PRESS DIGEST – British business – May 8

Saturday May 8 2010

The Times

INVESTOR CALLS FOR THE HEAD OF PRU CHIEF

The managing director of Neptune Investment Management and
Prudential (PRU.L: ) shareholder Robin Geffen has begun a campaign
to oust the insurer’s chief executive Tidjane Thiam from his
post. Geffen is displeased with Thiam’s bungled attempts to
acquire the Asian subsidiary of U.S. insurer AIG (AIG.N: ) and any
subsequent implications for Prudential’s UK business. He is
creating the “Prudential Action Group”, which hopes to gain the
10 percent of support amongst investors necessary for a special
resolution of no confidence in Thiam at a May 27 meeting.

THOUSANDS ON THE BRINK OF GOING BUST

35,386 British people went bankrupt, entered an individual
voluntary arrangement or took out a debt relief order in the
first quarter of 2010, a rise of 18 percent. R3, the association
of business recovery specialists, said that the figures did not
include up to half a million people who had turned to debt
management plans or those who had contacted creditors
informally, also thought to number around half a million. Alan
Tomlinson, partner at insolvency boutique Tomlinsons said that
insolvencies could see a further sharp spike if interest rates
rose.

HOUSE PRICES SLIP AS MORE GO ON THE MARKET

Figures from leading mortgage lender Halifax show that house
prices saw an unexpected decline in April despite the raised
stamp duty threshold, as the number of properties for sale
increased. Prices fell 0.1 percent to an average of 168,202
pounds, but are still up 6.6 percent on this time last year.
Halifax housing economist Martin Ellis said: “The improvement in
house prices since spring 2009 has encouraged more people to try
to sell their property, helping to push up the stock of unsold
properties. As a result, the imbalance between supply and demand
is easing.”

MOSS BROS GOES BESPOKE – BUT CAN IT MEASURE UP TO RIVALS?

Menswear retailer Moss Bros (MOSB.L: ) is to open a chain of
outlets selling Chinese-made bespoke suits as it looks to
undercut traditional retailers. The first Moss Bros Bespoke
store will open next month in the City of London, with customers
being fitted in-store and suits being delivered from China
within four weeks. The suits will sell for between 250 pounds
($386.7) and 350 pounds. The use of the word ‘bespoke’ has
attracted criticism from the Savile Row Bespoke Association,
whose chairman Mark Henderson said: “This is, figuratively and
literally, several thousand miles from bespoke tailoring.”

ITV PREPARES FOR SECOND-HALF STRUGGLE AFTER WORLD CUP

New ITV (ITV.L: ) chief executive Adam Crozier said on Friday
that the broadcaster has seen a 22 percent rise in advertising
revenue for the second quarter due to the upcoming World Cup,
but warned that the outlook for the second half of the year was
uncertain. ITV chairman Archie Norman, addressing the company’s
annual meeting, said that expected cuts to the public sector
could mean that the broadcaster falls back to “no growth or even
negative growth in the early part of 2011.” Revenue at ITV was
up six percent to 450 million pounds in the quarter to March 31.

Daily Telegraph

PUT THE ECONOMY FIRST, BUSINESS LEADER WARNS

Business groups and influential City figures have appealed
for a quick solution to the uncertain situation following the
general election, as the FTSE 100 fell to its lowest point in
three months. The Institute of Directors, the EEF and the
British Chambers of Commerce have all called for the period of
“political horse-trading” to be as short as possible, so that a
clear plan of action for the economy can be outlined.

BAD DEBTS CONTINUE TO PUSH RBS INTO THE RED

Royal Bank of Scotland (RBS.L: ) has reported a first-quarter
loss of 248 million pounds and admitted that it is unlikely to
return to profit until 2011 at the earliest. However, the bank’s
impairment losses appear to have peaked in 2009, and RBS expects
them to continue falling for the rest of 2010. Chief executive
Stephen Hester stated that he was pleased with the progress
being made, although it compares unfavourably with the
unexpectedly strong performance of Lloyds Banking Group (LLOY.L: )
and HSBC (HSBA.L: ) during the first three months of the year.

The Independent

BA FACES 20 DAYS OF STRIKES AFTER LATEST OFFER TO CREW…

The cabin crews of airline British Airways (BAY.L: ) have
rejected an offer from the management of the company that was
intended to resolve their industrial dispute. The staff’s union,
Unite, said that there had been a majority of 81 percent opposed
to the deal. The failure of the offer leaves BA open to further
strikes, which could last up to 20 days each. Unite’s leaders
said: “BA management should take note of their own employees’
strong rejection of their offer and immediately address the
outstanding concerns.”

The Guardian

STRONG RESULTS MAKE HSBC A RARE RISER

British bank HSBC (HSBA.L: ) was one of the four companies to
have its share price increased at close of trading on Friday. It
was boosted by the announcement that its US operations had
returned to profit for the first time since the start of the
financial crisis in 2007. HSBC did not produce exact figures,
but claimed that profits were up in its global banking and
markets arm compared to the last quarter of 2009.

UK WINS REPRIEVE FOR POLLUTING POWER STATIONS

The European Union has extended a deadline for new
regulations that could lead to the closure of coal-fired power
stations in the UK, such as the one operated by British energy
firm Drax (DRX.L: ). This follows the application of pressure by
the UK government and energy companies on the EU, which has
delayed the introduction of tougher emissions targets to 2019.
It was argued that the previous deadline of 2016 would subject
Britain to an “energy crunch” if it was forced to stop using
coal stations in favour of renewable and nuclear power
infrastructures that would still be under construction.

Investing Analysis

($1=.6465 Pound)

PRESS DIGEST – British business – May 8