PRESS DIGEST - Financial Times - Oct 2

The Financial Times

ECONOMISTS EXPECT RATE CUT AFTER OUTPUT SURVEY FALLS TO RECORD LOW

Economists predict the Bank of England will cut interest rates next week, after a key survey of manufacturing output fell to its lowest level on record. The Chartered Institute of Purchasing and Supply/ Markit purchasing managers' index - a survey which began in the early 1990s - plunged to a record low of 41 in September. The manufacturing sector "suffered the worst operating conditions so far recorded in the survey's 17-year history", said Roy Ayliffe, director of professional practice at the CIPS.

CARMAKERS HIT OUTPUT BRAKES AS SALES FALTER

Short-term working is becoming the norm in British motor manufacturing as firms cut output in response to the impact of the credit crunch on car and van sales. Some factories are cancelling night shifts or planning extended Christmas breaks, while others are reducing production levels by introducing three- or four-day weeks. "[W]e are cutting our cloth and aligning our production with demand," said Ford.

WAGE SETTLEMENTS YET TO FEEL THE PINCH, SAYS PAY SPECIALIST

Pay specialist Incomes Data Services said on Wednesday that a difficult climate for wage bargaining is in prospect, despite recent settlements having been largely unaffected by the worsening economic outlook. Ken Mulkearn, editor of IDS Pay Report, said: "Some firms will remain able to maintain the purchasing power of their employees' salaries," but other organisations "more affected by the downturn will pay towards the lower end of the range of increases. The result will be a wider spread of settlements as sectors are affected in different ways by the economic difficulties."

OAKDENE TUMBLES DESPITE LIFELINE

Oakdene Homes OKD.L saw a 37 percent share slump after the developer said it was using a temporary banking facility after its debt covenants were breached. This came in spite of reassurances from Carl Turpin, the chief executive, who characterised Oakdene's financial difficulties as a "cash-flow glitch" and said the company had "agreed in principle" on a 2.5 million pound cash lifeline with its bankers that would support it until its balance sheet was replenished by the sale of completed homes. The shares fell five pence to 8.5 pence.

ASOS GETS A BOOST FROM WEB SHOPPERS

The online fashion retailer Asos (ASOS.L) more than doubled sales in the first half as it benefited from an exodus of shoppers fleeing the high street for cheaper deals on the internet. The website has 890,000 active users -- those who made purchases in the previous six months -- up from 490,000 last year. Nick Robertson, chief executive, said: "While we are proceeding with caution given external events, we remain positive about the long-term prospects for Asos."

BIG SPENDERS STILL FLOCKING TO HARRODS

Harrods the department store is riding a wave of spending on luxury goods and saw a 13.5 percent rise in group sales in the year to February 2 to 688.3 million pounds. Women's wear, fashion accessories and fine jewellery reported double-digit growth. "The company has continued to register double-digit sales growth during the second quarter ending August 2, despite the generally difficult conditions in the UK retail sector, although the company is by no means complacent," the company said.

ADMINISTRATION CLOCK TICKING FOR HARDY AMIES

Last-ditch efforts to secure the future of the couturier Hardy Amies HRDS.L seemed to have been to no avail on Wednesday as the company filed its intention to appoint an administrator. It now has five days to secure a deal for funding to avoid administration. In a statement, the company said: "Following the suspension of Hardy Amies shares on September 26 . the board has approached and has been approached by various parties [but] has, as yet, been unable to finalise an offer that would secure the future of the company."

AVANTI COMMS BOOSTS REVENUE

Avanti Communications (AVN.L) reported a pre-tax loss of 1.4 million pounds for the year to June 30 compared with an underlying previous deficit of 3.1 million pounds, on revenues that more than doubled to 5.9 million pounds through the sale of broadband services to European customers using leased satellite capacity. The company plans to launch the first European broadband satellite next year and described the results, which were in line with expectations, as "relatively immaterial" in the context of that venture. The shares closed at 201 pence, up 16 pence.

NORTHWEST WARNS ON CASH SQUEEZE

Northwest Biotherapeutics (NWBO.OB), the Aim-listed U.S. biotechnology company, warned on Wednesday that it could be forced out of business by a cash squeeze. The company said in a statement it was "in advanced stages of negotiations to secure additional funding sufficient to fund its ongoing working capital needs for the next two months". It added that it "may not be able to continue operations" if funding is not secured. The shares slumped 7.5 pence to 30 pence.

VOLLER SETS OUT FUNDING NEEDS

The future of Voller Energy VLR.L, which makes and sells portable fuel cell systems, is dependent on securing additional funding, the company said. Voller is currently selling each of its 1KW Emerald auxiliary power units at a loss and the company's pre-tax deficit widened from 2.3 million pounds to 2.8 million pounds. Robin Francis, the chief executive, said Voller was "excellently placed to meet the growing demand for environmentally friendly power generation systems. However, securing additional financing to take the company to the next stage of development remains of critical importance."

Prepared for Reuters by Durrants