PRESS DIGEST - Financial Times - Sept 24

The Financial Times

LENDERS DROP HOUSE PRICE FORECAST

The Council of Mortgage Lenders has decided to stop forecasting house prices, saying on Monday conditions were too difficult to make predictions with no improvement likely until 2010. The CML's last forecast was in May when it predicted that prices would be seven percent lower in the fourth quarter than last year. However, indices from Nationwide and Halifax suggest prices are already down by more than 10 percent on the year.

FURTHER FALL IN STAFF WITH FINAL SALARY PENSIONS

Figures from the Office for National Statistics reveal active membership of private sector final salary pension schemes dropped a further 10 percent last year, from three million to 2.7 million. Of the 2.7 million, only 57 percent were in schemes that remained open to new members. However, membership of such schemes in the public sector rose marginally, from 5.1 million in 2006 to 5.2 million in 2007, and there is a growing gap in the benefits offered. For instance, most private sector schemes now have a retirement age of 65, whereas in the public sector the retirement age is generally 60.

HOUSEBUILDERS FACE EXTRA TAX ON RENTS

According to official advice published by Revenue & Customs, many housebuilders face extra tax bills if they rent out newly built properties which they have been unable to sell. Property developers may be forced to repay VAT which they have already claimed back because of the differing VAT treatment of selling and letting properties. Alex O'Connor, of professional services group McGrigors, said the tax implications of renting new-builds were likely to come as a shock to some builders and may in some cases cause bankruptcy as they struggle to deal with plummeting prices and unsold stock.

CAR PRODUCTION FALLS 17.3 PERCENT

Official figures show last month there was a sharp drop in the number of new cars produced in the UK. Nearly 83,000 cars were manufactured in August, a 17.3 percent fall on a year earlier. Commercial vehicle production fell 28.2 percent to just over 9,300. The continued strength of UK vehicle production, however, was reflected in the fact that total car production for the first eight months of 2008 reached nearly 1.04 million, 4.5 percent up on the same period for 2007.

REGULATORS EASE PATH FOR BT'S SUPERFAST BROADBAND

BT's (BT.L) proposed 1.5 billion pound investment in a superfast broadband network became more likely on Tuesday when regulators set out plans to remove many price controls on Internet access. The move by Ofcom would give BT pricing freedom on many wholesale broadband products for the first time. BT came under pressure last year to start investing in superfast broadband because ministers were concerned that UK competitiveness could be threatened. Some investors in BT are nervous of the cost and shares in the company closed down four percent at 166.5 pence,.

SPARKLING AG BARR EXCEEDS ESTIMATES

AG Barr (BAG.L) has reported a 9.8 percent rise in first-half profits of 11.13 million pounds, ahead of analysts' predictions . Revenue for the period rose six percent to 82.4 million pounds, partly helped by a partnership with Rockstar Energy drinks and new brands Taut sports drinks and Vitsmart vitamin water. Irn-Bru, which is AG Barr's biggest brand, continued to perform well and matched the revenue increase. The drinks group recently acquired Groupe Rubicon for 59.8 million pounds and chief executive Roger White said he expected the deal to provide 1.5 million pounds worth of synergies by January 2011.

SHOWERS DAMP OUTLOOK FOR SEVERN

Severn Trent (SVT.L) was affected by poor weather over the summer and on Tuesday the company confirmed in an interim statement that revenue this year was likely to fall by 12 million to 14 million pounds. The water and sewerage company, however, did not join rival water companies in calling for customer prices to rise above inflation over the next five years. Severn Trent believes efficiency savings and low infrastructure renewal costs will allow it to keep prices only slightly above inflation for the next five years.

HELPHIRE CHANGES BUSINESS TACK

Helphire (HHR.L) is to switch its attention from growth to cash collection. The vehicle hire and accident management group announced pre-tax profits of 43 million pounds on revenue up from 290.3 million to 404.9 million pounds. Underlying profits were 46.8 million pounds. Chief executive Mark Jackson described the year to June 30 as difficult. While interest rates had risen, the value of second-hand cars had fallen, also, a reduced road usage of 10 percent had led to a similar fall in the number of accidents in the second half. Shares closed at 131.85 pence, down 6.25 pence.

CARPETRIGHT LAYS DOWN THE LAW ON EXPECTATIONS

Carpetright (CATVU.L) has emphasised the impact of the weakening economy on its business. On Tuesday, the carpet retailer noted that October and November were "important trading months" and were set to follow a "further deterioration in the housing and financial markets". The statement sent the company's shares 64 pence lower to close at 637.5 pence. Lord Harris, chairman and chief executive, said last month the company continued to improve gross margins even though it reported that like-for-like sales in the UK and Ireland fell 15.4 percent in the first quarter.

EDF SEALS BRITISH ENERGY DEAL

EDF (EDF.PA) is to take the lead role in the development of nuclear power in Britain with a 12.4 billion pound takeover of British Energy BGY.L which is to be announced in Paris on Wednesday morning. The takeover, at 774 pence per share in cash, will give EDF almost all of the UK's nuclear power stations and control over most of the best sites for building more. The company hopes to build at least four nuclear plants, with the first coming on line be the end of 2017.

Prepared for Reuters by Durrants