Newspaper round-up

LONDON (Reuters) - Here are the business headlines from Thursday's newspapers.

Financial Times

BROWN CONFIRMS 20 PERCENT RATE TALK

Tory leader David Cameron on Wednesday challenged Gordon Brown that the Treasury had considered raising value-added tax to 20 percent or even higher in 2011, thus concealing a "tax bombshell". Mr Brown responded by saying that "we considered all options but rejected options", and that "we chose options that were fairest to ordinary and hard-working families". Chancellor Alistair Darling and the prime minister argued that they rejected the rise in VAT because it was fairer to raise other taxes, including creating a 45 pence income tax rate for earnings above 150,000 pounds.

CONSUMER SPENDING FALLS IN THIRD QUARTER

Data from the Office for National Statistics has revealed a drop in consumer spending for the second quarter in a row. The 0.2 percent fall in spending between July and September follows the 0.1 percent decrease in the quarter to June, while gross domestic product fell by 0.5 percent in the third quarter. Most of the contraction came from a 2.4 percent drop in business investment, especially in housebuilding, and Hetal Mehta at the Ernst & Young Item Club said it was now clear that only government spending was contributing to growth.

N ROCK RAISES MORTGAGE RATES

Northern Rock NRK.L on Wednesday increased the rates of its most competitive home loans just 10 days after reducing them, while HSBC (HSBA.L) withdrew one of its popular mortgage rates, a lifetime 0.99 percent above the base rate tracker, due to business volumes three to four times above normal levels. The moves will be a blow for the government, which now owns Northern Rock, as it has been pushing high-street lenders to pass on recent base rate cuts to customers. Northern Rock said "we will adjust our competitive standing at different times to attract or moderate business flows".

BANKS PULL PLUG ON WOOLWORTHS

Thirty thousand jobs were placed at risk on Wednesday night after Woolworths succumbed to the drop in consumer spending and tightening of credit availability and fell into administration. Directors appointed Deloitte as administrator after they failed to get enough backing from banks to weather a cash crisis, and comes in spite of late moves by the government and BBC Worldwide to salvage the situation. The department of business brokered a deal with Woolworths and its bankers which will ensure that staff will be paid until the end of the year, even though an administration has occurred.

P&G TAKES STAKE IN LOSSMAKING OCADO IN BOOST TO ONLINE RETAILER

Procter & Gamble (PG.N) has paid five million pounds for a one percent stake in online retailer Ocado. The move is the first foray into a retail business for the maker of Fairy Liquid and Oil of Olay, and is intended to help it better understand how consumers use the internet. "We think it is a huge research opportunity. They have a unique business and we can learn from it", P&G said.

MFI GOES INTO ADMINISTRATION

MCR has been appointed administrator of MFI after the kitchen retailer went into administration on Wednesday night. MFI was bought from Merchant Equity Partners for a nominal sum in September by a management team led by chief executive Gary Favell, but saw a sharp deterioration in sales in October. Mr Favell said at the time of the buy-out that it would "safeguard employees within the store network", but if MCR fails to find a buyer then these jobs will be lost.

'ROBUST' UNITED UTILITIES ON COURSE FOR RAISED DIVIDENDS

Shares in United Utilities (UU.L) closed down 26 pence at 618 pence on Wednesday, after it recorded a 4.9 percent rise in revenues to 1.2 billion pounds in the six months to September 30. An increase in bills helped grow operating profit four percent to 362 million pounds, while pre-tax profit rose from 252 million pounds to 306 million pounds. The UK's largest listed water company said its "robust financial position" should allow it to hit a revised dividend target of real growth, of retail price index plus two percent, for the next two financial years.

ASSURA SET FOR CUTS AFTER REVIEW

Revenue for the six months to September at Assura (AGRP.L) jumped 60 percent to 22.3 million pounds, following increased rental income and higher sales at its wholly owned pharmacies. The healthcare services company made a pre-tax loss of 40.8 million pounds after writedowns on its portfolio of investment and development properties, compared with a profit of 26.6 million pounds for the same period last year. Shares in Assura closed at 32 pence on Wednesday, up one pence.

ITIS IN RED AFTER DOUBLE BLOW

Itis Holdings ITIS.L returned a pre-tax loss of just below one million pounds for the six months to September, compared with previous profits of 2.2 million pounds, on revenues of 8.3 million pounds, up from 8.1 million pounds. Stuart Marks, chief executive, said the vehicle telematics company was hit by both a sharp fall in the sales of luxury cars built with its navigation system, and soaring fuel prices, which eased road congestion and resulted in fewer calls being made to ascertain traffic conditions.

DE LA RUE CHIEF EXECUTIVE TO LEAVE

Leo Quinn is to leave his position as chief executive and director of De La Rue (DLAR.L) at the end of the year. Mr Quinn said that "It's a personal decision" and "I've completed the strategy I rolled out in 2004". James Hussey, currently managing director of the company's security paper and print division, will succeed Mr Quinn on January 1 2009.

The Times

QINETIQ PRIMED FOR ASSET SELL-OFF TO DEFEND ITS FUTURE

Defence researcher QinetiQ (QQ.L) is to sell several of its non-core businesses in the new year as it seeks to invest more capital into security and counter-terrorism. Chief executive Graham Love said the disposals would raise tens of millions of pounds and that the buyers are likely to be other defence groups. Love stressed that the move "is about realising cash for future investment and is not about downsizing the business". The group said it was well-placed to benefit from public spending on defence since "ministers had made it clear that it is their priority to support the troops in active operations".

QUICK MOVE BY SAVILLS FINANCE CHIEF

Mark Dearsley, the finance director of estate agents Savills (SVS.L), is stepping down in February. His exit will mark the second departure from Savills this year and comes just weeks after the company issued a profit warning. The group's shares are 66 percent cheaper than their peak of 701 pence in May 2007. Chief executive Jeremy Helsby said Dearsley was leaving the business "in a strong financial position and well-placed to take advantage of future growth opportunities".

COMPASS SERVES UP HEALTHY FIGURES

Catering giant Compass (CPG.L) reported a sharp rise in profits and said that its UK division was beginning to show benefits. Pretax profits for the year to September 30 soared 33 percent higher to 589 million pounds after revenues climbed 5.9 percent to 11.4 billion pounds. The UK unit saw operating profits increase by one million pounds to 108 million pounds.

The Daily Telegraph

STELIOS WARNS SHAREHOLDERS OF WIPE-OUT

EasyJet (EZJ.L) founder Stelios Haji-Ioannou has intensified his dispute with the rest of the company's board by warning that shareholder value could be wiped out unless the company cuts back on aircraft purchases. Haji-Ioannou is stunned by plans to acquire 109 Airbus aircraft by 2012 with a list price of 5.1 billion dollars amid the recession and is calling for a two-year slowdown in aircraft deliveries. The non-executive director believes EasyJet could struggle to fill the planes profitably if governments prove reluctant to let its competitors fail. EasyJet spokesman Toby Nicol defended the move, arguing that 45 of the new planes were replacement aircraft.

EX-CHRYSALIS CHIEF JOINS QUEUE TO BID FOR FIVE GLOBAL STATIONS

Phil Riley, the former head of Chrysalis Radio, is leading a private equity bid to buy five radio stations worth between 30 million pounds and 40 million pounds from Global Radio. Industry sources claim that five potential buyers are likely to table bids ahead of Christmas, with the stations due to be handed over in spring. Other known bidders include media group Bauer and Premier Digital Broadcasting, with at least two other private equity groups also thought to be in the final round of bidding. Global has been forced to sell the assets to avoid being referred to the Competition Commission following its takeover of GCap's 71 stations last year.

BUOYANT DE LA RUE NAMES NEW CHIEF

De La Rue (DLAR.L), the maker of bank notes in many currencies, has named James Hussey as its new chief executive as soaring demand for cash saw the group's pretax profits grow by 17 percent in the first half. Current chief executive Leo Quinn will step down in the new year, relinquishing the role to Hussey, who is currently managing director for security paper and print. The company said revenues were up 14 percent to 213.9 million pounds from increased demand for notes in circulation, security features and different currencies.

The Guardian

GOVERNMENT ACTUARIES FACE INVESTIGATION OVER FAILURE TO PREVENT EQUITABLE LIFE LOSSES

The Accountancy and Actuarial Discipline Board - the independent body for the professions - is investigating the "conduct of certain members" over their alleged failure to identify the problems that led to heavy losses at Equitable Life. If evidence of misconduct is found, the board would be able to ban people from practicing and impose unlimited fines. Such a development would prove embarrassing for the government, which has been resisting calls to compensate those who lost their money in the scandal. The board has not named any individuals, but the probe is thought to include Chris Daykin, who was the chief government actuary.

BRITVIC ENJOYS PROFIT RISE AS CONSUMERS TRADE DOWN

Soft drinks manufacturer Britvic (BVIC.L) posted a 14 percent increase in full-year profits on Wednesday. The group said profits rose to 70.1 million pounds as its key brands gained market share. Chief executive Paul Moody said: "Consumers this year traded from premium into value soft drinks categories, such as into cola and juice drinks and away from more expensive categories such as smoothies and pure juice".

SPEEDFERRIES TO BE WOUND UP WITH LOSS OF 100 JOBS

Over 100 jobs are to be lost following administrators' failure to find a buyer for cross-Channel ferry operator SpeedFerries. The company was placed into administration earlier this month after the Boulogne port authority seized its vessel in a dispute over unpaid taxes and charges. Administrators from Ernst & Young said they explored every possible means of saving the business, but were unable to find a buyer.

The Independent

DOWNTURN HITS TOOL AND EQUIPMENT HIRE FIRM

Speedy Hire (SDY.L), the tool and equipment hire company, has cut 10 percent of its staff in an effort to cut costs amid the economic downturn. Chairman David Wallis said the group would axe 492 of its 5,000 staff and close 38 sites. The move should allow the business to save 24 million pounds. Speedy Hire announced that pretax profits in the first half had climbed to 23.8 million pounds and that revenues were up by over a fifth to 256.2 million pounds.

M&B SCRAPS DIVIDEND UNTIL 2010 TO TACKLE DEBTS

Pub group Mitchells & Butlers (MAB.L) ditched its final dividend on Wednesday as part of a bid to address its debt mountain. The group hopes to save 60 million pounds a year through the move and will not reinstate the payout until at least 2010, when its unsecured bank facility should fall below 300 million pounds. The company is also planning to curb its spending next year with capital expenditure set to drop from 193 million pounds this year to 120 million pounds in the year to September 2009. M&B added that it continues to seek opportunities to sell off part of the business, but warned that the credit crunch made deals less likely as it is not prepared to divest assets "materially below" their fair value.

C4 SWITCHOVER FUNDING SHELVED

The government has put plans to fund Channel 4's switch to digital on hold after rescinding its application for European Commission approval of a 14 million pound injection from the BBC licence fee. The plan, proposed in June, required EC approval under state aid rules, but Culture Secretary Andy Burnham said that since notification was made, "the debate on the future of public service broadcasting in the UK has moved on significantly". A spokesman for C4 said the company supported the move. The government now intends to look at more wide-ranging funding proposals for the broadcaster and will put them before the EC when they are finalised.

Prepared for Reuters by Durrants