PRESS DIGEST - Financial Times - Nov 16

BIG BUILDERS YET TO FEEL EFFECT OF STIMULUS

A report from KPMG to be published on Monday will reveal that only 15 percent of leading international construction groups say that they expect state intervention into the industry will provide significantly greater opportunities over the next year. In Europe, Britain and the United States, the figure is even lower, with only 10 percent of respondents expecting to see a marked upside from government spending. In Asia, construction companies were more confident, with 27 percent expecting a positive impact. However, despite the scepticism concerning the impact of government spending, construction companies are generally positive about the future, with about two thirds expecting to see profits increasing by the middle of 2010.

PROPERTY GROUPS TO REPORT GAINS IN PORTFOLIOS

Land Securities(LAND.L) and British Land(BLND.L) are to report this week that the value of their portfolios has risen for the first time since the start of the real-estate slump. The UK's two largest property companies are to say that property values began to rise in the third quarter, confirming that a recovery in the market is feeding through to the books of the large real estate investment trusts. However, the tail end of the slump in the second quarter is expected to weigh on overall half-year results. Analysts expect Land Securities to show a fall in its net asset value from 593 pence to 568 pence a share, while British Land is expected to show a fall from 370 pence to 350 pence.

ADMIRAL SET TO HIGHLIGHT LLOYDS TOXIC DEBT

The restructuring of Admiral Taverns this week is likely to highlight the toxic legacy that Lloyds Banking Group (LLOY.L) inherited from HBOS. Lloyds, which has a 855 million pounds exposure in Admiral, is expected to agree a debt-for-equity swap at the pub group just days after the collapse into administration of property developer Kenmore into which it is estimated HBOS put at least 700 million pounds in loans and equity investment. Lloyds is expected to write off as much as 600 million pounds at Admiral which has suffered from tumbling beer sales.

FORMER GROUCHO OWNER IN 30 MILLION POUND RETURN TO LEISURE SECTOR

Longshot, the former owner of the Groucho Club, is moving back into the leisure sector with a pool of 30 million pounds to purchase distressed assets. The return of Longshot, which disposed of its last leisure assets in mid-2007, is the latest sign of investors deciding that the time is right for bargains to be had in the leisure sector, even though consumer spending remains uncertain. Longshot, established 15 years ago by Joel Cadbury and Ollie Vigors, sees opportunities in buying boutique hotels and golf clubs, as well as bars and pubs, and merging some under one roof

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CANADA PROTEST OVER RBS OIL SANDS ROLE

Canadian aboriginal groups will target Royal Bank of Scotland(RBS.L) and the government this week in an attempt to stop RBS lending to companies which invest in oil sands extraction in western Canada. Campaigners calculate that since the start of 2007, RBS has extended 13.9 billion pounds in loan guarantees or debt and equity underwriting to companies linked to oil sands. They say RBS and other lenders are in breach of the Equator Principles, the standards for socially and environmentally responsible lending agreed in 2003. The First Nations, as the native Canadians are known, argue that their rights to hunt and fish in the oil sands region of Alberta have been breached by the pollution created by oil projects.

INVISTA IN 60 MILLION POUND CAPITAL RAISING

Invista is hoping to pay down a sizeable tranche of debt by raising 60 million pounds through a capital raising. The raising, the first such move in the European investment trust sector since the beginning of the global recession, is being seen as an indicator of growing confidence that the property market is recovering. In addition to reducing its debts, Invista will also use a portion of the new money as working capital. Equity will be split between normal shares and preference shares issued at 20 pence per share.

GSK PLANS TO CUT DRUG PRODUCTION WASTE

GlaxoSmithKline (GSK.L) has pledged to reduce waste generated by drug production by two thirds in a bid to cut costs and improve its environmental record. Current industry levels allow up to 100 kg of raw material to be generated for every kg of "active pharmaceutical ingredient", but GSK hopes to slash the larger figure to just 30kg by 2015. Speaking of the group's decision, Glaxo's vice president for environmental health and safety, Jim Hagan, said: "It was the idea of sustainability that drove the idea. You make an improvement to the environment and you achieve a reduction in costs."

OVERSEAS INVESTORS TARGET ALTIUM AND SEYMOUR PIERCE

Altium Capital and Seymour Pierce have separately entered into discussions with potential foreign investors interested in purchasing either a part or all of the business. However, people close to the matter have suggested that the talks have been brief in light of both private brokers wishing to retain independence. Former Merrill Lynch banker Marco Capello is said to be one interested party having lost out in a bid for a stake in Panmure Gordon earlier this year. Despite recent travails that resulted in a swing into the red, analysts are predicting Altium will bounce back thanks to a 123 per cent rise in securities turnover in 2009.

MERLIN HOPES TO CONJURE IPO MAGIC

Merlin Entertainment is hoping that its forthcoming IPO, planned for 2010, will go some way to allaying fears among investors who are still reeling from a number of recent disappointing private equity-backed deals. The IPO, the first big listing on the London Stock Exchange since the credit crunch took hold, will value the company at two billion pounds and is likely to follow announcements of the appointment of a chairman and non-executive directors. Blackstone, which owns a little more than 50 per cent of Merlin, believes this particular offering differs from other recent listings since the theme park operator does not have to urgently tend to its one billion pound debts. The company has in fact enjoyed eight consecutive years of double-digit earnings growth before interest, tax, depreciation and amortisation.

JOHN LEWIS STORE MAKES CAPITAL GAINS

Retailer John Lewis has exceeded expectations for its store located in the St David's 2 centre in Cardiff, with performance up six percent on projected figures in the seven weeks since it opened. The news is a boost for John Lewis, having been forced to postpone six outlets at the start of 2009. Retail analyst Nick Bubb suggests the success of John Lewis's only Welsh store is indicative of a "revived consumer interest in household goods, which account for two thirds of John Lewis's sales". David Barford, director of selling operations at the retail group, erred on the side of caution, stating: "It would be naive to think the consumer is out of the woods. We've got some challenging months ahead as we move into 2010."

Prepared for Reuters by Durrants