PRESS DIGEST - FINANCIAL TIMES - MARCH 2

Financial Times

SAVINGS BACK IN FASHION, SAY MAIN BANKS

The UK's biggest banks - HBOS HBOS.L, Royal Bank of Scotland (RBS.L) and Lloyds TSB (LLOY.L) have said that higher interest rates have dampened consumer demand for unsecured debt and credit cards and that consumers are instead saving more. Chief executive of HBOS Andy Hornby said that liquid cash savings were set to exceed 1,000 billion pounds ($1,959 billion) for the first time by the end of the year. Tim Breedon, chief executive of Legal & General (LGEN.L) also said a significant part of the population had shifted into savings mode.

RISE IN DEMAND FOR RENTED PROPERTY WILL CHEER LANDLORDS

A survey by the Royal Institution of Chartered Surveyors (Rics) has found that though residential yields - rent as a proportion of the cost of a home - have fallen to record lows and are now below the cost of borrowing, tenant demand for residential property is rising at its fastest pace for nine years. The survey found that 30 percent more chartered surveyors reported a rise than a fall in tenant lettings in February. The Rics report follows a survey this week by Paragon PAG.L, a buy-to-let lender, suggesting a big rise in average rents in the year to January. Rics also found that gross yields had fallen for a second consecutive quarter across all locations in the UK, reflecting recent house price inflation.

BAN ON LANCASHIRE DAIRY TO END

The European Commission is expected today to rescind a ban on products from the Lancashire dairy, Bowland Dairy Products, four months after the company shut down with the loss of 26 jobs. The company had to recall and destroy its curd cheese exports after the Commission last year said it found evidence of contaminated milk being used. Bowland indicated it would pursue legal action to try and win damages for losses caused by the dispute.

DEMERGED FILTRONA ENJOYS ORGANIC LIFT

Filtrona (FLTR.L) has reported a 9.2 percent increase in 2006 pre-tax profits to 54.6 million pounds on revenues 5.9 percent higher at 544.2 million pounds. Chief executive Mark Harper said he "felt very good" about organic growth, which was in line with expectations. The results, which marked the company's first full year since demerging from Bunzl (BNZL.L) in 2005, also showed that the security laminates unit, which supplies the UK passports and makes Corgi gas engineer ID cards, recorded good growth.

RATHBONE BROTHERS EYES ACQUISITION

The investment management company Rathbone Brothers (RAT.L) has reported a 27 increase in 2006 pre-tax profit, with chairman Mark Powell saying an acquisition was a possibility. The company said profit rose from 35.3 million pounds to 44.7 million pounds in 2006 on greater fees and commissions. Funds under management also increased 28 percent to 12.2 billion pounds.

KELLER RIDES US HOUSING DOWNTURN

Keller (KLR.L), the ground engineering specialist, has reported a better-than-expected 72 percent rise in pre-tax profits in 2006 to 83.7 million pounds, boosted by strong organic growth across its four regional divisions. Chief executive Justin Atkinson said the group generated 70 percent of its profits in the US. Total revenues also rose to 920 million pounds from 731 million pounds the year before.

CONNAUGHT REPORTS BUMPER ORDERS

Connaught (CNT.L) has issued a trading update for the six months to the end of February, saying it had received orders in excess of 350 million pounds, up from 240 million pounds previously. The company, which won a five-year 35 million pounds maintenance deal with Barnet Homes, a 13 million pound maintenance contract with South Essex housing, and a five-year 22 million pound asset management contract with Aldwyck Housing Association, said that its social housing and compliance divisions were trading in line with expectations.

MORE HORSES FOR COURSES AT ARENA

Arena Leisure (ARE.L) has reported a 30 percent increase in 2006 pre-tax profits to 5.8 million pounds. The company, which operates more than a quarter of the UK's horse races, is spending 32 million pounds to redevelop the course at Doncaster in time for St. Leger, the world's oldest classic horserace, in September. Arena staged 2,388 races last year, a ten percent increase from 2005.

LAND BOOST HELPS UK COAL TO SWING BACK TO BLACK

UK Coal's (UKC.L) underground coal mines made a profit before exceptional items in three-quarters of last year but serious problems at several pits in the third quarter led to an operating loss of 29 million pounds. The company last year re-valued its portfolio of land, including disused pits and agricultural land, from 274.2 million pounds to 343.9 million pounds. Its revenues from continuing operations were 339.7 million pounds last year, down from a restated figure of 341.2 million pounds for 2005. Its shares fell 17 pence to 472 pence yesterday.

HMV TO SHUT STORES IN HIGH STREET REVIEW

HMV (HMV.L), the struggling music and books chain, whose shares have lost almost 50 percent of their value in the past two years, is expected to announce on March 13 a strategy that will include disposing of stores and introducing new products to counteract a declining music market. In advance of the briefing, chief executive Simon Fox has instructed property agents to review the entire portfolio of the company's stores, which trade under the HMV and Waterstone's names.

Prepared for Reuters by Durrants. ($1=0.5105 pound)