PRESS DIGEST - British business - Dec 24

The Times

CELEBRITY ENDORSEMENTS PAY OFF FOR SUPERMARKETS

Figures compiled by Nielsen Media Research have found supermarket groups dramatically increased their advertising budgets in 2007. Among others, Wm Morrison (MRW.L) increased its advertising spend by 61 percent to 18 million pounds, Tesco (TSCO.L) raised its expenditure by almost four million pounds to 71.2 million pounds, and Asda upped its spend by over five million pounds. Supermarket groups are also increasingly using celebrities to endorse their products. The combined strategy of increased expenditure and celebrity endorsements appears to be paying off, with all surveyed retailers enjoying increased sales during the year.

"OPPORTUNIST" APPROACH BY AUSTRIAN FUND REJECTED BY UK COAL

UK Coal (UKC.L) has rejected an approach by Vienna-based Meinl International Power MPOW.VI for its coal-mining business, which is estimated to be worth up to 400 million pounds. UK Coal is believed to view the approach as "opportunistic", and has refused to meet Meinl. Meinl has sought sensitive financial data about the business's assets without mentioning the price it was willing to pay. UK Coal, formerly known as RJB Mining, has been the subject of unsolicited bid approaches before.

SHOPPERS WORRY OVER THE SAFETY OF CHRISTMAS TOYS FROM CHINA

A Populous poll has found the biggest concern for parents shopping for toys this Christmas is the safety of toys made in China. Following a year in which Mattel MAT.N recalled 18.2 million Chinese-made toys from world markets due to safety-related fears, shoppers questioned in the survey said they would like to see toymakers move production back to their country of origin. The survey's findings also echo concerns expressed by Trading Standards officers, who say they lack the resources to prevent poorly made and counterfeit toys from entering Britain.

The Daily Telegraph

LONDON OFFICE PROPERTY MARKET TRANSACTIONS SLUMP

Research by the commercial property agency Cushman & Wakefield has found transactions in London's commercial property office market have fallen to their lowest level for over two years, with just 2.3 billion pounds worth of deals completed in the fourth quarter of this year. The City of London was particularly badly hit, with the value of deals falling to 1.7 billion pounds from 4.3 billion pounds in the previous quarter. The survey also found both the number of transactions and asking prices have fallen.

RYANAIR'S MILAN PLAN TURNED DOWN

Italy has rejected a plan by Ryanair (RYA.I) to set up a base at Milan's Malpensa airport. The move was aimed at bolstering the low-cost carrier's strategy of expanding its bases internationally. Ryanair presented plans for a multi-million pound investment programme which would see 12 additional aircraft operating out of the airport. But it is thought regulators were concerned about the financial package and low fares that Ryanair was proposing.

TULLOCH POSTPONES AIM FLOAT AFTER PROPERTY DOWNTURN

Tulloch Homes, the Scottish housebuilder, has abandoned plans to float on the stock market due to the deteriorating state of the UK property sector but has said it might consider private equity investment "at a future date". David Sunderland, chairman and chief executive, said he was still aiming to reach a turnover of 160 million pounds next year through organic growth and acquisitions. He also said acquisitions could be made without additional financing due to the company having access to funding packages which were put in place prior to the credit crunch.

The Guardian

HOMES HARDER TO SELL EVEN AFTER THREE MONTHS OF FALLING PRICES

Hometrack's monthly property survey has found the time it takes to sell a house has increased to more than eight weeks, the longest period since the report began in 2001. The survey also found average house prices fell by 0.3 percent this month, with some estate agents reporting falls of as much as 30 percent. Richard Donnell, Hometrack's director of research, said levels of market activity are likely to remain subdued in 2008, despite the recent cut in interest rates.

HALIFAX TURNS TO EXPERIAN TO FIND "LOST" CUSTOMERS

Halifax has stepped up its efforts to unite savers with their forgotten cash by hiring credit reference agency Experian (EXPN.L) to find customers who hold dormant accounts.

LAST-MINUTE SHOPPERS SEND WAITROSE SALES UP 30 PERCENT

Waitrose, part of the John Lewis Partnership, has reported last-minute shoppers spent 50 million pounds in its shops during the weekend and that it expects sales of about 20 million pounds today. Mark Price, managing director of the retailer, said top-end specialities were doing particularly well and that between eleven o'clock and noon on Sunday its stores took in 3.6 million pounds, about 500,000 pounds more than in any previous hourly period.

The Independent

PUB GAMING FIRM HOPES TO HIT JACKPOT

Shares in Gaming Group plunged last week after Icelandic investors FL Group pulled out of takeover talks, blaming their decision on the turbulence in the credit markets. Gaming Group, which provides entertainment machines for pubs, listed in June 2006 and raised 108 million pounds through Evolution Securities. FL and Gaming Group had been in talks since the Icelandic group launched a 385-pence-per share offer in September.

ROCK BOARD MULLS NEW RESCUE PLAN

The board of Northern Rock NRK.L is reportedly putting together an in-house rescue plan and is thought to have spoken to senior bankers about creating a top-level management team to work alongside new chief executive Andy Kuipers. It is believed Kuipers sees the option of an internally driven rescue as a credible alternative to nationalisation or takeover proposals put forward by Virgin Money and Olivant.

HSBC TO SLASH COSTS BY BRINGING RISK IN-HOUSE

HSBC (HSBA.L) is hoping to cut costs and generate extra revenue by taking on more insurance risk, believing it is well placed to do so because its liabilities are well-spread between countries and businesses. After reviewing the bank's operations, group managing director Clive Bannister concluded HSBC was financially stronger than the reinsurers that it was using to cover its risks. Bannister said: "It is a change in the way we are thinking about our risk and the way we wish to engage with our preferred strategic partners."

Prepared for Reuters by Durrants.