PRESS DIGEST - Financial Times - June 25

Financial Times

ECB LENDS 442 BILLION EUROS TO BANKS IN BID TO UNLOCK CREDIT MARKETS

The European Central Bank on Wednesday pumped hundreds of billions of euros in one-year loans at an interest rate of one percent into the eurozone's banking system in an effort to unlock credit markets and revive the region's economies. The high demand for the funds reflected a growing realisation by the banks that emergency funding may not be available again on such favourable terms. The action could boost the eurozone's recovery prospects by lowering market interest rates and creating more scope for banks to lend to the private sector.

AUDIT FINDS OLYMPIC BUDGET SHORTFALL OF UP TO 100 MILLION POUNDS

Forensic accountants from KPMG have been called in to investigate the discovery of a shortfall of up to 100 million pounds in the London Development Agency's (LDA) 2012 Olympics budget. The investigation will examine the size of the funding gap and how such a mistake could be made after an audit of the agency's accounts found the body had failed to budget for some payments to displaced businesses relocated from the territory needed for the Games, which could total between 60 million pounds and 100 million pounds.

FSA CHIEF GIVES UP 130,000 BONUS AMID POLICY REVIEW

The chief executive of the Financial Services Authority gave up a 130,000 pounds performance bonus for the 2008-09 fiscal year amid the policy review that sees the City watchdog debating the bonus schemes at the banks and the other companies it oversees. As a result, Hector Sants received a total compensation of 623,000 pounds for the year ending April 19, down from 662,000 the previous year. Overall, the City regulator, which published its annual report on Wednesday, paid 19.7 million pounds in incentive pay to individuals, roughly 14 percent of its total salary bill. It said the remuneration committee had concluded that "it was appropriate for very significant effort made by FSA employees.to be rewarded".

STAGECOACH HITS AT "CHAOTIC" DFT

The Department for Transport (DfT) has come under fire regarding its attitude towards rail companies after the chief executive of Stagecoach (SGC.L) accused it of being "either dysfunctional or deceitful". Brian Souter said the DfT had become "chaotic" and described its handling of the South West Trains franchise as a "dog's breakfast". Reporting its results for the year to April 30, Stagecoach said revenue increased from 1.8 billion pounds to 2.1 billion pounds, while pre-tax profits, before intangibles and exceptional items, beat market expectations of 189.4 million pounds, rising from 174.4 million pounds to 196.4 million pounds.

CONSORT STARTS ON EIGHT MILLION POUNDS RESTUCTURING

Consort Medical (CSRT.L), the drug delivery group, has launched an eight million pounds restructuring programme to help it deal with rising demand. The company, which makes breathing tubes and inhaler devices for asthma patients, said revenues fell five percent to 120.3 million pounds for the full-year ending April 30 2009, mainly due to Pfizer's decision in 2007 to stop using Consort's Exubera inhaler. Pre-tax profit leapt 186 percent to 12 million pounds but operating profit before special items declined one percent to 19.9 million pounds. The total dividend for the year was set at 19.1 pence as Consort declared a flat final dividend of 12.1 pence per share.

INVOCAS DECIDED TO CANCEL PAY-OUT

Invocas INVO.L has decided to scrap its dividend after it reported a one million pounds drop in pre-tax profits to two million pounds in the year to March 31. The Scottish consumer debt and corporate insolvency specialist, which is conducting a strategic review following the appointment of David Macmillan as chief executive four weeks ago, said revenues improved by two percent to 10 million pounds last year. The number of protected trust deeds increased from 780 to 921 while earnings per share dropped from 7.85 pence to 5.22 pence. Charles Stanley, the broker, has decided to postpone its forecast for the current year until completion of the business review.

CONFIDENT MCBRIDE CLEANS UP AS SHOPPERS KEEP EYE ON COSTS

McBride (MCB.L), Europe's leading provider of private label household and personal care products, saw its shares rising 16.75 pence to 139.75 pence on Wednesday after it predicted that it would beat full-year profits expectations. The group said strong sales growth in France and Italy, in conjunction with new contracts in the UK, had led to a six percent rise in revenues at constant currencies in the final quarter to June 30. The FTSE 250 company, which last year reported pre-tax profits of 19.7 million pounds on turnover of 701 million pounds, said it expected full-year revenue to rise four percent as it increasingly benefited from "private label gaining market share in our major markets".

TANFIELD TAKES PASSENGER IDEA ON BOARD

Tanfield (TAN.L), the electric vehicle manufacturer, is set to make a move into passenger vehicles after receiving 1.6 million pounds of funding from the government's Technology Strategy Board. The group, which makes vehicles based on the Ford Connect van classics, will develop and test 16 vehicles for the ultra low carbon vehicle demonstrator programme. It will also take part in the Department of Transport's low carbon vehicle procurement programme aiming to encourage public sector bodies to use electric vans.

CHIP MAKER MOVES TO QUASH BID SPECULATION

Imagination Technologies (IMG.L), the chip designer that has been in the centre of speculation over a possible takeover, has reiterated it expected an independent future. Chief executive Hossein Yassaie said that both Apple (AAPL.O), which is rumoured to be interested in Saad's holding in the group, and Intel (INTC.O), which recently increased its stake in 16 percent, were more interested in maintaining a stable shareholder base than launching a bid, The company said turnover for the year increased from 60 million pounds to 64 million pounds, while pre-tax profits rose from 1.88 million pounds to 2.7 million pounds. Earnings per share jumped from one penny to 3.5 pence.

INCHCAPE BUOYED BY PROFIT RECOVERY

Inchcape (INCH.L), the international car dealer, issued an upbeat note on Wednesday, saying that aggressive destocking and cuts in working capital had seen its net debt drop from 404 million pounds earlier this year to 100 million pounds by the end of May. The news sent its shares up two pence, or 12 percent, to 18.25 pence. The group, which in March raised 233 million pounds through a cash call, said pre-tax profits in the second quarter would be "significantly ahead" of the 20 million pounds it reported in the first, but added they were still "well below the same period last year".

Prepared for Reuters by Durrants