PRESS DIGEST – Financial Times – Jan 27

Financial Times

VIRGIN MONEY LANDS PITMAN TO LEAD ASSAULT ON HIGH STREET
BANKS

Virgin Money has stepped up its assault on Britain’s
established high street banks by appointing veteran retail
banker Sir Brian Pitman as chairman. According to people close
to the situation, the newly licensed group could announce
Pitman’s appointment as early as Wednesday. The move would be a
coup for Virgin Money, which is seeking to launch a fully
fledged banking service later this year. The company is also
likely to be among the frontrunners for a renewed bid for
Northern Rock (NRKx.L: ).

THAMESLINK TO OFFER FREE TRAVEL

Train operator FirstGroup (FGP.L: ) will announce on Wednesday
that passengers on the disrupted Thameslink commuter railway
line will be able to claim discounted tickets or free travel, in
addition to the usual compensation. A row that erupted over
drivers refusing to work voluntary overtime caused more than
200,000 commuters a day to suffer nearly three months of
disruption. FirstGroup is to promise season ticket holders a
choice between ten days’ free travel or a discount on their next
travel card.

LAW FIRMS PROBED OVER MORTGAGES

The Solicitors Regulation Authority investigated more than
100 law firms suspected of mortgage fraud last year. The body,
which supervises 113,000 solicitors, completed 106
investigations as part of a crackdown on rogue solicitors. Of
these, 22 law firms have been shut down, 24 cases referred to
the police and 30 cases have been referred to the Solicitors
Disciplinary Tribunal.

DOVER PORT SEEKS PRIVATE CAPITAL

The Port of Dover is likely to bring in private capital to
fund a 400 million pound expansion. The move would see the
busiest ferry port in Europe turn its back on more than four
centuries of public ownership. It would also be one of the first
assets to bring in outside investors under plans for publicly
owned assets announced recently by the government. The port,
which handled more than eight million vehicles in 2008, will use
the investment to fund a second terminal.

BUILDERS DOWNCAST OVER RETURN OF LOST JOBS

Out of the 400,000 jobs the construction industry lost
during the recession, the sector expects to recoup only a
quarter over the next five years. The gloomy forecast has
reinforced predictions that recovery in the labour market will
be a painfully long and drawn out process. According to the
Construction Skills Network, a further, small drop in output is
expected in 2010, with recovery not forecast until next year.
Mark Farrar, chief executive of Construction Skills, the skills
council coordinating the network, is urging politicians to
consider the wider economic impact before embarking on big cuts
in capital projects.

CQS WARNS OVER HOUSING MARKET AND GLOBAL ECONOMY

CQS, one of the largest hedge funds in Britain, briefed
clients on Tuesday on serious concerns over the UK housing
market and the prospects for recovery in the global economy. The
London-based manager of funds worth 3.8 billion pounds told a
private audience of 200 that it expected further market
dislocations as central banks withdraw their monetary support to
markets this year. Company founder Michael Hintze said: “The
easy liquidity trade has gone.”

SAGE CONTINUES TO PAY DOWN DEBT

Sage (SGE.L: ), the accounting software company, has sparked
speculation that the group could soon resume making acquisitions
after signalling a further debt pay-down. The group revealed
debt had decreased to 392 million pounds from 439 million pounds
in the three months to December 31, as it continued to generate
cash. Analysts expect full-year revenue will drop to 1.4 billion
pounds from 1.44 billion pounds, and that earnings before tax
will increase to 347 million pounds from 346 million pounds. Its
shares remained unchanged at 237.7 pence.

CURRENCY HITS RIGHT NOTE FOR DE LA RUE

Although strong production volumes boosted De La Rue’s
(DLAR.L: ) banknote printing arm, the company’s figures were
offset by less impressive performances at its two smaller
divisions. The group said in a trading statement, which covered
the bulk of the second half of its financial year, that
performance had been in line with its previous expectations. Its
shares dropped 38 pence to 946 pence on Tuesday, having
increased from a low of 808.5 pence last July. The biggest
commercial printer of currency and maker of banknote paper in
the world remained silent on progress towards a potential sale
of UK lottery operator Camelot [LOTT.UL], which it partly owns.

REGULATOR’S PRICE POLICY ACCEPTED BY THAMES

Thames Water has become one of the last water companies to
rule out a challenge to regulator Ofwat’s pricing restrictions.
The move means that most of the sector has accepted a regulatory
regime expected to herald five tough years ahead. Thames Water,
the largest water group in Britain, decided to submit to what it
described as a “particularly tough” settlement just hours before
a deadline to refer Ofwat’s decision to the Competition
Commission. Only Bristol Water said it would take on the
watchdog, although several small companies had still not made
their decision public following the midnight cut-off.

Prepared for Reuters by Durrants

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PRESS DIGEST – Financial Times – Jan 27