PRESS DIGEST - Financial Times - Aug 5

Financial Times

COOKSON BULLISH DESPITE POSSIBLE DEBT RENEGOTIATION

An interim loss and the prospect of an expensive renegotiation of its borrowing terms should it breach covenants by the year's end failed to dent Cookson's (CKSN.L) shares on Tuesday. They closed 22.4 pence up at 365.1 pence. Following a steady decline in global steel production, the supplier of ceramic moulds for the steel industry had improved its balance sheet with a 240 million pound cash call in January, intended to head off a breach of covenants on its 732 million pounds of debt. Revenue fell 12 percent in the first half -- 27 percent at constant currencies -- as Cookson fell from 99 million pounds profit to an underlying loss of 3.3 million pounds. Chief executive Nick Salmon said the group could fail to meet covenant tests due at the end of the year and June of 2010 if the market fails to improve at the anticipated rate, although he added that he was confident Cookson could renegotiate its debt -- albeit expensively.

MONEYSUPERMARKET TO PAY OUT 25 MILLION POUNDS

Despite a steep drop in profits, Moneysupermarket.com (MONY.L) has said it is paying out a 25 million pound special dividend. Increasingly stringent lending conditions have resulted in a fall in loans and mortgages available to customers through the site, increasing the company's dependency on insurance products which have become its biggest source of income. A first-half revenue drop of 31 percent year on year to 68.5 million pounds and an 87 percent decline in pre-tax profits have led chief executive Peter Plumb to cut marketing spending by 25 percent and to shed 15 percent of Moneysupermarket's workforce. However, the special dividend of 4.9 pence per share is being viewed as a signifier that Moneysupermarket's business has stabilised and will afford the company 50 millions pounds of cash.

WILLIAM HILL FALLS SHORT AFTER BAD DEBTS

William Hill (WMH.L) has said full-year profits will fall short of expectations after a series of key football and horse racing fixtures left the bookmaker suffering an 18 percent decline for the six months to June 30. Despite a 5.5 percent increase in turnover, Hills saw pre-tax profits fall to 91.5 million pounds from 111.1 million pounds over the first half of the year when a number of sporting results fell in favour of the customer. Despite comments from chief executive Ralph Topping that there is no real evidence to support the notion of a decline in punters, analysts have slashed their full-year forecasts by as much as 10 percent, causing William Hill's shares to dip by 18.3 pence.

JD TRIES RUGBY

JD Sports (JD.L) has confirmed the acquisition of the brand, goodwill and fixed assets of Canterbury Europe. The group hopes the 6.5 million cash deal will further strengthen its position in the rugby wear market. Canterbury, which was taken into administration in July, is the current brand shirt sponsor of both the Australian and South African international rugby union teams. The deal will see JD assume the global rights to the Canterbury and Canterbury of New Zealand rugby brands.

EMERGING MARKET APPETITE FOR SAUSAGES FATTENS UP DEVRO

Devro (DVO.L) has reported a 27 percent increase in first-half sales to 105 million pounds, flattered by exchange rate fluctuations and fuelled by overseas growth. Underlying profits were up 17 percent to 9.2 million pounds. The Scottish sausage casing maker noted a marked increase in demand for meat products in emerging markets such as China, Japan and Latin America. Although pre-tax profit increased to 11 million pounds from 5 million pounds, this figure was distorted by a 1.78 million pound exceptional credit introduced to take into account the closure of a U.S. healthcare plan. In addition, Devro was party to a 3.13 million pound exceptional write-off in 2008 following the closure of a Czech manufacturing plant.

SDL MOOTS MAIDEN DIVIDEND

SDL (SDL.L) said its growing cash reserves led the translation software company to consider paying a maiden dividend this year. Although the idea has been shelved for this year due to the uncertainty of the economy, Mark Lancaster, chairman and chief executive, hinted that a dividend could be paid next year. The company, which already lists Microsoft, Hewlett-Packard and Sony on its client base, enjoyed a doubling of cash reserves to 32.9 million pounds for the six months to June 30. While Lancaster said some business had dropped off as companies tighten their spending and cut back on projects, he added that certain areas, such as applications that assist in the managing and translation of websites, were expanding. Earnings per share were up 28 percent. However, shares were down 26.6 pence at 340 pence.

RESILIENT MEGGITT EXPRESSES CAUTION

Brakes and sensors manufacturer Meggitt (MGGT.L) has reported strong first-half results, with revenue up 11 percent to 586.4 million pounds compared with the same period last year. The company cited cost-cutting measures, a strong dollar and growth in military sales as the reason it was able to withstand an otherwise difficult time for the civil aerospace market. Accounting for 43 percent of Meggitt's revenue, the downturn in the civil side of its business has taken its toll, with a fall in orders for parts and equipment as customers use their aircrafts less. Although Terry Twigger, chief executive, pointed to improvements in this sector, he added that the company was remaining cautious and was taking a more conservative view on planning assumptions than the market. Shares rose 1.2 pence to 191.2 pence.

WHISKY INDUSTRY SHEDS MORE JOBS

Whyte & Mackay will shed 85 staff from its 574-strong Scottish workforce, the Glasgow-based spirits company revealed on Tuesday. A further 15 sales posts outside of its Scottish operations may also be affected, although none of the company's seven Scottish locations will be shut down. The news comes weeks after Diageo (DGE.L)> said it would be cutting 900 jobs over the next two years, including 700 positions in Kilmarnock. "We are hopeful that this difficult decision will ensure Whyte & Mackay has a sustainable future going forward, leaving us in a strong position to grow when the UK and global economy improves," said chief executive John Beard.

VESTAS WORKERS DEFIANT AFTER COURT RULING

Danish wind turbine manufacturer Vestas (VWS.CO) has been granted an order to repossess its plant on the Isle of Wight, which has been occupied for the last fortnight by 10 workers protesting against the threatened closure of the facility that would result in the loss of over 600 jobs. The government, embarrassed by this blow to its "low-carbon industrial strategy", has offered Vestas six million pounds to convert the factory into an offshore wind turbine research and development centre, which would save 300 jobs.

GROCERS ATTACK PLAN TO BOOST SUPPLIERS

Plans unveiled by the Competition Commission to appoint an ombudsman, with a mandate to arbitrate in disputes between grocery retailers and suppliers, were attacked by supermarkets, who warned of resulting price rises for consumers. Retail giants Tesco (TSCO.L) and Asda (WMT.N) argued that an ombudsman would benefit large multinational suppliers and lead to increased bureaucracy. The British Retail Consortium called on Business Secretary Lord Mandelson to reject the proposal, whereas the Food and Drink Federation that represents manufacturers was in favour of the proposed appointment.

FOOD PRICE INFLATION EASES

Last month saw food inflation reaching its lowest level for 18 months because of steep falls in commodity costs and fierce price competition between retailers. According to the British Retail Consortium-Nielsen Shop Price Index, the rise in food prices slowed from 5.6 percent in June to 3.8 percent in July. This was the fourth consecutive month of inflation slowing, with fresh food benefiting from extensive price cuts in supermarkets, and meat prices reflecting the impact of commodity prices on the cost of animal feed.

CALL FOR MORE INTERVENTION ON ENERGY

Prime Minister Gordon Brown's special representative for international energy issues, Malcolm Wicks, is set to call for the government to take an "interventionist" stance on energy supply security, in a report published by the Department of Energy and Climate Change. While the recession has caused an "unprecedented" drop in electricity demand, the planned predominance of gas-fired power stations has raised fears of Britain becoming increasingly reliant on gas imports from countries such as Algeria, Nigeria and Russia.

Prepared for Reuters by Durrants