PRESS DIGEST - British business - Oct 1

The Times

GROWTH AT ERNST & YOUNG NARROWS GAP WITH RIVALS

Ernst & Young, the accountancy firm, reported an eight percent increase in full-year revenue to 1.4 billion pounds on Wednesday, boosted by the integration of the company's UK operations with those in the rest of Europe, Africa and the Middle East. However, partners at the group, which is the smallest of Britain's big four accountants, were forced to take a lower share of the profits. Ernst & Young's growth outpaced that of bigger rivals PricewaterhouseCoopers and Deloitte, while KPMG, the other big four accountancy firm, has yet to announce its results for 2008-09.

INDIGOVISION BENEFITS FROM RECESSION-LED SURGE IN CRIME

British technology company IndigoVision (ID2A.L) reported a 60 percent leap in full-year pre-tax profits to 3.3 million pounds on Wednesday, taking advantage of a recession-led surge in crime. The Edinburgh-based maker and developer of Internet-based video security systems for casinos, airports, shopping centres and national border crossings said demand for its products had been robust as the economic downturn had been pushing up crime levels. Sales increased 43 percent to a record 26.4 million pounds.

BIG SPENDERS ABROAD HELP TO NEARLY DOUBLE ASOS SALES

Asos (ASOS.L), the online retailer, reported a 47 percent increase in turnover on Wednesday, helped by a growing army of free-spending overseas customers. International sales in the company have more than doubled, comprising now a quarter of its revenue. Chief executive Nick Robertson said changing delivery fees to a flat rate as well as the deterioration in the value of the pound made big overseas orders more appealing. Shares in the company fell 14.5 pence, or four percent, to 350 pence, on Wednesday following a decline in gross margin.

The Daily Telegraph

TONY CAPLIN QUITS PANMURE GORDON

Tony Caplin has resigned from his role as Panmure Gordon's (PMR.L) non-executive chairman to pursue other business interests, the stockbroker has said. A formal process is now to be started that will lead to the selection of Caplin's successor. Meanwhile, Simon Heale, an existing non-executive director, will undertake Caplin's duties. Caplin said: "Given the opportunities open to the firm I am unable to devote as much time to the role as I believe it merits."

CARE UK RISES AS IT CONFIRMS BID TALK

Care UK (CUK.L), the nursing home and health care operator, said on Wednesday it had rejected an unsolicited takeover approach from private equity group Bridgewater Capital. The news sent the shares soaring 27 percent to 377.5 pence. In a statement to the stock exchange, the listed company's board said: "The approach was very preliminary in nature, and having discussed it with its advisers Investec, the board rejected it." Bridgwater is believed to be backing a management buy-out of the business.

SMITHS GROUP CLOSES FINAL SALARY SCHEME

Smiths Group (SMIN.L) has become the latest company in the UK to close its final salary pension scheme as it faces a 339 million pounds deficit. Chief executive Philip Bowman said employees and unions had accepted the move. The FTSE 100 company's shares rose by six percent on Wednesday to close at 888.50 pence, after the company announced bigger than expected cost reductions. It also posted a 16 percent increase in pre-tax profit to 370.8 million pounds, although profit fell two percent to 371 million pounds after taking out one-off costs in 2008.

The Independent

"WOOLWORTHS" SET TO RETURN TO THE HIGH STREET NEXT MONTH

Alworths, a new "Son-of-Woolworths" chain, will open its first batch of stores on November 5, less than 10 months after Woolworths' final stores closed. The new chain, which will sell everything from picture frames to pick 'n' mix confectionery, will be headed by Andy Latham, former head of stores and concessions at the collapsed retailer. A significant amount of Alworths employees are expected to be drawn from the ranks of the 30,000 laid-off Woolworths employees who lost their jobs when the business fell into administration at the end of 2008.

BA HOPES TO SEAL IBERIA MERGER BY NEW YEAR

Willie Walsh, chief executive of British Airways (BAY.L), has said the airline's merger with the Spanish flag carrier Iberia (IBLA.MC) could be completed by the end of 2009. Walsh conceded the 14-month negotiations had gone on for too long, adding that last summer's appointment of Antonio Vazquez as Iberia's new chairman had given a new momentum to the 4.2 billion pounds all-shares deal.

BLACKS LEISURE TO CLOSE 89 LOSS-MAKING STORES

Blacks Leisure (BSLA.L), the outdoor clothing and camping retailer, has announced plans to shut down 89 loss-making stores. The company, which has come under increasing financial pressure, also said 50 jobs at its head office in Northampton were likely to be axed. The outdoor specialist described the 89 loss-making stores as a "considerable drag" on its outdoor arm and said further restructuring was still required to meet banking terms.

The Guardian

KRAFT MUST MAKE FIRM BID FOR CADBURY WITHIN 40 DAYS, SAYS TAKEOVER PANEL

The Takeover Panel has ordered Kraft Foods (KFT.N) to make a firm bid for Cadbury (CBRY.L) by November 9 or walk away for at least six months. The ruling comes a week after the British confectionery giant asked the panel to issue the American company with a "put up or shut up deadline" to force it to make its intentions clear. In late August, Cadbury rejected Kraft's unsolicited offer of 745 pence a share as seriously undervaluing the company. The panel's decision is understood to add pressure on Kraft to launch a higher bid, with Cadbury shareholders looking for between 850 pence and 900 pence, valuing the company at about 11.5 billion pounds.

JOHN LEWIS JOBS AT RISK AS CALL CENTRES CLOSE

John Lewis [JLP.UL], the department store chain, revealed on Wednesday that it planned to close its in-store call centre operation, in a job-threatening move for hundreds of staff. The centres are being shut down in favour of two big new "contract centres" which will open in 2010 in Glasgow and either Manchester or Newcastle. The company, which employs about 700 people in its call centres, said there would be job openings at the new centres, which will take on 500 people, adding that staff would also have the opportunity to be redeployed into shop floor roles in the stores. A spokesperson for the employee-owned business said it was not yet known how many workers would be transferred to new positions and therefore how many were at risk of losing their jobs.

Prepared for Reuters by Durrants