PRESS DIGEST - British business - June 17

The Times

OCADO COULD BRING 130 MLN POUNDS TO OWNERS IN FLOAT NEXT.

The online grocery retailer Ocado has announced that it may float on the stock exchange in 2010. This news has surprised many, as the co-founder of the business Jason Gissing ridiculed the idea of such a move as recently as last year; however, he said that he had become more enthusiastic about the idea after the IPO of OpenTable, an online restaurant booking service in the US that managed to float and still break even.

RBS CHIEF SEES GREEN SHOOTS BUT ISSUES "FROST" WARNING

Stephen Hester has warned that whilst the worldwide financial economy is recovering, the losses from loans secured against property in the banking sector could hamper growth for years. The chief executive of the Royal Bank of Scotland (RBS.L) said that signs of a rejuvenated economy were still insecure and dependent on a falling demand for credit by consumers. "Sometimes the first green shoots suffer from frost and are the first to die", he remarked.

TRAVELODGE PLANS 100 MILLION POUND FUND TO SNAP UP STRUGGLING.

The budget hotel chain Travelodge is intending to take advantage of the large number of distressed hotels laid low by the recession by buying them up. The company is collaborating the recession by buying them up. The company is collaborating with the Anglo-Indian property fund manager Meghraj in the creation of a 100 million pound fund named Tamesis Capital, which will attempt to raise 40 million pounds of equity and 60 million pounds of debt for the purpose of acquiring up to 14 hotels which would then be converted and leased by Travelodge.

TEMPUS

Halma (HLMA.L) [Look to buy lower down]

Whitbread (WTB.L) [Hold]

Ted Baker [Hold]

The Daily Telegraph

MAN GROUP PROSPERS AFTER HEDGE FUND CHIEF SAYS IT MAY SELL.

Shares in the hedge fund Man Group (EMG.L) rose by four percent yesterday, after its chief executive Peter Clarke implied to a conference of his fellow fund managers that it could sell its stake in MF Global. Mr. Clarke said that Man was not "a strategic long-term holder" of its 18.5 percent share, which has fallen in value from 426 million pounds to 80 million pounds since July 2007. Mr. Clarke's comments only added to existing speculation that the hedge fund plans to reduce its commitment to MF Global, which has seen Man's share price rise by six percent last week.

GUARDIAN MEDIA GROUP SET FOR LOSSES

Staff at the Guardian Media Group were told earlier this week that the group is expected to report an operating loss of around 35 million pounds in the year to March 2009. The losses were made on long-term investments with Apax Partners in Emap (in which it holds a 30 percent stake) and Trader Media Group, despite both businesses making a profit. The regional newspaper division, GMG Regional Media, also made an operating profit of less than one million pounds.

LAND SECURITIES' LONDON BOSS EXITS OVER SPIN-OFF VETO

Mike Hussey, the head of Land Securities' (LAND.L) five billion pound London division, has resigned from his position and left the company. Until November 2008, Mr. Hussey was set to become chief executive of an independent London unit, which would be split from the retail portfolio; however, to his disappointment the move was cancelled due to the financial crisis. "Demerger is no longer a strategic option for the company and following that decision it was agreed by the board and Mike that his future lay best outside the company", stated the chairman Alison Carnwath.

QUESTOR

National Grid(NG.L) [Buy]

Tesco(TSCO.L) [Buy]

The Independent

CLINTON CARDS SET TO BUY BACK BIRTHDAYS STORES AFTER COLLAPSE

Clinton Cards is set to re-acquire 140 Birthdays stores after it placed the loss-making subsidiary into administration last month. Birthdays had 2,100 staff when it appointed Zolfo Cooper, the restructuring specialist, as administrator on May 21. The repurchase of 140 of Birthdays' 332 stores in favourable locations could help save hundreds of jobs. Clinton Cards has struggled recently, partly because of Birthdays, but it has also battled fierce rivalry from supermarkets and a perception among shoppers that its cards are expensive.

ABBEY JOINS THE RUSH TO RAISE HOME LOAN RATES

In the latest round of increased borrowing costs, Abbey is to raise the cost of its fixed-rate mortgages by between 0.25 per cent and 0.5 per cent, following announcements by Lloyds Banking Group (LLOY.L) that it was raising by up to 0.7 per cent its rates for fixed-rate mortgages taken out through the brokers. Last week, Nationwide raised the cost of fixed-rate loans by up to 0.86 per cent, with other lenders, including Woolwich and Northern RockNRK.L also increasing costs. It is thought to be only a matter of time before the remaining major lenders follow suit.

WHOLESALE SALES FALL AT TED BAKER

Ted Baker has reported a worsening performance from its beleaguered wholesale arm as department stores and retail clients continue to struggle in the economic climate. The fashion chain said wholesale sales to retailers fell 15.7 per cent in the 19 weeks to 12 June, but gave an upbeat review of trading from its UK retail arm, which has been enjoying a better-than-expected performance. Retail sales rose 15.2 per cent in the 19-week period. Total group sales rose by 7.6 per cent, with the UK growth offset by tougher conditions overseas, as well as the wholesale woes.

Investment Column

Whitbread(WTB.L) [Buy]

Halma(HLMA.L) [Hold]

Journey Group [Avoid]

The Guardian

BIG SHAREHOLDERS QUESTION BARCLAYS PAYOUTS

Barclays (BARC.L) is to face disapproval from several big shareholders following huge windfall payouts to staff at its fund management arm BGI, following the sale of the business to BlackRock for 13.5 billion dollars. Barclays hit back at criticism saying the original incentive plan was approved by shareholders at the Barclays annual meeting in 2000. Senior managers will bank 380 million pounds in total with 50 executives taking the lion's share. A source close to the company said that the incentive levels were normal for the fund management industry.

TESCO ENJOYS 'GREEN SHOOTS' SALES BOOST

Tesco(TSCO.L) has unveiled first-quarter like-for-like UK sales growth of 4.3 per cent, excluding petrol and VAT - up from the 3.7 per cent growth reported in the previous three months, but in line with City expectations. The supermarket says there are "some green shoots" appearing as its recession-battered clothing and homewares ranges return to growth. However, the retailer continues to lag behind its smaller rivals, with Sainsbury's(SBRY.L) expected to report like-for-like growth of more than seven per cent, and the latest figures from Asda and Morrisons(MRW.L) showed 8.4 per cent and 8.2 per cent like-for-like sales growth respectively.

'ALDI EFFECT' FAILS TO PROTECT PREMIER INN FROM SLUMP

Whitbread(WTB.L) has reported a 7.9 per cent fall in sales at Premier Inn, its budget chain, as the "Aldi effect", of customers trading down, fails to protect it from a slump. Like-for-like sales in the 13 weeks to 28 May fell by nearly eight per cent. Revenue per available room was also down nearly ten per cent. Premier Inn accounts for the bulk of Whitbread's profits and the recession has underlined its exposure to business customers, which account for nearly two-thirds of its sales. Whitbread's chief, Alan Parker, said the chain was targeting the leisure market, which was showing promise due to the weak pound.

Prepared for Reuter by Durrants