PRESS DIGEST - British business press - May 4

The Times

SEVERN TRENT AIMS TO TURN WASTE INTO FUEL

Severn Trent (SVT.L), which supplies water and waste services to 3.3 million households, is planning to convert waste piped from millions of homes into fuel and then sell it to power companies. The company, one of Britain's largest water companies, already generates almost 17 percent of the electricity it uses by burning sewage gas collected from its sewage plants across mid-Wales and the Midlands.

STOCKS OF DRUGS DWINDLE AS CHEMISTS SELL THEM ABROAD FOR HIGHER PROFITS

Evidence has emerged that pharmacists are over-ordering drugs, in a practice known as 'skimming', and selling stock overseas in order to profit from higher prices in foreign currencies. Wholesalers fear that the practice, which has led to temporary shortages of some drugs, means that some patients may not receive the medicines they require in time and that this may result in death. AstraZeneca's (AZN.L) Nexium stomach ulcer treatment is one of 25 drugs that British pharmacists are reporting having problems obtaining and the company said, 'If we continue to see an increase in the number of pharmacies trading medicines outside the UK, it is not possible to rule out potential shortages of medicines in the future.'

TIDDLERS' AIM EXODUS SET TO CONTINUE

The Alternative Investment Market (AIM) has consistently outperformed fully listed stocks since the start of the year and this is prompting some market-watchers to ask whether the long decline of the junior market has come to an end. At the same time, the market is becoming the domain of large, frequently traded shares as very small, illiquid stocks continue to drift away from AIM. A survey by Smith & Williamson, adviser to over 30 AIM companies, suggests that although the majority of AIM companies are finding it hard to raise finance, nearly four in ten still intended to raise cash over the next year.

The Daily Telegraph

PEARL BOSS OSMOND TO STAND HIS GROUND IN RESOLUTION BONDHOLDER BATTLE

Hugh Osmond, the boss of insurance group Pearl, is expected to argue with bondholders at a meeting on Wednesday that the bonds were issued by Resolution (RSL.L) before the company was acquired as Tier 1 capital, so therefore they ought to be regarded as an equity stake in the financial institution, rather than as a traditional bond. Holders of Pearl's subordinated debt have formed a steering committee to represent their interests after an interest payment worth 33 million pounds was deferred on the 500 million pound bond issue. Pearl recently announced plans to raise 500 million pounds from investors and float on the stock exchange later in the year.

JJR BOSS SAYS SCRAPPAGE SCHEME IS A NON-STARTER

David Smith, the chief executive of Jaguar Land Rover, has questioned Alistair Darling's scrappage scheme for the motor industry, saying it will have minimal impact on a struggling market. Mr Smith says the UK's scheme is likely to disappoint because of the decision to limit the state discount to 1,000 pounds, with the industry contributing the other 1,000 pounds, and to set such a high age for eligible old cars, well above the average vehicle age of seven. Mr Smith said these factors would dilute what could have been up to 300,000 more car sales this year down to a lower number.

UK BRACED FOR BLACK WEEK FOR JOBS

A slew of bad news on the job front anticipated for the advertising, manufacturing and software industries could make it a grim week for UK workers. Up to 850 employees at LDV face an uncertain future with the failed attempt to engineer a management buyout at the van manufacturer, and Sage Group (SGE.L) is expected to launch a cost-cutting programme on Wednesday with analysts expecting the company to cut up to 500 jobs in the UK and the United States. WPP (WPP.L) is also looking to slim its global workforce with analysts expecting a further 1,000-1,500 staff to take redundancy by the end of 2009.

The Independent

RBS FINANCE DIRECTOR WHITTAKER TO RESIGN

Guy Whittaker, the finance director at Royal Bank of Scotland (RBS.L), is set to resign. Mr Whittaker is the only remaining top level board member still at the bank following its government rescue, and his departure is set to cause some controversy as he will be entitled to a pay off under the terms of his contract. The bank has come under intense scrutiny in recent months following the revelation that former chief executive Sir Fred Goodwin is being paid a pension of over 700,000 pounds a year. Shares in RBS have risen 116 percent in the last three months.

LEADING COMPANY HEADS ATTACK HEATHROW PLANS

The chief executives of some of the country's biggest companies are set revolt against the government's plans for a third runway at Heathrow airport. The bosses, including Justin King of Sainsbury (SBRY.L) and Ian Cheshire of Kingfisher (KGF.L), are backing a campaign led by Russell Chambers, an adviser to Credit Suisse (CSGN.VX). The group believes that the business case for a third runway is ill thought out and that it will have a damaging impact on the environment.

FORMER O2 HEAD TO BE NAMED CHAIR OF NUMIS

Sir David Arculus will this week be named as the new chairman of investment bank Numis. Sir David will replace Michael Spencer who is also the Conservative party treasurer. Sir David is also a non-executive director of Pearson (PSON.L) and is credited with brokering the deal to sell O2 to Telefonica (TEF.MC).

The Guardian

EX-BSKYB CHIEF IS FAVOURITE TO TAKE OVER AT ITV

Tony Ball, former chief executive at BSkyB (BSY.L), has emerged as favourite to replace Michael Grade at the head of ITV (ITV.L). Mr Ball, who is currently head of Kabel Deutschland, has held talks with ITV investors about his suitability for the role. ITV triggered the hunt for a chief executive in April when it said that Michael Grade would switch to a non-executive role before the end of the year, prompting analysts to speculate that Grade's hand had been forced by unhappy shareholders.

THINKTANK SAYS HOUSE PRICES WILL START TO RISE AGAIN NEXT YEAR

The Centre for Economics and Business Research (CEBR) says that house prices have almost bottomed out and will see a modest increase in 2010. The CEBR predicts a fall of another 8 percent from now until the first quarter of next year and then after that there will be a rise of 3.1 percent with a further 2.5 percent rise by the end of 2011. This data has led some industry commentators to call the bottom of the housing market but the CEBR says that this is slightly premature.

RECESSION FUELS SHARP RISE IN FINANCIAL CRIME

Research conducted by the City law firm Wedlake Bell has found that the number of company directors being pursued through the courts has surged with the government crack-down on fraud and tax evasion. Court actions aiming to have directors 'struck off' increased by 31 percent in the year to 31 March, rising from 820 to 1,079. The figures suggest that Revenue & Customs is taking a harder line as it chases 403 companies for underpayment of tax, a 14 percent increase on the same period a year ago.

Prepared for Reuters by Durrants