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FTSE 100 5,266.06 +20.85 DOW 10,319.95 -58.88 NASDAQ 2,190.27 -18.36 /$ 1.56 unc / 1.21 -0.01 /$ 1.28unc Certified Distribution31/05/10 till 04/07/10 is 103,725

BAA staff

set to strikeover wages

UK AIRPORTS are set to face chaos inthe coming weeks after BAA staff inthe Unite union voted three-to-one infavour of strike action yesterday.

Unite, which represents two-thirdsof BAAs workforce, said the voteshowed the firms offer of a one percent basic pay rise was derisory.

Union heads will meet on Monday to decide what form the industrialaction will take. One option involves

walk-outs over the August bank holi-day, though the union must giveseven days notice of any action.

The arbitration body Acas con-firmed last night it will facilitate anearly meeting with Unite and BAA

bosses as soon as a suitable time can be arranged, in an attempt to head off major travel disruption.

BAAs six airports, includingStansted and Heathrow, face closureor a slew of cancelled flights whileaction is ongoing.

For the past four months BAA hasrefused to even meet with us, saidUnite official Brendan Gold.

BAA is doing passengers a greatdisservice by allowing this dispute toget to this stage. We are therefore call-ing on BAA to return to the negotiat-ing table with a fair offer.

Staff working at the Spanish-ownedBAA have seen other large firms offergenerous pay deals recently, includ-

ing a 9.3 per cent pay rise over 39months for BT workers, agreed in July, and a 6.9 per cent rise and otherperks at Royal Mail, secured in March.

BY MARION DAKERSTRANSPORT

Sir Philip Green(left) with Kate

Moss who designsa fashion range for his Top Shop chain.

Pictures: REUTERS

BUSINESS secretary Vince Cable, a vociferous opponent of tax avoidance, was not consulted over the appoint-ment of Sir Philip Green to lead areview into government efficiency,City A.M.has learned.

In the past, Sir Philip has been asso-ciated with sophisticated tax plan-ning arrangements in the UK andoffshore locations to produce tax sav-ings on behalf of non-resident mem-

bers of his family.Cable, who is one of the govern-

ments lead contacts for the businesscommunity, yesterday reacted withsurprise on learning that the TopShop tycoon had been asked to helpthe coalition root out waste in

Whitehall.Theres a lot I could say on this,

but Id better miss this one out, hetold City A.M. Im tempted to com-ment, but I think Id better not.

Prime Minister David Cameron hasappointed Sir Philip to lead an exter-nal efficiency review into govern-ment spending. He is being asked toexamine government spending over

CABLE SNUBBEDOVER GREEN ROLE

BY DAVID CROWPOLITICS

www.cityam.comIssue 1,198 Friday 13 August 2010 FREE

PRU HIRESCITY FIXERTRIES TO PUT AIABID BEHIND IT ASPROFIT RISES P5

VICTORIA BATES REVEALSTHE CITYS FINEST LADIES

NAMED IN THE CAPITALISTP16

BUSINESS WITH PERSONALITY

the last three years and to identify potential savings, before reporting hisfindings to the cabinet office aheadof the comprehensive spendingreview in the autumn.

Francis Maude, minister for thecabinet office, said the coalition wasextremely fortunate to have SirPhilip on board, thanks to his com-mercial experience and his fantastictrack record of managing large organ-isations.

A spokeswoman for Cable insistedit was perfectly normal for the gov-ernment to appoint a high profile

businessman without consulting the business secretary. Sir Philip hasnt been recruited to advise Vince. If they consulted him on every appointment,

theyd never get anything done.But other Whitehall sources said

there were obvious contradictionsdue to the Liberal Democrat positionon tax avoidance. City A.M. under-stands that some Lib Dem MPs areconsidering voicing their oppositionto the appointment today.

Sir Philip, the tycoon behind Top-shop owner Arcadia, has in the pastdrawn criticism for his tax arrange-ments. Arcadias biggest shareholderis Taveta Investments, a UK-incorpo-rated company that is controlled by Sir Philips wife, a Monaco resident.

In 2005, his family saved a signifi-cant amount of tax relating to thepayment of a 1.14bn dividendthrough a series of complex arrange-

ments. Yesterday, Sir Philip dismissedquestions over his tax arrangements,telling City A.M:What difference doesit make if I live on the moon the realquestion is whether Im qualified todo the job.

Sir Philip was knighted for servicesto the retail industry in 2006, whenthe Labour government was in power,and is well-known for donating signif-icant amounts to charity.

A spokeswoman for Topshop owner Arcadia said: It is fully disclosed who Arcadias largest shareholder is andhas been known in the public domain

since 2002. There were no dividendspaid last year. The company pays UK corporation tax and Sir Philip Greenis a UK tax payer.

Im tempted to com-ment, but I think Idbetter not, said VinceCable on learning of Sir Philips appointment

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News2 CITYA.M.13 AUGUST 201

Alarm at dropin Greek GDP

WEAKER than expected growth fromGreece and a surge in unemploymentspread fresh fears in the City yester-day over the countrys ability to

weather the sovereign debt crisis. The Greek economy shrank by 1.5

per cent in the second quarter andthe unemployment rate jumped to 12per cent, according to official statis-tics, reflecting the pain of drastic aus-terity measures agreed with lendersin a bid to battle its debt crisis.

The disappointing GDP figure wassignificantly lower than the one percent drop expected by economistsand pushed up the cost of protectingGreek government debt againstdefault. It now costs 795,000 a yearto insure an exposure of 10m of Greek government bonds, according

to CDS monitor Markit. The Greek economy is expected to

contract by four per cent this year,according to the EU and IMF.

The figures also intensified con-cerns over the health of fellow weak Eurozone members sending investorsrushing into safe haven assets withthe spreads between Bunds andGreek, Portuguese, Irish, Italian andSpanish debt rising sharply.

It is an interesting little warningsign. The problems have not gone away,the cracks have just been papered over,said Evolutions Gary Jenkins.

BY KATIE H OPEWORLD ECONOMY

De La Rue stumped for an answer

IN the 1930s the bank note manufac-turer De la Rue created a number of

boardgames, including a cricketgame called Stumpz.

Yesterday its chief executive JamesHussey was well and truly stumped ashe resigned with immediate effect fol-lowing the discovery last month of serious problems with the groupspaper production operations.

What makes this corporate news soshocking is that De La Rue is anything

but a f ly by night company.It was founded in 1813, it has won

11 Queens Awards, its in the FTSE

250 and it prints currencies for 150governments (and has many other

businesses).Its investors hold shares in the

group because of its consistency, its

high dividend payout and over thepast few years its decision to exitperipheral investments such as itsstake in the lottery owner Camelot.Its current predicament shows that,as with the recent BP problems, thereis nothing risk free in investing inindividual equities.

Naturally De La Rue investors arepretty shocked by the groups currentproblems, which began on 20 July

with a revelation that it had identi-fied quality and production irregular-ities at one of its paper productionfacilities.

Investor irritation is intensified by the fact that as recently as June thegroup was giving a presentation to its

brokers at JP Morgan Cazenove at which it was notably upbeat abouttrading and likely results.

Its shares then traded at the dizzy

heights of 943p. By yesterday theshares were down to 711p after fallingaround 10 per cent.

Analysts, such as Paul Jones atPanmure Gordon and Alex Hugh of

UBS, are concerned about the likely effect of Husseys resignation onfuture orders as well as on the groupsreputation.

Hussey, who had been with De LaRue for more than 20 years, had a fan-tastic contacts book and his depar-ture leaves a void.

In the short term finance directorColin Child will be taking additionalresponsibilities as chief operatingofficer but he has only been with thegroup for a few weeks and his experi-ence beforehand lies in a differentfield.

De La Rue needs to complete itsinvestigation into the paper problemsas soon as possible so that it caninform the market of the financialimplications of this unfortunateaffair.

The worst thing in these types of

situations is if information drips out bit by bit. The fewer leaks and fewercompany statements the better, orelse investors nerves become morefrayed.

And by the way, just in case youthink the banknotes in your pocketare feeling especially flimsy, thegroup said yesterday that its problemsdo not concern either its productionof sterling or euro notes. Its a shameit could not have been equally forth-coming about the financial effect of its recent problems. MORE: P6

CORPORATE HOSPITALITYI for one can not wait for the start of the football season again tomorrow. Itseems ages since the last one finishedall those weeks ago (OK. It is only amonth since the World Cup).

Just one suggestion for the capitalstop clubs. Why not give over all thoseunsold corporate seats to local schoolsor charities? Have a great [email protected]

Allister Heath is away

BP will pay a record $50.6m (32.5m)fine for continuing safety problemsat its Texas City refinery, where anexplosion in 2005 killed 15 workersand injured around 180.

The energy giant, still reeling fromthe Gulf oil spill, has settled 270 of the 709 cases brought against it by the US Operational Safety and Health

Administration (OSHA) over chronicsafety issues.

It will also pay up to $500m overthe next six years to improve the haz-ardous conditions at the Texas plant.OSHA is still pursuing a $30.6m finefor more recent safety violations.

BP has already paid a $50m fine tosettle the criminal charges stemmingfrom the explosion, and spent morethan $2.1bn settling hundreds of law-suits brought by victims.

Iain Conn from BP said: BP has astated goal to become a leader inprocess safety and we look forward to

working collaboratively with OSHA.

BY M ARION DAKERSENERGY

BP hit by record US fi Ian Conn, BPs global head of Refining and Marketing Picture: PHOTOSHOT

NEWS | IN BRIEF

Big Pharma in corruption probeThe US government is investigatingleading pharmaceuticals firms as partof a corruption probe. Companiesincluding GlaxoSmithKline, Pfizer andMerck are under scrutiny for hospitality,licensing and consultant paymentsmade across the world. The US

Department of Justice and theSecurities and Exchange Commissionare thought to be examining whetherthe drugs market breaches local and USanti-bribery laws, which prohibit offer-ing payment to state employees for profit.

Android overtakes iPhone salesGlobal sales of Apples iPhone have beenovertaken by phones using GooglesAndroid system, according to researchby Gartner. Androids global share of the market now stands at 17.2 per cent,up from 1.8 per cent a year ago, withgrowth largely coming at the expenseof Nokia and BlackBerry makerResearch in Motion. Apples operatingsystem now sits in fourth place. Thesuccess of Googles mobile platform hashelped smaller handset makers likeMotorola and Sony Ericsson competewith the iconic iPhone.

DEPUTY EDITORS LETTER

DAVID HELLIER

7thFloor, Centurion House,24 Monument Street,London, EC3R 8AJTel: 020 7015 1200 Fax: 020 7283 5334Email: [email protected] www.cityam.comEditorialEditor Allister HeathDeputy Editor David HellierNews Editor Ben GriffithsNight Editor Katie HopeAssociate Editor David CrowLifestyle Editor Zoe StrimpelArt Director Darren SoulsbyPictures Alex RidleyCommercialSales Director Jeremy SlatteryCommercial Director Harry OwenHead of Distribution Nick Owen

Editorial StatementThis newspaper adheres to the system of

self-regulation overseen by the Press ComplaintsCommission. The PCC takes complaints about theeditorial content of publications under the EditorsCode of Practice, a copy of which can be found at www.pcc.org.uk

Printed by Newsfax International,Beam Reach 5 Business Park,Marsh Way, Rainham, Essex, RM13 8RS

Distribution helplineIf you have any comments about the distributionof City A.M. Please ring 0207 015 1230, or [email protected]

Greek Prime MinisterGeorge Papandreou inMay promised furtherwage cuts and taxhikes for EU/IMF loans

BARCLAYS REFUSES TO USE TARGETS The head of Barclays small businessdivision has firmly refused to sign upto UK lending targets in a move thatcould fuel government criticism of the industrys willingness to easecredit constraints in the economy.Speaking to the FT after Barclays

broadened the remit of its business bank to include companies withturnover of up to 5m, Steve Cooperhit out at the prospect of govern-ment-set targets, which he said couldencourage irresponsible lending.

AQUARIUS TO BOOST OUTPUT Aquarius Platinum, the worldsfourth-largest platinum producer,

will boost production by 100,000ounces next year to meet demandfrom the car industries in Europe and

Japan. The South Africa-based miner

returned to profitability in its full- year results yesterday, reporting a pre-

tax profit of $58.4m (37.2m).

CENTRICA AGREES A DEAL FOR 97CANADIAN GAS WELLSCentrica has agreed to buy 97 naturalgas wells and 42,000 acres of land in

western Canada, in a deal that willhelp move its North American opera-tion from supplying energy to beingan integrated production and supply

business. Centricas wholly owned USsubsidiary will pay Canadas SuncorEnergy C$375m (229m) in cash forland, wells and infrastructure.

PSION PRESSES ON WITH REVAMPAFTER RETURN TO BLACKPsion, the handheld computingdevices maker, expressed confidencethat its 18-month turnround plan

would bear fruit in the next year afterreporting steady first-half figures. Thegroup said its order intake for thefirst half rose 6 per cent while its for-

ward order book for the second half

was 14 per cent higher compared with the same period last year.

CITY ARMY CALLED UP IN WAR OF THEOLIGARCHSOleg Deripaska is urging City investors to back his war against a fel-low Russian oligarch over the worlds

biggest nickel miner, saying that hecould double its value if he won con-trol. Mr Deripaska wants to put a new

board, a new management team anda new legal structure in place atNorilsk Nickel, and was in London

yesterday to drum up support.

TESCOS CHEAPEST EVER MOBILE DEAL Tesco Mobile has today thrown downa challenge to its rivals by launchingthe UKs cheapest mobile phone con-tract. The no-frills deal will cost just6 a month, is available online andover the phone and provides cus-tomers with unlimited texts and 100minutes a month to use how they

choose. Customers will also benefitfrom Clubcard points on their bills.

GEORGE BUSH'S HONEYMOON RESORTSEA ISLAND FILES FOR BANKRUPTCYSea Island might have providedfamous guests including AnnaKournikova, Bill Gates, John Travoltaand George Bush memories to cher-ish, but for Lloyds Banking Group astay at the luxury resort has proved to

be the holiday from hell. The lenderlooks set to lose tens of millions of pounds after investing in the resortoff the coast of Georgia in the US.

DYSON RECEIVES THOUSANDS OFAPPLICATIONS FOR ENGINEERING JOBSDyson has been swamped with 4,000applications for just 350 engineering

jobs, but it is still far short of recruit-ing the total number of people itneeds. But in a sign that skills short-ages are still plaguing the engineeringsector, Dyson has hired so far only 100

people despite being overloaded withcandidates.

FOOD MAKERS CHEW OVER PRINestl has joined a growing list of global food makers warning abouthigher prices for key commoditieslike tea and cocoa, which could pinchmargins and ripple through the gro-cery store in the remainder of the

year. Higher costs add to the hasslesfor consumer-goods companies,

which are dealing with sluggishdemand for premium products.

ECB BUYS IRISH GOVERNMENTTO CALM MARKET The European Central Bank has

bought short-dated Irish government bonds over the past 24 hours in a bidto calm rising market volatility stem-ming from concerns on the credit-

worthiness of Irish banks, two peoplefamiliar with the matter said. Themove came after volatility rose

sharply in short-term Irish bondsamid low trading volumes.

WHAT THE OTHER PAPERS SAY THIS MORNING

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THE Department for Culture, Mediaand Sport (DCMS) is quitting its iconicheadquarters near Trafalgar Squareand renting space in another

Whitehall building, in an audacious bid to shave 10m from its annual budget, City A.M.has learned.

The unusual move shows thelengths that cabinet ministers aregoing to in order to find departmen-tal savings of up to 40 per cent, as thecoalition government gears up for thetightest fiscal squeeze in Britainspeacetime history.

Culture secretary Jeremy Hunt who currently leases the imposingGeorgian-fronted building onCockspur Street is in negotiationsabout renting spare office space fromthe Department for InternationalDevelopment and the Department of Health.

An aide to Hunt said the building, which costs 10m a year to lease and3,000-a-week to heat, was too large

for the departments needs.Its a massively expensive alba-

tross around our neck. We dont f ill itas it is, she said, adding the building

would be even emptier when job cutsstart to kick in.

Up to one in two staff at the depar t-ment could be made redundant inthe autumn, according to plans sub-mitted to the Treasury that imply a40 per cent cut to its 2.1bn budget.

DCMS officials yesterday insisted afinal decision on whether to quit the

building had yet to be taken, butCluttons and BNP Paribas Real Estateare already marketing the 95,670 sq ft

building to prospective tenants at aprice of 49.50 per sq ft.

The building, which began life asthe headquarters of a steamship com-pany in the eighteenth century,underwent a major redevelopment in2003 and boasts a plant-filled atrium,gymnasium and scenic lift.

Keith Harris, who is marketing theproperty for BNP Paribas, said therehad been a lot of interest due to adearth of West End commercial space.

Culture deptto quit iconicheadquarters CREDIT Suisse is axing 75 jobs in itsBritish investment banking and sup-port operations, becoming the second bank in as many days to slim down its

headcount. The Swiss-based bank said yester-

day the cuts are intended to help shiftresources to growth areas, but wouldnot be drawn on which departments

will feel the pain or benefit of thisshake-up.

We continue to be proactive aboutmonitoring the size of our businessrelative to client opportunities andmarket conditions, it said.

Credit Suisse has strengthened itsposition during the credit crisis,

which it escaped with far lower write-downs than rival investment bankssuch as Citigroup, Merrill Lynch and

JPMorgan Chase.Barclays investment unit BarCap

announced it was cutting around 130of its London back office staff on

Wednesday after revenues fell morethan 15 per cent from the first quar-ter to the second.

Global investment bank income was down by an average of about athird in the second quarter from thefirst, analysts have said, with fixedincome, currencies, equities andM&A advisory desks bearing the

brunt of the slowdown.

Credit Suissesheds 75 jobsin the capital

BY DAVID C ROW

POLITICS

BANKING

NewsCITYA.M. 13 AUGUST 2010 3

Jeremy Hunt (inset) is quitting his headquartersnear Trafalgar Square, saving the department

10m-a-year

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PRUDENTIAL has hired a trou- bleshooter to help repair its tatteredrelations with City investors after thecollapse of its $35.5bn (22bn)attempt to buy AIGs Asian arm.

After a wave of criticism over itshandling of shareholders, the FTSE100 titan has poached insuranceindustry veteran Steve Riley fromClive Cowderys Resolution business.Riley started at Prudential this week

with the special remit of liaising withfund managers and sell-side analysts.

Institutional investors repeatedly blasted Prudential and boss Tidjane Thiam for shambolic communica-tion during the aborted bid. Financedirector Nic Nicandrou said Riley

would be an important go-betweenfor the company and its holders.

One of the lessons weve learned

is, while we felt we were having agood dialogue with investors, it wasclear there was more we could have

done in that regard, he told City A.M.But some shareholders were criti-

cal. The head of equities at a fundshouse said: It doesnt really wash. Itmight help around the edges but it

will take a lot more than that torebuild confidence.

The news came as Prudentialsmashed forecasts with first-half operating profits boosted 41 per cent

by soaring Asian performance to968m. Group sales rose 28 per centto 1.7bn. Prudential upped its divi-dend five per cent to 6.6p per share.

Pru hires Cityfixer as profiteases tensionBY O LIVER S HAH

INSURANCE

PRUDENTIAL will be able to ramp upits payouts as early as next year as itenjoys strong underlying earnings,analysts and insiders believe.

The insurer, which has grown itsinterim dividend by five per cent forthe past four years, could eitherrebase the payout to a higher level or

up its growth rate to as much as eightper cent, according to one analyst.

Prudential is expected to expandearnings per share at a double-digitrate for the next three years. In thefirst half it generated 1.1bn, 460mof which was repatriated to the UK and 318m of which was paid out.

Referring to a potential upgradingof the dividend, finance director NicNicandrou said: Its something

where well get a decision as we come

to that point. We think being consis-tent is very important.

Insurer tipped to boost payoutsto investors as earnings expand

FINANCIAL SERVICES

Focus on Prudential 5CITYA.M. 13 AUGUST 2010

ANALYSIS l Prudential

500

540

580

600

4 Aug15 Jul28 Jun7 Jun17 May

p553.50

12 Aug

Shareholders try to forget the pa THE problem with failed takeovers is you have to try and pretend they never happened. For several months,the men from the Pru were courtingshareholders mercilessly, tellingthem a $35bn acquisition of Asian

insurer AIA was an unmissableopportunity. Sure, management were careful not to talk down thegroups chances as a standalone lifeinsurer, but the message was clear:

were fighting tooth and nail for thisdeal because its the only way to go.Now investors are supposed to forgeteverything they were told before thedeal fell through, and buy into theformer strategy of organic-only

growth in Asia. Theres no denying that manage-

ment put in a commendable per-formance in the first half, animpressive feat considering the biddistractions. Unsurprisingly, Asia is

the star of the show. There, new business sales totalled some 713m,a 36 per cent hike on the same peri-od a year ago. All regions excludingKorea (which has implemented avalue over volume strategy) report-ed double digit growth rates, offer-ing an average initial rate of returnin excess of 20 per cent within three

years. In the UK, it is a differentstory, with new business up just two

per cent; in truth, the British ops arelittle more than a tired cash cow.

Investors should be rating theseresults more highly, but the truth is

Tidjane Thiam is looking like a man who had one big idea: bold expan-

sion in Asia by acquisition. With theformer strategy in place, the Prushould find a team more suited tothe softly-as-she goes organicapproach. A new chairman would be

best-placed to start the [email protected]

BOTTOMLINEAnalysis by David Crow

Pru boss TidjaneThiam is repairing investor relations

Picture: GETTY

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THE BOSS of the worlds biggestmoney printing firm was forced toresign yesterday after quality issuesemerged at one of its factories.

James Hussey was muscled outdespite assurances the problems

would not affect any of the 150 worldcurrencies De La Rue is responsiblefor.

However, the firm issued a warningthat sales would be hit by the tempo-rary suspension of printing at theplant, sending its shares plummeting13 per cent to an 18-month low.

The FTSE 250 company said lastmonth that its paper factory inOverton ground to a halt after flaws

were found with a special type of paper which is then shipped else-

where to make bank notes. A spokesman said production at its

main plant had failed to meet cer-tain quality specifications. He added:De La Rue is confident that neitherthe physical security nor the security

features incorporated in the paperhave been compromised for any cus-tomer.

The impact of the paper millsproblems on the companys finances

was unlikely to be announced in thenear future, De La Rue said.

Nicholas Brookes, non-executivechairman, has been appointed execu-tive chairman, and finance directorColin Child has taken on the addi-tional job of chief operating officeruntil Husseys replacement is named.

Revenues at the firm in the year to27 March were 561.1m, up 12 percent against last years 502.4m,

while the operating profit margin, before exceptional items was 19.5 percent, from 19.2 per cent last year.

Hussey quitsDe La Rue dueto note errors

Colin Child (top) hasbeen appointed chief operating officer,while Nicolas Brookes(below) will beinterim chief executive.

BY S TEVE D INNEEN

MANUFACTURING

The worlds biggest non-governmental moneyprinter supplies currency to 150 countries. The currency division delivers around 75 percent of De La Rues group revenue. De La Rue also sells tills to retailers.

FAST FACTS |DE LA RUE

Focus on De La Rue6 CITYA.M.13 AUGUST 201

JAMES Hussey had worked for De LaRue for 25 years. He said his resigna-tion was to "take responsibility" forproblems "of a serious nature".

Hussey, 48, was managing directorat De La Rue's currency division,before being appointed chief execu-

tive in January 2009.His basic annual salary last year

was 325,000 with a bonus of 126,000, according to a companyspokesman.

Hussey was made chief executiveafter his predecessor, Leo Quinn, spun-off the companys cash systems busi-ness, which sold tills to retailers, tofocus on making bank notes and prod-ucts such as cheques, holographicmarks and tax stamps.

Hussey was seen as an industryinsider with strong international con-tacts, which meant he was well placedto maintain the company's relation-

ships with clients around the world.Hussey also serves as a non-execu-

tive director at lottery operatorCamelot. He read history at TrinityCollege, Oxford.

De La Rue finance director ColinChild will move up to chief operatingofficer to help pick up the slack.

Child joined De La Rue from DTZHoldings, a global property adviser,where he was also finance director.

He previously worked as financedirector of casino operator StanleyLeisure and has held similar seniorfinance positions at Fitness First andNational Express Group.

JAMES HUSSEY

DE LA RUE

ANALYSIS l De La Rue

650

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800

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950

1,000


p 719.0012 Aug

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FORMER Blue Oar Securities chief Andrew Monk has swallowed up apair of small businesses to boost hisnew vehicle, Third Quad Capital.

Third Quad said yesterday it had bought up loss-making corporatefinance and broking house VSA Capital, a resources, oil and gas spe-cialist, for a nominal sum. It has also

bought Softline, a software distribu-tor, for a total consideration of 1.3m.

Monk has kept a low profile in theCity since leaving Blue Oar, now

Astaire, when it was taken over by Edward Vandyks Evolve Capital.

DANA Petroleums embattled boardcame under fresh fire from share-holders and City analysts yesterday asit dug in its heels against a 18-a-share takeover bid from rival KoreaNational Oil Corporation (KNOC).

Dana said bid talks had stalledafter KNOC failed to recognise the

value of the companys recent devel-opments and work in progress.

The move leaves the future of thetie-up teetering perilously on the

brink, with KNOC mulling whether to walk away or go hostile. The Koreanfirm is thought to be unlikely to raiseits already-sweetened offer, given ithas the support of many of its targetsshareholders. Dana has faced growingpressure in recent weeks frominvestors, including its largest share-holder Schroders, to come to the tableat a level of 18, which many believerepresents fair value for the shares.

Its rejection of the offer yesterday leaves Danas suitor considering itsoptions, KNOC said, reiterating thatit believes that the 18-a-share offerfully and fairly reflects all of thecompanys recently announced and

ongoing developments, together withits exploration potential.

Dana argued yesterday that it hadoffered to open up its books to KNOCto start due diligence, blaming itsrival for jeopardising the process by refusing to sign a non-disclosureagreement (NDA). But critics of Danas chief executive Tom Crossremained staunchly unsympatheticto the companys position, with onefund manager saying that KNOC

would be perfectly entitled to refuse,given that such a move often pre-cludes a company from subsequently launching a hostile bid.

Danas shares initially tanked 12per cent before finally closing just3.72 per cent lower at 14.90 yesterday.

Dana is underfire after itrejects KNOC

THE JONES family ties with highstreet retailer JJB Sports have come toan end, as it emerged yesterday Stuart

Jones has quit his post as marketingmanager.

Jones father, former JJB chairmanSir David Jones, stepped down fromhis role as non-executive director on28 July due to ill health. Stuart is

understood to have followed just dayslater.Insiders suggested yesterday that

Jones junior had been sacked, after amanagement shake-up at the firm inthe wake of Sir Davids departure.

However, a company spokesmaninsisted he had resigned. Im sure he

will have a fruitful career in whateverhe does next, he added.

Jones junior has worked for severalfamily businesses including consul-

tancy firm Retail Gateway, where hecourted controversy in 2008 after being asked to write a six-monthreview of JJBs online business. Hisfather had been appointed as a non-executive director at the sports firm

just months earlier, while his mother worked as company secretary for theconsultancy. Keith Jones (no relation)

was hired by JJB as chief executive inMarch, to try and stem heavy losses atthe high street retailer.

We y from Gatwick and Stansted. Pr ice correct as at 2 August 2010. Flights available to book now for travelbetween 2 August and 30 October 2010. Variable charges for hold baggage apply and some payment methods

attract a handling fee. See website for details.

We y to Split & Dubrovnik

JJB loses links to the Jonesfamily as Sir Davids son quits

Ex-Blue oar bosson buying spree

BY V ICTORIA B ATESM&A

FINANCIAL SERVICES

Sir David Jones resigned on 28 July, closely followed by his son Stuart

BY M ARION DAKERSCONSUMER

News 9CITYA.M. 13 AUGUST 2010

ANALYSIS l Dana Petroleum

1,000

1,200

1,600

1,800

1,400


p 1,632.0012 Aug

THE number of US workers filing new claims for jobless benefits unexpect-edly rose last week to the highest levelin close to six months, the latest evi-dence the economys recovery is fal-tering.

The number of new claims for stateunemployment insurance rose by 2,000to 484,000 in the week ended 7 August,the second straight increase, the LaborDepartment said. Economists hadexpected claims to edge down to469,000. The four-week moving average

rose by 14,250 to 473,500, also the high-est in six months. ECONOMICS: P12

US jobless claimsat 6-month high

ECONOMY

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INTERNET gambling firmSportingbet said yesterday it hadperformed strongly during the

World Cup with margins boosted by a number of results goingagainst the favourites during thecompetition.

The company took more than50m worth of bets during thetournament, of which 65 per cent

were made during matches usingthe companys In Play bettingservice.

The strong World Cup perform-ance underpins the fourth quartertrading results and the boardremains confident that the group

will meet management expecta-tions for the financial year justended, Sportingbet said.

A significant number of low scoring games had also favouredthe bookmaker as punters tend to

back high-scoring results, the com-pany said. Sportingbet said it hadcontinued to perform in line withmanagement expectationsthroughout the final quarter of the

year. The company moved itsshares to the main London Stock Exchange from the AlternativeInvestment Market (AIM) in May this year after a growth spurt.

Chief executive Andrew McIversaid: In line with much of the bet-ting industry, the group enjoyed astrong performance during the

FIFA World Cup. The company will announce full-year results on 6October. Bwin and PartyGaminghave announced a merger whilethe industry hopes for a relaxationof gaming laws in the US which

would help to fuel a profit rise.

Sportingbet scoresa World Cup boost

Holidaybreakeducation armgives it a lift

BY J OHN DUNNELEISURE

HOLIDAYBREAK which operatesEurocamp gave a glimmer of hope

yesterday after poor results in theindustry from Thomas Cook and TUI.

The company said it remainedupbeat especially about Eurocampseducation division, providing schooltrips and adventure experiences for

youngsters. The adventures business, trading

under the PGL brand, has benefitedfrom a growing number of schoolschoosing it to fulfil the key stage twosyllabus requirement for children tolearn outside the classroom.

The company also provides abseil-ing and water activities in a safe envi-ronment for schools across the UK,

with experts giving classes.Chief executive Martin Davies, who

used to run the education arm, said:Were showing how our business hasdifferent dynamics to the big leisureoperators who reported this week. Forexample, the ash cloud which hurtthem so much had no impact on us atall.

Consumer News10 CITYA.M. 13 AUGUST 201

ALEXON SIGNS UP ANIMAL BOSS

WOM ENSWEAR group Alexonhas appo inted the former chief executive of lifestyle brand Animal, K evin Keaney (above), to the newly cr eated post of commercial director. Animal has appo inted Dou g Goodwin as chief executive toreplace Keaney. K eaney spent three years at Animal b efore which he worked for a number o f retailers including Mark s & Spencer and Sainsburys.

ANALYST VIEWS: IS SPORTINGBET ON A ROLL?By John Dunn

GREG FEEHELY|ALTIUM SECURITIES

While the companys shares didrespond positively to news of thePartyGaming Bwin proposed merger westill believe they fail to reflect the potentialof further M&A activity in the online gam-ing space which should gather momentumover the next 12-18 months. Furthermorewe do not think that the shares fac-tor an appropriate valuation.

SIMON DAVIES|COLLINS STEWART

We are leaving our 2010 forecastsunchanged, although we expect the firm tocome in modestly ahead. Trading into thefirst quarter has been relatively strong[with no obvious World Cup hangover onsports betting] and guidance for 2011 isunchanged the key risks, as previously,remain regulatory change in its coremarkets of Greece, Turkey, Spain.

KARL BURNS| SHORE CAPITAL

The group reported a strong performance from the World Cup with 50m staked during the tourna-ment, with an aggregate margin in excess of 17 per cent ahead of our expectations. We continue to believesportingbet will participate in industry consolidation, with further growth in sports betting. thereforetrading on a price to earnings ratio of 10 times, EV/EBITDA of six times, with a dividend yield of aroundtwo per cent, we reiterate our Buy recommendation.

ANALYSIS l Sportingbet

54

58

66

68

62


p60.75

12 Aug

LEISURE

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THE World Cup in South Africahelped brewing giant AB InBev torecord solid second quarter results.

The maker of Stella Artois andBudweiser said UK beer volumessurged by 18.6 per cent between

April and June and 11.4 per centover the first half of the year, asfans stocked up for the World Cup.

Budweiser was the official beerof the football tournament and UK

volumes jumped more than 70 percent against the first six months of 2009.

The strong UK results came incontrast to the groups perform-ance in other European markets.

AB InBev said own-beer volumesacross Western Europe increased by 2.6 per cent in the period amidtougher conditions in Germany and Belgium.

Heavy competition pressure inGermany sent first-half volumesdown 9.8 per cent, while the com-pany was also hit with strikes in itshome Belgian market.

Overall, the group which wasformed following a multi-billionmerger in 2008 between InBev and

Anheuser-Busch saw underlyingearnings increase by 5.6 per cent to2.2bn while organic revenues rose4.1 per cent to 5.8bn.

The firm said profit rose to$1.15bn (947m) from $1.07bn a

year earlier. Analysts had expected

a profit of $1.08bn. Revenue fell 3.4per cent to $9.17bn after the groupsold some operations last year, butorganic volume growth was 2.1 percent in the quarter as the firm pro-duced 90.5m hectoliters (19.13bnpints) of beer.

The company has recently beenconcentrating on turning roundthe Bud brand, which has beenstruggling in the US market whereit has traditionally been a power-house. But poor US sales have beenoffset by a surge in Latin America.

AB InBev cheers asurge in beer sales

Findel raises 600k afterselling unit to address debt

BY J OHN DUNNECONSUMER

HOME shopping and educationsupplies firm Findel said it wouldsell a unit, which includes its gadg-ets and gifts business, to onlineretailer The Hut Group in a cashdeal worth 600k to help reduce itsdebt pile.

Findel, whose net debt stood at309.6m as of 2 April, had earlier

said its level of net debt was toohigh.Operations of the unit CWIO

comprise online retailer of gadgets

and gifts iwantoneofthose.comand Confetti, a multi-channelretailer for bridal products.

The sale of CWIO, formerly known as Findel Direct, forms apart of the companys strategy toexit non-core and loss-making oper-ations. For the year ended 2 April,the multi-channel retailer hadreported an adjusted pre-tax profitof 13.8m from continuing opera-tions, compared with a restated

29.2m in 2009.Shares in Findel plummeted in July after the disclosure of a 76mpre-tax statutory loss and worries

about its high debt levels.Findels shares closed 2.7 per

cent lower yesterday at 6.61p.BY HARRY B ANKS

CONSUMER

PayPoint benefits from mobile foray

PAYPOINT yesterday said its moveinto mobile phone payments hadhelped revenue rise seven per cent

between March and July. The firm, whose services include

bill payment terminals and ATMmachines, made net revenue of 26m from 29 March to 25 July

after its takeover of PayByPhone, which allows motorists to pay for

their parking by credit or debitcard over their mobiles.

Bill payment, internet and retailservices also grew in the period.

PayPoint said bill and generalpayment transactions were in line

with its expectations.In Romania, it processed more

than three million bill payments,up more than 200 per cent.

Net cash as of 25 July fell to 6m

from 15m on 28 March.PayPoint is currently in a battle

with lottery operator Camelot, which wants to give customers thechance to pay bills at their termi-nals.

The National Lottery Commission (NLC) has launched aninvestigation into Camelots plansand could block the move.

PayPoint has argued thatCamelots move would be unfairon its rivals who are already in the

payments business. The NLC hasalready blocked one Camelot plan.

BY HARRY B ANKSCONSUMER

Consumer News 11CITYA.M. 13 AUGUST 2010

AB InBev was given a lift by World Cup beer sales Picture: Micha Theiner/City A.M.

ANALYSIS l Findel

10

15

25

20


p6.8812 Aug

Volumes acrossWestern Europe

2.6 %

Total underlyingearnings

to 5.6 %$2.2 bn

UK beer volumes

between April and June

between April and June

over the firsthalf of the year

18.6 %

11.4%UK volumes

against the firstsix months of 2009

70 %

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THE Council of Mortgage Lenders(CML) has revised down its forecast forthe number of borrowers who eitherfall behind in mortgage payments orlose their homes through reposses-sion this year.

The CML now expects 39,000 repos-sessions and 175,000 mortgages to endthe year in arrears of 2.5 per cent ormore, down from its previous forecastof 53,000 and 205,000 respectively.

The revision comes after news thatmortgage repossessions continued tofall in the second quarter. There were9,400 repossessions, down from11,800 in the second quarter of 2009.

But the CML warned against com-placency and said that yesterdaysheadline figures masked differencesin health between arrears bands.

For example, there has been animprovement in the lowest arrears

category between 1.5 per cent and2.5 per cent of the total balance. Butthe number of mortgages in arrearsof 10 per cent or more has remainedstatic, the CML said.

Although yesterdays news was wel-comed, some industry analysts arestill concerned about the future.With interest rates possibly due torise next year and some borrowerstrapped on their lenders standard

variable rates, arrears and reposses-sions may actually deteriorate now,even as economic recovery contin-ues, said David Newnes, estateagency managing director of proper-ty firm LSL.

CML director general MichaelCoogan said government budget cutscould reduce debt advice funding andgovernment mortgage rescueschemes: While we dont want to cry

wolf, it seems obvious that the ongo-ing prognosis for arrears and posses-sions is far from a healthy all-clear.

Reposessions

are still fallingBYKATHLEEN B ROOKS

UK ECONOMY

THE massive 1.3trillion of debt refi- nancing that Euro- zone banks need tocarry out by theend of 2013 is man- ageable as long as

funding markets

normalise, the European Central Bank said yesterday. The ECB headed by Jean- Claude Trichet (pic- tured) said bankswould have to stepup their refinanc- ing efforts in thecoming months.

Picture: REX easyJet is an Appointed Representative of Mondial Assistance

(UK) Limited which is authorised and regulated by the FinancialServices Authority (FSA). See website for details.

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Economic News12 CITYA.M. 13 AUGUST 20

CITY VIEWS: ARE YOU CUTTING BACK GIVEN ECONOMIC UNCERTAINTY?Interviews by Oliver

Im definitely spending less and Im trying to cut down ongoing out too. Im also trying to buy a property so Imtrying to save a certain amount of money everymonth. Ive been in the UK for 10 years and things

have certainly changed its more difficult.

MARCELA KERUL-KMECOVA |ERNST & YOUNG

Am I worried about the state of the economy? Yes. Am Ispending less? Of course. Im concerned, but Im Frenchand there are the same problems over there too. Atleast in fixed income, which is the sector I work in,things arent too bad at the moment.

CHRISTOPHE GROSEIL |OPPENHEIMER

At the moment Im trying to buy my first property andalthough prices are down, Im worried about a doubledip. But if it happens, it happens I dont get too wor-ried by what Mervyn King says because you cant liveyour life by what other people think.

JENNY BROWN |MARSH

TRICHET CONFIDENT ON BANK DEBT REFINANCINGNEWS | IN BRIEF

Eurozone industry output fallsEurozone industrial production declinedin June, with output in France andGermany falling sharply, but a strongshowing over the second quarter as awhole suggests Fridays GDP data forthe bloc will be robust. Output fell 0.1per cent month-on-month, figures from

Eurostat showed, and rose 8.2 per centyear-on-year, although the drop fol-lowed sharp rises in April and May.

Australia unemployment risesAustralias unemployment monitorrecorded a surprise rise in July, makingit unlikely that the central bank will raiseinterest rates from their current 4.5 percent in the near future. Unemploymentedged up to 5.3 per cent over the month,compared to 5.1 per cent in June.

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GERMAN authorities have askedaround 1,500 German clients of Credit Suisse to provide evidence aspart of a probe into whetherSwitzerlands second-largest bank helped them dodge taxes.

The chief prosecutors office in the western city of Dusseldorf said in astatement yesterday it had written tothem to ask why they had depositedtheir money with the Swiss bank.

The target of the survey is theexplanation of the circumstancesunder which the investments withCredit Suisse came about, the prose-cutors said in a statement. It shouldalso be determined who participatedin the engagements from the banksside.

A spokesman for Credit Suissedeclined to comment.

German tax authorities had passedon names of the Credit Suisse clientsafter they turned themselves in for

not paying their taxes in full, theprosecutors said. The clients had torespond to the questionnaire as they

were contacted as witnesses, the pros-ecutors said.

Searches of Credit Suisses private banking offices in Germany lastmonth netted huge amounts of dataand more than 100 boxes of materialafter tax authorities obtained a com-pact disc with names of alleged taxdodgers this year.

That was the latest episode in aninternational crackdown on suspect-ed tax cheats in offshore centres. Last

year, Swiss wealth manager UBSagreed to a hefty settlement after a

bitter US tax probe. The Dusseldorf prosecutors office

sent the Credit Suisse clients 24 ques-tions, including whether there had

been any discussion that the funds would not be taxed, whether a couri-er service transferred funds and

whether the possibility of openingtwo accounts with one for untaxed

wealth had been addressed.

Germans quizCredit Suisseclients on tax FEARS of a fresh rights issue overshad-owed a consensus-beating secondquarter performance from Dutch

insurer Aegon yesterday, after thefirm said its capital buffer had fallen.

Shares in Aegon fell 3.5 per cent to 4.37 (3.60) as the life and pensionsfirm said tougher requirements fromratings agency Standard & Poorsmeant its reserve capital declined by 700m to 3bn. The shift means bailed-out Aegon will have to tapinvestors for a cash call if it decides torepay 2bn in state aid and a 1bnpenalty this year.

Albert Ploegh, an analyst at ING,told City A.M.: The question is how

badly this derails the process. Themarket thinks the likelihood of a cap-ital raising has increased.

The news cast a gloom over other- wise strong three-month numbers. Aegon swung back to a net gain of 413m against a loss of 161m the year before, topping expectations,driven by growing pension sales andlower impairments on investments.Core pre-tax earnings were up 26 percent year-on-year to 522m.

Chief executive Alex Wynaendtssaid he expected to receive the all-clear from the European Commissionon plans to repay state aid soon.

LONDONS cycle hire scheme has beenused for more than 100,000 journeyssince its launch on 30 July, Transportfor London (TfL) said yesterday.

Around 44,000 people have signedup to the hire programme, and are

between them making up to 14,000 journeys per day.

Around 70 extra docking stationsare under construction, bringing the

total number of docks to over 400.Boris Johnson cheered the mile-

stone yesterday. These are the early days of the scheme, and we are stilllearning and improving the system. Iappreciate Londoners patience and

would ask everyone to bear with us.He added: However it is now clear

that, with 100,000 journeys already made, there is an indefatigableenthusiasm for cycling that is mak-ing Barclays Cycle Hire one of thecitys success stories.

Aegon cash cafears grow ascapital shrinks

TfL signs up 44,000 touse Barclays Cycle Hire

Transpor t fo r London plans over 400 park-and- ride stations Pic ture : PABY H ARRY B ANKS

FINANCIAL SERVICES

NewsCITYA.M. 13 AUGUST 2010

BY M ARION DAKERSTRANSPORT

BY O LIVER S HAHINSURANCE

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VEDANTA Resources is in talks to buy part of Cairn Energys Indianspin-off oil firm, both companiesconfirmed yesterday.

Vedanta is already focused onmining in India, but is keen tomove into oil and gas operations inthe country.

Aberdeen-based Cairn, which hasa 62.37 per cent stake in Mumbai-listed Cairn India, emphasised in astatement that there can be nocertainty the contemplateddisposal will occur or, as to theterms of any such disposal.

Cairn India is the fourth-largestoil and gas company in thecountry, and was valued at 8.92bnat the close of trading yesterday,

valuing Cairn Energys stake at5.56bn.

The big question now is how bigthis stake is going to be and how are they going to structure thedeal, said Liam Fitzpatrick, an ana-lyst at Credit Suisse. It will proba-

bly be more of a minority interest,he said, noting that Vedanta isalready relatively highly geared.

Other analysts voiced concernsabout the possible purchase. A move into oil would be a very strange shift away from Vedantas

core business of developing minesand smelters, analysts at CreditSuisse said in a note. They added:We therefore struggle to see any strategic fit or synergies.

Vedanta in talks tobuy Indian oil firmBY MARION DAKERS

ENERGY

News14 CITYA.M. 13 AUGUST 20

Terms and Conditions apply. Subject to status. The Platinum Charge Card is offered by American Express Services Europe Limited. Registered Of ce: Belgrave House, 76 Buckingham Palace Road, London SW1W 9AX, United Kingdom. Registered in England and Wales with Company Number 1833139.

Brit InsuranceThe insurance group has nominated Scott Egan asits new group chief financial officer, replacingMatthew Scales, who announced his intention tostep down earlier this year.

Egans appointment will be put to a shareholdervote at the next general meeting, which the firm

said would be held no later than January nextyear. Scales will remain at the group until Eganarrives.

Egan joins from Zurich Financial Services,where he has held various roles including groupfinancial controller, based in Switzerland, and UKchief financial officer.

His appointment comes at an uncertain time forBrit, which last month finally agreed to open itsbooks to suitor Apollo for due diligence after itsubmitted a third bid for the group at 10.75 ashare. Two previous bids from Apollo at 10 and10.50 a share had already been roundly rebuffedby Brit.

Edison Investment ResearchIan McLelland has joined the independent invest-ment research house to bolster its oil and gasteam.

McLelland has spent his 20-year career to datewith oil giant BP, where he worked in the refining

and petrochemicals sectors in a range of technicaland engineering management positions.

He later moved to the groups London head-quarters, where he advised the various executivecommittees on issues such as strategy develop-ment, financial planning and performance man-agement.

CapcoThe business and technology consultancy hasexpanded its European capital markets team withthe appointment of Jonathan Davis as its UK lead.

Davis joins from Accenture, where he spent 22years after graduating from university. He workedin the UK financial services team, where he waslatterly a member of the ten-strong UK leadershipgroup. Davis said these are particularly interestingtimes for consultancy businesses, as firms recon-sider their strategies, cost structures and internalcontrols in the aftermath of the economic crisis.

MercerThe consulting and outsourcing group is to set upa new financial strategy group based in Edinburgh,providing specialist advice to Scottish andNorthern Irish companies on how to manage risksin their occupational pension schemes.

Mercer said the move comes in light of the raft

of challenges currently facing UK pension funds,including the continuing rise in longevity, the fall inglobal equity market and corporate bond yields,and the current fiscal squeeze. FTSE 350 companypension deficits stood as high as 85bn at the endof June, according to Mercer.

The new Edinburgh group will be headed up by

Sathish Ramdayal, who has over 15 years of expe-rience in the industry and joins from P-Solve AssetSolutions, the investment advisory and manage-ment arm of Punter Southall.

RothschildThe bank said yesterday that Oliver Goetz andJames Ankers have moved over to its South-eastAsia office from Frankfurt and London respective-ly. In Singapore, Goetz will be head of transportfor Asia and Ankers will be head of financial insti-tutions in the region.

Threadneedle CommunicationsThe City public relations firm has poached TerryGarrett from rival Weber Shandwick.

Garrett was formerly co-head of capital mar-kets at Weber Shandwick, which he joined in2000. He is an ex-journalist, having spent eightyears as UK company news editor at the FinancialTimes.

CITY MOVES |WHOS SWITCHING JOBS Edited by Victoria Bates

DeloitteThe accountancy firm has appointed ZahirBokhari to lead its UK banking and capital mar-kets audit business.

Bokhari brings over 20 years of experience tothe role, having provided audit, assurance andadvisory services to numerous listed clients inthe retail banking, inter-dealer brokers and capi-tal markets sectors in his previous capacity assenior banking audit partner.

These are challenging times for all financialservices companies, with significant demand foraudit, assurance and advisory services, saidBokhari. I look forward to taking on this roleand helping our clients to address these issues.

+44 (0)20 7557 7245morganmckinley.com

To appear in CITYMOVES please email your careerupdates and pictures to [email protected] SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT

in association with

ANALYSIS l Vedanta Resources

2,100

2,200

2,400

2,500

2,600

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p 2,181.0012 Aug

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News 15CITYA.M. 13 AUGUST 2010

BAKER & MCKENZIE said yesterday profits per equity partner at the firm

jumped by 13 per cent to $1.13m forfiscal year 2010 even as gross rev-enue at the 3,750-lawyer firm wasessentially flat, falling 0.4 per cent to$2.104bn.

While Bakers profits reversedcourse from last years 17 per centdrop, 2010 marks the second straight

year of declining revenue for thefirm. Baker was able to increase prof-its thanks to several cost-cuttingmeasures including reducingcapacity levels and delaying somecapital expenditures. Emerging mar-kets, specifically in Asia and Latin

America, were key areas of opportuni-ty for Baker in fiscal year 2010.

Partner profitslifted at Baker& McKenzie

LEGAL

BLACKBERRY-MAKER Research InMotion (RIM) yesterday moved onestep closer to a potentially disastrous

ban in India. A meeting with authorities was

inconclusive and the superpowerhas given the firm until the end of the month to address its concerns.

India is worried that BlackBerrysencrypted data can be used by terror-ists such as those involved in theMumbai attack. It is especially con-cerned about its Messenger service.

Officials say RIM proposes trackingemails without sharing encryptiondetails, but Indian sources say that is

not enough. The latest setback for RIM follows a

ban in the UAE and a deal with theSaudi Arabian authorities to providethem with some users data.

A shutdown would affect 1m of thesmartphone makers 41m users. But

with India being one of RIMs fastestgrowing markets, this would be a dis-aster for the firm.

This year, India restricted importsof Chinese telecoms network equip-ment over security fears. It is also

worried about the introduction of 3G wireless services with no monitoringsystem in place.

RIM, unlike rivals Nokia and Apple,operates its own network throughsecure servers.

BlackBerry rockedby India ban fearsBY S TEVE D INNEEN

TELECOMS

BRITISH aero engineer Hampson yesterday said its full-year profit would fall short of market expecta-tions due to a slowdown in ordersat its aircraft tooling unit, sendingits shares to a seven-year low.

Our largest tooling business has been impacted by order delaysacross a number of aircraft pro-grammes, Howard Kimberley,Hampsons finance director saidafter the company said full-yearpre-tax profit would fall materially

below current market estimates.The [new] Lear [jet 85 aircraft] is

one of those programmes and theBoeing 787 [Dreamliner] has beensomewhat delayed, which has hit

Boeings sub contractors, each of which have a relationship with our

facility, added Kimberley.Shares in Hampson plunged by

up to 61 per cent, their lowest levelsince March 2003, valuing thegroup at around 75m, before clos-ing at 21.25p.

Before yesterdays announce-ment, Hampson was expected toreport pre-tax profit of between21.7m and 28m for the year tothe end of March 2011, with theconsensus at 24.3m.

The company said in June thatthe rate of recovery at its tooling

business, which supplies thedefence, commercial aerospace andspace industries, had been slowerthan it had anticipated.

The delays experienced by thetooling business on new aircraftprogrammes have continued and

the group is missing the large con-tribution to overheads that this

business should produce, said Arbuthnot analyst Michael Blogg, who cut Hampsons full-year pre-tax profit target to 15m from25m after its profit warning.

Hampson said delays in thereceipt of engineering data fromcertain customers had furtherimpacted activity levels at its UStooling facility.

Hampson warns on2010 as orders slowBY HARRY B ANKS

INDUSTRY

INDIAS TAJ REOPENS AFTER TERROR ATTACK

THE Taj Mahal Palace and Tower hotel (above) reopened in Mumbai yesterday, 18months after it was stormed by Islamist militants. The 107-year old heritage wing of theluxury hotel is set to receive guests for the first time since it was badly damaged by fire,smoke and explosions in the deadly 60-hour siege. A total of 1.75bn rupees (23.9m) hasbeen spent repairing, restoring and upgrading the wing. Picture: REUTERS

ANALYSIS l Hampson

20

30

50

60

70

40


p 21.0012 Aug

Realisethe

potentialTM

or se a rch po te ntia la me r ica nexpre ss.co.uk /p o te ntia l

Well he lp you ge t your ha ndso n s o m e o f t h e h o t t e s t t ic k e ts

in t o w n .

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The Capitalist16CITYA.M. 13 AUGUST 2010EDITED BY

VICTORIA BATESGOT A STORY? [email protected]

THE CITYS GOT TALENT: OUR TOP TEN LOVELIEST LADIES

2HANNAH WOODLEY

PANMURE GORDONThe Capitalist lost count of thenumber of people emailing in to

nominate the dazzling Miss Woodley, who caused quite a stir when sheturned up as an associate director inthe corporate broking team at PanmureGordon earlier this year.

Hannahs past career history includesstints at stockbrokers Collins Stewartand Noble and some time spent market-ing hedge fund Essential CapitalManagement that, and a spell of mod-elling for the Mustard Models agency (hence the stunning photograph on theright).

Shes beautiful, and a lovely personto boot, was how one earnest admirerdescribed her. Aww.

1GEORGIA RAIMESWORLD FIRSTLast years winner, the gorgeous Sarah Davison of RBSSempra, was always going to be a tough act to follow,

but the City has found an eminently worthy successor in theform of brunette bombshell Georgia Raimes.

The lovely Georgia is a forex dealer on the private clientdesk at World First, and also often provides a video marketupdate published on the firms website, much to the boysdelight (just watch that online traffic shoot up)

I hear her stunning good looks and sultry tones haveearned her a cheeky nickname among colleagues andclients: the Nigella Lawson of FX. Richly deserved, as Imsure youll agree.

4CORDELIA ORR-EWING

STRAND HANSON With a name like that and havingperfected her sultry stare (see left),

Cordelia is certainly the posh totty of the competition. After graduating justlast summer, she gained experience atMirabaud Securities and Williams deBroe before being snapped up recently

by Strand Hanson as an analyst in thecorporate finance team.

3JOANNE VOWLES

CHARLES STANLEY Joanne is the freshest-faced of allour lovely ladies, having joined

Charles Stanleys PR team earlier this year at the tender age of 22. (Internalreports say the procession of maleemployees tramping into the PR office has roughly trebled since she

joined.) Outside of work, the blonde beauty is a bit of a sports junkie, play-ing club netball, running and skiing.

5FIONA CINCOTTACITY INDEX28-year-old Fiona, an account man-ager at City Index, has the gents all

of a-flutter when filming her frequentmarket updates to be uploaded ontothe web. Outside work she goes to thegym and runs to stay in shape, andadmits she has a weakness for sunny summer barbecues.

8TAMZIN MANNINGKBC PEEL HUNT

Another candidate to swell theranks of the blonde contingent

(and neutralise the age-old blonde vs brunette debate), flaxen-haired Tamzinsecured the vote of a number of admir-ers in the stockbroking community. She

joined KBC Peel Hunt in 2006 to work ingeneralist equity sales.

6PAOLA SCAGNELLIEVERSHEDSIts no surprise that associatelawyer Paola made the cut for this

years hotlist, with her smoulderinggood looks. A member of Evershedsproject finance team, Paolas Italianroots have evidently influenced her hob-

bies outside of work good food and wine, music and watching motor sports.

9LEANNE BARNHAMF&CSocial butterfly Leanne works as amarketing manager at F&C, bright-

ening up the office with her sunny dis-position and cheeky smile. She joinedthe fund management group a few

years ago from boutique rival SkylightCapital, where she was the marketingdirector.

7.KATIE RATNERSEYMOUR PIERCEKatie is a corporate broker atSeymour Pierce where her late

father, Richard Ratty Ratner, was vicechairman. Bubbly and fun-loving, sheenjoys skiing and horseriding, once rep-resented England at elephant polo at agame in Nepal (yes, really), and was alsopreviously a Soccerette on Soccer AM.

JILL ROOTSAERTHENDERSON

At a recent party, the boys were falling over themselves to

nominate Jill for the ladies hotlist, a yearand a half after she joined Hendersonfrom the investment banking arm of Fortis. The lucky girls certainly blessed

with brains as well as beauty shes incharge of Hendersons currency fund.

10

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GENERAL Motors (GM) posted its biggest quarterly profit in six years yesterday and chief executive Ed Whitacre stepped aside on the cuspof an IPO expected to allow the USgovernment to relinquish its major-ity stake.

Whitacre, who has served justeight months as chief executive of the top US automaker, said he

would step down on 1 September, to be replaced by Dan Akerson, a GM board member and a managing

director at private equity firm TheCarlyle Group.

Whitacres departure had beenexpected but the timing of theannouncement was a surprise andcame just a day ahead of GMsexpected filing for a landmark stock offering. Whitacre, who continuedto commute from his home in Texasduring his stint as chief executive of the Detroit-based company, had saidrepeatedly that he would be aninterim leader at GM.

It was obvious that I was notgoing to be at GM for the long haul,

Whitacre said. We have put a

strong foundation in place, so I am very comfortable with my timing.

Akerson, a former boss at Nextel, will become GMs fourth chief exec-utive in just a year and a half, under-scoring a continued challenge foran automaker analysts see as still inthe early stages of a turnaround.

Separately, GM posted a second-quarter profit of $1.3bn (834m) inevidence of a turnaround driven by cost-cutting in its 2009 bankruptcy and better sales in the US. The sec-ond-quarter profit was the largestsince 2004, when the US car market

was still booming.

GM back in black asboss heads for exitBY H ARRY B ANKS

AUTOMOTIVE

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UKTV yesterday announced a majorshake-up of its board just days after itemerged Virgin will sell its stake inthe joint venture.

Darren Childs will take the helm atthe profitable broadcaster, steppingdown from his post as managingdirector of BBC Worldwide Channels.

He will replace David Abraham, who stepped down in April to becomethe chief executive of Channel 4.

UKTV also announced the appoint-ment of Jan Gooze-Zijl as chief finan-cial officer.

Virgin is looking to offload its half of the joint venture it holds with thecommercial arm of the BBC.

The channel is expected to raisearound 350m, with the BBC under-stood to be interested in taking fullcontrol of the owner of channelsincluding Dave.

UKTV appointsnew boss asVirgin seeks abuyer for the JV

News18 CITYA.M.13 AUGUST 201

Darren Childs is set to take the helm at UKTV

NEW EU rules to boost insurers finan-cial strength will spur more issues of securities tied to natural disasters andpeak mortality risks as the sectormoves onto even safer footing, SwissRe said yesterday.

The worlds second-biggest reinsurerand other industry experts expect theSolvency II capital regulations set totake effect in 2013 to support insur-ance-linked securities (ILS) given insur-ers need for robust balance sheets.

Solvency II will have a positive effecton more mature ILS products such ascatastrophe bonds, Alison McKie, man-aging director in Swiss Res life andhealth area, said.

In addition to the traditional rein-surance market, insurers use cat

bonds to transfer risks associated with

disasters like huricanes and earth-quakes to capital markets investors,thus limiting exposure to major dam-age claims.

Capital market solutions mitigatingrisks were not assessed under the pre-

vious regulatory system, but they will be under Solvency II, McKie said.

Securitisation is an effective way of managing these peak risks and reduc-ing capital requirements. Overall, wetherefore expect the new regulationsto lead to an increase in the use of alternative risk transfer products, inparticular by those companies who areusing internal models to assess theircapital position, she added.

Top reinsurers such as Munich Re,Hannover Re and Swiss Re expect salesto rise as insurance companies buy risk cover from them to help offsetSolvency IIs more stringent capitalrequirements.

New EU rules setboost reinsuranceand securities issuBY H ARRY B ANKS

INSURANCE

BEST OF THE BROKERSANALYSIS l Interserve

205

195

215

225


p

203.2512 Aug

INTERSERVEUBS downgrades Interserve to sellfrom neutral with an 180p price targetwarning it faces serious headwindsgoing forward. Expects significant rev-enue drop in UK construction of 32 percent from peak to trough resulting in an85 per cent fall in divisional profit.Believes support services margin pres-sure will also persist.

To appear in Best of the Brokers email your research [email protected]

ANALYSIS l ING

6.50

6

7

7.50

2 Aug19 Jul28 Jun7 Jun2010

7.23

12 Aug

INGDeutsche Bank reiterates its buy rat-ing on ING saying its second quarterresults indicate it is back on tracktowards normality. Says its ability togenerate substantial amounts of capi-tal organically is abundantly clear, yetsays the shares valuation does notreflect this noting it currently trades at0.7 times net asset value.

ANALYSIS l Premier Foods

20

18

22

24


p18.7612 Aug

PREMIER FOODSRBS reiterates its Buy rating onPremier Foods saying its current valuation of four times price to earnings ratfor 2010 is unjustified. Notes its firsthalf results beat market expectationsyet the shares have failed to reactaccordingly. Believes that the sharescould double in value between the nex12 to 18 months.

BY S TEVE D INNEENMEDIA

8/9/2019 cityam 2010-08-13

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ADEGREE in law couldnt stifle

Anthony Payne, the founder of Peregrine Communications, fromunleashing his entrpreneurial

spirit. Even when he was completing arti-cles the early stages of legal training hetook time out to start a pizza delivery busi-ness called Moonlight Munchies.

Skip forward a couple of decades andPayne is eating lunch at the Ivy Club, justoff the Strand. He founded his own finan-cial PR firm Peregrine Communications in2003. The Ivy is his favourite haunt for busi-ness, the Groucho club is for fun, he says ashe digs into a fish pie. And he is optimisticabout the future: Its imperative now,especially since the financial crisis, thatfinancial firms are good at messaging.

He soon ditched his law career: I knew Icould never compete with double firstOxbridge types as I dont have a head fordetail. Thats when he moved to PR, hon-ing his craft at some of the worlds largestfirms in the 1980s and 1990s, includingBurson-Marsteller where he worked inHong Kong for its financial services divi-sion, eventually heading up its Thailand

branch. He returned from Asia in 1994.Back home, Payne persuaded Hill &

Knowlton to set up a financial PR divisionthat he went on to head for three years.

Then in 2003 he went back to his entrepre-neurial roots. He didnt choose the easiestenvironment in which to start Peregrine.

The internet bubble had burst and 9/11 hadhappened sparking a mini-recession: It

was a terrifying time to start. I had two chil-

Launching Peregrine has seenAnthony Payne fulfill his destiny,Kathleen Brooks meets him.

Anthony Payne,founder of Peregrine

Picture:Micha Theiner

/City A.M.

Virgin-founderRichard Branson ishelping youngentrepreneurs

Picture: REX

A high-flying PR success story

IN THE past, corporate social responsi-

bility meant big firms sponsoring a

recycling plant, or an art exhibitionat one of the major galleries. But now well-known corporate brands are startingto direct their altruistic impulses towardentrepreneurs.

At the start of this year, Virgin Mediateamed up with Enterprise UK to support

young entrepreneurs. It uses the internetto give advice, run tutorials and help youngpeople with a good business idea to make ithappen. T-Mobile is also jumping on the

bandwagon. Just last week, it held aBusiness Sense Round Table to discuss

what small companies and start-ups needto succeed in the coming years.

So does this mean that entrepreneurshave become the new social responsibili-ty? Not necessarily, says Stephen

Alambritis, spokesperson for theFederation for Small Business (FSB): Itsrather like foreign students who come tothe UK to study. One day it might lead tothen choosing Britain to do trade with.

The same principle applies when largecompanies help entrepreneurs one

would expect that if they do well they willgo back to the large company to do busi-

ness.Helping entrepreneurs can be vital forlarge corporations, adds Alambritis:Without a groundswell of medium-sized

businesses in the UK, corporations will findit hard to get firms who can service theirlarge orders. So its important for them tohelp small start-ups to grow.

It can also help corporations understandtheir business clients of the future, saysOliver Chivers, head of indirect business at

T-Mobile. Small businesses are diverse andchanging all the time, so its important forus to understand their needs so we can pro-

vide them with the best solutions for their businesses. One can assume that this willhopefully lead to an increase in sales.

Large corporations can use their associa-tion with entrepreneurs to boost theirimage, especially if they are seen to be help-ing small firms with an ethical bias. Forexample, T-Mobile is particularly interestedin helping socially responsible firms. The

FSBs Alambritis says that being associated with socially responsible start-ups is attrac-

tive for large firms: A corporation mightnot be able to do direct social enterprise

work, but if it can support social entrepre-neurs then it will get some of the benefitthrough association.

Corporate social responsibility could bere-named as corporate economic responsi-

bility. But even if it helps the large firm as

much as the start-up, its still good forentrepreneurs.

Social responsibility programmes can nowbenefit entrepreneurs, writes Kathleen Brooks

Big corporates helpsmall firms prosper

Q.I have been runningmy own business for twoyears and am looking to take onmy first employee, how do I go aboutwriting a legal contract and how muchdoes it cost?

A.It is absolutely crucial to set up acontract, which sets out thearrangements between the employ-ee and employer in detail. Many small busi-nesses make the mistake of not giving thisenough importance and write sketchy andvague contracts. The employer needs to becareful that the offer letter and contractreflect what has been agreed with theemployee. While it might be tempting toavoid lawyers fees and instead write con-tracts yourself using free templates that areavailable on the internet, they often do notgo into enough detail. Employers might endup amending the contracts themselves,which could come back to bite them in thefuture. It is always advisable to seek legaladvice when drafting a contract, as correctphrasing is crucial when it comes to legaldocuments. For a bespoke contract you canexpect to pay anything between 800 and5,000, depending on the level of detail andcomplexity.

Q.What are the main points I shouldinclude in the contract and is thereanything I should be aware of?A.The contract itself does not have tobe complicated but it will need toinclude a few key points. Theseinclude the job description, pay, hours, holi-day, sickness arrangements and terminationprovisions. Again, wording is very importantto prevent discrepancies or ambiguities.Financial institutions, for example, shouldtake special care when including bonuses inan employment contract. This could lead toan employer being legally bound to pay anemployee a bonus even if they havent per-formed well. So, for both parties, its best tobe clear what bonus and terms of employ-ment both the employee and employer canexpect. Other points to be aware of are thematernity, paternity and parental leaverights of employees and a duty to provide apay slip. Thankfully, for small business own-ers there are many places that you can getinformation on employment law, such as thedepartment for businesses, innovation andskills and the ACAS websites, alongside HRadvisors and lawyers.

Q.How can I protect myself frombeing sued in case I need to letsomeone go?A.The most important thing is to beclear why you are letting someonego, as well as having a clear processto regularly check your employees perform-ance. If you are dismissing someone, it isvital to be up front and honest. For example,many employers hide behind redundancy,

when the real reason may be poor perform-ance. Small companies can protect them-selves by having a probationary period inwhich the employee can be monitored andinformed about their progress. The employershould take time to discuss performance-related issues regularly, and not shy awayfrom uncomfortable discussions. In the caseof redundancy, it is sensible to seeklegal advice as it can be a relative-ly complex process,and it is importantto follow the correctset of laws in orderto minimise the riskof a dispute.

MagdalenaBrzezniak

Age:48Born:KenyaLives: Battersea, London with hiswife, Tanya Layzell-Payne, theowner of Gerber PR, and twoteenage sons.Car you drive: Pashley motor-bike, Golf GTI

Reading: Churchill: A biography,by Roy JenkinsPeregrine has representatives innine countries. Thinking globallycomes naturally to Payne. Hisgreat-grandfather moved toKenya in 1910: We know allabout emerging markets.

CV |ANTHONY PAYNE

City Focus | Entrepreneurs CHECK OUTHONG KONGTRAVEL SECTION,MONDAYS PAPER19

EMPLOYMENT

Q A

dren at boarding school so I had to get work. He credits three people for his initialsuccess: Tim Weller, CEO of Incisive Media;Robin Bowie, head of Dexion Capital andChristian Yates, CEO of investment bank

Julius Baer. They all let his firm bid for busi-ness when it was in its infancy. I was oper-ating the business from one room in my home, but those initial accounts gave megreat encouragement. From the start,Payne decided to specialise in the alterna-tives space, particularly hedge funds, pri-

vate equity and renewables. Although he says that he went into

financial PR because it requires less brainsthan other careers in the City, dont befooled. He applied laser-like focus to settingup Peregrine: Contracts were always quar-terly in advance since cash is absolutely critical. The firm now has eleven staff inits London office.

His advice for budding entrepreneurs is

simple: dont set up with a partner on day one and dont give away equity in the busi-ness instead incentivise via profit share. Ialways remember the Clint Eastwood linefrom Magnum Force: A mans got to know his limitations. But if you do that, then the

world conspires to help you achievethings.

&

8/9/2019 cityam 2010-08-13

20/32

If you have the time, then SIPPscan work well, says Jessica Mead

Putting property into your SIPP is an extreme-ly complex matter and one on which you shouldseek specialist advice. Investing directly inproperty is only available through a full SIPP.

l You can include commercial property.l You can borrow up to 50 per cent of the netfund value of the SIPP for the purpose of buy-ing a commercial property within a SIPP.l Investing in residential property is a mine-field. You need a minimum 1m invested inthree properties and no property can be worth

more than 40 per cent of the SIPP value.

SIPP INVESTMENTS |PROPERTY

Investment | Personal Finance20 CITYA.M.13 AUGUST 201

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tional pensions, we are all choosing totake more control over our retirementplanning. And rather than choosing aone-size-fits-all stakeholder pension,investors are increasingly opting for themade-to-measure self-invested personalpension (SIPP), which gives them the ulti-mate in a personalised pension schemeand the tax benefits to boot.

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cityam 2010-08-13

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