PRESS DIGEST – British business – June 8

The Times

GREEN BUT DEADLY — THE ARMY’S NEW ETHICAL BULLET

BAE Systems (BAES.L: ), the largest defence company in Europe,
is to provide the Ministry of Defence with a million new rounds
of lead-free ammunition for testing. The company has been
commissioned to redesign the British Army’s light ordnance,
following concerns expressed by serving soldiers that their
bullets are not deadly enough. The Army’s current ammunition
consists of a steel tip, lead core and copper jacket. The new
bullet will be lead-free and lengthened in order to maintain the
weight. The 5.56mm bullet was introduced in the Fifties to allow
soldiers greater manoeuvrability, but operations in Afghanistan
have shown that it can be ineffective against the Taliban who
have no body armour.

DEAL OF THE DAY

Shares in Avanti Communications (AVN.L: ), the broadband
satellite operator, fell 12.5 pence to sit at 471.5 pence
following the announcement that the company has signed a
ten-year contract to sell services on its Hylas 1 satellite to a
new customer. The contract is expected to generate a minimum of
10.47 million pounds and will be used to deliver broadband, TV
and Internet telephone services to consumers in the UK and
Ireland.

NEED TO KNOW: VECTURA

Vectura (VEC.L: ), the British specialist in inhaled drugs,
reported a 29 percent rise in full-year revenue, adding that it
was in negotiations about partnering its asthma product in the
United States. The product is thought to be a generic copy of
Advair, which is produced by rival GlaxoSmithKline (GSK.L: ).
Milestone payments from Vectura’s partner Novartis boosted
revenue.

TIDDLER TO WATCH

Nighthawk Energy (NGTE.L: ), the UK-registered, U.S.-focused
energy company, witnessed a rise in shares of 3.75 pence to 26
pence after the company said it had moved to appoint an adviser
to investigate the possible sale of a stake in its Jolly Ranch
project in Colorado. There has been a suggestion that the
company has received up to ten indications of interest for the
project, of which it owns a 50 percent stake with its partner
Running Foxes Petroleum.

TEMPUS

Brammer (BRAM.L: ) (there is every reason to hang on)

Workspace (WKP.L: ) (pass)

Phoenix IT (PHIT.L: ) (buy)

The Daily Telegraph

EMI ON “FIRM FOUNDATIONS” SAYS CHIEF EXECUTIVE ALLEN

EMI’s new executive chairman, Charles Allen, reports that
the record label is on “firm foundations for growth” despite
owing Citigroup an estimated three billion pounds. Guy Hands’
private equity group Terra Firma bought the business for 4.2
billion pounds in 2007, borrowing from Citigroup, and Allen says
that since then the business has more than trebled cash
generation at its recorded music division. Hands recently
persuaded investors to inject an additional 105 million pounds
to meet its June 14 Citigroup debt repayment deadline. Allen
said: “It buys us at least a year. I think that really gives
confidence because why would you write a cheque for around 100
million pounds and not look to invest in the business further.”

AFREN SUFFERS PROTEST VOTE OVER PAY

Afren (AFRE.L: ), the independent oil and gas group which
focuses on Africa, has carried a directors pay and bonus
resolution in despite of the fact that 49.25 percent of
shareholders voted against it. Chief executive Osman Shahenshah
told the annual general meeting’s audience that the decision to
guarantee directors their options packages was taken in order to
insure that the small company could continue to attract talent.
Shahenshah pointed out that the share price has risen since the
beginning of 2009 to 89.75 pence from 27 pence.

HSBC BACKS ISSUE

HSBC (HSBA.L: ) has taken up a 3.34 billion pound rights offer
by China’s Bank of Communications by spending 635 million pounds
in order to maintain its 19 percent stake in the bank. It is
using its own resources to fund the investment in China’s fifth
biggest bank as part of its growing commitment to a shift in
focus to the emerging economies in the East. The bank described
the move as being a sign of its financial strength.

PRU BOARD APOLOGISES TO ANGRY INVESTORS

Shareholders in insurer Prudential (PRU.L: )> called for board
members to quit at the company’s AGM on Monday after the
collapse of Prudential’s bid to buy rival AIG’s Asian business.
However, Prudential chairman Harvey McGrath, while apologising
and calling the company’s decision to pull out of the deal
“regrettable”, said that he did not think the insurer needed to
“kneejerk into any asset sales or other fundamental
restructuring”. Insiders said apologies from the board were not
likely to prevent further calls for resignations. However,
shareholders approved Prudential’s remuneration report. Panmure
Gordon analyst Barrie Cornes said the meeting was “well
handled”.

QUESTOR

Petropavlovsk (POG.L: ) (buy)

Brit Insurance (BRE.L: ) (buy)

The Independent

“TWITTER WITHOUT TYPING” AUDIOBOO SECURES FUNDING

Radio content producer UBC Media (UBC.L: ) and the Pure Radio
division of microprocessor manufacturer Imagination Technologies
(IMG.L: ) have announced investments in Audioboo, a company which
allows users to record audio clips on their mobile phones and
upload them to the Internet.

INVESTMENT COLUMN

British Airways (BAY.L: ) (buy)

Phoenix IT (PHIT.L: ) (buy)

UBC Media (UBC.L: ) (buy)

The Guardian

UNITE THREATENS SUMMER STRIKES

The Unite trade union has held talks with British Airways
(BAY.L: ) cabin crew regarding the terms of a new strike ballot.
Unite is expected to make an announcement regarding the
possibility of a summer of walkouts when the last of three
five-day strikes finishes on Wednesday. It is believed that the
dispute now centres on travel concessions that have been
withdrawn from BA employees who took part in strikes over March.
British Airways chief executive Willie Walsh said the current
strike action had been a “failure”. Walsh said: “Unite have
failed to ground British Airways, and we are continuing to fly
and we are continuing to work.”

Investing

Prepared for Reuters by Durrants

PRESS DIGEST – British business – June 8