great achievement for the OEA and a step that “reflects their commitment to a higher standard of customer service”.

He said consumers can be rest assured that when they select an estate agent who has the OEA/OFT Approved Code logo, they will get a fair treatment if they have a complaint.

The establishment of the code coincides with the revelation made by a team of BBC journalists on the illegal and unscrupulous practices by a number of estate agents. An unnamed property developer had told the BBC that estate agents were willing to sell him houses well below their true value in exchange for a substantial fee. And he said this practice is very much in prevalence in the industry. A BBC reporter then discovered that some of the estate agents even resorted to erecting “for sale” boards outside properties that were not on their books and lying to clients about false offers. The reporter also found that overvaluing a property and then making up the price of comparable properties in the area to influence surveyors was a common practice among them.

Another reporter came across instances of how a firm of financial advisers — recommended to would-be buyers by a particular estate agent — passes supposedly confidential personal financial information back to agency staff to help them evaluate the clients. Another estate agent provided the reporter, who posed as a world-be buyer of property with a false British passport for 750 pounds and false Customs and Revenue documentation, to facilitate obtaining a mortgage.

LONDON: UK inflation rates reached its targeted 2 per cent in February, official data showed Tuesday. According to the Office for National Statistics, consumer prices rose 0.3 per cent in February, thereby achieving the target set by the Bank of England for the first time since June 2005.

The annual rate of inflation was at 1.9 per cent both in December and January.

Economists felt there is a remote chance of the inflation going up in the coming months because of the phenomenal increase in energy charges.

However, going by the central bank’s own projections, the CPI annual rate is expected to be flat at 2 per cent through the next two years.

The bank forecasts could mean relatively robust GDP growth estimate — 2.7 per cent in 2006 and 3.1 per cent in 2007.

According to the ONS, the inflation went up for the first time in five months as retail stores stopped offering discounted prices on items such as books and furniture. Costs of recreation and culture, in which book prices are included, rose 0.8 per cent in the month, adding 0.2 percentage point to the annual index. Prices of furniture, furnishings and carpets gained 0.4 per cent, adding 0.02 percentage point. Computer games prices too were higher.

Despite the worries about the long-term impact of high energy prices, the increase in February rate was contained by a lower rate of increase in the price of petrol. The ONS said the average price for a litre of petrol rose by 0.4 pence in February compared to an increase of 0.6 pence per litre a year earlier.

Prices gained 0.3 per cent during February in housing, water, electricity, gas and other fuels, adding 0.01 percentage point to the annual index. Natural gas prices were 60 per cent higher on an average compared with February 2005, while crude oil gained 19 per cent in the past year, the ONS said.

Goods prices went up 0.6 per cent, compared with a 0.3 per cent increase the month before.

Inflation was curbed by a decline in air fares, falling 1.9 per cent in the month as the winter holiday season ended. That knocked 0.1 percentage point off the overall index.

The ONS expects the inflation to go up further in March as there have been increases in energy prices.

Meanwhile, a survey by the central bank showed that households’ inflation expectations increased in the past quarter — the median expectation for the inflation rate over the next 12 months rose to 2.6 per cent, from 2.2 per cent in a November survey.

The Retail Price Index, which includes housing costs, and which is used to determine pensions, wage claims and index-linked contracts, was up 2.4 per cent in February, unchanged on the previous month.

The ONS also said it would be publishing two new indices intended to track the impact of changes in indirect taxes on inflation. The CPIY is intended to measure movements in “underlying” prices, excluding price changes considered to be directly the result of changes in indirect taxation.

The other new index is CPI at constant tax rates (CPI-CT), which is an analytical tool to determine the contribution of tax changes to the overall CPI inflation figures.

LONDON: Broking company Collins Stewart Tullett Plc., is demerging its Collins Stewart stockbroking business from the group and returning 300 million pounds to shareholders. The announcement came as the group announced its financial results — profits nearly trebling on higher revenues.

For the full year 2005, the firm’s pre-tax profit rose to 97.6 million pounds, compared with 34.2 million pounds in the previous year, on revenues of 798.1 million pounds, up from 583.9 million pounds.

Chief executive Terry Smith said in a statement that 2005 was another successful year in terms of progress with its strategic development and the financial performance with both the inter dealer broking and stockbroking businesses producing revenues and profits substantially ahead of the same period last year.

Smith said the demerger will make it easier for the firm to return cash to shareholders. Smith and the firm had won 300,000 pounds in legal damages from the Financial Times in 2005 over an article by the newspaper about alleged business practices by the firm.

Smith said the demerger is likely to be completed around the third quarter of the year. He will remain group chief executive of Tullett, which now owns a rival broking firm Prebon Yamane, and chairman of Collins Stewart. Shane Le Prevost, who became chief executive of Collins Stewart last year will continue to head that business.

Smith said Collins Stewart, which specialises in equities market making, will have a separate listing with a valuation of around 600 million pounds, while the Tullet interdealer broking business will be different and valued at around 1.3 billion pounds. The Tullett business functions as middleman between banks and other financial institutions that want to trade in bonds and derivatives.

The demerger is largely seen as a counter to the new rules on regulatory capital governing the amount financial institutions have to set aside to cover the risks they take.

Shares of Collins Stewart were down 8 pence at 713-1/2 pence, valuing the company at 1.51 billion pounds.

LONDON: A Manchester accountant has successfully sued his bank, Lloyds TSB, over what he claimed as unfair penalty charges, and won 2,000 pounds as he threatened to send bailiffs to recover the money.

The bank said it agreed to pay the accountant, Brian Mullen, the money he claimed was taken from his current account in the bank’s Manchester branch towards penalties on bounced cheques, direct debits and standing orders when Mullen exceeded his overdraft limit, mostly when he was a student.

Mullen claimed these penalties were unlawful because they made money for the bank rather than simply cover its costs. He got a court order against the bank in February. As the bank failed to settle the claim, Mullen got a warrant of execution through bailiffs, who are empowered to seize the bank’s assets.

The bank said it did not pick up the claim as it should have and did not file a defence in time and he was given a default judgement. It decided not to challenge the judgement, but said in a statement that it believed its charges are transparent and fair “and to say these charges are unlawful is inaccurate”.

These charges are now subject of discussion and even the Office of Fair Trading is expected to advise banks to cut down the penalties on customers or put a cap.

Mullen, working to become a chartered accountant, said he fought the case without having to move from his computer. He found advice on a website, www.bankchargeshell.co.uk. and with this information prepared his case and fought it through the Court Service’s site www.moneyclaim.gov.uk.

He had to spend 120 pounds to get an original of the court order and 55 pounds for the warrant of execution. He said these costs are recoverable as the judgment is in his favour.

LONDON: Britain has told the U.S. that it would call off its 10-billion-pound plan to acquire the new joint strike fighter F-35 if it does not get access to the technology for development of the aircraft.

Britain’s minister for defence procurement Lord Drayson told the U.S. Senate Armed Services Committee that his country would lose sovereign control without access to the technology.

Both the U.S. Congress and Lockheed Martin are not in favour of any technology transfer fearing it would mean handing over stealth aircraft technology to industrial competitors in the U.K.

But the Royal Airforce commanders say in the absence of such an understanding, they will be at the mercy of Lockheed Martin executives in operating the fleet.

Lord Drayson told media persons before his meeting with the senators that Britain wants to be absolutely clear about what the bottom line is on this matter. Unless this is clarified, “we will not be able to purchase the aircraft.”.

Meanwhile, defence experts in the U.K. are talking about the government considering alternatives to the joint strike fighter, including continuing with the Harriers or buying the French Rafale aircraft. Indeed it is thought that the UK has already entered into a verbal agreement with the French to buy 150 Rafale aircraft for use on the new generation of aircraft carrier.

If this is the case, as is likely, then it could be that the British Government is spinning this for all it’s worth in an attempt to get out of the JSF deal when in fact another deal has been done for the French aircraft. This could be the reason why the US is slow to come forward with the technical and sensitive data as one would expect if they know about the Rafale deal too.

Although the UK has already bought a few Rafale aircraft already, it would indeed be a great pity for Britain, the Royal Navy and RAF if the UK Government opts for the lesser Rafale instead of the new state of the art JSF either as a political stunt to get in with the French as an EU gesture or one to try and save a bit of money at the expense of putting Britain’s security and defence first.

Lord Drayson told the senators that the U.S. needed to understand that a mutual commitment to the joint strike fighter was dependant on Britain having the operational sovereignty it requires.

Britain believes that the row could impact future cooperation between the two countries, especially on issues like replacement of Trident as Britain’s nuclear deterrent. Britain is also apprehensive about the U.S. defence department’s decision to scrap a $2 billion program for a second engine for the joint strike aircraft, proposed to be jointly developed by Rolls-Royce and General Electric.

Lord Drayson said Pentagon did not consult Britain properly before the project was dropped.

Several key U.S. senators questioned the Pentagon on its decision to scrap the plan.

Senate Armed Services Committee chairman John Warner, said relying on a single-engine design is a “scenario that presents unprecedented vulnerability,” notably if a glitch should ground the fleet.

The administration in its fiscal 2007 spending plan, has suggested ending the alternative engine proposal, developed in 60-40 partnership by GE and Rolls-Royce.

Deputy defence secretary Gordon England had told the senate hearing that the Pentagon had felt “it would be nice to have a second engine, (but) it is not necessary and not affordable.”

England said the defence department has found that the second engine will never yield savings in the “most realistic scenario”.

The F-35 project is being co-financed by the U.S., Britain, Italy, the Netherlands, Turkey, Canada, Australia, Denmark and Norway. While Britain and other countries, except the U.S. have committed $2 billion for the project, while the U.S. has committed the balance. Lockheed Martin is the prime contractor, while Pratt & Whitney, part of United Technologies Corp. , has been chosen to build the plane’s initial engine.

LONDON: The British government has clarified that it will not demand repayment from pensioners of the overpaid pension credit, which is calculated at around 130 million pounds.

The government’s reiteration came in response to fears raised by Conservative shadow minister David Ruffley that the government is planning to ask the pensioners to repay the overpaid pension credit.

Pension reform minister Stephen Timms said the government has written to the pensioners clarifying the issue.

The government, in a parliamentary answer had admitted that overpayment of pension credit in 2004-2005 is estimated to have risen to 2.1 per cent of the total paid.

Timms said there is no demand for pay back. He said when there is a mistake, a letter goes out to the pensioners. “It makes it clear that social security law does not allow us to require repayment,” he said.

“If people want to, and are willing to pay that money back, we’ll be pleased. But nobody will be forced to pay the money back,” he added.

The pension credits system came into being in October 2003 replacing the earlier minimum income guarantee system. For the year to March 2003, the overpayment of MIG to pensioners was estimated at 50 million pounds. However, in the following years, as pension credits were brought in, this had gone up to 100 million pounds and then 130 million pounds.

The department of work and pensions has framed rules to the effect that the extra money would only be clawed back where “there was a misrepresentation of, or failure to disclose, a material fact”. There would be no demand for the money if it was overpaid due to official error.

Ruffley said the figures revealed by the government showed that ministers were running the pension credit system “incompetently”. He said the government will have to explain why overpayments have trebled and give reassurances to affected pensioners that they will not be harassed and treated insensitively by government officials.

LONDON: Surfing the web has overtaken watching the TV as the favourite pastime of Britons, according to a survey commissioned by search engine Google. The survey, which covered more than 1,000 adults in the age group pf 16-64, found that on an average a person spend 164 minutes online every day, meaning 41 days a year, against 148 minutes watching television, which is equivalent of 37 days a year.

Men have been found to better women in surfing averaging 172 minute a day against 156 minutes a day by the latter. Nearly two-thirds of the respondents said they improved their online habit in the last one year, the highest increase being among the 16-24 year range.

On regional basis, people in the Greater London area spent the longest time on the net, an average of 181 minutes a day. They were also the largest online spenders, spending as much as 517 pounds a year buying goods and services online.

The average online shopper spends 446 pounds buying things on the net, which may range from groceries and clothes to holidays and cars.

The people who use the net the least are from the South and East, averaging 155 minutes, and the North West, averaging 142 minutes, the survey found.

Google UK’s Richard Gregory said this is not changing of guard, but shows how “people think about the place the internet has in their lives”.

Google’s claim is, however, contested by studies conducted by a television audience ratings group, Barb, which said its January figures showed a person viewed television on an average for 238 minutes a day. The firm uses electronic measurement in estimating the extent of television viewing.

Media watchdog Ofcom has another set of conclusions. Its report on media literacy claims television viewing has reduced in recent years. It said, the number of people watching the TV for at least 15 minutes a day had declined by 2.5 per cent among the 25-34 group. The shift is even higher among younger groups.

Industry watchers say the figures cannot be conclusive proof. For instance, they point out, many internet users may be using their computer systems to watch TV programmes and may be to watch a video or listen to radio even as they surf web pages.

In fact, there is convergence happening in this segment as demonstrated by the efforts of BSkyB and BT to bring in TV programmes over the internet using the internet protocol television – IPTV.

LONDON: The Competition Commission has found that in the absence of competition, store card users end up paying 10 per cent to 20 per cent more on interest and insurance, which on an annualised basis could be of the order of 55 million pounds. The commission, which carried out a two-year-long investigation, has directed store card providers to provide information to customers that they may get better deals elsewhere.

The commission’s deputy chairman Christopher Clarke said retailers and store card credit providers are insulated from competitive pressures and “We estimate that the detriment in terms of the excess prices paid for credit and insurance on store cards has been at least 55 million pounds a year, and possibly significantly more.”

There are 11 million Britons who use store cards mostly provided by six prominent players — Arg Card Services, Creation Financial Services, General Electric Consumer Finance UK, HSBC Group, Ikano Financial Services and Style Financial Services. These cards usually offer discounts on purchases within a fixed period — as well as a period of interest-free credit lasting a few weeks. Though the adverse publicity has led to a fall in the interest rates, these are still prevail around 30 per cent, compared with 10 to 15 per cent for conventional credit cards.

The commission is telling card providers, who charge an annual percentage rate (APR) above 25 per cent to print warnings on monthly statements that cheaper credit may be available elsewhere. It has also called for providing payment protection insurance to cover debt repayment for borrowers who lose their sources of income separately instead of including it in store card insurance and offer the option to pay by direct debit.

The commission had originally mooted these proposals in September to be implemented on a voluntary basis. It will now be imposed by an order.

The commission found that there were 11.4 million store cards in circulation at the end of 2005, down from 17.5 million at the end of 2002. Some 57 per cent of cardholders took credit on to their accounts, paying it back with high rates of interest.

The Finance & Leasing Association, which represents major store card providers, claimed the higher APRs are now historic and that most consumers were now offered a range of rates beginning 12.9 per cent.

Ashley Holmes, the association’s head of legal affairs, said the APRs are now lower and there is greater consumer transparency. He said the warning on cards costing more than 25 per cent could act as a back door cap on prices and may backfire.

A spokesperson for consumer rights organisation Which? said consumers should avoid store cards altogether.