PRESS DIGEST - Financial Times - June 8
SUNNY WEATHER REVIVES HIGH STREET SALES
High street sales rebounded in May, following a dip in the previous month, according the British Retail Consortium, although consumers remained wary of big ticket purchases. The trade association's closely watched monthly sales survey revealed a year-on-year growth rate of three percent for May, compared with a 0.2 percent decline in April. The three month on three month rate, considered a smoother measure of retail activity, showed a 3.4 percent rise in the three months through to May, with sunny weather towards the end of the month boosting sales of clothing and footwear.
FILM INDUSTRY SEEKS TO HEAD OFF FUNDING CUTS
The UK film industry has published a "defence document" stressing the sector's beneficial impact on the wider economy. The report, commissioned by the UK Film Council, Pinewood Shepperton Studios and visual effects company Framestore, puts forward the industry's case in an effort to head off any measures contained within the government's austerity package that would reduce funding or remove tax relief for the sector. It contributed over 4.5 billion pounds to Britain's output last year. Analysts believe the industry's tax relief system is unlikely to be abolished -- given the need to incentivise production.
SCOTLAND FACES "TRIPLE ECONOMIC TSUNAMI", RETAIL CHIEF WARNS
Retail entrepreneur Sir Tom Hunter has warned that Scotland faces a "triple economic tsunami" of reduced state spending, falling rates of business start-ups and markedly increased unemployment. Research carried out by the Hunter Centre for Entrepreneurship at Strathclyde University showed that last year business start-up rates in Scotland reached their lowest levels since they began being recorded ten years ago. Commenting on the findings of the centre, Hunter called for "aggressive fiscal policies" as well as "ground level support for entrepreneurial start-ups".
ADVERTISING INDUSTRY OPTIMISM SPARKS CONCERN ON COSTS
GroupM, the media buying division of advertising giant WPP (WPP.L), has upwardly revised its growth forecast for the UK advertising market, in response to a startling improvement in spending since the start of the year. The company raised its 2010 forecast from flat to growth of 4.2 percent and a value of 11.8 billion pounds. The increased optimism in the industry has led to concern over advertising price inflation, with clients having budgeted on the assumption of zero growth in the sector.
BEGBIES EXPECTS RISE IN INSOLVENCIES
Insolvency specialist Begbies Traynor (BEG.L) said it is on track to deliver expectations of a 10.3 million pound profit update for the year ending April 30 2010, as it reported its tax consulting unit returned to profitability in the second half. Despite the proportion of corporate insolvencies in Begbies' second half to April 30 being relatively flat in comparison to the first half, the firm said it remained confident of a rise in companies becoming insolvent due to the recession. Executive chairman Ric Traynor said there are many "zombie businesses, which are effectively the walking dead and have no chance of actually coming back to life". Begbies is expected to announce its profits on July 8.
500,000 OCADO CUSTOMERS GIVEN CHANCE TO BUY SHARES IN IPO
Online food retailer Ocado is inviting customers who have spent more than 300 pounds since the beginning of 2010 to buy shares in the firm to facilitate its market listing on the London Stock Exchange. The start-up, which is seeking a one billion pound float by mid-July, agreed an exclusive ten year supply deal with supermarket chain Waitrose to demonstrate the feasibility of its business model to investors. Chief executive Tim Steiner defended the unique move to tap private investors for its initial public offering, saying the "banks would prefer us not to do this because it is simpler to do an institutional float". Meanwhile, finance director Andrew Bracey said he predicts retail investors buying anything from about 20 to 50 million pounds of shares if the IPO goes ahead.
GROWTH IN FROZEN FOOD SALES HELPS LIFT ICELAND
Iceland Foods Group [ICFDG.UL], owner of retailers Iceland and Cooltrader, has delivered a rise in pre-tax profits by 19.4 percent to 135.4 million pounds, bolstered by buoyant frozen food sales. The acquisition of 74 new outlets for Iceland was credited with the sales growth through the year ending in March, 51 of which were bought from Woolworths. Chief executive Malcolm Walker said buying Woolworths outlets helped give the retail group "a lift in one fell swoop". The foods group, which is now majority owned by the Icelandic government, is expected to continue opening new retail outlets but at a slower rate, with about 20 new sites expected in 2011.
WORKSPACE CLOSE TO DEBT REVAMP DEAL
Commercial property provider Workspace (WKP.L) said a rise in like-for-like occupancy to 84.7 percent from 82.9 percent in March 2009 helped secure an eight percent rise in trading profit to 10.8 million pounds. The developer of flexible business space in London reported a pre-tax profit of 26 million pounds, reversing the 360 million pound loss it posted in 2009. Adding to the firm's optimism was news that Workspace has secured a 199 million pound debt facility with GE, ahead of its extension date of August 2010 and is in negotiations with a group of lenders for a new five-year facility worth 200 million pounds. Chief executive Harry Platt said occupancy enquiries were at a good level and forecast "some recovery under way".
FALKLANDS EXPLORER SET FOR 40 MILLION POUND CASH CALL
Aim-listed oil firm Rockhopper (RKH.L) is set for a 40 million pound cash call, after working with broker Canaccord Adams to sound out institutional investors to take part in an accelerated book build. The group, the first to find oil on the Falkland Islands, will use the money raised from the placing to pay for part of the well and flow testing of its Sea Lion discovery. Rockhopper intends to raise less than ten percent of its market value, in order to avoid triggering pre-emption rights, and is understood to be considering a larger equity raising later in the year when it plans to move to the main market and enter the FTSE 250.
Prepared for Reuters by Durrants