PRESS DIGEST – British business – May 16

The Mail on Sunday

RECORD LOSSES AT BA SPARK SURVIVAL FEARS

British Airways (BAY.L: ) is expected to report losses of
around 615 million pounds when it reports its results on Friday.
The results for the 12 months to the end of March will mark the
airline’s worst ever financial performance, over a period in
which it suffered from the effects of recession, strikes and bad
weather. There are suggestions from senior staff that the
company will not be able to survive any further blows and
analysts attending Friday’s Investors’ Day conference will be
keen to hear how chief executive Willie Walsh intends to address
the ongoing dispute with cabin crews.

BARCLAYS TO SELL CARE PRINCIPLES

Barclays’ (BARC.L: ) investment banking arm Barclays Capital
is seeking buyers for Care Principles, the specialist healthcare
group on which it wrote down more than 200 million pounds last
year. Barclays is understood to be holding discussions with
several care home groups, including Four Seasons Health Care,
though it is thought unlikely that the bank will be able to
recoup its losses. Both Four Seasons and BarCap have declined to
comment.

The Sunday Times

DRINKERS REJOICE — THE MINI REAL ALE BARREL IS HERE

Marston’s (MARS.L: ), the brewer and pub company, has
announced plans to sell cask ale in take-home form. Marston’s is
currently in talks with a number of retailers about stocking a
miniature version of its new high-tech beer barrel, known as
Fast Cask, for the home. Traditionally, pubs have to leave the
ale to rest for a couple of days before it can be sold. However,
the company’s new technology allows the ale to settle
immediately. The news is expected to be confirmed when the
company announces interim results this week. Panmure Gordon, the
stockbroker, is forecasting interim pre-tax profits of 26.6
million pounds.

BRITISH LAND SET TO SOAR

British Land (BLND.L: ), the property development and
investment company, is on course to outperform its bigger rival,
Land Securities (LAND.L: ), when both companies announce full year
results this week. Known as the second biggest property company
in the UK, British Land is expected to reveal that its net value
of assets has increased by more than 20 percent over the past
year to 490 pence a share. At the same time, it is anticipated
that Land Securities will announce a 16 percent increase in its
net asset value from around 593 pence a share to over 690 pence.

BID TO BARCODE FORESTS

Helveta, an Oxfordshire-based supplier of systems for
tracing products through supply chains, has raised five million
pounds from investors, as it aims to barcode the world’s
rainforests. The company will use satellite mapping technology
with radio tags and barcodes in order to produce a tracking
system. Timber companies use the technology due to legislative
pressure to prove they are not buying from illegal loggers.
Patrick Newton, Helveta’s chief executive, said: “In America and
Europe there is a substantial legal framework in place,
including, in some cases, criminal offences.” Newton said the
company is aiming to break even in 2011 and would consider a
public share offering.

SHAREWATCH

Stobart Group (STOB.L: ) (stock has been driven up 14.9
percent since Monday)

The Sunday Telegraph

PRU IN LAST-DITCH PUSH FOR AIA BACKING

Insurer Prudential (PRU.L: ) expects to launch a record 21
billion dollar UK record rights issue this week in a bid to
kick-start its 35.5 billion dollar acquisition of rival AIG’s
(AIG.N: ) Asian arm, AIA. An announcement is expected to come as
early as Monday. Before the deal can be announced, the Financial
Services Authority needs to approve a new capital structure at
Prudential, which sources close to the deal say the regulator
has done “in principle”. Analysts expect the rights issue to be
priced at about 140 pence a share, 40 percent less than the
theoretical ex-rights price of 230 pence.

ALLIANCE BOOTS EXPANDS ON BACK OF ONE BILLION POUND RESULTS

Privately-owned UK pharmaceutical retailer and wholesaler
Alliance Boots [ABN.UL] is preparing to report record full-year
profits of one billion pounds on Monday, making it only the
third British retailer after Marks & Spencer and Tesco to reach
the billion pound mark. The figures are expected to show that
trading profit for the year to March 31 has surpassed the 11.6
percent growth seen in 2009, when Boots’ profits were 953
million pounds. Boots is now strengthening its internal
development team, looking for new acquisition targets and
developing new store formats, having recently announced
partnerships with Procter & Gamble and Waitrose.

VODAFONE TO REPORT 150 PERCENT PROFIT RISE

Mobile phone company Vodafone (VOD.L: ) is expected to
announce a 150 percent increase in profits this week. Analysts
expect pre-tax profits of around 10.4 billion pounds for the
year to the end of March. In 2009, Vodafone’s profits were 4.1
billion pounds after it accepted 5.9 billion pounds of
impairment charges. Chief executive Vittorio Colao is expected
to reassure investors that Vodafone’s Turkish arm, which he
described as a “disaster” in 2009, is making good progress.
Earlier in 2010 Colao raised Vodafone’s full-year operating
profit target to 11.8 billion pounds from 11.4 billion pounds
after demand for the iPhone surged.

QUESTOR

Tullett Prebon (TLPR.L: ) (buy)

Vodafone Group (VOD.L: ) (buy)

The Independent on Sunday

SANTANDER SET TO BUY ALL OF RBS’S WILLIAMS & GLYN BANKS

Santander (SAN.MC: ) is believed to have submitted the winning
pitch for the 318 Williams & Glyn-branded Royal Bank of Scotland
(RBS.L: ) branches across England and Wales. The Spanish bank has
successfully defeated bids from Virgin, Spanish rival BBVA and
Blackstone, and only National Australian Bank’s Clydesdale Bank
arm remains in the fray. A source said: “The offer won’t be
trumped.” Although it is believed that the deal could be
formally agreed next month it is unlikely that the bank will
take possession of the branches, located across England and
Wales, until next year. RBS is likely to make around two billion
pounds from the sale.

SHAREHOLDERS SNUB SIR STELIOS’S CALL FOR AN EASYJET REVOLT

The founder of no-frills airline EasyJet (EZJ.L: ), Sir
Stelios Haji-Ioannou, is seeking to hold a series of meetings
aimed at persuading shareholders to join an activist campaign
against the firm. The entrepreneur, who recently announced his
resignation from the EasyJet board over conflict on strategy, is
seeking support from the airline’s major investors who include
Standard Life, Legal & General and Schroders to veto plans by
EasyJet to purchase another 24 planes. Haji-Ioannou said the
board should focus on stabilising EasyJet, “which has been hit
by the volcanic cloud and the recession”. But one leading fund
management group said it would not be backing Haji-Ioannou,
describing his argument as “flawed”.

SIR VICTOR BLANK JOINS LIST FOR M&S CHAIRMAN

Former Lloyds Banking Group chairman Sir Victor Blank has
joined a shortlist of candidates being considered for the
position of chairman at retailer Marks and Spencer (MKS.L: ) when
Sir Stuart Rose steps down. Blank was forced to resign as
chairman of Lloyds in 2009 due to investor indignation over the
bank’s rescue of HBOS. Nevertheless, industry sources say Blank
could be a strong contender because of his retail
accomplishments, which includes masterminding a spin-out of the
Burberry Brand. JHA headhunter Jan Hall, acting for M&S, is
compiling a list of suitors for the role, with deliberations
expected to take place in the weeks ahead with new chief
executive Mark Bolland.

The Observer

GLENCORE LAUNCHES 4.2 BILLION POUND FLOTATION TO EXPAND
MINING

According to City sources, Glencore, the commodities trader,
is to raise up to 4.2 billion pounds with a London stock market
flotation. Analysts value the company at 45 billion euros. The
cash will be used to expand the company’s mining business with
possible acquisitions in Brazil, Australia and South Africa.
Observers said the flotation could be the first steps in a
merger with mining group Xstrata (XTA.L: ), which could create a
group valued at 50 billion dollars. Glencore’s chief executive
Ivan Glasenberg favours the merger route and there are reports
executives have already met Xstrata’s shareholders.

REGULATOR CALLS ON EMI TO FUND PENSIONS GAP

The Pensions Regulator has called on EMI, the music group,
to inject as much as 250 million pounds into its pension scheme
to fund the deficit. EMI’s parent company, Maltby Capital, said
the deficit ranges from ten million pounds to 200 million
pounds, depending on the different assumptions made by different
firms of actuaries. EMI said the situation could be rectified by
diverting funds from cash flow instead of drawing down more
debt. It said the gap can be narrowed if the fund looked for
higher-yielding investments. The fund has about 900 million
pounds worth of assets.

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Prepared for Reuters by Durrants

PRESS DIGEST – British business – May 16