PRESS DIGEST - Financial Times - July 31

FSA 'FAILED SPECTACULARLY,' SAY MPS

The Commons Treasury committee says that the Financial Services Authority "failed spectacularly" in its supervision of the banking system, but the committee does not endorse Conservative plans to scrap the watchdog. The committee's report on the banking crisis says that the appointment of Lord Turner as chairman has "had a noticeable impact on the approach to regulation taken by the FSA." The report dismisses reforms to the tripartite system of UK regulation proposed by Chancellor Alistair Darling as "largely cosmetic."

NATIONWIDE SEES HOUSE PRICES RISE FOR THIRD MONTH

An index produced by Nationwide Building Society shows that July was the third consecutive month to see a rise in house prices, with prices up 1.3 per cent over the month, following broadly similar increases in May and June. July's rise left prices 14.6 per cent lower than their peak in late 2007, and prices have increased at a 10.7 per cent annualised pace over the last three months, having been falling at an annualised rate of 17 per cent as recently as February.

SHOP VACANCIES SOAR ON HIGH STREETS

A survey has found that the number of vacant shops on the high street has more than doubled in the past year, with one in 10 shops in large towns and cities currently vacant, up from four per cent in mid-2008. The last 18 months has also seen a halving of the number of new store openings. British Chambers of Commerce director-general David Frost said: "Vibrant town centres are at the heart of prosperous communities. The holes in the high street are knocking confidence."

S&N HURT BY DEFERRALS

Medical device group Smith & Nephew (SN.L) says that half-year revenues were stable overall, despite depressed sales of orthopaedic implants as hard-up patients deferred medical procedures. Chief executive David Illingworth said: "We've been benefiting from the fact that we've had a strategy in place that has targeted the younger, more active patient." The group's strongest performer was its wound management division. The division accounts for 22 per cent of S&N's turnover, and increased four per cent in constant currency terms.

ROLLS-ROYCE AHEAD IN SPITE OF GLOOM

Rolls-Royce (RR.L) has reported robust first-half revenue and profit growth, but chief executive Sir John Rose warned: "The global trading environment remains difficult and we believe the recovery is likely to be slow." Pre-tax profits were up more than six times at 2.5 billion pounds, with two billion pounds of that figure due to mark-to-market revaluations of hedging positions. Rose said that the company is on track to deliver modest underlying revenue growth for the full year on the back of cost-cutting measures and a record order book of 57.5 billion pounds. Shares were up 32.75 pence to 408 pence.

BRIT INSURANCE 'FRUSTRATED' AFTER CURRENCY LOSS

Brit Insurance BRE.L announced a 24 per cent increase in half year pre-tax profits to 64.9 million pounds for the six months to June 30. However, a 73.6 million pound accounting charge on foreign exchange movements pushed the Lloyd's of London insurer into an 8.7 million pound loss. Brit said that it had increased net written premiums by 37 per cent from 577.7 million to 792.1 million. The insurer saw an investment gain of 59 million pounds, which compared with a gain of two million pounds during the first half of 2008.

AVIATION CLAIMS AND RECESSION PUSH NOVAE TO BIG DEFECIT

The Lloyd's of London insurer Novae (NVA.L) reported an 18.5 million pound loss for the first half of the year compared with a 16.3 million pound profit for the same period in 2008. The Air France plane crash in the Atlantic in June, aviation claims from Buffalo, Yemen and the Hudson River, and the effect of the recession on trade credit insurance were blamed for the decline in profits. Novae's aviation reinsurance losses totalled 29 million dollars, meaning the unit would see a large loss in 2009 following years of strong profits.

PENNON BOOSTS WASTE BUSINESS

Pennon (PNN.L) has reported that it will invest the 125 million pound proceeds raised from investors through a convertible bond issue into Viridor, its waste management business. Finance director, David Dupont, said the money raised would help the company finance its stake in the Greater Manchester private finance initiative for waste management and refinance the company's 11 million pound acquisition of London Recycling, the West Ham-based collection and disposal group that it purchased last month.

ADVERTISING DENTS TRINITY BUT RATE OF DECLINE SLOWING

Newspaper publishing group Trinity Mirror (TNI.L) reported a steep decline in interim operating profit caused by a fall in advertising revenue. Trinity said that operating profit before exceptional items fell from 80.5 million pounds to 49.1 million pounds during the 26 weeks to June 28, while revenue fell from 460.8 million pounds to 383 million pounds over the same period. The Group which owns the Daily Mirror and over 140 regional newspapers said that the company was seeing a marginal improvement in the rate of decline, particularly in July.

BATTERED CHARTER MAINTAINS DIVIDEND

Charter International CHTR.L held its interim dividend steady at seven pence despite a sharp fall in first half profits and revenue. The supplier of welding equipment, fans and gas compressors also suggested that it would maintain its final pay-out for the year if trading conditions did not deteriorate further. Pre-tax profits for the six months to June 30 fell 62 per cent to 39.5 million pounds, while revenue at the company fell six per cent to 846 million pounds over the same period. Charter is currently half-way through a staff reduction programme aimed at cutting 18 staff at its ESAB business and chief executive Mike Foster said the company had no further plans for cuts.

Prepared for Reuters by Durrants