PRESS DIGEST - Financial Times - Oct 1

Financial Times

JOBLESS FORECAST CUT BY MINISTERS

Ministers have revised their forecasts for the number of long-term unemployed after a slower than expected rise in benefit claimants and warned welfare-to-work providers of the flagship Flexible New Deal to expect about 40 percent fewer jobseekers. Some providers have already laid off staff before the FND programme begins, but the reduced numbers are expected to save 75 million pounds of public money. Employment Minister Jim Knight said the government was not going to apologise for fewer people being out of work than previously expected.

WHOLESALE GAS PRICES PUMP UP PROFITS FOR SUPPLIERS

According to consultants Energy Contract Company, profit margins at gas suppliers are higher than at any time in the past ten years because the plunge in wholesale prices has not been matched by a drop in household bills. The level of profit generated is reliant on the timing of the purchase of the gas, and if bought during the summer, an estimated 20-30 percent of a household bill could be profit. Garry Felgate, chief executive of the Energy Retail Association, said suppliers purchased gas well in advance to protect consumers against market volatility.

RECESSION SPURS RISE IN UNFAIR DISMISSAL CLAIMS

According to figures published by the Tribunals Service, claims for unfair dismissal increased by 30 percent in the year to the end of March. Complaints related to the failure to consult on redundancies have more than doubled. Law firm Eversheds said employers will this week face a "double whammy" of an increase in statutory redundancy entitlements and unfair dismissal compensation coupled with court recommendations for increased discrimination rewards.

BLACKS POISED TO CONTACT LANDLORDS FOR LEASE EXITS

Blacks Leisure (BSLA.L) and its advisers KPMG are set to contact its landlords in order to set up a company voluntary agreement by November. Blacks is expected to offer landlords six months' rent in exchange for allowing it to withdraw from the leases on 89 stores it hopes to close. The company said: "The majority of the stores to be closed have not traded profitably for years." The plan is similar to those recently signed by JJB Sports (JJB.L) and Focus DIY. Blacks also announced it would look to axe 50 jobs at its head office and has been consulting staff in about 400 stores about further redundancies.

NEW INTERNATIONAL STRUCTURE HELPS E&Y WEATHER DOWNTURN

Ernst & Young has reported revenue growth of eight percent, thanks to a new international structure that has helped it survive the economic downturn. The professional services group surpassed its sector peers by generating revenue of 1.38 billion pounds for the year to June 30. Globally, E&Y's revenues dipped 0.2 percent in local currency terms, while revenue in the U.S. dropped by 3.2 percent. Scott Halliday, managing partner for the UK and Ireland, said E&Y's tie-up between 87 of its partnerships across Europe, the Middle East, India and Africa had allowed it to shift staff between countries as needed.

MANGANESE STARTS MORE JOB-CUT TALKS

Hackney cab manufacturer Manganese Bronze (MNGS.L) warned of widening losses as it began consultations with workers over further job cuts. The group recently extended its summer shutdown amid falling demand and faltering sales, which gave rise to predictions that full-year losses would be worse than anticipated. Chief executive John Russell said the expected run-rate of sales indicated the business would not reach its break-even sales target of 2,000 vehicles a year. The company, which has begun production of a cheaper version of its taxi through a joint venture with Chinese carmaker Geely, hopes to reduce production costs by sourcing cheaper components in the country.

ASOS DISPLAYS CAUTION DESPITE SURGING SALES

Online fashion retailer Asos (ASOS.L) said extra costs incurred in expanding its product offering meant profits would be only slightly better than the same period last year, despite surging sales. The company said the strong sales seen during the recession had started to slow but that growth remained strong. Asos said it would concentrate on expanding its overseas business where sales rose 110 percent on the same period last year. UK sales were up 47 percent.

TRAVIS PERKINS UPBEAT ON RAISING MARKET SHARE

Geoff Cooper, chief executive of Travis Perkins (TPK.L), is confident that once the recovery takes hold the group can take market share from recession hit rivals who have had to scale down. This is despite the continuing struggles of the group's trade arm. The group has closed only one site since the market's 2008 peak -- compared with 600 closures across the sector. Sales at its retail division, which trades under the Wickes brand, were buoyed by the collapse of rival MFI -- with showroom sales rising 21 percent from the start of the year to September 26.

BA STILL HOPES TO CONCLUDE IBERIA DEAL

British Airways (BAY.L) chief executive Willie Walsh has said there is still a chance the airline could complete the proposed merger with Spanish carrier Iberia (IBLA.MC) before the end of the year. Walsh said talks were progressing but also restated his insistence that BA would accept no less than a 53 percent stake in the merged company. Walsh also said BA was interested in making a "very credible" offer for BMI if its majority owner Lufthansa decides to sell the loss-making airline.

SMITHS COMBATS "TOUGH" YEAR WITH CUTS

Higher than forecast cost savings at engineering conglomerate Smiths Group (SMIN.L) helped mitigate a sharp fall in underlying profits. Chief executive Philip Bowman referred to what he described as a "desperately tough year" but noted the group was well positioned to benefit from the economic recovery. Excluding exceptional items and the effect of exchange rate changes, sales at the group fell seven percent and profits fell 21 percent.

Prepared for Reuters by Durrants