cityam 2012-07-27

7/31/2019 Cityam 2012-07-27

1/35

BUSINESS WITH PERSONALITY

7/31/2019 Cityam 2012-07-27

2/35

7/31/2019 Cityam 2012-07-27

3/35

BUSINESS WITH PERSONALITY

BUSINESS leaders from some of thelargest companies in the worldhave begun arriving in London fora showcase event to boostinvestment into the UK, timed tocoincide with the Olympic Games.

The UK Trade and Investmentdepartment yesterday launched itsso-called British Business Embassy,attracting figures such as GooglesEric Schmidt, WPP boss Sir MartinSorrell and Cisco Systems CEO

John Chambers.Prime Minister David Cameron

spoke at the Global InvestmentConference, attempting to assurethe assembled heavyweights that

Britain is back open for business.Cameron was joined by other key politicians, and central bankers,such as International Monetary Fund head Christine Lagarde, Bank of England chief Sir Mervyn King,and European Central Bank (ECB)president Mario Draghi.

The Prime Minister received kind words from business leaders suchas Schmidt, but also came underfire for some coalition policies.

In a Q&A session Chamberspressed Cameron over thegovernments plans to restrict netimmigration, a policy that has

been strongly attacked by businessand higher education groups.

The UKs stumbling aviationpolicy also came in for criticismfrom Emirates CEO Tim Clark.

FACEBOOKs woes deepened last nightas after-hours trading sunk shares inchief executive Mark Zuckerbergscompany to an all-time low after thesocial networks earnings stagnated inits first quarter as a public company.

Shares fell 10 per cent to under$24 (15.29) 37 per cent down on

its listing price as income flat-lined despite Facebook reportingrising sales and closing in on a

billion users worldwide.Investors bailed out as it

became clear that as Facebook grows, it is struggling to sustainthe margins that led to a $100bn

valuation on the firms initial publicoffering (IPO) just two months ago. The company reported a loss of

$157m in the three months to July,Facebooks first, due to compensa-tion payments associated

with the IPO. But even with figures adjustedto account for thisone-off charge, prof-

its were just $295m, barely up on last year despite continuing sales growth.Facebooks revenue was $1.18bn,

which surpassed analysts expecta-tions and led to a brief after-hoursrally on Wall Street before the extent

of the companys slow-down became clear.

As Facebook has

invested in staff andinfrastructure tosupport its rapidrise, its marginshave shrunk dra-matically, with the

firm seeing lowerad sales in emergingmarkets compared with the West and

failing totake

advantage of users accessing the net- work on mobiles.

Since Mays disastrous IPO, which was plagued by technical problemsand required underwriters to ploughcash in to prevent shares losing valueon their first day, Facebooks shareprice has declined solidly, a trendthat worsened yesterday even before

the results were announced.Gloom over the firms future wasexacerbated by social gaming giantZynga badly missing its own targetson Wednesday night and slumping40 per cent. Including after-hourstrading, Facebook shares fell by morethan 17 per cent yesterday.

David Ebersman, the companyschief financial officer said it was dis-appointed with how stock was trad-ing but added that it was the samecompany as before the IPO.

Zuckerberg has already admittedthat mobile is Facebooks biggestchallenge, a problem that was laid bare in an earnings call last night.

The companys chief executive said yesterday that more than half of

Facebooks 955m users now access the site via their mobilephones, and Ebersman added

that in Facebooks most lucrative mar-kets, the US and Europe, the numberof adverts sold had fallen as a result.

Facebook has recently moved intomobile adverts with the introductionof sponsored stories, a new type of advert that is placed in the usersnews feed instead of the side of thepage and is thus more suited to

mobiles.Sheryl Sandberg, Facebooks chief operating officer, said the company isnow making $1m a day from spon-sored stories.

Zuckerberg added last night thatFacebook making its own phonewouldnt make that much sense forus to do, despite rumours of a tie-up

with Taiwanese manufacturer HTC.

www.cityam.com FREE

BY JULIAN HARRIS

FTSE 100M 5,573.16 +74.84DOW 12,887.93 +211.88NASDAQ 2,893.25 +39.01 /$ 1.56 +0.01 / 1.28 unc /$ 1.22 +0.01

LET THEGAMESBEGIN

ISSUE 1,683 FRIDAY 27 JULY 2012

ALLIS TER HE ATH: Page 2

Certified Distribution28/05/2012 till 01/07/2012 is 132,857

BY JAMES TITCOMB

Facebook Inc

May Jun Jul

35.00

37.50

40.00

30.00

27.50

32.50

42.50 $

26.8426 Jul

FACEBOOKREELSAS RESULTS FLOPCameron ttop bossesback UK P

Facebook chief MarkZuckerberg has seenshare prices plummet

OLYMPICS SPECIAL: PAGES: 2, 15, 18, 1

EXCLUSIVE COLUSALLY GUNN

WRITES FORCITYA .M.

PAGE 31

7/31/2019 Cityam 2012-07-27

4/35

[email protected] me on Twitter: @allisterheath

AMAZON, the online retailer,reported a sharp drop in profits lastnight as its massive investmentprogramme took its toll on thecompany balance sheet.

The firm reported quarterly profits of $7m (4.5m) versus $191ma year ago, equating to earnings pershare of just one cent compared to41 cents a share a year earlier.

This was despite net salesincreasing 29 per cent to $12.83bnin the second quarter, compared

with $9.91bn in second quarter of 2011.

Its investing activities havehammered the companys earningsover the past year as it spendsheavily on overseas expansion andattempts to compete with large techcompanies on digital content.

Chief financial officer TomSzkutak said operating expenses aregrowing faster than revenue andsuggested that this may continue.

Were investing a lot because of the opportunities we see, he said.

The firm, which offers DVDs and books at knock down prices, alsoforecast a possible loss in the thirdquarter.

It said operating income losses were expected to be between $350mand $50m, down from $79m in theprevious year.

Amazon shares were up 1.25 perin after hours trading.

Amazon pro

dragged dowby expansionBY MICHAEL BOW

Markets jump as ECB hintsat more support for SpainEUROPEAN markets soared yester-day after European Central Bank

boss Mario Draghi promised he would do whatever it takes to endthe Eurozone crisis a hint thatmore government bond purchasescould be on the way to ease the pres-sure on struggling states like Spain.

He told an audience at the GlobalInvestment Conference that thereforms and agreements of the pastsix months represent more progressthan we could possibly have hopedfor in trying to resolve the situation.

But central bankers from key emerging markets disagreed, argu-ing that progress in the Eurozonehas been too slow, adding to theuncertainty hurting global markets. And OpenEurope released a report

warning that the Eurozone bailoutfunds may be too small to properly support Spain if the troubled coun-try needs a full-blown aid package. That could result in leaders kicking

the can down the road again withsmaller measures designed to holdoff the problem for six months or a

year until they develop a fuller plan.Draghi said that he would do what-

ever he could within the ECBs man-date to help, and that includes

bringing down governments high borrowing costs.

Markets underestimate the politi-

Universal in talks to hive offParlophoneUniversal Music is in talks to sell most ofParlophone, one of the crown jewels ofEMI and home to Coldplay and Gorillaz, inan attempt to overcome the concerns ofEU regulators reviewing its 1.2bn bid forthe British recorded music group.BMG, the music publishing joint venturebetween Bertelsmann and the privateequity group KKR, has met Universal andexpressed its interest in Parlophone,people familiar with the situation said.

China funds near deal for Dexia unitTwo Chinese private equity funds areclosing in on a deal to buy the assetmanagement arm of Dexia, highlightingthe interest of Asian buyers in Europeanfinancial assets as banks look torestructure in the wake of the financialcrisis.

Barrick Gold slows down expansionThe worlds largest gold producer hassignalled a new restraint on expansion,declaring it would no longer pursue sizefor sizes sake as it pruned growth targetsand shelved projects.

London hosts surprise party to endthem allSeven years of meticulous planning cometo a spectacular climax tonight when theOlympic flame completes its 8,000-mile journey around Britain.

Cameron and Osborne obsessedwith 24-hour newsA Tory peer has become the latest seniorfigure to tell George Osborne toconcentrate on being Chancellor.

Oxford attacks Vince Cable's stateschool student targetVince Cable, the Business Secretary, hastold elite universities to increase thenumber of undergraduates they admitfrom working class backgrounds or facefinancial penalties.

Britain flew drones over LibyaRAF personnel flew armed remote-controlled drones over Libya against ColMuammar Gaddafi's forces.

Bond Sale In Ireland ProvidesHopeful SignThe Irish government returned to thebond markets Thursday after an enforcedabsence of almost two years, marking animportant step in its rehabilitation afterits 2010 bailout.

German Consumers RemainConfidentGerman consumer confidence looks set toimprove in August for the second monthin a row, data showed.

NATIONWIDE building society yesterday admitted that it hascharged a substantial number of customers twice for debittransactions made on Tuesday.

Over 700,000 accounts around afifth of Nationwide customers

were affected by the mistake, whichis thought to have occurred whenan employee inadvertantly processed Tuesdays debit cardtransactions for a second time on

Wednesday.Nationwide said that the 50,000

customers judged to have beenadverseley affected by the error those who experienced declinedtransactions as a result would not

be left out of pocket. All charges will be refunded in full and any costs associated with this error will

be reimbursed in full. None of ourcustomers will suffer financial lossas a result of this one-off error,said Nationwides Jenny Groves.

Coincidentally, yesterday afternoon RBS, which ownsNatwest, confirmed that some of itscustomers were again havingtechnical difficulties with online

banking and debit cards.Last night, an RBS spokesperson

said: Online banking is now fully operational and debit cardtransactions are processing asnormal. We continue to monitorthe systems closely.

Nationwide and

NatWest hit bymore glitches

Mario Draghi said the ECB is likely to become the single regulator for Eurozone banks

2 NEWS

BY JAMES WATERSON

BY TIM WALLACE

To contact the newsdesk email news@citya

I TS TIME for a confession: I haventalways been the Olympics greatestfan. I still dislike the Zil lanes, thedisruption to business, the

restrictions on free speech, theclosure of parks and facilities, theimmense cost to taxpayers. But itstime to move on. Even I am now

feeling really excited about theGames and it is clear that the publichas finally caught the Olympic bug.

There has been an awe-inspiringturnout all across London to see the

Torch, with entire streets coming outto watch. Many thousands lined thestreets yesterday in the City andcentral London. Tonight will seeDanny Boyles opening ceremony,

which will be spectacular.So its time to forget about all the

problems and no, the Olympics wont really boost the economy andembrace this very special national

EDITORSLETTER

ALLISTER HEATH

Even sceptics must now embrace the greatest shoFRIDAY 27 JULY 2012

and international moment. Hugenumbers of people have made it toLondon; and millions in the UK and

billions abroad are about to enjoy themselves thoroughly. London is atthe centre of the world for the nextfew weeks, and that can only be a

wonderful thing. We must all now hope that the Olympics are as success-ful as possible and a great showcasefor contemporary London and itmust be said that our great city looksresplendent in the sun, with the lat-

est additions to its skyline such asthe Shard combining with the oldclassics such as Tower Bridge tocreate a stunning, iconic ensemble.

Boris Johnson and David Cameronare trying to use the Olympics as anopportunity to attract investment. Letus hope they succeed as London

needs more companies to move here,in established business districts as well as in the new enterprise zonearound the Royal Docks (though ulti-mately it will be real policies, ratherthan a slick sales job, that will attractgenuine, unsubsidised economicactivity to these shores).

But the rivalry between the Mayorand Prime Minister is also on display for all to see: the Olympics will notmerely be about athletes competing it will also be about Boris andCameron fighting to stamp theirmark on the festivities and grab as

ibly, the crowd at Hyde Park startedchanting Bo-ris, Bo-ris after one par-ticularly successful gag as thoughthe Mayor were a pop star, not a politi-cian. The story of the Mayors slightly unfair attacks on Mitt Romney, the

visiting US presidential hopeful whohad the temerity to question whether

London would be ready on time, hasalready travelled around the world,leading several US websites last night.

For the public, however, this is notabout politics. It is about a uniquesporting and cultural event, a jam-

boree of international entertainment,the origins of which go right back tothe beginnings of Western civilisa-tion. It will be the greatest show onearth, and its taking place right herein London. Let the Games begin.

much of the limelight as possible.So far, the Mayor is well ahead in

this very special game. Boris wasequally in his element last night atthe Mansion House, where he and theLord Mayor co-hosted a reception forsenior business people, royalty anddignitaries, as he was addressing a

large crowd at Hyde Park. He gave very similar speeches to both groups(the one to Mansion House was slight-ly longer) and yet got almost identicalreactions from the two, entirely dif-ferent audiences. Therell be enoughgold and silver medals here to bail outSpain and Greece together, he joked,eliciting cheers. Business leaders and

young people alike shouted yes when asked by the Mayor whether we were ready for the Games. No otherBritish politician has anything likethe same appeal, cutting across allages and backgrounds. Almost incred-

cal capital that has been put behindthe euro, he said.

The project is irreversible, and theseare not just empty words they are

based on actions that have been takenand will be taken.

The ECB is ready to do whatever ittakes to preserve the euro.

Italys 10-year borrowing costs fell0.389 percentage points to 6.056 percent yesterday, while Spains fell 0.448points to 6.928 per cent.

Shares jumped with the FTSE 100 up1.36 per cent and Spains IBEX up 6.06per cent. And the euro hit a two-week

high against the dollar.But Brazils central bank governor

Alexandre Tombini said the reformsare late and rather too little, and hisMexican counterpart Agustin Carstenssaid implementation must be acceler-ated, arguing that greater coordina-tion between Eurozone leaders wouldgive markets more confidence andhelp global growth.

Meanwhile Greeces ruling coalitionfailed to agree the terms of a new 12bn (9.39bn) round of spendingcuts, despite the presence of Troikaofficials and EC president Barroso.

The new jobs website for London profeCITYAMCAREERS.com

WHAT THE OTHER PAPERS SAY THIS MORNING

7/31/2019 Cityam 2012-07-27

5/35

LLOYDS reported a first half loss yes-terday as it set aside another 700magainst PPI mis-selling claims, takingits total bill to date to 4.3bn. The majority taxpayer-owned bank

said it made a management profit of 1.165bn in the six-month period, upsix per cent on the year, but an overallloss of 439m thanks to one off items like the mis-selling bill.

Chief executive Antonio Horta-Osorio said the bank has reviewed allproducts to try to stop any repeat.

He also revealed the bank is lookingto push forward the move to a fully ring-fenced retail bank, hoping to getthe shift underway well before legisla-tion forces the shift.

But he also argued against other reg-ulations, claiming liquidity bufferrules are too tight, forcing banks tohold too much government debt Lloyds holds roughly 20bn in gilts

which crowds out private lending.It is thought that the bank is in dis-

cussion with the FSA over the way buffers are both measured and used,potentially allowing more lending.

PPI drags downLloyds again innew 700m hit

BY TIM WALLACE Meanwhile analysts from LiberumCapital estimated Lloyds would haveto pay out up to 1.5bn to settle Libor-related claims, but finance directorGeorge Culmer rejected the claim, say-ing the bank has not set aside any funds to cover potential payouts.

Horta-Osorio said no staff membershad been fired over claims of Libor-fix-ing, but would not deny reports thatsome may have been suspended.

He specifically rejected claims madein an email from a Barclays trader tothe New York Fed that Lloyds enteredsuspiciously low readings on 28

August 2007, saying they had in facttaken deposits at below the rate.

THE obloquy seems like it willnever end at times. Take yesterday, with Lloydsannouncing 700m more set

aside for PPI mis-selling, and revealingthat it has received subpoenas overLibor-rigging. Santander alsoacknowledged increased PPI claims.

And yet the grinding aftermath of scandal can disguise good news as

well. Santanders share price riseover the day had more to do withMario Draghi than fundamentals property exposure saw its net profithalve over the first half of the year

but Santander is in a better positionthan many Spanish banks, with

Junes audit showing it wouldntneed rescue funds under stress.Chairman Emilio Botin said it couldput real estate write-offs in Spain

behind us by the end of this year.Lloyds did far better, beating

expectations on underlying profitand improving its balance sheet. Sixmonths is a long time to wait forclarity on Libor liabilities speculatedat 1.5bn, but Antonio Horta-Osoriois already showing that damagingscandals can be overcome.

BOTTOMLINE

MARC SIDWELL

Lloyds Banking Group PLC

26 Jul20 Jul 23 Jul 24 Jul 25 Jul

29.2529.50

28.7529.00

29.7530.0030.2530.50 p

29.0326 Jul

SANTANDERS profits halved in thefirst half of the year after it took

writedowns on deterioratingSpanish real estate assets, the bankrevealed yesterday.

Profits fell to 100m (78.3m) forthe second quarter and 1.704bnfor the half, down 51.3 per cent onthe same period of 2011.

Expenses rose 5.1 per cent on the year, and staff levels actually rose0.1 per cent in the year to 187,251.

The Eurozones biggest bank saidit had now completed 70 per centof required writedowns againstrepossessed housing and

Spanishproperty writedownsbatter Santanders earnings

BY HARRY BANKS unrecoverable loans to developersdemanded by regulators in anattempt to belatedly recogniselosses from a 2008 property crash.

Although in line with theprovisions ordered by the Spanish

government, traders weresurprised the bank was willing totake such a slice of these losses soearly in the year.

The provisions will allow us toput real estate write-offs in Spain

behind us by the end of this year,explained chairman Emilio Botin.

Shares rose 10.6 per cent on theday, closing at 4.51, lifted in part

by Mario Draghis speech hinting atmore ECB support for the economy.

FRIDAY 27 JULY 20123NEWScityam.com

Chairman Emilio Botin hopes this will be the final blow from Spanish property loans

Scandals castlong shadow but it willpass

7/31/2019 Cityam 2012-07-27

6/35

BT Business

Open up new ways

of working withBT Infinity for business.Its the new standard in business broadband giving yousuperfast access to the web with speeds of up to 76Mb.

Video conferencing.More face time without thehassle and cost of travel thanksto flawless video conferencing.

Cloud computing.Get fast, secure access to yourbusiness applications in theCloud, and reduce the need forexpensive software and servers.

Flexible working.Work wherever you are withoffice wi-fi for up to 20 people.Plus free unlimited access to4 million UK wi-fi hotspots.

Faster upload anddownload speeds.Upload and download largefiles quicker. Files as big as5Mb upload in just 1 secondand 10Mb download evenfaster than that. *

Superfast browsing.Guaranteed minimum speeds of 16Mb even at the busiest timeswith our dedicated businessbroadband fast lane.

Transform the way you workCall: 0800 032 1393 Visit:bt.com/businessinfinity

, !A-A

7/31/2019 Cityam 2012-07-27

7/35

NOMUR A Securities boss Koji Nagai will replace Kenichi Watan a bi as chief executive a t the troubled bank, it wasannounced yesterday as sev en topmanagers quit o ver the growing insid-er trading scandal. Analysts said the m ass resignations,

wh ich saw Watanabis close adviserand chief operating o f ficer TakumiShibat a stand down, may put the

brakes on the Japanese ba nksglobal exp ansion plans of recent years. The pair were

joined by five sen-ior managingdir ectors who alsoleft the firm fol-lowing the thirdinsider tradingscandal in the four

years since Watanabitook the helm.

Nagai has worked atthe group for m ore

Top brass quitNomura as itswoes escalate

BY TIM WALLACE than 30 years and headed the securi-ties unit since April of this year.

He said he will continue pushing forthe group to become a global invest-ment bank, but may tweak overseasstructures: We will make bold choicesof what we will focus on. We will notsimply stick to how we did things inthe past, he said.

But analysts said the change couldmean an end to the banks globalambitions, a shift from Watanabisexpansion which included the acquisi-tion of Lehman Brothers Asian andEuropean assets a move thatexposed the group to the Eurozonecrisis and put pressure on profits.

Indeed, yesterdays earnings datashowed profits in the first quarter

of just Y1.89bn (15.4m), down 89per cent on the year.

Stocks in the group rose 5.71per cent on the day to close at

Y259.

Kenneth Jacobs said Europe was a concern

Koji Nagai will replaceKenichi Watanabi

INVESTMENT bank Lazard reported a50 per cent slump in second quarterprofits yesterday, forcing it to look at

ways of cutting costs. The New York based asset

manager and adviser reported netincome had halved to $33m (21m)from $66m a year earlier, withearnings per share down to 25 centsfrom 48 cents.

Last night it said costs were toohigh at the 164 year old institutionand that it would make cuts in a bidto increase operating margins by more than ten percentage points.

Lazard chief executive Kenneth Jacobs said uncertainty over Europe

Lazards profits slump 50pc asassets under management fall

BY MICHAEL BOW and the US fiscal outlook continued to be a headwind forthe firm. Were not assumingsome magical recovery of timespast, he said.

Assets under management fellfrom $162bn to $148bn, led by a ten

per cent fall in allocations toalternatives reflecting investorsshying away from esoteric assetclasses for fear of marketdepreciation.

Restructuring operating revenuealso fell 38 per cent to $30m due toless corporate restructures.

We are confident the expenseinitiatives we have under way will

bear fruit in 2013, chief financialofficer Matthieu Bucaille said.

CME Group, the Chicago futuresexchange operator, beat analystexpectations yesterday to record ahigher income per share figure com-pared to a year ago, due to a lowerthan expected tax bill.

Total net income fell to $244.9m(156m) from $293.7m a year ago

but net income per share rose to 89cents seven cents ahead of analystexpectations of 82 cents a share after adjusting for a one-time tax

bill.Its a little better than expected,

but not nearly as much as that 89cent headline number would imply.

The vast majority of the beat seemsto be on lower than expected taxes,

Macquarie Securities analyst EdDitmire said.

CME Group in

tax bill boostBY MICHAEL BOW A SENIOR London barrister was yesterday accused of failing to pay 600,000 in tax.

The Crown Prosecution Service(CPS) is prosecuting Rohan PershadQC, of 39 Essex Street chambers, forunpaid VAT between 1 June 1999and 24 September 2011 taxescharged on services he provided as a

barrister.Pershad, who was only made a QC

last year, will appear at Highbury Corner Magistrates Court next

Thursday.In a statement he said: The CPS

has issued this summons while I amstill providing HMRC and the CPS

with further information and

representations setting out why Iam not guilty of any offence.

QC accused in

VAT fraud caseBY ELIZABETH FOURNIER


RATING agency Moodys Corporationreported an 8.7 per cent slide inprofit yesterday, blaming increasedexpenditure on staff numbers and IT systems.

Net profits fell to $172.5m(109.9m) at the end of June, downfrom $189m in the second quarterof 2011, with earnings per sharehitting 76 cents, down from 82cents last year.

The company blamed the drop onan increased headcount, followingits acquisition of insurance analysisfirm Barrie & Hibbert and statisticalresearch firm Copal Partners in2011.

Rising headcount at Moodycancels out jump in revenu

BY MICHAEL BOW This increased costs from$335.1m to $362.3m year on year overshadowing a six per centrevenue increase of $35.6m for thesame period.

Moodys revenue results for thesecond quarter reflected solid year-

on-year growth in public financeand structured finance at MoodysInvestors Service as well ascontinued strong results fromMoodys Analytics, chief executiveRaymond McDaniel said.

Moodys best performing division was its analytics business, whichsaw a 19 per cent revenue increasein the second quarter led by increased sales of research throughits CreditView business.

7/31/2019 Cityam 2012-07-27

8/35

7/31/2019 Cityam 2012-07-27

9/35

BSKYB posted record profits yester-day, as the broadcaster revealedplans to spend 500m on buying

back shares. The pay-TV company added just

300,000 extra customers in the past year, but boosted income by signingup existing subscribers to its broad-

band and telephone deals. Sky alsoannounced it was launching a 30mcampaign to promote Now TV, its on-demand online streaming venture,and said it had invested $10m(6.4m) in Roku, an internet connect-ed set-top box.

Revenues for the 12 months to July were 6.8bn, three per cent up onthe year before, and operating profit

jumped 14 per cent to 1.2bn. Thefirm boosted the final year dividendto 16.2p, pushing full-year yields upnine per cent to 25.4p per share.

It also announced it would spend500m on a share buyback, followingon from last years 750m repurchas-ing scheme after News Corps bid totake control of the company col-lapsed. Shares in BSkyB, 39 per cent

Broadband andphone deals liftBSkyB earnings

BY JAMES TITCOMB owned by News Corp, rose three percent in trading yesterday as theresults beat forecasts. The company said revenue per user

had increased to 548, as a decline innew customers led Sky to focus onencouraging pay-TV subscribers tosign up to internet and telephonedeals. Sky now has 10.6m users.

Skys chief executive Jeremy Darroch said: In what remains atough economic environment, cus-tomers are choosing Sky over otherproviders. Weve continued to addnew households and existing cus-tomers are remaining loyal and tak-ing more products from us.

ITV studios, which produces shows including Julian Fellows Titanic, saw sales rise

British Sky Broadcasting Group PLC


680

690

700

710

720 p706.50

26 Jul

Another solid operational performance given the challenging macrobackdrop, combined with a robust nancial performance. Churn is the standoutoperational number at 9.9 per cent and we expect a similar performancein 2013 retaining our positive stance and target price of 815p.

ANALYST VIEWS

This is a solid full-year statement from BSkyB, indicating goodprogress across the board as the company continues to invest inits programming and launch new products to drive customerretention. Importantly the number of triple-play customers rose to 3.4m.

Various new initiatives are likely to increase costs e.g. sports contentsignings/re-signing, Now TV and Ireland communications launch but these

should be more or less offset by higher base numbers and cost mitiga-tion elsewhere. The gures are very good overall

WHAT DID YOU MAKE OFBSKYBS FULL YEARRESULTS?Interviews by James Titcomb

PAUL RICHARDSNUMIS SECURITIES

PATRICK YAUPEEL HUNT

STEVE LIECHTIINVESTEC


PUBLISHING and events group ReedElsevier yesterday said it wouldaccelerate plans to dispose of non-core businesses.

The FTSE 100 firm, which owns

legal database LexisNexis andscientific publishing houses, saidsales were up from 2.9bn to 3bnin the first half of the year, withprofits increasing seven per cent to666m.

With most of the firms growthcoming from subscription productsand events the firm is looking tosell outlets that depend onadvertising, such as Hollywoodmagazine Variety.

Reed Elsevieeyes disposa

BY JAMES WATERSON

PROFITS at ITV were hit by slowing advertising revenues inthe first half of the year, butshares in the broadcaster jumped

as it reported growth elsewhere inthe business. A 34 per cent rise in turnover at

the companys production armITV Studios, thanks to hit showsincluding Titanic, drove an 11 percent sales increase to 1.28bndespite the group describingadvertising revenue as flat.

Boosts to other sources of income, including licensing andonline ad sales, meant non-

ITV spreads its wings as studiosmake up for advertising drag

BY JAMES TITCOMB advertising revenue accounted for40 per cent of ITVs turnover.

Shares in ITV jumped by morethan 10 per cent yesterday withpre-tax profits better thanforecast, despite the drop from

181m to 167m.Chief executive Adam Croziersaid he expects the TV advertisingmarket to stay relatively flatalthough ITV had outperformedthe sector as a whole thanks to

viewing figures during Euro 2012.Over the full year we expect

ITV Studios revenues to grow at asimilar rate to 2011 and to growthe ITV Studios share of ITV1output, Crozier said.

7/31/2019 Cityam 2012-07-27

10/35

WEAKER oil and gas prices took theirtoll on Royal Dutch Shells second-quarter profits while extra mainte-nance costs on high-margin US Gulf production drove earnings below analysts expectations.

Shell, the second largest of the western world oil majors behindExxon Mobil, said earnings fell toaround $5.7bn (3.6bn) from $6.6bna year ago on a current cost of supply

basis adjusted for special items. The miss was primarily due to

maintenance costs and shutdowns inthe US Gulf, where the company hassome of its most profitable produc-tion, and in Australian LiquefiedNatural Gas.

Chief executive Peter Voser said theprofit miss included about $500m of costs associated with these factors.

Like its rivals, Shell is battlingresource nationalism and competi-tion from Asian rivals to keep growthgoing, and has to keep one eye on a

volatile oil price.

Falling oil and

gas prices hitprofits at ShelBY HARRY BANKS Last week it lost out to much small-

er state-owned Thai company PTT inits attempt to add gas reserves forfuture liquefied natural gas (LNG)production, pulling out of a potentialauction for Cove Energy to avoid over-paying. Some 72 per cent of Coveshareholders had accepted PTT's of fer

by yesterday. Our industry continuesto see significant energy price volatil-ity as a result of economic and politi-cal developments, said Voser in theearnings statement.

Investments help British Gasowner Centrica beat forecastsUTILITY group Centrica, which owns

the British Gas brand, said yesterday it was reaping the benefits of recentinvestments in infrastructure as itreported a rise in first-half earnings

which beat market forecasts.Profits were boosted by new invest-

ments that increased productioncapacities, Centrica said, one day after it confirmed a 1.4bn invest-ment in the Cygnus gas field follow-ing the governmentsannouncement of a new North Sea

BY CITY A.M. REPORTER tax break.Centrica said earnings per share

(EPS) for the six months ending 30

June rose 14 per cent from last yearto 14.80p. The utilitys UK upstream profits

rose 28 per cent to 682m, despitegenerating 20 per cent less electricity than the same time last year.

Centrica said economic conditionsremained challenging and that itsfull-year earnings were expected to

be weighted towards the first half of the year, but added it still saw growth for the year.

For the full year, we expect todeliver further earnings growth, sub-

ject to the usual variables of weather

patterns, commodity price move-ments, production performance andthe competitive environment, thecompany said in a statement, raisingits interim dividend by eight per centto 4.62p. The companys nuclear power

assets contributed to most of itspower business profits and Centricasaid it expected a seven-year lifeextension on nuclear plants it holdsshares in.

CHINA will try GuKailai (pictured),the wife of oustedPolitburo memberBo Xilai, oncharges ofallegedlymurdering Britishbusinessman NeilHeywood, statemedia saidyesterday in thelatest turn in ascandal that hasrocked thegovernment inBeijing and couldbring Gu the deathpenalty. She willface trial in easternChina.

GU KAILAI CHARGED WITH HEYW

Royal Dutch Shell PLC


2,140

2,160

2,100

2,120

2,180

2,200

2,220 p 2,137.5026 Jul

EXXON M OBIL RESULTS: Page 14

FRIDAY 27 JULY 20128 NEWS cityam.com

GAS trading at energy company BG Group has been hit by adowngrade of its US shale assetsand falling European productionas a result of a gas leak at TotalsNorth Sea Elgin facility earlier this

year, BG Group said yesterday.The US asset downgrade and

production drop in Europe werepartly offset by strongperformance in its liquefiednatural gas (LNG) business as wellas by strong growth expectationsfor Africa and Australia, thecompany said in its second quarterearnings report.

The company said that its LNGoperating profits had grown by

some 25 per cent to the upper endof a range of $2.6bn to $2.8bn.

Elgin leak drags

down BG GroupBY CITY A.M. REPORTERSSE said yesterday it was on track fora full-year dividend increase of atleast two per cent more than retailprice inflation (RPI) for 2012-2013and above-RPI inflation dividendincreases from 2013-2014 onwards.

The utility also saw a steep dropin output from its gas and coal-firedpower plants, with 43 per cent lessgenerated in its first quarter thanthe same time last year, mainly dueto maintenance work, it said.

The company, which last year withdrew from a consortiuminvesting in new nuclear plants tofocus on renewable energy instead,saw a slight increase in powerproduction from its hydro, onshore

wind farms and biomass plants to1.33 gigawatt-hours (GWh).

SSE on track

for payout riBY CITY A.M. REPORTER

7/31/2019 Cityam 2012-07-27

11/35

WEALTH manager St Jamess Place yesterday beat expectations as itannounced a 20 per cent jump infirst half profits to 220.5m. Analysts had thought sales would

struggle as clients feared economicuncertainity in the Eurozone andkept their funds close to hand.

But instead St Jamess said that new business hit 353.9m in the first half of this year, up from 335.6m in thelast six months of 2011. The firm said it expects to see

growth continue for the rest of the year and increased its interim divi-dend by 33 per cent.Uniquely, St Jamess Place controls

both its investments and its salesprocess, which involves a team of advisers known as the Partnership.

Chief executive David Bellamy toldCity A.M.that the firms core businessis solid, robust and resilient.

Weve grown the Partnership inthe first three months and themomentum thats developing is very positive. This years recruitment isnext years growth, he said.

Wealthy clientsboost profits atSt Jamess Place

BY JAMES WATERSON Weve got 1,700 people out thereproviding advice and attracting new funds so we can be confident that thenet inflow will see improvements forshareholders. Around 90 per cent of the firms

business comes from existing clientsor referrals, with the typical cus-tomer aged around 55 and lookingfor a medium to long term invest-ment to support them in old age.

The mass affluent niche in the UK market is expected to continue toenable the company to grow its busi-ness steadily in a market place whichis currently ex-growth, said analystKevin Ryan of Investec.

St. James's Place PLC


325330335

315320

340345 p

340.0026 Jul

ARBUTHNOT reported pre-taxprofit of 10.8m for the half year,up from 200,000 a year ago,thanks in part to the rapid

growth of Secure Tr ust, the retail banking arm that it f loated on Aim in November.

Secure Trust, which remains 75per cent owned by Arbuthnot,

boasted its own pre-tax profi t of 12.5m as its acquisition of Everyday Loans in June boostedits bottom line.

The firm also grew itscustomer base 58 per cent toalmost 200,000 and nearly

Arbuthnot bucks trend as newstructure defies banking slump

BY MARION DAKERSAND TIM WALLACE

doubled its loan book to260.3m.

Part of that increase camefrom the acquisition of personalcredit firm Everyday Loans astep which added 71m to the

groups loan book, takin g it to atotal of 260.3m.

The firm is also benefittingfrom the sale of its securitiesarm, divested in an effort tomove out of the struggling sectorand free up funds for expansionin the retail sector.

Meanwhile Arbuthnot Latham,the groups private bank,continued with its turnaroundplan and reported a pre-taxprofit of 1.4m, up from 1m.


The bank, led by Henry Angest, has increased staff levels against the industry trend

MONEY printer De La Rue saidorders in the last three monthshave been lower than expected,

with an order book broadly flat on

a year ago.The banknote maker added thatit has a number of importantopportunities in the pipeline thatare yet to be confirmed forproduction in the current financial

year.Shares in the firm, which has

embarked on a cost-cutting plan,closed down 4.6 per cent at 10.16.

Note of cautiofor De La Ru

BY MARION DAKERS

BANKING group Investec said yester-day it is trading in line with last year,though the falling South Africanrand has hampered its progress.

The firm said its operations inSouth Africa were doing well on aconstant currency basis but the 17per cent fall of the rand over the last

year has impacted the results whenconverted into sterling.

The group recorded net inflows of 1.6bn since March, taking thirdpart assets under management to96.6bn though currency changesmean this figure is f lat on last year.

Investec hurtby rands fal

BY MARION DAKERS

7/31/2019 Cityam 2012-07-27

12/35

STRONG emerging markets helped

consumer goods giant Unilever avoidissuing similar profit warnings totwo of its main rivals yesterday,although it did warn of toughertimes ahead due to difficulteconomies and volatile input costs.

The maker of brands such as Doveand Knorr is facing tough trading insouthern Europe and is seeing somecommodities costs edge up. However,it stuck to its 2012 targets ratherthan alarm investors like rivalsDanone and Procter & Gamble.

Unilever, with annual revenues of 46.5bn (36.4bn), said second-quarter underlying sales rose 5.8 percent helped by its lower exposure toproblem economies, such as Spain,than Danone, while it has more

business in fast-growing markets likeIndia and Indonesia than P&G.

This beat a company-compiledconsensus of 4.8 per cent and cameafter a f irst-quarter increase of 8.4per cent and 6.5 per cent growth for2011. Emerging markets, whichmake up 55 per cent of sales, saw growth of 11 per cent.

The macro economic situation isdifficult and shows signs of furtherdeterioration and there is volatility in commodities, but we still expectto deliver a modest improvement inoperating margins for 2012, financedirector Jean-Marc Huet said

yesterday.European sales fell 2.2 per cent in

the quarter, but Huet said Eurozonecrisis-hit southern Europeaneconomies accounted for less thanfour per cent of group sales. These

were slightly offset by goodperformances in Britain, Germany,France and the Netherlands.

Unilever defgloom withstrong growt

BY A CITY A.M REPORTER

G E T T Y

BUILDERS MERCHANT TravisPerkins blamed the unseasonably

wet weather for stalling construc-tion activity in the first half of the

year and wiping 10m off profits. The company, which owns

brands such as City Plumbing and Tile Giant, said revenues fell 0.7per cent to 2.4bn on a like-for-like

basis, with exceptional bad weather impacting its business inthe second quarter.

Whilst weather patterns nor-mally average themselves out overany trading period, it has been dif-ficult to ignore the impact on theresults of the first half trading of the wettest three months sincerecords began, Geoff Cooper,chief executive said.

This has inhibited constructionactivity and particularly con-strained turnover in our heavy-siderelated businesses in a marketalready struggling to recover tomore normal levels. The construction and home

improvements retailer, made anadjusted pre-tax profit of 137.7min the six months to 30 June, down1.9 per cent compared with thesame period the previous year.

But the firm has continued togrow gross margin and gain like-for-like market share in all of itsfour divisions -- general merchanti-ng, specialist merchanting, plumb-

Travis Perkinsprofits washedout by weatherBY KASMIRA JEFFORD ing and heating, and consumer -- and

manage costs tightly. Though both construction and con-

sumer markets have been weak in theeconomic downturn Travis Perkinshas performed relatively well, win-ning share from rivals and benefitingfrom acquiring plumbing and heat-ing specialist BSS in 2010 and

Toolstation in January this year. Analysts at Liberum Capital said

Travis Perkins should be well placedto benefit from resilient or even ris-ing home improvement spend asinflation pressure on disposableincome starts to fall.

The group announced a dividend of 8p, up 23 per cent from last year. Netdebt, meanwhile, fell just under20m to 563.5m.

Cooper said while forecastingremained difficult due to declines inpublic sector spending in the con-struction industry, it was happy withfull year consensus expectations.

IN BRIEFPPR and LVMH see strong salesn French luxury firms PPR and LVMHreported strong first-half profit growthyesterday. LVMH, the worlds largestluxury company which holds brands likeLouis Vuitton, saw a 20 per cent rise inits profit from recurring operations,which reached 2.66bn. PPR also sawits recurring operating income rise 20.4per cent. Its luxury division profitgrowth was up 30 per cent for the half,with profits at Yves Saint Laurent risingmore than three-fold. However, the

performance of Puma hit earnings.

Hobbycraft sees surge in earningn Arts and crafts chain Hobbycraftyesterday reported an 8.3 per cent risein total earnings before interest,taxation, depreciation and amortisationto 15.6m. The retailer, owned byprivate equity firm Bridgepoint Capital,saw an 11.9 per cent jump in revenue to106.5m in the 12 months to 19February. Hobbycraft, which opened 10new stores during the year, now has 61outlets in total. Chief executive CatrionaMarshall said Hobbycraft was well

positioned to survive the downturn.

Travis Perkins PLC


1,0001,0101,020

980970

990

1,0301,040 p

990.0026 Jul

CAPITAL Shopping Centres,Britains largest shopping centreowner, has suffered a drop in rentalincome in the first half of 2012 as itstruggled to re-let shops following astring of retail failures earlier this

year.The owner of malls including the

Trafford Centre in Manchester andLakeside in Essex, said like-for-likenet rental income dropped 2.3 percent to 181.8m in the six monthsto 30 June. Occupancy remainedstable at the 95 per cent levelreported in the first quarter, but itis still down from 97 per cent at theend of 2011.

Since December a slew of well-known high street names including

Capital Shopping Centres suffersas its rival Shaftesbury prospers

BY KASMIRA JEFFORD Game, La Senza and Clintons havefallen foul of an increasingly tougheconomic climate. And some 80units in CSCs 15 malls across thecountry are let to tenants inadministration.

In contrast, Shaftesbury, aproperty peer centred solely onLondons sought-after West End,reported continued strong demandfor its shops and offices, with highlevels of occupancy as a result.

In an interim update for thethree months to 26 July 2012, the

group which owns 500 buildingsin areas like Carnaby Street andChina Town said it was preparedfor some disruption around theOlympics, but was uncertain of theextent of its impact on trading inthe West End.

TATE & Lyle said its operatingprofit for the three months to June

was in line with its expectations, asstrong demand for its speciality food ingredients from the US andemerging markets offset weakerappetite in Europe.

The London-based group, whichmakes sucralose zero-caloriesweetener Splenda, said yesterday operating profit in the sucralosedivision was lower than itsexpectations due to difficult

market conditions in Europe and astrike at its Turkey plant.Co-products generated a small

amount of additional income

Tate & Lyle says earningsline despite European wea

BY A CITY A.M REPORTER during the quarter as it had lockedin prices at levels marginally higher than those anticipatedduring the 2012 pricing round, itsaid.

It said it was not clear how cornprice volatility would impactdemand for co-product demandand pricing for the rest of the year,

but said it would stick to itsstrategy of maintaining full cornsilos in the US to secure supply.

We continue to expect to makeprogress this financial year whilerecognising the current level of

uncertainty surrounding the widereconomy and volatile cornmarkets, said chairman PeterGershon yes terday.

SHARES in Compass Group,the worlds biggest caterer, rose almostfive per cent yesterday after itreported strong third quarterfigures, boosted by large contract

wins in emerging markets. The group, which caters for

everyone from the armed forces toschools around the world, posted a5.7 per cent rise in revenue in thequarter to 30 June.

Its North American and emergingmarkets businesses both grew

strongly, with revenues up 15.5 percent. This helped offset toughconditions in Europe and Japan,

where sales edged up 0.9 per cent.

Contract winslift Compass

BY KASMIRA JEFFORD

CSC, which owns Lakeside mall above, has seen its rental income fall since December


T H E F O R U M

cityam.com/forum

n nJOIN THE DEBATE

SEE PAGES18-19

7/31/2019 Cityam 2012-07-27

13/35

Hula 4 seater sofa. Credit subject to acceptance. Credit is provided by external nance companies as determined by DFS. 4 years interest free credit from date of order. Delivery charges apply. Sale price applies from 30.07.12 to 27.08.12. Sale price applies from 30.07.12 to 09.09.12. After sale price applies from 10.09.12 - see instore or online for details. Mobile charges may apply when calling 0800 110 5000. DFS is a division of DFS Trading Ltd. Registered in England and Wales No 01735950. Redhouse Interchange, Doncaster, DN6 7NA.

Visit your nearest store, order direct at www.dfs.co.uk or call free on 0800 110 5000 24 hours a day, 7 days a week

4 years interest free credit on everything

Or pay nothing until Easter 2013 then take 3 yearsinterest free credit

0 %REPRESENTATIVE

APR

No deposit with 4 years interest free credit. 48 equal monthly payments of 10.39. Or pay nothing until Easter 2013 then 36 equal monthly payments of 13.86. 0% APR. Total 499.

saleprice

749

after saleprice

998

Hulanow only

499

the DFSsummer sale

D O U B L E S A V I N G S

E N D S U N D A Y

Summer Sale Opening Hours: Now open 10am to 6pm Sundays

7/31/2019 Cityam 2012-07-27

14/35

UK still in top 3 for M&A despite Eur

PRESSURE on the pharmaceuticalindustry from generic competitionand government-squeezed prices wasevident again yesterday as

AstraZeneca reported a 21 per centdrop in second quarter sales. The loss of exclusivity on the firms

top-selling antipsychotic drugSeroquel was responsible for 15 per-centage points of the revenuedecline, while pre-tax profits tum-

bled by a third to 2.16bn. Yet Astras earnings per share yes-

terday surpassed analyst forecasts,slipping just 12 per cent to $1.53 ashare significantly above consensuspredictions of $1.39 a share, andhelping the firms share price toclose up 0.15 per cent in London. The better than expected earnings

were boosted by the release of a taxprovision in quarter two, which lift-ed core earnings by 19 cents a share.

Were always actively looking out-side for high-quality science, high-quality projects and high-quality product portfolios to bring into

AstraZeneca, finance chief SimonLowth commented.

AstraZenecatops forecastsyet sales diveBY JULIAN HARRIS The news came a day after

AstraZenecas rival GlaxoSmithKline,the UKs biggest pharma company,reported a four per cent decline insales for the three months to June,itself citing price cuts imposed by European governments.

In a further sign of the state of theindustry, the stock of two of the

worlds largest generics firms spikedin the US yesterday.

Mylan posted second-quarter profit well above Wall Street estimates, while rival Watson Pharmaceuticalsraised its full-year forecast afterreporting quarterly results.

Mylan closed up 4.9 per cent, while Watson closed up 1.4 per cent.

THE MERGERS and acquisitionsmarket is still in the doldrums, yetthe UK and other established

venues are not currently missingout on a swathe of lucrative deals atthe expense of newer markets,according to research from Ernst &

Young (E&Y) and the Cass BusinessSchool.

M&A activity in developingmarkets has remained steady as apercentage of the worlds dealssince 2009, accounting for around40 per cent of global transactions,said E&Y.

And while deal volumes worldwide are up 10 per cent in thesecond quarter compared to last

BY MARION DAKERS year, much of the increase comesfrom large transactions in North

America. The UK remains the thirdmost attractive place to do a deal,

behind the US and Singapore. Asiancountries make up half of theresearchers top ten most maturemarkets.Ernst & Youngs chief economistand transaction partner Mark Gregory said: While the sovereigndebt crisis has had far reachingeffects on countries in theEurozone, the UK, in terms of itsappeal in attracting domestic andcross-border transactions, hasconsolidated its position as one of the worlds leading markets forM&A.

But over the longer term, E&Y has

picked out several nations that are becoming more attractive as venuesfor deals, based on infrastructure,regulatory environment, socio-economics and technologicalcapability.

The United Arab Emirates hasclimbed up the rankings in the past12 months to take 20th spot in E&Ysglobal table, while Poland has shotup to 30th, Romania has risen 13places to 36th and Thailand, theCzech Republic and Malaysia werealso singled out as rapid growthmarkets. But in an indication of

what E&Y describes as a two-speed world, Portugal has slumped eightpositions to 39th, while Greece hasfallen 12 spots to 53rd in the worldin the last year.

AstraZeneca PLC


2,9202,9402,960

2,8802,860

2,900

2,9803,000 p 2,911.50

26 Jul


Explore the culture of Rome with 3 nights for the price of 2, as well ascomplimentary spa access* at Jumeirah Grand Hotel Via Veneto. Situated inthe heart of the Dolce Vita, this elegant property is w ithin walking distanceof all that Rome has to offer.

To book email j vv [email protected] call reservations on 0800 082 8000

*Summer offer available until 30th September 2012. Summer offer valid at Jumeirah Grand Hotel Via Venet o only. All offers a re subjec t to avai labilit y.

Relax by the sea on the Northwest coast of Mallorca with 5 nights for the priceof 4, as well as complimentary breakfast and spa access** at Jumeirah PortSoller Hotel & Spa. Spectacularly located on the side of a cliff surrounded by the sea and the mountains, the art of relaxation has never been so simple.

To book email jps [email protected] call reservations on 0800 082 8000

**Summer offer available until 30th November 2012. Summer offer valid at JumeirahPort Soller Hotel & Spa only. All offers are subject to availability.

ESCAPE TO THE SUN WITH JUMEIRAH THIS SUMMER AND ENJOY ONE NIGHT FREE!

Jumeira h Grand Ho tel Vi a Veneto, Rome Jumeira h Port S oller Hotel & Spa, Ma llorca

Maturity %

Countries in greyare not available

10080

60

40

20

0

TheUSis seen asthe best place forM&A, followed bySingapore, theUK

andHong Kong

Global M&Avolumes rose 10% in Q2 compared to

last year

M&A indeveloping markets

remains steady,accounting for40% of deals

since 2009

of businesses planto pursue an

acquisition in thenext year

31%

7/31/2019 Cityam 2012-07-27

15/35

Harlequin corner sofa, cushions and patterned stool optional extra. Credit subject to acceptance. Credit is provided by external nance companies as determined by DFS. 4 years interest free credit from date of order. Delivery charges apply. Sale price applies from 30.07.12 to09.09.12. After sale price applies from 10.09.12 - see instore or online for details. Mobile charges may apply when calling 0800 110 5000. DFS is a division of DFS Trading Ltd. Registered in England and Wales No 01735950. Redhouse Interchange, Doncaster, DN6 7NA.

Visit your nearest store, order direct at www.dfs.co.uk or call free on 0800 110 5000 24 hours a day, 7 days a week

4 years interest free credit on everything

Or pay nothing until Easter 2013 then take 3 yearsinterest free credit

0 %REPRESENTATIVE

APR

No deposit w ith 4 years interest free credit. 48 equ al monthly payments of 16.56. Or pay nothing until Easter 2013 then 3 6 equal monthly payments of 22.08. 0% APR. Total 795.

saleprice

1045

after saleprice

1295

Harlequinnow only

795

the DFS

summer sale D O U B L E

S A V I N G S

E N D S U N D A Y

Summer Sale Opening Hours: Now open 10am to 6pm Sundays

7/31/2019 Cityam 2012-07-27

16/35

IN BRIEFGambling firm 888 wins bign Online gaming company 888Holdings yesterday said secondquarter revenues rose 17 per cent to$92m but added that it was not yetclear what effect the London Olympicswould have on its business. The firmsaid third quarter trading started inline with expectations, with July'saverage daily revenue 10 per centabove a year ago, the company said.At the end of June, 888 had 12.1mregistered users, up a quarter on thesame point last year.

New orders slide at Siemensn Manufacturing giant Siemens yester-day posted a 23 per cent drop in quarterlynew orders, steeper than expected, ascustomers wary of Europe's debt crisisincreasingly refrained from makinginvestments. Order intake a barometerof future sales declined to 17.8bn(13.9bn) in the third quarter, missing a19.5bn forecast. Profit at at the firmscore industry division fell by 26 per centto 523m.

Promethean boss steps downn The boss of education technologyspecialist Promethean World is leaving

the business to pursue a new challenge,it was announced yesterday. Jean-YvesCharlier, the US-based chief executiveof the Blackburn classroom interactivewhiteboard supplier, revealed hisintention to quit as the companyrevealed half year operating losses of148.5m, compared with a profit of4.1m a year ago.

EXXON Mobil, the worlds largest pub-licly traded oil company, posted lower-than-expected quarterly earnings

yesterday as its oil and gas outputsagged and weak margins hurt itschemicals business.

Weaker global oil prices have weighed on earnings across thesector and Exxon also felt the stingof decade-low US natural gas prices,especially in the United States

where it is the largest producer of the fuel.

The company, which has pledgedto spend a record $37bn this year asit brings new projects on line incountries including Canada, PapuaNew Guinea and the Gulf of Mexicosaid oil and gas output fell 5.6 percent to 4.15m barrels oil equivalentper day during the quarter.

Exxon is hoping those new projects will boost its long-term oiland gas output.

The Texas-based company

BY HARRY BANKS reported a second-quarter profit of $15.9bn, or $3.41 per share, up from$10.68bn, or $2.18 per share, a yearearlier. Profit was boosted by a$7.5bn gain related to the sale of astake in its Japanese refining andchemicals business, and tax items.

Excluding those one-time gains,Exxon earned $8.4bn, or $1.80 pershare. Exxons earnings from US oiland gas production fell by morethan half in the second quarter to$678m, largely due to the steepdecline in prices of natural gas.

How Croydons Whitgift Centre could look if it is redeveloped by Hammerson

Exxon Mobil Corp


84.00

84.50

85.00

85.50

86.0086.50 $ 86.5226 Jul

HAMMERSON yesterday unveiledits plans for the redevelopment of Croydons Whitgift Centre as the

battle between the property developer and Australian rival

Westfield escalated.Plans to revive the 1960s

shopping mall came to a halt this year after its leaseholders RoyalLondon Asset Management andIrish Bank Resolution and thefreehold owners the Whitgiftfoundation were split over whichdeveloper to support.

Hammerson reveals Croydoncentre plans to rival Westfield

BY KASMIRA JEFFORD Hammerson and theleaseholders presented CroydonCouncil with plans last night tocombine the centre with Central,Hammersons other nearby shopping mall, and create acolossal 1.6m square feet scheme

with shops, restaurants, a hotel,five public squares, 500 residentialunits as well as a car park.

Westfield, presented its plans tothe council earlier this month.Both will now go through publicconsultation and submit planningapplications later this year beforethe council makes a final decision.

FRIDAY 27 JULY 2012 cityam.com14 NEWS

Exxon Mobil hitas price of gasand oil tumble

7/31/2019 Cityam 2012-07-27

17/35

ACCOUNTANTS may not be wellknown for their daredevil spirit orattention grabbing antics, but severalemployees of big four firm PwC aredoing their best to prove the stereo-types wrong.

First up, Iain Mackay part-timePwC trainee, part-time Team GBHockey hero. The midfielders dedication to

his sport has seen him under-take intensive training and com-pete for more than a year, gopart time at work, and even moveoffices to fit round his schedule. Though he broke his hand just

before the qualifiers, Mackay recovered in time to makeit into the squad, and

will line up with theteam on Monday to face

Argentina in the heats.But not content with one Olympian,

the firm is also fielding competitors insailing, marathon running, and

wheelchair basketball for New Zealand, Ireland and Japan, as well asone of the coaches for the Japanese

team. The proud PwC lot reckon

their very own Team GB might just be a record for a City firm but The Capitalist wantsto hear from any one who begs

to differ, so please get in touch if you know a banker moonlight-

ing as a badminton whizz,or a basketball-playing

barrister.

Got A Story? [email protected]

15cityam.com

cityam.com/the-capitaTHECAPITALISTFRIDAY 27 JULY 2012

AT LO N D O N 2 0 1 2

PwC fields teamof athletes fromacross the globe

Team GB hockeyplayer Iain Mackay

THE Olympic torch made its waythrough the City yesterday, setting offfrom Camden and pausing at St Paulsand the Museum of London beforecontinuing to Trafalgar Square andDowning Street. During the day it wascarried by (clockwise from above left):Daniel Mccubbin at St Pancras, M&Schairman Robert Swannell, Esa-PekkaSalonen, conductor and composer ofthe Philharmonia Orchestra, and ArcelorMittals Lakshmi Mittal

Torch comesto the City

7/31/2019 Cityam 2012-07-27

18/35

IN BRIEF Acquisitions lift Intertek profitn Testing company Intertek Groupreported a 27 per cent rise in profit forthe first half of the year, helped by

acquisitions and strong demand for itsservices. Intertek said it expects high-single-digit revenue growth for the restof the year. Pre-tax profit rose to 140mfrom 110.6m a year earlier.

QinetiQ has solid first quartern Defence technology firm QinetiQ saidyesterday first-quarter trade had beensolid but warned that it could be hit bycontract delays caused by the USelections. QinetiQ, which makes militaryequipment such as bomb disposalrobots, said uncertainty over defencespending was reducing in the UK, butconditions in the US were unpredictable.

Volkwagens earning growth slon Germany's Volkswagen suffered aslowdown in underlying profit growthin the second quarter, as costs of atechnology overhaul and Europe'sdeepening debt crisis weighed on thecarmaker's earnings. Operating profitgrew 3.4 per cent to 2.56bn, lessthan the 10 per cent achieved in thefirst quarter.

LOreal sees strong luxury salen France's L'Oreal, the world's biggestcosmetics maker, yesterday reiterated itwas on track to outperform its market in2012 after second-quarter sales grew 5.7per cent on a like-for-like basis. Strongluxury sales and a recovering NorthAmerican market have helped L'Orealoffset stagnation in Western Europe.

NATIONAL Express is on the hunt fora new chairman, af ter John Daveney announced his retirement yesterday.

The firm, which reported a 14 percent slump in half-year profits afterditching the East Anglia railfranchise, said Devaney will retirein early 2013 to focus on his otherroles at Cobham, NATS and inprivate equity.

Stripping out the loss of incomefrom East Anglia, National Express

said non-rail operating profits fellone per cent to 90m.

Chairman toleave NationalExpress in 2013

OECD boss saysOsborne andcuts must stay

BY MARION DAKERS

G E T T Y

ROLLS-ROYCE posted a better-than-expected seven per cent rise in first-half profit yesterday, driven by increased production at planemak-ers Airbus and Boeing who areresponding to growing demand fromairlines for new fuel-efficient planes.

Rolls, the worlds second-largestmaker of aircraft engines behind USgroup General Electric, reported anunderlying pre-tax profit of 637mfor the six months to the end of Juneon revenues five per cent higher at5.8bn.

Europes Airbus and US rivalBoeing are ramping up output andare targeting more than 1,100 deliv-eries this year. The company, whose website says a

Rolls-Royce powered aircraft takes off or lands every 2.5 seconds, raised theinterim dividend by 10 per cent to7.6p per share and said it expected todeliver further growth in 2012 inspite of global economic uncertainty.

For the full year, we continue toexpect good growth in underlyingprofit with cash flow around

Airline ordersboost profitsfor Rolls-Royce

BY HARRY BANKS breakeven, chief executive JohnRishton said.

The volatility of the economic envi-ronment -- whether its in Europe, aslowdown in China or the US -- doeshave an impact and none of us areimmune to this. But the diverse rangeof products we produce and the geo-graphic spread we have helps protectus.

Rolls, which has more than 5,000engines worth some 50bn on order,said revenues at its main civil aero-space unit rose 17 per cent in the lastsix months. Around 60 per cent of theunits revenues come from aftermar-ket services.

THE secretary-general of the OECD yesterday backed the UK

governments deficit-reductionplans, saying that chancellor GeorgeOsborne should maintain hisresolve in the face of opposition.

When asked on Radio 4s Today programme what he would say toOsborne following the crash in GDP,

Angel Gurria said hed tell him tostay the course, claiming thatflexibility with austerity goals couldspook ratings agencies and investors who might doubt the coalitionscommitment to fiscal consolidation.

BY BEN SOUTHWOOD

GREECE now has a 90 per centchance of exiting the Eurozone in

the next year and a half, accordingto increasingly gloomy economistsat Citigroup yesterday.

Chief economist Willem Buiter wrote in February that the chanceof a Greek exit was 50-50, but has

become more pessimistic amid a worsening Eurozone economy.

Buiter said a Grexit is most likely to occur in the next two to threequarters, while he also expects tosee some form of state bailout for

both Spain and Italy this year.

BY MARION DAKERS

GERMANY and France will lose 82bn (64bn) and 62bn

respectively if Greece crashes out of the Eurozone, German research unitIfo claims.

However, the cost of Greecedefaulting on its debt butremaining in the currency union iseven steeper, with expected losses of up to 89bn and 67bn for the coreEurozone nations. Ifos figuresinclude losses on earlier bailoutsand liabilities from bonds and theGreek central bank, but not write-offs by private creditors.

BY MARION DAKERS

SABMiller escaped a shareholderrevolt on executive pay yesterday,although one in four votes at the

brewers annual meeting opposed bosses remuneration packages.

Despite investor advisory body Pirc urging shareholders to voteagainst electing chief executiveGraham Mackay to executivechairman, all motions at

yesterdays annual meeting werecarried, with 77.3 per cent of votescast in favour of the pay package.

Investor anger was possibly tem-pered by SABMiller beating expec-

SABMiller chief weathers storm

as one in four revolt over payBY JAMES TITCOMB tations to report an eight per centrevenue jump in the three monthsto July, with strong growth in Asiaand Africa offsetting sluggish salesin the West. Emerging markets nowmake up 80 per cent of sales atSABMiller, the worlds second-

biggest brewer by volume.Pirc said on Tuesday that there

was a lack of independentrepresentation on the board of SABMiller, and objected toMackays bonus, five times hissalary.

Few shareholders voted againstMackay replacing Meyer Kahn aschairman, as Kahn stepped downafter 46 years at the firm.

THE number of Americans filingnew claims for jobless benefits felllast week to near a four-year low

but an unusual pattern forsummer factory shutdowns kept

hopes in check that the weaklabor market was improving.The labour market has suffered

three months of sub-100,000 job growth as the economy slowedamid a cloud of uncertainty spawned by fears of sharpcontraction in fiscal policy anddebt problems in Europe.

Last week, initial claims forstate unemployment benefitsdropped 35,000 to a seasonally adjusted 353,000, the Labor

Employment data raises hthat US economy is impro

BY BEN SOUTHWOOD Department said. That was amuch sharper drop thaneconomists expected.

The reading for jobless claimshas been volatile this month

because of the timing of theannual auto plant shutdowns for

retooling. The number of newclaims had touched a four-yearlow in the 7 July Week at 352,000.One measure that tries to smoothout this volatility, the four-weekmoving average, fell 8,750 last

week to 367,250.Jobless benefit claims numbers

provide further encouraging newson the US economy, building on

better than expected growth of durable good orders seen in June,said Chris Williams at Markit.


Graham Mackay, the executive chairman of SABMiller, has been criticised over his bonus

TalkTalk battles Skywith pay-TV serviceBY JAMES TITCOMB

BUDGET broadband provider TalkTalk bid to take on Sky, VirginMedia and BT yesterday as itunveiled plans to launch a pay-TV service in tandem with the newly released YouView set-top box.

The company also appointed Sony chairman Sir Howard Stringer to its

board as it said it lost 19,000customers in the quarter to July.

TalkTalk is now planning toundercut its rivals with a 29 a

month broadband and phonepackage with YouView the 299

internet connected freeview TV box backed by Alan Sugar as well asoptions to sign up for additionalSky channels. Chief executive DidoHarding claimed the offer wouldhalt a decline in subscribers andattract new customers. This is

TalkTalk at its disruptive best shesaid.

TalkTalks revenue during thelatest quarter was 414m, a dip onlast years figures, but Harding saidthe operator expects to return togrowth in the second half of the

year based on a recent pickup insubscribers.

BAA has pledged to fight on in itsattempts to keep Stansted Airport,despite losing a Court of Appealhearing yesterday.

Judges yesterday upheld theCompetition Commissions 2009ruling that BAA exerted adominant hold on airports inScotland and south east England.

BAA, which also owns Heathrow,sold off Edinburgh Airport in April

but has mounted several appealsagainst the order to dispose of Stansted.

We will now consider its

judgement carefully and we intendto submit an appeal to the Supreme

BAA loses another appeafight to keep Stansted AiBY MARION DAKERS Court, the firm said in a

statement.Ryanair, however, welcomed the

ruling, criticising BAAs stance as a blatant attempt to delay the sale.

Legal experts were sceptical of BAAs chances in further appeals.

BAA has done well to hang onto Stansted for three yearsfollowing the CCs originaldecision. With the benefit of hindsight, it might conclude that it

would have done better to sell theairport in 2009 than now, given thedecline in the economic situationin that time, said Rosemary Choueka, Lawrence Graham LLPs

head of EU, competition andregulation.

Rolls-Royce Holdings PLC


860870880

830840850

890900 p 885.00

26 Jul

Ifo puts a pricetag on Grexitfor core nations

Citi: Greece is90pc likely toleave the euro

7/31/2019 Cityam 2012-07-27

19/35

17FRIDAY 27 JULY 2012cityam.com

Saxo Capital Markets UKNick Beecroft has been appointedchairman of Saxo Banks UKonline trading subsidiary. He hasworked at the firm since 2009,most recently as senior marketsanalyst. Beecroft has over 30years experience in internationaltrading, and has also held roles atStandard Chartered and DeutscheBank.

Speechly Bircham

James Trafford has been appointed as a partner in the law

firms private wealth practice. He most recently led theprivate client team at Wilsons in Salisbury.

AccreateThe executive search firm has opened up a London office andappointed Bonnie Stevens as its practice leader. Stevens waspreviously responsible for hiring at Standard Chartered Bank,and led Santanders attraction and talent management team.

NavigantChris Mills has been appointed as a director at the advisoryfirm and will be responsible for sales and businessdevelopment in its investment management practice. Mills

has more than 15 years experience in financial services,

spanning accountancy and asset management firms.

Broker ProfileThe investor relations firm has appointed Celine Saikali as aclient manager in its investor access team. She joins fromEdison Investment Research, where she was head of itsinvestor access business. Saikali started her career atDresdner Kleinwort in emerging market sales.

OilexMichael Maloney has been appointed chief operating officerof the oil and gas firm. He previously held seniormanagement roles at Nexus Energy, BHP Petroleum, AGR

Pacific and Clough.

LONDONREPORT

Wall St riseshopes of actito save euroUS stocks rode a wave of hopeinspired by comments fromEuropean Central Bank President Mario Draghi

yesterday, ignoring mixed corporateresults to focus on the strongestsignal yet of the ECBs intentions toprotect the Eurozone.

Draghi hinted the ECB wouldtarget high sovereign bond yields, ameasure the ECB has been reluctantto take in the past. Policymakershave made similar statements aboutsaving the euro before, but if theseremarks result in decisive action inEuropean bond markets, it couldspur a sizable rally in stocks.

Shares in sectors more sensitive torisks in Europe and economicdemand, such as energy-relatedstocks and industrials, were amongthe days best performers, with the

S&P 500 energy index up 2.7 percent. Diversified manufacturer 3M, whose stock rose 2.1 per cent to$90.59 after its results beatestimates, helped boost the Dow and

was among the brighter spots of theearnings season.

Zynga shares ended down 37.5 percent at $3.17 after hitting an all-timelow, a day after the company slashedits profit outlook after fadingenthusiasm for its games onFacebook. After the closing bell,shares of Facebook tumbled 11 percent to $23.87 after reporting its f irstquarterly results since Facebooksmarket debut. The Dow Jones industrial average

was up 211.88 points, or 1.67 percent, at 12,887.93. The Standard &Poors 500 Index was up 22.13 points,or 1.65 per cent, at 1,360.02. TheNasdaq Composite Index was up

39.01 points, or 1.37 per cent, at2,893.25.

BRITAINS top share index rose

yesterday after European Central

Bank president Mario Draghipledged to act if needed to preservethe euro, boosting sentiment amonginvestors hoping for a fresh round of stimulus.

Speaking at an investment conferencein London, Draghi said the central bank

was ready to do whatever it takes withinits mandate to preserve the euro, addingthat the euro area was much strongerthan many acknowledged. The comments sparked a share

rebound across Europe, halting a four-day losing streak and offsetting earlierlosses driven by weak results in theenergy sector.

At the close, the FTSE 100 was up 74.84points, or 1.4 per cent, at 5,573.16,recovering from a one-month low of 5,498.32 points set the previous day.

Banks and miners were the sessions best performers, adding a combined 17.6points to the index as investors piled into

both sectors, which fell earlier in the week. Lloyds , however, did not join its

peers and was instead down 0.5 per cent,ranking among the FTSEs top losers

after it reported weak results for its firsthalf, kicking off earnings season for the banks.

The shares were also hit by the banksinvolvement in the Libor scandal after itreceived subpoenas from governmentagencies investigating interest raterigging. Poor earnings also weighedon Royal Dutch Shell , the sessions worstperformer and biggest individual dragon the FTSE. The energy heavyweightsshares dropped 2.3 per cent after itreported a fall in second-quarter profits.

FTSE breaks four-day losing runas Draghis speech boosts mood

BESTof theBROKERS

DASHBOARDCITY NEW YOREPORT

YOUR ONE-STOP SHOP FOR JOB MBROKER VIEWS AND MARKET RE

FTSE

25 Jul 26 Jul20 Jul 23 Jul 24 Jul

5,750

5,700

5,650

5,600

5,550

5,500

5,573.1626 Jul

FTSE

25 Jul 6 Jul220 Jul 23 Jul 4 Jul2

05,

75,

5065,

6005,

5,5

6 Jul21673.5,5

5,500

6 Jul

6 Jul16

EasyJet PLC


570

560

550

540

530

p568.00

26 Jul

EASYJETThe budget airline hasbeen moved from Buy toHold by Liberum Capital,with a target price of 562p.Business over winterremains uncertain, it says,

estimating that underlyingfares are on the decline.

WHOS SWITCHING JOBS Edited by Tom Welsh

+44 (0)20 7092 0053morganmckinley.comSPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT

CITY MOVES

To appear inCITYMOVESplease email your career updates and pictures to [email protected]

in association with

3M, the manufacturer of Post-Itnotes and scotch tape, yesterday reported second quarter profit slightly higher than expected as cost-cutting off-

set a revenue shortfall.3M earned $1.17bn, or $1.66 per share,compared with $1.16bn or $1.60 pershare, a year earlier.

US corporate results round-upEdited by Keval Dhokia

Capital & Counties Properties PLC


217.50

212.50

215.00

207.50

210.00

p 208.3026 Jul

CAPCOUBS has changed itsadvice from Buy to Neutralfor the property companywith an unchanged targetprice of 215p. Whileremaining upbeat, UBSsays upside prospects arealready priced in.

BTG PLC


415

405410

395400

385390

380

p381.00

26 Jul

BTGPeel Hunt has moved thehealthcare specialist fromHold to Sell, shifting thetarget price from 350p to340p. BTG has doubled itsshare price since mid 2008and Peel Hunt says now isthe time to take profits.

Cost-cutting boosts 3M

SECOND-QUARTER profit at travelfirm Expedia fell 25 per cent, the com-pany said yesterday, as technology costsate into a rise in revenue. Expedias profitfell from $140.4m a year ago to $105.2m,

while revenue grew 14 per cent to1.04bn. Operating margin narrowed to14.9 per cent from 15.7 per cent.

Expedia income falls

COLGATE-PALMOLIVE posted ahigher quarterly profit yesterday asthe toothpaste maker increased adver-tising and cut costs.

Second-quarter profit rose to $627m, or$1.30 per share, from $622m, or $1.26 pershare. Sales rose two per cent to $4.27bn,ahead of analysts forecast of $4.25bn.

Colgate sees profits rise

MCGRAW-HILL reported higher sec-ond-quarter profits, beating analysts'estimates, on greater sales of commodi-ties market information and tools forinvestors. Net income increased to$216m, or 76 cents a share, from $211m,or 68 cents a share, a year earlier, the New

York-based company said.

McGraw-Hill sales rise

DR Pepper Snapple reported higher-than-expected second-quarter profit

yesterday helped by price increases.The maker of 7UP, Sunkist and other

drinks, saw net income rise to $178m, or83 cents per share, up from $172m, or 77cents per share, a year earlier. Net salesrose two per cent to $1.62bn.

Dr Pepper beats hopes

STARBUCKS reported higher quar-terly profit last night, but cut its out-look for the current quarter citing theeconomic weakness around the world.Net income grew to $333.1m, or 43 centsper share, for the fiscal third-quarterended 1 July, from $279.1m, or 36 centsper share a year earlier.

Starbuck cuts outlook

HIGHER paper and digital subscrip-tions lifted quarterly revenue at theNew York Times yesterday, even afterthe company wrote down the value of its

Internet property, About.com. The pub-lisher said second-quarter revenue grewalmost one per cent to $515.2m as circula-tion revenue climbed eight per cent.

New York Times revenue up

PAYMENT services firmMoneyGram posted a second-quarterloss due to legal expenses and restruc-turing costs yesterday.It lost $25.1m, or 35 cents per share, com-pared with a net loss of $438.3m, or$10.97 cents per share, last year. Total rev-enue rose six per cent to $330m.

Moneygram sees a loss

7/31/2019 Cityam 2012-07-27

20/35

I TS fitting that the Olympicflame, which passed through theCity yesterday, is lit in Olympia

by focusing the suns rays in amirror. The modern Games is a

mirror of nations, in which the hostnation and its guests revealthemselves to the world.

Take the torch relay. For the Nazis, who ran the first relay in 1936, it wasa statement of imperial intent. Theflame crossed Czechoslovakia like adog marking its territory. ForBritains latest Games, the samesymbol is instead a beacon of both apeaceful ideal and more localanxieties, criss-crossing the lengthand breadth of our small island, inan effort to bring a spirit of national

unity to a Games centred on London.

W HAT persuades anormally rational personto part with hard-earnedcash to watch Turkey play Angola in the

preliminary stages of a womens basketball tournament? Withapologies to the female basketballplayers of said countries, and theotherwise right-thinking friend of mine in question, it can only be theexcitement of a home Olympics.

Its the same giddy impulse thatdrew thousands of Glaswegians toHampden Park to watch Hondurasplay Morocco, hardly titans of worldfootball and not known for theirScottish fanbases, in a group fixture

yesterday afternoon; the same senseof doing something now, before thechance passes, perhaps forever, thathas tempted millions of us to line thestreets and applaud the torch relay.

Because this is the point: what weare about to witness in London overthe next two weeks we will almostcertainly never live to see here again.Prominent individual sporting occa-sions will return, fleetingly, but the

in association with category sponsorsvenue sponsorchampagne reception sponsor

City A.M. Awards 2012

Wednesday 17 OctoberGrange St.Pauls Hotel, London. Visit: www.cityamawards.com to book your place.

cityam.com/foru

Transport may be

tricky twas ever thus,at least this time wehave a good reason

THEFORUM

Twitter: @cityamforum on the web: cityam.com/forum or by email: [email protected] Agree? Disagree? Got a sharp comment?The Forum wants you to join the debate. Top responses will be reprinted in The F

18 FRIDAY 27 JULY 2012

FRANK DALLERES

London Olympics 2012: Nowtime for sport to take centre s

greatest names in track and field,swimming, cycling and the full kalei-doscope of disciplines that make upthe Olympics some of whom, likeUsain Bolt, are the best to have everlived competing here simultaneous-ly? That is truly a one-off.

It has been easy to lapse into cyni-cism and tire of hype since London

was awarded the Games in July 2005.Seven years is a vast wait and on occa-sions 27 July 2012 has seemed amirage, never quite in reach. In thatcontext, perhaps some disenchant-ment about budget, security andtransport has been understandable.

But the real problem is that, untilnow, we have been bereft of the oneoverwhelming positive the sport

itself and the carnival spirit theGames are sure to generate to out-

weigh the negatives. In the context of the vast celebration and the excite-ment of the Olympics those concerns

will seem trifling, the gripes drownedout by cheers.

Lets demolish them one by one. Thecost of the Games has been huge,although the vast majority has beenfunded by the private sector and, ulti-mately, its too late to carp about. Yes,

we are part-funding it, but aside fromleaving the country there is little to be done about it. In short, we are pay-ing for it whether we like it or not, so

we might as well enjoy ourselves. The row over security and the fail-

ure of G4S to provide the number of guards promised has been the latestissue to cast a shadow. It has beenembarrassing, certainly, for the gov-ernment and the company itself, andinconvenient for some soldiers calledupon to compensate for the shortfall.But for the person on the street it is of little direct consequence. The sight of military around the Olympic Park might be alien to us although per-

haps less so for many visitors butthere is something more reassuringabout a well-drilled soldier safeguard-ing a huge potential terrorist targetduring a time of increased threatthan the pimply youth in a polo shirt

who waved me into the Olympic Park yesterday.

Which leaves us with transport dis-

ruption or, as the rest of us know it,normality. Because its not as if we areused to a paradise of clockwork effi-ciency in which Underground trainsare never late, dont stop mid-tunnel

when you are most in a hurry, and in which entire lines are out of actionfor maintenance work for days, some-

times weeks, at a time. So unpre-dictable are London buses that they have become proverbial, while com-plaining about trains is so quintessen-tially British it deserves a spot inDanny Boyles stereotype-proddingopening ceremony. So transport may

be tricky twas ever thus, at leastthis time we have a good reason.

Instead lets take pride in a host of gleaming new venues many of them, such as the cycling velodrome,the aquatics centre and the basket-

ball arena, architectural wonders delivered in plenty of time (remem-

ber Athens?). There, and at enviablehistoric venues such as Lords,

Wimbledon and Wembley, our ath-letes will have their best ever chanceof winning medals. They are all onour doorstep and in a little over two

weeks they will all be gone again,never to be seen by our eyes again. Itstime to celebrate it, Turkey v Angolain the womens basketball prelimi-naries and all. Frank Dalleres is sports editor of City

A.M. You can follow him on Twitter @frankdalleres

Making sense of the pictures thatthe Olympics reveals also requiresdiscernment in its spectators.Beijings spectacular openingceremony in 2008 was a propagandacoup for the state capitalists, and

widely acclaimed. But its strengths were also a display of Chinas weaknesses its commitment tocentral direction, a cultural pride

that looks inward rather than

outward for solutions, and a willingness to use technology tocensor reality for effect. Boris

Johnsons pomposity-puncturingappearance at the closing ceremony in a Routemaster bus was criticisedat the time, but it of fered arefreshing contrast to theauthoritarian humourlessness of thehosts.

The Olympics is a revealing timeprecisely because it is not what issaid but what is done that counts:the humiliation of would-be Aryansupermen by Jesse Owens in 1936spoke louder than a tho

cityam 2012-07-27

Documents