PRESS DIGEST - Financial Times - June 25

The Financial Times

WELFARE DELIVERY OPENED UP

The government will announce plans on Wednesday to open up the operation of the welfare system by encouraging the private and voluntary sectors to bring forward successful business models in a bid to improve service delivery. The move, seen as a way to minimise the role of the state, will create a huge market for outside contractors who could express interest for every kind of service under a so-called "right to bid". "This is us saying very clearly the only limit is the quality of service and the imagination of the provider," said James Purnell, Work and Pensions Secretary. A commissioning team, which will report to Purnell and his top civil servant, will evaluate each offer.

PRIVATE GROUPS TO GET BIGGER ROLE IN PRIMARY HEALTHCARE

David Nicholson, National Health Service chief executive, has said the private and voluntary groups will get a bigger role in supplying community and primary care services. Nicholson spoke of plans under which community services would be transformed into free-stand foundation trusts, while staff would be encouraged to create social enterprises and sell their services back to the NHS. "The issue is that primary care trusts need to stand with their population and with their patients. That now has to be their focus, not their providers," said Nicholson. The Department of Health is looking to hire executives for the chairman and chief executive roles for the "cooperation and competition" panel that will be established this autumn.

ENERGY INDUSTRY HINTS AT SHARP RISE IN BILLS

Energy industry executives warned of steep rises in the forthcoming bills after a meeting with MPs from the business and enterprise committee on Tuesday. The industry managers blamed the hike in retail costs on mounting wholesale gas prices, but independent suppliers accused the top six energy groups for high retail prices. Sam Laidlaw, chief executive of Centrica (CNA.L), said: "For next winter we are buying gas at one pound a therm and after distribution and transportation costs selling it at 60 pence a therm. That is not a sustainable model." There was no official disclosure on the size of the increases but forecasts from industry executives after the meeting varied from 20 percent to 50 percent.

SAFESTORE PROFITS RISE ON "RESILIENT" BUSINESS MODEL

Safestore (SAFE.L) has posted a 17.6 percent rise in pre-tax profits, saying its business model had proven to be resilient. Pre-tax profit rose to 28.5 million pounds for the six months to April 30 compared with 24.2 million pounds from the year before, while basic earnings per share dropped 3.8 percent to 10.96 pence. The opening of six new stores drove the group's property portfolio up to 645 million pounds for the same six months, a 10.5 percent rise. Steve Williams, the self storage operator's chief executive, said: "We are seeing inquiries holding up well. The housing market will affect us if it gets much worse, but we are not reliant on that market."

RIVAL SUITORS FACING ONE-BID ENODIS AUCTION

U.S. groups Manitowoc (MTW.N) and Illinois Tool Works (ITW.N) will clash over Enodis ENO.L in a "one shoot, sudden death, shoot out" auction process next Monday if the industrial catering equipment maker remains in play by 4.30 p.m. on Friday. The Takeover Panel, the body which oversees the process, said on Tuesday there should be "only one round in the auction procedure", with each company obliged to offer five pence in excess of any previous highest bid. The move contrasts with the procedure used during the bidding for Corus by Brazil's Tata and CSN. Shares in Enodis, whose clients include McDonald's and Starbucks, fell one penny at 316 pence on Tuesday, a 22 pence premium to the current recommended price.

MOSS BROS SALE

Roland Gee, non-executive director of Moss Bros (MOSB.L), and his brother Nigel, have sold a 4.3 percent stake in the menswear chain to a trust controlled by Simon Berwin, owner of Leeds-based suit specialist Berwin & Berwin. The stake, which represented the majority of the holding controlled by the Gee family, was worth around 138,000 pounds at Tuesday's closing price of 34.25 pence. The family shareholders had previously helped to scupper Baugur's 40 million pound indicative bid for Moss Bros.

ITV FALLS DESPITE ON-SCREEN SUCCESS

ITV (ITV.L) saw its share of commercial impacts -- the number of times an adult watches a 30 second commercial -- on its terrestrial ITV1 channel rise from 30.2 percent in April to 31.9 percent in May. The broadcaster outperformed commercial rivals Channel 4 and Five, which recorded falls from 12.6 percent to 11.5 percent and 9.1 percent to 8.5 percent respectively. However, the news did not benefit ITV's share price, which reached an all-time low of 48.6 pence on Tuesday, before recovering to close at 49.8 pence, a fall of 1.8 percent.

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