PRESS DIGEST – Financial Times – June 8

Financial Times

SUNNY WEATHER REVIVES HIGH STREET SALES

High street sales rebounded in May, following a dip in the
previous month, according the British Retail Consortium,
although consumers remained wary of big ticket purchases. The
trade association’s closely watched monthly sales survey
revealed a year-on-year growth rate of three percent for May,
compared with a 0.2 percent decline in April. The three month on
three month rate, considered a smoother measure of retail
activity, showed a 3.4 percent rise in the three months through
to May, with sunny weather towards the end of the month boosting
sales of clothing and footwear.

FILM INDUSTRY SEEKS TO HEAD OFF FUNDING CUTS

The UK film industry has published a “defence document”
stressing the sector’s beneficial impact on the wider economy.
The report, commissioned by the UK Film Council, Pinewood
Shepperton Studios and visual effects company Framestore, puts
forward the industry’s case in an effort to head off any
measures contained within the government’s austerity package
that would reduce funding or remove tax relief for the sector.
It contributed over 4.5 billion pounds to Britain’s output last
year. Analysts believe the industry’s tax relief system is
unlikely to be abolished — given the need to incentivise
production.

SCOTLAND FACES “TRIPLE ECONOMIC TSUNAMI”, RETAIL CHIEF WARNS

Retail entrepreneur Sir Tom Hunter has warned that Scotland
faces a “triple economic tsunami” of reduced state spending,
falling rates of business start-ups and markedly increased
unemployment. Research carried out by the Hunter Centre for
Entrepreneurship at Strathclyde University showed that last year
business start-up rates in Scotland reached their lowest levels
since they began being recorded ten years ago. Commenting on the
findings of the centre, Hunter called for “aggressive fiscal
policies” as well as “ground level support for entrepreneurial
start-ups”.

ADVERTISING INDUSTRY OPTIMISM SPARKS CONCERN ON COSTS

GroupM, the media buying division of advertising giant WPP
(WPP.L: ), has upwardly revised its growth forecast for the UK
advertising market, in response to a startling improvement in
spending since the start of the year. The company raised its
2010 forecast from flat to growth of 4.2 percent and a value of
11.8 billion pounds. The increased optimism in the industry has
led to concern over advertising price inflation, with clients
having budgeted on the assumption of zero growth in the sector.

BEGBIES EXPECTS RISE IN INSOLVENCIES

Insolvency specialist Begbies Traynor (BEG.L: ) said it is on
track to deliver expectations of a 10.3 million pound profit
update for the year ending April 30 2010, as it reported its tax
consulting unit returned to profitability in the second half.
Despite the proportion of corporate insolvencies in Begbies’
second half to April 30 being relatively flat in comparison to
the first half, the firm said it remained confident of a rise in
companies becoming insolvent due to the recession. Executive
chairman Ric Traynor said there are many “zombie businesses,
which are effectively the walking dead and have no chance of
actually coming back to life”. Begbies is expected to announce
its profits on July 8.

500,000 OCADO CUSTOMERS GIVEN CHANCE TO BUY SHARES IN IPO

Online food retailer Ocado is inviting customers who have
spent more than 300 pounds since the beginning of 2010 to buy
shares in the firm to facilitate its market listing on the
London Stock Exchange. The start-up, which is seeking a one
billion pound float by mid-July, agreed an exclusive ten year
supply deal with supermarket chain Waitrose to demonstrate the
feasibility of its business model to investors. Chief executive
Tim Steiner defended the unique move to tap private investors
for its initial public offering, saying the “banks would prefer
us not to do this because it is simpler to do an institutional
float”. Meanwhile, finance director Andrew Bracey said he
predicts retail investors buying anything from about 20 to 50
million pounds of shares if the IPO goes ahead.

GROWTH IN FROZEN FOOD SALES HELPS LIFT ICELAND

Iceland Foods Group [ICFDG.UL], owner of retailers Iceland
and Cooltrader, has delivered a rise in pre-tax profits by 19.4
percent to 135.4 million pounds, bolstered by buoyant frozen
food sales. The acquisition of 74 new outlets for Iceland was
credited with the sales growth through the year ending in March,
51 of which were bought from Woolworths. Chief executive Malcolm
Walker said buying Woolworths outlets helped give the retail
group “a lift in one fell swoop”. The foods group, which is now
majority owned by the Icelandic government, is expected to
continue opening new retail outlets but at a slower rate, with
about 20 new sites expected in 2011.

WORKSPACE CLOSE TO DEBT REVAMP DEAL

Commercial property provider Workspace (WKP.L: ) said a rise
in like-for-like occupancy to 84.7 percent from 82.9 percent in
March 2009 helped secure an eight percent rise in trading profit
to 10.8 million pounds. The developer of flexible business space
in London reported a pre-tax profit of 26 million pounds,
reversing the 360 million pound loss it posted in 2009. Adding
to the firm’s optimism was news that Workspace has secured a 199
million pound debt facility with GE, ahead of its extension date
of August 2010 and is in negotiations with a group of lenders
for a new five-year facility worth 200 million pounds. Chief
executive Harry Platt said occupancy enquiries were at a good
level and forecast “some recovery under way”.

FALKLANDS EXPLORER SET FOR 40 MILLION POUND CASH CALL

Aim-listed oil firm Rockhopper (RKH.L: ) is set for a 40
million pound cash call, after working with broker Canaccord
Adams to sound out institutional investors to take part in an
accelerated book build. The group, the first to find oil on the
Falkland Islands, will use the money raised from the placing to
pay for part of the well and flow testing of its Sea Lion
discovery. Rockhopper intends to raise less than ten percent of
its market value, in order to avoid triggering pre-emption
rights, and is understood to be considering a larger equity
raising later in the year when it plans to move to the main
market and enter the FTSE 250.

Stock Market Trading

Prepared for Reuters by Durrants

PRESS DIGEST – Financial Times – June 8