PRESS DIGEST - Financial Times - Aug 8

Financial Times

STAY-AT-HOME BRITONS GIVE JOHN LEWIS A WELCOME BOOST

The growing trend for so-called "staycations", whereby Britons holiday within the UK, has boosted retailer John Lewis [JLP.UL], which reported a rise in sales for the third consecutive week. Sales were 5.6 percent higher than the same period last year at 50 million pounds. In addition, the recent bad weather has also helped generate footfall into stores, in turn lifting sales in the group's homewares sector. The announcement bolsters BDO Stoy Hayward's recent figures that appear to show a recovery in the retail sector. "Demand was up in most areas, with furniture and textiles the most positive, helped by movement in the housing market as a well as generous discounts," said the accountancy firm.

APPETITE FOR PREMIUM FOODS RETURNS

In what is being seen as something of a recovery in consumer confidence, figures from market research company Nielsen show an increase in sales of supermarkets' own-brand premium food lines. "(This) is not just due to discounting but because consumers are feeling more confident (about the economy) than six months ago," suggests Nielsen's Mike Watkins. This month, Tesco (TSCO.L) announced a rise in sales of its premium foods in the two months to July, with steep increases in its Finest meat range. The Co-op also reported a 45 percent climb in year on year sales to the end of June of its Truly Irresistible-branded products.

STANLEY GIBBONS POSTS 13 PERCENT PROFIT RISE

Interim pre-tax profits at stamp and collectibles specialist Stanley Gibbons (SGI.L) have risen 13 percent to 1.4 million pounds, helped by sales of rare stamps. According to Michael Hall, chief executive, investors have been drawn to the relatively safe returns offered by rare stamps as an alternative to more conventional investments hit by the drop in interest rates, with this particular sector averaging a return of ten percent per annum. The news comes as a relief to Stanley Gibbons whose publishing business has been hit by a slump in catalogue sales, as well as a fall in sales at its autograph and memorabilia arm. Earnings per share were up from 4.16 pence to 5.09 pence, with the interim dividend stable on 2 pence. Company broker Seymour Pierce is predicting full-year profits of 3.7 million pounds.

CENTRICA WINS APPROVAL TO BUY 20 PERCENT STAKE IN BRITISH ENERGY

The Office of Fair Trading has approved Centrica's (CNA.L) bid to buy a 20 percent stake in British Energy from EDF (EDF.PA). The 2.3 billion pound deal will allow Centrica to share both electricity and profits from four soon-to-be-built nuclear power plants, as well as claiming 20 percent of British Energy's uncontracted power output. The OFT granted the approval after concluding that a Centrica-EDF tie-up would be unlikely to create either volatile energy prices or act as a barrier to entry into the UK energy market for would-be competitors.

SPORTS DIRECT FACES DEAL PROBE

On Friday, it was revealed that the purchase of 31 JJB Sports (JJB.L) stores by rival Sports Direct (SPD.L) is under investigation, with the Office of Fair Trading referring the matter to the Competition Commission. In May, the OFT gave Sports Direct three months to find buyers for stores which were sited in five areas where no other national sports retailer has a presence. Having failed to secure any buyers, the OFT is now suggesting the worst case scenario of a forced sale to a competitor. Sports Direct can ill afford such action, having suffered a 90 percent drop in pre-tax profits in the year to April.

HOUSE PRICE RISE

Research from Acadametrics shows a 0.1 percent rise in house prices for July. This is the second consecutive month that the figures, compiled for the FT house price index, have shown an upwards trend. Chairman Peter Williams suggests this is a sign the market in the UK is levelling out and that the "sharpest falls are behind us. The rate of decline has now slowed significantly, even if it is too early to talk of a prolonged reversal."

MOD OUTSOURCING PLAN SHOT DOWN

Following strong objection from the Ministry of Defence, ministers are expected to review a recommendation to outsource the management elements of Defence Equipment & Support. An unpublished report had suggested a publicly owned but privately managed agency, but due to the opposition it is likely the recommendation will be watered down or possibly dropped entirely. The so-called "GoCo" -- a government owned, contractor operated body -- had been mooted as a way of saving cash and cutting back on some of DE&S's 24,000 staff. However, following a recent spate of casualties in Afghanistan, it was decided the effective privatisation would be not only detrimental to the UK's defence capabilities, but also an embarrassment to the government.

RECORD NUMBER OF PEOPLE DECLARED INSOLVENT

The government's Insolvency Service has said the second quarter saw a record number of people declared insolvent in England and Wales. The figure for individual insolvencies hit 33,073 over the period -- the highest recorded total since records began in 1960. However, Deloitte's Louise Brittain says worse is to come, predicting as many as 130,000 people could be declared insolvent by the year's end. Echoing Brittain's comments, PwC's Pat Boyden pointed out that insolvencies peaked two years after the worst of the recession of the 1990s had abated.

LOGICA FEARS FOR SPENDING IN IT SECTOR

A raft of cost-saving measures has helped Logica (LOG.L) achieve better-than-anticipated first-half profits. However, chief executive Andy Green said an industry-wide reluctance to increase spending on IT will result in revenues moving in line with the economy, rather than slightly outpacing it, as Green had suggested earlier in the year. This will result in a fall of approximately 2 percent in Logica's sales for 2009, he said. While Green ruled out any additional job cuts to an already announced 1,900 redundancies, he hinted at further drives to improve efficiency and cost-cutting that have already resulted in a surge in interim pre-tax profits from 12.6 million pounds to 24.2 million pounds.

FAMILY HISTORY HOLDS THE KEY TO FRIENDS REUNITED DEAL

In combining its FindMyPast.com and 1911census.co.uk websites with this week's acquisition, social networking site Friends Reunited, Brightsolid, the DC Thomson subsidiary, looks set to enjoy the spoils of an industry worth 50 million pounds a year. According to Enders Analysis, the value of the genealogy business has grown thanks to increased public interest sparked by television shows such as the BBC's Who Do You Think You Are? series. ITV (ITV.L) sold Friends Reunited for 145 million pounds less than it paid for the site less than four years ago. Friends' spin-off Genes Reunited is seen as a complement to Brightsolid's existing portfolio.

Prepared for Reuters by Durrants