PRESS DIGEST – British business – July 21

The Times

FORGERY FEARS AS BANKNOTE COMPANY SAYS PAPER IS SUBSTANDARD

De La Rue (DLAR.L: ), the global banknote producer, said it
had discovered quality and production irregularities in the
paper used to produce banknotes. The news raised fears that
security of banknotes had been compromised. De La Rue said the
production and shipment of the paper has been suspended while an
investigation is carried out. It is unsure whether the
substandard paper had ended up in circulation and how long the
problem had gone undetected. News of the discovery sent the
company’s share price to a two-year low of 776.50 pence, down
147 pence, wiping 146 million pounds of its value.

HAYWARD PREPARES TO QUIT AS BP CHIEF EXECUTIVE

Tony Hayward, chief executive of BP (BP.L: ), is expected to
step down before October. His departure is seen as a move to
restore the energy group’s reputation and thwart a takeover in
the wake of the Gulf of Mexico oil spill. Robert Dudley,
appointed last month to run BP’s Gulf Coast Restoration
Organisation, is seen as the leading contender to replace
Hayward.

TEMPUS

Severn Trent (SVT.L: ) (the sector remains a strong defensive
play)

William Hill (WMH.L: ) (the immediate upside looks limited)

Enterprise Inns (ETI.L: ) (shares don’t look to be going
anywhere for now)

Cable & Wireless Worldwide (CWP.L: ) (shares plunged 17.4
percent on Tuesday after company admits public spending cuts
will adversely affect its business)

The Daily Telegraph

IG GROUP DELIVERS RECORD RESULTS ON INTERNATIONAL GROWTH

Spread-betting firm IG Group (IGG.L: ) has posted record
full-year results for the seventh consecutive occasion, boosted
by international expansion and a rise in trading by customers.
Revenue in IG Group’s UK market increased by eight percent to
163 million pounds, which received a boost from volatile equity
markets triggering strong trading by customers in May.
Meanwhile, overall pre-tax profits increased 26 percent for the
year at 140 million pounds. Chairman Jonathan Davie said that
over the year IG Group has focused on developing established and
newer businesses and is aiming to make newer markets “reach the
scale and performance” achieved in both the UK and Australia.

FINDEL SHARES SLIDE ON WIDENING LOSSES

Shares in home shopping and educational supplies company
Findel (FDL.L: ) dropped 42.39 percent to 9.65 pence on Tuesday
after the firm announced a pre-tax loss of 76.1 million pounds,
up from a restated figure of 57.4 million pounds in 2009. Findel
said the fall in revenue was “entirely attributable” to “very
disappointing” performance at the education division, where
sales fell by 15 percent. Revenue and profit for Findel’s
education business for 2009 had to be restated after auditor
KPMG found “unsubstantiated accounting entries” at the division,
but “no material misstatements” were found in any other
division.

BAE HAS 500 MILLION POUND HAWK DEAL IN SIGHTS

Defence company BAE Systems (BAES.L: ) is likely to announce
an order from India for Hawk trainer aircraft valued at about
500 million pounds during the next few weeks. An announcement on
the contract for between 50 and 60 aircraft could come within a
fortnight. BAE declined to comment on the negotiations but said
it was confident that it would “get a contract soon”. Defence
Secretary Liam Fox recently threatened to scrap government
programmes unless British defence companies cut their prices.

QUESTOR

Gem Diamonds (GEMD.L: ) (hold)

Petra Diamonds (PDL.L: ) (buy)

The Independent

HALF-BAKED, THE VERDICT ON TESCO’S BREAD BOASTS

The Advertising Standards Agency has ruled that supermarket
chain Tesco (TSCO.L: ) was wrong to suggest its bread was baked
in-store from scratch after it was revealed that most stores
simply warm up bread made on other premises. A spokesman for the
ASA said the adverts were banned “because we considered that the
ad implied all Tesco stores with a baking facility baked bread
from scratch”. An investigation from the ASA found that only 504
of Tesco’s 2,362 UK stores baked their bread from scratch. Iain
Loe, spokesman for the Real Bread Campaign, said: “We believe
this ruling sends an important message to advertisers.”

VEDANTA FACES PROTESTS AT AGM OVER ETHICAL RECORD

Vedanta Resources (VED.L: ), the global metals and mining
group, is set for protests at its annual meeting next week, with
pressure groups set to tackle the firm’s ethical record.
Activist shareholders are also attempting to remove members of
the board. Pirc, the independent research and advisory
consultancy, has called on shareholders not to re-elect
directors Euan McDonald and Aman Mehta over what they call the
“failure of the group to engage with explicit investor-led
concerns over the impact of group activities”.

INVESTMENT COLUMN

Enterprise Inns (ETI.L: ) (speculative buy)

IG Group (IGG.L: ) (keep buying)

Severn Trent (SVT.L: ) (hold)

The Guardian

WORLD CUP UPSETS LEAVE WILLIAM HILL CHEERING

Ahead of the reporting of full interim results next month,
William Hill’s (WMH.L: ) chief executive Richard Topping told the
City that this summer’s World Cup was the bookmaker’s most
lucrative since the 1970 tournament in Mexico. The group
benefited from a number of upset results, such as Germany’s 4-1
hammering of England, and also gained from the growing
popularity of in-game betting, where bets are taken during a
game. The profitable World Cup helped William Hill shrug off a
poor Royal Ascot, where a number of wins by favourites cost it
one million pounds-a-day over the five-day event.

PENSION TRUSTEES TAKE LEGAL ACTION TO BLOCK ITN PLAN

ITN is likely to face a legal challenge over plans to reduce
pension payouts to the families of former employees. The news
provider, which is 40 percent owned by ITV (ITV.L: ), has written
to staff to inform them that a “discrepancy” in the scheme has
resulted in overpayments to next of kin when employees die in
retirement. ITN estimates it can save 11 million pounds a year
by changing the way the scheme is administered but the scheme’s
trustees are to seek a High Court ruling on the legality of the
proposals. ITN’s pension deficit currently stands at 56 million
pounds.

OFT TO EXAMINE TAKEOVER OF BSKYB’S TAKEOVER OF VIRGIN TV

The Office of Fair Trading is set to examine whether last
week’s 160 million pound acquisition of Virgin Media Television
by BSkyB (BSY.L: ) is likely to throw up any regulatory issues in
the UK. The regulator will assess whether BSkyB’s acquisition of
Virgin, which operates channels such as Bravo and Living,
constitutes a merger under the 2002 Enterprise Act and has
invited the industry to put forward its views. If it decides
that competition in the pay-TV market has been lessened the OFT
will then refer the deal, which has already won regulatory
approval in Ireland, to the Competition Commission.

Stock Market Advice

Prepared for Reuters by Durrants

PRESS DIGEST – British business – July 21