PRESS DIGEST - British business - Feb 27

The Times

BLOW FOR INVESTORS IN ENTERTAINMENT RIGHTS

Entertainment Rights ERT.L 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 (GKN.L) 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 (WMH.L) 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 HBOS.L, 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 (ITV.L) 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 (BBA.L) 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 (LLOY.L) 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 (RBS.L) 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 HBOS.L 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 (CNA.L) 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 BKG_u.L 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 (LSE.L) 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 (TNI.L) 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(NEX.L) 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 (RSA.L) [Buy on weakness]

Capita (CPI.L) [Hold]

Rank Group (RNK.L) [Worth holding]

Daily Telegraph

QUESTOR

RSA Insurance (RSA.L) [Hold]

Capita (CPI.L) [Buy]

The Independent

INDEPENDENT INVESTMENT COLUMN

Capita Group (CPI.L) [Hold]

British American Tobacco (BATS.L) [Buy]

Hays (HAYS.L) [Tentative buy]

Prepared for Reuters by Durrants