PRESS DIGEST – British Business – July 27

NATIONAL GRID’S GAS VOLUMES FALL BY FIVE PERCENT

Electric and gas company National Grid (NG.L: ) announced in a
trading update that its full-year results will beat forecasts
despite a 5 percent fall in gas volumes. Electricity volumes
rose by 1.3 percent while gas volumes were hit by industrial
demand failing to recover following the recession, but the
company’s earnings are not linked to the volumes it transports.
National Grid chief executive Steve Holliday said: “We are well
positioned to deliver another year of good performance, which
will underpin our targeted 8 percent dividend growth policy to
2012.”

QUESTOR

Reckitt Benckiser (RB.L: ) (Buy)

Pearson (PSON.L: ) (Buy)

The Independent

CONNAUGHT ADMITS IT WILL BREACH DEBT COVENANTS

Social housing maintenance group Connaught (CNT.L: ) has
admitted that its net debt at the end of its year will be
significantly higher than the previously forecast figure of 120
million pounds. Shares in the group fell by 69 percent to 31.5
pence after the company made the announcement on Monday. Stock
market analysts declared the company to be “in serious trouble”,
with many removing share price targets citing insufficient
information about the company’s finances as the reason.

UK COAL SEPARATES MINING AND PROPERTY BUSINESSES

UK Coal (UKC.L: ), the largest mining company in Britain,
announced on Monday that it is to split its resources and
property businesses. It also announced that its current chief
executive, Jon Lloyd, and chairman, David Jones, will be leaving
the company. Jones said that the mining division had seen “sharp
improvements” in performance recently, while the property
division has “demonstrated the substantial value it can
release”. UK Coal’s value has declined by almost 50 percent over
the last six months and its share price has slid by 92 percent
since Lloyd succeeded previous chief executive Gerry Spindler in
2007.

DUDLEY TO TAKE OVER AT BP BUT CITY PREDICTS HE WILL NOT LAST

Most City observers are sceptical that Bob Dudley, the main
widely tipped to take over from Tony Hayward as BP’s (BP.L: ) new
chief executive, will remain in the post for longer than a
couple of years. Dudley is seen as an “easy option” following
the expected departure of Hayward after the disastrous Deepwater
Horizon oil spill. As an American national, one brought up not
far from the Gulf Coast which has been the area worst affected
by the oil slick, his appointment is also seen to be beneficial
for the company in PR terms.

INVESTMENT COLUMN

National Grid (NG.L: ) (Buy)

Pace (PIC.L: ) (Buy)

Pearson (PSON.L: ) (Buy)

The Guardian

WILLIAM HILL TAKES UK PHONE BETTING SERVICE OFFSHORE

Bookmaker William Hill (WMH.L: ) has announced the closure of
one UK call centre and the outsourcing of jobs from another,
affecting 400 workers. Chief executive Ralph Topping has
complained that the company is under increasing pressure from
competitors, warning that 170 of its betting shops are
unprofitable. 50 of those are likely to have their situation
reviewed before the end of the year, putting 200 UK jobs at risk
if the business decides to close these outlets. The company is
expecting to report half-year revenues up by 3 percent and
profits flat at 135 million pounds.

CABLE WARNS HIGH STREET BANKS ON BONUSES

On Monday, business secretary Vince Cable warned high street
banks to be “very, very self-conscious” when drawing up their
employee and stockholder remuneration packages. Cable also did
not rule out the possibility of levying a tax on the profits of
banks. High street banks will announce their first-half figures
next week. Barclays (BARC.L: ), HSBC (HSBA.L: ) and Royal Bank of
Scotland (RBS.L: ), the three with investment banking divisions,
are expected to announce a total of five billion pounds’ worth
of bonuses and pay for their employees. Taxpayer-owned RBS is
expected to report its first profit since October 2008.

BROADBAND PROVIDERS PULLING A FAST ONE

On Tuesday, communications regulator Ofcom will release
research that shows the average percentage of broadband speed
received by consumers has fallen to 46 percent of the advertised
theoretical maximum to which they subscribe. The average figure
at the same time last year was 56 percent. Ofcom will also
complain that some Internet service providers are advertising
speeds that no customers are actually receiving. The regulator
is to push for tighter control of what ISPs can advertise, as
some consumer groups said that the figures showed ISP
advertising to be “misleading”.

Investment Research

PRESS DIGEST – British Business – July 27