Comment & Analysis

Thursday February 12, 04:57 AM
Glance-PRESS DIGEST - British business - Feb 12

The Times WILLIAM HILL MAY JOIN RACE FOR NEW EQUITY Like a growing number of cash-strapped British companies, the bookmaker William Hill (LSE: WMH.L - news) is considering making an attempt to raise between 200 million pounds ($290 million) to 500 million pounds through a rights issue. The business, however, is unusual in that it is operating from a comparatively good position. 'We view William Hill as the most likely company in the sector to launch a rights issue,' remarked the Teathers analyst Mark Reed. 'This is not because its level of debt is excessive, or its business model is flawed or particularly exposed to the downturn. It is simply the timing of the maturity of its debt facility and the freezing of debt markets.' KINGFISHER CALLS ON WHITE VAN MAN TO REPAIR B&Q Tradesmen and self-employed builders - Britain's 'White Van Men' - have been identified by B&Q's owner Kingfisher (LSE: KGF.L - news) as the demographic which the company must strive to attract to see it through the recession. Even though Kingfisher only controls around three percent of the building trade market, chief executive Ian Cheshire has noted that this is an area suitable for growth, as sales continue to decline in the core DIY market. Self-employed tradesmen are desirable because they tend to buy and use their own equipment, meaning that they provide greater profits for retailers of buildings and DIY supplies. EU ORDERS BT TO PAY 16.6 MILLION POUND PENALTY OVER. The European Commission has ruled that BT Group (LSE: BT-A.L - news) was given an unfair advantage by having a state guarantee on its pension fund and decreed that the company will have to pay a levy of 16.6 million pounds. Three quarters of the pension fund liabilities were covered by a 'Crown Guarantee' when the former state telecoms operator was privatised in 1984, which also allowed BT to avoid making payments into the Pension Protection Fund. 'It is important to ensure that BT is subject to the same rules and obligations as its competitors to guarantee a level playing field and fair competition,' stated Neelie Kroed, the EU Competition Commissioner. Daily Telegraph WS ATKINS BLAMES GOVERNMENT DELAYS FOR CUTS 1,000 jobs are to be cut at design and engineering group WS Atkins, due in part to delays in Government infrastructure projects. Chief executive Keith Clarke said that he was 'disappointed but not surprised' at the lack of any material increase in Government spending three months after Chancellor Alistair Darling announced in his pre-Budget report plans to bring forward three billion pounds worth of infrastructure investment. Shares were nevertheless up 19.5 pence to 560.5 pence, with the company insisting that general performance and cash generation remain 'good.' RECKITT 'POWERBRANDS' PUSH REVENUES TO RECORD LEVEL Consumer goods company Reckitt Benckiser (LSE: RB.L - news) intends to raise its final dividend by 60 percent after announcing an eight percent rise in like-for-like revenues, to 1.72 billion pounds in the last quarter of 2008. Full-year pre-tax profits were up 22 percent to 1.47 billion pounds while revenues for the year were up 25 percent to 6.56 billion pounds. Shares rose 221 pence to 2843 pence on Reckitt's forecast that 2009 would see a further four percent rise in revenues, with net profits expected to increase by between eight and 10 percent. NEW CHIEF AT MORSE AFTER 17.7 MILLION POUND LOSS Kevin Loosemore has been replaced as chief executive of computer consultancy Morse (LSE: MOR.L - news) by Mike Phillips, previously the firm's finance director. Morse reported a 17.7 million pound loss for the second half of 2008, compared to a 6.2 million pound profit in the previous year. Revenue was down to 114.4 million pounds from 123.8m pounds and there will be no interim dividend. Loosemore, who will return to his previous role as chairman, said that the impact of the credit crunch on the demand for IT services had proven more pronounced than expected. The Independent STANDARD LIFE GIVES 97,000 SAVERS 100 MILLION POUND REFUND Insurer Standard Lifehas been forced to pay 100 million pounds in compensation to 97,000 investors in the Pension Sterling fund that was supposed to be invested purely in cash, but which actually had far riskier underlying investments. The fund's value had dropped by 4.8 percent on January 14, losing customers an average of 900 pounds each in a single day. Initially, Standard Life (LSE: SL.L - news) said it would compensate only a few investors, but following widespread complaints by investors and financial advisors, all those affected will now have the 4.8 percent loss refunded. FOXTONS' HUNT SELLS HAMMERSON SHORT Foxtons founder John Hunt is set to pocket a profit of several million pounds after short-selling shares in the troubled developer Hammerson. Regulatory filings show Hunt borrowed a 0.45 percent stake in the developer -- about 1.3 million shares -- betting the stock would fall. His position was worth over 5 million pounds when Hammerson announced its rights issue on Monday. Hammerson launched the 584-million-pound rights issue to shore-up creaking finances, after the contracting lending market and a fall in the merger and acquisition market hindered its alternative funding plans. FEARS MOUNT FOR JOBS AT LAND OF LEATHER Land of Leather (LSE: GB00B099P682.L - news) administrator Deloitte has warned that more than 650 staff at the furniture retailer could soon be made redundant if a purchaser cannot be found. Land of Leather, which fell into administration last month, operates 86 stores in the UK and Republic of Ireland and employs 656 staff in total. Deloitte has already closed 23 stores and is winding down another 10, whilst updating customers with outstanding orders within a week. Lee Manning, a partner at Deloitte, said: 'We are still receiving goods from our suppliers and our aim remains to fulfil as many existing orders as possible.' The Guardian ITV IMPOSE PAY FREEZE ON SENIOR EXECUTIVES TO COMBAT CASH CRISIS Around one in 10 employees of ITV (LSE: ITV.L - news) , all earning over 60,000 pounds a year, have been told they will receive no pay increase in 2009. The broadcaster is also imposing below-inflation increases on staff earning more than 25,000 pounds. The pay deal set out by ITV, following three months of negotiations with unions, will see employees earning less than 25,000 pounds receive a 4.1 percent pay increase, those earning between 25,000 pounds and 40,000 pounds will receive an increase of 2.5 percent, those earning between 40,001 pounds and 58,750 will receive an increase of just 2.1 percent. Employees earning between 58,750 and 59,999 pounds are to have their pay increased to 60,000 pounds. FLEET STREET CUTS JOBS AS ADVERTISING SLUMP BITES In a trading update for the three months to the end of December, Daily Mail (LSE: DMGT.L - news) & General Trust announced that revenues at its national division, Associated Newspapers, fell by 5 percent to 237 million pounds and recorded falls of 18 percent at its regional division, Northcliff. The trust announced that advertising revenues were down 23 percent in January, with a 40 percent fall recorded for regional titles. Daily Mail General Trust finance director, Peter Williams, said, 'Within regions, we are certainly expecting continuing decline in revenue year-on-year throughout this year. We are not expecting to hit the bottom before the end of 2009 - in some people's books that's optimistic.' Separately, News International has announced that it is to cut 65 jobs across its four national news titles. PHONE GROUPS IN BROADBAND TALKS The communications minister, Lord Carter, has called a meeting with the UK's five mobile phone networks to try to agree a deal to achieve universal broadband access by 2012. Lord Carter is aiming to get the networks O2 and Vodafone (LSE: VOD.L - news) to share radio bandwidth allocation - awarded to them in the 1980s - with rivals T-Mobile, Orange and 3. Kip Meek, head of the independent advisory panel the Broadband Stakeholder Group, is understood to have been appointed by Carter to lead negotiations, which will begin on Thursday. The Times TEMPUS Hargreaves Lansdown (LSE: HL.L - news) WS Atkins Shaftesbury (LSE: SHB.L - news) Daily Telegraph QUESTOR Aveva Hammerson The Independent THE INDEPENDENT INVESTMENT COLUMN Reckitt Benckiser Group Atkins (WS) Hargreaves Lansdown Prepared for Reuters by Durrants ($1=.6941 Pound) Keywords: PRESS DIGEST British business Feb 12 =3

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