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NEW YORK (Reuters) - Slow economic growth and austerity measures in European Union countries may have negative rating implications for some sovereign ratings, Moody’s Investors Service said on Monday.

“Given the magnitude of the fiscal challenge and the need to sustain tight fiscal policy for several years, the risks to economic growth are clearly a downside risk for sovereign ratings,” Moody’s said in a report.

Moody’s said it continues to monitor the impact of gross domestic product growth and government financial strength on European sovereigns as the deleveraging process unfolds.

It noted that governments including Latvia, Lithuania, Hungary, Greece, Portugal and most recently Ireland have been downgraded over the past 24 months.

Spain’s Aaa rating was recently placed on review for possible downgrade, due to a poor growth outlook and its negative impact on government financial strength.

“Those countries that are facing persistently strong deleveraging could experience renewed negative pressure on their ratings in the future, depending on how long the process lasts,” Moody’s said.

Countries such as Iceland, Bosnia and Herzegovina, and the Ukraine face “high” event risk, the report found. Most Aaa-rated nations face “low” to “very low” event risk.

Moody’s does not expect a strong credit rebound to take hold between 2011 and 2016.

“Moody’s does not expect credit to turn negative again, but credit creation is unlikely to experience a strong rebound anytime soon either,” the report said.

(Reporting by Walden Siew; Editing by Leslie Adler)

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More than 300 former Woolworths stores are still empty a year and a half after the chain collapsed.

The Local Data Company, which provides information on the retail sector, says this represents some 40% of the once-national chain.

The company said some experts believed about 150 stores may never be used as shops again.

The biggest group now using the outlets are discount retailers, including Poundland.

It, along with 99p Stores and B&M Bargains, occupy 25% of former premises.

The next biggest takers of ex-Woolworths stores are supermarkets. New owners include Iceland, which has taken more than 60 premises, and Waitrose.

Less common new uses include a health centre and a library, while a few have reopened stocking a similar range of products under similar sounding names, such as Alworths and Wellworths.

The best take-up of old Woolworths has been in Greater London, where 81% have now been reoccupied, followed by those in Yorkshire and the Humber area at 64%.

Last year the number of empty stores was 60% and one analyst said that despite many stores remaining empty, the latest figures provided some encouraging news of the retail climate.

Andrew Garbutt, retail and leisure director at PricewaterhouseCoopers, said: “The Local Data Company’s research shows the UK high street is experiencing a gradual recovery, with vacant ex-Woolworths stores being filled gradually.”

Woolworths went into administration in 2008 after facing increased competition from supermarkets and online retailers.

(Reuters) - Newspaper distribution and aviation services firm John Menzies Plc (MNZS.L) reported a 46 percent rise in its first-half underlying pretax profit as cargo volumes recovered and the company reiterated its full-year outlook.

“The board expects the full-year results to be slightly ahead of current market expectations,” the company said in a statement.

Analysts’ on average expect the company to post a full-year pretax profit of 41.7 million pounds on revenue of 1.8 billion pounds, according to Thomson Reuters I/B/E/S.

John Menzies, which had reinstated its dividend payment from March 9, said it would pay an interim dividend of 5 pence.

Underlying pretax profit for the six months ended June, was recorded at 19.3 million pounds, compared with 13.2 million pounds.

The company, which operates across two divisions — Menzies Aviation and Menzies Distribution — posted a revenue of 924 million pounds, up 12.5 percent from a year ago.

Profits at Menzies Aviation more than doubled despite the effect of the Icelandic volcano, while the company’s distribution division performed in line with its expectations.

John Menzies expects its aviation division to exceed full-year market consensus.

The Edinburgh, Scotland-based company’s shares, which have gained 37 percent since the beginning of the year, were up 3 percent at 427 pence at 0704 GMT on Thursday on the London Stock Exchange.

(Reporting by Juhi Arora in Bangalore; Editing by Aradhana Aravindan)

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John Menzies, the Scottish company best known for newspaper distribution, saw half-year profits almost treble.

It made £20.6m, up from £7.4m for the same period last year.

The company also distributes cargo worldwide, and profits doubled in this area, despite disruption from the Icelandic ash cloud earlier this year.

John Menzies started in Scotland in 1833 but is now a “time-critical logistics company” - a business that moves goods to a timetable.

The company said profits at its Menzies Aviation division, which moves cargo around airports in 27 countries, were boosted by contract gains, in particular with Lufthansa/bmi at London Heathrow.

Menzies said distribution remained a difficult market, but it had been helped by the sale of stickers for the 2010 World Cup.

The group, which used to compete with WH Smith, withdrew from the High Street in 1998.

STOCKHOLM | Wed Aug 18, 2010 12:20pm BST

STOCKHOLM | Wed Aug 18, 2010 10:02am BST

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David Clover of the CAA offers advice to Kiss customers

Kiss Flights has become the latest British travel company to collapse, sparking uncertainty for an estimated 70,000 holidaymakers.

The budget firm sold flights to Greece, Egypt, Turkey and the Canary Islands.

The Civil Aviation Authority said travellers abroad who had flown with Kiss would get home as normal.

And anyone due to travel from the UK before 1800 BST on Wednesday is guaranteed their flight out and return after their holiday, the CAA added.

Kiss currently has about 13,000 customers overseas and 60,000 people have forward bookings with the company.

The “vast majority” of people who had booked future trips with the firm would receive refunds, the CAA said.

London-based Flight Options, which has owned Kiss since January last year, ceased trading at 1700 BST on Tuesday.

Travel journalist Simon Calder told the BBC that “bookings were not coming in for September and October that were needed for cashflow”.

Last month Goldtrail, which specialised in holidays to Greece and Turkey, collapsed, affecting as many as 50,000 travellers.

And last week Birmingham-based travel firm Sun4U folded, leaving about 1,500 people stuck abroad, mostly in Spain.

In all, 13 travel firms have gone bust in the UK this year as a result of the recession, belt-tightening by travellers and the Icelandic volcanic ash cloud that threw European travel into turmoil. That compares with 33 last year.

Flight Options has bought a string of travel firms since it was launched in 1995 as a small tour operator offering seats only on various routes across the Mediterranean.

A statement on its website read: “As of 1700hrs on 17 August the Flight Options group of companies have ceased trading.

“The Civil Aviation Authority have been informed and we are awaiting further advice on the situation.”

Full refunds

A spokesman for the CAA said: “We are picking up the pieces. People abroad will be fine.

“We will make sure everyone will be able to come back from their holidays. We will also make arrangements so that all of the people who were Atol [Air Travel Organisers' Licensing] protected will received full refunds. That will be the vast majority.”

Clive Rees, from Llandrindod Wells, Powys, was due to fly to Turkey on Monday with Kiss, and had previously booked with Goldtrail when it collapsed.

He told the BBC: “We’re very frustrated, it’s a real nuisance… We’ve already had to rebook flights because of Goldtrail’s collapse, and we’re now looking around for cheaper flights.”

Gary Johnson, from Colwyn Bay, was due to fly to Sharm El Sheik with Kiss flights in just over a week. He said his family’s plans were ruined.

“We’re just absolutely gutted, really are, because we can’t get hold of anybody to let us know what is going on or ask them any advice… It’s just disgusting really.” His trip was a family holiday before his daughter goes to university.

Travel analyst Bob Atkinson, of www.travelsupermarket.com, said: “Unfortunately for some, it may be the case that some unlucky holidaymakers will be affected all over again.

“At this stage it is unclear how many passengers will be protected by the Atol scheme and we are waiting for advice from the CAA.

“This is sadly yet another collapse in what could become a rash of company failures this autumn.”

Mr Calder said it was “not surprising” that a number of the “smaller players” were going bust in the current economic climate, but the timing of the recent collapsing was “surprising”.

“Here we are, two weeks before the end of August and it is the third significant failure during the school summer holidays,” he said.

“Normally travel companies which are going to go bust do the decent thing and wait until the middle of September when the earnings are no longer coming in but the bills most definitely are.

“It’s really disconcerting for people, and not just the tens of thousands who have booked to travel with Kiss flights in the next few weeks but also people travelling on other companies who are wondering what’s going to happen.”

However, he said he did not think there would be any further significant collapses of travel companies this summer.

Some analysts believe the new coalition government’s spending cuts are affecting consumer confidence, which is impacting the travel industry.

“There was a real drying up of business in the early part of the summer when the volcanic ash crisis hit, but then it bounced back pretty well,” Douglas McNeil, transport analyst at Charles Stanley, told Radio 5 live’s Wake Up To Money programme.

“But since the Budget in June the penny has dropped that austerity measures are on the way, which means the latter part of the summer has been pretty weak”.

LONDON (Reuters) - Airport operator BAA offered ground staff a 2 percent pay rise plus a one-off payment of at least 500 pounds, averting strikes which had threatened to close major UK airports, the Unite union said.

Unite said on Tuesday it would recommend its members at BAA — which include security staff, firemen and engineers — accept the pay settlement reached on Monday following nine hours of talks.

The deal is an increase on BAA’s previous offer of a 1 percent rise plus an extra 0.5 percent conditional on changes to sickness agreements.

“The negotiations were tough but Unite has delivered a fair offer for BAA staff,” Unite national officers Brian Boyd and Brendan Gold said in a statement.

The threatened walkout by ground staff would likely have shut BAA’s six British airports, which include Heathrow and Stansted in London, disrupting the plans of thousands of travellers at the height of the holiday season.

BAA apologised to passengers for uncertainty caused by the dispute, which followed strikes by airline cabin crew and disruption from the spread of ash from an erupting volcano in Iceland this year.

“We believe this is a fair offer for staff in what remains a difficult economic environment for the aviation industry,” a spokeswoman for BAA said.

“All parties brought a constructive approach to negotiations and we are sorry for the uncertainty ahead of yesterday’s discussions.”

Unite said that under the deal staff would get a 2 percent pay rise effective from the start of 2010, and arrangements to sick pay would remain unchanged.

BAA, owned by Spanish group Ferrovial, had angered union members by withdrawing a 450 pound payment conditional on BAA’s hitting earnings targets — which it missed by 3 percent.

But the union said BAA had now agreed to lump-sum payments of between 500 and 900 pounds, linked to the earnings performance of each airport, to be paid in two instalments.

British Airways, BAA’s largest customer, remains in dispute with Unite over cabin crew pay and conditions, which has resulted in 22 days of strike so far this year.

(Reporting by Kylie MacLellan; Editing by Michael Shields)

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