PRESS DIGEST - British business - Nov 27

The Times

DRINK FLOWS FOR M&B BUT GROUP SAYS TOO EARLY TO RAISE GLASS

The pub group Mitchells & Butler(MAB.L) reported a 3.2 percent increase in like-for-like sales in the first eight weeks of the current financial year. It also said that in the year to September it served 129 million meals and 450 million alcoholic drinks, encouraging signs of an improvement in consumer confidence. However, overall in the year to September 26, the group reported a 24 per cent drop in pre-tax profits to 134 million pounds.

NETWORK RAIL DEFENDS HEDGES, 326 MILLION POUND CHARGE

Network Rail's pre-tax profits for the six months to September were hit hard by a 326 million pound ($543.7 million) hedging charge on its massive debt and a new regulatory regime. The figure for the six months to September 30 was down 80 percent to 146 million pounds. Its net debt remained at 22.2 billion pounds. Chief executive Iain Coucher said its level of debt was sustainable and its hedging policy sensible. Revenues fell 9 percent to 2.84 billion pounds.

GUY TO LOSE SEAT ON GARTMORE BOARD AFTER FLOTATION

According to a research note prepared by Citigroup, Roger Guy will lose his seat on Gartmore's board after its 950 million pound flotation next month. The six-man board will be made up of Jeff Meyer and Keith Starling, Gartmore's chief executive and chief financial officer, two current non-executive directors and two from Hellman & Friedman, the private equity house with a 58 percent stake which will be lower after the IPO. Citigroup said Gartmore hopes to raise between 250-300 million pounds from the flotation to reduce its debt of 580 million pounds.

TEMPUS:

Daily Mail and General Trust(DMGOa.L) (worth holding)

Clinton Cards (hold)

Hampson Industries (feels too soon to buy)

The Daily Telegraph

LLOYDS GETS GO-AHEAD FOR 22.5 BILLION POUND FUND-RAISING

Lloyds Banking Group(LLOY.L) looks set to raise enough capital to escape the government's asset protection scheme (GAPS) as shareholders approved the world's largest rights issue. Thursday's meeting at the NEC in Birmingham received a 99 percent approval for the 13.5 billion pounds rights issue, the amount necessary to free the banking group from GAPS. The shareholders berated the board for allowing the government to force them into a takeover of failing bank HBOS.

PC WORLD OWNER DSG BEATS PROFIT FORECASTS

DSG International'sDSGI.L interim results were better than expected but the electrical retailer warned that the recession is not over. The PC World and Curry's owner reported a pre-tax loss of 17.6 million pounds for the 24 weeks up until October 27, for which analysts had forecasted a loss of 27 million pounds. Chief executive John Browett said sales are improving, like-for-like by 1 percent, but added a note of caution.

BORDERS COLLAPSES

High street bookstore Borders called in administrators on Thursday putting 1,150 jobs at risk. The chain has been unable to compete with internet sales, while many publishers were taking their supply line elsewhere. MCR, the turnaround specialists, are the appointed administrators. MCR director Phil Duffy said: "All stores currently remain open for business as normal whilst we undertake a review of the company's affairs and seek a purchaser for all or some of the company's stores."

QUESTOR:

Dana PetroleumDNX.L (buy)

Water sector (buy)

The Independent

VAUXHALL TO AVOID JOB LOSSES AT ELLESMERE

GM GM.UL Europe's new chief executive Nick Reilly has given assurances that there will be no closures or job cuts at Vauxhall's Ellesmere Port plant. Reilly said that jobs would be retained in order to support the 2010 launch of a new Astra Sports Tourer and to prepare for a 2011 move to a three-shift production pattern which will utilise the plant's full capacity.

EVENING STANDARD SET TO CLOSE MIDDAY EDITION

The London Evening Standard is to ditch its early edition in a decision thought to have been accelerated by the closure of rivals thelondonpaper and London Lite. From January 4 the Standard, which last week went to a free sheet in order to boost revenue, will print all 600,000 copies as the later 'West End Final' edition which will be distributed from 2pm onwards. The move is expected to result in the loss of around 20 jobs.

ITV BUYS OUT DISNEY TO TAKE 100 PERCENT OF GMTV

ITV(ITV.L) has secured 100 per cent ownership of GMTV after agreeing an 18 million pound acquisition of The Walt Disney Company's (DIS.N) 25 percent share of the breakfast programme. ITV said the deal would allow 'closer integration'. ITV's chief operating officer John Cresswell is quoted as saying: "GMTV is the gateway to ITV day and a perfect fit with ITV's existing daytime programming."

INVESTMENT COLUMN:

DSG InternationalDSGI.L (hold)

Jarvis (avoid)

Clinton Cards (hold)

The Guardian

NATIONAL EXPRESS LOSES SECOND FRANCHISE

The Department for Transport has announced it will not grant permission to National Express(NEX.L) to extend its East Anglian franchise beyond March 2011. Speaking about the decision, Lord Adonis, the transport secretary, said National Express has forfeited the chance to keep control of the East Anglian services until 2014 when it decided in July that it could no longer afford to operate the East Coast franchise. The decision has led union bosses to call for wholesale renationalisation of the rail network.

BAE SYSTEMS TO CUT 640 JOBS DUE MILITARY SPENDING SQUEEZE

BAE Systems(BAES.L) will cut a further 640 jobs in the UK as a result of reductions in military spending. The latest round of job losses will take the total number of redundancies at the defence contractor this year to 2,300. Hugh Scullion, general secretary of the Confederation of Shipbuilding and Engineering Unions, said: "This is bad news for the workers and the unions will be working to prevent compulsory redundancies."

MAIL'S SECOND-BIGGEST PROFIT STEMS DECLINE

Daily Mail & General Trust(DMGOa.L) has recorded a 23 percent fall in adjusted pre-tax profits to 201 million pounds for the year ended October 4. DMGT said revenues at Associated Newspapers, fell 11 percent year-on-year to 876 million pounds, circulation revenues were down 2 percent and underlying ad revenues fell 15 percent. Revenues for its 100-paper regional arm, Northcliffe Media, fell 22 percent to 328 million pounds with operating profits down 65 percent to 24 million pounds.

Prepared for Reuters by Durrants ($1=.5996 Pound)