Comment & Analysis

Wednesday April 8, 03:42 AM
Glance-PRESS DIGEST - Financial Times - April 8

BUDGET EXPECTED TO DISAPPOINT SAVERS The Chancellor Alistair Darling has been unreceptive to calls from the Conservatives to abolish basic rate income tax on savings income for the Budget on 22nd April. The Budget is likely to disappoint savers, who have seen the value of their investments fall thanks to historically low interest rates. The Budget is likely to contain some measures to help savers, such as an increase in the Individual Savings Account limit, but the Tories have promised a far more ambitious four billion pound 'thrift package'. DETERIORATION IN JOBS MARKET EASES SLIGHTLY A poll of 400 recruiters carried out by the Recruitment and Employment Federation and KPMG has concluded that the jobs market deteriorated at a less rapid rate in March, although the situation still continues to get worse. The survey complements other data indicating that the downturn is beginning to slow. Mike Stevens of KPMG, however, warned against claiming the poll as evidence of 'green shoots of recovery', saying that 'recovery might take longer and be more protracted than many hope'. WATCHDOG TRAIN LEASE PROPOSAL FACES SNUB An inquiry into the length of train franchises from the Competition Commission has called for the Department of Transport to extend the terms of passenger rail leases from the current seven to 10 years to 12 to 15 years. The commission argues that the measure would encourage train operators to invest in new trains, improving their services. Government ministers are generally not in favour, however, claiming that giving the rail companies too long would make them complacent and difficult to influence. RBS PLANS TO CUT UP TO 9,000 JOBS ACROSS THE GLOBE Up to 9,000 jobs at Royal Bank of Scotland will be lost around the world over the next two years, the bank has announced. 4,500 of these redundancies will be in the UK, mainly in the areas of technology and call centres. 10,000 of the bank's employees have already been laid off over the past year, as part of a scheme which RBS hopes will save it 2.5 billion pounds over the next three years. The bank stressed that the actual number of job cuts was likely to be 'significantly lower' than 9,000, and hoped that most redundancies would be voluntary. C4 WOULD MAKE CUTS TO AVOID FIVE MERGER Channel 4 has indicated that it would prefer to make cuts to its public-service schedule rather than merge with its competitor Five. The broadcaster is intent on a merger with BBC Worldwide to mitigate its 150 million pound financial shortfall, but may not have assets of sufficient value to allow the new business to deal with its debts. Despite being urged by the communications minister Lord Carter to consider a tie-up with Five, a person present at negotiations said, Channel 4 had maintained that it would fall back on making public-service cuts if the BBC Worldwide deal fell through. PEARL PLANS FLOTATION ON LSE Hugh Osmond's Pearl life assurance group is nearing a restructuring that could see it float on the London Stock Exchange later this year with a targeted market capitalisation of around two billion pounds. Those close to Pearl say that Osmond is close to raising around 500 million pounds from new institutional investors to recapitalise the parent company. Analysts estimate that a post-restructuring Pearl would have an embedded value of five to six billion pounds and a market capitalisation of about two billion pounds. ROBERT DYAS MANAGEMENT TEAM TO SEAL 30 MILLION POUND BUY-OUT. The management of high street hardware chain Robert Dyas hopes to complete a 30 million pound buy-out as early as Wednesday, and has been in final stage discussions with its banks, including Lloyds Banking Group. A buy-out would see Change Capital Partners, which bought the chain five years ago for 61 million pounds, removed from the picture, with its equity wiped out. Such a move would also stave off administration and save 1,250 jobs. TAYLOR WIMPEY IN 11TH HOUR RESCUE DEAL After nine months of negotiation, housebuilder Taylor Wimpey has reached a refinancing agreement with its key creditors. The deal comes on the eve of a Wednesday deadline to seek approval from its creditors, and holders of Taylor Wimpey Eurobonds are expected to grant formal approval to the deal in meetings on April 30. The terms of the deal mean that a capital raising from shareholders, which would substantially reduce the interest on the housebuilder's debts, is likely in the coming months. JJB'S CREDITORS SMILE ON CVA Proposals from JJB Sports to enter a Company Voluntary Agreement have been met with more favour than expected from landlords. The agreement would see JJB paying rent monthly rather than quarterly, and paying less rent than is due on the 140 stores forced to close so far during the downturn. Richard Fleming, head of restructuring at KPMG and the proposed supervisor of the CVA, said: 'We have been very busy speaking to the landlords of the stores and the initial response has been very positive.' HIRING FREEZE PROMPTS FURTHER JOB CUTS AT MICHAEL PAGE Michael Page, the UK's second-largest recruiter, has cut a further 809 jobs, or 16 per cent of its workforce, following a sharp decline in profits. Gross profits in the first quarter were down 32 per cent on the same period in 2008, to 95 million pounds. Gross profit from permanent placements, which account for 70 per cent of the recruiter's revenue, fell 39 per cent in the quarter; gross profits from temporary placings were down seven per cent. Chief executive Steve Ingham said it was difficult to predict how quickly the company could recover. Shares were down 4.25 pence at 212 pence. Prepared for Reuters by Durrants Keywords: PRESS DIGEST Financial Times

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