PRESS DIGEST – Financial Times – April 17

Financial Times

BUSINESS FAILURES FALL

Corporate data provider Equifax said the number of business
failures in the UK has fallen by 11.1 percent in the last 12
months. Head of commercial information solutions Nic Beishon
said the data indicated a slowing of the economic downturn,
although the recovery was still not strong. Business failures
continued to fall in the first quarter of 2010 but the figures
were only 0.5 percent down on the same period in 2009. Declines
in business failures were seen in the transport, communications
wholesale and services sectors but the retail sector saw an 11.2
percent rise in failures in the first quarter, compared with the
same period in 2009.

LATE PAYMENTS INCREASE

Figures released this week by BACS Payment Schemes show
delays in the time customers take to settle their bills are
continuing to rise. BACS, the organisation behind direct debits,
said small firms are on average having to wait 41 days longer
than their originally agreed payment terms, 9.5 days longer than
they did six months ago. A total of 37 percent of the survey’s
467 respondents cited large companies as the worst culprits and
the problem was found to be worse in the south than in the rest
of the country. However, both the total and the average amounts
owed in late payments fell between June 2009 and December 2009.
The total amount owed fell from 30.4 billion to 24 billion
pounds, while the average amount owed fell from 28,000 to 25,000
pounds.

LONDON LUXURY PROPERTY MARKET STAGES RECOVERY

The London luxury home market has experienced a recovery in
recent weeks, aided by a number of “big-ticket” deals. A number
of the sales have been to overseas buyers, including the sale of
a property at the One Hyde Park development in Knightsbridge,
which is managed by property entrepreneurs the Candy Brothers.
The 28 million pound sale, to a Middle Eastern buyer, is a
record price for the year and the development, which will be
officially launched on Monday, has also received reservation
fees for a further 100 million pounds worth of deals from Asian
and European buyers. Noting the correlation between the luxury
market’s recovery and the higher price of oil, Nick Candy
suggests that foreign buyers are also attracted to properties
priced in weakened sterling.

UK VULNERABLE TO ENERGY SHORTFALL

Energy provider Eon UK has said European Union regulations
could expose Britain to energy shortfalls. The energy firm,
which is part of German utility E.ON (EONGn.DE: ) (EONGn.DE: ), said
EU rules are forcing its oil-fired power station at Grain in
southeast England to shut down. The announcement comes as the UK
Business Council for Sustainable Energy suggested Britain would
need to increase its generating capacity by more than 40,000
megawatts to maintain power supply when output from renewable
sources recedes. The BCSE said Britain is planning to instal
8,000 offshore wind turbines over the coming decade.

TESCO TO LAUNCH CLOTHING LINE AIMED AT YOUNG

Retailer Tesco (TSCO.L: ) is launching a new clothing line
targeting the “style-conscious 16 to 24-year-old market”, in a
bid to challenge rival Asda (WMT.N: ) by becoming the biggest
seller of clothes by volume in the UK. The new clothing line,
Florence & Fred Trend, offering a collection with the latest
street and catwalk trends, will be launched in May. Jan
Marchant, Tesco buying director, said the F&F Trend collection
“has been developed in response to the increased desire for
fashion-forward clothes that don’t break the bank”.

BRITISH LAND REACQUIRES BAKER STREET SITE

Property development and investment company British Land
(BLND.L: ) has re-aquired a large site on Baker Street in London,
for 29 million pounds from Irish construction group McAleer &
Rushe. Previously, the FTSE 100 firm had owned the Baker Street
site but opted to sell in 2005 for about 57 million pounds. The
acquisition is expected to allow British Land to go ahead with
plans to develop a 100 million pound office scheme, which has
planning consent on the Baker Street site. JP Morgan analyst
Harm Meijer was optimistic about the deal, describing it as
“good value for British Land” and estimated that with no rental
growth British Land could expect a “profit margin of 15 percent
on the development”.

GLIMPSE OF PROFIT ON RBS SHARES

The share price of Royal Bank of Scotland (RBS.L: ) increased
on Friday above the average level at which the government
invested 45 billion pounds in the state-backed bank, following
an analyst’s prediction that RBS would make almost 600 million
pounds in profit this year. Bank of America Merrill Lynch
analyst Michael Helsby said quick asset sales and a brighter
economic outlook than expected would improve RBS’s prospects.
The bank’s share price peaked at 50.1 pence on Friday, slightly
above the 49.9 pence average price at which the government’s
bailout measures have been priced, before closing at 48.3 pence.

NEXT’S CHIEF SECURES ONE MILLION POUND BONUS

Simon Wolfson, chief executive of fashion chain Next
(NXT.L: ), more than doubled his total pay last year with a one
million pound bonus, following a decision by Next to reset the
criteria it uses to calculate bonuses. Wolfson’s remuneration
increased to 1.74 million pounds last year from 831,000 pounds
in the year to January 2009. His annual bonus rose to 1.02
million pounds from 123,000 pounds after Next exceeded its
earnings per share target of 233.2 pence, set last year. A
leading shareholder welcomed the pay deal, saying Next’s
executive directors had “delivered for shareholders”.

AUSTRALIAN ANTITRUST BODY POSTPONES RIO-BHP RULING AGAIN

The Australian Competition and Consumer Commission has again
deferred its ruling on a proposed iron ore joint venture between
miners Rio Tinto (RIO.L: ) and BHP Billiton (BLT.L: ). The
competition regulator said on Friday it is giving the two firms
“additional time to respond” to an earlier request for more
information about the venture. The deadline for the ruling has
been revised to May 27. The ACCC has said it is investigating
whether the venture would hinder competition by withholding
supply or tacitly collaborating with rival miner Vale, the
area’s other big producer of iron ore.

BEST THREE MONTHS ON RECORD FOR HARGREAVES

Hargreaves Lansdowne said on Friday that the three months to
March 31 were marked by an unprecedented volume of business and
a rise in clients, as equity markets rose and investors sought
tax efficient investments ahead of imminent changes to
legislation. The Bristol-based investment adviser said the last
three months had been its best quarter on record. The firm,
which is the UK’s largest investment adviser by market
capitalisation, saw assets under administration increase by 12.8
percent quarter-on-quarter to 17.6 billion pounds and revenue go
up by 20 percent compared with a year ago.

Stock Market Money

Prepared for Reuters by Durrants

PRESS DIGEST – Financial Times – April 17