/raid1/www/Hosts/bankrupt/TCREUR_Public/030728.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Monday, July 28, 2003, Vol. 4, No. 147
Headlines
F I N L A N D
STONESOFT CORPORATION: Expects Loss to Extend to Fourth Quarter
TJ GROUP: Half-Year 2003 Operating Result Improves by 66%
F R A N C E
AIR LIB: Former Head Faces Charges of Fraud and Mismanagement
RHODIA SA: Completes Sale of Polyurethane Flame Retardants Biz
VIVENDI UNIVERSAL: Comcast Signals Interest in U.S. Assets
G E R M A N Y
COMMERZBANK AG: Ratings Affirmed on Restructuring Progress
DEGUSSA AG: Sells Methanova to Focus on Specialty Chemicals
HEIDELBERGER DRUCKMASCHINEN: Printing Industry Remains Weak
HVB GROUP: Subsidiaries' Ratings Remain On CreditWatch
INTERSHOP COMMUNICATIONS: Plans to Merge With Unit by August
WESTLB AG: Further Writedowns Stall Efforts to Turn in Profit
I R E L A N D
AER LINGUS: Servicing Two New Routes in October
ALLIANZ IRELAND: S&P Assigns 'BBB-' Ratings with Stable Outlook
ELAN CORPORATION: Antegren Fails Final Round of Clinical Trial
I T A L Y
TELECOM ITALIA: Seat PG Issues Preliminary First Half Results
N E T H E R L A N D S
KLM GROUP: Reports EUR66 M Operating Loss for First Quarter
KONINKLIJKE AHOLD: Giving No Extra Contribution to Pension Fund
P O L A N D
BANK PEKAO: Support Rating Remains Despite Changes in Methods
HOOP: Sets New Date for Postponed Initial Public Offering
LOT AIRLINES: Appoints New Members to Management Board
UPC POLSKA: Gets Court Nod to Hire Ordinary Course Professionals
S L O V A K R E P U B L I C
SLOVENSKE ELECTRARNE: BB+ Rating Withdrawn at Issuer's Request
S P A I N
UNION FENOSA: ENI Acquires 50% Stake with EUR440.8M Investment
S W E D E N
SWITCHCORE AB: Increases Net Sales, Narrows Operating Loss
S W I T Z E R L A N D
ZURICH FINANCIAL: Confirms Exclusive Talks with P&V Assurances
U N I T E D K I N G D O M
ABBEY NATIONAL: Unicredito May Buy Mortgage Biz, Sources Say
ACCIDENT GROUP: MPs Call on DTI to Probe Past Trading Activities
ACCIDENT GROUP: Parent's Administrator Criticized on Dual Role
BRITISH AIRWAYS: Biggest Union Holds Back Strike Ballot for Now
BRITISH AIRWAYS: Engineers Move to Reject Time Recording System
BRYANSTON INSURANCE: Creditors Approve Early Closure of Scheme
CORUS GROUP: Supplying Steel for Rebuilding Ground Zero
ENERGIS PLC: Launches Low Cost U.K. Directory Enquiries Service
FIRM PUBLICATIONS: Cash Flow Problem Forces Receivership
GLAXOSMITHKLINE PLC: Garnier Waits for Pay Package Review Results
J SAINSBURY: Releases First Quarter Trading Statement
LONDON CLUBS: Recovery of Prior Year Debts Ups Operating Profit
NETWORK RAIL: Stops EUR10B Improvement Work in Bid to Curb Costs
TRINITY MIRROR: Closure of Two Saturday Magazines Imminent
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F I N L A N D
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STONESOFT CORPORATION: Expects Loss to Extend to Fourth Quarter
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Interim Report Summary
January - June 2003
(a) Net sales were EUR11.6 million, a reduction of 28% compared
to the previous year.
(b) The net sales of continuing businesses fell by 18% compared
to the previous year.
(c) Operating loss before goodwill depreciation (EBITA) was EUR
8.7 million.
(d) Business restructuring incurred a total cost of EUR1.8
million during the reporting period.
Stonesoft has continued adjusting its costs to better match the
present level of business. The level of costs for the company
will be approximately 16% lower for the last quarter of the
current year than it was for the first quarter of the year.
April - June 2003
(a) Net sales were EUR5.6 million, down 6% from the previous
quarter.
(b) Sales of own software products declined by 11% from the
previous quarter. Compared with the previous quarter:
(i) Sales of StoneGate increased by 1%
(ii) Sales of StoneBeat fell by 32%
(c) Operating loss before goodwill depreciations (EBITA) was
EUR4.4 million, of which EUR1.2 million was one-time expenses
from operational restructuring.
(d) The co-operation negotiations with employees commenced in May
drew to a close in July. The objective was to obtain total
cost savings of approximately EUR1.5 million by quarter.
(e) The company's liquid assets totaled EUR34.2 million at the
end of the period, equity ratio was 90%.
Outlook for the future
Stonesoft believes that due to the prospective customer
opportunities for StoneGate and the adjustment of costs, the
company's operating profit before goodwill depreciation (EBITA)
will continue to improve towards the end of the year, but will
most likely still be at a loss in the fourth quarter of 2003.
Group Financial Indicators For January - June 2003
The net sales of the Stonesoft Corporation in the period from
January to June totaled EUR11.6 million (EUR16.2 million). The
net sales of continuing businesses were EUR14.1 million during
the same period in the previous year; the comparable net sales
have been declined by EUR2.5 million (18%).
Operating loss for the Group during the period before goodwill
depreciation (EBITA) was EUR8.7 million (an operating loss of
EUR14.2 million), which included 1.8 million (EUR2.0 million)
one-time expenses of operational restructuring.
The loss for the Group before extraordinary items was EUR8.9
million (a loss of EUR15.8 million).
The loss for the reporting period was EUR9.0 million (a loss of
EUR6.1 million). The previous year's result was boosted by the
capital gain of EUR10.2 million that resulted from the sale of
Stonesoft e-Solutions Oy. The loss per share was EUR0.16 (a loss
of EUR0.33).
Group Financial Indicators For The Second Quarter
Net sales and financial position
Net sales totaled EUR5.6 million (EUR6.4 million). Sales of own
software products decreased by 11% compared to the previous
quarter.
Sales of StoneGate rose 1% compared to the previous quarter and
totaled 76% of the sales of the Group's own license sales. Sales
of the StoneBeat product family decreased by 32% compared to the
previous quarter.
The Group posted an operating loss before goodwill depreciation
(EBITA) of EUR4.4 million (a loss of 6.1). One-time expenses of
operational restructuring totaled EUR1.2 million.
Personnel costs for the second quarter were EUR4.8 million (6.0),
down EUR 0.6 million compared to the previous quarter. Other
operating costs fell 7% from the previous quarter (the above
mentioned figures do not include the costs incurred of
operational restructuring).
At the end of the period, the number of personnel totaled 312
(376), of which 35% (38%) were employed outside of Finland.
Financing and investments
At the end of the reporting period, the Group's balance sheet
totaled EUR49.9 million (EUR71.3 million). The equity ratio was
90% (91%) and net gearing was -0.84 (-0.78). At the end of the
period, the Group's liquid assets stood at EUR34.2 million
(EUR47.3 million). The liquid assets per share were EUR0.60.
Product business
The market for the company's product business remained
challenging during the second quarter. The sales of the
StoneGate firewall and VPN product increased by 1% compared to
the previous quarter, and by 34% compared with the same period of
the previous year. StoneGate accounted for 76% of the sales of
own licenses. The sales of StoneBeat products fell by 32% from
the previous quarter and 69% compared to the same period of the
previous year.
Highlights for the second quarter were:
(a) Stonesoft announced a partnership with computer manufacturer
Mikrolog Ltd. on appliance-based data security solutions.
The objective is to produce, in co-operation with Mikrolog,
an appliance-based firewall and VPN product family for
demanding, distributed enterprise environments. These
products will be available in Europe through selected
partners in the third quarter.
(b) For the second year in a row, SC Magazine awarded the
company's StoneGate firewall and VPN solution as the Best Buy
2003 in the enterprise firewall market.
(c) The company delivered its first StoneGate orders for the IBM
Z-Series mainframes.
(d) According to the research published by IDC in April,
Stonesoft's share of the domestic market for firewalls and
VPNs has risen to 35%.
Market areas
The relative volume of business by geographical area was: North
and South America 23%, Europe, the Middle East and Africa 71%,
and the Asia-Pacific Region 6%.
The company's sales in the Americas area grew by 12% from the
previous quarter. The total sales for Europe, the Middle East
and Africa fell by 5%. In the Asia-Pacific region, sales fell by
46% compared to the previous quarter.
Research and Development
During the first quarter, the company's R&D costs totaled EUR1.7
million (EUR1.7 million).
Stonesoft's R&D units are located in Helsinki, Turku, Oulu and
Sophia Antipolis in France. At the end of June, a total of 97
(95) people were involved in R&D activities in the company.
R&D expenditure is recorded as expenses from the time they are
incurred in accordance with the Group's accounting policy.
Current Authorizations
1) The Company's share capital may be increased in one or more
lots in a manner whereby the shares to be issued in the new
issue and/or on the basis of option rights and/or in
connection with a convertible loan may altogether increase the
Company's share capital with the maximum of 229,000.00 euros,
so that the aggregate maximum number of shares eligible for
subscription on the basis of the above mentioned alternatives
is 11,450,000 shares, each with an accounting equivalent value
of EUR0.02. Option rights may only be granted in a manner
that the shares to be issued on the basis of the option rights
will increase the share capital of the Company with the
maximum of 30,000.00 euros. Option rights may only be granted
in connection with mergers and acquisitions.
2) The Company's Board of Directors is entitled to decide on who
shall have the right to subscribe for new shares in a new
share issue, subscribe for option rights or for convertible
loan. The new shares and/or option rights and/or convertible
loan may, in accordance with Chapter 4 Section 6 of the
Companies Act (734/1978, as amended), be subscribed against
contribution in kind or otherwise under specific conditions.
3) The new shares to be issued in a new issue and/or the option
rights and/or the convertible loan may be offered for
subscription in deviation from the shareholders' pre-emptive
subscription right pursuant to Chapter 4, Section 2 of the
Companies Act (734/1978, as amended) if the deviation is
justified because of a weighty financial reason of the
company, such as the financing of an acquisition, the enabling
of joint venture transactions and the providing of additional
financial alternatives, and/or a part of the incentive program
directed to the company's management and/or other personnel.
4) The company's Board of Directors is entitled, in a share
subscription by way of a new issue and/or on the basis of
option rights and/or in connection with a convertible loan, to
decide on the grounds on which the subscription price shall be
determined and on the subscription price which may not,
however, be less than the accounting equivalent value of the
shares.
5) The company's Board of Directors is entitled within the limits
as set out in the Companies Act (734/1978) to decide on all
other matters and provisions related to a new issue and/or the
granting of option rights and/or convertible loans, such as an
eventual interest payable on the convertible loan.
6) The authorization will be in force until the following Annual
General Meeting of Shareholders; however, it shall not exceed
the maximum period of one year from the Annual General Meeting
of Shareholders held in 12.3 2003.
Significant Events After the End of the Reporting Period
In May, the company commenced co-operation negotiations that were
drawn to a close in early July. The measures to be taken will
lead globally to cost savings of at least EUR1.5 million by
quarter. The savings will materialize in full in the fourth
quarter of this year. Approximately 50 people will be
terminated, about half in Finland and half abroad. The one-time
costs accrued due to the above mentioned actions totaled EUR1.2
million and were entered as expenditure for the second quarter.
From the 9.7 2003 the management team of Stonesoft consists of
the following persons; Jorma Turunen (CEO, marketing, business
development, investor relations and APAC-region), Ilkka
Hiidenheimo (R&D and customer services), Mikko Hietanen (CFO),
Saara Laine (Legal and HR), Tobias Christen (Product Management),
Markus Bj"rkqvist (EMEA-region and global partnerships) and Juha
H"rk"nen (Americas-region).
Outlook for the Future
Jorma Turunen, CEO, Stonesoft Corporation:
"In the short term, the market situation will continue to be
uncertain, and customers are very conservative with their data
security investments.
This is why we have continued adjusting our costs so that they
better reflect to the present level of business. The level of
costs of the company will be approximately 16% lower for the
fourth quarter of the current year than it was for the first
quarter of the year.
We have tried to make cost cuts without adversely impacting our
capability to react to the inevitable growth of security solution
needs that will occur in the long run. In the period under
review, we have continued to develop sales training and new
operational models to support our sales. In addition, we have
continued our emphasis in R&D with the objective of maintaining
the technological edge of our existing solutions. We also intend
to launch a new generation of integrated data security solutions
in the second half of the year."
Stonesoft believes that due to the prospective customer
opportunities for StoneGate and the adjustment of costs, the
company's operating profit before goodwill depreciation (EBITA)
will continue to improve towards the end of the year, but will
most likely still be at a loss in the fourth quarter of 2003.
Next Interim Report
The Interim Report for the third quarter will be released on
October 24, 2003.
The Financial figures presented in the Interim Report have not
been audited.
CONTACT: STONESOFT CORPORATION
Jorma Turunen, Chief Executive Officer
Phone: +358 9 47 67 11
E-mail: jorma.turunen@stonesoft.com
Mikko Hietanen, Chief Financial Officer
Phone: +358 9 47 67 11
E-mail: mikko.hietanen@stonesoft.com
TJ GROUP: Half-Year 2003 Operating Result Improves by 66%
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Highlights:
(a) Net sales decreased by 11%; EUR12.48 million (EUR14.08
million)
(b) Result improved by 66%; Operating profit/loss -EUR3.70
million (-EUR10.73 million)
(c) Result before taxes improved by 57%; -EUR5.31 million (-
EUR12.40 million)
(d) Equity ratio 48% (70%), shareholders' equity/share EUR0.07
(EUR 0.17)
(e) Earnings per share -EUR0.03 (-EUR0.17)
(f) Number of personnel decreased by 34% and was 259 (395) at the
end of June
(g) Sales of own product licenses grew by 13%
(h) Total costs decreased by 34% to EUR18.23 million (EUR27.45
million)
The Net Sales and Result Development
Extended customer relationship management provider TJ Group's net
sales for the review period January 1 - June 30, 2003 decreased
by 11% to EUR12.48 million (EUR14.08 million) due to the
company's reorganization and the market situation in the IT
field. The net sales of the group's companies in Finland
increased by 10% to EUR7.59 million (EUR6.91 million) and the net
sales of companies outside of Finland decreased by 32% to EUR4.89
million (EUR7.17 million).
TJ Group's operating result improved by 66% compared to the
corresponding period of the previous year. The company has
achieved this primarily by following its strategy of cutting
costs and developing the profitable units.
TJ Group's result in the review period still showed a operating
loss of EUR3.70 million, but the loss is clearly smaller than in
the corresponding review period of the previous year, when the
operating result showed a loss of EUR10.73 million.
The result before extraordinary expenses and taxes improved by
65% to -EUR3.95 million (-EUR11.36 million). The result before
taxes improved by 57% to -EUR5.31 million (-EUR12.40 million).
The salary and personnel costs for the review period decreased by
38% or EUR5.37 million and were EUR8.83 million, which is 71% of
the net sales (101%). The net sales per person improved by 32%
in the review period and were -EUR41 thousand (EUR31 thousand).
Other operating costs for the review period decreased by 36% and
were EUR2.71 million (EUR4.21 million). The total costs for the
period were EUR18.23 million (EUR27.45 million).
The financial expenses include EUR155 thousand for costs
incurring from the arrangement of the convertible loan.
The extraordinary expenses include EUR1.37 million for costs
incurring from reorganization, mainly in Sweden and Germany.
Second Quarter
The net sales for the second quarter of the review period (April
1 - June 30, 2003) were EUR5.30 million. In the corresponding
quarter of the previous financial period (April 1 - June 30,
2002), the net sales were EUR6.25 million. The net sales of the
group's companies in Finland were EUR3.44 million (EUR2.97
million) and companies outside of Finland EUR1.86 million
(EUR3.28 million).
The second quarter's result before extraordinary items and taxes
was -EUR1.54 million. In the corresponding quarter of the
previous financial period (April 1 to June 30, 2002), the result
before extraordinary items and taxes was -EUR6.07 million. The
result before taxes was -EUR2.76 million (-EUR7.02 million).
The second quarter's result before extraordinary items and taxes
was -EUR1.54 million. The result before extraordinary items and
taxes for the first quarter of the review period was -EUR2.41
million. The result before taxes was -EUR2.76 million (-EUR2.56
million in the first quarter).
Business Operations
In the review period, TJ Group's business took place under the TJ
Group name in Finland, Denmark, Germany, Norway, Sweden,
Switzerland, United Kingdom, and the United States. TJ Group has
100% ownership in Finnish subsidiaries Documenta Oy, Key Partners
Oy, PlanMill Oy, and TJ Group Services Oy, and 50% ownership in
Morning Digital Design Oy. Each of these companies focus on
their own area of expertise.
Documenta Oy
Documenta Oy's net sales in the review period were EUR1.48
million (EUR1.55 million). The result before extraordinary
expenses and taxes was -EUR0.10 million (EUR32 thousand).
Documenta Oy's net sales for the second quarter of the financial
period were EUR0.76 million (EUR0.72 million in the first
quarter). The result before extraordinary expenses and taxes was
EUR -0.10 million (EUR3 thousand).
At the end of the review period, the company had 38 (32)
employees.
Documenta Oy is a company specializing in electronic document
handling and work process intensification. It offers information
technology based software, maintenance, operation service and
integration solutions for companies and public administration.
Documenta's software have a total of over 50,000 end users. Of
its products, the document and workflow
management system Dynasty and the quality management system
Quality First are Finland's market leaders in their respective
customer segments.
Documenta's customers include the Hospital District of Helsinki
and Uusimaa (HUS), Ministry of Justice, Forest and Park Service,
Ministry of Defence, University of Helsinki, ABB, the City of
Espoo, Outokumpu, and Vapo. Documenta Oy's CEO is Kaarina
Hakkarainen.
Key Partners Oy
Key Partners Oy's net sales in the review period were EUR4.48
million. The result before extraordinary items and taxes was
EUR0.99 million. The company was founded in April 2002, so there
are no comparison figures for the first quarter and, thus, there
are no commensurable figures for 6 months either.
Key Partners Oy's net sales for the second quarter of the
financial period were EUR2.27 million (EUR2.21 million in the
first quarter). The result before extraordinary expenses and
taxes was EUR0.50 million (EUR 0.49 million).
At the end of the review period, the company had 93 (113)
employees.
Key Partners Oy is a service company, which plans and implements,
for example, J2EE-based operative systems, system integration,
and network services. Its strengths include especially total
deliveries, multi-level architecture, and usability know-how. The
company's customers include Aktia, Nordpool, Elisa
Communications, Pension Fennia, University of
Helsinki, Local Government Pensions Institution Finland, Lassila
& Tikanoja, Mandatum, Metso, Tapiola, UPM-Kymmene, VV-Auto (Audi,
Seat, Volkswagen). Key Partners Oy's CEO is Anneli Koivunen.
PlanMill Ltd.
PlanMill Ltd.'s net sales in the review period were EUR 0.46
million (EUR0.54 million). The result before extraordinary
expenses and taxes was -EUR13 thousand (EUR75 thousand).
PlanMill Ltd's net sales for the second quarter of the financial
period were EUR0.22 million (EUR0.24 million in the first
quarter). The result before extraordinary expenses and taxes was
-EUR31 thousand (EUR18 thousand).
At the end of the review period, the company had 11 (10)
employees.
PlanMill Ltd. is a leading provider of user-friendly PSA
(Professional Services Automation) solutions. Solutions by
PlanMill help project-oriented organizations to improve the
control of personnel, projects and business processes, which in
turn improves their productivity and profitability. PlanMill
solutions have been deployed to more than 60 leading service
companies and IT and R&D divisions of companies in more
than 10 countries. Its customers include Digita, Frantschach
Consulting, Iocore, Nordea, TJ Group, Raiffeisen Informatik
Zentrum, and Sofia Digital. The offices of PlanMill Ltd are
located in Helsinki, Finland and St.Gallen, Switzerland. The
company has established an authorized dealer network to Austria,
Switzerland, and Germany. PlanMill Ltd's CEO is Thomas Hood.
TJ Group Services Oy
TJ Group Services Oy's net sales in the review period were
EUR1.73 million. The result before extraordinary items and taxes
was -EUR0.21 million. The company was founded in April 2002, so
there are no comparison figures for the first quarter and, thus,
there are no commensurable figures for 6 months either.
TJ Group Services Oy's net sales for the second quarter of the
financial period were EUR0.94 million (EUR0.78 million in the
first quarter). The result before extraordinary expenses and
taxes was -EUR0.18 million (-EUR30 thousand).
At the end of the review period, the company had 34 (16)
employees.
TJ Group Services Oy is a company specialized in IT support and
specialist services. Its offering includes hosting, customer
care, training and consulting services. TJ Group Services is
also responsible for product sales and implementation services of
the customer relationship management solutions TJ Group CRM, CMS
and CAI in Finland.
Customers include Scania, Storebrand, Castrol, Orkla, and SE-
Banken. TJ Group Services' CEO is Marco Ylitorma.
Participating Interest Company Morning Digital Design Oy
Morning Digital Design Oy's net sales in the review period were
EUR1.59 million (EUR2.59 million). The result before
extraordinary expenses and taxes was -EUR0.12 million (EUR0.77
million).
Morning Digital Design Oy's net sales for the second quarter of
the financial period were EUR0.69 million (EUR0.90 million in the
first quarter). The result before extraordinary expenses and
taxes was -EUR0.12 million (-EUR1 thousand).
At the end of the review period, Morning Digital Design Oy had 52
(60) employees.
Morning Digital Design Oy, a participating interest company of
which TJ Group owns 50%, is a company that plans and produces
digital marketing communications. Morning's expertise areas are
consultation and planning for digital marketing communications,
Internet solutions and services, high quality digital
presentations, and services and advertising for digital
television. Morning Digital Design Oy's CEO is Torsti Tenhunen.
Significant Events in the Review Period
On January 13, 2003, TJ Group Plc transferred group's Finnish
product business to its subsidiary TJ Group Services Oy. On 28
February 2003, the parent company announced that it will transfer
marketing and product development of the customer relationship
management (CRM) solutions to its subsidiary TJ Group Services
Oy. The parent company TJ Group Plc now includes the group
management, financial management, and communications.
On February 28, 2003, TJ Group announced that it was closing 4
offices in Germany and focusing its operations to the Stuttgart
and Dresden offices.
The costs of the actions in Germany were estimated to be about
EUR1.3 million. The company estimated that, with these actions,
it will reach annual savings of EUR2.5 million.
On February 28, 2003, TJ Group announced that it was adjusting
its operations in Sweden to correspond with the current market
situation by means of personnel cuts. The cost of the actions
were estimated to be about EUR450 thousand. The company
estimated that, with these actions, it will reach annual savings
of EUR600 thousand.
The Annual Shareholders' Meeting approved on March 27, 2003 the
Board of Directors' proposal to issue a convertible loan (the
loan) in accordance with the notice of the Annual Shareholders'
Meeting and the terms and conditions supplemented by the Board of
Directors and published as a stock exchange release on March 19,
2003.
The total principal amount of the loan is no less than
EUR2,000,000 and no more than EUR10,000,000. The subscription of
the loan shall take place no later than on December 31, 2003.
The Board of Directors may decide to terminate the subscription
period at any time if the amount of subscriptions has exceeded
the minimum principal amount of the loan. The loan may be
converted into a total maximum number of 64,100,000 shares in the
Company, each with a book value equivalent of EUR0.02. The share
capital of the company may be increased with a maximum of
EUR1,282,000 on the basis of conversion of the loan into shares.
On April 4, 2003, TJ Group announced that the actions in Germany,
announced on February 28, 2003, had proceeded as planned. In
Sweden, the number of personnel was decreased from 21 to 11
persons.
On April 4, 2003, TJ Group announced that it will close down its
subsidiary in Denmark. In the same release, the company
announced that it had signed a letter of intent with Convergens
A/S concerning the sales of TJ Group products and managing of
existing customer relationships in Denmark. On April 14, 2003,
TJ Group sold the hosting and service business of its Danish
subsidiary to three employees of the subsidiary.
On May 20, 2003, TJ Group announced that the letter of intent
with Convergens A/S had expired.
On May 20, 2003, TJ Group announced that, in accordance with its
strategy, it had signed a partner agreement with three British
and one French company.
On June 2, 2003, TJ Group announced that the Board of Directors
of the company had decided, by the authorization of the company's
shareholders' meeting on March 27, 2003, to issue warrants to the
management and personnel of TJ Group. The number of warrants
issued will be 4.000.000 at the maximum and they entitle to
subscribe a maximum of 4.000.000 shares of TJ Group Plc. The
total number of warrants constitute approximately
2.99% of the company's fully diluted share capital.
On June 10, 2003, TJ Group announced that it had signed a
cooperation agreement with Ementor Norway ASA. The cooperation
includes product development, sales and marketing of TJ Group's
customer relationship management software (TJ Group CRM Suite)
and Ementor's knowledge management systems software (Symfoni).
On June 19, 2003, TJ Group announced that the Board of Directors
of the company had accepted Convertible Loan 2003 subscriptions
for the amount of EUR3,000,000. Jyrki Salminen, a major
shareholder of the company, subscribed for the loan with EUR
1,500,000, which entitled him to 1,500 units of loan bonds. Tuomo
Tilman, a major shareholder of the company, subscribed for the
loan with EUR1,500,000, which entitled him to 1,500 units of loan
bonds. One bond note carries the right to subscribe for 6,410 TJ
Group shares.
As a result of the share subscriptions, the share capital of the
company may increase by a maximum of EUR384,600 and the number of
shares by a maximum of 19,230,000 shares.
On June 19, 2003, TJ Group released a notification referred to in
Chapter 2, Section 10 of the Securities Market Act. The
notification stated that on June 18, 2003, Tuomo Tilman and Jyrki
Salminen had subscribed for TJ Group Plc's Convertible Loan 2003
with an amount as a result of which both Tilman's and Salminen's
portions of the share capital and the votes attached to the
shares of the company may reach and exceed one-third (1/3).
The Current Authorizations of ohe Board of Directors
On April 27, 2003, the Annual Shareholders' Meeting authorized
the Board of Directors to decide, within one year from the Annual
Shareholders' Meeting, on the increase of share capital by
issuing of new shares, to grant option rights, or to take
convertible loans in one or several installments. On the basis
of the authorization, the share capital may be increased by a
maximum of EUR489,349.08.
Financing and Investments
The value of TJ Group's cash and liquid current assets totaled
EUR3.70 million (EUR12.23 million) at the end of the review
period. The equity ratio of the group was 48% (70%).
The value of TJ Group's trade receivables totaled EUR2.95 million
(EUR4.77 million) at the end of the review period.
In the review period, the group's gross investments totaled
EUR0.1 million (EUR0.3 million), which equals to 1% (2%) of the
net sales. The product development costs have not been activated
in the balance sheet, but have been registered as costs in the
profit and loss statement at the time they incurred.
Personnel and Management Team
At the end of the review period, the company had 259 (395)
employees. 186 (210) of these worked in Finland and 73 (185)
outside of Finland. The group employed an average of 302 (452)
persons during the review period.
TJ Group Plc's Management Team members are CEO Mikko Setala, COO
Hannu Jokela, and CFO Anneli Saarikoski.
Shares and Share Capital
TJ Group Plc's share capital on June 30, 2003 was
EUR2,446,745.40, and the total number of shares was 122,337,270.
The nominal value of a share is EUR0.02. Shareholders'
equity/share was EUR0.07.
Events Following the Period
After the review period, there have been no events significantly
affecting the company.
Near-Term Outlook
In the second half of financial period 2003, in accordance with
its earlier statements, TJ Group will invest in the development
of its profitable units and continue cutting costs and improving
its operations.
TJ Group's goal is to increase product sales also through new
partners.
For this, TJ Group strives to further increase the number of
partners and, thus, improve the profitability of its product
business.
TJ Group believes that the result before taxes for the second
half of 2003 will be better than the result for the corresponding
period in 2002.
The interim report for TJ Group's third quarter January 1 -
September 30, 2003 will be published on October 21, 2003.
Helsinki, 24 July 2003
The Board of Directors of TJ Group Plc
Tuomo Tilman, Chairman of the Board
Bo Eklund
Jyrki Salminen
Kari Salo
To See Financial Statement: http://bankrupt.com/misc/TJ_Group.htm
The figures in the interim report are not audited.
In addition to the accounts of the parent company, the financial
report of TJ Group Plc consolidates the accounts of Documenta Oy,
Planmill Oy, Key Partners Oy, Key Partners Projektit Oy, TJ Group
Services Oy, TJ Group AB, TJ Group Holding AB, TJ Solutions AB,
Kompetensbolaget PMV AB, Leylock Data AB, TJ Group AS, TJ Group
GmbH, TJ Group Switzerland GmbH, TJ Group A/S, TJ Group Americas
Inc, and TJ Group Limited.
The figures for Morning Digital Design Oy (ownership 50%) have
been consolidated in the interim report by using the equity
method.
CONTACT: TJ GROUP PLC
Mikko Setala, CEO
Phone: +358 205 5151
Tuomo Tilman, Chairman
Phone: +358 9 6122 870
Perttu Ijas, Communications Manager
Phone: +358 205 51 5435
===========
F R A N C E
===========
AIR LIB: Former Head Faces Charges of Fraud and Mismanagement
-------------------------------------------------------------
The former chief executive of failed airline Air Lib is under
formal investigation of the French public prosecutor on alleged
financial mismanagement, abuse of confidence, and fraud,
according to the Financial Times.
Jean-Charles Corbet took over the helm of Air Lib two years ago,
endorsed by the then socialist government, with only about
EUR40,000 (US$45,600) to start with.
After the airline liquidated in February, he took over assets of
the failed Air Lib with the help of Jean-Calude Gayssot, former
communist transport minister, with whom he has a close
relationship through his role as trade unionist.
The formal inquiry of the French prosecutor on Thursday, led by
Judge Renaud van Ruymbeke, will probe allegations that Mr. Corbet
abused his position to benefit financially as the sole owner of
the holding company Holco, which took control of Air Lib's
assets. He allegedly took for himself about EUR800,000 on top of
his salary of EUR243,000.
It will also look into the byzantine structure of the Holco
group, which spent some EUR2.6 million in personnel costs for Air
Lib's four staff in the financial year 2001-2002.
The investigation is further expected to examine the role of the
French state in the rescue of the airline.
RHODIA SA: Completes Sale of Polyurethane Flame Retardants Biz
--------------------------------------------------------------
Following the announcement on June 17 of a binding agreement to
sell its phosphorus-based polyurethane flame retardants business
to Albemarle Corporation, Rhodia confirmed all regulatory
approvals have been received and the sale has been completed.
Used in rigid and flexible polyurethane foam applications,
Rhodia's polyurethane flame retardants activity generated sales
of around EUR60 million in 2002 with approximately 90 employees.
As part of the divestiture, Albemarle is acquiring Rhodia's
associated production site in Avonmouth in the United Kingdom
Rhodia will also supply Albemarle with flame retardants and
intermediates manufactured at its sites in Charlestonl (S.C,
USA), Oldbury and Widnes (U.K.).
Polyurethane flame retardants are not a key segment for Rhodia's
Phosphorus & Performance Derivatives. The Enterprise will focus
on developing its global leadership position in Phosphorus
chemistry through its strong positions in the water treatment,
agriculture, lubricants, pharmaceuticals and textile markets.
This transaction forms part of Rhodia's strategy to make targeted
divestments of non-core businesses and reduce its net debt/EBITDA
ratio, while re-aligning its portfolio on its growth model based
on the cross fertilization of technologies and the development of
high value-added solutions.
Rhodia's Phosphorus & Performance Derivatives enterprise is a
dynamic technology-driven and market focused business serving
customers in the agriculture, lubricants, pharmaceuticals,
textiles and water treatment markets. By working closely with
clients and possessing detailed understanding of their processes,
PPD develops new products and provides innovative solutions to
meet customer needs.
Rhodia is one of the world's leading manufacturers of specialty
chemicals. Providing a wide range of innovative products and
services to the consumer care, food, industrial care,
pharmaceuticals, agrochemicals, automotive, electronics and
fibers markets, Rhodia offers its customers tailor-made solutions
based on the cross-fertilization of technologies, people and
expertise. Rhodia subscribes to the principles of Sustainable
Development communicating its commitments and performance openly
with stakeholders. Rhodia generated net sales of EUR6.6 billion
in 2002 and employs 24,500 people worldwide. Rhodia is listed on
the Paris and New York stock exchanges.
CONTACTS: RHODIA
Investor Relations
Fabrizio Olivares
Phone: + 33-1 55 38 41 26
VIVENDI UNIVERSAL: Comcast Signals Interest in U.S. Assets
----------------------------------------------------------
The bidding for Vivendi Universal's U.S. entertainment assets may
soon have another player: Comcast Corporation, the largest U.S.
cable TV operator, according to The Times.
The report said Comcast has told Vivendi Universal it is
considering making an offer for Vivendi Universal Entertainment.
But a source familiar with the situation said: "This is an
extremely preliminary stage and there's been no decision yet to
make a bid."
Comcast, which previously declined Vivendi's initial approach
regarding the asset, recently received a US$7.9 billion financial
boost by exercising an option to sell its 57.5% stake in QVC.
Vivendi Universal Entertainment's assets include the Sci-Fi and
USA cable channels and Universal Studios. It is expected to
raise at least US$12 billion.
If Comcast pushes through with its bid, it would have to compete
with Metro-Goldwyn-Mayer, General Electric's NBC, Viacom, John
Malone's Liberty Media and a private equity consortium led by
Canada's billionaire Bronfman family.
=============
G E R M A N Y
=============
COMMERZBANK AG: Ratings Affirmed on Restructuring Progress
----------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'A-/A-2'
counterparty credit and certificate of deposit ratings on
Commerzbank AG and related entities. The outlook is negative.
"The affirmation follows Standard & Poor's regular review of
Commerzbank and reflects progress in the bank's restructuring
process, particularly its sound credit risk management, which
compares favorably with many domestic peers, and its declining
cost base," said Standard & Poor's credit analyst Stefan Best.
At this stage, however, Commerzbank's weak profitability and
modest capital strength remain well below those of international
peers rated in the 'A' category.
"Standard & Poor's continues to be concerned that Commerzbank's
initiatives might not yet be sufficient to substantially improve
earnings over time considering the weak economic environment and
the persistent structural problems of the German banking
industry," said Mr. Best.
Provisioning needs in 2003 could remain below the EUR1.3 billion
level seen in 2002, reflecting the bank's proactive risk
management and the low number of unexpected major corporate
defaults in the first half of 2003, in contrast with the first
half of 2002. Furthermore, operating expenses in 2003 are
expected to be lower than in 2002. Although revenues are likely
to remain depressed, Standard & Poor's believes, from today's
perspective, that Commerzbank might be able to record modest
operating profits in 2003. Standard & Poor's believes that
revenue generation will be the key challenge for Commerzbank to
further improve earnings to a level commensurate with its present
ratings. The difficult credit environment, and uncertainties
regarding the successful restructuring of Commerzbank's
investment banking and asset management units will remain a
challenge. Therefore, Standard & Poor's remains concerned that
Commerzbank might fail to substantially improve earnings within
an acceptable time frame, considering the weak economic
environment and the persistent structural problems of the German
banking industry.
"Although progress has been made, further tangible improvements
are needed, but they cannot be taken for granted in a volatile
operating environment," said Mr. Best. Standard & Poor's
considers both the successful continuation of Commerzbank's
restructuring program and a steadily improving earnings trend as
prerequisites to allow Standard & Poor's to maintain its current
ratings on Commerzbank, however. Setbacks would most likely have
negative rating implications.
DEGUSSA AG: Sells Methanova to Focus on Specialty Chemicals
-----------------------------------------------------------
Degussa AG of Dusseldorf, Germany, sold its subsidiary Methanova
GmbH of Mainz-Mombach, Germany, to INEOS Lyndhurst, United
Kingdom, effective June 30, 2003. The purchase price is
undisclosed.
In fiscal 2002, Methanova generated sales of approximately EUR45
million with 170 employees. The company produces methanol
derivatives such as formaldehyde and paraformaldehyde, which
among other things are used in the production of phenolic, urea
and melamine resin.
The sale is in line with Degussa's strategy of focusing on
specialty chemicals, which it entered on taking up business in
February 2001. This involves identifying activities that no
longer fit in with its core operations and giving them better
possibilities of development within another ownership structure.
Along with the intended disposals in its almost completed
divestment program, such non-core activities include Methanova.
The U.K.-based INEOS Group of companies is a leading global
manufacturer of specialty and commodity chemicals. Employing
approximately 10,000 people at 60 locations in 16 countries, the
business generated sales of ca. EUR5 billion in 2002.
Degussa is a multinational corporation consistently aligned to
highly profitable specialty chemistry. With sales of EUR11.8
billion and a workforce of some 48,000, it is Germany's third-
largest chemical company and the world market leader in specialty
chemicals. In fiscal 2002, the corporation generated operating
profits (EBIT) of more than EUR900 million. Degussa's core
strength lies in highly-effective system solutions that are
tailored to the requirements of its customers in over 100
countries throughout the world. Degussa's activities are led by
the vision "Everybody benefits from a Degussa product -- every
day and everywhere.
CONTACT: DEGUSSA AG
Corporate Communications
Hannelore Gantzer
Spokeswoman
Phone: +49-211-65 041-368
HEIDELBERGER DRUCKMASCHINEN: Printing Industry Remains Weak
-----------------------------------------------------------
During the first three months of fiscal year 2003/2004 (April 1
to June 30), Heidelberger Druckmaschinen AG recorded sales of
around EUR720 million (previous year: EUR930 million). Incoming
orders were EUR760 million (previous year: EUR1.1 billion),
whereas last year's figure had benefited from the IPEX trade fair
held in Birmingham, U.K., in April 2002.
"The reluctance to invest among commercial printers in virtually
all markets continued during the first quarter. The weak demand
in the USA and Europe had a particularly strong impact on the
Sheetfed division in this quarter", stated Bernhard Schreier, CEO
of Heidelberger Druckmaschinen AG. "The current economic climate
does not allow concrete sales and profit forecasts for the
current fiscal year."
The operating result of the Heidelberg Group was -EUR59 million
(previous year: EUR21 million profit). The net result for the
period under review was -EUR77 million (previous year: EUR12
million profit). "As expected, the lack of contribution margins
led to a negative result for the first quarter", stated Dr.
Herbert Meyer, CFO at Heidelberg.
As of June 30, 2003, the Heidelberg Group had a workforce of some
24,100 worldwide (previous year: around 24,700). Since April 1,
2002, the company has reduced its staffing levels worldwide by
around 2,300 on a comparable basis, including approximately 600
in the first quarter of 2003/2004. Overall, Heidelberg is
looking to reduce its staffing levels worldwide by around 3,200
over the period April 1, 2002, to March 31, 2004.
Developments in the divisions:
Weak sales in Sheetfed led to a negative result for the first
quarter, first signs of improvement in Web Systems and Digital
Sales in the Sheetfed Division fell from around EUR700 million to
EUR500 million. Incoming orders dropped by almost 35% to EUR551
million. Customers in the major Western markets, in particular,
are deferring investments in large printing systems. This
situation is being further exacerbated by increasingly tough
competition from Japanese manufacturers that has emerged as a
result of exchange rate influences. The Sheetfed Division
recorded an operating result of -EUR18 million (previous year:
EUR74 million profit), among other things due to lower capacity
utilization.
In the Digital and Web Systems Divisions, sales remained stable
and the operating result improved. "Initial successes of the
site concentration in the Digital Division and of staff cutbacks
in Web Systems had a positive effect on results", stated Dr.
Herbert Meyer. "Sluggish demand also affected the Postpress
Division. This sector can only expect an improvement in results
after the site consolidations have been concluded", he added.
Business in the regions mostly restrained
Restrained sales developments in all regions reflected the
continuing weakness in global demand for investment goods. Only
the Eastern Europe region came close to repeating the
satisfactory figures of the previous year, with sales of around
EUR70 million. In the Asia/Pacific region, China remains a
growth market. In this country, Heidelberg expanded its position
during the first quarter of 2003/2004.
CONTACT: HEIDELBERGER DRUCKMASCHINEN AG
Corporate Communications
Thomas Fichtl
Phone: +49 6221 92 47 47
Mobile: +49 173 318 69 47
E-Mail: thomas.fichtl@heidelberg.com
HVB GROUP: Subsidiaries' Ratings Remain On CreditWatch
------------------------------------------------------
Standard & Poor's Ratings Services commented on the CreditWatch
placement of four subsidiaries of Germany-based Bayerische Hypo-
und Vereinsbank AG (HVB; A-/Negative/A-2), in the lead-up to
their forthcoming spin-off, an important step in HVB's
restructuring. All of these entities were placed on CreditWatch
with varying implications on March 31, 2003.
The long-term 'BBB' counterparty credit and senior unsecured debt
ratings on HVB Real Estate Bank AG (HVB REB) and Westfaelische
Hypothekenbank AG (WestHyp) remain on CreditWatch with negative
implications.
The 'BBB+' long-term counterparty credit and senior unsecured
debt ratings on Wuerttembergische Hypothekenbank AG (WurttHyp)
remain on CreditWatch with positive implications.
In addition, the 'BBB+' long-term and 'A-2' short-term ratings on
Pfandbrief Bank International S.A. (PBI) remain on CreditWatch
with negative implications.
"The upcoming spin-off of HVB REB, WestHyp, WurttHyp, and PBI in
September is the next major step in HVB's restructuring process,"
said Standard & Poor's credit analyst Stefan Best.
Progress has been made by HVB to facilitate the spin-off, since
this was announced in March 2003.
Standard & Poor's expects to resolve the CreditWatch placements
on these entities in August or September, once it is sufficiently
confident the new structure will be implemented as announced.
INTERSHOP COMMUNICATIONS: Plans to Merge With Unit by August
------------------------------------------------------------
Intershop Communications AG announced the company is taking
action to further simplify the company's group structure.
The company plans to merge all assets of its fully-owned
subsidiary Intershop Software Entwicklungs GmbH with the assets
of Intershop Communications AG.
All operating functions as well as the intellectual property
rights of Intershop Software Entwicklungs GmbH will be merged
into Intershop Communications AG, which in the past has
exclusively acted as the holding entity for the Intershop group
of companies.
Intershops stockholders will be notified in the German Federal
Bulletin (Bundesanzeiger) pursuant to section 62, paragraph 3 of
the German law regulating the transformation of companies. The
merger of Intershop Software Entwicklungs GmbH into Intershop
Communications AG is expected to be effective by the end of
August 2003 when the merger agreement is scheduled to be
notarized and registered with the Local Court in Gera, Germany.
The company expects the transaction will lower the administrative
costs of the Group and will have a positive impact on the
consolidated earnings per share for fiscal year 2003.
About Intershop
Intershop Communications (Nasdaq: ISHP; Prime Standard: ISH1) is
the market leader in Unified Commerce Management, which can
create strategic differentiation for companies by integrating
online commerce processes across the extended enterprise.
Intershop Enfinity, based on the best practices of Unified
Commerce Management, enables companies to manage multiple
business units from a single commerce platform, optimize their
business relationships, improve business efficiencies and cut
costs to increase profit margins. By streamlining business
processes, companies can achieve a higher return on investment at
a lower total cost of ownership, increasing the lifetime value of
customers and partners. Intershop has more than 300 enterprise
customers worldwide in a broad range of industries, including
multichannel retail and high technology. Customers including
Hewlett-Packard, Bosch, BMW, TRW, Bertelsmann, Otto and Homebase
have selected Intershop's Enfinity as the cornerstone of their
global online commerce strategies. More information about
Intershop can be found on the Web at http://www.intershop.com
CONTACT: INTERSHOP COMMUNICATIONS
Investor Relations and Press:
Klaus F. Gruendel
Phone: +49-3641-50-1307
Fax: +49-3641-50-1002
E-mail: k.gruendel@intershop.com
Home Page: http://www.intershop.de
WESTLB AG: Further Writedowns Stall Efforts to Turn in Profit
-------------------------------------------------------------
WestLB insiders warned last week up to EUR1.5 billion (US$1.7
billion) of extra provisioning and write-downs this year would
probably keep the bank from returning into profit. The amount
includes several hundred million euros from an investment in U.S.
aircraft leasing business Boullioun Aviation, according to the
Financial Times.
The state-owned bank though assured during a five-hour meeting
with the budgetary committee at the North-Rhine Westphalia
parliament, there are a significant number of measures being put
in place to improve risk management.
At the meeting, acting chief executive Johannes Ringel said the
exact amount of the writedowns will be determined after a full
review by accountants Ernst & Young.
In June, Germany's financial regulator, BaFin, criticized WestLB
regarding its risk management after the bank posted a record loss
of EUR1.7 billion due to a EUR1.9 billion of provisioning,
including a EUR430 million write-down of a loan to U.K.
television rental business BoxClever.
According to the report, insiders said BoxClever would account
for a maximum of EUR220 million of writedowns this year.
Mr. Ringel said in the meeting the bank would focus in future on
providing local services for the region's savings banks and
funding for small and medium-sized businesses, with careful
checks imposed on any international operations. It would also
create a specialist risk function, impose stricter ceilings on
credit exposures, and ban controversial practice.
=============
I R E L A N D
=============
AER LINGUS: Servicing Two New Routes in October
-----------------------------------------------
On October 26, Aer Lingus will start two new routes linking
Dublin with Toulouse and Tenerife. These are in addition to the
five new routes already launched this year from Dublin to
Washington-Baltimore, Lisbon, Bologna, Palma and Jersey.
Fares to the newly introduced routes start from:
Dublin-Tenerife EUR149 each way including all taxes.
Dublin-Toulouse EUR79 each way including all taxes.
Schedule to Tenerife (Saturday only)
Flight Number Time (depart) Time (arrive)
EI764 Dublin 1315 Tenerife 1740
EI765 Tenerife 1840 Dublin 2310
Schedule to Toulouse (Tuesday/Thursday/Saturday)
Flight Number Time (depart) Time (arrive)
EI536 Dublin 1500 Toulouse 1800
EI537 Toulouse 1845 Dublin 1950
Commenting on the new services to Tenerife and Toulouse, Aer
Lingus Chief Operations Officer, Seamus Kearney, said the
introduction of these new routes is yet another example of how
the airline is reacting quickly to market demands by
restructuring its network and schedules in a more efficient
manner. "Lower airfares, scheduled flights to popular sun
destinations, a user friendly website are all part of our
commitment to provide customers with the service they want, while
at the same time relentlessly continuing our work to drive costs
down," he said.
The airfares quoted above are available for booking on
http://www.aerlingus.com,from July 24.
*****
Aer Lingus has been struggling from the global economic slowdown,
industrial unrest, decline in tourism, stiff transatlantic
competition and rising fuel prices even before the September 11
attack. It posted a EUR52 million loss in 2001, forcing it to
slash its costs by EUR235 million as part of an emergency rescue
package that also saw it decide to enter the low-cost sector.
ALLIANZ IRELAND: S&P Assigns 'BBB-' Ratings with Stable Outlook
---------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'BBB-'
long-term counterparty credit and insurer financial strength
ratings to Republic of Ireland-based non-life insurers Allianz
Ireland PLC and Allianz Corporate Ireland PLC (collectively
Allianz Ireland). The outlook is stable. Previously, the
companies were rated 'BBpi/--/--' on a public information basis.
"The ratings on Allianz Ireland and Allianz Corporate Ireland
reflect the companies' good business position in the domestic
Irish and Northern Irish markets, good level of reserves, and
conservative investment strategy," said Standard & Poor's credit
analyst Paul Oates. "These positive factors are offset by the
companies' marginal earnings (affected in recent years by equity
exposures) and a marginal capital position."
The ratings do not include credit for implied group support from
the companies' ultimate parent, Allianz AG (AA-/Negative/A-1+).
The stable outlook reflects improved premium rates in the Irish
market and a conservative investment profile that should lead to
a restoration of the capital base to a level in line with the
ratings. Business position is expected to remain good, as the
small size of the Irish market limits competition from overseas
or new entrants. Expected profitability over the next few years
will need to be sustained to lead to an upgrade.
Premium growth is expected to be modest, as the group will
concentrate on profitability over growth of market share.
Solvency is expected to improve to a level more in line with the
ratings in 2004, and should remain at or above that level
thereafter.
Operating performance should improve for 2003 as underwriting
results are expected to contribute to an ROE in excess of 15%.
The investment return should be restored to positive levels as
the group retracts from equity participations.
ELAN CORPORATION: Antegren Fails Final Round of Clinical Trial
--------------------------------------------------------------
Elan Corporation's efforts to survive received another blow after
it admitted that its Antegren drug has no apparent advantage in
treating Crohn's disease than an inactive placebo in a large
Phase III trial. The admission, which came less than two weeks
after it warned of potential default on several bonds for failing
to disclose accounts on time, sent the company's shares 25% down
on Thursday.
The success of the Phase III trial would have given the Irish
pharmaceuticals group the go signal to ask for regulatory
approval to launch a new medicine in the market. It would have
been a significant step for the struggling company which has sold
many of its top-selling medicines to avoid running out of cash
lately.
The company downplayed the setback saying it was only a delay as
management hopes that the drug would eventually come out.
The Financial Times quoted Lars Ekman, head of research and
development, saying: "This is just one of two big trials in
Crohn's disease. I'm sure it will get to patients, but it could
be delayed."
David Marshall, an analyst at NCB Stockbrokers, said the drug
could be delayed by up to a year.
=========
I T A L Y
=========
TELECOM ITALIA: Seat PG Issues Preliminary First Half Results
-------------------------------------------------------------
SEAT PG GROUP
(a) Operating income fourfold increase to EUR80 million;
(b) Revenues grew by 5.2% in comparable terms;
(c) In the 2nd quarter, revenues from the Directory Assistance
increased by 21.5% and the Internet Area achieved a positive
operating income;
The Board of Directors of Seat Pagine Gialle, chaired by Riccardo
Perissich, reviewed the (unaudited) preliminary results for the
first half 2003.
(a) Consolidated revenues for the first half of the year amounted
to EUR863 million and decreased by 0.9% compared to the same
period of 2002, mainly due to the divestments carried out
over the last year: on a constant consolidation area and net
of the exchange-rate effect, revenues increased by 5.2%. In
the second quarter, revenues amounted to EUR518 million, with
a 4.2% increase in comparable terms versus the same period
2002.
(b) Due to the performance of almost all business areas,
consolidated gross operating profit (GOP) for the semester
amounted to EUR246 million, with an increase of 17.3%
compared to EUR209 million recorded in the first half of the
previous year.
(c) Consolidated operating income for the half year (after
amortization of the goodwill) was positive at EUR80 million,
for a fourfold increase compared to EUR19 million for the
first half 2002.
(d) The cash flow for the period further improved the net
financial position that reached EUR606 million compared to
EUR680 million at December 31, 2002.
The definitive figures of the half-year report 2003 of the Seat
Pagine Gialle Group will be submitted for approval to the Board
of Directors on September 1, 2003.
Performance of the Business Areas
During the six-month period, the Directories Area, in relation to
substantial stability of revenues at EUR453 million (-0.8%
compared to the first half of 2002), improved operating income by
9.7%, reaching EUR143 million. In an advertising market that is
still strongly recessive, and due also to the devaluation of the
pound against the euro, the Directories Area just ended what will
probably be the most difficult quarter of the year (based also on
the trend seen in the order portfolio): revenues for Q2 2003
amounted to EUR315 million, 1.8% less than the same period of
2002.
The Directory Assistance Area closed the first half of the year
with revenues that rose by 9.6% to EUR87 million, due to an
increase by 21.4% in Q2 2003, and with a strong increase in GOP
to EUR16 million compared to the figure of EUR5 million for the
first half 2002.
Revenues from the Internet Area for the first half of 2003
amounted to EUR118 million, with an increase by 79.1% compared to
2002, due also to the new revenue recognition procedure applied
to dialup Internet traffic and introduced in 2003. Gross
operating profit from the area showed a strong increase to
EUR20.7 million compared to EUR1.2 million for the first half of
2002. It is to be noted that in Q2 2003, the Internet Area
showed a positive operating income for the first time ever
(approximately EUR100 thousand after amortization of the
goodwill), whereas the portals segment recorded positive figures
in terms of GOP.
Lastly, the Television Area closed the six-month period with
revenues up 22% to EUR50.6 million (EUR41.5 million for the first
half of 2002) and an operating loss that has shrunk to EUR36
million compared to EUR43 million for the previous period.
***
The Board of Directors also appointed the members of the
Supervisory Committee - as per Legislative Decree 231/2001:
Stefano Braidotti (Internal Control); Giovanni Fiori (Member of
the Board of Statutory Auditors); Mario Zanone Poma (Independent
Director).
=====================
N E T H E R L A N D S
=====================
KLM GROUP: Reports EUR66 M Operating Loss for First Quarter
-----------------------------------------------------------
KLM Group reported an operating loss of EUR66 million for the
first quarter, ended June 30, 2003. This compares to an
operating profit of EUR41 million last year. First quarter net
income amounted to a loss of EUR54 million, or EUR1.23 per common
share. This compares to a net profit of EUR11 million, or
EUR0.23 per common share last year.
The outbreak of SARS significantly impacted the operating
environment in the first quarter of this fiscal year, while the
effects of the aftermath of the Iraq war were still visible in
the first two months of the quarter. Towards the end of June
traffic volumes started to improve gradually from the low levels
seen earlier this fiscal year, most apparent on the Asia Pacific
routes. Yields continued to be under pressure throughout the
quarter, albeit in part because of the weaker dollar. As a
consequence, Group operating revenues (EUR1,417 million in the
first quarter) declined by 16% compared to last year. A decline
of 10% in Group operating expenses (EUR1,483 million) could only
partially compensate for this. On operating income level, SARS
had an effect of approximately EUR110 million in this quarter.
The reduction in operating expenses reflects both short-term
measures that have been taken to mitigate the effects of SARS, as
well as the first tranche of earlier announced structural cost
reduction measures, which however only had a limited effect on
the first quarter results.
Leo van Wijk, President and CEO of KLM, said: "Our first quarter
results continue to reinforce the necessity of structural changes
going forward. Traffic demand was weak, and yields dropped year-
on-year. Although the impact on traffic volumes from the
outbreak of SARS is now diminishing, there continues to be
pressure on yield. On the other hand the global economy remains
weak and the outlook remains fragile. We must and will therefore
continue to implement the cost reductions in order to secure
KLM's future and maintain a robust financial position."
FINANCIAL PERFORMANCE OF KLM'S BUSINESSES
Passenger Business
Passenger operating revenues amounted to EUR960 million,
representing a decrease of 17% compared to last year. The
decrease is primarily a function of less traffic (minus 9%,
measured in RPKs) and lower yields (minus 11%, including currency
effects). Excluding currency effects, yields were down 3% on last
year, with the most pronounced decrease in the Europe route area.
Although the aftermath of the Iraq war still had an impact in the
first two months of the quarter, the outbreak of SARS had the
most significant effect on the financial performance of the
Passenger Business, putting pressure on traffic volumes on top of
continuous pressure on yields.
The decline in revenues could in part be offset by a decrease in
operating expenses, where KLM again proved its ability to swiftly
adapt capacity to changing market circumstances. Operating
expenses of EUR996 million were down 10% on last year, whereas
unit cost in the first quarter declined by 7% as well. Without
currency effects, unit cost was up 3%, mainly as a consequence of
lower capacity levels.
Passenger Business operating loss in the first quarter was EUR36
million. This compares to an operating profit of EUR51 million
last year.
Cargo Business
Cargo operating revenues amounted to EUR259 million. In terms of
cargo traffic measured in RTKFs, Cargo outperformed its major
European competitors this quarter, reporting a 3% increase year-
on-year. However, a decline in yield of 7% year-on-year put
strong pressure on cargo operating revenues in the first quarter,
which were 4% down on last year. Eliminating currency effects,
cargo yields were up 5% on last year.
Continued focus on direct cargo costs resulted in a reduction of
operating expenses by 2%, while unit cost were down 4% on last
year. Without currency effects, unit cost were at the same level
as last year on 3% higher capacity.
In the first quarter, Cargo Business reported an operating profit
of EUR14 million, which is EUR6 million lower than last year.
Engineering & Maintenance Business
The weak industry environment, resulting in fewer flight hours
and hence lower demand for maintenance, as well as the weaker
U.S. dollar significantly impacted Engineering & Maintenance's
operating revenues. These amounted to EUR209 million, which is
16% lower than last year.
Lower operating revenues were in part offset by a reduction in
direct costs. As a result, operating expenses were 10% lower
than last year.
Engineering & Maintenance reported an operating loss for the
first quarter of EUR3 million, compared to an operating profit of
EUR15 million last year.
Transavia (Charter and Low Cost Business)
Operating revenues of EUR 126 million were down 8% on last year.
This is the result of lower traffic volumes in the charter
segment, where Transavia suffered from the low booking levels in
the period January through March, when passengers were reluctant
to book because of the Iraq war. BASIQ AIR traffic volumes
developed in line with expectations, albeit with more pressure on
yields.
Operating expenses declined by 3%, and amounted to EUR118
million. Transavia's unit cost was down 5% year-on-year.
For the first quarter, Transavia's operating profit amounted to
EUR8 million, which compares to EUR15 million last year.
CASH FLOW AND FINANCING
Cash Flow and Liquidity Position
First quarter's cash flow from operating activities was EUR25
million negative. Net investing cash flow amounted to EUR118
million. Therefore, free cash flow in the first quarter was
EUR143 million negative. The cash inflow from financing
activities (EUR146 million) includes the export financing for two
Boeing 747-400ER freighters received in this quarter.
As of June 30, 2003, KLM Group had cash and cash equivalents
totaling EUR894 million, of which EUR611 million is in cash and
EUR283 million is in Triple A bonds and long term deposits.
Financial Position
During the First Quarter of fiscal 2003/04, KLM's net-debt
position increased by EUR152 million to EUR3,039 million on June
30, 2003, reflecting KLM's fleet replacement program. Group
equity decreased by EUR70 million to EUR1,407 million. KLM's
gearing (net debt as a percentage of group equity) went from 195%
at March 31, 2003 to 216% at June 30, 2003.
FLEET DEVELOPMENTS
KLM set the first step in implementing phase one of its
intercontinental fleet renewal program in April, when two new
Boeing 747-400ER freighters entered KLM's fleet replacing two
747-300 freighters. The first phase, which runs until February
2005, consists of replacing the Boeing 747-300 aircraft by 10
Boeing 777-200ER aircraft and in total 3 Boeing 747-400ER
freighters. This will on balance be capacity neutral.
In view of market circumstances and subsequent reduced capacity
deployment, KLM has decided to accelerate the phasing out of its
Boeing 747-300 aircraft. Before the end of calendar year 2003,
the last seven Boeing 747-300 aircraft will be removed from
operation.
In autumn of this year, two Boeing 737-300 aircraft will leave
KLM's fleet. They will be replaced by one Boeing 737-900, which
will enter the fleet in May 2004. This will be the fifth
aircraft of this type in our fleet.
During this quarter, Transavia completed the sale of three Boeing
757-200 aircraft. The book profit on this sale, being EUR10
million, is reported under Results on sale of assets. At the
same time, two purchased Boeing 737-700 aircraft entered
Transavia's fleet.
STRUCTURAL MEASURES: UPDATE
On May 8, 2003 KLM Group reported its plans to implement cost
reduction measures, aimed at a structural operating income
improvement of EUR650 million as from April 1, 2005. The
structural measures will result in a reduction of jobs of the
equivalent of approximately 4,500 FTEs. Implementation has
started, but the effects on the first quarter results are
limited. It is currently anticipated that EUR200 million of cost
savings including a reduction of 3,000 FTEs will be realized in
fiscal year 2003/04.
In the first Quarter, KLM has successfully finalized the
negotiations with its unions on the terms and conditions of the
Social Plan. To finance parts of the plan, parties have agreed
to postpone the general wage increase of 2.5%, originally planned
for October 1, 2003.
KLM and its Works Council have agreed on the process of
monitoring the redundancy selection and matching, which means
that the implementation of the reorganization plans will now
commence.
In addition, KLM signed a protocol with the unions for ground
personnel, which embodies agreements outlining the process to be
adhered to in arriving at alternative duty roster arrangements
and rosters. Through initiating the roster project KLM aims to
achieve a structural improvement in productivity. At the same
time, the protocol outlines a number of agreements concerning
short-term measures that could be implemented on commencement of
the new winter schedule in October 2003.
Outlook
We anticipate that the effects of SARS will still have a
significant impact on KLM Group operating revenues in the second
quarter of this fiscal year. At the same time, we are confident
that the structural cost measures, identified to be realized this
fiscal year, will be successfully implemented.
On this basis we currently expect the operating income for fiscal
year 2003/04 to be approximately break even, recognizing that we
continue to operate in an uncertain environment.
This report is unaudited.
KONINKLIJKE AHOLD: Giving No Extra Contribution to Pension Fund
---------------------------------------------------------------
No extra net contributions will be given to Royal Ahold's pension
fund, as the embattled retailer is paying the regular employer's
part of an employee's pension premium, a company spokeswoman told
Dow Jones Newswires Tuesday.
The announcement follows the publication of the annual report of
Ahold's pension fund, which ended the year with a coverage ratio
of 105%. It is noted that Ahold has a contractual obligation to
its pension fund to pay a contribution if the fund's coverage
ratio falls below 100%. This indicates that the company is not
obliged to make any extra contributions to its pension fund for
2002.
As the fund's return on its investment portfolio recorded a
negative 12.2% in 2002 compared with a negative 2.9% in 2001, the
unit has submitted a recovery plan aimed at achieving the
required ratio of 121% within a maximum period of eight years.
The plan involves employees paying a higher premium in coming
years.
Ahold's pension fund has half of its assets invested in equities,
40% in fixed-income investments, 7.5% in real estate, and 2.5% in
alternative investments.
It recently advised that its 2002 earnings will be hit by EUR907
million in accounting irregularities.
Standard & Poor's Ratings Services previously lowered its long-
term corporate credit rating on the food retailer and food
service distributor to 'BB-' from 'BB+', following the
announcement by the group that accounting irregularities at its
U.S. Foodservice arm reached US$900 million.
CONTACT: ROYAL AHOLD N.V.
P.O. Box 3050 1500 HB
Zaandam Netherlands
Phone: +31 (0)75 659 57 20
Fax: +31 (0)75 659 83 02
Homepage: http://www.ahold.com
===========
P O L A N D
===========
BANK PEKAO: Support Rating Remains Despite Changes in Methods
-------------------------------------------------------------
The Management Board of Bank Polska Kasa Opieki SA has been
informed on July 23 that in accordance with introducing by Fitch
Ratings new methodology of Support rating for banks, the Support
rating for the Bank remained unchanged and it is 2.
The Support rating describes probability of external support for
the bank -- either by the state or by institutional owner, when
the danger of being not able to meet liabilities by the bank is
nearby.
There are two basic elements of Support rating to be taken under
consideration. The first one is the probability of granting
support by other entity, which has already long-term rating from
Fitch Ratings. The second one is a probability of being provided
with support because of complex of criterions, including
importance of the bank for the domestic financial system.
The important feature of new Support ratings is their unambiguous
relation to the already existing long-term ratings, thanks to the
description of minimum rating floors tied to them. This means
that for instance the Support rating 2 is linked with the long-
term ratings floor of the bank, which cannot be lower than BBB-.
Support rating in gradation scale from the highest to the lowest
is: 1,2,3,4,5.
HOOP: Sets New Date for Postponed Initial Public Offering
---------------------------------------------------------
Polish soft drink producer Hoop has revised dates for a planned
initial public offering of five million shares at PLN23 to PLN29
(US$5.99-7.56) that was postponed last week.
Online news agency Justdrinks.com said the company adjusted
initial public offering dates to July 28 to 30 following claims
of a financial website that Hoop has committed accounting
irregularities.
Hoop denied the accusation and said it will take legal action
against the owner of the site, the report said.
Under the initial public offering plan, the current owner of the
company will retain control after the initial public offering.
It will, however, allow new shareholders the opportunity to
appoint a supervisory board member as well as a number of other
measures to improve transparency and minority shareholder
protection.
CONTACT: HOOP
01-102 Warszawa ul.
Jana Olbrachta 94
Phone: (022) 338-18-18
Fax: (022) 338-18-28
E-mail: warszawa@hoop.com.pl
LOT AIRLINES: Appoints New Members to Management Board
------------------------------------------------------
LOT Polish Airlines Supervisory Board informs that after a number
of interviews, these persons have been appointed to Management
Board member positions:
Mr. Piotr Dubno - Management Board member, Sales
Mr. Andrzej Wysocki - Management Board member, Human Resources
Mr. Wladyslaw Metelski - Management Board member, Flight
Operations & Maintenance
Mr. Marek Grabarek, elected on June 13, 2003, holds the position
of the President and CEO of LOT Polish Airlines.
*****
LOT is a member of the bankrupt SAirgroup and it has not seen any
profit on its operations since 1997. It got into a heated debate
with International Air Transport Association agents for half a
year before both sides came to an understanding regarding
remuneration.
The airline posted a net profit for the airlines in 2002, but
this is because some of its aircraft were resold to their leasing
companies.
UPC POLSKA: Gets Court Nod to Hire Ordinary Course Professionals
----------------------------------------------------------------
UPC Polska, Inc., sought and obtained approval from the U.S.
Bankruptcy Court for the Southern District of New York to
continue employing the professionals it utilized in the ordinary
course of its business, without the submission of separate
employment applications and affidavits.
The Debtor will pay to each Ordinary Course Professional without
an application to the Court by such professional, 100% of fees
and disbursements incurred. Such payments would be made
following the submission to and approval by the Debtor of
appropriate invoices setting forth in reasonable detail the
nature of the services rendered and disbursements actually
incurred but not to exceed a total of $30,000 per month or
$250,000 in the aggregate in the Debtor's Chapter 11 Case,
The Debtor desires to continue to employ the Ordinary Course
Professionals to render many of the services to its estate
similar to those services rendered prior to the Petition
Date. Prior to the Petition Date, the amount of aggregate annual
compensation paid by the Debtor to the Ordinary Course
Professionals on an annual basis was approximately $700,000.
These Ordinary Course Professionals render key services for the
Debtor that impact the Debtor's continuing business operations.
It is essential that the employment of the Ordinary Course
Professionals, many of whom are already familiar with the
Debtor's operations and business affairs, continue on an ongoing
and uninterrupted basis to avoid disruption of the Debtor's
business operations, as well as to ensure Debtor's compliance
with state and federal legal and regulatory requirements.
UPC Polska, Inc., headquartered in Denver, Colorado, is an
affiliate of United Pan-Europe Communications N.V. The Debtors
is a holding company, which owns various direct and indirect
subsidiaries operating the largest cable television systems in
Poland. The Company filed for chapter 11 protection in July 7,
2003 (Bankr. S.D.N.Y. Case No. 03-14358). Ali M.M. Mojdehi,
Esq., and Ira A. Reid, Esq., at Baker & McKenzie represent the
Debtor in its restructuring efforts. As of March 31, 2003, the
Debtor listed $704,000,000 in total assets and $940,000,000 in
total debts.
=============================
S L O V A K R E P U B L I C
=============================
SLOVENSKE ELECTRARNE: BB+ Rating Withdrawn at Issuer's Request
--------------------------------------------------------------
Standard & Poor's Ratings Services said it withdrew its 'BB+'
foreign currency corporate credit rating on Slovenske Elektrarne
a.s., the main power generation company in the Slovak Republic
(local currency A-/Stable/A-2; foreign currency BBB/Positive/A-
3). The rating was withdrawn at the company's request.
The company is undergoing corporate and financial restructuring
and has no rated debt.
=========
S P A I N
=========
UNION FENOSA: ENI Acquires 50% Stake with EUR440.8M Investment
--------------------------------------------------------------
Eni has entered the Union Fenosa Gas share capital, acquiring the
50% of participation with a EUR440.8 million investment.
Consequently, Eni has appointed 5 Board Members in the Board of
Directors of Union Fenosa Gas: Domenico Dispenza, Camillo Gloria,
Angelo D'Abundo, Cesare Larghi, Massimo Mantovani.
The remaining Board Members appointed by Union Fenosa Gas are:
Elias Velasco, Ramon Novo, Jose Manuel Arrojo, Juan Luis Lopez-
Cardenete, Eloy Alvarez-Pelegry.
"Entering in Union Fenosa Gas represents for Eni a milestone of
its growth strategy in the gas sector at European and
International level", declared Vittorio Mincato, Chief Executive
Officer of Eni.
"I am extremely pleased with the Eni-Union Fenosa strategic
alliance" commented Honorato Lopez Isla, Chief Executive Officer
of Uni¢n Fenosa. "Our presence in the natural gas business has
been strengthened with an incorporation of a partner like Eni, a
leading international player in this business. Through this
operation, a key element of our Strategic Plan for the coming
years ahead has been consolidated."
*****
Standard & Poor's Ratings Services said last month it affirmed
its 'BBB+' long-term corporate credit and debt ratings and its
'A-2' short-term credit rating on Spain-based electricity utility
Union Fenosa SA.
According to S&P, the ratings on Fenosa reflect the group's good
business profile, stable cash flows, and the measures undertaken
by management to strengthen the group's capital structure, but
"these factors are offset by the weak financial profile that has
resulted from Fenosa's aggressive capital expenditure plans, its
continued involvement in telecommunications operations, and its
increased exposure to more volatile and high-risk countries."
===========
S W E D E N
===========
SWITCHCORE AB: Increases Net Sales, Narrows Operating Loss
----------------------------------------------------------
Summary
The company's net sales for the period totaled SEK40.4 million
(23.3). Calculated in U.S. dollars, growth was 118% up on last
year, which is significantly above the market performance in
general. Net sales for 2Q reached SEK23.4 million (15.3).
The Group's operating loss for the period was SEK37.8 million (-
68.9). The improvement came on the back of climbing sales and
continued good cost management, which was partly due to the
restructuring scheme that was decided in September 2002 and is
now achieving its full effect.
SwitchCore's new rights issue, carried out in May, was fully
subscribed and raised SEK96.1 million after deductions for issue
expenses. The new issue is expected to financially sustain
SwitchCore until the company achieves a positive cash flow and
makes a profit. Liquid funds and current investments at the
period's end reached SEK111.1 million (103.7).
In line with the company's forecast for growing volumes during
2003, the order inflow was SEK27 million for the second quarter
compared to SEK25 million for the first quarter 2003. Working
from its ever-broader customer base and its competitive
technology platform, SwitchCore's objective is to continue to
expand steadily on the Gigabit Ethernet market.
Events after the period's end:
Intel placed an initial order worth SEK4.5 million for co-
developed versions of the CXE-16 and CXE-2010, with delivery
expected for the later end of 2003. In line with the current
agreement where SwitchCore is entitled to compensation for tied
up capital, Intel will issue a full prepayment of SEK4.5 million.
Additional royalty earnings arising from Intel's sales will be
deducted from previously prepaid royalties.
General information about the business:
SwitchCore AB develops, markets and sells integrated network
devices for data and Internet communication. The core of
SwitchCore's expertise is in its CXE technology, which allows for
significantly higher data and internet switch capacity. Using
SwitchCore's components, customers can cut manufacturing costs
for the completed product and time-to-market. Customers and
partners are network equipment manufacturers and suppliers,
including Intel, Asante Technologies, Allied Telesyn and Huawei.
The company presently has just over 70 employees. SwitchCore's
headquarters is in Lund, Sweden. The Company also has offices in
Stockholm, Sweden, San Jose, Ca, Boston, Ma, in the U.S., and
Singapore in Asia. The company is listed on Stockholmborsen's O
List (Attract 40 list) under the SCOR ticker. For more
information visit http://www.switchcore.com
Footnote: The figures in parenthesis (xx) correspond to the
figures for the same period last year.
Comments by the CEO
"We are pleased with orders received during 2Q. More customers
are now placing larger orders with us, which is reducing our risk
exposure towards our largest customers. Furthermore, our success
in South Korea is a potential foundation for a development of
South Korea as one of our most important markets in the future.
Calculated in U.S. dollars, sales have more than doubled in the
first six months of the year compared with the same period last
year, which represents growth that is significantly above the
market performance in general.
The fully subscription of our new issue is also very satisfying.
We can be more aggressive with our sales, particularly in Asia,
to increase our market shares long-term. We believe that
SwitchCore's capital will suffice to achieve a positive cash flow
and make a profit.
In summary, we are in an expanding market, we have a sound
customer base and we run a cost-effective business. We are now
beginning to really see the results of our sales efforts, and
feel ever-confident in our assessment that 2003 will entail
greater volumes."
Sales and results for the period
The Group's net sales for the period amounted to SEK40.4 million
(23.3).
The gross profit margin for the period was 52%, up 8 percentage
points compared with the same period last year.
The Group's operating loss for the period was SEK37.6 million (-
68.9). A total of SEK7.4 million (7.5) was capitalized in
research and development expenses.
The Group's results for the period include a currency exchange
profit of SEK0.1 million (-3.8). Since all invoicing is in USD,
as the majority of the operating costs, exposure of the operating
profit/loss to USD is less than 5% of sales.
Sales and results for 2Q
The Group's net sales for 2Q amounted to SEK23.4 million (15.3).
Other operating income for the period was SEK0 million (1.9).
The Group's operating loss for the period was SEK17.6 million (-
35.1).
Financing and liquidity
Stockholders' equity stood at SEK128.5 million (116.3) on June
30, 2003 and equity per share was SEK0.75 (1.35).
The new issue, with preferential rights for the company's
stockholders, carried out in May was fully subscribed, meaning a
capital injection of SEK96.1 million after deductions for issue
expenses. SwitchCore now has sufficient financial strength to
enable the company to attain a positive cash flow and makes a
profit.
The parent company
The parent company's net sales for the period amounted to SEK40.4
million (23.3).
The loss after interest income/expense, net was SEK50.7 million
(82.6).
The market
SwitchCore's customer segments consist of companies that develop
equipment and system solutions for data and telecommunication
based on the Ethernet standard. This segment holds about 500
potential customers. The market for SwitchCore's products is
divided into telecommunications operators and enterprise
networks. The majority of SwitchCore's sales relates to
enterprise networks. According to Dell'Oro's forecasts, the total
market for enterprise networks is estimated at about USD 360
million in 2003, rising to US$720 million by 2007. In 2002
SwitchCore had a market share of around 3% based on Dell'Oro's
forecast. The company judges that market shares can grow year to
year since the company is currently in a growth phase in a growth
market. SwitchCore's customers are the key to further market
shares and most are in a development phase or have products at an
early commercial phase.
Products and sales SwitchCore received around ten orders in the
beginning of the second quarter from Allied Telesyn, Huawei and
Dasan, valued at over SEK13 million. The customers operate in
both the enterprise network and access network segments. The
orders are for all of SwitchCore's products and are intended for
delivery in 2Q and 3Q, 2003.
The Dasan Networks order entails expanding the infrastructure for
broadband connections used by South Korean businesses. Dasan
Networks, appointed one of the main suppliers, will provide VDSL
access routers containing SwitchCore's integrated circuits for a
major project called the Metro Express Project. The initial order
is worth SEK5 million. South Korea has the largest development
of high-speed networks for internet connections, in relative
terms, compared with any other country in the world.
As announced April 8, SwitchCore and Intel signed a new
cooperation agreement at the close of 1Q. SwitchCore will
manufacture products co-developed for both companies' customers.
Intel placed a first volume order valued at SEK4.5 million in
July after the close of the period. The products will be
delivered during the later part of 2003.
The substantially improved versions of CXE-16, CXE-1000 and CXE
2010 were launched during the period under the trademark
Xpeedium.
SwitchCore expanded its new design wins and customers during the
second quarter. In total, SwitchCore had about 70 design wins
and over 50 customers by the end of 2Q. A design win is when a
customer decides to develop a switch or router based on
SwitchCore's CXE products. About half of SwitchCore's customers
have launched CXE technology-based products. In line with the
company's expectations, the first two quarters report a growing
number of customers that invoice in excess of USD 100,000. Some
ten customers are presently responsible for about 80% of the
company's sales, which means that dependence on large customers
has fallen somewhat.
Organization and employees
The SwitchCore organization consists of a parent company,
SwitchCore AB, first-tier subsidiaries SwitchCore Options AB,
SwitchCore Singapore Private Limited, SwitchCore Taiwan AB
(dormant) and SwitchCore in Stockholm AB (dormant), and one
second-tier subsidiary SwitchCore Corporation (a wholly-owned
subsidiary of SwitchCore Options AB).
At the close of the period the distribution of the Group's
employees was:
The Group had 73 (90) employees of whom 58 (69) are in Sweden, 8
(16) in the US and 7 (5) in Asia. Of the total, 12% (13%) are
female and 88% (87%) male: The average age is 36 (35). In
addition, the company employed 4 (4) people on a project basis at
the close of the period.
Investments
The Group's investments in tangible fixed assets totaled SEK0.1
million (0.9), of which SEK0 million (0.5) was in the parent
company. Examples of investments include development and testing
tools, computer equipment, and office inventory.
Patents
SwitchCore's patent strategy is built on creating a patent
portfolio where the most important parts of the CXE technology
are protected. The functions of future products are earmarked at
an early stage for possible patenting. In total SwitchCore owns
six patents in Sweden and three in the US. A further nine patent
applications have been submitted for review in the U.S. and two
in Sweden.
Outlook for 2003
Independent market analysts Dell'Oro judges that the Gigabit
Ethernet market will show an annual 15-20 percent growth in sales
revenues up until 2007. SwitchCore's objective is to continue to
expand steadily on this market based on its ever-broader customer
base and its highly competitive technology platform.
In line with the company's forecast for growing volumes during
2003, orders were good during the year's first two quarters.
SwitchCore's stocks
The Company's stocks are quoted on Stockholmsborsen's O List (the
company was formerly quoted on the Attract 40 list). The average
daily turnover of stocks for the January 1 - June 30, 2003 period
was SEK1,227,049. During the same period, the average number of
traded stocks was 582,408 per day. The total number of stocks in
the company at the end of the period was 172,055,610.
Reports 2003
3Q report January 1 - September 30, 2003 October 23, 2003
Financial statement January 1 - December 31, 2003 January 29,
2004
Accounting principles
This interim report was prepared according to the Annual Accounts
Act and Swedish Financial Accounting Standards Council
recommendations.
Lund, Sweden July 24, 2003
Henric Isacsson, CEO
SwitchCore AB (publ)
This report has not been subject to review by the company's
auditors.
CONTACT: SWITCHCORE AB
Maria Ryden-Persson, Chief Financial Officer
E-mail: Maria.Ryden-Persson@switchcore.com
Mobile: +46 (0)73-429 25 65.
=====================
S W I T Z E R L A N D
=====================
ZURICH FINANCIAL: Confirms Exclusive Talks with P&V Assurances
--------------------------------------------------------------
Zurich Financial Services and P&V Assurances confirmed that they
are in exclusive talks about the possible sale of certain Zurich
operations in Belgium and Luxembourg to P&V. These businesses
represented a Gross Written Premium volume of about EUR300
million in 2002. Excluded from the negotiations are Zurich's
Non-life operations in the corporate segment and the
international Life business in Luxembourg.
P&V is a Belgian Life and Non-life insurer with total Gross
Written Premiums of around EUR366 million in 2002. The
successful acquisition of the Zurich operations would enable P&V
to expand its multi-channel strategy with an important network of
brokers. The group P&V currently commercializes its products
through a network of employed exclusive advisers under the
umbrella of P&V D (P&V Distribution), independent agents, a
limited number of brokers, a specific unit for institutions and
direct sale through Actel.
Zurich will continue to operate the Non-life corporate businesses
in Belgium and Luxembourg through its business unit Continental
Europe Corporate.
Both companies will make no further statement concerning the
contemplated transaction until an agreement has been reached.
Zurich Financial Services is an insurance-based financial
services provider with an international network that focuses its
activities on its key markets of North America, the United
Kingdom and Continental Europe. Founded in 1872, Zurich is
headquartered in Zurich, Switzerland. It has offices in
approximately 60 countries and employs about 68,000 people.
CONTACT: ZURICH FINANCIAL SERVICES
Media and Public Relations
8022 Zurich, Switzerland
Phone: +41 (0)1 625 21 00,
Fax: +41 (0)1 625 26 41
Homepage: http://www.zurich.com
P&V
Marnic Speltdoorn, Manager Communications
Phone: +32 (0)2 250 91 05 or +32 (0)2 250 92 09
Homepage: http://www.pv.be
===========================
U N I T E D K I N G D O M
===========================
ABBEY NATIONAL: Unicredito May Buy Mortgage Biz, Sources Say
------------------------------------------------------------
UniCredito Italiano SpA and Abbey National Plc may just find the
right partner for each other in a possible transaction involving
Abbey's mortgage business.
UniCredito is expanding outside of its main consumer banking
business to stem a decline in interest income, while Abbey
National is divesting European units to revive profits.
UniCredito may buy Abbey's Italian mortgage business, people
familiar with both sides said, according to Bloomberg. Gestnord
Intermediazione SpA an analyst in Milan estimates the business to
be worth about EUR350 million. It has EUR4 billion (US$4.6
billion) of loans, and employs 250 people.
Abbey National spokesman Matt Young said: ``It's a business we
are looking to exit.'' He also admitted that officials are
"talking to a number of parties."
UniCredito is the frontrunner to buy the unit, said the people,
who asked not to be identified, according to the report.
ACCIDENT GROUP: MPs Call on DTI to Probe Past Trading Activities
----------------------------------------------------------------
Austin Michell, Labour MP for Greater Grimsby, and Jim Cousins,
Labour MP for Newcastle upon Tyne Central are calling on the
Department of Trade and Industry secretary Patricia Hewitt to
probe into possible breach of Insolvency Act by Accident Group,
according to the Financial Times.
The call follows the discovery that Amulet, Accident Group's
parent, continued to trade for two years despite being
"technically insolvent." The MPs are asking the secretary to
probe into the company's activities, and into the role of
directors and auditors in the eventual collapse of the personal
injury claims.
A report into the collapse of Accident Group compiled by Prem
Sikka, a professor of accountancy at the University of Essex
claimed that its parent company, Amulet Group, reported net
liabilities of GBP4.41 million in 2001 and GBP2.32 million in
2002. It also continued to make large dividend payments to its
backers despite its losses. The company's continued trading
despite its dire financial straits puts the company in breach of
Insolvency Act guidelines.
KPMG acted as the group's auditor in 2002 after Arthur Andersen.
The firm declined to comment on Amulet until after the report
from administrators PriceWaterHousecoopers.
ACCIDENT GROUP: Parent's Administrator Criticized on Dual Role
--------------------------------------------------------------
A report into the collapse of Accident Group bears criticism on
the dual role of the firm's administrator,
PriceWaterhouseCoopers, according to the Financial Times.
A PriceWaterhouseCooper-sponsored report on U.K.'s most desirable
quoted companies put Amulet, Accident Group's parent, at number
five just months before the company went under administration.
"PwC has a clear conflict of interest and should step down as
[Amulet's] administrators," Prem Sikka, a professor of
accountancy at the University of Essex said in its report into
the collapse of the company. PriceWaterhouseCoopers, meanwhile,
denied there was a conflict.
The administrator also said that it was preparing in its role as
administrator to report to the Department of Trade and Industry
in due course.
Amulet went under administration in May with the loss of 2,400
jobs.
BRITISH AIRWAYS: Biggest Union Holds Back Strike Ballot for Now
---------------------------------------------------------------
British Airways was relieved Thursday after the biggest union of
its ground staff refrained from calling a strike ballot while all
three unions involved in the dispute continued talks at Acas, the
conciliation service.
A possible strike from T&G workers would have greater negative
effects on the airlines' operations than an industrial action by
the GMP and Amicus unions.
But the situation remained tense, according to the Financial
Times. The report quoted a T&G official warning that while the
union exhausts all possibilities to reach a deal through
negotiated settlement, there is "a very, very clear view that we
will consider a strike action ballot."
The Acas talks followed Wednesday last week. This was after
workers at Heathrow staged unofficial industrial action Friday of
the prior week to oppose British Airway's introduction of swipe
cards, which monitors employees' working hours. They claimed
British Airways will use the new system to send people home
during quiet periods, forcing them to make up the time during
busy periods, according to the report. They also fear that the
airline will introduce split shifts.
A British Airways official denied the allegations, although he
admitted there are plans to employ more people at busier periods
than at quieter ones.
GMG and Amicus are currently pressing ahead with ballots at
Heathrow and Gatwick that could produce official strikes from
late August.
BRITISH AIRWAYS: Engineers Move to Reject Time Recording System
---------------------------------------------------------------
Further evidence of British Airways worker's frustration emerged
when British Airways engineers gave notice of negotiations with
the company over its plans to introduce the Automated Time
Recording system.
British Airways engineers agreed to give the legally required 14
days notice to British Airways to negotiate on the introduction
of the controversial swipe card at a mass meeting held at
Heathrow Thursday.
Failure by the company to enter into negotiations after the 14-
day notice period has elapsed will spark a ballot of British
Airways engineers at Heathrow and Gatwick for industrial action.
Bob Shannon, Amicus National Officer, said:
"The British Airways engineers decision will certainly increase
the pressure on the company to rethink its position. British
Airways employees don't want the new swipe card system introduced
and they certainly don't want it imposed."
97% of British Airways engineers rejected the introduction of the
Automated Time Recording system in a consultative ballot
conducted by the company.
Check-in and supervisory staff at Heathrow walked out in
unofficial strike action last Friday after British Airways
announced they would have to operate the new Automated Time
Recording system from Tuesday this week or face suspension.
BRYANSTON INSURANCE: Creditors Approve Early Closure of Scheme
--------------------------------------------------------------
At the Special Meetings of Scheme Creditors with Potentially
Protected Liabilities and Scheme Creditors with Scheme
Liabilities other than Potentially Protected Liabilities, both
held at Chartered Insurance Institute, 20 Aldermanbury, London
EC2V 7HY on June 26, 2003, the Special Resolution designed to
bring about the early closure of the Scheme was approved by the
requisite majority of Scheme Creditors. A copy of this notice
verifying the outcome of the vote has been published on
Bryanston's website, http://www.bryanstoninsurance.co.uk.
As detailed in the Special Resolution, all Scheme Creditors to
whom the notice of the Special Meetings was given will receive a
Claim Form from the Scheme Administrator, Scheme Creditors with
Scheme Liabilities other than Potentially Protected Liabilities
have until the Bar Date, January 27, 2004, to submit details of
their claims on their Claim Forms. Any such Scheme Creditors who
do not return their Claim Form before the Bar Date will be deemed
to have accepted as their total claim against Bryanston the
amount shown on their Claim Form as sent or made available to
them, which may be nil.
Scheme Creditors with Potentially Protected Liabilities are
subject to the same provisions as other Scheme Creditors for the
agreement of claims in the Scheme, except that the Bar Date does
not affect their right to make claims in respect of Potentially
Protected Liabilities if and when they subsequently mature into
payable claims. As and when they mature, all future claims
should be presented, as they have been throughout the Scheme, to
Bryanston's run-off managers.
Scheme Creditors should return the completed Claim Form by email
to bryanston@omniwhittington.co.uk or by post to the Scheme
Administrator at the following address: Bryanston Insurance
Company Limited, c/o Omni Whittington Insurance Services Limited,
Omni Whittington Court, Whitfield Street, Gloucester, GL1 1NA,
England.
If you have any questions please contact the Bryanston team at
Omni Whittington byTelephone: +44 (0) 1452 428000 or by Fax: +44
(0) 1452 301387
CONTACT: PAB EVANS, PRICEATERHOUSECOOPERS LLP
Scheme Administrator
CORUS GROUP: Supplying Steel for Rebuilding Ground Zero
-------------------------------------------------------
Four thousand tons of steel left Teesside Friday, July 2, bound
for the first major rebuilding project at New York's Ground Zero.
The giant steel sections (beams) were made by Corus' Teesside
steelworks and will be used in the new '7 World Trade Center'.
The original building stood adjacent to the twin towers and was
the third structure to collapse, hours after the towers were
destroyed in the September 11, 2001 terrorist attack.
The new steel frame office building, at 228 meters high, will
have fifty-two stories. Its basement will house the electrical
transformers for Consolidated Edison -- the company that supplies
power to most of Lower Manhattan, including the future trade
buildings. The quick reconstruction of building 7 is therefore
key to the redevelopment of the whole site.
Corus has already provided 700 tons of sections for 7 World Trade
Center's foundations and is hoping to supply a further 3,000 tons
of steel for the project. [Fri]day's shipment will be delivered
to a small port at Wilmington, close to New York, where it will
be fabricated by leading Delaware-based fabricator Helmark Steel
Company. Corus' close relationship with Helmark on numerous
projects in New York and New Jersey was a key factor in obtaining
the order.
Corus Sales Manager Peter Gate said: "We are proud to be a
supplier to this significant and prestigious project. Corus won
this order because of our track record of working to Helmark's
tight timescales and our global expertise in providing cost-
effective project solutions."
Architects Skidmore, Owings and Merrill designed 7 World Trade
Center.
ENERGIS PLC: Launches Low Cost U.K. Directory Enquiries Service
---------------------------------------------------------------
Energis launched one of the lowest priced U.K. directory
enquiries services for businesses.
Business customers who use Energis' U.K. directory enquiries 118
810 number will pay only 29p per call with no additional costs,
such as minimum or per minute call charges or set-up fees.
Based on the average length of a call to a U.K. directory
enquiries service, which is 44 seconds, Energis' service is 38%
and 17% cheaper than the equivalent services provided by BT and
Cable & Wireless, respectively. Energis will also provide an
international directory enquiries service on 0118 805 at a price
competitive with other main operators.
Julian Payne, Product Manager for Telephony at Energis, said:
"Directory enquiries services should be simple -- a full service
at low cost with no hidden extras. That's what our customers
have been asking for - that's what we're giving them.
About Energis (http://www.energis.co.uk)
Energis is a leading provider of high-value telecoms and Internet
services to major companies and public institutions in Great
Britain and Ireland. It offers a portfolio of data, voice, call
center and internet services. Around 437 million call minutes
per week are routed over the Energis network and Energis hosts
more than 20,000 commercial websites. Major customers include
the BBC, Boots, Freeserve, Royal & SunAlliance and Tesco.
CONTACT: ENERGIS
Marta Judge
Phone: +44 (0)20 7206 5800
E-mail: marta.judge@energis.com
FIRM PUBLICATIONS: Cash Flow Problem Forces Receivership
--------------------------------------------------------
Edinburg-based Firm Publications was forced into receivership
after running out of cash in the wake of a slump in advertising
revenues. Its owners are currently trying to sell the titles,
including Business and Finance and legal monthly Firm, to pay
creditors.
Publisher Steven McColl said: "We simply reached a stage where
there was no more money in the bank. In last month's run of
magazines the advertising revenues absolutely floored," according
to The Scotsman. He said the bank needed about GBP150,000 to
pay bills and cash commitments, and continue operations. Philip
Healey, the publisher of Scottish glossy Caledonia and a 25%
shareholder in Firm, wrote off GBP250,000 of his investment.
Twelve interested parties are now looking at all four of Firm's
titles, Mr. McColl disclosed, including venture capitalists and
media houses. "Hopefully, the jobs will be secured," Mr. McColl
said.
Publisher Steven McColl set up Firm, a magazine for the Scots
legal profession, four years ago with former Conservative party
election candidate Bill Frain-Bell. The company also publishes
Catering in Scotland.
Firm was highly dependent on advertising revenues because the
bulk of its print run was sent free to a targeted readership.
GLAXOSMITHKLINE PLC: Garnier Waits for Pay Package Review Results
-----------------------------------------------------------------
Jean-Pierre Garnier, GlaxoSmithKline CEO whose pay package has
been under attack in recent months, is adopting a wait-and-see
stance regarding his remuneration.
"Let's see what happens," he said referring to the pending report
of Deloitte & Touche on its investigation into the company's
remuneration policy, according to The Telegraph.
When asked whether he we would leave if his pay package were
changed, he said: "It depends. Not if they made it better." Mr.
Garnier could receive a potential GBP22 million golden parachute
if he lost his job as chief executive under his existing
contract. The severance pay was the center of shareholders
revolt on the remuneration committee's report in May. Although
their vote against the report was only advisory, it was able to
force the company to hire Deloitte & Touche to review the firm's
remuneration policy.
At present, speculations circulate that Mr. Garnier and his chief
financial officer John Coombe might agree on cutting their
contracts to 12 months.
"It's not a question of my compensation, it's a question of the
compensation system throughout the company," he said, according
to the report.
J SAINSBURY: Releases First Quarter Trading Statement
-----------------------------------------------------
J Sainsbury plc issued its first quarter trading statement for
the 12 weeks to June 21, 2003.
Highlights:
Sainsbury's Supermarkets (U.K.)
(a) Total sales up 2.0%1
(b) Like-for-like sales growth of 0.3%1
(c) Business Transformation Program begins to deliver benefits
(Easter adjusted and including petrol)
Shaw's (U.S.)
(a) Total sales up 1.1%2
(b) Like-for-like sales growth of 0.8% (Easter adjusted)
At the J Sainsbury plc 2003 Annual General Meeting on Wednesday,
Sir George Bull, addressing shareholders for the last time before
his retirement in March 2004, said:
"When I became Chairman in 1998 it was apparent that Sainsbury's
was losing its way. It had lost market leadership some years
before, customer numbers were declining and Group profits were
falling. Having only just arrived on the scene I had the
difficult task of announcing two profit warnings in 18 months.
The infrastructure was antiquated following years of under-
investment and the market place was changing rapidly and becoming
increasingly competitive.
"We recognized that Sainsbury's recovery could not be achieved
overnight. We set about making fundamental changes to bring us
in line with the industry. We agreed an ambitious and, of
necessity, capital intensive recovery program to rebuild our
supply chain, our IT infrastructure and radically improve our
store portfolio and our product range. We are currently some two
thirds of the way through the program and we are achieving
traction. There is still much to be driven through to a
successful conclusion but progress is being made and the Board is
confident that the benefits from the program will increase in
pace during the next 18 months.
"Considering the intensity of the business transformation
program, the results that Peter and the management team have
achieved already have been highly commendable. Customer numbers
are increasing and we have reclaimed our position as `First for
Food'. There are inevitably concerns that the full benefits of
the transformation program are not yet evident. I believe that
these concerns should be seen within the context of the last
financial year when we delivered double-digit growth of 10.8% in
underlying group operating profits. This is our second
consecutive year of double-digit profit growth and, in addition,
we delivered a Total Shareholder Return of 17%, which has
outperformed the FTSE100 by 68% from March 2000 to July 21, 2003.
"I am pleased to report that as a consequence of the changes we
are implementing Sainsbury's is in a fundamentally much stronger
position than it was five years ago."
Commenting on performance during the first quarter, Sir Peter
Davis, group chief executive, said:
"We have reported like-for-like sales growth in the first quarter
of 0.3%1 for Sainsbury's Supermarkets against strong comparatives
from last year when we benefited from the Golden Jubilee weekend
celebrations and our sponsorship of the England team in the World
Cup and as a result reported a sharp increase in market share.
"As suggested previously, we have aligned our reporting with the
rest of the industry in only quoting like-for-like sales growth
including petrol. Excluding petrol like-for-like sales (adjusted
for Easter) were slightly negative, but an improvement over
quarter four.
"I am not satisfied by our sales performance during the last two
quarters. There is no doubt that while implementing significant
change in-store and within the supply chain there has been some
disruption to the execution of our customer offer. We are
focusing on delivering overall value for money to our customers
through a combination of Quality, Innovation, Choice and Service,
delivered at competitive prices and will continue to retain this
focus throughout our transformation program. Recent improvements
in-store, particularly in service and in fresh foods, have been
received positively by customers and early evidence of this on
our sales performance is encouraging. We are looking forward to
continuing our progress in service and `First for Fresh'. We are
also excited about the re-launch of our new non-food ranges,
which will start in September.
"The next twelve months are most important in the delivery of our
change program, when the first two years of groundwork and
capital investment really take hold. It is the Board's top
priority to ensure that this program is fully completed. We will
then have a leaner, fitter business in better shape to compete in
the U.K.'s dynamic food retailing sector.
"Shaw's in the U.S. reported total sales growth of 1.1% and like-
for-like growth of 0.8%. Shaw's continues to perform well
against its U.S. peers, although the spring weather in New
England has been unusually cold and rainy which has adversely
impacted sales in seasonal categories and seasonal locations.
During this period, Shaw's added more than 340,000 sq. ft of new
selling space, including opening five new stores.
"Profits for the first quarter are ahead of the same period last
year. This year unprecedented changes are being implemented and
the recovery program remains on track. We are committed to
delivering our cost savings target of GBP250 million this year
and remain confident that we are making real progress across the
group."
CONTACT: J SAINSBURY PLC
Investor Relations
Roger Matthews
Lynda Ashton
Phone: +44 (0) 20 7695 7162
LONDON CLUBS: Recovery of Prior Year Debts Ups Operating Profit
---------------------------------------------------------------
London Clubs International plc, the operator of 11 casinos, 7 of
which are located in the U.K. and 4 internationally, announces
significantly improved preliminary results.
2003 2002*
Turnover (GBP million) 159.5 152.5
Operating profit before exceptional items (GBP million)
24.1 0.16
Pre tax profit/(loss)(pre-exceptionals) (GBP million)
8.5 (19.8)
Earnings/loss per share (pre-exceptionals) (p)
6.4 (10.7p)
* Excludes Associate
Financial
(a) Improved trading, cost reductions and recovery of prior year
debts dramatically increased operating profit.
(b) Revaluation of U.K. casinos - Group's net assets increased to
GBP70.8 million (2002: GBP3.0 million).
(c) Sale of Palm Beach and sale and lease back of 50 St James's
have reduced the Group's net debt by GBP60 million.
(d) Covenant to further reduce debt by 1 September 2003 has been
waived by the lenders.
(e) Negotiations initiated with the Group's principal lender to
refinance the Group.
Operational
(a) In London drop levels have exceeded expectations and win
levels broadly maintained despite a background of
geopolitical uncertainty.
(b) Casinos in Southend and Brighton well established and form
the template for further UK development.
Michael Beckett, Chairman, commented:
"London Clubs is well positioned for the future: within our
existing estate we are relocating and expanding the Sportsman and
are repositioning 50 St James' with new facilities which will be
unique in the London market. We have another license in
Manchester and will be applying for further licenses outside
central London over the next 12 months. We have the template and
the management skills to operate in the post deregulation
environment as well as the flexibility to locate where we want.
These excellent results are a reflection of the dedication,
loyalty, innovation and determination of all at London Clubs.
We are now ready to embark on the next phase of our development."
To view full report and financials:
http://bankrupt.com/misc/LONDON_CLUBS.htm
CONTACT: London Clubs International
Phone: 020 7457 2020 (Today)
Barry Hardy, Chief Operating Officer
Phone: 020 7518 0000 (Thereafter)
Linda Lillis, Finance Director
College Hill
Phone: 020 7457 2020
Matthew Smallwood
Justine Warren
NETWORK RAIL: Stops EUR10B Improvement Work in Bid to Curb Costs
----------------------------------------------------------------
Rail regulator Tom Winsor has decided to stop a EUR10 billion-
improvement work, including upgrades to the West Coast main Line,
in a bid to limit expenses at Network Rail.
Mr. Winsor told BBC Radio 4's Today program: "Costs have gone out
of control, they have exploded."
"The inefficiency that has gone into the company is quite
remarkable and my decision...is all about getting out of the
system unnecessary cost."
Work on the project will stop at the end of next year while the
company reviews spending. Mr. Winsor is due to announce his
final decision regarding "the size, the quality and the cost of
the national railway network" in December. He promised to cut
Network Rails GBP6 billion yearly spending to GBP4 billion a year
within five years.
Although expected improvements may not come as hoped, it is his
belief that the stoppage of the improvement works is justified.
He also cleared that he is not against Network Rail or its
managers.
"I am right behind them in terms of the work they are doing, but
I believe they can make these improvements faster than they are
presently projecting," he said.
TRINITY MIRROR: Closure of Two Saturday Magazines Imminent
----------------------------------------------------------
Newspaper publisher Trinity Mirror is expected to announce next
week the closure of M, its award-winning Saturday magazine, along
with its listings supplement, Look.
The Financial Times reported that Trinity's chief executive, Sly
Bailey, will announce on Thursday that the two Saturday magazines
will be shut down in order to redirect resources.
Trinity mirror is currently undergoing a restructuring of its
advertising, administrative and distribution operations, aimed at
simplifying newspaper distribution contracts, advertising sales
and marketing efforts. Ms. Bailey, the former head of magazine
publisher IPC, has overseen a major shake-up of boardroom
personnel since she arrived at Trinity Mirror at the start of the
year.
A person familiar with the plans told the Financial Times that M
and Look were deemed by Ms. Bailey to be too expensive to earn
their keep.
Ms. Bailey recently ruled out a sale of any of Trinity Mirror's
major national titles, but is expected to announce several
hundred job cuts.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter -- Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Trenton, NJ
USA, and Beard Group, Inc., Washington, DC USA. Larri-Nil
Veloso, Ma. Cristina Canson, and Laedevee Gonzales, Editors.
Copyright 2003. All rights reserved. ISSN 1529-2754.
This material is copyrighted and any commercial use, resale or
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