PRESS DIGEST - British business - Jan 5

The Times

TIDDLER TO WATCH

Shares in Afren (AFRE.L) rose seven pence to 115 pence after broker Jeffries raised its target price to 129 pence with a "buy" recommendation. The company, which explores for oilfields in Nigeria, Ghana, Gabon and Congo Brazzaville, says it is about to become a producer and will begin production from a field off Nigeria early in the second quarter of this year.

DEAL OF THE DAY

Shares in Cape (CIU.L) rose 11 pence on Friday to 243.5 pence after its chief executive Martin May bought 5,000 shares in the company at 245.8 pence each when the gas, oil and mining support services company said profits would beat market expectations. Numis has upgraded its recommendation for Cape from "add" to "buy" with a 366 pence target price.

BET OF THE DAY

Marks & Spencer's (MKS.L) will give its Christmas sales update on Wednesday. Shares in the retailer, which lost 24.5 pence on Friday, have fallen from 670 pence to 518 pence since October. Goldman Sachs has tipped the company as a winner but Citigroup is less sure. Cantor Index is offering a March contract-related spread of 532.5 pence to 535.6 pence.

The Daily Telegraph

SSE BUYS IRISH WIND POWER FIRM AIRTRICITY

Scottish and Southern Energy (SSE.L) has agreed to purchase the Irish wind power company Airtricity in a deal worth 1.6 billion pounds. The Scottish energy company is paying around one billion euros for Airtricity equity and will assume 375 million euros in debt. Scottish and Southern Energy will also pay 746.5 million euros in cash for the proceeds that have come from the sale of Airtricity's wind farms in the United States. Barclays and Royal Bank of Scotland have provided the debt.

EMI STILL HITS WRONG NOTES IN U.S.

According to figures from Nielsen SoundScan, EMI saw its shares of U.S. album sales fall by over eight percent last year as releases from artists such as Joss Stone and Kylie Minogue failed to improve the company's position. The British record company now has less than a 10th of the all-important album category. EMI fared little better in catalogue albums, with a market share fall of 6.2 percent. However, the company saw an eight percent improvement in its share of digital U.S. album sales. Terra Firma, EMI's private equity owner, is about to inform staff of its new strategy for the company and analysts say that it needs to capture more of the booming digital market.

LAND OF LEATHER STRUGGLES DESPITE ADVERTISING BLITZ

Land of Leather LAN.L has said annual profits will fall well below expectations despite unprecedented levels of price-cutting at its stores. The company bought almost 200 hours of prime-time Christmas television advertising but this failed to draw customers to its biggest New Year sale. Two weeks ago Land of Leather said it expected to sell over 300,000 sofas on Boxing Day. But the group has revealed turnover for the first nine days of the sale fell significantly below expectations. Shares closed at 59 pence, down 48 percent.

The Guardian

CORAL CALLS TIME ON FIVE GALA BINGO HALLS

Gala Coral is to close its bingo halls in Bedminster, Bristol, Edinburgh, Lakeside in Essex, Teesside and Winton in Bournemouth. The closures may see the loss of up to 130 jobs and come just three weeks after the company's chief executive Neil Goulden said he had no plans for closures. A spokesman for Gala Coral said there has been no further deterioration in trading and that the closures are being done in the normal course of business. The bingo industry has been hit by a wave of regulatory changes and the smoking ban. Ssmoking rates among bingo players are nearly double the national average.

WEAK BUSINESS CLASS BOOKINGS FOR BA

British Airways (BAY.L) has reported total passenger figures grew in December but that its short-haul, business class bookings continue to show signs of weakness. A total of 2.52 million passengers travelled with BA in December, an increase of 1.1 percent on the same month in 2005. Numbers were helped by a capacity increase and better figures than December 2006 when heavy fog caused thousands of passengers to be stranded.

BANKS WELCOME DARLING'S LESSON FROM ROCK CRISIS

The British Bankers' Association on Friday welcomed plans to increase the powers of the Financial Services Authority to prevent another Northern Rock NRK.L type debacle. But the organisation said detailed consultation will be needed on the proposals and that the FSA must recruit top quality staff if it is to supervise the industry more effectively. Opposition MPs have criticised the plans, saying they are muddled and do not address structural problems posed by banks' aggressive trading strategies.

The Independent

NESTOR SHARES UP ON TAKEOVER TALKS

Nestor Healthcare (NSR.L), a firm that provides home and social care and GP services, has revealed it is in early stage takeover talks. Shares jumped 41 percent to 48 pence, valuing the firm at 54 million pounds.. In June, Nestor Healthcare said it was in takeover talks with a private equity fund, but the talks collapsed.

VIRGIN URGES STAFF TO BREAK STRIKE

Virgin Atlantic [VA.UL] has urged its workers to cross picket lines as it faces the first of two 48-hour strikes on Wednesday. Lyell Strambi, Virgin Atlantic's chief operating officer, said: "The only way our cabin crew are going to see any form of pay increase in future is by joining the hundreds of volunteers coming to work on the planned strike days."

CAIRN ABANDONS BANGLADESHI WELL

Oil explorer Cairn Energy (CNE.L) has said it is plugging and abandoning a well it sunk at the Magnama structure in Bangladesh after it failed to hit commercial gas reserves. The company said drilling will commence soon on the Hatia-1 prospect. Shares closed at 2876 pence, down 71 pence.

Prepared for Reuters by Durrants.