PRESS DIGEST - Financial Times - May 30

The Financial Times

MIXED RESPONSE TO BLOCK ON FURTHER WORK LAWS

Business Secretary John Hutton's comments over the new employment laws have provoked a mixed reaction from unions and employers. Hutton was accused yesterday bytrade unions of "subservience to business" over his remarks regarding the end of the government's efforts to create a new framework of workers' rights. In contrast, the CBI welcomed Hutton's "encouraging speech" and added that employers would be "watching policy-makers closely to ensure their actions match their words". The GMB, source of 10 percent of Labour's funding since 2001, expressed its frustration over the government's plans and called for more union friendly policies. Its members are to decide next month whether to disaffiliate from the ruling party.

PM FACES REBELLION OVER FAST-TRACK PLANNING APPROVALS

Sixty-three rebel Labour MPs have opposed the government's plans to create a fast-track system to approve new nuclear power stations and other large infrastructure programmes. They have signed a parliamentary motion objecting to the creation of a new independent "infrastructure planning commission" that would take the key decisions over such projects. Strongly backed by business, the planning bill starts the report stage at the Commons on Monday with ministers expected to react to the pressure by giving away limited concessions. Planning Minister John Healey said this will not signal a U-turn as the government plans to deliver all the important elements of the new system, including the independent commission and the national policy statements.

NHS PAYS HIGHER PRICES TO CUT WAITING LIST

The National Health Service is paying higher prices in a bid to lower the waiting times and reach the 18-week target, it has emerged. One senior NHS manager said: "I know of examples where the NHS has recently paid the private sector 140 percent, and even 160 percent of the NHS price." Statistics published by the Department of Health showed that by March 85 percent of patients who required admission and 90 percent of outpatients had started treatment within 18 weeks. The department said a "milestone" had been reached nationally but private providers said part of the improvement had been due to the re-emergence of "spot purchasing" in some areas of the country.

JOHN LEWIS SEES SALES FALL AT MOST OF ITS OUTLETS

The latest year-to-date sales report by John Lewis [JLP.UL] has added to the gloom of the retail sector by revealing declining sales at almost every outlet for the department store chain. The sales data showed that in the 16 weeks to May 17, overall sales had a slower growth rate than in the same period last year, but remained higher by 2.3 percent overall. Only two outlets, the flagship Oxford Street store and its johnlewis.com Internet site, showed strong increases in sales.

CALEDONIA EYES GROWTH THROUGH LEVERAGING

Caledonia Investments (CLDN.L) is considering setting up bank facilities for up to 100 million pounds over the next year, in a bid to reach good investment opportunities through leveraging. The trust, which has 1.3 billion pounds under its management, posted a 4.6 percent drop in its net asset value per share but managed to outperform the market by 6.3 percent. Caledonia recommended a final dividend of 22.6 pence, lifting the total dividend for the year by 4.5 percent to 32.5 pence. Chief executive Tim Ingram said last year's performance signalled the trust's long-term strategy worked in both "falling as well as rising markets".

BELGIAN LANDFILL BAN IS A DRAG ON SHANKS

Waste disposal company Shanks (SKS.L) reported a rise in sales of 11 percent to 564 million pounds for the year to the end of March, with underlying profits also ahead by 10 percent, excluding amortisation and exceptional items. The improved results came in spite of reduced contribution from the company's landfill business in Belgium, where volumes are in long-term decline as the government looks to stop municipal biodegradable waste from going to landfill. Chief executive Tom Drury said losses in Belgium would be counterbalanced by growth this year in the UK and the Netherlands. Pre-tax profits fell to 41.3 million pounds as a result of higher interest charges and a large non-cash adjustment to profits caused by accounting rules on PFI deals. Shares lost 9.5 pence to 245.75 pence.

INM TAKES 20 PERCENT HOLDING IN INDONESIAN GROUP

The Anthony O'Reilly controlled Independent News & Media (INME.I) is acquiring a 20 percent stake in the publicly listed Indonesian media company Abdi Bangsa (ABBA.JK) for 7.5 million dollars, valuing the latter at 37.5 million dollars, double its present market capitalisation. The chief operating officer at INM, Gavin O'Reilly, who is to stand for election to the Abdi Bangsa board, told the Financial Times the price paid was fair for a company which had increased its profits in 2007 by 330 percent compared with 2006. Owner of the Republika newspaper, billboard and dotcom companies, in addition to a stake in the country's leading radio group, Abdi Bangsa will use the proceeds from the sale to expand all sectors of the company, particularly regional newspapers.

CAFFYNS SEES TOUGH TRADING

Warning of the tough trading conditions facing the sector, Caffyns (CFYN.L), the car retailer that controls 15 dealership franchises in southeast England, reported improved turnover to 182 million pounds in the year to March 31. Profits also rose to 2.6 million pounds, reflecting 2.8 million pounds of exceptional credits, mainly VAT refunds. However, the company generated an underlying loss of almost 200,000 pounds compared with the previous year's 1.28 million pounds. A worsening economic environment, tax increases and the impact of the credit crunch in the second half were cited by chairman Brian Carte as having "had a significant effect" on the company's margins "caused by reduced customer confidence and competitive pressures". Shares were unchanged at 725 pence.

ATM RECOVERY BOOSTS ZYTRONIC

Zytronic (ZYT.L), a specialist maker of touchscreen and optical filters, experienced a 44 percent rise in touchscreen orders in the six months to March 31, helped by increased demand for the company's Zypos sensor. Pre-tax profits improved by 45 percent to 666,000 pounds on turnover 17 percent ahead at 6.99 million pounds. Shares closed up by one pence at 188.5 pence with the company's broker, Brewin Dolphin, forecasting before tax profits of 1.6 million pounds for the current year on a turnover of 14.2 million pounds. The broker said that if the current momentum continued, the forecast could potentially be lifted. Chairman John Kennair derived "continuing confidence" in sales and profitability growth from the 73 percent of Zytronic sales generated through exports, coupled with the return of ATM trading to normal levels.

JESSOPS FINANCE PACKAGE STAVES OFF "DEATH"

Shares in Jessops (JSP.L) closed up 0.2 pence at 7.25 pence after the struggling camera retailer disclosed it had successfully refinanced its onerous debt terms. Interim results released on Thursday said HSBC (HSBA.L) had gambled on either an acquisition or recovery at Jessops by agreeing to 49 million pounds in senior debt and an overdraft facility that sees the seven million pounds in fees from the previous agreement with the retailer converted into a 10 percent warrant over the share capital. After the closure of 81 stores, the retailer reported a fall of 25 percent in sales to 134.8 million pounds in the six months to March 30, with pre-tax losses standing at 11.2 million pounds compared with 24.7 million pounds a year earlier.

Prepared for Reuters by Durrants