Comment & Analysis

Saturday January 17, 04:35 AM
Glance-PRESS DIGEST - British business - Jan 17

Saturday 17 January 2009 The Times POUNDSTRETCHER REELS FROM COLLAPSE OF WOOLWORTHS Poundstretcher's owner Instore (LSE: INST.L - news) has blamed the collapse of Woolworths (Munich: 886853 - news) and heavy discounting undertaken by Woolworths' administrators for an expected full-year pre-tax loss of up to five million pounds. The group reported a decline of 0.7 per cent in like-for-like sales for the 18 weeks to January 3, with the rate of decline increasing to 1.92 per cent for the last five weeks of this period. The performance of Ponden Mill, the homewares retailer purchased by Instore in 2007, was also described as disappointing. MOUNTFORD TO STEP DOWN AS MOSS BROS CHIEF Men's clothing retailer Moss Bros announced Friday that its chief executive Philip Mountford will step down on Monday, being replaced by Brian Brick for an interim period. The move follows the sale by Sir Philip Green of a 28 per cent stake to Simon Berwin of Berwin & Berwin, a Leeds-based supplier to Moss Bros. Brick joined the company in August as a non-executive director and is a former director of the Specialty Retail Group. POLICYHOLDERS AT NORWICH UNION HIT BY PAY CUT Britain's biggest life insurer, Norwich Union, announced Friday that its 2.3 million with-profits customers will receive lower payouts 'across the board.' Payouts on policies maturing this month are expected to be up to 15 per cent lower than those that matured a year ago and the decline in payouts means that most of the insurer's endowment mortgage customers will face shortfalls when their policies mature. Danny Cox of Hargreaves Lansdown noted that there was little evidence of the 'smoothing' effect where surpluses in good years are held back to bolster payments in difficult years. Daily Telegraph BELLWAY TO REVIEW DIRECTOR BONUSES AFTER SHAREHOLDER REVOLT AT. After shareholders refused to back a generous remuneration package for the directors of housebuilder Bellway (LSE: BWY.L - news) , the company is reconsidering its bonuses policy. The chief executive John Watson and two other executives, Peter Stoker and Alistair Leitch, received 632,500 pounds in bonuses each, following a year in which the business' profits fell 85 per cent and its share price dropped by 62 per cent. 'This is a clear message that there must be a proper link between reward and performance, even in a sharp economic downturn', noted Peter Montagnon, head of investment affairs at the Association of British Insurers. SCHRODERS INVITES CENTRICA TO BID FOR ITS 10 PER CENT STAKE IN. The fund manager Schroders (LSE: SDR.L - news) is considering selling its 10 per cent stake in the North Sea oil and gas producer Venture Productions (LSE: VPC.L - news) to Centrica (LSE: CNA.L - news) . 'If Centrica would like to give me a call, I would be delighted to hear from them', remarked the Schroders fund manager Andy Brough, after it was disclosed that Centrica had considered putting in an offer of around one billion pounds for Venture. The utility group's advisers, Citigroup (NYSE: C - news) and Deutsche Bank (Xetra: 514000 - news) , advised it to contact Venture's board with an offer and to try and get the backing of the directors; if this tactic proved unsuccessful, it was suggested that it would be better for Centrica to buy a 30 per cent stake from institutional investors such as Schroders. BAE DEFIES DOWNTURN WITH PLAN TO ADD 8,000 JOBS IN UK AND US Thanks largely to the security of its state order, the defence contractor BAE Systems (LSE: AP16.L - news) will be able to create nearly 8,000 jobs in Britain and the United States in 2009. 7,000 of these positions will be in the US, but the contractor's chief executive Ian King also stated that 300 graduate trainees and 300 trade apprentices will be taken on in the UK. BAE (LSE: BA.L - news) is also a leading member of the consortium which will construct two new aircraft carriers for the Royal Navy, at a cost of four billion pounds. The Independent SAINSBURY (LSE: SBRY.L - news) 'S TO BAN BATTERY EGGS On February 5th Sainsbury's, the UK's third largest supermarket chain, is to become the first of the 'Big Four' chains to ban the sale of eggs from battery hens. This announcement comes three weeks before the European Union imposes a ban on battery cages. Sainsbury's has also pledged to stop using caged eggs as ingredients in its food and drink by 2012. Compassion in World Farming's Rowen West-Henzell said: 'We are over the moon that Sainsbury's has gone cage-free almost a year ahead of schedule. The scale of this move is breathtaking.' TOMB RAIDER GAME FIRM CONFIRMS TAKEOVER TALKS The computer game maker Eidos has confirmed that it has been the subject of a preliminary takeover approach which 'may or may not lead to an offer being made to the company'. This will be a source of relief to investors in the business which issued a profit warning last week and has lost three quarters of its share price over the past twelve months. Sales of Eidos' new game, Tomb Raider: Underworld have also been underwhelming. The share price rose by 22.9 per cent to 14.75 pence on Friday as a result of the announcement. ITV FINED 220,000 POUNDS ITV (LSE: ITV.L - news) has been punished for not spending enough money on making programmes outside of the capital in 2006 and 2007 by the media regulator Ofcom. Whilst the channel met its 50 per cent quota of productions made outside of London, it was fined 200,000 pounds for failing to spend half of its budget outside that area, only managing 45.6 per cent in 2006 and 44.3 per cent in 2007. ITV's head Michael Grade protested, saying that the regulation was '20 years out of date', and that the channel's job was not 'to be an instrument of governmental industrial policy or social engineering'. The Guardian BANK SHARES IN NEW COLLAPSE AS CRISIS ENTERS SECOND PHASE Huge losses reported yesterday at Citigroup and Bank of America, prompted shares in Barclays (LSE: BARC.L - news) and Royal Bank of Scotland to plummet, marking the second wave of a banking crisis that has already dragged the financial industry to the edge of collapse. Analysts said that Barclays had suffered a severe loss of confidence following speculation that it faces more write-downs on hundreds of billions of pounds' worth of toxic investments. The Treasury last night indicated that measures to bolster the industry would be brought forward, possibly to early next week. An array of options to kick-start lending, including a scheme to ring fence 200 billion dollars into toxic assets, will be thrashed out with the big banks at a meeting tomorrow. THE KING OF BLING LOSES HIS MOJO Theo Fennell (LSE: TFL.L - news) , the celebrity jeweller, warned it could make a loss in the year to March 31, with sales in December 21 per cent lower than last year on a like-for-like basis. The jeweller will no longer run the luxury watch counters at Harrods, but will retain jewellery counters at the department store with a three year extension of its contract. After reviewing its international expansion plans, the company has decided to cut costs and reduce its borrowing needs. Talks with a potential investor resumed after Christmas. While Theo Fennel sounded a note of optimism that it could secure 'a significant' cash injection through new equity, the jeweller was keen to reiterate that there was no guarantee of success. FORMER ITV CHIEF CHARLES ALLEN JOINS EMI MUSIC Charles Allen was yesterday named non-executive chairman of EMI Music, adding to the growing number of non-executive roles he has picked up since stepping down as ITV's chief executive in 2006. Speaking of his new role, Allen said it is 'hugely exciting and complements my other non-executive positions.' Allen was recruited by Guy Hands, the financier whose private equity firm Terra Firma bought EMI (LSE: EMI.L - news) in 2007. 'Charles has vast experience of managing change in creative industries. His enthusiasm for music, his business skills and experience makes him an ideal non-executive chairman,' said Hands. The Times RUMOUR OF THE DAY Investors have evinced growing interest in Alliance Pharma (LSE: APH.L - news) , down 0.25 pence to 4.375 pence, with speculation suggesting that Goldshield, down 1 pence to 236 pence is taking a look at the drug provider. Daily Telegraph WHAT THE BROKERS SAY Persimmon (LSE: PSN.L - news) Cattles (LSE: CTT.L - news) Fuller Smith and Turner J Sainsbury Marshalls (LSE: MSLH.L - news) Sage Group (LSE: SGE.L - news) Misys (LSE: MSY.L - news) Whitbread (LSE: WTB.L - news) Michael Page (LSE: MPI.L - news) Prepared for Reuters by Durrants

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