Scottish Business Briefing – Tuesday October 2 2007

Published on Tuesday 2 October 2007 07:27

BANKING & INSURANCE

Mortgage approvals slow

New Bank of England figures have revealed the number of mortgage approvals for buyers has fallen to its lowest level since April. August saw 109,000 home loans going ahead, a 5% fall on July, while 8.5 billion of new lending was secured on dwellings another fall from the previous month. The current market turbulence and the gradual interest rate increase are being blamed for the slowing in the housing market. Bank of England chief UK and European economist Howard Archer commented: “Housing demand seems set to lose further significant momentum as it is increasingly pressurised by the affordability pressures stemming from higher interest rates, modest real disposable income growth and elevated house prices.” (The Scotsman)

ABN completes LaSalle sale

ABN Amro has completed the sale of its US division LaSalle to the Bank of America. The $21 billion cash sale was a source of controversy when it was first announced with many feeling the deal was an attempt to block the Royal Bank of Scotland-led consortium in their rival bid to Barclays. It had been thought RBS would not push ahead with the takeover bid if LaSalle was not included in the sale. (Financial Times)

Read all today's banking news from scotsman.com

ENERGY & UTILITIES

SSE in green spending plan

Scottish & Southern Energy has revealed they are to spend 600 million by 2010 on improving their green energy portfolio. Among the plans unveiled by the Perth utility were the upgrading of the conventional boiler at Peterhead power station to a combined cycle gas turbine and a raft of wind farm projects. Chief executive Ian Marchant commented: “The reality is the UK’s not going to meet its renewables targets because of delays in the planning system. We’ve got enough steam going through planning, but they aren’t all going to get approved or constructed on time.” Marchant also revealed SSE is eyeing a series of hydro-electric schemes in the Highlands, adding: “Their development would, however, require a planning and policy framework attuned to the critical need to maximize production of energy from renewable sources and reform of the current regime for charging generators for the use of the electricity networks.” (The Scotsman)

Pentland Firth targeted for tidal power

The Sustainable Development Commission has pinpointed the Pentland Firth as a key site for generating electricity from tidal power. A report from the government advisory body stated that 5% of the UK’s electricity could be generated using fast-flowing tidal currents, with nearly 60% of that power sourced from the Pentland Firth. Shetland, Kylerhea, Islay and the Mull of Kintyre have also been highlighted as potential sites for tidal stream generator installations. (BBC Scotland Online)

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INDUSTRY

Textiles industry making leap to retail

A survey by Scottish Enterprise has revealed the Scottish textile industry is increasingly expanding into the retail sector. According to the survey, nearly half of all Scotland’s textile companies now have their own retail operations compared to 25% two years ago. Kirsty Scott, head of Scottish Enterprise’s textiles team commented: “As competition continues to intensify within the global textiles sector, Scottish textiles companies have recognized the need to build their own brand presence and sell directly to consumers. Rather than completely moving away from manufacturing, we are beginning to see more and more companies getting involved in a whole range of activity and operating across the entire industry value chain from manufacturing to design, wholesale and retail.” (The Herald)

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RETAIL

Morrisons forced closed by court order

A new Morrisons store in Dundee has been unable to open its doors after a court order was issued against it. Transport Scotland sought the order after it ruled the supermarket giant had failed to complete road safety improvements at the site of the former Linlathen High School. A spokesman for Transport Scotland said: “We have a legal agreement with Morrisons, signed on August 17, that they would not open the new store until the mitigating signalled junction they are introducing on the road is completed. We learned the company planned to open the store today (Monday) in clear breach of that agreement. We contacted the company to remind them of this agreement but they did not respond to our letter. We had no other course of action left open to us but to seek an interdict to prevent the store opening until the works are completed.” Morrisons responded: “We have put a lot of effort into ensuring good road access, which would have allowed the store to open while the ongoing road works are completed and it is disappointing that the authorities are not permitting us to open at this time.” (BBC Scotland Online)

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TECHNOLOGY

NiTech in funding boost

East Kilbride technology firm NiTech Solutions has secured 800,000 in funding from PUK Ventures. The London-based venture capital arm of Partnerships UK invested in the Heriot-Watt University spin-off in a bid to drive forward the commercialisation of its technology which can reduce the cost and environmental impact of manufacturing. NiTech’s Continuous Oscillatory Baffled Reactor can lower costs by 50% and the process time by 90% in the manufacture of commodities including chemicals, drugs and biofuels. Managing director Ian Laird said: “Since Braveheart’s initial investment, we have demonstrated the use of our technology for commercial applications such as crystallisation and hydrogenation, and won new customers producing a range of biofuels. This investment will allow us to accelerate the process of commercialisation.” (The Scotsman)

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TRANSPORT

First complete Laidlaw deal

Aberdeen’s FirstGroup have finally completed the $3.4 billion purchase of Greyhound coach operator Laidlaw. The deal for Laidlaw, who also operate yellow school buses in the US, is the latest move in what First is calling a ‘good start’ to the year. First are due to publish interim results on November 7, but said in a statement: “The group has made a good start in the first half of the year, in line with management expectations, with a good performance delivering strong cashflows and an improved group operating margin.” (The Herald)

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