PRESS DIGEST - British business - Oct 31

The Times

SORRELL FORECASTS THIS YEAR'S CAMPAIGN IS GOING TO BE TOUGH

Sir Martin Sorrell, chief executive of advertising group WPP (WPP.L), has predicted a "very tough" year ahead for global businesses as the group's third-quarter results showed flat revenue in the United States and a 2.9 percent increase in UK turnover. Sorrell said the group would do "whatever is legal to make sure we hit our 15.5 percent margin target". WPP pointed out that revenue from Asia, the Middle East and Latin America continued to soar, growing 16.5 percent. The group expects further divergence between growth in digital and traditional media as advertisers increasingly turn to the Internet.

PUNCH HAS CAUSE TO SAY CHEERS

Shares in Punch Taverns (PUB.L) soared almost 14 percent higher on Thursday after analysts at Morgan Stanley said fears of a covenant breach were exaggerated. The broker said the pubs group had made moves to refinance its debt that saw it cut its dividend and extend its loan facility. Analysts said while they remain cautious on such businesses, Punch's share price already factored in an 80 percent chance of a covenant breach. The company, whose shares were recently hit by fears over the size of its 4.5 billion pound debt, added 17.75 pence to close at 147 pence. Morgan Stanley expects Punch to post pre-tax profits of 265 million pounds when it announces annual results on Tuesday.

LOOKERS ISSUES WARNING

Manchester-based car dealer Lookers (LOOK.L) has said its third quarter trading has decreased by around 20 percent due to the current economic climate and that the outlook for the sector was poor.

The Daily Telegraph

BARCLAYS FIRST TO SIGN UP TO EIB SCHEME

Barclays (BARC.L) is to become the first high street bank to offer small businesses "cheap loans" under the four billion pound scheme provided by the European Investment Bank. Steve Cooper, managing director of local business at Barclays, said the bank plans to accelerate the lending facility it operates on a current 150 million pound facility in an effort to help "hundreds" of firms a month before applying for new loans.

ROLLS ROYCE ON COURSE TO MEET FORECASTS

Shares in Rolls-Royce (RR.L) rose nine percent to close at 314.25 pence on Thursday after the engine manufacturer said in a trading update that it remains on course to meet market expectations and that activity across all divisions "has been good" in the last quarter. Nevertheless, chief executive Sir John Rose said it was still too early to predict what effect the deteriorating global economy would have on the business. The group said its order book continued to grow with the addition of five billion pounds in new projects during the period. Analysts expect full-year pre-tax profits of between 860 and 890 million pounds, up from the 800 million pounds it made last year.

The Independent

LUMINAR SHARES HIT BY LIGHTER FOOTFALL

Nightclubs operator Luminar (LMR.L) saw its shares lose almost 11 percent of their value after it reported a drop in sales and analysts reduced their profit forecasts. The company said profits before tax and exceptionals dropped to 8.4 million pounds for the six months to August 28, down from 13.4 million last year. Like-for-like sales shrank by 5.2 percent across its clubs for the eight weeks to October 22, while those of its branded clubs dropped by 2.7 percent. The group blamed the late start of the college term, but said it was well-placed for the Christmas season with the addition of 12 branded sites and 2.5 million pounds in cost savings. Luminar expects its core 18 to 24-year-old customer segment to remain resilient and added that more steps would be taken to boost footfall.

WHOLESALE BOOST GIVES BOOTS A SHOT IN THE ARM