PRESS DIGEST - Financial Times - Oct 28

Financial Times

JCB FACES FIRST ANNUAL LOSS AFTER GLOBAL DEMAND FALLS

Matthew Taylor, the chief executive of JCB, has warned that the construction equipment manufacturer could face its first ever annual loss this year. He told the Financial Times revenues could drop by 35-40 percent, but refused to make any predictions about profits. He said that although demand for construction machines would probably grow in China, demand outside China was likely to fall by about 50 percent in 2009, making it one of the sector's hardest years since the Second World War. JCB will today say that 2008 saw a fall in pre-tax profits, from 187 million pounds to 39 million pounds.

THRESHERS OWNER FIGHTS ENTERING ADMINISTRATION AS DOWNTURN BITES

First Quench, the struggling owner of off-licence chains Threshers and Wine Rack, may enter administration soon. Although the company was last night fighting hard to avoid this threat, sources close to it said administration could not be ruled out. KPMG, which has been advising First Quench and is trying to find a buyer for the firm, declined to comment. First Quench signalled problems earlier this year after demand dropped and credit insurance was withdrawn. A decision to enter administration will affect the many private investors who have been buying Threshers outlets over the past few years.

PRIVATE EQUITY GROUPS CIRCLE MATALAN

Several major private equity groups are examining 1.5 billion pound bids for discount retailer Matalan [MTLAN.UL]. KKR, Blackstone, Cinven, TPG and CVC Capital Partners have all shown interest, with the latter having already held a preliminary meeting with Matalan's management about a deal. Analysts think private equity groups will have no trouble raising debt finance for a buy-out. One banker said: "This is a defensive business that does well in a downturn. It is the right business model in its pricing and products for banks to lend to." A sale would be lucrative for Matalan founder John Hargreaves, who took the business private three years ago.

TPG SELLS REMAINING NINE PERCENT STAKE IN DEBENHAMS

Private equity group TPG has become the second of Debenhams' (DEB.L) three former owners to quit the group, after selling its nine percent stake in the department store for 100 million pounds. Debenhams' share price has risen three percent to 84.35 pence because some analysts think the retailer, valued at 1.1 billion pounds, may now be vulnerable to a bid. However, some are not sure a bid will be made. Investors who backed Debenhams' flotation in 2006 have since been impatient with what they see as poorly performing stock, and a source close to TPG has said that Debenhams' 323 million pound share issue in June meant the private equity firm was always likely to sell its stake.

CINEWORLD TAKINGS LIFTED BY 3D FILMS

Cineworld (CINE.L) has reported an 11 percent increase in box office revenue on the back of the popularity of 3D films like "Up". Sales of drinks and popcorn also increased by five percent in the 43 weeks to October. Although "Harry Potter and the Half Blood Prince" and "The Hangover" performed well in the second half of the year, nearly a quarter of Cineworld's revenue this year has come from 3D animations. Cineworld is set to open two new cinemas in the fourth quarter -- one in Oxfordshire and one in Aberdeen. Its share price recently fell two pence to 151 pence.

BP OFFERS PROOF OF TURNROUND AS "STELLAR" RESULTS BEAT EXPECTATIONS

BP (BP.L) has revealed far better third-quarter results than it expected and has made significant cost savings. Its headline third-quarter profit halved to just under three billion pounds because of the sharp fall in oil and natural gas prices. However, a programme of cuts put in place by chief executive Tony Hayward -- entailing the loss of 6,500 workers in 18 months -- means that profits are 30-50 percent higher than analysts predicted. Citigroup analysts called the results "stellar". BP is now expected to save one billion dollars more than it predicted at its second-quarter results.

RECKITT SURPRISES WITH SALES DECLINES

Reckitt Benckiser (RB.L) has reported unforeseen third-quarter declines in sales of its fabric care and dishwashing products. Revenue in fabric care and dishwashing has fallen by four and five percent respectively. The results shocked analysts and left Reckitt's shares down 66 pence at 30.16 pounds. The pharmaceutical company blamed the fall on increased competition from firms like P&G, and retail price discounts on dishwasher products such as Finish. Reckitt also expressed concerns over generic rivals to its Suboxone and Subutex drugs, which are used to treat heroin addiction.

BRAEMAR MAINTAINS OPTIMISM IN ROUGH WATERS

Managers at Braemar Shipping Services (BRMS.L) are optimistic about the firm's prospects despite the economic downturn. The group has revealed pre-tax profits for the six months to August 31 of 7.02 million pounds, down from 9.79 million pounds in the first half of 2008. These results improved on the second half of 2008, which saw the collapse of the dry bulk market when Lehman Brothers went bust. Alan Marsh, the shipbroker's chief executive, said the firm was "in good shape" and indicated that it was still interested in making acquisitions after growing steadily in recent years.

FOUNDERS CASH IN AS CISCO BUYS SCANSAFE

Eldar and Roy Tuvey, the British founders of ScanSafe, will pocket about 36.7 million pounds after selling the Internet security firm to Cisco Systems (CSCO.O). ScanSafe, which has bases in London and California, used its software to raise 43.5 million dollars in venture capital funding from groups like Balderton Capital, Scale Venture Partners and Montagu Newhall Associates. ScanSafe's management team owned about a third of the business while Balderton Capital owned about 35 percent. The company, which has grown at 100 percent a year, was recently named the worldwide market leader in software-as-a-service web security by U.S. consultancy IDC.

SENIOR UBS BANKER SET TO HEAD UKFI

Alistair Darling is set to decide whether senior UBS (UBSN.VX) banker Robin Budenberg will replace John Kingman as chief executive of UK Financial Investments, the body responsible for the government's share in the UK's banks. Budenberg could be appointed as early as Wednesday. His first role, if appointed, is to manage the split of Northern Rock. Budenberg has already helped the government structure last year's bank bail-outs, and also assisted in the sale of British Energy to EDF. Although some insiders fear the opposition may criticise the choice of an investment banker to lead the UKFI, Budenberg is generally regarded as an able mediator whose appointment would be welcomed by the Conservative Party.

Prepared for Reuters by Durrants