Scottish Business Briefing – Friday 17 October, 2008

Published on Friday 17 October 2008 08:25

WELCOME to scotsman.com's Scottish Business Briefing. Every morning we bring you a comprehensive round-up of all news affecting business in Scotland today.

BANKING & INSURANCE

National Australia Bank to release full-year results 10 days early

National Australia Bank (NAB), owner of the Clydesdale, yesterday brought forward its results release date by 10 days to October 21, but said that "does not fore- shadow any proposed material announcement" (Herald). The bank said it wanted to update the market with additional clarity on its financial position, due to the "extreme levels of volatility and uncertainty", but announced that its annual cash earnings would fall by around 11% in line with market expectations. One analyst at a major Australian brokerage said: "That they brought forward the release could be a positive sign and mean there are no more nasties, at least in this set of results." NAB stunned the market in July by flagging an A$830m (330m) provision for possible losses on A$1.2bn of collateralised debt obligations, or CDOs, backed by US mortgages, which came on top of a A$181m provision taken in the first half for the same portfolio.

Osborne tells Scottish bankers to return to their 'traditional virtues'

SHADOW chancellor George Osborne yesterday called for a return to "traditional virtues of Scottish banking" after meeting senior bankers at HBOS and Royal Bank of Scotland (Scotsman). In a trip to Edinburgh following the government's 37 billion bank bail-out on Monday, Osborne met senior representatives at HBOS's headquarters on the Mound and later met members of industry body Scottish Financial Enterprise (SFE) including representatives from RBS, Aberdeen Asset Management and Standard Life. "We could learn something from the traditional virtues of Scottish banking, which are 'know your customer, behave in a sensible and prudent way, don't overborrow, and make sure your institutions are built on sound foundations'," Osborne said. "That is what made Scotland such an important centre for financial services and made Scottish banks world leading banks." The shadow chancellor did not share his view on whether the takeover of HBOS by Lloyds TSB should continue. He said it was "a decision for the shareholders" and admitted he was in the dark about the details of the deal.

Grant named Braveheart CFO

BRAVEHEART Investment Group has taken its executive director count to three with the appointment of Colin Grant as chief financial officer (Scotsman). Grant joins the angel investor from Digital Bridges, the Fife-based mobile gaming group that was bought last year by Oberon Media of New York. In addition to his main role, Grant will take on the post of company secretary from Carolyn Smith, Braveheart's chief investment officer. Earlier this month, Perth-based Braveheart vowed to press on with expansion plans despite warning it was set to post a first-half loss. The firm said it was operating in a buyers' market and had a strong balance sheet. Commenting on Grant's hiring, Braveheart chief executive Geoffrey Thomson said: "His experience of public markets and venture-backed technology companies means that he is ideally suited for the CFO role.

City cool as McFarlane tipped for RBS role

THE City has reacted coolly to speculation that Royal Bank of Scotland insider John McFarlane is a strong candidate to replace Sir Tom McKillop as chairman (Scotsman). City sources said the appointment of Scots-born McFarlane, who became a non-executive at RBS on 1 October, would play to Scottish sensitivities following English-born Stephen Hester's appointment as chief executive. But analysts and fund managers said there would also be concerns because McFarlane, 61, is an unknown quantity to the City. One fund manager said: "I think there might be some unease just because nothing is really known of him. He has no track record as a chief executive or chairman in this country."

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INDUSTRY

Aggreko chooses Dumbarton over China for new plant

AGGREKO is to spend 20 million on a new manufacturing base in Dumbarton after Scottish Enterprise helped lure the company away from an investment in China (Scotsman). The Glasgow-based group, which yesterday announced it was on track to increase its profits by 50 per cent to almost 190m, said a new facility would be built over the next three years. The plant will manufacture power generators to be deployed around the world. In August, The Scotsman revealed that the company, which provides temporary power generators and cooling equipment, was planning to invest either in Dumbarton, where it currently operates from several sites, or move all or part of its manufacturing and assembly to Wuxi, near Shanghai.

Read all today's industry news from scotsman.com

RETAIL

Hunter lies in wait for prey

Ayrshire entrepreneur Sir Tom Hunter is poised to snap up Baugur's dominant stake in the House of Fraser department store chain if the troubled Icelandic investor is forced to offload its holding (Herald). Baugur is a 35% share- holder in House of Fraser, which was founded in Glasgow 159 years ago. But its future is uncertain as Iceland's banking crisis has seen its debt, estimated at 1bn, effectively put up for auction. Hunter, who owns 11.1% of the company, and other existing shareholders have the first call on any stake that Baugur sells. They "have not been offered it at this stage", a highly placed industry source said yesterday, but Hunter is thought to be willing to look at the Baugur stake if it becomes available. Any purchaser of Baugur's debt would have enormous sway over the direction of the company and by extension its investments such as House of Fraser, whose stores include Jenners in Edinburgh. Baugur also owns Mosaic Fashions, Oasis, Principles, Karen Millen, Warehouse and Coast chains, and Iceland supermarkets, and has stakes in listed companies Debenhams, Moss Bros, French Connection and Woolworths.

Diversity the big cheese for Fife dairy farm

FARMERS are always being urged to diversify into "value added" products – and that is precisely what dairy farmers Robert and Jane Stewart have done in establishing the St Andrews Cheese Company and "Anster Cheese", made using traditional skills (Scotsman).The Stewarts, who run a herd of 150 Holstein Friesian cows at Falside Farm, now have a team of ten staff involved in cheese-making and hospitality at their farm near Anstruther. The new cheese was officially launched yesterday by Richard Lochhead , the Cabinet secretary for rural affairs.

Read all today's retail news from scotsman.com