PRESS DIGEST - British business - Feb 27

The Times
BLOW FOR INVESTORS IN ENTERTAINMENT RIGHTS
Entertainment Rights has said it was in advance
talks with a number of bidders. However, investors were likely
to be left out of pocket as offers on the table were not enough
to recover its debt of about 130 million pounds. Despite
attempts to sell the group in its entirety, potential buyers are
only interested in taking on its assets and operations.
Prospective bidders are understood to include Apax-owned HIT
Entertainment and Cookie Jar Group. Shares in the group plunged
10.55 per cent to 16 pence.
GKN CUTS JOBS AND DIVIDEND
GKN has announced another 2,400 job cuts, bringing
the total number of losses at the group to nearly 6,000, or 14
per cent of its global workforce. The British aircraft and motor
engineer also reported a 130 million pound loss for 2008 and
suspended its dividend for the first time in 29 years. GKN
issued a bleak forecast for this year and was unable to rule out
a further round of redundancies if conditions continue to
deteriorate.
EXPECTED INVESTOR BACKING PUTS WILLIAM HILL ON A SAFE BET
William Hill is to launch a 350 million pound rights
issue as part of a 1.2 billion pound debt refinancing. The share
issue, to be fully underwritten by adviser Citigroup, is tipped
to be priced at a discount of 40 per cent to its share price of
246.75 pence. The decision to tap investors for new equity will
inevitably result in a decision to scrap the final dividend,
which analysts had forecast would be reduced to conserve cash.
The refinancing will ease the covenants but at the cost of a
higher interest rate.
Daily Telegraph
WHISTLEBLOWER SAYS HBOS CHIEF GIVEN RISK WARNINGS
Paul Moore, former head of risk at HBOS , has told
the Treasury Select Committee that ex-chief executive Andy
Hornby was personally and specifically warned the bank and its
clients were "at risk" if the markets turned. The whistleblower,
whose original claims that the bank's former management ignored
risk were strongly denied a fortnight ago, delivered a 53-page
document full of fresh claims to the committee. The document
alleges that Moore met with Hornby on March 5 2005 "to give him
an early briefing to warn him of controls failures."
STV TO PULL PLUG ON MORE ITV NETWORK SHOWS
STV Group will seek to broadcast more home-grown shows in
2009 by showing less ITV Network programmes. The
Scottish media company reported full-year results on Thursday
showing an 11 per cent increase in regional advertising revenues
as more domestic content was introduced into its schedule.
Pre-tax profits rose from 4.4 million pounds in 2007 to 12.3
million pounds, but revenues dropped from 185 million pounds to
145 million pounds due to the loss of income from the sale of
Virgin Radio and Primesight.
BBA AXES 350 JOBS AS PRIVATE JET TRAVEL FALLS
BBA will cut 350 jobs this year due to a collapse in
demand for private jet travel. BBA provides services for
businesses and commercial jets and suffered a 20 per cent fall
in demand for private jet travel in the last quarter of 2008.
BBA, which makes 80 per cent of its revenue in North America,
announced almost all of the job losses will be made in North
America. Chief executive Simon Pryce said he is "not planning on
(demand) recovering in 2009" but added the company is well
placed to cope in "very volatile and tough conditions".
The Independent
LLOYDS SEEKS ITS OWN TERMS FOR ASSET SCHEME
Negotiations are taking place between Lloyds Banking Group
and the Treasury over the terms of its involvement in
the government's asset protection scheme. Shares in Lloyds
jumped after Royal Bank of Scotland was given generous
terms by the government on Thursday. The terms require
participating institutions to retain a "first loss" risk, which
is 90 per cent insured by the state. The losses suffered by HBOS
make it even more likely that Lloyds will agree to take
part in the scheme, as the most probable alternative is full
nationalisation.
PROFITS FALL 34 PER CENT AT CENTRICA'S BRITISH GAS UNIT
Although Centrica's gas production division more
than doubled its profits to 1.2 billion pounds in 2008 thanks to
energy prices rises, the group's total profits fell 0.4 per cent
to 1.9 billion pounds. This was largely due to falling profits
at the company's British Gas retail business, which totalled 379
million pounds in 2008 compared with 571 million pounds in 2007.
Centrica claims that the figures show that calls last year for a
windfall tax on companies enjoying the soaring energy prices
would have been a mistake.
BERKELEY RAISES 50 MILLION POUNDS FOR LAND ACQUISITIONS
The housebuilder Berkeley has boosted the amount
of funds it has to spend on land acquisitions with 50 million
pounds raised from shareholders, who bought six million shares
(five per cent of the company's share capital). The sale was
supported by the group's largest shareholder, the Saudi Arabian
Saad, and underwritten by UBS. "The current market weakness
presents exceptional value-creation opportunities for strong
businesses," stated Berkeley, claiming that the added funds now
provided it with a total of 300 million pounds to invest in new
land.
The Guardian
JJB REJECTS PAYOFF CLAIM FROM ITS CHIEF EXECUTIVE
Chris Ronnie, the suspended chief executive of sportswear
chain JJB, issued a statement on Thursday through his lawyers
Pannone that said he had "tendered his resignation after a
financial settlement was reached at a meeting on Tuesday 24
February 2009". However, JJB claimed in a separate statement to
the London Stock Exchange that "no such agreement has
been reached and accordingly Mr Ronnie's resignation is not
effective." Ronnie was suspended from the company a month ago
following the launch of an investigation regarding the details
surrounding the seizure of his 27 per cent stake in the retailer
by the Icelandic bank Kaupthing.
TRINITY MIRROR SCRAPS FINAL DIVIDEND AFTER PLUNGE
The newspaper group Trinity Mirror revealed on
Thursday that it has made 1,200 people redundant since the start
of 2008 as part of a cost cutting programme. The group also
cancelled its final dividend and warned that advertising
revenues had fallen around 30 per cent in the first two months
of 2009. Overall, the group made operating profits of 145.2
million pounds in 2008, down 22 per cent on the previous year,
and a statutory net loss of 73.5 million pounds after taking
into account non-recurring charges including a 190 million pound
impairment charge on the value of papers in the south of England
and the Midlands.
NATIONAL EXPRESS CHIEF COMES OUT FIGHTING AS RECESSION GRIPS
The transport operator National Express announced in
the company's full year results on Thursday that it is to cut
its dividend payment and probably implement further staff cuts -
on top of 750 redundancies already announced - in order to keep
hold of the group's rail franchise. National Express' rail
business is becoming increasingly expensive to run due to the
structure of payment commitments made to the government when the
east coast mainline franchise was first agreed. National Express
announced a six per cent increase in revenues to 2.76 billion
pounds and pre-tax profits of 109.9 million pounds, down from
149.9 million pounds.
The Times
TEMPUS
RSA [Buy on weakness]
Capita [Hold]
Rank Group [Worth holding]
Daily Telegraph
QUESTOR
RSA Insurance [Hold]
Capita [Buy]
The Independent
INDEPENDENT INVESTMENT COLUMN
Capita Group [Hold]
British American Tobacco [Buy]
Hays [Tentative buy]
Prepared for Reuters by Durrants

Keywords: PRESS DIGEST British business Feb 27

Keywords: PRESS DIGEST British business Feb 27

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