British business press - Aug 23

The Times

STEEP FALL IN ADVERTISING WILL MEAN CUTS AT CHANNEL 4

Channel 4's chairman Luke Johnson has said the broadcaster will have to reduce its 620 million pound programming budget as it struggles to cope with a severe downturn in advertising. According to the broadcaster's advance booking data, a collapse in September bookings is expected to be followed by difficult trading in the important pre-Christmas period. "In looking at the programming budget, we are going to have to be mindful of the stresses out there," said Johnson.

ASDA GETS SMART WITH SPECIALLY TIMED PRICE CUTS

Asda has introduced a series of substantial price cuts as it steps up efforts to win cash-conscious customers. The move was a reflection of decreasing spending power, the supermarket said. "We are finding that people are buying more of our own-brand value range and this is particularly happening on the third week of the month as salaries run down." Sales of items in the "Smart Price" range have soared, particularly in areas such as South Wales where disposable income has been hit hardest.

ARRIVA PROFITS UP 40 PERCENT AS MOTORISTS LEAVE THE CAR AT HOME

Arriva reported a 40 percent increase in pre-tax profit and said the worsening economy and surging fuel costs are encouraging people out of their cars and on to public transport. Revenue increased 59 percent in the six months to June 30, rising to 1.4 billion pounds compared with 902 million pounds a year earlier. Pre-tax profits rose from 47.3 million pounds to 66.3 million pounds for the first half of the year. David Martin, chief executive, said: "Our focus on Europe's diverse transport markets gives us resilience and great potential for further growth." Shares rose 4.2 percent to 743 pence.

The Daily Telegraph

TNK-BP'S CHIEF ACCUSES RUSSIANS OF POWER ABUSE

Robert Dudley, the exiled chief executive of BP's joint venture TNK-BP, has written an open letter accusing the Russian authorities of abusing their powers in hounding him out of the country. "There has been an abuse of power by the State Labour Inspectorate," Dudley claims, before setting out a list of grievances and demanding an immediate investigation. Chief of the inspectorate, Mikhail Malyuga, denied Dudley's claims of bias, saying: "All the checks that took place at the firm were done by the law".

ITV'S DIRECTOR OF TELEVISION DISMISSES IN-HOUSE PRODUCTION QUOTA

Peter Fincham, ITV's (ITV.L: Quote, Profile, Research, Stock Buzz) new director of television, has cast aside Michael Grade's controversial target of commissioning three-quarters of the broadcaster's programmes from its in-house production teams. Questioned on the 75 percent quota set by Grade last September, Fincham said: "That's not a target. When that was said it was making the point that the in-house arm could aspire to that . For broadcasters like ITV it's very important to maximise our own production capability while working with the best indies."

WPP SHOWS GROWTH IN FACE OF SLOWDOWN

Advertising giant WPP , run by Sir Martin Sorrell, beat market expectations for sales and profits in the first half and stood by its full-year profit target as it reported strong growth in Central and Eastern Europe, Africa, the Middle East, Latin America and Asia. But Sorrell warned that cooling developed economies meant a slowdown in advertising spending. WPP's interim dividend, payable on November 10, is up 20 percent to 5.19 pence. The shares rose 16 pence to 491.5 pence.

The Independent

HALIFAX TO CLOSE 53 ESTATE AGENTS

Halifax, the UK's biggest mortgage lender, is closing 53 estate agent branches because of the slump in house sales. The closure of the branches - around a quarter of its network - will result in 100 job losses, with 450 other employees transferred within the retail bank, Halifax said. The cuts are the latest by HBOS , Halifax's parent, which announced the closure of a mortgage business and 425 job reductions a week ago. It is also merging two business banking divisions, an exercise that will lead to a further 650 redundancies.

RENTOKIL RECOVERY MAY TAKE FIVE YEARS

Rentokil Initial reported a halving of profits in the first half of the year and admitted it could take five years to turn the business around. Pre-tax profits fell to 39.3 million pounds, compared with 88 million pounds a year earlier. Rentokil blamed a deterioration of its washroom and textiles business, losses at its parcel delivery business, and market conditions generally. One analyst said a rights issue was "a distinct possibility". The shares fell 4.5 pence to 69.25 pence.

LIBERTY FLIES HIGH ON SIMON PROPERTY BID TALK

Shares in Liberty International were propelled to pole position on the FTSE 100 on Friday after Simon Property Group, the US's largest public real estate group, revealed it had built a 3.45 percent stake in the UK company, sparking talk of a possible bid. Analysts were not as optimistic as the market, talking down the probability of a full bid by Simon given the challenge of funding the acquisition in current market conditions. The shares closed up 70 pence at 945 pence.

The Guardian

JOHN LEWIS BLAMES BEIJING FOR POOR SALES

The department store chain John Lewis has blamed the distraction of the Olympics and school exam results for poor sales, which fell 4.2 percent in the week to August 16. Sales were particularly subdued because of distractions such as A-level results and sporting events, John Lewis said. It was the tenth week in 15 that sales have suffered as consumers cut back on spending because of higher mortgage, food and fuel costs and the economic uncertainty.

AON TO BUY REINSURER BENFIELD FOR 844 MILLION POUNDS

Aon, the world's largest insurance broker, has made an 844 million pound recommended cash offer for Benfield , the British reinsurer. The 350 pence-a-share offer - agreed unanimously by both boards - represented a premium of more than 29 percent to Thursday's closing price. Shares in Benfield rose more than 27 percent on the news, closing at 345.5 pence. Aon said Benfield would be integrated into its existing reinsurance business, Aon Re Global.

BHP BID FOR RIO TINTO MAY BREACH COMPETITION RULES

Australia's competition regulator said on Friday that mining group BHP Billiton's 69 billion pound bid for rival Rio Tinto could raise competition issues in the iron ore sector. Analysts say a combined group would control about 35 percent of the world market for seaborne traded iron ore. The competition and consumer commission, which will rule in October, said the deal could drive up global iron ore prices, pushing up costs for Australia's steelmakers.

Prepared for Reuters by Durrants