PRESS DIGEST – British business – Jan 29

The Times

HIGH-DEFINITION TAKE-UP PUTS HELPS BSKYB

Growing demand for high-definition television helped lift
underlying first-half profits at satellite broadcaster BSkyB
(BSY.L: ) to 471 million pounds. The broadcaster saw 482,000 new
subscriptions for its HD service in the three months to December
31. The figure was more than double that achieved in the
previous year, and took the number of households with a Skyplus
HD box to more than two million. First half revenues beat
analysts’ expectations, up ten percent to 2.9 billion pounds.
Shares fell 14 pence to 540 pence as BSkyB awaits the results of
an investigation by regulator Ofcom into the wholesale prices
charged to other broadcasters on sports rights.

INVESTORS CHEERED AS 3i BEATS DEBT REDUCTION TARGET

Private equity group 3i (3IN.L: ) said it reduced its debt
bill by 211 million pounds in the three months to December 31.
Net debt currently stands at 643 million pounds, beating the
group’s aim to cut the debt to one billion pounds by the middle
of the year. 3i said it had generated 270 million pounds exiting
investments in the fourth quarter, having floated Chinese
retailer PCD and sold both telecoms operator DNA and shipping
group Dockwise. Shares were up 1.25 pence at 264.75 pence.

UNILEVER CHIEF CALLS FOR NEW CLIMATE OF SUSTAINABILITY

Unilever (ULVR.L: ) chief executive Paul Polman told a session
at Davos on Thursday that business leaders must ignore the
short-term demands of shareholders in order to focus on issues
such as sustainability and climate change. Polman said his
decision last year to stop providing earnings guidance to
investors, which resulted in a six percent fall in the firm’s
share price, was a result of such thinking. “I can be a hero for
six months by driving up the share price,” Polman said. “But we
are running the company for the long term.”

TEMPUS

Tate & Lyle (TATE.L: ) (Hang on)

Robert Wiseman (RWD.L: ) (A solid hold)

Paragon (A buy for the brave)

The Guardian

TRENDY SUPERDRY LABEL HIRES VODAFONE VETERAN

Peter Bamford, former head of marketing at Vodafone, is
expected to be hired as non-executive chairman of the fashion
company SuperGroup. As chief marketing officer at the mobile
phone operator, Bamford oversaw lucrative sponsorship deals with
Manchester United, Ferrari and the England cricket team.
SuperGroup, which has experienced much success among young
people with its Superdry label, plans to float on the stock
market in the spring, and intends Bamford to become its
representative in the City.

GAS FROM SHALE ROCK COULD TRANSFORM US ENERGY SUPPLIES – BP

The chief executive of oil giant BP (BP.L: ), Tony Hayward,
has predicted that “unconventional” methods of extracting gas
will “transform the U.S. energy outlook for the next 100 years”.
Sites in Texas, Wyoming and Pennsylvania have proven themselves
capable of extracting gas from shale rocks and coal seams,
although environmentalists have expressed concerns about the
amount of water needed and pollution issues. BP has invested in
shale operations through the purchase of a billion pounds’ worth
of shale interests from Chesapeake Energy in 2008, and a
production-sharing deal with the Indonesian government which
will see the technique used in that country.

LEWIS OUSTS LAFFIN IN LANDSLIDE M&B VOTE

Rebel shareholders led by the currency trader Joe Lewis have
succeeded in removing Simon Laffin as chairman of Mitchell &
Butlers (MAB.L: ), with Laffin’s tenure lasting only eight weeks.
The chairman, who had alienated Lewis and other powerful
shareholders by ousting two of his representatives from the
board in December, was voted out by 66 percent of shareholders.
His speech defending his actions was nevertheless warmly
received at the shareholder meeting where the decision was made,
in contrast to the indifferent response to a representative of
Elpida, an investment vehicle owned by Irish racing tycoons
which had backed Lewis.

WEAK ECONOMY BLAMED AS BRITISH BANKS ARE TAKEN DOWN A LEVEL

Standard & Poor’s have downgraded the UK banking industry (Read more about the banking industry recovery.),
citing Britain’s poor economic environment and the reputational
damage caused by the state being forced to prop up some of the
country’s largest financial institutions, such as Royal Bank of
Scotland (RBS.L: ) and Northern Rock (NRKx.L: ). The industry was
demoted by one level to Standard & Poor’s Group 3 out of 10,
behind the Canadian, French and German banking industries in the
first and second groups. The credit rating agency said
regulatory changes making the industry “less prone to excessive
credit expansion and more resilient to economic shocks” could
restore the sector’s previous higher rating.

Daily Telegraph

ADAM CROZIER “WILL DELIVER CHANGE” AT ITV

UK broadcaster ITV (ITV.L: ) has announced that Adam Crozier
is to succeed Michael Grade as chief executive at the company.
Crozier’s appointment ends months of speculation about who would
replace Grade, who announced last April that he was standing
down from the post as soon a replacement was found. The
appointment by ITV’s chairman Archie Norman came as some
surprise to those who were expecting someone with more
broadcasting experience to be chosen for the post. Crozier is
currently the chief executive of Royal Mail.

TATE & LYLE TAKES A CANING AS STARCH SALES STAY DEPRESSED

Agri-processor Tate & Lyle (TATE.L: ) has said it expects to
report annual profits of between 220 and 235 million pounds, at
the lowest end of previous predictions. The decline in profits,
down from 247 million pounds for the previous year, is partly
attributed to a drop in demand for industrial starches that are
used in paper and cardboard packaging. The company has also said
U.S. prices of sweeteners will be reduced for 2010 due to a
decline in demand. The news prompted the company’s share price
to fall by 18.4p to 388.7p, a five-month low.

BAD LOANS TO IMPROVE AT LENDER PARAGON

Mortgage lender Paragon has reported a 13.1 million pound
pre-tax profit for its first quarter. Fewer landlords entering
arrears on their payments helped to boost the company’s income,
reducing the percentage of problem loans that it holds down from
1.54 per cent to 1.5 per cent. It also increased the amount of
free cash that it holds to 98.2 million pounds, having generated
14 million pounds. Paragon specialises in buy-to-let mortgages
and match-funds its mortgages in the wholesale markets. The
lender has been in wind-down since the credit crunch, but aims
to recommence lending when market conditions facilitate.

QUESTOR

ARM Holdings (ARM.L: ) (Buy)

Britvic (BVIC.L: ) (Buy)

The Independent

OIL GIANTS TO REBUILD INDUSTRY IN IRAQ

Tony Hayward, chief executive of the oil producer BP (BP.L: ),
said his company aims to increase production in an Iraqi
oil-field that it has agreed to modernise from one million
barrels of oil a day to three million barrels a day over the
next 10 years. His counterpart at Royal Dutch Shell (RDSa.L: ),
Peter Voser, has made a similar commitment for the two fields
that Shell is involved with. Hayward suggested the increase in
volumes would see Iraq return to mass oil production for the
international market and would be an important step to plugging
an expected gap between supply and demand in the coming decades,
estimated by Hayward to reach 50 million barrels of oil a day by
2030.

BANK CHIEF TELLS DARLING OF U.S. REFORM FEARS

The Chancellor of the Exchequer, Alistair Darling, is to
meet prominent global bankers to discuss U.S. President Barack
Obama’s financial reform plans. Barclays president Bob Diamond,
HSBC chief executive Stephen Green, Standard Chartered chief
executive Peter Sands, plus senior executives from Goldman
Sachs, Morgan Stanley and Citigroup will meet the chancellor
privately over breakfast on Friday. Darling is expected to
reiterate his misgivings over the U.S. approach to financial
reform, specifically his concern that the White House proposes
to break-up larger financial institutions with or without
corresponding international action.

ASTRAZENECA CUTS 8,000 JOBS

The UK drug maker AstraZeneca (AZN.L: ) has announced plans to
cut a further 8,000 jobs over the next five years as several of
its most profitable products lose their patent protection
status. The latest staff reduction comes in addition to the
recent loss of 12,600 positions at the company since 2007.
Speaking as he announced the company’s annual results,
AstraZeneca chief executive David Brennan said the company’s
research and development, and sales and marketing arms worldwide
would bare the brunt of the losses but he would not speculate
about exactly where the cuts would be made.

INVESTMENT COLUMN

Tate & Lyle (TATE.L: ) (Buy)

Paragon (Avoid)

Sports Media Group (Sell)

Stock Analysis

Prepared for Reuters by Durrants

PRESS DIGEST – British business – Jan 29