PRESS DIGEST - British business press - Aug 14
The Times
BA CLOSES ON US LINK
On Thursday, British Airways (BAY.L) is due to announce that it is seeking regulatory approval to form an alliance with American Airlines.
The statement will detail what is effectively a merger of transatlantic operations, and is expected to be made before the New York Stock Exchange opens. BA-AA will seek anti-trust immunity to collaborate on pricing, marketing and revenue sharing.
UTILITIES
The water regulator Ofwat has fined Tendring Hundred Water 42,000 pounds for supplying inaccurate information, which led the company that delivers water to the Tendring peninsula, in Essex, to overcharge customers in 2006. Tendring Hundred is part of the Veolia Environment Group (VIE.PA).
SUPPORT SERVICES
Interserve (IRV.L) announced that a strong market in the Middle East left it well placed for further growth. The FTSE 250 business support organisation reported a 19.5 per cent hike in first-half profits to reach 33.7 million pounds.
The company also said that it had won a 44 million pound contract to build and operate two leisure centres for Leeds City Council.
The Daily Telegraph
WRAPIT COUPLES TO LOSE THEIR PRESENTS
Most of the 2,000 customers waiting for gifts from the collapsed online wedding list company Wrapit will not receive any of their presents.
The news came after the company's administrator, KPMG, revealed on Wednesday that it had ceased trading. KPMG also made more than half of the company's 73 staff redundant, and said the moves followed "unsuccessful attempts by the directors to find a buyer for the business."
Wrapit claimed its bank, HSBC (HSBA.L), had withheld funds crucial for the business' cashflow, and dozens of angry brides marched on the bank's head office to hand in a petition demanding action last week.
BRITANNIA PROFITS TAKE HIT FROM BAD DEBTS
Britannia's BRTB.L profits have been dragged lower due to bad debts on niche loans. Pre-tax profits for Britain's second-largest building society sunk from 82 million pounds to 51 million pounds in the first six months as arrears increased higher than the industry average.
Neville Richardson, chief executive, said:
"The bulk of those arrears are arising on eight per cent of our book. It is a small percentage of our total book that is incurring the arrears - it is contained and it is manageable." Gross mortgage lending for the group dropped from 3.7 billion pounds a year ago to 1.9 billion pounds as it tightened its criteria in the face of a worsening economic backdrop.
C&W EXTENDS OFFER FOR RIVAL
Cable & Wireless (CW.L) has now gained effective control of 72.1 per cent of the shares in Thus THUS.L, its rival telecoms group, and extended its offer for the company until August 26. On June 30, Cable & Wireless made a 180 pence-a-share cash offer for Thus Group, valuing its small peer at 329 million pounds.
It also acquired 29.9 per cent of the shares in the market and has since received acceptances from other investors holding 42.2 per cent of shares in Thus. The group requires 75 per cent total acceptances to delist the company and 90 per cent to compulsory purchase the remainder.
