cityam 2012-02-29

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Senior exec slams former Everything Everywhere chief

IRELAND has sparked fresh uncertain-ty across the European Union by vow-ing to hold a referendum on the new fiscal treaty.

Enda Kenny, the Prime Minister,said he opted “on balance” for a pollafter taking legal advice. The arrange-ments will be made within weeks.

Last month Ireland joined 24 otherEU states – but not Britain – in agree-

ing the pact for stricter budget disci-pline but may face a struggle toconvince voters to back the German-led plan. Fianna Fáil, Ireland’s mainopposition party, has said it will jointhe governing Fine Gael and Labourparties in campaigning for a “yes” vote.

Sinn Féin, which has seen its sup-port surge after fighting against aus-terity moves, will oppose the treaty.

The Irish have rejected the last twoEU referendums before passing them

with concessions. EUROZONE: P10-11

BY PETER EDWARDS

EUROZONE▲

www.cityam.comIssue 1,581 Wednesday 29 February 2012 FREEBUSINESS WITH PERSONALITY

EVERYTHING Everywhere, Britain’s biggest network operator, “lost a year”under the leadership of its former boss

Tom Alexander, according to anextraordinary outburst by a top execu-tive.

Benoit Scheen, France Telecom’sEuropean boss and a member of theEverything Everywhere board, blamed

Alexander for failing to make thesevere cuts in management needed inthe wake of the merger betweenFrance Telecom’s Orange and T-Mobilein the UK.

He said: “We gave him a chance anda second chance and a third andfourth chance, and eventually youhave to make a decision based on theinterests of the company.”

Scheen’s criticisms are the first pub-lic indication that EverythingEverywhere’s first year was marred by deep internal divisions.

Alexander – one of Britain’s leadingtelecoms executives – and EverythingEverywhere have always maintainedhis departure was purely for “personalreasons”.

The remarks came as a shock to

Alexander’s allies, who refused to com-ment because there is understood to be a legal agreement preventing eitherparty from discussing the circum-

stances surrounding his departure.Scheen went on: “Tom Alexander

was a nice guy but he wasn’t an opera-tions man. When you’re merging twodifferent boards, and you end up witha board of 24, you have to make sacri-fices.

“A year down the line we had a board with 24 people on it and no deci-sions had been made.”

Scheen also said he did not believe Alexander was hands-on enough tooversee the new company.

Alexander resigned fromEverything Everywhere last July, a yearafter the merger of Orange and T-Mobile created Britain’s largest net-

work operator with 28m customers.Deutsche Telekom – T-Mobile UK’s

parent – and France Telecom eachhave a 50 per cent stake in EverythingEverywhere, which is now run by Olaf Swantee.

Alexander, who owns a fleet of sports cars, secured more than £20mfrom the flotation in 2004 of VirginMobile, the mobile phone business hefounded. His exit from EverythingEverywhere was followed by the depar-ture of a string of top level staff,

including former T-Mobile boss andEverything Everywhere chief financialofficer Richard Moat.

Scheen became France Telecom’s

executive vice president of Europe lastSeptember. Previously he was chief executive of Mobistar in Belgium,

which is majority-owned by France Telecom.

The Belgian national made the out-spoken remarks at a dinner earlierthis week with journalists and ana-lysts at Mobile World Congress, theindustry’s trade fair in Barcelona.

When City A.M. asked him for fur-ther comment the following day, hesaid he was not in a position to speak about Alexander as he was not in hiscurrent role at the time. He added thethrust of his comments could have

been misconstrued because English isnot his first language.

Alexander could not be reached forcomment. France Telecom Group saidin a statement: “France Telecom wish-es to reiterate its appreciation for the

work Tom Alexander undertook asCEO of Everything Everywhere inestablishing it as the UK’s largestmobile communications company.

Tom successfully led the company dur-ing its first 18 months bringing togeth-er both the Orange and T-Mobile

businesses. Having achieved this hestood back for personal reasons and onamicable terms and he and his contri-

bution to Everything Everywhere’ssuccess continue to be held in highregard by the company’s sharehold-ers.” MOBILE WORLD: P9

Certified Distribution

02/01/12 till 29/01/12 is 92,258

THE ROWTHATTOPPLED TOP

MOBILE BOSS

Shock as Irelandplots referendumon fiscal treaty

CORPORATE financier Simon Collinshas emerged as one of the three short-listed candidates to become chairmanelect at KPMG, the auditing and con-sulting group.

Collins, who is the firm’s globalhead of transactions and restructur-ing, joined KPMG from the invest-ment bank Warburg. He is said to beoutgoing, part of one of the betterperforming businesses, and a popularchoice to follow in the footsteps of

John Griffith-Jones, who steps downat the end of September.

The other two candidates are AlanBuckle, who has been overseeing a lotof the firm’s European and globalactivities, and early favourite Oliver

Tant, who is UK head of auditRichard Bennison never applied.

KPMG said last night that it expect-

ed to announce a chairman elect within the next couple of weeks. The decision will be made by the

firm’s near 600 UK partners.

Last three tusslefor top KPMG job

BY STEVE DINNEEN IN BARCELONA

EXCLUSIVE▲

BY DAVID HELLIER

EXCLUSIVE▲

Benoit Scheen (left) has hit out at Tom Alexander (right)

8/2/2019 Cityam 2012-02-29


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News4 CITYA.M. 29 FEBRUARY 2012

Asia hedgies’boost for CityLONDON is set to pick up lucrativenew work from the boom in the Asian hedge fund industry, accordingto the authors of a new report.

China and Asia’s other emergingeconomies are expected to drivegrowth in the size of the global hedgefund industry this year and the skillsand location of the City of Londonmean it is in line to pick up manage-ment work, according to MarkoMaslakovic, senior economist at TheCityUK. London currently runsabout $280bn worth of single manag-er hedge funds, the lobby group said.

“The structural advantages whichhave attracted around 800 hedgefunds to London include its localexpertise and the proximity of clientsand markets. The UK is also a leading

centre for hedge fund services such asadministration, prime brokerage andcustody,” Maslakovic said.

TheCityUK’s 2012 hedge fundsreport, published today, showsLondon remains the dominant centrefor hedge funds in Europe, managing85 per cent of the continent’s assets.

Global hedge fund assets undermanagement fell three per cent to$1,902bn at the end of 2011. London’sshare of the market dipped slightly to18 per cent, but remains more thandouble its proportion in 2001. New York had a 42 per cent share last year.

BY PETER EDWARDS

HEDGE FUNDS▲

DIMON DISMISSES REGULATORYTHREAT JP Morgan Chase executives have toldinvestors the bank will prosper evenafter the implementation of new reg-ulations as they maintained profittargets and dismissed talk of a his-toric threat to Wall Street’s businessmodel. “I’ll be damned if we don’thave record profits for the next yearor two,” said Jamie Dimon, chief exec-utive, as US finance’s most vocal criticof new regulation shrugged off theimpact during an investor day.

BLACKSTONE AND KKR WEIGHBILLABONG BIDSBlackstone and KKR are considering joining the bidding race for

Billabong, the Australian surf wearcompany that has rejected a revised

A$840m offer by TPG, say peoplefamiliar with the matter.

FSA WARNS OF £20BN PENSIONTRANSFER BILL A drive to encourage defined benefitpension scheme members to transfertheir savings pots out of their employ-er’s scheme could cost companies anextra £20bn, a review by regulatorshas suggested. The Financial Services Authority, which regulates the advi-sory firms brought in to help schememembers decide whether to take upan employer’s offer of a transfer value, said on Tuesday that it wasincreasingly concerned about how the advisers determine when such amove really is in an individual’s bestinterest.

REPUBLICANS BICKER OVER CALLS The battle for the Republican presi-dential nomination got nastier still yesterday when a furious row brokeout over Rick Santorum’s attempts torecruit Democratic voters as spoilersin the key Michigan primary. MittRomney was enraged after itemerged that the rival campaignmade automated calls to Democratson the eve of the primary.

CUT-PRICE CHRISTMAS STAMPSPROMISE FOR THE POORFive million Britons could be offeredthe chance to buy their Christmasstamps at last year’s prices while therest of the country faces a steepincrease in postal costs.

NUMBER 10 SILENT ON WHETHERDAVID CAMERON USED REBEKAHBROOKS’ POLICE HORSEDowning Street has refused to disclose whether David Cameron used thepolice horse lent to Rebekah Brooks onriding trips together. The PrimeMinister is long rumoured to havespent time horse-riding with Brooks,the ex-News International boss.

PAUL CONROY EVACUATED FROM HOMSIN RESCUE THAT COST 13 LIVES A British photographer working forthe Sunday Times has beenevacuated from a beleagueredenclave of the Syrian city of Homs ina perilous rescue that cost the lives of 13 volunteers.

HEWLETT-PACKARD PLANS LAYOFFSHewlett-Packard said yesterday it would cut some jobs in its groupfocused on mobile software. About275 people will be affected, a personfamiliar with the matter said, or justunder half the team that works onthe software, known as webOS.

UNICREDIT CHAIRMAN WON’T SERVENEW TERMUniCredit chairman Dieter Rampl won’t serve a new term, the Italian bank said in a statement, a surpriseannouncement that comes in the wake of a capital increase that hasaltered the bank’s shareholdingstructure and brought in new foreignstakeholders.

WHAT THE OTHER PAPERS SAY THIS MORNING

China’s bad debts will fuel next crisis

THERE can be no doubt that China’sstory is one of astonishing economicsuccess. Ever since they started toembrace capitalism in the late 1970s,the authorities in Beijing havepresided over the greatest, most exten-sive wealth creation and poverty reduction experiment in history. Butthe remaining elements of centralplanning at the heart of the Chinesemodel have allowed massive misallo-cation of resources to take place.

Inevitably, such excesses eventually lead to a bust – which is why the West, which is now dependent on Chinese

growth, needs to worry. The government still controls the

direction, volume and pricing of loans;it caps deposit rates and ensures mini-mum lending rates, thus preventing

real competition, in a bid to bolster theindustry’s margins. State firms aresupplied with unlimited credit fromstate-owned banks; neither ever go bust. China maintains capital controls;its increasingly prosperous public isforced to keep most of its growing wealth in domestic bank accounts(now worth 75 per cent of GDP). Thismeans that the stock of money to belent out to often insolvent firms keepson growing, and the mad machinekeeps going. Roughly two-thirds of total bank lending goes to the centraland local government via special off- balance sheet vehicles or to stateowned companies.

As an excellent report by DianaChoyleva of Lombard Street Researchexplains, wherever one looks, state-directed liquidity is hiding insolvency. There have been waves of recapitalisa-

tions of the banking industry, and reg-ular attempts at removing vastamounts of bad debt from the system. Yet it remains crippled by the legacy of the bad loans of the 1980s and 1990s,

as well as by huge amounts of excessive and misallocated lendingduring the past 12 years. Bank creditsurged in 2002-03 to prop up Chinesefirms after the dot.com bubble burst; it jumped in 2006 after China’s domesticdemand growth slumped; and itsurged in 2009-2010 to shield the econ-omy from the financial crisis. Officialfigures are useless; they don’t providereliable estimates of bad debt, whichmust be massive. Lombard Street citesone study which suggests bad loans tothe local governments’ special financ-ing vehicles could alone be worth asmuch as 6.4 per cent of GDP.

China’s total debt remains suffi-ciently low: it could still just aboutrecognise and absorb bank losses on its balance sheet. Household debt is 29per cent of GDP, net company debt 76per cent and gross government debt 79

per cent. When massive reserves of 43per cent of GDP are factored in, netgovernment debt falls to 36 per cent.China’s total debt is thus 141 per centof GDP, less than many other coun-

tries. If one imagines that half of alldebt in the economy is bad and is writ-ten off, and the state recapitalises banks accordingly, China’s net govern-ment debt would surge to 108.5 percent of GDP – bad, on par with Japan, but still just manageable.

For the time being at least, the show can go on. But unless China finally turns its banks into real commercialentities, accepts the existence of mas-sive bad debt, writes it off and moveson, the current malinvestment willcontinue. China is already at the limitof what it could absorb in the event of a crisis: another couple of years of thisand the situation would becomeunmanageable. Time is running outfor Beijing to tackle the biggest time bomb beneath the world economy.

[email protected] Follow me on Twitter: @allisterheath

THE GOVERNMENT has been warnednot to bring down its cap on non-EUimmigration even further, as figuresshowed the number of people arrivingin the UK on visa schemes is lowerthan the recently-imposed limit.

A maximum of 21,700 general visasfor skilled workers were to be madeavailable in the first year of new gov-ernment restrictions on immigration.

Yet as few as 10,000 will have been

taken up, the Migration Advisory Committee said yesterday – as it warned against an even lower cap.

Companies appear to be adapting tothe limits by increasing their use of intra-company transfers (ICTs), whichare not included in the cap.

The ICT scheme allowed 29,700 staff from outside the EU to work in the UK,in the 12 months to September 2011.

Business group London First saidthe government must scrap its immi-gration target until it has assessed thefull economic impact of the limit.

BY JULIAN HARRIS

POLITICS▲

Tougher visa cap opposed Home secretary Theresa May is under pressure to alter the cap Picture: GETTY

NEWS | IN BRIEF

Unite boss raises Olympic strikeThe leader of Britain's biggest union hassaid workers should consider strikeaction to disrupt the Olympic Games as aprotest against the government's publicspending cuts. Len McCluskey, general-secretary of the Unite union, told theGuardian that the austerity measures

were so unfair that they justified actionduring the event. “If the Olympics pro-vide us with an opportunity, then that'sexactly one that we should be lookingat,” McCluskey said. Meanwhile, unionRMT said it was balloting Transport forLondon members for a strike over a banon staff leave during he Games.

SEC puts Goldman on noticeUS regulators have notified GoldmanSachs and Wells Fargo that the banksmay be hit by civil cases relating to sub-prime mortgage securities. Goldman saidin a filing that the Securities andExchange Commission has given it a“Wells notice” relating to a $1.3bn bonddeal in 2006, which is intended to give abank time to mount a defence against animpending legal action. Wells Fargo saidin a separate regulatory filing that it alsofaces investigations.

EDITOR’S LETTER

ALLISTER HEATH

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 Editor’sCode 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]

London managerscan also win morebusiness from Asiansovereign wealthfunds, Maslakovic said

4th Floor, 33 Queen Street, London, EC4R 1BRTel: 020 3201 8900 Fax: 020 7248 2711Email: [email protected] www.cityam.com

EditorialEditor Allister HeathDeputy Editor David HellierNews Editor David CrowActing Night Editor Marion DakersBusiness Features Editor Marc SidwellLifestyle Editor Zoe StrimpelSports Editor Frank DalleresArt Director Gavin BillennessPictures Alice Hepple

CommercialSales Director Jeremy SlatteryCommercial Director Harry Owen

Head of Distribution Nick Owen

The new jobs website for London professionalsCAREERS.com

8/2/2019 Cityam 2012-02-29


FAILED bank Northern Rock couldreturn £11bn to the Treasury – butthe government may have to waituntil 2027 to realise this profit.

UKFI, the body which manages thecountry’s state bank holdings, claimstaxpayers will eventually get between£46bn and £48bn back from the oldNorthern Rock business.

Northern Rock has received £37bnof taxpayer support since it came

close to collapse in 2007 when theinter-bank lending market dried up.

“This means that, in cash terms,the companies are expected to morethan repay the original funding pro-

vided by the taxpayer,” UKFI said in areport.

But it will take over a decade toclaw back these funds.

“This cash is expected to bereturned over a period of around 10to 15 years from 2012 as NorthernRock is run down and the remaining

government loan is repaid,” they con-tinued. The predicted profit wouldrepresent an annual rate of return of around four per cent on the govern-ment’s intervention.

Last November the retail arm of Northern Rock was sold to VirginMoney for an initial £747m, repre-senting a loss of at least £400m.

Consumer accounts have beentransferred to the new firm and theNorthern Rock name will eventually disappear from the high street.

Another company, Northern Rock

Asset Management, which mainly consists of the former bank’s toxicassets, will remain in governmentownership for the foreseeable future.

15 year waitfor NorthernRock profit

THE GLOBAL body that rules on thesale and use of credit default swaps

will meet tomorrow to discus

whether Greece’s debt swap should beconsidered a default, or “credit event”. The International Swaps an

Derivatives Association could pave the way for a payout on outstanding Greek CDS contracts if it decides a creditevent has occurred. An Isda memberhas asked if the approval by Greece toimplement collective action clauses ondebt governed by Greek law consti-tutes a “restructuring credit event”.

A THIRD group is considering atakeover offer for east Africa explorerCove Energy, raising the prospect of a

bidding war for the Aim-listed group.Indian energy giant ONGC said it is

mulling a joint offer with state gasfirm GAIL, putting it in competition

with Shell’s £992m potential offerand a rival £1.1bn plan from PTT.

ONGC said it was “participating inthe formal sale process” for Cove’s

Rovuma assets in Mozambique that

began in January, but that it hadmade no decision.

“Rovuma... contains a world classgas asset, and so it is unsurprisingthere is competitive tension withregard to the current bid situation,”said Peel Hunt analyst Werner Riding.

“Anecdotally, there has been a very high level of interest with many major integrated oil firms viewingthe data room, but it remains to beseen whether others will emerge as

bidders.”

Isda to rule onGreece’s debt

Indian interest may sparkCove Energy bidding war

John Craven’s Cove Energy could be facing a bidding war Picture: REUTERSBY JAMESWATERSON

BANKING▲

FINANCIAL SERVICES

● The UK taxpayer could get between £46bnand £48bn back from its stake in Northern Rock● UKFI also reported yesterday that the gov-ernment could make up to £22bn on the nation-alised Bradford & Bingley bank.

FAST FACTS

NewsCITYA.M. 29 FEBRUARY 2012

BYMARIONDAKERS

ENERGY▲

5

THE DOW Jones industrial averagelast night closed above 13,000 for the

first time since the onset of the finan-cial crisis.

The index ended the day up 0.18per cent at 13,005.12 after US con-sumer confidence data and a sharpdrop in oil prices boosted investorconfidence. It briefly touched thelandmark level last week.

The Dow last closed above 13,000 inMay 2008, four months before the col-lapse of Lehman Brothers marked the

beginning of a meltdown.MARKET REPORT: P22

Relief as Dowhits milestone

WORLD ECONOMY▲

▲

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SHARES IN PERSIMMON soared totheir highest in almost four years yes-terday after the UK housebuilderunveiled plans to return £1.9bn insurplus cash to shareholders.

Persimmon said it will pay investors a total of 620p per sharethrough dividends over nine-and-a-half years starting in 2013, and willremain largely debt-free throughoutthe period.

The announcement was made asthe housebuilder reported a 55 percent rise in a pre-tax profit to £148.1min the year to December, compared with £95.5m the previous year.

It ended the year with a net cashposition of £41m having reported net borrowings of £51m a year earlier.

Chairman Nicholas Wrigley saidPersimmon’s “successful strategy of improving operating margins, invest-ing in high quality land and generat-ing surplus cash to pay down debtproved highly effective, despite diffi-cult prevailing housing market condi-tions.”

Housebuilders have been widening

their operating margins by focusingon houses and building on cheaperland purchased since the downturn.

Persimmon has spent £1bn overthe past four years buying 32,000plots of land, taking the total to63,300 – representing six and a half years of supply.

Wrigley said the group would con-tinue to pursue its strategy of acquir-ing high margin land and increasingsales volumes.

Visitors to its developments were 10per cent higher in the first eight

weeks of 2012 than in 2011 and forward sales revenue is 9.4 per centhigher than last year at around£927m.

Persimmon to

return £1.9bn

to investorsBYKASMIRA JEFFORD

PROPERTY▲

News 7CITYA.M. 29 FEBRUARY 2012

Housebuilders should be re-evaluatedPERSIMMON, the UK’s biggest housebuilder by value, is experiencingimproving fortunes like most in thesector – but it is still a shadow of itsformer self.

Pre-tax profits, which were 55 per

cent higher at £148.1m, are nothingcompared to the £600m or so that was the norm in 2006.

Still, the outlook for housebuildersis quickly getting better. Conditionsin the market are hardly buoyant, but they have remained stable for thelast 15 to 18 months, allowingPersimmon and its rivals to invest innew projects.

Asking prices are pretty stagnant,

but housebuilders have managed topush up their average selling price by changing the types of properties they develop. Out with the endless new- build flats in northern towns, whichare struggling to find first-time buy-

ers, and in with semi-detached housefor affluent southerners. A change in government policy has

helped. The coalition has reformed aLabour policy that encouraged housebuilders to have around 60 per centof their development portfolios asflats.

More developments and higherasking prices have pushed up prof-itability, but the real reason for

improving margins is new land deals.Old land – bought at the top of the

market and subsequently writtendown – is falling out of the equation,to be replaced by newer, more prof-itable land buys. That’s why margins

have gone from virtually zero to between 15 to 17 per cent for mosthousebuilders.

Old fears die hard, meaning sharesin many housebuilders are stillcheap. The entire sector deserves to be re-evaluated.

BOTTOMLINEAnalysis by David Crow

ANALYSIS l Persimmon PLC

p

22 Feb 23 Feb 24 Feb 27 Feb 28 Feb

750

725

700

675

650

625

706.5028 Feb

GM closer to Peugeot deal

FRENCH car maker PSA PeugeotCitroen is set to consult engine part-ners Ford and BMW before agreeing toa tie-up with General Motors.

The US firm is expected to take aseven per cent stake in PSA, which isreportedly planning a rights issue toraise cash for new ventures.

GM, the world’s biggest carmaker,and Peugeot are discussing a broadalliance designed to stem losses in

Europe and cut production costs elsewhere, sources said. Last night PSA

could not be contacted about theterms of a deal but industrial directorGuillaume Faury said earlier: “If there’s any agreement that goes beyond our existing partnerships,each of those partnerships will have toevaluate what can be done”.

CM-CIC Securities analyst FlorentCouvreur said: “The Peugeot family seems to be willing to dilute its stake a bit more and seems therefore to beready to soften its position, which hadalways been considered by the market

to be a brake on PSA’s strategic devel-opment.”

AUTOMOTIVE▲

CITY SLICKERS: ST PAUL’S CLEAN-UP BEGINS

A clean-up operationbegan yesterdayafter activists fromOccupy LSX wereevicted from the areaoutside St Paul’sCathedral. The 137 day camp was shut down in the earlyhours of yesterdaymorning. Last night protesters gatheredoutside the cathedralas 30 to 40 policewatched on. Members of Occupyhave also been evict- ed from the so-calledSchool of Ideas, thesite of a former primary school in Islington.

Picture: Laura Lean / CITY A.M.

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THE PRICE of a smartphone will fall tothe equivalent of $20 (£12.60) withintwelve years, Google chairman EricSchmidt predicted yesterday.

He said the internet will change dra-matically over the next decade as peo-ple across the world connect for thefirst time using mobile phones. Thenumber of users is expected to jumpfrom almost 2bn to 5bn as people fromdeveloping countries connect to the

web for the first time. This will be spurred by ever increas-

ing processing speeds and a drop inthe price of smartphones. He added:“If we get this right there will be an Android in every pocket.”

He said technology that was in therealms of science fiction a few yearsago, such as holographic avatars, isalready in development and thatGoogle’s driverless cars will save thou-sands of lives every year.

Schmidt also warned that govern-

ments must not put a free internet atrisk with legislation. He said censor-ship abroad – and even proposals being discussed in the US – could cre-ate a “digital caste system”.

The firm also showed off a versionof its Chrome for Android software, which allows users to sync their brows-ing history between devices andincludes intuitive new ways to browse between tabs and interact with links.

Schmidt did not outline plans forGoogle’s Mobile Wallet rollout inEurope, which some had expected.

The keynote speech came as Googleis preparing to update its privacy set-tings to allow data to be shared between its different propertiesincluding YouTube and Search. Thechanges will allow Google to tailor itsadvertising to users. But the controver-sial move caused an outcry among privacy campaigners.

Schmidt, who referred to his “love”of privacy several times in his speech,said all users will be able to browse without Google monitoring them.

Google boss:smartphoneswill cost $20 UK chip designer ARM is still years

ahead of rival Intel, its chief executive Warren East told City A.M. yesterday.

Intel has set is sights on ARM’s nearmonopoly of the mobile chip marketand launched a smartphone withOrange at this year’s Mobile WorldCongress event.

East said: “There is more competi-tion in the market and Intel havemade no secret of the fact they aretargeting this space but... we see tech-nology that is one to two generations behind ARM and we see ARM movingfurther ahead.

“This show is all about quad-core A9s and duel-core A15s. Intel is get-ting a bit more competitive but giventhat we are moving the competitivegoalposts we’re not hugely perturbed.

“They are a big, successful company

so we need to be aware of what they are doing but we see ARM as a long way ahead.”

East added that the explosion inmobile internet plays into ARM’s busi-ness model. He said: “There are bil-lions of consumers connected to theinternet through phones. The ARM business model, with its diversity of chips, means there is something foreverybody. You are not going to have5bn people all wanting the samething.”

ARM is yearsahead of rivals,boasts chief

BY STEVE DINNEEN IN BARCELONA

TELECOMS▲

▲

Mobile World CongressCITYA.M. 29 FEBRUARY 2012 9

BY STEVE DINNEEN

TECHNOLOGY

EU Commissioner Neelie Kroes met with phone chiefs to discuss the change Pic: GETTY

EU defies phone firms toclamp down on mobile fees

EUROPEAN lawmakers voted forsteeper cuts to mobile phone roam-ing charges yesterday in a move thatdefied calls by the chief executives of Vodafone and France Telecom for amoratorium on revenue-hitting tele-coms regulation.

Politicians from the EuropeanParliament agreed to lower the cost of making phone calls when abroad by up to two-thirds within two years,going further than a proposal initial-ly floated by the European

Commission last summer.Now the Commission and

Parliament must thrash out a final

plan with 27 EU governments toapprove the new caps before June, when current roaming rules expire.

At the Mobile World Congress inBarcelona, telecoms executives haveaccused Europe’s regulators of sap-ping the industry of much neededcapital.

“What does Europe need? DoesEurope need investment? DoesEurope need employment or doesEurope need mobile termination ratecuts,” said Vittorio Colao of Vodafone.

▲

BY HARRY BANKS

TECHNOLOGY

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GERMANY’S efforts to set up a parlia-mentary committee to approve urgentaction by the Eurozone bailout fundhave been deemed “in large part”unconstitutional by the county’s topcourt, hampering efforts to ensure fail-ing states can be rescued.

The European Central Bank (ECB)stopped accepting Greek government

debt as collateral after Standard andPoor’s put the country’s debt in “selec-tive default”, forcing Greek banks toturn to the national central bank foremergency cash.

The German constitutional court’sruling means any use of the bailoutfund to give loans to troubled coun-tries must be approved by either a fullsession of the 620-strong parliamentor its 41-member budget committee.

The special committee of nine MPs

will only be allowed to approve thepurchase of debt on the secondary market by the fund – a facility that hasnot yet been used.

Finance minister WolfgangSchauble warned the bailout fundmust be able to be used quickly whena country needs help.

Meanwhile official data showed asmall improvement in economic senti-ment in the Eurozone in January,though confidence remains fragile.

Top court blocks Merkelplan to fast-track bailout


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IS THE WORST NOW OVER FOR ITALY AND SPAIN?Interviews by Lauren Davidson

“Not yet – it’s going to take a while. They will pullthrough but I don’t think we’ll be out of thisEuropean trouble for at least three years. CanSarkozy and Merkel force creditors to take a

hit? They’re still faffing around.”

ZACH RIVERS | BUSINESS MONITOR INTERNATIONAL

“No, and it won’t be for a long time to come.The system is still the same and nothing hasreally changed – youth unemployment inSpain is above 50 per cent, for example. Theyneed to drastically improve their industry.”

“Greece still has a strong bearing on the Eurozoneas a whole, which will continue to affect Italy andSpain. Historically the biggest crashes seemto come in June to August, so this could be

the calm before the storm.”

ELIZABETH WALKER | ORIEL SECURITIES

CHRIS WARD | IRISH BANK RESOLUTION CORPORATION

8/2/2019 Cityam 2012-02-29


THE ITALIAN government’s borrow-ing costs fell to a six-month low yes-terday, as investors grew moreconfident the country’s economy ismoving in the right direction.

Support from the EuropeanCentral Bank’s (ECB) long-term refi-nancing operation (LTRO) has alsohelped, increasing Europe’s banks’liquidity and reducing fears thatItaly’s banks are about to collapse.

Italy sold €3.75bn (£3.18bn) of ten

year bonds at a yield of 5.5 per cent,down from 6.08 per cent in a similarauction a month ago and 200 basispoints below the dangerously highlevels seen in November.

It also auctioned €2.5bn of five year bonds at 4.19 per cent, down from5.39 per cent a month ago.

“The falling yields largely reflectgeneral improvements in Italy’s econ-omy and particularly in its fiscal posi-tion,” said Capital Economics’

Jennifer McKeown.

“The LTRO has helped matters, butin an indirect way – investors aremore confident that the banking sys-tem will not fail, making the govern-ment more stable and reducing thechance that the sector will need bail-ing out.”

Prime Minister Mario Monti wasput in government by the EU to slashspending and free up closed sectionsof the economy including the rigidlabour market. Investors haveapproved of his reforms so far.

The ECB is carrying out a secondLTRO today.

Italian debtcosts drop onnew demand

PORTUGAL passed the third review by the EU and International Monetary Fund (IMF) of its €78bn (£66bn) bailoutprogramme yesterday, and the coun-try’s finance minister said it would notneed a second rescue like Greece.

But the lenders warned thatPortugal’s economic slump will deep-en this year, and urged more reforms.

Inspectors recommended the bailout’s next tranche of €14.9bn bepaid after finding Portugal had metfiscal goals and launched reforms tomake the economy more competitive.

Portugal set toreceive nextbailout tranche

BY TIMWALLACE

EUROZONE▲

EUROZONE


ANALYSIS l Italy 10-year bond yields

Oct Nov Dec 2012 Feb

7.5

7

6.5

6

5.5

IRISH Life and Permanent said it tre- bled its loan impairment provisions to €1.4bn last year, blaming the poor stateof the Irish property market.

The bank said it now thinks houseprices fell 55 per cent from peak totrough, worse than its earlier estimateof 43 per cent.

And a “significant increase” of mort-gages in arrears have also pushed thefirm’s impairments higher.

Irish Life raisesloan hit forecastEUROZONE

Low rates contributed tocredit bubble, says Tucker

▲

▲

EASY money contributed to the hugecredit bubble of the early and mid2000s that eventually led to the finan-

cial crisis, a senior Bank of Englandofficial said last night.

Paul Tucker, the Bank’s deputy gov-ernor, also said that he and his col-leagues must stand ready to bringinterest rates back to normal levels.

“We must be alert to the need grad-ually to withdraw stimulus as and

when recovery builds,” Tucker warned. Rates can only be held attheir historic low for as long as “infla-tion expectations remain anchoredto our target of two per cent,” he said.

The current ultra-loose policycould be building up problems,

Tucker added. “We must be alive tothe possibility that the alleviation of

current macroeconomic problemscould sow the seeds, somewhere inthe financial firmament, of the nextset of imbalances.”

Referring to the expansion of cred-it and asset prices prior to the creditcrunch, Tucker cited as a possiblecause: “increasing global liquidity,transmitted through expansive cross-

border lending, kicked off by pro-longed accommodative monetary policy”. Yet he maintained that fornow, interest rates had to stay low.

ECONOMY▲

The Bank of England’s Paul Tucker warned against continually low interest rates

8/2/2019 Cityam 2012-02-29


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LAWYERS yesterday railed against theretrospective £100m tax bill handed toBarclays bank by HMRC this week, say-ing it could set a worrying precedent.

Barclays faces paying over £100m tothe Treasury after the governmentchanged the law to close a tax loop-hole. The bank was allegedly exploit-ing a rule that says profit arising froma buyback of a firm’s own debt is notsubject to corporation tax.

“The concern is if the governmentstarts to use the tactic of retrospectiverules, what’s to stop them using itagain when there’s something they might not like?” said Sam Ripon, a taxassociate at Bristows.

Although its actions were legal,Barclays and other banks have signedup to the Banking Code of Practice on Taxation, which contains a commit-ment not to engage in tax avoidance.

“Barclays may have chosen [whatthe Treasury regards as] aggressive

schemes, but we are told it did exactly what it should – it implemented thearrangements and disclosed them toHMRC,” added Ripon.

Barclays said its actions were “basedon guidance that the treatment was both legal and compliant with the taxcode”.

But the Treasury called the scheme“highly abusive” and said it was“designed to work around legislationthat has been introduced in the past to block similar attempts at tax avoid-ance”.

Lawyers slamretrospectiveBarclays tax

PART-NATIONALISED bank Lloydsreceived the most complaints amongUK financial firms in the second-half

of last year, data from the FinancialOmbudsman showed yesterday. The Ombudsman said the various

operations within Lloyds BankingGroup – including the likes of Bank of Scotland and Halifax – got 20,310 com-plaints from July to December last year.

Barclays got more than 11,500 com-plaints, MBNA Europe got 9,185 com-plaints while various operations run by Royal Bank of Scotland got morethan 6,000 complaints.

DEUTSCHE Bank has said it is talk-ing exclusively to privately held USfinancial services firm GuggenheimPartners over the sale of a big chunk of its asset management businesses.

Germany’s biggest lender declinedto give financial details but it isexpected to raise between €1.5bn(£1.27bn) and €2bn from the deal. The businesses up for grabs haveabout €400bn in assets under man-agement.

THE Eurozone’s biggest bank Santander is doubling its bet onPoland, Europe’s most resilient econ-omy, by taking over a unit of Belgianlender KBC to create a business worth about €5bn (£4.24bn).

Spain’s Santander will combineKBC’s Kredyt Bank with Bank Zachodni WBK to turn the unit it bought just last year into Poland’s

number three lender.“It’s a smart deal because

Santander gains scale and synergies with minimum capital outflow,” said Andrea Filtri, analyst at Mediobanca.

Under the deal with KBC,Zachodni will issue 6.96 of its ownshares for every 100 in Kredyt Bank, valuing the KBC unit at $1.37bn(£866m) based on current shareprices, which is about a third morethan Kredyt Bank’s value before yes-terday.

Lloyds gets themost complaints

Deutsche set for€2bn asset deal

BY JAMESWATERSON

BANKING▲

BANKING

BANKING

▲

▲


BYHARRY BANKSBANKING▲

13

ANALYSIS l Barclays PLC

p


252.5

250.0

247.5

245.0

240.0

242.5

237.5

243.9528 Feb

Ana Botin’s Santander has taken over Kredyt Bank

Santander to take controlof Kredyt Bank in Poland

8/2/2019 Cityam 2012-02-29


News14

LEADING supermarket Tesco failed toincrease sales as quickly as its rivals inthe last 12 weeks, data out yesterday showed, while leaked documentsshowed the Co-op is well behind itssales targets already this year.

Tesco’s sales rose 2.5 per cent in the12-week period ending 19 February,compared with the same period last year, lagging behind a 4.7 per centrise at Asda, 5.3 per cent forSainsbury’s and 3.8 per cent atMorrisons.

As a result of this relatively slow sales growth, Tesco’s market share fellfrom 30.3 per cent a year ago to 29.7per cent now.

Rival Asda held steady at 17.5 percent, while Sainsbury’s shuffled upfrom 16.5 per cent to 16.6 per cent.

Waitrose’s market share climbedfrom 4.4 to 4.5 per cent, Iceland’sgrew from two to 2.1 per cent and Aldi’s jumped from 3.1 to 3.6 per cent.

Part of the reason for Tesco’s rela-tive decline over the last 12 weeks is,it believes, heavy couponing by rivalsaround the Christmas period, while ithopes to have made up ground again with its own promotions in the lastmonth.

Meanwhile Co-op is thought to bestruggling to integrate the acquiredSomerfield stores into its wider busi-ness.

Its market share fell from 6.7 to 6.3per cent, and documents seen by TheIndependent revealed the supermar-ket’s food sales are already £15.55bn behind budget so far this year.

The leaked papers also showed thecompany struggling with hundredsof customer complaints each week.

Tesco keeps on

losing share tocut price rivalsBY TIMWALLACE

RETAIL▲

TESCO IS LOSING MARKET SHARE TO RIVALS (MARKET SHARE IN PER CENT)

12 wks to 12 wks to % change19 Feb 2012 20 Feb 2011 in sales

1 Tesco 29.7 30.3 2.5

2 Asda* 17.5 17.5 4.7

3 Sainsbury’s 16.6 16.5 5.3

4 Morrisons 12.2 12.3 3.8

5 The Co-operative** 6.3 6.7 -1.3

6 Somerfield** 0.0 0.1 -84.4

7 Waitrose 4.5 4.4 7.6

8 Aldi 3.6 3.1 23.5

9 Lidl 2.6 2.4 10.5

10 Iceland 2.1 2.0 10.9

* Asda completed its purchase of Netto UK last year and some stores were sold to win approval from competition regulators.

** Somerfield was bought by the Co-op in 2008 and some stores were sold to win approval from competition regulators.

8/2/2019 Cityam 2012-02-29


15News

WHITBREAD has revealed a slow-down in fourth quarter sales atPremier Inn, the budget hotel chain,as consumers remained under pres-sure and demand for hotel roomsoutside of the capital softened.

The UK’s largest hotel and restau-rant owner said like-for-like sales atPremier Inn fell 0.9 per cent in the 11

weeks to 16 February, compared with a 2.6 per cent rise in the thirdquarter.

Chief executive Andrew Harrisonsaid consumers “are still underheavy financial pressure, withfalling disposable incomes”.

Harrison said the group was out-performing the market in theregions where revenue per room(revpar) – an industry measure – isestimated to have fallen aroundthree per cent in the quarter.

Sales at Costa Coffee, however, jumped by 6.2 per cent, from 3.8 per

cent in the previous quarter. Overall,the company, which also owns theBeefeater and Brewers Fayre pubrestaurant chains, said sales rose 1.8per cent, down from 2.4 per cent inthe third quarter.

Harrison said that with 10,000rooms in its committed pipeline thecompany was on track to have 65,000Premier Inn rooms by 2016, raisingits market share to 10 per cent f romseven per cent. The group also plansto double global sales at Costa by 2015-16.

Whitbread

sees its hotel

demand slowBYKASMIRA JEFFORD

LEISURE▲

ANALYSIS l Whitbread PLC

p


1,720

1,710

1,700

1,690

1,670

1,680

1,709.0028 Feb

HOPES that the economy is begin-ning to recover were boosted by upbeat retail sales figures published

yesterday, although shoppremained cautious of splashing outon big-ticket items.

The Confederation of BritisIndustry’s (CBI) distributive tradesstory showed 34 per cent of retailersreported increasing sales volumes inFebruary while 36 per cent suffered adecline, a sharp improvement on

January’s data. The survey follows fourth-quarter

GDP data which showed the firstquarterly rise in consumerspending – which accounts for over60 per cent of all expenditure inBritain – in 18 months, offering theeconomy a base to bounce back froma dip in the last three months of 2011.

“Consumers have more life inthem than previously thought andhave been quite sprightly so far in2012,” IHS Global Insight economistHoward Archer said on the CBI poll.

Food retailers reported theirstrongest sales growth since last May,

but sales of durable household goodscontinued to fall sharply and cloth-ing sales declined at their fastest pacein almost three years.

Retail figuressurprise fuelsrecovery hopes

RETAIL▲

ANALYST VIEWS: WHAT DID YOU MAKE OFWHITBREAD’S RESULTS? Interviews by Kasmira Jefford

“

JAMIE ROLLO | MORGAN STANLEY

Whitbread has reported fourth quarter like-for-like sales growth of 1.8 percent, in line with our expectations but with a slightly different mix...With a strongerperformance at Costa balancing the slightly weaker performance at Premier Inn wedo not expect to see changes to consensus for 2012.

”

“

WYN ELLIS | NUMIS

Whitbread’s update was mixed with Costa trading very strongly, PremierInn slowing further, and some recovery at Pub Restaurants. The shares have been

solid performers over the last quarter and may be subject to some near term profittaking, but we believe that the long term fundamentals remain attractive.

”

“

SIMON FRENCH | PANMURE GORDON

Whitbread expects to report full-year results in line with expectationsof around £315m profit before tax but we think consensus expectations of £337mfor the full year ending in 2013 will come under downward pressure and wereduce our forecast by five per cent to £329m profit before tax.

”

DAVID Adams will step down fromhis position as chairman of camera-maker Jessops this week.

Martyn Everett will replace Adamsfrom 1 March, joining from Chorion,the media rights firm that is home toNoddy and the Mr Men.

Jessops welcomed Everett’s “wealthof experience in change management

and delivering stakeholder value” in astatement yesterday.

As an active chairman Evans playedan important role in Jessops’ crucialrestructuring in 2009, and appointedcurrent chief executive Trevor Moore.

Yesterday Moore thanked Adams“for his significant contribution tothe business”. “He has provided wisecounsel ... and is highly regardedacross our business,” Moore said.

Camera-maker Jessops’chairman calls it a dayRETAIL

▲

PRE-TAX profits more than doubled

for MoneySupermarket in 2011 as theprice comparison website continuedto attract cash-strapped consumers,reaching 140m visitors last year.

The FTSE 250 company grew rev-enues 22 per cent to £181m, pocket-ing £24.3m before tax compared to£11m last year. It was boosted by strong performances in its money

and insurance sectors, whichincreased by a fifth to £52.6m and£102.7m respectively.

But takings from the website’stravel arm were down four per

cent to £13.3m.M o n e y S u p e r m a r k e trevamped its advertising last

year, boosting marketing invest-ment by 24 per cent to £77.5m.

The company has upped itsadvertising spend on TV andprint a further 20 per centso far this year.

Chief executive Peter Plumb (pic-tured) was pleased with

MoneySupermarket ’s“powerful performance”,announcing the compa-

ny saved customers morethan £900m last year, upfrom £690m in 2010, and

will continue to invest inits mobile services.

The company more thandoubled its dividend to8.46p. Shares jumped six

per cent to £1.29.

Profits up for money websiteBY LAUREN DAVIDSON

CONSUMER▲

Whitbread chief exec Andrew Harrison said consumers are still being squeezed

8/2/2019 Cityam 2012-02-29


HALMA RINGS THE CHANGES ANDHIRES BROKERS WITH PAST LINKS

THEY say that a City broker's rela-tionship with a client is usually asignificant one and so it has provedat Halma, the safety, health and sen-sor technology group, which yester-day hired Investec and Credit Suisseas joint brokers. Out goes JPMorgan Cazenove.

Both Investec and Credit Suisse benefit from relationships made by two of their broking stars whilethey were plying their trade for dif-

ferent employers.Investec's Chris Baird used to

broke the £1.5bn-valued Halma when he was at Dresdner Kleinwortand Credit Suisse's John Hannaforddid the same when he was brokingat HSBC.

Investec's case is bolstered by thepresence of sector analyst ChrisDyett, a close watcher of Halma, andMichael Blogg who has joined thefirm from Arbuthnot.

The new mandate has gone down well at Investec, which recently merged with Evolution, and thefirm’s Keith Anderson wouldn't besurprised if more followed. “There'sa lot of pitching going on,” he said

yesterday. Last month Investec wonthe brokership for Ricardo.

The jilted team at JP MorganCazenove, which still retains moreFTSE 100 clients than any otherhouse, declined to comment.

Digby Flower and Andrew Parker join Cushman & Wakefield, leasing agent to Heron tower

The Capitalist16 CITYA.M. 29 FEBRUARY 2012

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CUSHMAN POACHES CBRE DUO

ANOTHER week, another staffingcoup in the property world – this time

costing CBRE two star agency direc-tors, Digby Flower and Andrew Parker.

After a 17-year stint at CBRE, wherehe was a member of the CentralLondon Board, Flower told City A.M it

was time for a change and looks for-

ward “to bringing some firepower” toCushman & Wakefield’s London busi-

ness. But not before a lengthy garden-ing leave, and hopefully a spot of skiing. He will join as a partner andhead of London markets while

Andrew Parker joins the firm as apartner and head of its City agency.

MORE NEWS

ONLINE

www.cityam.com

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BUILDING materials group CRH said yesterday that full-year profits camein ahead of forecasts for its debutresults as a FTSE 100 company.

CRH said the outlook for 2012 ispositive despite rising energy costsand a weaker economic picture inEurope.

The Irish company is strong in theUS, where it is the major producer of asphalt for highways.

CRH, which moved its primary list-ing to London from Dublin at theend of last year, posted a 33 per centrise in pre-tax profits to €711m(£602m) in 2011.

The relatively warm weather at theend of the year contributed as build-ing projects were not hampered by poor conditions.

Market expectations had been for apre-tax profit of between €588.1mand €733m. Earnings before interest,tax, depreciation and amortisation

(Ebitda) came in at €1.65bn, ahead of its forecast in November of approxi-mately €1.6bn.

“The final weeks of the year gaveus a good strong finish and allowedus to be a little bit ahead of the guid-ance,” said financial officer MaeveCarton.

The group, which reported a fiveper cent rise in sales, said a recover-ing private construction market inthe US will help offset rising energy costs that are driving costs 10-15 percent higher.

CRH bullishas its profitsbeat forecast

SHARES in Apple closed at a recordhigh of $535.41 last night, valuing

the company in excess of $500bn. The tech giant, already the world’s biggest listed firm after sur-passing Exxon, becomes one of justsix public companies worldwide toever pass the $500bn equity value barrier, with its market cap set tohit the same level today based onafter-hours trading last night.

The firm is expected to revealdetails of the latest iPad next week.

CAR and plane parts maker GKN said yesterday a strong performance fromits cars business was behind a 15 percent rise in 2011 profit, as sales of lux-ury cars like Audi and BMW rose anddemand in China remained strong.

The company reported pre-tax prof-its of £417m on revenue 13 per centhigher at £6.11bn.

“Demand for premium autosremains strong and we feel that will be the case in 2012 -- China is the

biggest driver of that but North America has come back strongly too,”

GKN chief executive Nigel Stein said.“Global car production should rise

about five per cent this year and weexpect to deliver more growth on the back of that.”

GKN’s auto unit makes productssuch as driveshafts, chassis, axles andlighter auto components for a number of brands.

Revenue at the automotive busi-ness, which makes up almost two-thirds of group sales, rose 10 per centto £2.68bn in 2011.

Apple reaches$500bn value

GKN boosted as luxurycar market gets into gear

BY JOHN DUNNE

CONSTRUCTION▲

TECHNOLOGY▲


BYHARRY BANKS

MANUFACTURING▲

17

ANALYSIS l CRH plc

p

23 Feb 27 Feb 28 Feb24 Feb22 Feb

1,350

1,370

1,380

1,390

1,360

1,340

1,342.0028 Feb

THE JUSTICE Department is conduct-

ing a criminal probe into whether the world’s biggest banks manipulated aglobal benchmark rate, according to aperson familiar with the situation.

While the Justice Department’sinquiry into how the London inter- bank offered rate, or Libor, is set had been known, the criminal aspect of the probe was not.

The investigations are examining whether traders at the banks tried toinfluence whether the rate went upor down.

Criminal probeinto the LiborENFORCEMENT▲

GKN has benefitted from strong demand for high-end vehicles in China

8/2/2019 Cityam 2012-02-29


OUTSOURCING firm Serco will targetfurther expansion in fast-growingmarkets in Australasia and the MiddleEast in 2012, after the regions helped itride out tougher times in its core UK and US markets.

FTSE 100-listed Serco, which runsservices from the Docklands LightRailway to prisons and air traffic con-trol centres around the world, postedadjusted pre-tax profit of £262.2m for2011, ahead of an average forecast of £259.6m by eight analysts.

Revenues rose 7.4 per cent to£4.64bn, helped in part by organicgrowth of 37 per cent across Africa,the Middle East, Asia and Australia, where it won a number of deals in thedefence, transport and health sectors.

“For us this has probably been ourtoughest year in our traditional mar-kets of the UK, which was flat, and theUS, which declined, in a first for us. The story for us has really been aboutthe growth in the developingeconomies,” Serco chief executiveChristopher Hyman said.

Serco said its order book, which isthe value of future revenues based onsigned contracts, stood at almost£18bn at the end of the year, givingrevenue visibility of 92 per cent for2012, 80 per cent for 2013 and 70 percent for 2014.

Serco has begun 2012 with UK defence contract wins worth over

£210m, including a deal to providetraining and support to the army priorto deployment on operations.

Serco, which employs over 100,000people in 30 countries, raised its full- year dividend by 14.3 per cent to 8.4p.

Rival outsourcer Capita, whichpipped Serco to a £500m deal to runBritain’s army recruitment pro-gramme, posted a six per cent rise in2011 profit last week, underpinned by growth from acquisitions.

DUTCH cable-television company Ziggo is expected to file for its IPOtoday or later this week and could belooking to raise up to €800m (£677.4m)from the sale of 15 to 20 per cent of the company.

Some think the float could makemore than €1bn, making it the biggestIPO in Western Europe since Spanish’sBankia floated for €3.27bn in July.

A Ziggo spokesperson said: “No deci-sion has been made on an IPO, but thecompany will make sure it is preparedshould that decision be made.”

Expected to price on 14 March, theIPO is being led by JP Morgan andMorgan Stanley, with Deutsche Bank and UBS as joint bookrunners.

MEDIA and communications firmUBM beat market expectations with a13 per cent rise in full-year earningsper share to 56.8p after an “outstand-ing” performance from its events divi-sion in the final quarter.

The group posted adjusted pre-taxprofit of £177.4m on revenues of £972.3m, an increase of nine per cent.

Analysts predicted £161.6m and£968m respectively, and 54p per share.

UBM also said that the new year hadstarted well. It expects underlyinggrowth of between four and five percent in 2012.

The group raised its full-year divi-dend to a record 26.3p, up from 25p.

Shares closed down 2.3 per cent.

Ziggo set forexpected IPOfiling this week

UBM looks to agood 2012 asearnings jump

THE ever-growing string of patent law-suits between technology firms has branched out to social media compa-nies as Yahoo and Facebook scrap overintellectual property.

Waning search site Yahoo has assert-ed claims on a variety of mechanismsused by Facebook, including the way itoperates its adverts, privacy controls,news feed and messaging service.

The list features between 10 and 20patents which Yahoo claims it owns.

Yahoo has not disclosed how muchit expects Facebook to fork out inlicensing fees, but has indicated it would be prepared to take the socialnetwork to court.

“Yahoo has a responsibility to itsshareholders, employees and otherstakeholders to protect its intellectualproperty,” the company said.

These claims come just weeks afterFacebook announced it is looking toraise $5bn from a flotation later this

year – although some analysts think the firm could aim higher, with sec-

ondary trading valuing the company at more than $100bn.

Technology giants, particularly inthe mobile phone sector, are in anongoing spat over patents.

Apple, Google, Samsung andMotorola – in various combinations –are embroiled in a string of litigations.

Meanwhile, Facebook announced itcould team up directly with mobileoperators on payments, restoringsome of the revenue and influence

they have lost in recent years to mar-ket hoggers Apple and Google.

Yahoo battles for licensing fees as itlaunches patent war with Facebook

TECHNOLOGY▲

DIGITAL sports rights groupPerform yesterday revealed its first

annual results since floating on theLondon Stock Exchange last April,showing strong revenue growthdespite a steep drop in pre-tax prof-its.

Revenues rose 53 per cent to£103.2m leading to a £14.7m netprofit excluding one-off costs, up 45per cent on 2010.

But unadjusted profits more thanhalved to £3.7m, dragged down by £3.2m of flotation costs, £4.8m

from its share option plan and£1.8m relating to the £25m it spenton acquisitions, including the £18mpurchase of Goal.com.

Perform, which buys sports

media rights and builds productsaround them for bookmakers, newsproviders and consumers, increasedits total video and data subscribers by 50 per cent to 375,000 and multi-plied the number of on-demand video streams viewed on its ePlayer by 240 per cent to 3,606.

The group’s biggest unit is Watch&Bet, its streaming service toonline bookies, which streamed11,376 events – a growth of 40 per

cent – as it tripled its number of licensees.

Perform also builds internet andmobile platforms for companiesincluding Chelsea FC and al-Jazeera

Sport.Co-chief executive Oliver Slippersaid: “The opportunities for long-term sustainable growth are signifi-cant.”

He added that Perform hasalready contracted revenues inexcess of £90m for the year ahead.

Perform floated in April at £2.60a share, valuing the company justshy of £600m. Shares closed yester-day at £2.79, down 1.2 per cent.

Costs dent Perform’s resultsBY LAUREN DAVIDSON

MEDIA▲

Serco profits rise as

Asia drives growthBYHARRY BANKS

SUPPORT SERVICES▲

▲


Perform, which built Chelsea FC’s website, grew revenues 53 per cent Picture: GETTY

ANALYSIS l Serco

p


570

565

560

550

555

545

540

548.0028 Feb

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MORE NEWSONLINE

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Serco runs and maintains the Barclays Bike Hire scheme Picture: GETTY

TELECOMS▲

MEDIA

8/2/2019 Cityam 2012-02-29



ICAP, the world’s largest interdealer broker, has purchased European biofu-els dealer Sun Commodities for anundisclosed sum.

Geneva-based Sun was establishedin 2008 to capitalise on the boomingmarket – both physical and derivative– for alternative fuels such as

bioethanol, biodiesel and vegetableoils produced from rape, soya andpalm.

The firm’s existing staff, includingmanaging director Laurent Gonelle,

will join the parent company. The acquisition marks an expansion

for ICAP Energy into European alterna-

tive fuels, as it looks to increase broking of physical commodities.

Although no price was placed onthe deal, at the end of 2010 Sun hadgross assets of approximately $803,000(£506,000).

The deal is ICAP’s second acquisitionin the last week after the purchase of Singaporean tanker firm IslandShipbrokers. The firm is attempting tofill gaps in its portfolio and provide anincreasingly global service.

Paul Newman, managing director of ICAP Energy in London, said: “Theincreased use of biofuels and persist-ently high prices for traditional fuels isdriving renewables centre stage. Weare very pleased to welcome the SunCommodities team to ICAP, and their

established strengths in this spe-cialised area will allow us to bring new and important services to our cus-tomers.”

Shares in ICAP were up slightly at388.1p yesterday.

Broker ICAP snapsup biofuels dealerBY JAMESWATERSON

CAPITAL MARKETS▲

Facilities

Management A special reportdistributed withinCity AM tomorrow!

Crisis ManagementHow outsourcing canoffer peace of mind

Working environment The impact it has onstaff and performance

Customer requirementsKnow the customer’swants and needs

ANINDEPENDENTSUPPLEMENTBY MEDIAPLANET

‘Now is thetime to shift themind-set fromcost-cutting toexpansion andinvestment’

MikeDanielsof BarclaysCorporatediscusses what’simportantfor2012

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providers are supporting UK businesses inunstable economic conditions

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No.2/Mar.’12

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Mediaplanet is the leading Internationalpublisher of high-quality and in-depth

analysis on topical industry and marketissues, in print, online and broadcast

LOWER bad debt charges boosted full- year profits at sub-prime lenderProvident Financial, and the compa-ny said yesterday that it was confi-dent of further growth in 2012,lifting its shares to their high-est level since February 2001.

Provident Financial, which lends to people whocannot get credit frommainstream banks and

whose roots date back to1880, reported pre-tax prof-its for 2011 of £162m, up12.2 per cent from the previ-

ous year.Its earnings

were lifted by a reductionin impair-

ment charges for loans that have hadto be written off, and the profitscame in ahead of the £160m averageconsensus forecast.

The company proposed a final divi-dend of 42.3p, making a total divi-dend for the year of 69p, up 8.7 per

cent from last year.It also renewed £382.5m

worth of funding facilities.“We’ve enjoyed very

strong growth eventhough we’ve been pretty cautious about whom weissue credit to,” chief executive Peter Crook

said.“The group is in a

position to makefurther good

progress in2012,” headded.

Provident Financialboosted by lower

bad debt chargesBYHARRY BANKS

FINANCIAL SERVICES▲

NEWS | IN BRIEF

Elementis falls as profits growShares in Elementis fell by almost five percent yesterday, making it one of thebiggest losers on the London StockExchange, after the speciality chemicalssupplier reported 2011 results below ana-lyst expectations. Despite raising its full-year dividend as adjusted pre-tax profit

rose by over a third, shares dipped byseven per cent, before recovering slightlyin later trading. Annual adjusted pre-taxprofit rose to $134.5m (£85m) from$96m the previous year. Revenue for theyear rose nine per cent to $760.5m.

SDL cheered by North AmericaSDL yesterday posted a higher full-yearprofit on strong demand for its translationservices in North America and its growingweb content management offering.The company –which provides translationservices for multinationals includingHewlett-Packard, Bosch and Microsoft –said its sales pipeline remained robust, andraised its final dividend by 5.5 per cent.SDL's full-year pre-tax profit rose to£33.8m from £28.8m a year ago.Adjusted profit was £39.7m.

Quieter markets hit WorldspreadsSpreadbetting group Worldspreads has

said it now expects a loss in the year to 31March, after “benign” market conditionsand low volatility affected revenues. Thecompany also said its finance chief NiallO'Kelly will leave after eight years.

SONY ASKS BRUSSELS FOR EMI BID APPROVAL

A CONSORTIUM led by Sony has asked Brussels to give the green light to its EMI takeover bid, which would see the record label’s music publishing business (owner of therights to Beyonce’s music) bought by the group for $2.2bn (£1.38bn). The EuropeanCommission has until 2 April to respond. Indie music representative Impala has urgedthe EC to block this deal, claiming it will ruin market competition. Picture: GETTY

MORE NEWSONLINE

www.cityam.com

ANALYSIS l ICAP

p


397.50

395.00

390.00

392.50

387.50

385.00

388.1028 Feb

Should UK forces intervene in Syria? AFTER Syria’s United Nations envoy stormed out of an emergency meet-ing yesterday, leading the US todenounce President Assad’s regimeas “delusional”, we’re asking ourCity panel what they think of esca-lating violence in the country.

Fayassal al-Hamwi, Syria’s ambas-sador in Geneva, accused membersof the UN Human Rights Council of promoting terrorism and prolong-

ing the country’s crisis by organis-

ing the emergency debate yesterday.Given the rising death toll in

Syria – which the UN claims hasreached 7,500 – do you think theinternational agency would be justi-fied in taking military actionagainst the Syrian government, andshould the UK and allies beinvolved?

We’re also interested in whether you think unrest in Syria will lead to

wider disruption in the region, and

whether it could cause problems forthe UK’s energy supply.

Run in association withPoliticsHome.com, the Voice of theCity is our weekly poll of businessand finance professionals acrossLondon. The results of the poll willrun in Monday’s edition of thepaper.

To answer these questions andmore, you can apply to join the

panel at cityam.com/panel.

PoliticsHome.comPolitic

sHome.com

In partnership with

Apply to join today atwww.cityam.com/panel

Provident Financialis led by Peter Crook

8/2/2019 Cityam 2012-02-29


BOMBARDIER’S hopes have beenraised over lucrative work to buildtrains for London’s Crossrail project,after the government said the suppli-er must fulfil the contract in a way that benefits Britain.

The Canadian firm, which has a fac-tory in Derby, will compete withHitachi, Siemens and Spanish groupCAF for the contract to supply around60 new trains and a London depot.

Transport secretary JustineGreening said the tender process“includes requirements for responsi- ble procurement” that ask bidders toset out how they will offer trainingand jobs in the UK, as well as requir-ing them to “establish an appropriatelocal presence to manage the delivery of the contract”.

Bidders must also set out whereeach element of the contract will besourced.

However, Greening said the “madein Britain” requirements would not bea factor in deciding who wins the con-tract, but rather a rule that the even-tual winner must follow.

The move comes after Germany’sSiemens won a £1.6bn contract to sup-

ply Thameslink trains last summer,prompting Bombardier, which missedout, to announce some 1,400 job cutsat its Derby plant.

Trade union Unite gave a cautious welcome yesterday. “At first sight, theprocurement criteria for the Crossrailcontract looks like an improvementon the Thameslink fiasco. We hopethat this is a strong indication, that inthis instance, the government haslearnt lessons,” said assistant generalsecretary Diane Holland.

“We expect a fair and transparent bidding process. We are not asking forfavours, we are asking for fairness forBritish based manufacturing and thesupply chain.”

Labour’s shadow transport secre-tary Maria Eagle echoed the senti-ment, saying the focus on British jobsis “a huge victory for common sense”.

The four companies will submittenders during the summer, when thegovernment will narrow down thecompetition to two bidders. A finaldecision expected in spring 2014, a year later than first planned.

The new 200m-long trains willcarry up to 1,500 passengers each when the route linking towns fromMaidenhead to Shenwood beginsoperating in 2018.

STRUGGLING Dutch satellite navi-gation systems maker TomTomsaid sales and profit will continueto fall this year as more consumersopt for free software on smart-phones, hitting its shares.

“The visibility in our core PND[personal navigation device] mar-kets is limited as there remains

great uncertainty about the rate of decline of customer demand for

the category,” chief executiveHarold Goddijn said yesterday.

TomTom, which posted quarterly results that met forecasts, said itexpected 2012 revenue of around €1.1bn (£932m) and adjusted earn-ings per share of €0.35, compared with €1.27bn and €0.55 respectively in 2011.

Sales for 2012 had been forecastat €1.2bn. Fourth-quarter net profitfell 76 per cent to €12m, on sales

down 31 per cent to €357m. TomTom has struggled to over-

come slumping demand for PNDsused by car and truck drivers, assmartphones become more preva-lent. PND, its biggest division and which makes up around two thirdsof group sales, saw quarterly salesfall 40 per cent.

TomTom had issued two profit warnings in 2011, in April and June, and announced cost cuts anda strategy shift in October.

It’s shares closed down 15 per

cent yesterday at €3.75, valuing thecompany at around €957m.

Satnav maker TomTom warns on 2012as smartphones dominate its market

Crossrail train

work has tobenefit BritsBYMARION DAKERS

TRANSPORT▲

BYHARRY BANKS

TECHNOLOGY▲


Bombardier’s Derby plant could benefit from Crossrail’s bidding rules Picture: GETTY

NEWS | IN BRIEF

Ofwat head to work from LondonWater regulator Ofwat will let its nextchief executive work from London afterit failed to find a replacement for cur-rent boss Philip Fletcher who was will-ing to work from the company’sBirmingham base. Fletcher has alreadystayed at the company longer thanplanned after the initial search for hissuccessor was abandoned last year dueto a lack of suitable candidates.

AZ Electronics revenues riseSpeciality chemical materials maker AZElectronics said yesterday its annualrevenues rose to $791.8m (£498.7m)from $682.1m the previous year, whilea loss of $90.6m in 2010 became a

profit of $125.6m this year. Earningsbefore interest, tax, depreciation and

amortisation leapt 16 per cent to$261m. The firm paid a final dividendof 8.5 cents per share, making a totaldividend payment of 12.3 cents pershare.

BP sells Kansas fields for $1.2bnBP has sold its natural gas assets inKansas to Linn Energy for $1.2bn as partof its divestment plans. The assets’ cur-rent production is about 110m cubic feetequivalent per day. BP is selling off assets to raise $45bn to pay costs linkedto the 2010 Gulf of Mexico oil spill. Theoil company is currently in settelementtalks with tens of thousands of business-es and individuals affected by the disas-ter, delaying a planned trial by a week.

The firm could settle a large numbers of cases this week, a source said.

IRISH airline Aer Lingus warned yes-terday that its profit would fall this year due to higher fuel costs, andthat a growing pension deficit hadthe potential to spark industrialaction that would hurt the company.

The airline beat analyst expecta-tions by posting an operating profitof €49.1m (£41.6m) in the year toDecember, compared to analyst fore-casts of €40.7m.

But it said its fuel bill wouldincrease by €60m this year if oilprices remained at current levels,representing a rise of 20 per cent. That would wipe out the benefit of expected low single-digit growth inpassenger numbers and yield, thekeenly watched measure showingaverage revenue gained per mile perpassenger.

“We think we will make a decentprofit but it will be a little bit lowerthan this year,” finance chief Andrew McFarland said.

Davy analyst Stephen Furlong said:“The company’s underlying [perfor-mance] is good, but they can’t pay forfuel basically.”

“This is going to be the story in the[airline] network earnings season.Revenue is good, but it doesn’t pay for fuel.”

Aer Lingus is in talks with unionsover how to fill a hole in a staff pen-sion scheme. The estimated deficitincreased to €700m by the end of the year from an earlier estimate of €400m, it said in a statement.

Fuel bill set toknock profits

at Aer LingusTRANSPORT

▲

Growing confidence should drive spending

TODAY I can report some positivenews from the February figuresof YouGov’s HouseholdEconomic Activity Tracker

(HEAT). Consumer confidence contin-ues to rise with the overall HEAT Index(a composite of eight current and forward looking metrics) moving from 92

to 93. This may be a small increase, butthe real story is that the rise that wesaw in January (up from 88 inDecember) has been sustained and isnow five points higher than inDecember – as well as eight pointshigher than a year ago.

As we dig deeper into the eightmeasures, we see a very clear pictureemerging – consumers’ personal situa-tions have not improved (the house-hold financial situation has dropped

from 80 to 79, and job security from 88to 85) but they are seeing a bigincrease in business activity at work and have greater confidence in the

future than for many months.Business activity, which fell in theautumn as fears about the euro-crisisdeepened, rose from 101 to 105 and isnow nearly at the levels of October2011. Despite the slight decline inhousehold financial situations, expec-tations for the same in 12 months areat the highest level since August 2010.

So the momentum is definitely pos-itive, but the next few months will becrucial in resolving the tension

between slightly worsening situationsand improving confidence. The hope isthat the latter will win out to boost

spending and lead to a virtuous circleof confidence – driving activity that will drive further confidence.

BRANDINDEX

STEPHAN SHAKESPEARE

ANALYSIS l Economic Activity Tracker Index

Feb2011

May2011

Aug2011

Nov2011

Feb2012

96

94

92

90

88

86

84

80

82

78

ANALYSIS l Business Activity Index

Feb2011

May2011

Aug2011

Nov2011

Feb2012

110

105

100

95

90

85

80

8/2/2019 Cityam 2012-02-29


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WEAK economic growth meansunemployment will keep risinginto 2013 – and an overhaul of jobsregulation will do little to help,according to the head of a leadingemployment industry body.

Joblessness will rise from 2.67mcurrently to almost 3m, CharteredInstitute of Personnel andDevelopment (CIPD) boss JohnPhilpott will say in a speech thisevening, although a modest bout of economic growth would seeemployment stabilise at roughly itscurrent level.

Despite predicting a rise inunemployment, Philpott believesprivate sector employers are in

robust health, and labour marketreforms are unnecessary.

“The buoyancy of private sector job growth following the recessionhas been masked by a sharp fall inpublic sector employment com-

bined with a 600,000 increase in theUK labour supply,” the CIPD said.

“Even with the public sector jobcuts, only 40 per cent of the net risein unemployment is accounted for

by a fall in the number of people in work – the bulk is accounted for by the increased labour supply.”

The problem is a lack of demandin the economy, Philpott believes –reforms to make it easier to hireand fire workers would simply “turn the clock back on employ-ment rights”, he claims.

He will also argue that the

400,000 rise in numbers unem-ployed for more than one year is “amuch better outcome than follow-ing previous recessions”.

“In the early 1990s when unem-ployment was last at a similar levelto today, around 1.2m were long-term unemployed,” compared with860,000 now.

Joblessness to near3m, warns industryBY TIMWALLACE

UK ECONOMY▲

US MANUFACTURING orders were weak and house prices kept tum- bling last month, data out yester-day showed – though consumerconfidence did rise in February.

Durable goods orders fell fourper cent in January, theCommerce Department said yes-terday – the largest fall since

January 2009 when the country was mired in recession.

The orders rose strongly in

November and December, and January’s fall exceeded the one

per cent drop forecast by econo-mists.

Meanwhile house prices fellfour per cent on the year toDecember across the 20 major

American cities monitored by theS&P / Case Shiller index – thelargest fall since July 2011.

“We are still looking at foreclo-sure issues, distressed propertiesand low absolute levels of activi-ty,” said economist SeanIncremona from 4Cast.

“It is really a tough market for

these prices to make any progress.”

However, consumer confidenceincreased in February accordingto the Conference Board, whoreported a rise in their index to70.8 from 61.5 in January.

The rise still keeps the index in weak territory – 13.3 per cent of consumers described businessconditions as “good” while 31.2per cent said they are “bad.”

In terms of employment, 6.6 percent described jobs as “plentiful,”up from 6.2 per cent a month ago,

while the number calling jobs

“hard to get” fell from 43.3 percent to 38.7 per cent.

US economic recovery looks weakas manufacturing orders take a hitUS ECONOMY▲

CONFIDENCE in the UK remained at very low levels this month, accordingto a survey published today.

The GfK NOP index showed con-sumers feel slightly less negativeabout their financial situation overthe past year, but are still worriedabout the general economic situationand are more concerned about mak-ing large purchases.

The overall index held steady atminus 29 on the month – one pointlower than February 2011.

GfK’s managing director Nick Moon believes the consistent readings

are a good sign for the future.“February’s figures suggest this

current increase is built on sturdierfoundations than the short-termspike we saw last year, where the gain

was wiped out over the following few months,” he said.

Reasons for cautious optimism arefound in the detail of the index,Moon added. “While the climate formajor purchases fell following the

January sales, this has been offset by an improvement in consumer senti-ment about the state of the economy and how people feel about theirfinances over the coming year.”

Consumers remaincautious but show

signs for optimismBY TIMWALLACE

UK ECONOMY▲

HOUSE prices stabilised in January,the Land Registry said yesterday, as themarket in London and the south east

continued to rise much more strongly than the rest of England and Wales.

Prices nationwide rose 1.1 per centin the month, but remain down oneper cent compared with January 2011.

London’s prices were up 2.5 per cent in January and 2.9 per cent on the year.

Every other region saw a decline inprice compared with January 2011 – atrend analysts say is set to continue.

“In the long-term, house price rises

like January’s are not sustainable,”said Tracy Kellett from buying agentBDI Home Finders. “They are beingpropped up by an extreme lack of stock and low interest rates.”

House prices stabilised inJanuary on falling supply

London’s house prices rose particularly strongly Picture: GETTY

BY TIMWALLACE

HOUSING▲

AS the deadline for this year’s ISA allowance approaches on 5 April,research claims that just half of Britons will contribute to the tax-freeschemes, with the UK’s total ISA sav-ings falling £182bn short of the com-

bined allowance for the year.Mainly citing financial restraints

such as paying off credit card bills,those who do plan to put money intoan ISA will put away an average of £2,784 – just over half the annualallowance of £5,340.

According to the study by pricecomparison website uSwitch.com, 29per cent of people plan to contributeless than £1,000, while a quarter willtake full advantage of their 2012allowance.

But those who do plan to save are becoming increasingly willing to cut

back on other spending in order tosave cash, with 16 per cent sayingthey would sacrifice a holiday to pay into an ISA, while 22 per cent wouldcut back on daily luxuries.

Savers are notusing full ISAallowances

PERSONAL FINANCE▲

ANALYSIS l Consumer Confidence

Index Score

Feb2011

Aug2011

May2011

Feb2012

Nov2012

0

-5

-10

-15

-20

-30

-35

-40

-25

ANALYSIS l Unemployment rate

%

Oct-Dec2009

Oct-Dec2010

Oct-Dec2011

8.5

8.0

7.5

8/2/2019 Cityam 2012-02-29


PearsonThe educational publisher has madetwo senior non-executive appoint-ments, hiring Tamara Minick-Scokalo

as president of Pearson Europe, MiddleEast, Africa and the Caribbean, andBhavneet Singh will be joining Pearsonas president, Global English. Minick-

Scokalo joins from Trax, a privatelyfunded technology business, where sheis the chief executive, and Singh joinsfrom Viacom International MediaNetworks where he was managingdirector and executive vice president of emerging markets.

Barclays WealthThe global wealth manager hasappointed Philippe Hofer as managingdirector and market head for AfricaOffshore within International PrivateBank, Europe Middle East and Africa(IPB EMEA). Philippe joins from UBSwhere he has worked for 23 years,including as market head for Africaand Turkey.

ShellThe energy giant has hired SumanBery as chief economist from his roleat the International Growth Centre,where he was most recently residentcountry director of the India Central

programme. Suman also worked atthe World Bank from 1972-2000 in arange of functions connected witheconomic research and country policy.

Quindell PortfolioThe brand extension company hasmade two appointments to its strate-gy and integration advisory boardthrough a partnership with technolo-gy and consultancy firm 360 group.

The company has appointed 360chairman and chief executive PaulStanley and board member MarkJones to its advisory board. Jones haspreviously held senior managementand consultancy roles at Natwest,Abbey, Royal Bank of Scotland, Direct

Line, while Stanley has significantexperience in the insurance industry,working with groups including RoyalInsurance and Direct Line.

Allenby Capital LimitedThe provider of corporate finance andbroking services to smaller companieshas hired Mark Connelly, Nick Harrissand Jeremy Porter as directors in itscorporate finance team.

CITY MOVES | WHO’S SWITCHING JOBS Edited by Elizabeth Fournier

+44 (0)20 7092 0053morganmckinley.com

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

in association with

Dow closes above13,000 milestone

THE DOW closed above 13,000 forthe first time since May 2008 yes-terday and the Standard & Poor’s500 also hit a milestone, as buoy-

ant US consumer confidence data anda sharp drop in oil prices nudged the

nearly five-month rally forward. The S&P 500 closed above 1,370, itsMay 2011 intraday high, a move thatcould invite momentum buying asmoney managers chase performance,though low volumes lately have raisedconcerns about the rally’s longevity.

“I don’t see anything technically favouring a downturn right now,” saidChris Burba, short-term market tech-nician at S&P in New York.

“No doubt (the market) has beenoverbought since the beginning of February, but in a powerful uptrend,price will continue higher for sometime amid overbought conditions.”

Technology shares ranked amongthe best performers, and the Nasdaq was trading at its highest since 2000.Micron Technology shot up 3.7 percent to $8.88 after Intel said it will sellits stake in two wafer factories toMicron and buy chips from the com-

pany.Intel advanced 1.3 per cent to

$27.24. The PHLX semiconductorindex rose 1.6 per cent.

The Dow Jones industrial averagegained 23.61 points, or 0.18 per cent,to close at 13,005.12. The S&P 500Index rose 4.59 points, or 0.34 percent, to end at 1,372.18. The NasdaqComposite Index climbed 20.60points, or 0.69 per cent, to finish at2,986.76.

The S&P 500 is up about nine percent since the start of the year, largely because of data showing strongermomentum in the economy and signs

of progress in managing theEurozone’s debt crisis.Low volumes overshadowed the

gains, however. With just one tradingday left in February, daily volume onthe New York Stock Exchange, NYSE Amex and Nasdaq has averaged6.89bn shares. In February 2011, thedaily average volume was 7.81bn.

Yesterday’s volume was about 6.4bnshares on the NYSE, NYSE Amex andNasdaq.

Consumer confidence in the world’s largest economy jumped to aone-year high in February, accordingto a report from The ConferenceBoard, a private business researchgroup. Consumer spending accountsfor more than two-thirds of US eco-nomic activity.

The drop in oil prices from recenthighs also relieved worries about theoutlook for consumer spending. Brent

crude oil futures fell more than $2 tosettle at $121.55 a barrel.

THE FTSE 100 crept into positiveterritory yesterday, with minerstracking metal prices higher asthe anticipation of cheap

European Central Bank loans floodingthe financial system boosted the out-look for raw materials demand and for

lending.London’s blue-chip index closed up12.36 points, or 0.2 per cent, at5,927.91, as gains were capped after weak economic data from the USshowed the world’s biggest economy began 2012 on a slightly weaker note.

Miners rose as copper prices ralliedto a more than two-week high, lifted by the expectations of large-scalecheap funding for banks from theEuropean Central Bank.

Although Paul Kavanagh, a partnerat Killik & Co, sees the second ECBlong-term refinancing operation(LTRO) today as potentially offeringimmediate support to equity markets,he thinks the key to long-term gainslies elsewhere.

“The trick is we want to see somedecent numbers coming out on theeconomy, and that's the story that willunravel over months rather than

weeks,” he said.Banks were higher, although there

was a note of caution after the down-grade of Greece to selective default by credit rating agency Standard & Poor’s.

FTSE 100 volume was thin at just 85per cent of the 90-day average, mean-ing fund managers remained cautiousabout global economic conditions and were unwilling to commit freshmoney to a market that has ralliedsome 15 per cent from November lows.

Yet volatility has fallen around 20per cent this year, suggesting thosethat are investing have become moresatisfied with the equity valuation gap

perceived to have existed before therally over the last three months.For those wanting to get involved in

the market now, Deutsche Bank ana-lysts said the way to play the recentgains would be to buy put options onhigh beta cyclical sectors such as min-ing, and replace stock with calloptions on defensive, ultra-low volatili-ty equities.

As Europe battles the threat of reces-sion, the US tries to decouple itself from the impact of the euro zone debtcrisis and China battles to sateinvestors’ appetite for growth, corpo-rate earnings remain challenged.

Of the 62 per cent of companies inEurope to report earnings so far thisquarter, 50 per cent have beat or metexpectations with a positive reportedsurprise of 1.4 per cent, according to Thomson Reuters Starmine data.

Car and plane parts maker GKNsaid

strong performance at its autos busi-ness was behind a 15 per cent rise in

2011 profit, as sales of luxury cars roseand demand in China remainedstrong. GKN’s shares, however, fell 4.4per cent having enjoyed a near 40 percent rise since mid-December.

British housebuilder Persimmonleapt 12.7 per cent after it unveiledplans to return £1.9bn of surplus cashto shareholders as it posted a slightly stronger-than-expected jump in full- year profit.

Other housebuilders were also indemand led by Taylor Wimpey, aheadsix per cent. SDL added 7.3 per cent

after unveiling a higher full-year profiton strong demand in North America,prompting Panmure Gordon to raiseits rating to “buy” from “hold” and liftits target to 713 pence from 699 pence.

Others did not fare so well.Whitbread dropped 0.6 per cent as thehotels and leisure group issued amixed trading update, highlighting aslowing in fourth-quarter salesgrowth, with Oriel Securities expect-ing to reduces its estimates.

FTSE jumps on prospect of new cash injection from ECBTHELONDONREPORT

THENEW YORKREPORT

BEST OF THE BROKERS To appear in Best of the Brokers email your research to [email protected]

ANALYSIS l Banco Espirito Santo SA

1.60

1.20

1.40

1.00

Dec Jan Feb

€

1.6428 Feb

BANCO ESPIRITO SANTONomura has maintained its negative view on Portuguese banks, but seesBanco Espirito Santo as better placed versus its domestic peers against apossible Portuguese debt restructuring. The broker also says it faces alower shortfall than others against capital requirements for 2012 issued byboth the Bank of Portugal and the EBA. Nomura upgrades the bank to neu-tral and reduces its target price on the stock to €1.50 from €2.

ANALYSIS l Essar Energy PLC

240

200

220

180

160

140

120

Dec Jan Feb

p

113.4028 Feb

ESSAR ENERGYGoldman Sachs has removed the India-focused energy firm from its buylist following a weak set of second-half results from the company andwhat it sees as an uncertain outlook for the firm’s power business. Thebroker has re-rated Essar to “neutral” and lowered its target price on thestock from 190p to 134p. Goldman is concerned about low visibility onearnings at the group, as well as high leverage.

ANALYSIS l Cookson Group PLC700

650

600

550

500

Dec Jan Feb

p 696.528 Feb

COOKSONUBS rates the materials science firm as “neutral” and raises its target pricefrom 650p to 675p after a better-than-expected finish to the year thatshowed cyclical fears were mostly unfounded and the business performedwell in November and December. The broker has upgraded its estimates bysix per cent to reflect higher growth in Advanced Refractories, but wantsto see much better cash conversion before it becomes more positive.

p

28 Nov 16 Dec 10 Jan 17 Feb30 Jan

6,000

5,400

5,300

5,200

5,600

5,500

5,800

5,700

5,900

ANALYSIS l FTSE5,927.91

27 Feb

Houlihan LokeyStephen Winningham has joined the interna-tional investment bank as managing director,and co-head of European corporate finance inthe firm’s London office.

Winningham was until recently head of

major corporates at Lloyds Banking Group,overseeing the group’s coverage of UK and USinvestment grade corporate clients. Prior tothis, he was global head of Lloyds’ financialinstitutions business. He has also worked atSalomon Brothers/Citigroup in Hong Kong.


8/2/2019 Cityam 2012-02-29


Accommodating the greatest showon earth by calling on a global team

Chris Hale explainswhy it makes senseto be the official hotelservices provider tothis summer’s Games

Q.WHAT WAS YOUR BRAND’S PRIMARYREASON FOR BEING INVOLVED WITHTHE GAMES?

A. There are many compelling reasons why we have chosen to be a partner.Probably the most compelling, cer-

tainly at the time we were discussing andsigning the deal, was that we had just spentthe biggest sum of money of any hotel com-pany ever on relaunching a single brand.IHG spent $1bn (£631m) relaunchingHoliday Inn and Holiday Inn Express allround the world. Given that we had madesuch a significant investment ensuringthat all of our Holiday Inns and Holiday InnExpresses were excellent, we really wantedto shout about that. The Olympics give

you an opportunity to talk about your brand in a way that no otherevent and no other sponsorshipenables you to do, so it wasreally nice timing. It was alsocoupled with the fact that

we’re a UK-listed company.Outside the US, the UK is oneof our most important mar-kets and we’ve got a UK chief executive. We also felt that wehad a great story to tell aroundour corporate social responsibility credentials. We have better disability

access than any other branded hotel inthe UK, for example. But the two main rea-sons were around putting our brand on aglobal stage and secondly using theOlympic relationship to build a biggersports business within our hotels. It’s anarea where I think we’ve traditionally not

been as strong. Sport is a massive global business: from professional athletes whoare travelling the world going to sportingevents to teams and support teams, to ama-teur players right through to spectators.

We’ve seen this and seen an opportunity to win a greater share of that business.

Q.HOW DID YOU STRUCTURE THE CASEFOR INVOLVEMENT TO THE BOARD?

A. We were rigorous in looking at whatthe benefits from the sponsorshipmight be. There was a significant

brand opportunity, to drive preference for

our main brands; there was a revenueopportunity, winning more revenue from

sports business glob-ally; and thirdly we

realised there was a big

staff engagement opportuni-ty. The way the contract is structured, we have external marketing rights in theUK but globally we can use the partnershipto engage our staff across all of our brandsand geographies. By doing that right there

was a great opportunity to engage people who aren’t necessarily going to be at themain stadium but to touch them with themagic of the Olympics. That’s something

we’ve had a lot of success with.

Q.HOW HAVE YOU STRUCTURED YOURBUSINESS TO MAXIMISE OLYMPICOPPORTUNITIES?

A. We were very keen from the outsetnot to be just a sponsor who pays asum of money for use of some mar-

keting collateral. We really wanted to havea deeper relationship with the Games andunderpin that with genuine involvement,so there are two big areas we’re heavily

involved in. One of those is the athletes’ vil-lage. About 90 of the key staff in the village

are going to be ours, the equivalents of gen-eral managers in a hotel. The village willhost some 17,000 athletes, so it’s a huge

operation and we will be at the heart of it. We’ll also be providing some of the staff training. We’ve selected people from allover the world – Beijing, Kenya, acrossEurope – all handpicked for the task of pro-

viding great service. We’ve also got a role supporting the

torch relay. We will be providing a lot of theaccommodation and we’ve selected 72 of our staff to be torch runners. We’ve chosenpeople who have done outstanding thingsoutside of work. People who saved neigh-

bours from floods in the Philippinesthrough to those who give a huge amountof time to a local UK scout group.

Q.THE GAMES PRESENT NUMEROUSCOMMERCIAL OPPORTUNITIES.WHICH ARE MOST CRUCIAL FOR YOU?

A. There’ll be a lot of demand in sum-mer for hotel rooms and we’ll belooking to fulfil that at realistic rates.

But it doesn’t all happen immediately. InBarcelona, visitor numbers went up from

1.5m in the year of the Games to some-thing like 5m 15 years later. London is aglobal city already enjoying huge visitor

numbers, but it is a chance to give people agreat experience so they come back.Not a lot of people know that in order to

win the bid, the London organising com-mittee (Locog) secured the backing of thehospitality industry, and the industry as a

whole gave Locog 65 per cent of all of itsrooms, some 40,000, at a discounted rate.So, far from using it as an opportunity tomake hay while the sun shines, we andother hotels said we were willing to sub-sidise the Games in our long-term interest.

Q.WHAT HAS SURPRISED YOU MOSTABOUT YOUR INVOLVEMENT TO DATE?

A.I hadn’t appreciated it was such anenormous undertaking. I think once we as a country realise the

scale of what will happen this summer, Ithink it’s going to be magnificent. Britsmake the best fans in the world.

Chris Hale is head of London 2012 for Intercontinental Hotels Group (IHG).

The Olympic

Games giveyou a uniqueopportunityto talk aboutyour brand.

149 DAYS TO GO

COUNTDOWN

TO THE LONDON

2012

OLYMPIC

GAMES

Q A&

Business Features23

WORDS BY MARC SIDWELL

Providing service with a smile to the athletes’ village Picture: Laura Lean / CITY A.M.

8/2/2019 Cityam 2012-02-29


T

HE UK’s higher education sector is anexport success story. Only the UnitedStates recruits more international stu-

dents. Those from outside theEuropean Union contribute £2.5bn each year in fees to our universities and spend

a further £2.5bn while they are here. If students in further education and private sector colleges are included, the

figure rises to £8.5bn. And financialcontributions are just the beginning.

The reputation and quality of UK universities draws the best and brightest students from all over the world. Many of these graduates goon to contribute to our businessesand research institutions. Even those

who leave upon the completion of their studies maintain trade and busi-ness connections. In a recent survey of international graduates, four out of five said that they planned to developprofessional links with businesses inthe UK in the future.

There are good reasons beyond eco-nomics to prize these students. Four

years ago, I met the son of a MalaysianPrime Minister who regretted the weak-ening of British influence. He attributed

this decline to the Thatcher govern-ment’s decision to make universi-ties charge overseas studentssubstantially more in fees. Going touniversity in the UK had meantthat people like his father andSingapore’s Lee Kuan Yew were pos-itively influenced by this country’sthinking and remained, broadly,friends and supporters of Britishlinks throughout their politicalcareers.

Today, that Malaysian leader isPrime Minister himself. Like hisfather, he went to university inBritain. In business and geopoliti-cal terms, it is vital that future lead-ers from the Bric nations, the

Middle East, and other strong

economies of the future have positive formativerelationships with the UK. The direction of cur-rent government policy is putting that at risk.

The government has made a rod for its own back with the pledge to reduce net migration tothe “tens of thousands” by the end of the parlia-ment. As a result of focusing on this sole measureof success, those coming from outside Europe tostudy are being lumped into the category of “undesirables” by the tabloid media.

International applicants are sensitive to badpress. The publication last year of Home Officeproposals to reform the student visa system gener-ated very negative publicity in several of our key markets. “UK visa rules may force Chinese studentexodus” and “India upset over UK visa rules”, warned headlines in The China Daily and TheHindustan Times respectively.

There is a growing perception in these coun-

tries that the UK is becoming less welcoming of foreign students. A survey this week will show some universities reporting 40 per cent falls inIndian student numbers. India is the world’s thirdfastest-growing economy, and one with which wehave had historic educational links. In 2010, theUK attracted 58,000 students from India, morethan any other country. The key question is: forhow long will this continue?

This month, the government announced fur-ther curbs on international students, targetingtheir ability to work for a period following gradu-ation. The Home Office is worried that they may be displacing UK graduates in the labour market but the evidence for this is minimal. The graduate job market is extremely tough, but for reasons far broader than the competitive presence of interna-tional students.

Post-study work in the UK is part of the attration for international students. A survey by tNational Union of Students showed that thr

quarters of international students viewed tpost-study work visa as a very important factor their decision to study here. It was so critical th were it to be abolished, two-thirds said they wounot recommend the UK as a study destination.

That is not an empty threat. Students can ealy take their business elsewhere. The market finternational students is fiercely competitive. TUK’s market share fell over the last decade an will continue to drop if the government does nchange course.

Following a recent review, Australia has adoed provisions very similar to those we are abolising. These will allow international students work for four years after graduation. Not surpringly, the media reaction there to the UK’s viproposals has been of a rather different nature The Australian proclaimed the UK reforms to “an own goal”.

We recommend one simple policy chanstraight away: remove students from migratifigures while they are studying. Like tourists, thare temporary residents and should be treatedsuch. If they stay to work after graduating, incporate them at that point. The government hset itself the task of reducing net migration belothe 100,000 mark. In doing so, it must be carefnot to turn yesterday’s established success stointo tomorrow’s tale of decline.

Simon Walker is director general of the Institute Directors.

24 The ForumCITYA.M. 29 FEBRUARY 2012

It’s vital that future foreignleaders have positive early

relationships with the UK.

Hysteria over student visasis damaging our reputationand Britain’s future growth

cityam.com/forum

SIMON WALKER

Agree? Disagree? Got a sharp comment?The Forum wants you to join the debate.

COMMENT NOW ON

Twitter: @cityamforum;

on the web : cityam.com/forum;

or by email: [email protected].

Top responses will be reprinted in The Forum.

8/2/2019 Cityam 2012-02-29


8/2/2019 Cityam 2012-02-29


AS a result of lower FX market volatil-ity and high daily trading volumes,combined with rock-bottom dollar yields, traders have been driven into

long risk positions in the hunt for gains.Higher-yielding Canadian and Aussie dol-

lars and even the euro have been targets for

trading on the risk trend. This trend wasgiven another boost yesterday as news of another round of the European CentralBank’s Long-Term Refinancing Operation(LTRO) lessened demand for the safety of the dollar.

The pumping of cheap credit from theECB comes after the Bank of England (BoE)and the Bank of Japan (BoJ) announced inrecent weeks that they would be expandingtheir quantitative easing programs.

DOLLAR OUT OF FASHION The flattening of FX market volatility is not just a result of the ECB’s LTRO2 but part of a longer term trend. FX market volatility indices are at their lowest levels since August 2008 (See the chart, below right, based on the FX options market volatility expectations.)

After the Swiss National Bank imposedcapital controls on the franc in Septemberlast year, the dollar has acted as the havencurrency of choice. But with volatility onthe wane, so is demand for the dollar as a“safe” currency. According to Christopher Vecchio, currency analyst at DailyFX, a pro-longed period of this calmness could leadto a continutation of the current euro-dol-lar rally, as well as gains for the Aussie dol-lar commodity currency: “Recent priceaction supports this theory, as euro-dollar broke above a key descending trendlinecoinciding with the psychologically signifi-cant $1.3200 level.” Vecchio adds: “Weexpect that the dollar may fall further if recent market trends continue.”

As traders seekgains, the dollar hasfallen out of favour,writes Craig Drake

Less shaky forex markets have changed the direction of flows. Picture: GETTY

Lower volatility drives

flows into higher yieldsD

ESPITE signs of improvement for the UK economy, thepound traded at the month’s low versus the US dollar and a10-week low versus the euro last week. A weaker poundwas initially triggered after the release of the minutes for

the Bank of England’s (BoE) February policy meeting. The minutesshow that two of the nine policymakers wanted a £75bn increasein quantitative easing (QE) instead of the £50bn supported by theother seven. Despite the increase in QE being widely anticipated,the market was surprised that two of the policy makers voted fora higher figure. This was priced in and spurred a round of sterlingselling.In the following days the pound then received another blowwhen UK GDP revealed that the economy had contracted by 0.2per cent in the last three months of 2011. The negative dataalong with a string of dovish statements from the BOE policy-

makers began to raise questions about the state of the UK econ-omy and the next BoE move.After the release of the fourth quarter GDP figure, BoE GovernorKing said that the recovery of the UK economy is slow anduncertain. Fisher echoed King’s sentiment and said that the out-look for the economy is still incredibly uncertain and he waskeeping an open mind on whether more quantitative easingwould be needed. The dovish comments continued with votingmember Bean saying that although he expects a modest pickupin the economy there are continuing headwinds from unwindingof excessive debt and the government’s fiscal consolidation.Meanwhile Miles, who voted for a larger asset purchase inFebruary, said the UK hasn’t seen much of a recovery from one of the deepest recessions in the history of the country. The MPC islikely to wait until May before deciding on further easing.The February minutes, poor GDP data and the increased proba-bility of more QE suggest that sterling will trade with a negativebias in the near-term. However, in the bigger picture the maindrivers for the pound are risk appetite and the EU debt crisis.This means in the longer term the pound’s downside should belimited if the equity rally and market risk appetite continueswhich will largely depend on news from the EU.

Please note that Forex trading (OTC Trading) involves substantial risk of loss, and may not be suitable for everyone. Do not invest money you can-not afford to lose. The information provided is for informative purposesonly, and can under no circumstances be considered as a recommenda-tion to engage in any trade. Easy Forex Trading Ltd is regulated by theCyprus Securities and Exchange Commission (CySEC) (License Number 079/07).

CONTINUINGTHE DOVISH

BOE TRENDZOE FIDDESUK BRANCH MANAGER, EASY-FOREX

Wealth Management | Foreign Exchange

26 CITYA.M. 29 FEBRUARY 2012

S o u r c e : F X C M

1-Week volatility index

2011 2012

16

10

8

12

14

ANALYSIS l Daily FX Volatility Indices

1-Month volatility index3-Month volatility index

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Lifestyle | Motoring

MAZDA’S CLEVER CITY BRAKE SUPPORT SYSTEMMazda says its new CX-5 compact crossover SUV will have collision-avoiding “Smart City Brake Support” technology fitted as standard.The SCBS system uses a laser sensor to detect a vehicle or obstacle infront of the car and then, if the driver fails to stop or avoid it, will auto-

matically activate the brakes.

CAR TALK BY RYAN BORROFF

CITROEN UNVEILS SPORTY DS4Citroën is unveiling a sport version of its successful DS4 model atGeneva. Powered by a 1.6-litre turbo petrol engine – producing 256bhp –the DS4 Racing has a chassis lowered by 35mm, a wider running track,upgraded brakes, larger 19-inch two-tone wheels, additional carbon fibre

components and it’s dressed in a special textured matt grey paint.

RANGE ROVER GOES TOPLESSA Range Rover convertible. Well, why not? Here's the forthcomingEvoque Convertible concept that will be unveiled at the Geneva motorshow. Officially Land Rover is just exploring whether such a car wouldprove popular amongst car buyers, but I'd be astonished if it doesn't

build what would be the world’s first premium convertible SUV.

Rev it up baby: Bentley’s super-hot V8

THE engine sound reminds me of achurch organ,” I say as I press andlift my right foot on the acceleratorin Bentley’s latest Continental GT

V8. What an intensely lovely and richsound it is too. The engine serves upsonorous notes rising from the deepestrumble at low speeds, before swellingupwards like a pipe organ to a boomingcrackle as the revs reverberate upwards.

The sound of the new V8 is simply stun-ning. Yet as much as you can hear such adeep bass you don’t feel it: such is the car’srefinement. Which of course has definedBentley’s most recent cars, as much as thenoise of this V8 engine defines this one.

Bentleys have always been big, brash, bombastic. Conveying locomotive-likepower to the privileged few as brutally aspossible. But the days of simply puttingthe biggest and most powerful enginesinto the most extravagant cars are draw-ing to a close. Such things are no longer sostraightforward.

Delivering such extreme speed in thelap of luxury comes at a price. And not just a fiscal one. Trimming a Bentley in burr walnut, fine leather and brightmetal adds weight which costs fuel econ-omy. It has always been thus but now, itseems even for a brand like Bentley, econ-omy and efficiency are synonymous withtechnical excellence.

And so Bentley has developed a leaner,keener and cleaner V8 engine for itsContinental GT and convertible GTCmodels that will be sold below the exist-ing W12 versions. In the new ContinentalGT V8 the 567hp 6.0-litre W12 engine isreplaced by the smaller, lighter butalmost as powerful twin-turbo 4.0-litre V8. The new engine produces 500hp, which is very close to its W12 sibling, butthe real story is that the new powerplantcan shut down half of its cylinders whenappropriate to reduce the vehicle’s fuelconsumption.

When being driven calmly, theContinental GT V8 can run on just four of its eight cylinders which, claims Bentley,enables the car to use 40 per cent lessfuel than the W12 engine. This is impres-sive. Particularly when you consider thishappens with almost no cost in perform-

In for a treat: theContinental isdevilishly sleekand powerful

THE VERDICT:DESIGN hhhhh

PERFORMANCE hhhhh

PRACTICALITY hhhhh

VALUE FOR MONEY hhhhi

THE FACTS:BENTLEY CONTINENTAL GT V8

PRICE: £123,8500-62MPH: 4.6secTOP SPEED: 188mphCO2 G/KM: 246g/kmMPG COMBINED: 26.7mpg

ance. The Continental GT V8 has a new eight-speed automatic transmission which further increases fuel economy.Gear changes are smooth, lightning-quick and close to indiscernible. Acceleration appears continuous andunbroken and in combination with thatsweet music of the V8 engine, progress ismade with a single and tremendously rich and resonant hooomph.

Bentley has shaved 25kg off the car’s weight. The result is that the ContinentalGT V8 feels more dynamic than the W12and very nearly as fast. It can acceleratefrom 0-60mph in 4.6 seconds and on to188mph. The car’s lower weight andimproved handling is brilliantly appar-ent, helped by its all-wheel drive system. The Continental GT V8 feels agile and the25kg reduction feels like so much more.Outside, the Bentley Continental GT V8 wears its athleticism subtly. The exteriorof the car has a new dark mesh radiatorgrille, triple air intakes at the front andfigure-eight twin exhaust pipes at therear. But the real glory is in the red enam-el Bentley winged “B” badge atop its bon-

though it makes an indelible impressionon me. But I can’t help but be haunted by the one unavoidable question that, sure-ly, must be the elephant in the room back at Crewe. Why, when thContinental GT V8 is such a triumph, would anyone now buy the more expen-sive, less frugal and less fun W12-enginedContinental GT?

WORDS BYRYAN BORROFF

28

net and in the centre of its wheels. Theinterior is more contemporary andincludes eucalyptus veneers and two-toneleather. Regrettably, the cool red enamel badging seen on the exterior is not car-ried through on to the steering wheel orthe gear shifter – here the Bentley “B”emblem is in black.

My time with the new Bentley Continental GT V8 is lamentably short,

The Bentley not onlylooks good on the out-side, the inside isgorgeous, too.

8/2/2019 Cityam 2012-02-29


T E R R E S T R I A L

THE FISHERMAN’S APPRENTICE

WITHMONTY HALLS BBC2,8PM

In this new series, writer and explorerMonty Halls becomes a traditionalCornish fisherman working out of thesmall village of Cadgwith Cove.

DADDY DAYCARECHANNEL 4, 8PM

An old-fashioned gay parent and a

21-year-old first-time dad are sent to

spend a week working at TadpolesNursery in Chelsea. Last in the series.

NCISCHANNEL 5, 9PM

The team investigates when the bodyof an American petty officer isdiscovered, and evidence suggests hewas killed on a British ship.

BBC1

SKY SPORTS 15.30pm Live International

Football 7.30pm Live

International Football 10pm

You’re on Sky Sports! 11pm FIFA

Futbol Mundial 11.30pm A

League Football 12am-6am

International Football

SKY SPORTS 27pm Live International Football.

Wales v Costa Rica (Kick-off

7.45pm). 10pm Inside the PGA

Tour 10.30pm European Tour

Weekly 11pm Tennis 1am-3am

International One-Day Cricket

SKY SPORTS 37pmTotal Rugby 7.30pm Live

International Football 10pm

Boots ’n’ All 11pm Trans World

Sport 12am Total Rugby

12.30am European Tour Weekly

1amPool 2am Watersports

World3amSuperleague Netball

5am-5.30am Total Rugby

BRITISH EUROSPORT5.15pmEquestrian 7.15pm

Riders Club 7.20pm Golf 8.20pm

Golf Club 8.25pm Yacht Club

8.35pm Superbikes 10.05pm

Motorcycling 11.05pm-12.10am

International Football

ESPN5.30pm Live International

Football8.15pm International

Football 10pm Premier League

World 10.30pm Goal Show 11pm

ESPN Kicks: Serie A 11.15pm

ESPN Kicks: Extra 11.30pm Press

Pass 2012 12am Friday Night

Fights 2am Live NBA Basketball

4.30am Planet Speed 5am FIS

Alpine Ski World Cup Report

5.30am-6am Snowboard FIS

World Cup Magazine

SKY LIVING7pm Criminal Minds 8pm

The Secret Circle 9pmClaire

Richards: Slave to Food

10pm Grey’s Anatomy 11pm

Bones 12am Criminal Minds 1amCSI: Crime Scene Investigation2.40am Medium 3.30am Bones

4.20am Maury 5.10am-6amJerry Springer

BBC THREE7pm Snog, Marry, Avoid? 8pmDon’t Tell the Bride 9pmSun, Sex

and Suspicious Parents 10pmFILM Starship Troopers 1997.12am Family Guy 12.45am Sun,

Sex and Suspicious Parents1.45am White Van Man 2.15amPramface 2.45am Don’t Tell the

Bride 3.40amSnog, Marry,Avoid?4.10am-5.10am Junior

Doctors: Your Life in Their Hands

E47pm Hollyoaks 7.30pm How IMet Your Mother 8pmFILMThe

Golden Child 1986. 9.50pmFILM Elektra 2005. 11.45pm

The Big Bang Theory 12.40am

Scrubs 1.35am How I Met Your

Mother 2.05am Rules of

Engagement 2.25am Balls of Steel Australia 2.50am Greek3.35amUgly Betty 4.15am-6am

Switched

HISTORY7pmStorage Wars 7.30pm Pawn

Stars 8pmOnly in America 9pmSwamp People 10pm Storage

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Wonderland Film: A Hasidic

Jewish couple take a cruise

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45

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15

17

10

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29

3

13

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35

9

18

6

21

30

28

11

25

32

14

9

7

Fill the grid so that each block

adds up to the total in the box

above or to the left of it.

You can only use the digits 1-9

and you must not use the

same digit twice in a block.

The same digit may occur

more than once in a row or

column, but it must be in a

separate block.

COFFEE BREAKCopyright Puzzle Press Ltd, www.puzzlepress.co.uk

KAKURO

QUICK CROSSWORD

LAST ISSUE’SSOLUTIONS

KAKURO

WORDWHEELUsing only the letters in the Wordwheel, you have

ten minutes to find as many words as possible,

none of which may be plurals, foreign words or

proper nouns. Each word must be of three letters

or more, all must contain the central letter and

letters can only be used once in every word. There

is at least one nine-letter word in the wheel.

SUDOKU

Place the numbers from 1 to 9 in each empty cell so that each

row, each column and each 3x3 block c ontains all the numbers

from 1 to 9 to solve this tricky Sudoku puzzle.

SUDOKU

QUICK CROSSWORD

ACROSS

1 Expected and wished (5)4 Addenda (5)7 US musician and record

producer, ormer husbando Tina Turner (3)

8 Lone Star Stateo the USA (5)

10 Consciousness o one’sown identity (3)

11 Body o water (4) 12 Tubes (5) 14 Disgrace (5) 15 Censure severely (5) 16 Arm of o a larger

body o water (5)19 Measure (out) (4) 20 Appropriate (3) 21 Due (5) 23 Moldovan monetary

unit (3) 24 Tennis stroke that puts

the ball into play (5) 25 Coil o knitting wool (5)

DOWN

1 Worked up emotionallyby anger or excite-ment (coll) (3,2)

2 Contagious diseasecharacterisedby purulent skineruptions (3)

3 Take apart (11)4 Impoverished,

destitute (11)5 Foot digit

protector (7)6 Have a cigarette (5)9 Alcoholic beverage (3) 13 Device attached to

a computer (7) 15 Uncouth (5)17 Novel (3) 18 Ofspring o a

male tiger and aemale lion (5)

22 Coat a cake withsugar (3)

I

P

R

N

MT

E

S

A

M O S S B O R I N G

U A B E E

S A I L D E N I A L

L V A T

I M P O S S I B L E

M A O H O N E

S T O R E H O U S E

C F U R

P A S T E L T A X I

R A X E L

G A L L O P R A C Y

3 1 5 9 8 9

2 5 3 1 5 3 2 4

9 7 4 8 7 2 1 3

6 2 3 7 8 1

9 4 1 6 5 9 8

8 1 2 5 1 1 7

4 2 1 9 6 7 9

7 9 8 5 3 6

7 3 9 8 8 2 5 1

2 1 4 6 3 6 8 99 2 7 9 1 4

WORDWHEELThe nine-letter word was

COMPOSURE

29

Lifestyle | TV & Games

8/2/2019 Cityam 2012-02-29


ENGLAND’S selectors displayed ahitherto unseen ruthless streak yesterday when they announcedEoin Morgan had been axed

from the Test squad that will tour SriLanka next month.

Clearly Morgan struggled out in Abu Dhabi and Dubai againstPakistan’s spinners, averaging just

over 13 from three Tests, but he washardly alone there and considering

how much faith the selectors haveshown the likes of Ian Bell in thepast, I’m surprised they’ve taken theIrishman out of the firing line atpretty much the first sign of trouble.

The Middlesex left-hander (right) isan extremely gifted operator who will remain a central figure in theone-day and Twenty20 sides. As longas he continues to prosper in thoseformats of the game he’ll be back inthe Test side before too long, I’m sure.

Morgan’s loss is likely to be RaviBopara’s gain, but Samit Patel mustalso be in with a chance of forcing his way into that middle order after heimpressed with both bat and ballagainst Pakistan towards the end of the tour.

Clearly he’s never going to have the body and fitness levels of Usain Bolt,

but he’s obviously done enough tosatisfy the coaching staff and he

deserves credit for revitalising acareer that could quite easily havegone the other way.

TOUR OF TWO HALVESEngland will head to Sri Lanka havinglearnt a lot about themselves follow-ing their contests against Pakistan.

It’s encouraging to see a fairnumber of the batsmen intend-ing to head there early in an effortto acclimatise to what are likely to be stifling conditions.

Had England enjoyed that sort of preparation ahead of their tour of the United Arab Emirates, or atleast played the one-dayers beforethe Test series, I’m convinced Andrew Strauss’s side would have been far more competitive andclued up in terms of deal-

ing with the mystery spin of Saeed Ajmal.

As gentuine plus points go I think you have to look at the bowlingdepartment first and foremost. Whatever the pitch, Strauss can beconfident he can pick an attack, froma group of seven, capable of taking 20 wickets.

Kevin Pietersen’s return toform, meanwhile, was a surpris-ing and uplifting end to thetour. I must confess I thought he was drinking at the last chance

saloon but he appears somewhere near back to his best

and England instantly become an entirely dif-ferent proposition withan in-form Pietersen tocall upon. Andy Lloyd is a former England Test cricketer who

made 17,211 first-classcareer runs.

Sport30

ENGLAND outcast Danny Cipriani ispoised to confirm his return to thePremiership with Sale as the waywardstar looks to resurrect his internation-al career – just days after his latest off-field scrape.

Cipriani, who has been playing forMelbourne Rebels in the southernhemisphere’s Super 15 league since2010, is believed to be in advancedtalks to join Sale this summer on athree-year contract.

The move would put the 24-year-old back in the frame for internationalselection, with England chiefs com-mitted to only picking home-basedplayers, and reunite him with Sale’sformer Wasps coach Tony Hanks.

It comes amid fresh scrutiny of thefly-half’s behaviour away from thepitch, following allegations that he was one of three players in a car thatran off the road and into a parked vehicle on Friday. Cipriani’s time in Australia has already seen him finedfor a nightclub incident and then banned by the Rebels for a month forrepeatedly breaking curfews,although he says his misdemeanourshave been overplayed.

Sale and England winger Mark Cueto confirmed that director of rugby Steve Diamond was working tomake Cipriani the revitalised club’slatest high-profile capture.

“I know we’ve signed a couple of players for next season, and one of them is [Scotland lock] Richie Gray, who’s going to be a fantastic signing,”said Cueto. “But I know he is lookingat signing a couple more and Cips[Cipriani] is obviously one of them.”

Cipriani setfor Sale as

fly-half eyesresurrectionBY FRANK DALLERES

RUGBY UNION▲

CRICKET COMMENT

ANDY LLOYD

Test axe cruel but it’s not the last we’ll see of

Pearce andEngland setfor acid testInterim boss and fringe players can take a steptowards the Euros by impressing against Holland

ENGLAND caretaker managerStuart Pearce has urged his squadto cast aside the negativity sur-rounding the state of the nationalteam and use tonight’s friendly against Holland to make concretecases for Euro 2012 selection.

Without a permanent headcoach or skipper the Three Lions, who must also make do without aclutch of key first team players,are in a state of flux ahead of Holland’s first visit to Wembley since they were thrashed 4-1 by an Alan Shearer-inspired Englandside at Euro 96.

Pearce, who assumed the role of head coach on an interim basisearlier this month following FabioCapello’s resignation over theFootball Association’s decision tostrip John Terry of the captaincy,must make do against the 2010 World Cup finalists minus thelikes of Wayne Rooney, DarrenBent and Glen Johnson.

But the former England left- back, who confirmed he had notapplied for the full-time vacancy but is also effectively on trial

tonight after outlining his deter-mination to continue in the rolethrough to the Euros, has chal-

lenged the less established members of his squad to launch a bid to be included in the 23-man party that will travel to Ukraine andPoland in June.

He said: “We’re in the home runfor the (European) Championshipsand we have to find out about oneor two in and around the squadand it’s a great opportunity tofind that out, playing against oneof the tournament favourites.

“It’s a fantastic opportunity,that’s how we see it. I think they will acquit themselves very well.Some will stake a claim for thesummer. I hope the majority will.”

Liverpool right-back Johnsonpulled out of the squad yesterday,meaning Manchester City’s MicahRichards is almost certain to startin his place and make his firstEngland appearance sinceNovember 2010.

Bent was ruled out for threemonths with ankle ligament dam-age on Monday, leavingManchester United’s Danny Welbeck, Chelsea’s DanielSturridge and Sunderland’sFraizer Campbell with an opportu-nity to impress.

Pearce added: “We’re threefriendlies away from the firstgame in the group so I think thisis vital. Every time we get thegroup of players together we haveto hit the floor running.”

BY JAMES GOLDMAN

FOOTBALL▲

ENGLAND

HOLLAND

Dec 04: Makes Wasps debut aged 172007: Helps Saxons win Churchill CupMar 08: Axed on eve of first Englandstart after enjoying a late nightOct 08: Returns to England set-up afterbroken ankle but is later dropped09: Misses autumn Tests through injuryFeb 10: Announces he will move toMelbourne Rebels in summerMay 11: Suspended by Rebels for curfew

breach but finishes season as top scorer

TIMLINE | CIPRIANI’S CAREER

Cipriani is aiming to win back his placein the England side Picture: GETTY

8/2/2019 Cityam 2012-02-29


31

SQUADAndrew Strauss (capt), AlastairCook, Jonathan Trott, KevinPietersen, Ian Bell, Ravi Bopara,Samit Patel, Matt Prior, StevenDavies, Tim Bresnan, Stuart Broad,Graeme Swann, James Anderson,Steven Finn, James Tredwell, MontyPanesar

SCHEDULEMarch 15 v Sri Lanka Board XIMarch 20 v Sri Lanka Development XIMarch 26 v Sri Lanka, Galle

April 3 v Sri Lanka, Colombo

ENGLAND | TOUR OF SRI LANKA

Morgan

Results

email [email protected]

SPORT | IN BRIEF

Murray struggles in DubaiTENNIS: Britain’s Andy Murray over-came rustiness to beat Germany’sMichael Berrer in his first matchsince last month’s Australian Open.World No4 Murray won 6-3, 4-6, 6-4at the Dubai Championships to set upa second round match with Swissqualifier Marco Chiudinelli.

Wasps duo in contract boostRUGBY UNION: Wasps pair TimPayne and Hugo Southwell havesigned contract extensions with thePremiership outfit. England propPayne, 32, will bring up a decade atthe club next season, while Scotlandfull-back Southwell has been ever-present since his summer arrival.

ASTON VILLA risk falling foul of European Financial Fair Play rules afterthe Premier League side yesterday announced record annual losses of £54m.

Villa confirmed the overall loss for the year up to 31 May 2011 represents a signif-icant increase from £37.6m, but does notincorporate the £37m the club recoupedin player sales following the departures of England internationals Stewart Downingand Ashley Young in the summer.

Under the rules, to qualify for a licenseto play in European football for the 2014-15 season clubs must break even – withina £4.2m leeway – over rolling two-yearmonitoring period, the first of which

runs until the end of next season.“Our objectives are to compete strong-

ly on the pitch and to achieve sustainabil-ity as well as compliance with Uefa’sFinancial Fair Play requirements,” said

Villa’s chief financial officer RobinRussell. “The actions taken since the endof the 2010-11 financial year have gal-

vanised the sustainability of the club.” As well as reducing the wage bill by

offloading the likes of Downing and Young, Villa also curbed their transferspend over the summer.

Charles N’Zogbia and Shay Given werethe only major arrivals at a cost of just£13.5m, just over half the £24m they paidSunderland for Darren Bent in January 2011.

Villa, who currently sit a disappointing15th in the Premier League, recorded aminimal increase in the club’s annualincome to a record £92m, which camedespite attendances dropping dangerous-ly close the 30,000 mark for some lessglamorous fixtures.

Villa also announced they spent £12min “exceptional charges” in 2010-11 relat-ing to changing the club’s “managementpersonnel” following the departures of Martin O’Neill and Gerard Houllier.

Struggling Villa announcerecord losses of £54m

BY JAMES GOLDMAN

FOOTBALL▲

GOALKEEPER Joe Hart admits captain-ing England would be “amaz-ing” but insists it is still “along way off” for theManchester City No1.

Hart (inset) has beentouted as a possibleskipper for tonight’sfriendly againstHolland, a notion lentcredibility by his nomina-tion for media duties onthe eve of the match. But heremains a less obvious choice thanother members of the squad, such as

Liverpool’s Steven Gerrard or evenHart’s club colleague Gareth Barry.

And he said: “I think I speak foreveryone who is English and likesfootball that to captain your country

would be amazing and a great hon-our. But it’s a long way off happeningfor myself, there are some big candi-dates and big names and a lot of capsto be put on the table. Whatever hap-pens, happens.”

Hart flattered

to be candidatefor captaincyFOOTBALL

▲

STEVEN GERRARD

Has the most England captaincy experi-

ence in the squad and used to leadingLiverpool for years. The outstanding can-didate for the role long-term.

JOE HART

A certain starter, widely admired andblessed with a good temperament, but

questions raised over potential influ-ence of a goalkeeper as skipper.

GARETH BARRY

Has worn the armbandbefore and, with 51 caps,has more experience than

most, but faces stern competi-tion for a regular starting place.

SCOTT PARKER

Newly-crowned England player of theyear to match his PFA award and anincreasingly prominent figure in the teambut Tottenham man remains an outsider.

JAMES MILNER

Midfielder has been mentioned as cap-taincy material despite just 23 caps and aloose grip on a starting shirt.

ARMBAND OPTIONS

Fraizer Campbell(Sunderland)Caps: 0; Goals: 0

Daniel Sturridge(Chelsea)Caps: 1; Goals: 0

Danny Welbeck(Manchester United)Caps: 3; Goals: 0

Total caps: 4; Total goals: 0

Robin van Persie(Arsenal)

Caps: 61; Goals: 25

Dirk Kuyt(Liverpool)

Caps: 84; Goals: 24

Klaas-Jan Huntelaar(Schalke)

Caps: 48; Goals: 30

Total caps: 193; Total goals: 79

ARE YOU EXPERIENCED? | ENGLAND’S ROOKIE FORWARDS

V

England’s striker resources have been stretched to breaking point by the withdrawals of Wayne Rooney and Darren Bent, leaving Stuart Pearce to pick from three rookies whoseinternational pedigree is minuscule compared to their Dutch counterparts.

Interim boss Pearce wants tolead England at the Euro 2012

Picture: GETTY

8/2/2019 Cityam 2012-02-29


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