PRESS DIGEST - British business - May 7

The Times

BRITISH AIRWAYS COUNTS COST OF T5 FIASCO

British Airways (BAY.L) announced passenger numbers had fallen by 7.9 percent due to the chaotic opening of Heathrow's Terminal 5. The resulting cancelled flights and negative publicity are thought to have contributed significantly to the fall in passenger numbers during the month. Nick van den Brul, Exane BNP Paribas aviation analyst, said: "T5 has clearly been a big problem and it will have an impact on profits."

BLOWS RAIN IN ON ROSE AS M&S TOLD IT IS "TIME TO GET REAL"

Tony Shiret, a retail analyst for Credit Suisse, has called on Marks & Spencer (MKS.L) to embark on a fundamental review of its strategy. The leading City analyst raised fresh concerns over the power wielded by Sir Stuart Rose and criticised the company for moving too downmarket. Shiret believes "issues currently facing investors have arisen because Stuart Rose has not been effectively challenged on his strategic decisions".

REBEL SHAREHOLDERS CRITICISE MOSS BROS BOARD

Rebel shareholders in Moss Bros (MOSB.L), the menswear retailer, have criticised its board after Bauger, the Icelandic investment group, revealed it needed yet more time to put together a 40 million pound takeover bid for the company. It is understood a formal offer could come in two weeks time.

The Daily Telegraph

PROPERTY PRICES WILL DROP 10 PERCENT, SAYS LENDER

The country's fourth-biggest mortgage lender, Lloyds TSB (LLOY.L), heaped fresh misery on home owners on Tuesday as it forecast a 10 percent drop in house prices over two years. Tim Tookey, acting finance director, said it made "slightly higher provisions on its mortgage book" as a result of the bank predicting "a 10 percent reduction in house prices in 2008 to 2009". Tookey also confirmed Lloyds has taken advantage of the current mortgage conditions to raise its profit margins and share of the market.

ABERDEEN DEAL SHRUGS OFF POOR PROPERTY VIBES

Aberdeen Asset Management (ADN.L) is to pay roughly 97.4 million pounds for Goodman Property Investors in a move which will make the combined entity Britain's second-largest property fund manager. Over the next two years, it will also pay the Goodman Group up to 12.5 million pounds more in incentives relative to the flow of Goodman Property Investor's assets under management. The Scottish group is funding the acquisition with a share placing that is set to raise about 95 million pounds.

BAE TO APPOINT ETHICS TSAR AFTER BRIBERY CLAIMS

BAE Systems (BAES.L) is set to appoint a senior executive to oversee the implementation of a new code of conduct at the company after its chairman and chief executive acknoledged it had not paid enough attention to ethical standards. The defence company will also incorporate 23 recommendations laid out on Tuesday in the Woolf Report.

The Independent

CENTRICA FIGHTS TO STAY IN BRIT ENERGY BIDDING

Centrica (CNA.L) senior executives are holding last-minute negotiations with European power giants amid increasing concern that it could be left out of bids for British Energy BGY.L. EDF (EDF.PA), having previously been linked with Centrica for a joint bid of BE, is now expected to table an independent offer by the Friday deadline. A board meeting on Wednesday will formally approve a solo offer from the French company, thought to value BE at around 6.2 billion pounds.

CLIMATE CHANGE CAPITAL SECURES 56 MILLION POUNDS

Four fresh investors have acquired over half of Climate Change Capital, the London-based specialist investor, for 56 million pounds. The new investors are: Alliance Trust, Universities Superannuation Scheme pension fund, SNS Reaal and Mitsui. CCC invests in projects to cut carbon emissions in the developing world and has also branched out into broader low-carbon investing, consulting and advisory work. Its new investors will also put 20 million pounds into a new fund of funds run by CCC.

RAIL GROUP JARVIS CONFIRMS SALE IS AN OPTION

Jarvis (JRVS.L) acknowledged on Tuesday it could be sold as part of a review of the business. The rail contractor chaired by Steven Norris, the former London mayoral candidate, said it was looking at its strategic options -- a process which it hinted may lead to an offer being made. Jarvis, however, also stated that no negotiations were currently taking place with any parties regarding a possible bid.

The Guardian

NO CASH CALL, SAYS LLOYDS TSB

Lloyds TSB (LLOY.L) has ruled out going back to investors for more cash despite taking a 1.1 billion pound credit crunch hit because the bank achieved "double digit" profit growth in the first three months of the year. Lloyds TSB differentiated itself from HBOS HBOS.L, Royal Bank of Scotland (RBS.L) and Barclays (BARC.L) in its trading update on Tuesday by indicating it did not need to bolster its capital strength.

WPP'S SORRELL ENJOYS 21 MILLION POUND PAY PACKAGE

The chief executive of WPP (WPP.L), Sir Martin Sorrell, received a pay package of 21 million pounds last year when a share-based performance-based plan crystallised. His salary and cash bonus of 3.5 million pounds was aided by the award of 2.9 million shares worth 18.4 million pounds at Tuesday night's share price. Sorrell could in future also receive expenses for "maintaining an apartment in New York" he has bought recently because he is spending a "considerable amount of time" in the city due to the size of the company's business in the United States.

BOVIS WARNS ON PROFITS AS RESERVATIONS COLLAPSE

The UK's fifth-largest housebuilder, Bovis (BVS.L), issued a stark profits warning on Tuesday after reservations in the past eight weeks plunged by 70 percent compared with the same period last year. Bovis' managing director, David Ritchie, said: "There are fewer buyers, and those who are present are struggling to get a mortgage. We are concerned about the number of reservations that can be achieved this year."

Prepared for Reuters by Durrants.