PRESS DIGEST - British business - July 7

The Times

QINETIQ STARTS TO WIELD THE AXE

In an effort to deal with the effect of falling government spending, QinetiQ (QQ.L) has said 391 jobs will go in Britain. The former Defence Evaluation and Research Agency also hinted that more jobs will be cut at a later time. Around 230 of the job cuts will be at QinetiQ's Malvern facility which develops and researches technologies in fields such as digital security, and nano electronics, and other staff cuts will be made at the company's headquarters in Farnborough. The company is to restructure the rest of the business over the summer and analysts predict there will likely be another 300 of 400 jobs cuts in Britain.

HSBC TIPPED FOR LIBYA

A senior Libyan official has said HSBC (HSBA.L) has a strong chance of winning one of the first international joint-venture banking licences in the country. Standard Chartered (STAN.L) is also on the shortlist of six banks. Libya has set the end of July as the deadline for awarding two new joint venture banking licences for which foreigners can bid for the first time.

NEED TO KNOW: ANITE

Anite (AIE.L) has reported a fall in full-year revenue to 78.8 million pounds from 90 million pounds a year ago. Pre-tax profits dropped nearly 50 percent to 9.9 million pounds. The telecoms testing and travel software developer said trading in its telecoms business had improved in the second half.

NEED TO KNOW: MITIE

Outsourcing group Mitie (MTO.L) has been given preferred status bidder status by Rolls Royce (RR.L), the power systems provider, for the facilities and energy management of its European properties. If won, the deal would represent Mitie's largest pan-European contract.

TEMPUS

Spice SPI.L (a few risks remain for the shares but analysts now see a fair value of 75 pence)

PartyGaming PRTY.L (shares are selling on about eleven times this year's earnings, suggesting that they are about up with events)

Tullow Oil (TLW.L) (conditional approval for purchase of Heritage stake goes some way to unblocking the uncertainty that has dogged the shares in recent months)

The Daily Telegraph

TULLOW OIL GETS GREEN LIGHT ON UGANDA

Tullow Oil (TLW.L) is expecting imminent conditional approval for its 1.5 billion dollar deal to buy from Heritage Oil (HOIL.L)> a 50 percent stake of oil fields near Lake Albert in Uganda. Tullow already owns the other 50 percent. The deal had been delayed as the Ugandan government was concerned that Tullow would be too much of a monopoly without bringing in partners and there were questions about whether it should charge Heritage a 360 million dollar capital gains tax bill. Tullow will bring in Total (TOTF.PA) and China National Offshore Oil Corporation to help develop the fields. Shares in Tullow rose 45 pence to 10.86 pounds on the news.

MINERS TO RESTART PROJECTS AFTER "SUPER-TAX" DEAL

Rio Tinto (RIO.L) and Xstrata (XTA.L) have resurrected plans to spend billions of dollars on projects in Australia after reaching an agreement with the government on a so-called "super-tax" on miners' profits. A 40 percent tax was proposed by Kevin Rudd, Australia's former prime minister, earlier in the year, leading to projects being suspended. The mining groups will now restart them after a compromise tax of 30 percent was negotiated last week between the groups and new Prime Minister Julia Gillard.

BRIDGE TOO FAR? M&S FACES TOP PAY REBELLION

Pirc, the corporate governance advisory body, has urged shareholders in Marks & Spencer (MKS.L) to oppose the company's remuneration report at the retailer's annual shareholder meeting next Wednesday. Pirc said it considers M&S's executive pay to be "highly excessive". The Association of British Insurers issued a so-called "amber top" warning last week regarding M&S's remuneration report and other shareholder bodies have criticised the company's pay policies.

QUESTOR

Ocado (avoid for now)

Persimmon (PSN.L) (avoid)

The Independent

CATALOGUE GROUP SEES SALES FALTER

Plus-sized clothes retailer N Brown (BWNG.L) has reported that like-for-like sales in the 18 weeks to July 3 were just 0.1 percent higher than the same period a year ago. At the end of April, like-for-like sales had been 3.1 percent higher year on year. The company said sales growth was subdued because shoppers had reined in spending due to pre- and post-election uncertainty. The Manchester-based group said it had increased its market share in women's clothing and footwear even though sales as a whole to customers of size 16 or more, and those over the age of 65, had fallen.

BG'S EGYPT UNIT TO INVEST TWO BILLION DOLLARS

BG Group's (BG.L) Egyptian subsidiary, BG Egypt, is to invest two billion dollars to install a pipeline and drill new wells off the country's Mediterranean coast. The move will help meet the country's growing demand for gas. BG Egypt expects the new offshore pipeline to be operational by the end of 2010 and that nine wells, to be drilled in West Delta, will be up and running by late 2011. BG says its production accounts for 35 to 40 percent of Egypt's gas output.

INVESTMENT COLUMN

Persimmon (PSN.L) (sell)

Meggitt (MGGT.L) (sell)

Ultra Electronics (ULE.L) (hold)

The Guardian

DELAY COULD DERAIL 7.5 BILLION POUND INTERCITY TRAIN UPGRADE

The Department for Transport has said a decision on whether to fund the 7.5 billion pound programme to replace the UK's ageing fleet of intercity trains will be made at the time of the government's October spending review. If the programme is cancelled, it will leave rail travellers on the east coast and Greater Western lines having to continue to use old trains, some of which were made in the 1970s. Agility Trains, a consortium formed by Barclays, John Laing and Hitachi, was named preferred bidder for the upgrade contract over a year ago.

PARTYGAMING READY TO BET ON INDUSTRY CONSOLIDATION

PartyGaming PRTY.L has reported a two percent decline in second-quarter revenues, but said that trading had been in line with expectations and that it was pursuing takeover opportunities. The online gambling group said it wanted an active role in the consolidation of the industry and was confident about its prospects. The group is reported to have held merger talks with Bwin, its Austrian rival, and the deal has been seen as a potential catalyst for a wave of takeover activity.

Prepared for Reuters by Durrants