PRESS DIGEST - British business press - July 15

The Times

BRITISH AIRWAYS WEIGHS BOND ISSUE AS IT SEEKS TO SHORE UP

British Airways(BAY.L) is to ask investors whether they would back a cash safety net against a poor summer holiday season or cabin crew strike as the carrier expects to burn through 400 million pounds of reserves this year. Chief executive Willie Walsh said he had spoken to institutions about issuing a convertible bond to shore up the balance sheet, on which it would pay interest, and holders would be entitled to convert the bond into BA shares at an agreed price.

RATES LIKELY TO STAY AT RECORD LOW AFTER DROP IN INFLATION

Concerns that price pressures in Britain may prove stubbornly persistent faded, as inflation on the consumer prices index dropped below its two per cent target last month for the first time in two years, hardening expectations that the interest rate will remain at 0.5 per cent until next year. Analysts said the Monetary Policy Committee was also now more likely to increase the scale of the Bank's quantitative easing scheme to pump newly created money into circulation to help kick start growth.

RSA BUYS INSURANCE AGAINST HIGHER PENSION COSTS

Royal & SunAlliance(RSA.L) has taken out a 1.9 billion pound policy with Goldman Sachs against the risks of paying pensions to more than half of its 15,000 former employees if they live longer than expected, and also covers RSA against the risk of market fluctuations and interest rate changes. The deal with Rothesay Life, Goldman's specialist insurer, and facilitated by an asset swap, is the largest example of a so-called "pensions buy-in" yet seen in Britain.

Tempus

BG Group(BG.L) [Hold on]

James Fisher(FSJ.L) [Buy on weakness]

Alphameric [Pass]

Daily Telegraph

JARVIS JUMPS DESPITE DELAYED TRACK WORKS

Delayed track replacement work cost the rail contractor Jarvis 11 million pounds last year, meaning the company made an overall annual loss of around six million pounds despite full-year pre-tax profits of 5.1 million pounds. Recognition that track replacement losses were a one-off and as a consequence of decisions by Network Rail meant that shares in Jarvis rose 18.4 percent to 7.4 pence. The chairman Steven Norris commented that the results were in line with the company's expectations, but warned against complacency as difficult trading conditions continue.

BRITVIC TOPS FORECAST AS FIZZ RETURNS

The soft drink company Britvic (BVIC.L) has announced it expects to beat its profit forecasts this year due to a marked increase in sales of fizzy drinks and Robinsons squash since the start of the economic downturn. The recession has driven consumers to buying less expensive beverages, whereas in recent years many were buying costlier juices and smoothies. "Consumers have switched their spending to staple categories they understand", acknowledged Britvic's chief executive Paul Moody.