Entrepreneur swoops in to bid for 180 Comet stores

BUSINESS angel and entrepreneur

Clive Coombes has emerged as a
surprise bidder for around 180
Comet stores.
Comets administrator Deloitte
confirmed yesterday it is in talks
with 43-year-old Coombes over a bid
for the crisis-hit electronics retailer
but said it was too early to say if it
would result in a sale.
The little-known entrepreneur is a
consultant at CC Business Angels, a
Southampton-based turnaround
specialist that offers investment and
buyout services.
He is thought to be using another
private vehicle named Meridian
Wholesale to front the bid, which if
successful could offer a ray of hope
to Comets remaining 5,500 staff.
Deloitte is weighing up a number
of offers, including a bid by
Appliances Online, the online
retailer owned by DRL, for Comets
website and brand, although this
would be unlikely to save any jobs.
Dixons Retail and TK Maxx are
among the retailers understood to
be looking to buy a handful of
Comets stores.
The retailer collapsed into
administration less than a year after
it was acquired by Henry Jacksons
private investment firm OpCapita,
putting 6,611 jobs at risk.
Deloitte has already made 1,000
staff redundant and announced the
closure of 41 of Comets 236 stores,
threatening a further 900 jobs.
The firm also started cutting
prices on goods in stores earlier this
month in a bid to salvage value.
BY KASMIRA JEFFORD
BUSINESS WITH PERSONALITY
King warns
Carney of his
tough future
OUTGOING Bank of England gover-
nor Sir Mervyn King yesterday wel-
comed the appointment of Mark
Carney as his successor, describing
the Canadian central banker as
outstanding.
But Sir Mervyn also warned that
Carney is coming to the role at a
tough time, as the economy is in
poor shape and the Bank is taking
on new regulatory responsibilities.
I am completely confident that
with Mark Carney we have someone
with whom the Bank is in good
hands. I am sure he will carry out
[the role] with very great distinc-
tion, Sir Mervyn told MPs.
The chancellor has selected a
truly outstanding candidate.
But that does not mean Carney
will find the role easy. The Bank cut
its growth forecasts earlier month
a move Sir Mervyn acknowledged
he should have made earlier, as the
global economy is so weak.
And Carney faces calls to reform
the Bank, as major reports recently
found its economic forecasting is
poor and needs improvement.
Sir Mervyns management style is
also under fire, after banking
heavyweight Bill
Winters told MPs
recently Sir
M e r v y n
crushed dissent
and intellectual
debate in the
Bank a charge
denied by the
outgoing governor.
Mike Lynch challenged HP chief Meg Whitman to answer questions about the accusations she was making against former Autonomy management
THE founder of the British technology
firm at the centre of a multi-billion
pound accounting scandal yesterday
went on the offensive against comput-
ing giant Hewlett-Packard (HP), chal-
lenging the US company to answer
questions over the allegations it made
against his firm.
Mike Lynch, the founder and former
chief executive of Autonomy, said he
found it shocking to see HP allege
serious accounting improprieties
against former Autonomy manage-
ment following HPs $8.8bn (5.5bn)
writedown related to its $11bn acqui-
sition of his business. In particular, he
expressed anger that he had not been
told of the allegations before HP
released them publicly last week.
In an open letter to HPs board,
Lynch wrote: It was shocking that HP
put non-specific but highly damaging
allegations into the public domain
without prior notification or contact
with me, as former CEO of Autonomy.
I utterly reject all allegations of
impropriety, he added, as he called
on HP to answer a list of questions
related to its claims.
HP boss Meg Whitman said last
week that senior members of
Autonomy had inflated profit and
revenue figures in the firms books
before HP bought it last year.
She blamed these serious account-
ing improprieties for $5bn of the
writedown, and promised civil and
criminal legal action against those
responsible.
www.cityam.com FREE
HP hit back at Lynch yesterday fol-
lowing his letter. While Dr Lynch is
eager for a debate, we believe the
legal process is the correct method in
which to bring out the facts and take
action on behalf of our shareholders,
the company said.
In that setting, we look forward to
hearing Dr Lynch and other former
Autonomy employees answer ques-
tions under penalty of perjury.
The Autonomy founders move yes-
terday is bound to ignite speculation
that Lynch, who was forced out of the
firm in May, is set to launch formal
action against HP, which he believes
has sullied his reputation and made
him a scapegoat for the companys
own failings.
A spokesperson for Lynch would not
comment on legal strategy.
Lynch has made it clear he believes
the blame for Autonomys disappoint-
ing performance while under HPs
ownership lies at the door of
Whitman, who took the reins after
the acquisition was announced.
He asked: Can HP really state that
no part of the $5bn write down was,
or should be, attributed to HPs opera-
tional and financial mismanagement
of Autonomy since the acquisition?
I have been truly saddened by the
events of the past months, and am
shocked and appalled by the events of
the past week, Lynch added.
BY TIM WALLACE
FTSE 100 5,799.71 +12.99 DOWM12,878.13 -89.24 NASDAQM2,967.79 -8.99 /$ 1.60 unc / 1.24 +0.01 /$ M1.29 -0.01
BY JAMES TITCOMB
TECH BOSS SPARKS
NEW ROW WITH HP
ISSUE 1,770 WEDNESDAY 28 NOVEMBER 2012
Certified Distribution
01/10/12 til 28/10/12 is 129,297
Mark Carney will
take the top job at
the Bank in July
Deloitte is already closing 41 stores
FORUM: Page 24

MORE: Pages 2,7

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Europe continues to play, extend and
pretend with the situation in Greece,
but the game wont last forever.
We need to reach the true crisis that will
herald a way forward. The single currency
experiment has simply not worked.
Delay is the greatest form of denial.
Steen Jakobsen
Chief Economist, Saxo Bank
[email protected]
Follow me on Twitter: @allisterheath
King denies stamping on
dissent in reign at Bank
BANK of England governor Sir
Mervyn King yesterday denied claims
he crushes dissent at the central
bank, insisting he has fostered an
open, intellectual culture in his time
in the top job.
The outgoing governor also tried to
defend his decision to let the
Treasury take 37bn from the asset
purchase programme, although he
apologised to MPs for the presenta-
tional failings which left observers
fearing the Banks treasured inde-
pendence is being undermined.
A major report from former JP
Morgan banker Bill Winters found
Bank staff are unwilling to put for-
ward all of their ideas to senior man-
agers in case dissent harms their
careers.
The City grandee criticised Sir
Mervyn for failing to interact with
junior staff, and recommended the
Bank adopt more modern manage-
ment systems and a 360 degree
approach for assessing staff.
But Sir Mervyn hit back at the
claims, arguing all three suggestions
are already in place.
I regularly talk to small groups of
junior staff, he told MPs on the
Treasury Select Committee.
On monetary policy heads of divi-
sion send their views to the mone-
tary policy committee (MPC) on what
Moodys faces curbs on Buffett links
Moodys faces a ban on rating products
issued by Warren Buffetts Berkshire
Hathaway in an EU clampdown on alleged
conflicts of interest at credit rating
agencies. Last night the European
parliament and EU member states agreed
a draft plan to impose limited curbs on
the sector that restrict when agencies can
rate sovereign debt and give investors
clearer grounds to sue for gross
negligence. While the industry is uneasy
about the reforms, the text is far weaker
than the original proposal
Coalition faces split over Leveson
David Cameron, the Conservative prime
minister and Nick Clegg, his Liberal
Democrat deputy, have been preparing to
make separate statements about the
Leveson report on journalistic ethics, due
out tomorrow.
EU rejects broadband delay charge
Brussels has rejected claims that stifling
EU bureaucracy was to blame for delays
to the rollout of superfast broadband to
Britains regions in an unusual public
rebuke of Maria Miller, the UK culture
secretary.
Close ticket offices to save millions
Rail bosses are urging the government to
scrap regulations that prevent them from
closing ticket offices, saying a programme
of closures could save the industry
hundreds of millions of pounds a year.
Starbucks targets tea in China
Starbucks, the Seattle-based coffee chain,
aims to open 800 new shops in China by
2015 roughly one a day taking its
network to 1,500 stores across 70 cities
from Chongqing to Chengdu.
Entwistle said payoff wasnt enough
George Entwistle, the former director-
general, asked the BBC for more money
when he was offered a 450,000 payoff
despite having only spent 54 days in the
job, Lord Patten has said.
NHS must be fastest not slowest
The government must drive an overhaul of
the NHS and its approach to innovative
medicines for the UK to become a global
research and development centre, leading
scientists have warned.
Dividends early to avoid fiscal cliff
More US companies are racing to get
ahead of the looming fiscal cliff. Faced
with a possible tax increase on dividends
next year, boards are approving bigger
payouts faster.
Google campaigns on German law
Google has begun a campaign against a
German copyright bill that could force
search engines to pay for linking to news
articles, a move the company said could
hobble basic internet functions.
THE GOVERNMENTS planning
minister is calling for an enormous
increase in housing levels in Britain
in order to meet rising demand.
Nick Boles, a Tory who was
appointed to his role in David
Camerons September reshuffle,
will today reveal a plan to expand
the area that property can be built
on by up to a third.
In the UK and England at the
moment weve got about nine per
cent of land developed. All we need
to do is build on another two to
three per cent of land and well
have solved a housing problem,
Boles will tell BBC2s Newsnight
this evening, calling the right to a
home with a little bit of ground
around it a basic moral right.
The area equates to around 1,500
square miles more than twice the
size of Greater London. However,
his plans do not include the
greenbelt land around the
capital.
Boles believes his proposals will
combat a growing housing crisis,
drive down the cost of property,
and provide a welcome boost to the
economy.
Were going to protect the
greenbelt but if people want to
have housing for their kids they
have got to accept we need to build
more on some open land, he will
say this evening.
Tory minister
plans massive
building drive
Sir Mervyn said the 37bn transfered to the Treasury will be paid back in full or more in future
4
NEWS
BY JAMES TITCOMB
BY TIM WALLACE
To contact the newsdesk email [email protected]
W
HO would have thought that
in 2012, at a time when a
technological revolution has
allowed anybody to become
a publisher, that politicians would
seriously be mulling a return to the
licensing of newspapers. The practice,
last adopted during the English Civil
War in 1643 and thankfully abolished
in 1695, would be an affront to free
speech and permanently subordinate
the media to the state bureaucracy.
Anybody with any sense wants to
reform the media. The question is
how. Many MPs want the state to regu-
late newspapers by statute, setting up
an independent quango for the pur-
pose. Under this system, and regard-
less of what proponents may claim,
nobody could launch a publication or
continue to publish without being
given the go-ahead by this new body.
This would be a terrible mistake.
EDITORS
LETTER
ALLISTER HEATH
Putting politicians in charge of the press would be a disaster
WEDNESDAY 28 NOVEMBER 2012
This newspaper always respects the
law. We do our best to be as accurate
as possible and put stories to all con-
cerned and when, sadly, we do get it
wrong, we correct our errors as speed-
ily as possible. Yet we too would be
affected by any statutory regulation
of the press. The same would be true
of other innocent publications and
journalists: they would all pay for the
sins of others.
The reality is that a small minority
of journalists disgraced themselves
and their profession; but the laws and
powers to prosecute such abuse has
long been on the statute books. As so
often the case in this country, includ-
ing in the City, a lack of enforcement
of existing rules has long been a
major problem.
It is vital to keep the press free from
government control. Regulatees never
really dare to criticise their regulators
in the same way as independent out-
siders can. City A.M. is a genuinely free
newspaper we are available at no
charge to our readers, we are often
handed out in the street, we are free
thinkers and we are an independent
media company. We say things as we
see them, stand up for our readers,
attack monopolies, criticise those
whom we think are in the wrong and
praise those who have done good.
The Liberal Democrats have a great
tradition of defending free speech; a
men have the habit of liberty, the
press will continue to be the Fourth
Estate, the vigilant guardian of the
rights of the ordinary citizen.
Many newspapers made terrible
mistakes. But the answer is to punish
the guilty and make sure that proce-
dures are put into place to prevent
abuses, improve journalistic practices
and crucially make it easier for
wronged parties to find justice. The
statutory, statist alternative would
undermine one of civilisations key
freedoms, punish innocent publica-
tions and give politicians the ultimate
right to decide who can and cannot
publish. David Cameron is right to
want newspaper companies to clean
up their act but he must reject the
statutory regulation of the press.
hallmark of liberalism is a free press.
John Stuart Mill must be turning in
his grave at the news that many Lib
Dem MPs support government con-
trol. The Labour party has also long
defended freedom of expression; its
MPs must follow the lead of Frank
Field, Betty Boothroyd and others and
fight for freedom.
As for the Tories, those MPs who
believe in the statutory regulation of
the press will end up undermining
the small platoons and the civil socie-
ty they have long supported, and
diminishing the medias diversity and
pluralism, a development which will
eventually hurt them. They should
recall the views of Winston Churchill:
A free press is the unsleeping
guardian of every other right that
free men prize; it is the most danger-
ous foe of tyranny where free insti-
tutions are indigenous to the soil and
the committee should be doing. They
speak to their juniors on what should
happen we do elicit views positively.
The governor also had to defend him-
self against claims the transfer of
37bn from the Bank to the Treasury
shows the MPC has lost full control of
monetary policy.
The transfer was possible because the
Bank has stored up the income from
the coupons on bonds purchased
under the quantitative easing pro-
gramme. The Treasury indemnifies
the programme, so it must cover any
losses but can also take cash surpluses.
The transfer is equivalent to 37bn of
quantitative easing, spread over a year
meaning the Treasury, not the MPC
has ordered a round of easing.
MPC members Ben Broadbent and
Martin Weale admitted one reason
they voted against further easing in
October was the transfer of cash.
But the move was not public knowl-
edge until several days later, meaning
the wider financial system was not
aware that a form of QE, initiated by
the Treasury, was taking place.
Its unfortunate if people were mis-
led and I regret that, said Sir Mervyn.
The new jobs website for London professionals
CITYAMCAREERS.com
WHAT THE OTHER PAPERS SAY THIS MORNING
IN BRIEF
Green investment bank launched
nThe UKs Green Investment Bank
(GIB) was launched today, announcing
multi-million pound investments in
waste management and energy saving
projects. The GIB is backed by 3bn of
taxpayer money to invest in green
projects which private investors are
unwilling to fund alone. Business
secretary Vince Cable said the GIB will
place the green economy at the heart
of our recovery and help the UK
become a world leader in green energy.
Government to hammer pensions
nGeorge Osborne could slap
pensions with any one of a welter of
taxes in the Autumn Statement, tax
experts told City A.M. yesterday, as
part of the governments plan to put
more of the burden of austerity on
the wealthiest people in the UK. The
most likely measure the chancellor
might adopt was lowering the annual
tax-free pensions allowance from
50,000 to around 30,000, Ernst &
Young tax specialists said.
Fitch cuts Argentina debt rating
nFitch yesterday slashed Argentinas
sovereign debt rating to near-default
status after a US judge ordered the
country to pay holders of debt from its
historic 2002 default. Fitch said a
default was probable as it made a
five-notch cut to Argentinas debt
rating, from B to CC. The ratings
agency put a negative outlook on the
sovereign, which is two steps away
from outright default. Argentina has
vowed not to pay the investors.
BANK advisers to Alisher Usmanovs
mobile telecoms group Megafon
were last night expected to price the
groups shares at the bottom of a
guided range, valuing it at around
7bn, in what is one of the largest
share issues this year on the London
market.
Megafon is Russias second largest
mobile phone group, controlled by
Usmanov, one of the countrys rich-
est men. It is selling global deposi-
tary receipts (GDRs) in London and
Moscow, offering an alternative to
New York-listed Russian market play-
ers MTS and Vimpelcom.
The company set a range of $20-$25
per GDR, to raise $1.7bn (1.06bn) to
$2.3bn, valuing the firm at between
$11.2bn and $14bn. The flotation is
the second largest of the
year in terms of
money raised on
the London mar-
kets, behind the
Russian bank
Sberbank. It
comes towards
the end of an
especially quiet
time for London
initial public
Usmanov seals
London float as
price struck low
BY DAVID HELLIER
offerings (IPOs), with the market suf-
fering from a lack of trust between
buyers and sellers and different types
of advisers.
The Megafon issue itself was nearly
derailed at the outset when Goldman
Sachs stepped aside from the syndi-
cate after becoming uncomfortable
with changes to the ultimate owner-
ship structure of the group.
Morgan Stanley and Sberbank per-
severed with the flotation, but there
was a delay caused by the UKs
listing authority wanting to become
comfortable with the altered
arrangements.
Many thought Goldmans action
might prove fatal for the share issue
but Megafon persevered, bolstering
its chances of success recently with
the appointment of former City min-
ister Lord Myners to the groups
board.
The float received an important
endorsement when the head of
Nordic telecoms group Teliasonera,
which is selling down its stake,
signed up for Megafon stock, agree-
ing to buy $2m-worth of shares at the
offer price.
Boris says bienvenue to Mittal as
France threatens to nationalise
BORIS Johnson yesterday slammed
a French government minister as
eccentric and said Indian steel
boss Lakshmi Mittal should
relocate his business to London,
where he would be welcomed with
open arms.
French President Francois
Hollande escalated an industrial
dispute with the magnate
yesterday, threatening to
nationalise ArcelorMittals idle
blast furnaces in Florange if they
BY JAMES WATERSON cannot be kept open otherwise.
On Monday French industry
minister Arnaud Montebourg
accused billionaire Mittal of lying
and blackmail, adding that he
should not operate in the country
because he has not respected
France with plans to close two
blast furnaces.
The Mayor said London would
welcome such firms. The sans-
culottes appear to have captured
the government in Paris, and a
French minister has been so
eccentric as to call for a massive
Francois Hollande has talked about nationalising ArcelorMittals French plants
Alisher Usmanov is also a
shareholder in Arsenal
WEDNESDAY 28 NOVEMBER 2012
5
NEWS
cityam.com
LONDONS SPARSE MARKET FOR FLOTATIONS IN 2012
Name Date Market value at listing Money raised
KCell Expected December about 1.93bn about 483m
Direct Line 16 October 2.63bn 787.5m
Insurance
MD Medical 17 October 562m 194m
Ruspetro 24 January 440.5m 162.9m
Sberbank 24 September 43.7bn 3.2bn
Megafon 28 November about 6.87bn about 1.06bn
Indian investor to depart from
France. I have no hesitation or
embarrassment in saying to
everyone here venez a Londres mes
amis come to the business capital
of the world, he said in a speech
during a visit to India.
Hollande met with Mittal
yesterday and reiterated his desire
to ensure the sustainability of jobs
on the site, his office said in a
statement, adding that he wanted
talks to continue until a 1
December deadline to sell the
plants.
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IT is that time of the year again. City
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We recently reached our highest ever
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are very keen to hear any thoughts or
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Thanks for reading City A.M., thank
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HELP US MAKE YOUR FAVOURITE PAPER EVEN BETTER
THE UK rebounded out of recession
in the third quarter, figures out yes-
terday confirmed, driven by con-
sumers pulling out their wallets and
spending.
Output grew one per cent between
the second and third quarters, the
Office for National Statistics said, the
same as their original estimate driv-
en by the 0.6 per cent rise in house-
hold consumption expenditure.
But Citi analyst Michael Saunders
said this data showed the UK is failing
to rebalance away from consumption
and towards exports and investment,
with the latter making up the just
13.9 per cent of GDP the lowest frac-
tion since records began in 1955.
Business investment presented a
rosier picture, rising 3.7 per cent on
the quarter to 31.3bn, making it 4.5
per cent higher than a year earlier.
But this means business investment
is still just 8.1 per cent of GDP, which
is well below the average of 10.3 per
cent for the past 20 years, according
Consumption
underpins third
quarter growth
BY BEN SOUTHWOOD
to Saunders.
The index of services grew 0.5 per
cent into September, capping off 1.1
per cent growth over the year, but ana-
lysts warned that these figures did not
indicate underlying strength in the
biggest sector of the economy.
Chris Williamson at Markit predict-
ed the economy would fall back into
decline in the fourth quarter. The
strong bounce in the UK economy was
confirmed by the updated GDP esti-
mate, but payback is likely in the
fourth quarter, with the country fac-
ing a slide back into contraction.
WHAT DO YOU THINK OF THE NEW
BANK GOVERNOR?
Interviews by Ben Southwood
Carney seems to be a very well qualied can-
didate, and the City has reacted very positively
to his appointment. But Im worried that the issues in the
UK are different to those in Canada.
These views are those of the individuals above andnot necessarily those of their company
JOHN HENRY WICKS
NORTHLAND CAPITAL

Personally I think its nice. Carney kept Canada

from recession, and prevented a banking crisis
there. I think he could contribute to a stable economic
environment here.
ANDY LAVERY
SCHNEIDER ELECTRIC
Its good to see some fresh blood in the Bank,
and to see the UK pulling in the worlds best to
ll the role. My interest is in how a non-European will
help tackle the Eurozone debt crisis.
PAUL DALY
LIVERPOOL VICTORIA

OECD chops its UK forecasts as

the Eurozone crisis rumbles on
BRITAINS economic growth
forecasts were slashed by the
OECD yesterday, in a sign that
chancellor George Osborne will
face lower tax revenues and a
higher benefits bill than he may
have hoped for, hitting his chances
of meeting his deficit targets.
The think tank cut the UKs
forecast to 0.9 per cent growth in
2013, down from 1.9 per cent in its
previous estimate six months ago.
BY TIM WALLACE But even the reduced estimate
puts Britains economy in a better
position than Frances or
Germanys, which are set for
growth of just 0.3 per cent and 0.6
per cent respectively.
The OECD chopped back its
global growth forecast too, from
4.2 per cent to 3.4 per cent for 2013.
It largely blamed the ongoing
Eurozone crisis, as well as fears
that politicians will fail to avert the
US fiscal cliff, both of which are
hitting confidence.
But despite the sustained
pressure on growth, the report
backed the thrust of the UKs
deficit reduction programme.
With the fiscal deficit and
public debt still high, the policy of
fiscal consolidation remains
appropriate to ensure the
sustainability of the public
finances, the OECD said.
Recent and planned structural
reforms, especially on planning
and work incentives, should boost
growth over time.
CITYVIEWS
THE OBAMA administration yesterday said Chinas currency remained significantly
undervalued but stopped short of labeling the nation now led by Xi Jinping (above) a
currency manipulator. The US Treasury noted that yuan had risen 12.6 per cent against the
dollar since June 2010. Presidential candidate Mitt Romney had pledged to deem China a
currency manipulator in his first day in office, but Obamas team have taken a softer stance.
US TALKS DOWN CURRENCY FEUD WITH CHINA
GDP edges back up as part of sluggish recovery
2008Q3 2009Q3 2010Q3 2011 Q3 2012Q3
98
100
102
96
104
106
108
110
112 Output, 100=averagefor2009
Manufacturing
Total
Services
S
o
u
r
c
e
: O
f
c
e
f
o
r
N
a
t
i o
n
a
l S
t
a
t
i s
t
i c
s
WEDNESDAY 28 NOVEMBER 2012
7
NEWS
cityam.com
NATIONWIDES profits were cut
almost in half as the building
society joined Britains banks in
increasing its payment protection
insurance compensation provisions,
as well as recording losses on
housing loans in its first half results
published yesterday.
The building society yesterday
confirmed it would like to buy the
316 branches RBS is being forced to
offload as part of its 2008 bailout,
which would provide Nationwide
with 250,000 small business
customers.
Strategically we want to enter
into the SME space. If there is
anything I could do that would
accelerate our strategy it would
be of interest, Nationwide
chief executive Graham Beale
told Reuters. RBS is
something which we will
watch very carefully.
Nationwide in
line to buy RBS
SME customers
BY TIM WALLACE
He added Nationwide could easily
afford the purchase, arguing weve
got one of the strongest solvency
ratios in the industry.
RBS had hoped to sell the
branches, alongside 1.8m customer
accounts, to Santander for 1.65bn.
But the deal dragged on for two
years and collapsed last month.
Analysts believe it could buy the
branches for 500m, down from the
1.65m Santander considered.
Nationwide reported profits of
124m in the six months to
September, down 47.9 per cent on
the 238m recorded in the same
period of 2011.
Part of the hit came from a
PPI provision hike of 45m,
taking the total so far to
173m. Losses on commercial
property continued to
mount, hitting 193m in the
six month period compared
with 72m a year ago.
More positively, gross
mortgage lending was up 15
per cent to 10.2bn.
Maude wants government to
hand contracts to private firms
THE GOVERNMENT is today
encouraging private sector firms
to bid for more than 1,700 public
sector contracts worth up to
84bn in the hope of stimulating
economic growth.
Writing in todays City A.M.,
cabinet minister Francis Maude
says that in the past unnecessary
bureaucracy has hindered efforts
to create strong links between the
public and private sectors.
Instead Maude claims greater
transparency is needed.
BY JAMES WATERSON
For years under Labour,
government didnt bother to
engage properly with potential
suppliers. The market didnt know
what the public sector wanted
and government
didnt know what
the market could
offer, he says.
The government
has been publishing
some public sector
contracts since
November 2011 but
todays announcement sees
opportunities in four new sectors
including professional services and
financial services put online for
the first time.
Matthew Fell, CBI director for
competitive markets, said the
announcement is a move in the
right direction but that reform
needs to happen faster.
The government urgently needs
to increase the level of commercial
skills in the public sector to deal
with the increasing complexity of
contracts, Fell added.
CEO Graham Beale wants
more SME business
SAVERS and employers are set to
receive more information on
pensions fees in a new drive to
boost competition in the sector
and improve pension funds
reputations, with a fresh code of
conduct published today.
Firms following the new
guidance will send employers a
standard template summarising
how pension charges are levied,
Pension funds in new drive to
open up on savers fee costs
BY TIM WALLACE
and the services they get in return.
Auto-enrolment will help get
millions of workers saving for
their old age, but it will only truly
succeed if people join a pension
that offers good value for money,
said Joanne Segars from the
National Association of Pension
Funds. Employers need to be able
to see more clearly what is being
charged and why. They will then
be more likely to pick the best
pension for their staff.
FRANCIS MAUDE: Page 25

WEDNESDAY 28 NOVEMBER 2012
8
NEWS
cityam.com
BUFFETT BACKS DIMON FOR US TREASURY ROLE
BILLIONAIRE investor Warren Buffet yesterday threw his weight behind JP Morgan chief
Jamie Dimon (above) as a possible successor to US Treasury secretary Timothy Geithner.
I think hed be terrific, Buffett said. If we did run into problems in markets, I think
hed actually be the best person you could have in the job.
Maude is cutting red tape
WATER company Severn Trent yester-
day said it was on track to meet full-
year earnings targets, after rising
prices countered lower usage during
a wet summer.
An inflation-linked price hike of 5.2
per cent helped to offset a 2.8 per cent
fall in consumer consumption in the
six months to the end of September,
the utility said. Pre-tax profit rose 1.6
per cent to 157.5m, from revenue up
3.6 per cent.
The firm made good on its pledge to
raise its dividend above the rate of
inflation, delivering investors an
interim payout of 30.34p, or 8.2 per
cent higher than a year ago.
We have delivered again on our
commitments to our stakeholders,
said chief executive Tony Wray.
We are on track with our 150m
additional investment programme
announced in May, delivering opera-
tional improvements in the areas we
targeted for this year, improving our
Severn Trent
dampened by
wet summer
BY HARRY BANKS service to customers and producing
sustainable, progressive returns for
shareholders.
Severn Trent also increased its capi-
tal programme 28 per cent to
239.2m in the period, as agreed with
regulator Ofwat.
The firms new industrial water
management joint venture, Severn
Trent Costain, has made good
progress after winning its first client,
it said.
Shares in the FTSE 100 firm closed
down 0.1 per cent.
FT Group chief executive Rona
Fairhead leaves after 12 years
THE CHIEF executive of the
Financial Times Group stepped
down yesterday, in a move that is
likely to heighten speculation that
the newspapers owner Pearson is
looking to sell it off.
Rona Fairhead, who spent 12
years at Pearson, and six as head of
the FT Group, is departing after
missing out on the chief executive
position at the publisher following
the appointment of John Fallon as
Marjorie Scardinos successor.
The leadership transition at
BY JAMES TITCOMB
Pearson makes this a natural
moment for me to make a change,
she said yesterday.
Fallon, who will become chief
executive of Pearson at the end of
the year, is currently head of the
groups profit-raking educational
division, and is understood to be
less wedded to the FT Group
which owns a 50 per cent stake in
the Economist as well as the
newspaper than Scardino.
Pearson did not announce a
successor to Fairhead yesterday.
As head of the FT Group,
Fairhead has overseen a number of
sales, including French newspaper
group Les Echos and its 50 per cent
stake in FTSE International.
Scardino paid a glowing tribute
to Fairhead. She has led a
fundamental restructuring and
refocusing of the FT Group,
including its successful
development of digital businesses,
and leaves a strong organisation
with a bright future in a highly
challenging industry, she said.
Last month, Pearson merged its
book publishing division Penguin
with Random House, owned by
German powerhouse Bertelsmann.
Rona Fairhead will seek pastures new after missing out on the top job at FT Group
Severn Trent PLC
27Nov 21 Nov 22Nov 23Nov 26Nov
1,555
1,560
1,550
1,565
1,570
1,575
1,580
1,585
p
1,553.00
27Nov
THE GOVERNMENTS efforts to
bring the long-term
unemployed back into
the workforce was
attacked yesterday, as
figures showed it found
jobs for less than three
per cent of participants.
Labour leader Ed
Miliband said the Work
Programme, which
outsources responsibility
for finding jobs to a variety
of private, public and
charitable
organisations, was a
miserable failure.
Flagship back-to-work scheme
attacked for failing unemployed
BY JAMES WATERSON
In the first 12 months of the
scheme, 18,270 people held down
jobs for six months, or three
months in more difficult cases,
out of more than 785,000
people referred. This
represents an average
success rate of 2.3 per
cent.
The 5bn scheme,
backed by work and
pensions secretary Iain
Duncan Smith, had hoped
to find permanent
positions for 5.5 per
cent of the
people taking
part in
the pro-
gramme.
WEDNESDAY 28 NOVEMBER 2012
10
NEWS
cityam.com
Labour leader Ed Miliband
hit out at the programme
IN BRIEF
British Assets Trust lifts earnings
nF&Cs listed investment trust British
Assets Trust, one of the oldest trusts in
the world, yesterday said it had
increased its revenue earnings per
share, a key measure of how well the
trust is performing, up to 6.6p from
5.7p this year. However, the 442m
trust failed to beat its FTSE benchmark
after posting a 17.5 per cent increase
in its net asset value total return,
matching the benchmark instead.
F&Cs BAT was set up in 1898.
Indian brokerages settle with SEC
nFour Indian firms have agreed to pay
nearly $2m to settle US Securities and
Exchange Commission charges they
provided brokerage services to US
institutional investors without being
registered, the regulator said yesterday.
The SEC said Ambit Capital Private,
Edelweiss Financial Services, JM
Financial Institutional Securities
Private, and Motilal Oswal Securities
agreed to pay more than $1.8m in total
to settle the charges, the regulator said.
Pinewood feels the Bond effect
nPinewood Shepperton studios has
swung back into the black in the first half
of the year, it said yesterday, after the
production of the latest Bond film Skyfall
helped to boost profits. In the six
months to 30 September, revenue grew
27.1m from 24.6m in the same period
a year ago, while profits before tax after
exceptionals was 3m, compared to the
5.4m loss reported in December 2011.
Pinewood also appointed Ruth Prior as a
non-executive director.
BANKNOTE printer De La Rue yester-
day said it was on track to surpass the
100m operating profit mark next
year after posting a seven per cent
increase in banknote orders for the
past 12 months despite a big delay
in orders.
The Basingstoke based firm, which
also prints passports for governments,
said its order book for banknote pro-
duction was 195m for the full year
ending September 2012, boding well
for hitting its 100m operating targets
next year. Full year operating profits
for 2011/12 were 63.1m.
A company trading statement
released two weeks ago said signifi-
cant numbers of orders had been
delayed and would not feed into this
years results. De La Rue boss Tim
Cobbold yesterday said he was confi-
dent the firm would receive the
orders for shipment next year to meet
the 100m profit target.
Despite the strong pipeline of new
business in its banknote division, rev-
enues dropped seven per cent due to a
reduction in the amount of banknote
De La Rue print
run is in line to
drive up profits
BY MICHAEL BOW
paper it sells. Group revenues rose
three per cent to 245m in the six
months to 29 September.
Its print volumes held up, increasing
four per cent. The company has more
than half of its revenues coming from
banknote printing. The rest comes
from its solutions arm, which
includes passport production, where
revenue rose 20 per cent in the period.
In passport printing, the firm print-
ed its ten millionth passport during
the period and saw a 33 per cent rise
in revenues. Overall, the firm lifted
half-year operating profits by five per
cent to 33m.
Chief executive Tim Cobbold said the firm was in line to meet its profit objectives
De La Rue PLC
27Nov 21 Nov 22Nov 23Nov 26Nov
980
990
1,000
1,010
1,020
p
988.00
27Nov
BOTTOM LINE: Page 14

WEDNESDAY 28 NOVEMBER 2012
12
NEWS
cityam.com
Model shown is a Carrera 4S Coupe at 88,774.00 including first year road fund licence and first registration fee. Fuel consumption figures for the new 911 Carrera 4S Coupe in mpg (l/100km): Urban 19.9 (14.2);
Extra Urban 37.7 (7.5); Combined 28.5 (9.9). CO2 emissions (g/km) 234.
Two impressive red lines.
The new 911 Carrera models.
The redline of a Porsche 911 has always been impressive. For almost 50 years now, each new generation has pushed the boundaries
of performance further and further. The new 911 Carrera 4 models are no exception. As well as their legendary all-wheel drive handling,
they feature broad shoulders, making for a striking presence.
And the iconic red LED light strip across the rear, means other road users can now appreciate the red line of a 911 too.
To find out more visit www.porsche.co.uk/redlines
After the recent prots warning for the current full year, some of the
main rst half numbers were already known. The growth aim has not changed,
but the trajectory whereby growth is attained has, due to the recent
order delays suffered at the currency division.
ANALYST VIEWS

Currency order delays have been run of the mill throughout De La Rues
history. While disappointing, its more about phasing than anything untoward.
Banknote print volumes should continue to grow gently. The key to any
outperformance is more likely to come from banknote paper volumes.

The largest contributor to the growth in interim operating prot was the
Identity Systems business unit. This was largely driven by growth in internation-
al passports. We believe this augurs well for the future, the expertise and
xed cost base associated with UK passport work can be leveraged.

WHAT ARE THE GROWTH

PROSPECTS FOR DE LA
RUE? By Michael Bow
CHARLES PICK NUMIS

PAUL JONES PANMURE GORDON

ALEXANDER MEES JP MORGAN CAZENOVE

THE HEAD of the Olympic Delivery
Authority has been picked to chair
transport group National Express.
Sir John Armitt was yesterday
unveiled as the rail and bus firms
new chairman from 1 February,
replacing John Devaney, who is
leaving after four years to focus on
other roles.
The engineering stalwart has
chaired the ODA since 2007, over-
seeing the transformation of the
Olympic venues.
His exceptionally strong interna-
tional track record and extensive
knowledge of the UK transport sec-
tor meant he was an ideal candi-
date for the role, said National
Express senior independent direc-
tor Tim Score in a statement
announcing the appointment.
BY MARION DAKERS
Sir John will now oversee this
next phase as we continue to deliv-
er operational excellence while
developing a new pipeline of oppor-
tunities.
The new chairmans transport
pedigree will help National Express
as it battles tough conditions in
Spain and cutbacks to UK sub-
sidised travel.
Sir John was chief executive of
Railtrack and, following its col-
lapse, Network Rail between 2001
and 2007. He has also led Costain,
Channel Tunnel developer Union
Railways and the international divi-
sion of John Laing.
He was knighted in 2012 for servic-
es to engineering and construction.
Sir John is also a member of the
Davies Commission, set up by the
government earlier this month to
examine the future of UK aviation.
Insurer Standard Life unveils
details of 500m bond issue
EDINBURGH-based Standard Life
yesterday unveiled a 500m bond
issue as the firm looks to improve
its balance sheet.
The life insurer and pension
provider is enjoying a purple
patch, with its shares up 50 per
cent since June and analysts
believe its business model is well-
placed to deal with forthcoming
regulatory changes.
We have taken advantage of
favourable market conditions to
improve the leverage position of
BY JAMES WATERSON
the Standard Life Group via a
subordinated debt issuance
directly from our holding
company, said chief financial
officer Jackie Hunt.
The strong order book and
successful placement is a powerful
signal of investors confidence in
Standard Lifes financial strength
and strategic plans.
The issue, which the firm says is
heavily oversubscribed, will pay 5.5
per cent interest for the next ten
years. The offering is expected to
close on 4 December.
The bonds are expected to be
rated Baa2 by Moodys and BBB
by Standard & Poors.
Banks involved in the deal
included Barclays, Deutsche Bank,
Bank of America Merrill Lynch
(BAML), RBS and UBS.
Barclays team was led by Mark
Geller and Peter Mason, while the
BofAML team included Theo
Lentzos, Gareth Braithwaite and
Robin Palmer.
The news follows yesterdays
announcement that Standard Life
is set to open its first office in the
Middle East as it looks to expand
overseas.
WEDNESDAY 28 NOVEMBER 2012
13
NEWS
cityam.com
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and
Olympic chair
joins National
Express board
PEOPLE seeking more return on
their personal investments sent
emerging market equities soaring
to the top of a list of the best
selling asset classes for the first
time last month, data out yesterday
revealed.
Low interest rates in the
developed world helped drive
retail investors to pour 228m into
the global emerging market sector
in the hunt for better yield, data
from the trade association the
Investment Management
Association showed.
Typically the sector only attracts
around 86m a month.
It is the first time emerging
market equities have topped the
monthly list of net retail sales.
They were the third most popular
asset class the last time the IMA
took the temperature of the
industry in September.
IMA chief executive Richard
Saunders, set to stand down next
month, said the rise was a sign
investors were continuing to
diversify their investments.
The swing back towards equity
investment as the favoured asset
class of retail investors continued
into October with net retail sales
of 550m, boosted by the
popularity of UK equity income
funds.
These funds, which invest in
companies with strong dividend
policies, rose from the fifth most
popular asset class last month up
to second place with sales of
172m
When lower risk assets are
giving sub inflation returns, it is
not surprising that investors are
seeking asset classes with the
potential to provide a higher yield
than either cash in the bank or
bonds and with the prospect of
capital growth over the medium
term, Brewin Dolphin divisional
director Rob Burgeman said in a
statement.
Emerging fund
sales top list of
popular assets
BY MICHAEL BOW
EUROPEAN bond managers have
backed US politicians to avert the
countrys $600bn (375bn) fiscal
cliff before the turn of next year,
after a survey from rating agency
Fitch revealed 82 per cent of bond
fund executives said they were
confident a deal would be struck.
The Fitch study, which polled 97
high level bond fund managers and
credit researchers mostly from the
top 50 asset managers in Europe,
found just five per cent feared the
cliff would trigger a recession. The
majority, 82 per cent, said it would
ultimately be avoided but was
hitting investor confidence. Ten per
cent said it was having no impact.
Forecasters have been mulling
the likelihood of the US failing to
agree a deal on $600bn of tax cuts
and spending rises due to hit in
January 2013 since Federal Reserve
chairman Ben Bernanke coined the
term on 29 February during a
Congressional hearing, with
heavyweight strategists such as
BlackRocks Russ Koesterich
claiming markets are failing to
price in the risk of a cliff.
Further data out yesterday from
State Street Global Markets showed
confidence
among North
American
institutional
investors at a
record low on
fears of the
cliff, as they
scurried away
from US
equities
sending the
surveys
confidence
barometer
down six
points.
Bond bosses
back Congress
to avoid cliff
BY MICHAEL BOW
Better Capitals founder Jon Moulton
WEDNESDAY 28 NOVEMBER 2012
14
NEWS
cityam.com
Better Capitals 10m shareholder payback
LISTED private equity firm Better
Capital, founded by UK venture
capitalist Jon Moulton, is expected
to pay its first dividend to
shareholders early next year after
announcing plans for a 10.4m
payback from its first investment
fund.
The turnaround specialist, which
owns fashion retailer Jaeger and
publisher Readers Digest among
others, said it anticipated a
BY MICHAEL BOW
distribution to shareholders of 5p a
share in the first quarter of 2013
from its first investment fund
which it raised in 2009 after
calling time on the vehicle.
The 2009 fund was the first raised
by Better Capital and rounded off
its investment period, which
expires at the end of December, by
helping buy aerospace
manufacturer Gardner and buying
the debt of UK coal producer ATH
Resources for 15m.
Its second fund, which it raised in
2012, is still sitting on around
100m of dry power waiting to be
invested having only made two
investments since it was raised
40m to buy Jaegar and 25m for
double glazing firm Everest.
Yesterday, management said it
was exploring a deal every single
day in a bid to draw down on the
cash waiting to be put into
companies. Moulton and his team
have explored 886 deals since the
first fund was raised. In an attempt
to placate impatient investors, the
board said potential deal flow took
time to convert.
Moulton told City A.M. yesterday:
Most of the offers we get are direct
from the companies. Were looking
at several interesting deals at the
moment. The shortest weve turned
a deal around is four working days
but on average it takes around ten
working days to turn a deal around.
Often the firms that come to us are
very close to insolvency.
Moulton founded Better Capital
in 2009.
Obama has 33
days to avoid
the fiscal cliff
D
AVID Miles must be De La
Rues favourite member of the
Bank of Englands MPC. Last
weeks minutes showed Miles
was the only member of the
committee to vote for more
quantitative easing hardly
encouraging for a firm that relies on
money printing for a chunk of its
income.
Unfortunately for De La Rue, Miles
is a lone voice among nine. Despite
contracts to churn out notes for
more than 150 national currencies,
its money printing profits were flat
yesterday and overall figures were
only lifted by a 16 per cent rise in the
BOTTOM
LINE
ELIZABETH FOURNIER
On-the-move Brits keep De La Rue and Greencore happy
division of the company that makes
British passports. Still, while no
more cash and evidence of Brits
lining up to flee the country is
hardly an upbeat economic outlook,
perhaps bosses at the FTSE 250 firm
know something that we (and even
the MPC) dont.
Blaming contract delays for the
poor banknote performance,
management reassured investors
that the orders theyre waiting for
will come flooding in during 2013.
A GRANDE BOOST TO PROFITS TO GO
LAST week, I resolved to (temporarily)
give up convenience food. For the
next five days I gazed hungrily at
every City worker ducking into
Starbucks for a caffeine fix or
unwrapping an M&S sandwich on
the street. Luckily for private-label
food producer Greencore, the wider
populations appetite for grab-and-go
meals is much less fickle the Irish
group has boosted profits by 37 per
cent in a year, and yesterday
announced a deal to supply
Starbucks US chains. Its an
impressive turnaround for a group
that has had to bounce back from a
failed pursuit of Northern Foods
and one thats been rewarded with a
44 per cent rise in the share price so
far this year. Yesterdays results may
have been priced in, but theres
definitely scope for more than a
quick sugar hit from this stock.
Elizabeth Fournier is news editor of City
A.M. @ej_fournier
BRITVIC, the soft drinks maker
merging with AG Barr, yesterday
blamed the costly recall of its
Robinsons Fruit Shoot drinks earlier
this summer for a 19 per cent slump
in full-year profit.
The company said the blunder
dragged group revenue down 0.8 per
cent at constant currencies to 1.3bn
in the year to 30 September while
underlying pre-tax profit fell to
84.4m.
Withdrawing the bottles due to
faulty non-spill caps cost 16.9m in
the period, and will cost up to 8m
this coming year, it said, adding pro-
duction would return to levels in line
with historical demand by January.
Chief executive Paul Moody, who is
due to step down next year after the
merger with AG Barr, said the recall
had offset a strong performance
from its fizzy drinks brands while
Robinsons squash also grabbed mar-
ket share.
But he added that the wet weather
and the tough trading conditions
Britvic profits
fall after Fruit
Shoot blunder
BY KASMIRA JEFFORD
squeezing consumer spending had
weighed heavily on the soft drinks
market.
Britvics brands include J2O and
Tango and it also makes and sells
PepsiCo brands in the UK and
Republic of Ireland.
The group this month agreed to a
1.4bn all-share tie-up with the
Scottish Irn Bru maker, which if
approved will create one of Europes
biggest soft drinks companies,
named Barr Britvic Soft Drinks.
Roger White, the current head of
AG Barr, will become chief executive
of the new group.
Matthew Williams said his firm is adapting to a new environment
Britvic PLC
27Nov 21 Nov 22Nov 23Nov 26Nov
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397.5
400
402.5
405
407.5
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412.5
p
396.00
27Nov
WEDNESDAY 28 NOVEMBER 2012
15
NEWS
cityam.com
FLOORING specialist Topps Tiles
has managed to buck the gloom
and return a 12.5m profit after
like-for-like sales bounced back in
the second half of the year.
The FTSE 250 retailer reported a
seven per cent slump in like-for-
like sales in the first half but
swung back into positive territory
with a 3.5 per cent rise in the
second half to post a 0.7 per cent
fall overall for the year to 29
September.
Group sales at its 324 stores rose
1.3 per cent to 177m its first
overall increase in sales since 2007.
Topps said the results reflect
Topps Tiles enjoys first increase
in overall revenue in five years
BY KASMIRA JEFFORD
the stagnating performance of
the economy and the low level of
housing deals, but chief executive
Matthew Williams suggested a
pick-up in confidence as
households who have put off
moving invest in DIY projects.
The key factor for us is that the
market is flat but it is changing.
People are becoming much more
trend aware and we feel we are
uniquely placed to service that
changing market, he said.
Topps, which has a 27 per cent
share of the market, has spent
20,000 per store refitting 18 of its
stores and converted 10 Topps
Clearing House stores into its
more profitable Topps format.
GREENCORE yesterday announced
it has struck a $50m (30m) deal to
supply Starbucks stores in the US,
as the food group revealed a 21 per
cent rise in full-year profits.
The Dublin-based group said the
partnership will see it produce
sandwiches for all of the coffee
giants east coast stores except
Manhattan, a major coup for the
company that first broke into the
US market four years ago.
It has stepped up its presence this
year with the acquisitions of
Marketfare, one of the biggest
suppliers to 7-Eleven stores, as well
as food manufacturer Shau & Sons,
and the US now delivers annualised
sales of over $200m.
Greencore strikes up sandwich
deal with Starbucks US stores
BY KASMIRA JEFFORD Announcing its results for the
year to 28 September, Greencore
said overall revenues jumped 45 per
cent to 1.16bn, driven by its
acquisition of desserts-maker Uniq.
Stripping out the Uniq deal and
other acquisitions, sales rose 7.7 per
cent while pre-tax profits before
exceptional items rose to 42.8m.
Chief executive Patrick Coveney
called it a breakthrough year for
the group. The acquisition of Uniq
has reshaped the performance,
scale, capability and long-term
prospects of our group, he said.
Greencore supplies prepared
meals, sandwiches, soups, pickles
and sauces to supermarkets and
retailers including Tesco, Asda, WH
Smith and Boots and has a market
value of 356m.
FRENCH unemployment rocketed
to a 14-year high in November,
data out yesterday revealed, as the
Eurozones second biggest
economy struggles to deal with
the continents debt crisis and a
sclerotic labour market.
The number out of work
increased 45,400 in November, the
18th consecutive rise, bringing the
total to 3.1m the highest level
since April 1998 the Labour
Ministry data revealed. This
development will only add to the
pressure on President Francois
Hollande, who succeeded Nicolas
Sarkozy partially on the back of a
promise to fight unemployment.
Consumer confidence data did
little did work against the gloom
in the labour market. Insees
measure of consumer opinion
stayed flat at 84 well below the
24 year average of 100.
Meanwhile Portugals
parliament approved another
austerity budget, despite protests
and unemployment predicted to
risen even higher than its current
15.8 per cent. But the countrys
consensus came apart, with the
ruling majority Social Democrats
and CDS facing opposition from
Socialists, who called the budgets
tax hikes a fiscal nuclear bomb.
Unemployment
in France rises
to 14-year peak
BY BEN SOUTHWOOD
House prices set to edge up despite stagnation
2010Q4 2011 Q4 Endof 2013
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1.2
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1.4 AveragevalueofprimeLondonproperties, m
S
o
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: M
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&
P
a
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s
GREEK Prime Minister Antonis
Samaras hailed the beleaguered
Eurozone countrys deal with its
creditors as a new dawn for its
depression-hit people.
A very grey, very dark period for
Greece officially ended yesterday
and it has ended for good,
Samaras said, as Greece haggled its
debt down 40bn (32.3bn)
through giving the country more
time to meet targets and lowering
interest rates on some loans.
Samaras hails Greek debt deal
as new dawn for troubled state
BY BEN SOUTHWOOD
We Greeks were made for tough
times, and when the going gets
tough, it brings out the best in us,
Samaras added.
The deal will pave the way for a
further tranche of aid, worth
43.7bn, to be extended to Greece
by early 2013. But left-wing
opposition Syriza called the deal a
half-baked compromise, a band-aid
on the gaping wound of debt and
called for a 50 per cent write-down
instead, and blaming chancellor
Angela Merkel for blocking the
plan, which the IMF previously
argued for.
WEDNESDAY 28 NOVEMBER 2012
16
NEWS
cityam.com
Prime Minister Antonis Samaras said the tough times had brought out the best in Greeks
THE CURRENT explosion in Prime
London house prices cannot be sus-
tained into the next few years,
Marsh & Parsons said yesterday.
Prime London house price growth
will slow down to between three
per cent and five per cent next
year, the estate agent forecast, after
expansion running at 11.1 per cent
over the past 12 months, putting
the slower movement down tax
changes and reduced City demand.
Were not going to see the spec-
tacular price rises seen in the past
couple of years, said Marsh &
Parsons boss Peter Rollings, but
Londons prices arent going to
completely flatline.
But demand wont completely
drop off, Rollings said, suggesting
that President Francois Hollandes
tax hikes are still driving wealthy
French nationals to reassess their
options. And crisis-hit Spain and
Portugal could actually contribute
to demand, Rollings said, as citi-
Prime London
housing boom
to slow down
BY BEN SOUTHWOOD
zens flee high unemployment, state
debt problems and, again, big
increases in tax burdens.
On the other hand the rental mar-
ket may improve, but in the other
direction, the estate agent predict-
ed. Average rents fell 2.8 per cent in
the year to date, driven by weakness
in the higher end of the market
rents of more than 2,000 per week.
However, rents lower than 1,000 a
week were rising, Marsh & Parsons
said, and will grow eight to 10 per
cent through 2013, as unsuccessful
buyers pile into the rental market.
US consumer confidence climbs
to four-year high in November
US CONSUMER confidence hit a
four and a half year high yesterday,
as a swathe of other data added to
the picture of an economy
recovering modestly.
The Conference Boards
consumer confidence index grew
to 73.7 in November, from 73.1 in
October, where 100 is the average
for 1985. The last time it was higher
was when it reached 76.4 in
February 2008.
This months moderate
improvement was the result of an
uptick in expectations, said Lynn
Franco at the Conference Board,
BY BEN SOUTHWOOD
while consumers assessment of
present-day conditions continues to
hold steady.
This came as two house price
indices pointed to further recovery
in the housing market. House prices
grew 3.6 per cent in the year to
September 2012, according to the
most recent version of the Standard
& Poors Case-Shiller home price
index, out yesterday.
And houses bought with Fannie
Mae or Freddie Mac mortgages were
four per cent more expensive in the
third quarter, compared to the
same period a year earlier, the
Federal Housing Finance Agency
(FHFA) said yesterday. But FHFA
economist Andrew Leventis warned
that stagnant income growth, high
unemployment levels, lingering
uncertainty about the
macroeconomy, and the large
number of homes in the foreclosure
pipeline would keep a lid on prices.
Data on durable goods from the
US Census Bureau, also released
yesterday, was less positive but still
contained nuggets of optimism.
While shipments of manufactured
goods crept down 0.6 per cent,
inventories, unfilled orders, new
orders and new orders for capital
goods all increased, consolidating
the thoroughly upward trend in the
sector.
Spains strong banks prepare to
snap up assets from weak rivals
SPAINS healthiest banks are
looking to buy assets from their
bailed out counterparts as the
weaker institutions are forced to
shrink by the government, ratings
agency Fitch said yesterday.
The outcome of the bailouts will
see increased concentration in the
market as larger banks get bigger at
the expense of smaller institutions.
Banco de Sabadell is looking to
buy Banco Mare Nostrums retail
operations in two regions, a move
which Fitch believes will kick off a
major new round of merger and
acquisition activity in 2013.
BY TIM WALLACE
Resilient banks will take
advantage of others that are
receiving state aid and shedding
businesses as part of their
restructuring plans, said the
agency.
We expect banks being bailed
out to come down in size by at least
25 per cent, and follow the path of
Irish and Greek banks in
deleveraging and sector
consolidation.
Fitch argued this is positive to
stability in the sector, as a smaller
number of more efficient and viable
banks should have a greater
capacity to absorb losses from
Spains sovereign and real estate
crisis.
However, the researchers also
noted that continued consolidation
in the industry is not enough alone
to solve the sectors problems.
Despite the expected changes,
Fitch believes funding costs will
remain high for Spanish banks for
several years to come.
The EU agreed earlier this year to
bail out Spains banks to the tune of
up to 100bn (80.67bn), with the
European Commission this week
agreeing the sector met its
requirements for aid. Spain hopes to
restructure its institutions by the
start of December, creating a bad
bank as part of the rescue plan.
THE EUROPEAN Stability
Mechanism (ESM) was yesterday
approved by the European Court of
Justice, removing another hurdle in
the way of troubled governments
like Spain getting bailed out.
The Irish High Court had
challenged the ESMs compatibility
with EU law, after a member of
parliament argued that the
countrys rules require a
referendum on any major transfer
of power to the EU.
But the top court rejected the
claim, arguing the funds
establishment is within EU law.
The funds maximum lending
capacity stands at 500bn (403bn).
It is designed to show the
Eurozone bailout fund gets the
green light from highest court
BY TIM WALLACE
Eurozone nations determination
to keep the currency together, as
they can bail out countries like
Spain and Italy if need be.
But some analysts fear the fund
is not large enough to save both
governments if such drastic action
was required. In such an event the
ESM would only be able to delay
the panic, not stop it entirely as
hoped.
However, if Spain does request
aid, it is also likely to be helped by
the European Central Bank which
said it may purchase government
bonds. That would push down
government borrowing costs and
again ease tensions while Spain
pushes through economic reforms
to restore competitiveness and
improve its long-term prospects.
CHIEF EXECUTIVES across the
world are worried the global
economic climate will worsen in
coming months, data from
Harvard Business Review revealed
yesterday.
Some 65 per cent of
respondents to the survey said
they thought that conditions in
the economy would decline in the
coming months though most
thought the climate would
improve next year.
Of these worries, by some way
the biggest was the Eurozone,
with 84 per cent citing it as their
weightiest concern. Almost a
quarter said it was unlikely that
the euro would even exist in two
Two thirds of global chiefs say
world economy to shrink more
BY BEN SOUTHWOOD
years.
But chiefs vested much more
optimism in emerging markets,
particularly China.
Though 60 per cent called the
US the worlds current economic
leader, compared to 31 per cent
handing the accolade to China,
just 25 per cent thought the US
would be the worlds top economy
in 10 years, versus 46 per cent who
said China would take the throne.
And 31 per cent of these
executives also thought Londons
place as the worlds financial
centre would be taken by New
York in the next five years
compared to 21 per cent who
thought London would still wear
the crown then, equal to the
proportion opting for Shanghai.
EXMORGAN Stanley investment
banker Tobias Kormind imagined he
would be leaving his City colleagues
behind when he departed from the
world of finance to co-found bespoke
Mayfair jewellers 77 Diamonds.
However Kormind tells The
Capitalist nothing could be further
from the truth, as he now finds
himself run-
ning around
town to fulfil
our busy
b a n k e r s
Former Morgan
Stanley chap is
diamond trader
urgent diamond needs.
One such delivery recently got a lit-
tle too personal: A senior guy at one
bank ordered a bracelet set with over
a dozen one carat stones to give to his
wife upon delivery of their new baby,
says Kormind. However by the time
the bracelet was ready his wife was
already in the private birthing
wing about to have the baby. I
rushed up there and bumped
into our City man who was
literally closing the door
behind him to the
room where his wife
was about to push.
Left to right: Tobias
Kormind, boss of
77 Diamonds,
with co-founder
Vadim Weinig
MASSES of Mos of all shapes and
sizes have been terrorising The
Capitalists inbox this week.
And none more so than CBRE
analyst Tim Monger-Godfreys
Anchorman-inspired tache: If I
say so myself, the likeness is
uncanny. Frightfully so, The
Capitalist reckons.
Not to be outdone, traders at
Winterflood Securities also
deserve special mention for their
strong team solidarity.
CBRE and Winterflood Securities
are the current Mo Bros to beat
As promised, the City boy who
can grow the finest facial
specimen will be rewarded with a
cut at Kings Road salon
Lockonego, plus some Hanz de
Fuko hairstyling product which
has just landed in London from
LA and is available exclusively at
Lockonego.
Get MO-ving and send your
finest facial specimen to
[email protected] before
close of play on 30 November.
Tim Monger-Godfrey, an analyst at CBRE,
with his idol, Anchormans Ron
Burgundy (above), and traders from
Winterflood Securities (right)
17
cityam.com
Our outgoing Bank of England
governor may be an Aston Villa
fan, but Sir Mervyn King was quick to
show off his London football nous at
yesterdays Treasury Committee. Accused
by Labours George Mudie of looking as
independent as a Chelsea manager
following the Banks transfer of 37bn in
interest payments on gilts into the
chancellors coffers, Sir Mervyn quipped:
Few Chelsea managers have managed
to last 10 years. A fair point from the
guv, who can be certain of hanging onto
his long-serving mantle for a while yet,
as his replacement Mark Carney has only
committed to five years in the post. In
fact it seems Carneys wife Diana, who
has attracted her fair share of attention
for anti-banker comments, is already
counting down the days. Canada is
certainly a hard country to leave, she
tweeted. But we will be back in five.
City A.M.s Personality of the Year
award-winner, Lord
Sebastian Coe (pictured
below), will be popping
down from LOCOGs
Canary Wharf office at
lunchtime today to sign
copies of his
autobiography
Running My Life.
Catch a copy
while you can
at
Waterstones
in Jubilee
Place,
12.30pm.
WEDNESDAY 28 NOVEMBER 2012
cityam.com/the-capitalist
THECAPITALIST
EDITED BY CALLY SQUIRES
Got A Story? Email
[email protected]
IN BRIEF
Lending grows at Zopa
nPeer to peer lending has surpassed
250m at Zopa, the financial services
group that bypasses banks.
The latest lending figures are 90 per
cent up on the same month last year.
Giles Andrew, the Zopa co-founder
says: Passing the quarter of a billion
milestone way up on just a year ago
proves that increasing numbers of
people are looking beyond the banks
to find the best savings and borrowing
rates.
Google boss responds on taxes
nThe head of Google UK has hit back
at political criticism over the firms tax
affairs. Matt Brittin defended the tax
the company pays in the UK yesterday,
saying: Google plays by the rules set
by politicians. Talking to Channel 4,
he rejected Boris Johnsons comments
that Google pays zero tax. Boris
should get his facts right. We pay tax
and he should look at the broader
contribution we make, Brittin said.
Sony looks to sell battery unit
nJapanese powerhouse Sony has
been approached by at least three
investment banks offering to sell its
battery business as the struggling
Japanese group looks to offload non-
core assets and focus on reviving its
consumer electronics business,
banking sources said. Selling the unit,
which employs 2,700 people and had
sales last year of $1.74bn (1bn),
would help Sony cut costs and
generate cash as it restructures.
Henrietta Podd, head of debt advice and
origination at Canaccord Genuity, acted as
lead adviser on the Alpha Plus bond issue.
An Oxford classics graduate, Podd has spent
over 25 years in the bond markets, princi-
pally at RBC Capital Markets where she
worked for 17 years.
Podd left RBC in 2010 to set up the debt
advisory team at Evolution Securities and
joined Canaccord in April this year. Adrian
Bell, head of debt markets at the rm,
worked alongside Podd on the bond deal.
The team has acted for a number of other
companies this year who have tapped the
retail bond market for cash. In August it
helped fund manager ICG to launch its sec-
ond retail bond, raising 80m. In the same
month, Podd and Bell also helped property
company CLS Holdings raise 65m through
the issue of a retail bond paying 5.5 per cent
a year. Commenting on Alpha Pluss
fundraising yesterday Podd said: We like
this business and believe its a very attrac-
tive bond issue is because Alpha Plus is an
educational business with a stable and
growing cashow, which happens to owns
some high quality property over which we
have security... It contrasts with a lot of the
property bond offerings where companies
are not offering any security.
ADVISERS
HENRIETTA PODD
CANACCORD GENUITY
The redevelopment of River Plate House at Finsbury Circus is set be completed in 2016
Alpha Plus is chaired by Sir John Ritblat and owned by his son Jamies firm Delancey
Mitchells and Butlers PLC
27Nov 21 Nov 22Nov 23Nov 26Nov
310
315
320
325
330
335
340
p
312.01
27Nov
Graham Able, Alpha Plus
chief executive
WEDNESDAY 28 NOVEMBER 2012
18
NEWS
cityam.com
SCHOOLS provider Alpha Plus,
chaired by property grandee Sir John
Ritblat, yesterday became the latest
company to tap the retail bond mar-
ket to help raise 40m and pay down
shareholder debt.
The group, owned by Delanceys
DV4 fund, announced plans to launch
a seven-year retail bond paying 5.75
per cent and secured against part of
Alphas 131m schools portfolio.
The group aims to use 40m
proceeds from the bond issue
to cut debt and any proceeds
beyond that and up to
45m for general corpo-
rate purposes.
The launch follows a
string of retail bond launch-
es this year, as companies
look to reduce their
reliance on banks
and diversify
their sources of
funding. But
Alphas bond
Sir John Ritblat
latest to launch
a retail bond
BY KASMIRA JEFFORD
is the first directly secured by a proper-
ty portfolio.
Unlike cash bond deposits, retail
bonds are not covered by the Financial
Services Compensation Scheme, leav-
ing investors at risk if a firm goes bust.
Alpha owns and runs 19 nurseries,
sixth form colleges and private schools
including Prince William and Harrys
preparatory school Wetherby.
In the year to 31 August the company
turned over 57.9m, up 62.2 per cent
over a five-year period.
Chief exec Graham Able said revenue
was predictably stable because
pupils typically stay in the same
school throughout their education.
Sir John, the renowned former
British Land boss, said Alpha com-
bines all the areas that I am most
passionate about, delivering a pre-
mium education service which gen-
erates a stable cash flow and which
is also backed by a high quali-
ty real estate portfolio.
Pub meals help Mitchells and
Butlers as it faces muted sales
PUBS and restaurants group
Mitchells & Butlers yesterday
reported a rise in full-year profit but
like-for-like sales in the first eight
weeks of the new year were flat,
sending its shares down as much as
five per cent.
The owner of All Bar One,
Harvester and ONeills chains said
alcohol duty increases and food
price inflation remained a concern
for business in the new year.
We clearly feel there will be
continued pressure on food costs,
non-executive chairman Bob Ivell
said.
BY CITY A.M. REPORTER
Food costs last year were
particularly high, if you look at
things like red meat, particularly in
the first half.
British pub and restaurant
companies, which also face
competition from supermarkets,
have had a mixed year. Sales were hit
by heavy rain in April and June but
rebounded later as many Britons
celebrated the Queens Diamond
Jubilee and London hosted the
Olympics.
Mitchells & Butlers adjusted
profit before tax rose to 162m for
the 52 weeks to 22 September from
156m last year. The company, which
also owns the Toby Carvery and
Browns chains, said like-for-like sales
rose 2.1 per cent, led by food. Rival
JD Wetherspoon posted a seven per
cent increase in first-quarter like-for-
like sales earlier this month.
HIGH-END aviation firm VistaJet
has placed a $7.8bn (4.87bn) order
for up to 142 aircraft from
Canadian manufacturer
Bombardier.
The deal, which sent
Bombardiers shares up eight per
cent, is the firms biggest ever
business jet order.
By any standard, this is a
historic order for Bombardier,
said Steve Ridolfi, president of
Bombardier Business Aircraft, in a
statement.
VistaJet founder Thomas Flohr
said the purchase is the most
significant milestone for VistaJet
and is a testimony to our successful
strategy that focuses on global
VistaJet breaks records with its
$7.8bn Bombardier plane order
BY MARION DAKERS coverage.
He said the extra aircraft will
allow the plane-hire firm to cover
greater distances.
The eight-year-old company has
placed a firm order for 56 jets
worth $3.1bn at list price, with
options on 86 more planes.
Bombardier said it will start
delivering the aircraft in 2014.
Parts for 50 of the Global 2500
and Global 5000 models will be
built at Bombardiers Belfast
factory.
VistaJets prices range from
7,000 to 18,000 an hour.
Customers also have the option to
buy a plane and lease it back to
VistaJet for a management fee.
The firm aims to double in size
between 2011 and 2015.
JAPANS second largest property
developer has won consent for the
redevelopment of an office block at
Finsbury Circus in the City.
Mitsubishi Estate Company
announced yesterday that the City
of London Corporation had granted
planning consent for the 240,000
square feet scheme at River Plate
House.
The Wilkinson Eyre designed
project will be redeveloped into a
nine-storey office building with
ancillary retail on the ground floor.
Mitsubishi said it expects to
complete the building by 2016,
which it said will take advantage of
the limited speculative
development in the City.
City scheme
wins consent
BY KASMIRA JEFFORD
HELICAL Bar and Crosstree have
snapped up a site on Old Streets
Silicon Roundabout for 60.75m,
the two property
firms announced
yesterday.
The pair have
exchanged contracts
to buy the 3.1 acre
site using cash and
30m bank debt.
Crosstree, which is
backed by
pharmaceuticals
billionaire and
Alinghi founder
Ernesto Bertarelli,
will own a 67 per cent
stake of the freehold
Helical Bar and Crosstree buy
Silicon Roundabout portfolio
BY KASMIRA JEFFORD
interest with Helical owning the
remaining stake.
The site at 207 and 211 Old
Street includes two large office
buildings let to multiple tenants at
a rent of around 2.1m per
year, a retail parade and an
office block called Empire
House, which is vacant.
The developers are
working on plans drawn up
by architect AHMM to
revamp the two large office
buildings and build new
incubator studios to tap
into the influx of tech firms
looking to move to the area.
207 Old Street will be
refitted with new offices
@yourcanarywharf
CANARY WHARF
BARS & RESTAURANTS FASHION & STYLE ARTS & EVENTS canarywharf.com
MOST
WANTED
Thursday
29 November
WINTERS
*In Jubilee Place from 5pm, terms and conditions apply. See website for details.
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With discounts of up to 30%,**
Winters Most Wanted is the
perfect opportunity to pick up
your festive gifts. Fashion shows in
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30%: Aquascutum, Myla.
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Charles Tyrwhitt, Choice (excludes Mulberry),
Crabtree & Evelyn (on purchases of 30 or more),
David Clulow Opticians, Dune, French Connection,
Gant, Gap, Hackett, Jaeger London Menswear,
Jaeger London Womenswear, Jones Bootmaker,
Karen Millen, Kurt Geiger, L.K.Bennett (excludes
Signature and Black Ribbon Collections),
Links of London, Molton Brown (on purchases of
60 or more), Phase Eight, Reiss, Reiss Womenswear,
The Rejuvenation Clinic & MediSpa (services only),
Robert Dyas, SeanHanna (services only), Sk:n,
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IN BRIEF
St Ives resilient in headwinds
nMarketing and print group St Ives
yesterday said it had seen a jump in
operating profit year-on-year since
the end of July, despite broadly flat
revenues. The book publisher said it
was making good progress with our
strategy to reposition the business
[towards marketing] and offer an
extended range of services. It added
that margins had improved in a
challenging print business and that
its 17m February acquisition of
research consultancy Incite was
integrating well with the rest of the
business. Shares rose 3.2 per cent.
Apple fires mapping boss
nApple has sacked the head of its
maps division following the iPhone
makers embarrassment over the
service, which has been beset by
problems. Richard Williamson was
ousted by senior vice president Eddy
Cue in a bid to regain trust in the
division, Bloomberg reported
yesterday. Apple changed the maps
service on its iPad and iPhone this
autumn after years of using arch-rival
Googles well-respected software.
The software was criticised as being
dogged by glitches and putting
landmarks in the wrong places.
Correction
nIn our issue dated 27 November, we
wrote that Diageo is believed to be
considering moving its tax base to the
UK. In fact, Diageo is currently a UK
domiciled company.
THE LAUNCH of the iPhone 5 led to
Apple regaining the initiative in the
smartphone wars in recent weeks,
data released yesterday showed.
US sales of iPhones overtook those
of smartphones running Googles
software, Android, dur-
ing the 12 week period
to 28 October, figures
from researchers Kantar
Worldpanel showed.
It is the first time since
February when sales of
the previous iPhone 4S
were declining that
this has been the case.
The boost follows
Septembers release of
the iPhone 5, which has
seen record sales in the
early weeks of its release.
In major European
countries, Android
retained its lead, but its
market share was much
reduced in the period. In
iPhone 5 sees
Apple take bite
out of Android
BY JAMES TITCOMB
the UK, sales of iOS phones just the
iPhone were up to 32.7 per cent,
compared to Androids 54.2 per cent.
Phones running Android include
Samsungs Galaxy models, as well as
handsets from HTC, Sony and LG.
The data showed an improvement
from Microsofts Windows Phone
software, as well as a marked
decline in sales of Research in
Motion (RIM)s BlackBerry
ahead of the launch of its
next generation of model.
BlackBerry accounted for
eight per cent of sales in the
UK, while Windows Phone
took 4.6 per cent.
Kantars Dominic Sunnebo
said Apples market share will
continue to improve, as the
next set of data will include
12 weeks of iPhone 5 sales,
rather than the six weeks
included in this period.
Ericsson and Samsung in patent
wars as licensing talks collapse
ERICSSON, the worlds biggest
telecom network equipment maker,
said it was suing Samsung
Electronics for patent infringement
after two years of talks failed to yield
a licence agreement.
Swedens Ericsson, which reckons
more than 40 per cent of the
worlds mobile traffic passes
through its networks, filed a
lawsuit in the United States saying
Samsung had refused to sign a
licence to use technology on terms
it referred to as fair, reasonable and
non-discriminatory (Frand).
Ericsson has tried long and hard
BY CITY A.M. REPORTER
to amicably come to an agreement
with Samsung and sign a licence
agreement on Frand terms. We have
turned to litigation as a last resort,
Kasim Alfalahi, chief intellectual
property officer at Ericsson said in a
statement yesterday.
Alfalahi noted Ericsson has over
30,000 patents and more than 100
licence agreements with major
players in the industry.
An Ericsson spokesman declined
to comment on the size of its
lawsuit.
Samsung said it will take all
necessary legal measures to protect
against Ericssons excessive claims.
Samsung has faithfully
committed itself to conducting fair
and reasonable negotiations with
Ericsson over the past two years, but
Ericsson has demanded
prohibitively higher royalty rates to
renew the same patent portfolio,
the South Korean company said.
Samsung is also embroiled in a
legal war with Apple in more than
20 disputes in 10 countries, with
Apple alleging various Samsung
smartphone and tablet products
infringed its patents.
The complaint is filed in the
District Court for the Eastern
District of Texas, the district where
Ericssons US headquarters is
located.
BT makes plans to appeal Skys
controversial sports pricing win
BT has announced plans to appeal a
controversial competition ruling
over the price Sky is able to charge
other broadcasters for its sports
channels.
The telecoms company said it had
asked permission to challenge
Augusts decision from the
Competition Appeal Tribunal (CAT),
which stopped Ofcom from forcing
Sky to lower the prices it can charge
the likes of BT and Virgin Media for
Sky Sports channels.
If BT is successful in winning
permission to appeal, a five-year
dispute between Sky and the
BY JAMES TITCOMB
communications regulator could
reopen. Ofcom first began
investigating Sky Sports prices in
2007, and ordered a cut in prices in
2010 in order to foster competition.
This was successfully appealed by
Sky in August this year.
CAT said at the time that a
significant number of Ofcoms
pivotal findings of fact were
inconsistent with the evidence.
The findings were met with
incredulity by Skys rivals.
A successful appeal now would be
a significant boost to BT, which is
making an aggressive push into
sports broadcasting with the launch
of its own sports channel next year.
Virgin Media, which did not itself
ask permission because it would
have been on the same grounds as
BTs appeal, said: If permission is
granted, we will intervene.
BT Group PLC
27Nov 21 Nov 22Nov 23Nov 26Nov
224
225
226
227
228
223
229 p
226.03
27Nov
WEDNESDAY 28 NOVEMBER 2012
20
NEWS
cityam.com
YORKSHIRE-BASED telecoms
company KCOM said strong
demand for its superfast fibre
broadband service had enabled
profits to remain steady despite a
fall in revenues.
The company, which announced
plans to treble its fibre network,
posted a 4.7 per cent reduction in
revenues to 188.7m in the half-
year to October, which it blamed
on challenging conditions. Pre-
tax profit, however, rose
marginally to 27.6m.
It said that its fibre service had
been a big driver of growth, with
demand better than expected.
KCOM operates in and around
Hull, one of the few areas that
Superfast network keeps Hull
internet provider KCOM in line
BY JAMES TITCOMB
BT and companies such as Sky
that use BTs network does not
have a presence. Its only
competition comes from mobile
broadband services.
However, it has not been
immune to the economic
conditions, seeing a slowdown in
long-term business contracts. This
did not prevent the board keeping
its earlier promise to raise its
interim dividend by 10 per cent
though.
Despite the economic
headwinds, there are
opportunities for us to provide
more services to our existing
customers, as well as winning new
contracts in both the enterprise
and public sector, chief executive
Bill Halbert said.
MARKETING group Next Fifteen
wrote off almost 2m related to a
fraud at the companys PR firm
Bite Communications yesterday.
The alleged embezzlement,
which the company said was down
to a senior employee at Bites San
Francisco office when it flagged
the situation last month, is being
investigated by the FBI. The
announcement had sent the shares
down as much as fifteen per cent.
All steps will be taken to recoup
lost assets but it is too soon to
estimate the likely scale of any
recovery, Next Fifteen said.
The $2.8m (1.75m) writedown
led to the company announcing a
21 per cent fall in pre-tax profit to
Next Fifteen sees writedown on
embezzlement at PR firm Bite
BY JAMES TITCOMB
6m, even as revenues increased
from 86m to 92m.
The complex fraud had
delayed the annual results by
three weeks. Next Fifteens
chairman Richard Eyre said he had
seen strong operational
performances from every aspect
of the group, which is
transitioning from traditional PR
to digital marketing services.
This strategy is giving the
group access to new revenue
streams and helping drive growth
in many global markets, he said.
The technology PR divisions still
account for two-thirds of
revenues, however. Bites clients
include Microsoft, Nokia and Sony,
although it lost Hewlett-Packard
this year.
The iPhone 5 has broken
records since its release
iPHONE 5 HELPS APPLE WIN MARKET SHARE
IN EUROPE iOS IS GROWING
MAJOR EUROPEAN COUNTRIES
* all data is for 12 weeks to 28 October
SOURCE: KANTAR
4 OUT OF 5
ITS SHARE OF SALES IN
HAS THE HIGHEST SHARE
OF WINDOWS PHONE
USERS ACROSS EUROPE
ITALY
11.7%
UNITED STATES
APPLE iOS
48.1%
ANDROID
46.7%
WINDOWS
2.7%
RIM
1.6%
UNITED KINGDOM
APPLE iOS
32.7%
ANDROID
54.2%
WINDOWS
4.6%
RIM
7.9%
GERMANY
APPLE iOS
17.0%
ANDROID
73.9%
SYMBIAN
3.5%
RIM
2.5%
URBAN CHINA
APPLE iOS
19.9%
ANDROID
67.1%
SYMBIAN
6.2%
WINDOWS
4.2%
ITALY
APPLE iOS
19%
ANDROID
56.7%
SYMBIAN
7.3%
WINDOWS
11.7%
Record-breaking feats help Red Bull brand take flight
E.ON AG
27Nov 21 Nov 22Nov 23Nov 26Nov
13.70
13.80
13.90
14.00
14.10
14.20
13.80
27Nov
Buzz and Index Chart
10Sep24Sep8Oct 22Oct 5Nov19Nov
15
20
25
0
5
10
30
35
40
45
-6.0
-4.0
-2.0
-12.0
-10.0
-8.0
0.0
2.0
4.0
6.0
Index
Buzz
Falkand Oil and Gas Ltd
27Nov 21 Nov 22Nov 23Nov 26Nov
40
45
35
50
55
60
65
70
p
32.75
27Nov
MILITARY equipment maker
Chemring Group, which earlier this
month issued its second profit
warning in less than three months,
said yesterday that its 2012
performance had been extremely
disappointing.
But its shares rose on relief that
its year-end trading statement did
not contain more nasty surprises.
Chemring, which makes flares,
and mechanisms used in ejector
seats, earlier this month cut its
Chemring admits 2012 has been
extremely disapppointing year
BY CITY A.M. REPORTER
profit outlook by more than a
quarter for the year to 31 October
due to contract delays and technical
problems.
Chemrings operational
performance has been weak, and
management of investors
expectations over the past year has
also been poor, the company said in
its first statement to the market
since takeover talks with private
equity firm Carlyle Group fell
through in early November.
Shares in the firm closed up 3.6
per cent at 238.2p yesterday.
WEDNESDAY 28 NOVEMBER 2012
21
NEWS
cityam.com
Mark Papworth only joined Chemring three weeks ago as chief executive
IN BRIEF
Zambeef plans return to dividend
nArgicultural business Zambeef said
yesterday it plans to reinstate its
dividend, as its profits before tax rose
20 per cent to $12.7m (7.9m).
Revenues rose 23 per cent to $255.1m.
Profits after tax were hit by a $9m tax
liability that the Zambia Revenue
Authority (ZRA) is demanding, with a
judgment on a pending appeal not sue
until early next year. Zambeef said it
plans to start paying meaningful
dividends from 2014 onwards.
Capita preferred bidder to council
nSupport services firm Capita said
yesterday it had been recommended
as the preferred bidder to deliver
Staffordshire Councils educational
support services. The contract has an
initial value of 85m a year over 20
years to a joint venture (JV) of Capita
and the county council. Capita will
make an initial investment of 24.9m
to take a majority stake in the JV, then
and a further 6.6m over three years.
Xstrata starts production in Peru
nMiner Xstrata said yesterday that its
Antapaccay mine in Peru had
dispatched its first shipment of copper
in concentrate. The mine is expected to
produce an average of 160,000 tonnes
of copper in concentrate each year.
Production from the mine is expected
to boost the miners production figures
for the second half of the year. It said
yesterday that the mine had come in
on schedule and in line with the
original budget of $1.5bn.
BRITAINS energy regulator yesterday
ordered supplier E.ON UK to repay
customers 1.4m for wrong charges
it applied after they switched energy
provider in 2008 and 2011.
The energy supplier, one of the
UKs so-called big six, also agreed
with regulator Ofgem to pay another
300,000 pounds into a consumer
fund to help old people in fuel pover-
ty.
Ofgem found E.ON guilty of incor-
rectly charging customers an exit fee
when they switched supplier follow-
ing price rise announcements.
Energy users who announce their
intention to switch supplier follow-
ing an increase in prices are also
exempt from being charged the high-
er price, even if the switch occurs
after the price rise, a rule which
Ofgem found E.ON had also
breached.
We are very sorry to have let down
some of our former customers and
have made clear that we will refund
Ofgem finds
E.ON guilty of
overcharging
BY HARRY BANKS
the money plus interest, said David
Bird, customer service director at
E.ON UK.
The utility will repay around 94,000
customers an average of 14.83 in
January, E.ON said.
Ofgem has put in place protections
for consumers so they can get a fair
warning if their supplier puts up
prices and time to shop around for a
better deal. E.ON has accepted it
failed to meet these protections, said
Sarah Harrison, Ofgems senior part-
ner in charge of enforcement.
Shares in Falkland Oil and Gas
are hit by a miss at Scotia well
FALKLAND Oil and Gas, which is
engaged in a roller coaster ride to
find oil in the disputed South
Atlantic islands, lost almost half of
its value yesterday when it
announced the abandonment of a
well following disappointing
results.
The statement wiped 49 per cent
off Falklands volatile stock,
sending its shares to an historic
low of 32p, giving it a market
value of 103m.
The stock price had hit a high of
267p in July 2010.
Falkland Oil and Gas, which is
BY CITY A.M. REPORTER
partnered with US firm Noble
Energy and Italian utility Edison
on the project, said a reservoir at
its Scotia exploration well
appeared to be of poor quality,
with low permeability.
The collapse in the shares,
however, came despite an
insistence from the firm that it
remained upbeat on its campaign,
with further tests set to determine
whether there was a higher quality
reservoir elsewhere in the region.
The firm now intends to plug
and abandon the Scotia well.
The results of the Scotia well
provide further endorsement of
the hydrocarbon potential of the
South and East Falkland Basin and
have proven the presence of
hydrocarbons within the mid
Cretaceous Fan Play, chief
executive Tim Bushell said.
LONG-TIME suitor ConAgra Foods
finally sealed a deal to buy Ralcorp
Holdings for $5bn (3bn) to become
the biggest private label food
company in North America.
Ralcorp shareholders will receive
$90 per share in cash, a premium of
28.2 per cent to the stocks Monday
close, ConAgra said in a statement.
ConAgra, the maker of Chef
Boyardee pastas and Slim Jim meat
snacks, began its pursuit of Ralcorp
in March 2011 with an offer of $84
per share.
The company raised its bid twice
but Ralcorp spurned them,
including the then-final offer of
$94 per share, which valued
Ralcorp at $5.2bn.
ConAgra seals $5bn Ralcorp deal
after almost two years of talks
BY CITY A.M. REPORTER
Ralcorp chose instead to spin off
its cereals business into Post
Holdings earlier this year.
With yesterdays deal, the
combined market value of Ralcorp
and Post is about $6.12bn, showing
that Ralcorp was able to extract a
much higher price than last years
bids.
The deal is a big win for activist
investor Corvex Management,
Ralcorps largest shareholder,
which in August demanded that
the food manufacturer either sell
itself, buy another company or
change its strategy after a series of
earnings disappointments.
Ralcorp also reported a fourth-
quarter net loss of $44.2m, or 80
cents per share, on revenue of
$1.07bn.
I
N the last two months, energy
drinks brand Red Bull has raced
into the headlines on more
than one occassion. It has
benefitted both from Felix
Baumgartners stunning jump
from the edge of space, and a
winning Formula 1 team.
But amid these record-breaking
feats, what impact has this
exposure had on the brand in the
eyes of the public?
ALL EYES ON FELIX
The Red Bull Stratos Live Jump on
14 October was the most watched
live event ever on video streaming
site YouTube, with an audience of
8m.
YouGovs measure of brand
exposure on the newsfeeds of
social media audiences indicates
that, on the Sunday when the
jump finally took place, Red Bull
was mentioned at least once on
the newsfeeds of 40 per cent of
the UK Twitter population.
And the highlights of
Baumgartners death-defying fall
have been watched by more than
30m people on Red Bulls official
YouTube channel in the space of
just over a month. Thats not to
mention the viewers who followed
the event through more
traditional media such as TV news
bulletins.
RED BULLS FACEBOOK FRIENDS
Mentions of the brand also
rocketed on private Facebook
newsfeeds, where Red Bull was
most frequently heard together
with the words Stratos, Felix and
that familiar strap-line: wings.
Such heights of exposure were
reached again when Red Bull
Formula 1 driver Sebastian Vettel
roared to pole position at the
Indian Grand Prix in late October.
Vettels success pushed Red Bull
on to the newsfeeds of 29 per cent
of the UK Twitter population.
But subsequent Formula 1 team
success reached Twitter audiences
of just over half that size.
The Red Bull brand managed to
reach 16 per cent of British
Twitter feeds during the teams
third consecutive constructors
title victory last week.
Using BrandIndex, which
measures brand perception daily
using nationally representative
samples, we can measure the
impact of this increased exposure.
During October, following the
Stratos jump and Indian F1
success, the Buzz measure for Red
Bull increased by eight points.
Significantly, the Index score for
the brand a composite of six key
image measures including
corporate reputation also
increased steadily.
Despite Vettels successes and a
Championship win, both Buzz and
Index fell several points during
November indicating that the Red
Bull effect was quick to wear off.
But overall, such exposure
seems to have delivered lasting
success when it comes to
improving Red Bulls perception
in the eye of the consumer.
Stephan Shakespeare is the chief
executive of YouGov
BOTTOM
LINE
SEBASTIAN SHAKESPEARE
WEDNESDAY 28 NOVEMBER 2012
22
Fiscal cliff fears
send Wall St
shares diving
U
S stocks slid yesterday in a
choppy session, losing ground
in the last hour before the
close after Senate Majority
Leader Harry Reid expressed
disappointment that there has been
little progress in dealing with the
fiscal cliff.
The market was flat for most of the
session but fell sharply after Reids
comments, a signal that investors
remain skittish about the wrangling
in Washington. The CBOE Volatility
Index, or VIX, rose on Reids words.
It may be that the market feels the
goodwill before Thanksgiving is
evolving into more political
intransigence, said Quincy Krosby,
at Prudential Financial.
Markets are focused on whether
Congress and the White House can
agree on ways to avoid some $600bn
in automatic spending cuts and tax
increases that are due to kick in early
next year.
As budget talks linger, Las Vegas
Sands and Supertex added their
names to a growing list of companies
announcing special dividends aimed
at helping investors avoid a possibly
higher tax burden next year.
Higher dividend and capital gains
taxes are part of the negotiations in
Washington and may rise even if a
deal is crafted.
Las Vegas Sands jumped 5.3 per
cent to $46.36. Supertex rose 6.9 per
cent to $18.
The VIX shot up 2.7 per cent to 15.92
at the close.
The Dow Jones industrial average fell
89.24 points, or 0.69 per cent, to
12,878.13 at the close. The S&P 500
dropped 7.35 points, or 0.52 per cent,
to finish at 1,398.94. The Nasdaq
Composite lost 8.99 points, or 0.30
per cent, to end at 2,967.79.
B
RITISH top shares rose yesterday,
helped by a 2.5 per cent jump in
British aerospace group BAE
Systems after four traders cited
market speculation of interest in the
company from US firm Lockheed Martin.
Vague rumours that Lockheed is show-
ing interest, one trader wrote in an email.
BAE shares closed at 319.70p.
Banks also helped the FTSE along, gain-
ing after a deal was reached other Greek
debt but gains were capped as a global
growth warning from the OECD subdued
demand for energy-related stocks
Eurozone finance ministers and the
International Monetary Fund agreed late
on Monday on measures to cut Greek debt
by 40bn by 2020, reducing it to 124 per
cent of GDP and paving the way for Athens
to receive its next bailout installment.
Royal Bank of Scotland led FTSE 100 ris-
ers, adding 3.5 per cent. Of British banks it
is one of the most highly exposed to the
Greek debt crisis, and lost 1.1bn on Greek
bond investments in 2011.
RBS also benefited from an upgrade by
UBS, who cited the positive regulatory
implications of Canadian central bank
head Mark Carneys appointment as Bank
of England governor.
We think the appointment... provides
the opportunity for the UK regulatory envi-
ronment to be recast with a more concilia-
tory tone, UBS said. This helps reduce the
tail risk associated with investing in UK
banks. Lloyds gained 2.9 per cent, while
HSBC added only 0.2 per cent.
At the close, the FTSE 100 was up 12.99
points, or 0.2 per cent, at 5,799.71, with
financials, a sector that includes banks,
insurers and asset managers, adding 6.9
points to the index.
BESTof theBROKERS
Aberdeen Asset Management PLC
21Nov 22Nov 23Nov 26Nov 27Nov
p
355
350
345
340
330
335
328.70
27 Nov
ABERDEEN ASSET
MANAGEMENT
Analysts at Citigroup
yesterday downgraded
the stock from buy to
neutral, citing slow
capital returns. They also
increased the target
price from 320p to 345p.
DASHBOARD CITY
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
cityam.com
FTSE
27Nov 21Nov 22Nov 23Nov 26Nov
5,840
5,820
5,800
5,780
5,740
5,760
5,799.71
27 Nov
The Sage Group PLC
21Nov 22Nov 23Nov 26Nov 27Nov
p
314
312
310
308
304
306
311.94
27 Nov
SAGE
George O'Connor at
Panmure Gordon has
reiterated his sell
rating, saying brokers
have spivved up take-
up chatter but the
valuation is out of kilter
with operational reality.
Royal Bank of Scotland Group PLC
21Nov 22Nov 23Nov 26Nov 27Nov
p
298
296
294
292
288
290
286
284
295.10
27 Nov
RBS
UBS analysts have
upgraded the part-
nationalised bank to
buy. They believe the
appointment of Mark
Carney to lead the Bank
of England will be good
for state-owned banks.
RiverRock European Capital
Partners
Michel Preti has been
appointed partner and joint chief
executive at the investment firm.
He was most recently chief
executive of the corporate and
investment banking division of
Societe Generale. Preti was
also previously chairman and
chief executive of Bear Stearns International.
Jones Lang LaSalle
Jonathan Mills has been appointed to a senior role in the
real estate services firms West End investment team. He
was previously a director in its capital markets team.
Reynolds Porter Chamberlain
Charlotte Taggart has been appointed partner in the law
firms corporate insurance team. She joins from Lockton, the
insurance broker, where she was its international general
counsel. Taggart is a commercial insurance specialist, with
particular experience in distribution and affinity deals.
Capgemini
Bob Scott has been appointed group director of marketing
at the consultancy firm. He has worked for Capgemini for
over 20 years, where he most recently led its business
process management global service line. Scott began his
career at British Coal.
Dechert
Dmitry Kurochkin has been appointed partner in the law
firms dispute resolution practice. He was previously head of
litigation for central Europe, the Middle East and Africa at
Herbert Smith. Kurochkin focuses on litigation and
arbitration matters.
Quilter
The investment management firm has made three analyst
appointments. Anubhav Rastogi and Amish Patel join as
equity research analysts from Jefferies International and
Henderson Global Investors respectively. Nick Wood joins as
a collectives research analyst from Stamford Associates.
WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
CITY MOVES
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Lift to BAE Systems from Lockheed
rumour helps FTSE edge upwards
T
HE Australian dollar (Aussie)
has been riding a tsunami wave
over the last few years. Since
lows at the end of 2008, the
currency has rocketed by nearly 75
per cent against the US dollar. But as
Asian economies realign, its rise
looks set to end, bringing downward
pressure on the currency.
COMMODITIES SUPER CYCLE
Commodities play a significant role
in Australias economy, and the
Aussies rise has been fuelled by
demand from emerging markets in
Asia. The currency has previously
enjoyed a strong correlation with
resources, such as iron ore, and was
used as a proxy by investors to gain
exposure to markets like China, its
biggest export partner.
Over recent years, Asian economies
have kept their currencies artificially
weak to ensure their exports remain
attractive. But as these contries move
away from investment and export-led
growth models, and gear towards
domestic consumption, this may no
longer be necessary. This is beginning
to impact the Aussie, breaking down
its strong correlation with commodi-
ties (see chart).
As trade from emerging markets
slows, Australias current account
could be hit. Due to softer global
demand, the Organisation for
Economic Co-operation and
Development (OECD) has subsequent-
ly cut its GDP forecast from 3.7 per
cent to a still respectable 3 per cent.
As iron ore prices stabilise, and
export volumes continue to grow, the
OECD estimates that mining will still
expand vigorously in 2013. In a
note, UBS has argued that this may
carry on as several years of mining
investment feeds through to greater
export capacity. But the danger is
that the extra capacity will not be
soaked up, pushing prices lower.
LOOSE MONEY
Away from mining, the Australian
economy is less robust. In response,
the Reserve Bank of Australia (RBA)
has slashed its cash rate (its base rate)
to 3.25 per cent, from 4.5 per cent a
year ago, which has helped cool the
rise of the currency. And there may be
more cuts on the horizon, perhaps as
early as December. UBS has said that
more rate cuts could follow if non-
mining sectors of the economy do not
revive in time to pick up the slack,
which will add to the downward pres-
sure on the Aussie.
The RBA hasnt engaged in any out-
right quantitative easing, like the
Bank of England and US Federal
Reserve. However, rumours have been
circulating that it is passively inter-
vening, by stepping up the pace that it
is acquiring foreign currency reserves
(that it uses to buy foreign bonds).
Official data shows that the RBA is
now buying approximately Au$450m
(294m) of foreign currency per
month, up from around Au$100m per
month over the last year. This has
undoubtedly contributed to recent
The overheated
Aussie needs to
be cooled quick
Aussie weakness. Even though RBA
governor Glenn Stevens played down
the accelerated pace, UBS said that it
shows that the Aussie is high enough
[for the RBA] to allow accumulation of
foreign reserves on its balance sheet.
Inflation is expected to come in at 2
per cent this year. But looser mone-
tary policy and a weaker Aussie may
stoke it. This is not a point not missed
by Stevens: A lower exchange rate
would need to be accompanied by a
pace of growth of domestic costs
below that seen for much of the past
five years, in order to maintain low
inflation.
GET YOUR SHORTS ON
Brave traders may be tempted to use
the Aussie as part of a carry trade,
Time to get your Aussie shorts on
Australias currency may weaken over the
medium term, writes Yogesh Chandarana
WEDNESDAY 28 NOVEMBER 2012
23
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which is where you borrow money in
a cheaper currency and invest that
money in a higher yielding currency,
typically by parking the cash in
bonds. The Aussie carry is starting to
look very attractive against several
currencies, but especially versus
euro, says Morgan Stanley. But the
euro can be volatile, so it is not a trade
for the inexperienced.
And in the short-run, the Aussie is
likely to be supported by better eco-
nomic data coming from Asia. The lat-
est Chinese manufacturing
purchasing managers survey is show-
ing expansion for the first time in
over a year, which has helped to sup-
port the Australian dollar. But over
the medium term, the Aussies
prospects look grim.
Morgan Stanley expects Aussie-dol-
lar to fall from its current price
around $1.04 to the $0.96 level by the
end of 2013. UBS has a similar view,
saying that it expects the Aussie to
drift lower towards parity over com-
ing months.
By the standards of most countries,
Australias economy is relatively
strong: low unemployment, com-
bined with real growth over the next
few years is enough to make most
Western economies envious. But
despite this strength, macroeconomic
factors in Asia, along with a looser
monetary stance from policymakers
is likely to weigh on its currency.
Therefore, in the medium term, the
Aussie looks like a prime target for
traders to go short.
Aussie-dollar, 3 years
Nov 2011 Nov 2010 Nov 2009
1.15
1.10
1.05
1.00
0.95
0.90
0.85
$
Aussie-dollar vs Iron Ore
Sep 2012 Sep 2009 Sep 2006
0.6
0.5
0.7
0.8
0.9
1.0
1.1
60
30
90
120
150
180
210 $
Ironore
AUDUSD
Ironore, US$/tonne
S
O
U
R
C
E
:

F
T
S
E

G
R
O
U
P

/

U
B
S

/

B
L
O
O
M
B
E
R
G
A
NOTHER bailout deal has
been secured for Greece.
Some of the countrys
borrowing will be written off
it will be left with a debt to
GDP ratio of only 125 per cent. But
is this the end of the matter or
another failure by Europes elite to
face up to the real problems?
With the Greek economy
contracting by 7 per cent per year,
there is every chance that any cuts in
debt now will be more than matched
by a fall in national income. As a
consequence, debt as a proportion of
national income could just keep
growing. The markets may be
welcoming the deal now. But the
only real test of whether there is a
sustainable solution to the crisis is if
M
ARK Carney, the Bank of
Englands new governor,
will leave his current
position as governor of the
Bank of Canada with a
sterling reputation. The widespread
acclaim he has attracted is based on
his Banks deft handling of the
beginning of the financial crisis, and
his recent appointment as head of
the G20s Financial Stability Board.
But despite this praise, a more
comprehensive understanding of his
legacy will take time to emerge.
Carney was appointed governor of
the Bank of Canada in early 2007, just
before the financial crisis began to
unfold. Under his leadership, the
Banks initial handling was impecca-
ble. It lowered interest rates to record
levels and helped coordinate the
global response of central banks that
mitigated the risk of contagion.
And Canada weathered the storm
fairly well. Alone among the major
industrialised nations, its financial
system emerged unscathed,
although this largely reflects steps
taken by federal agencies before his
cityam.com/forum
Alone among the
major nations, Canada
emerged unscathed
from the financial crisis
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: [email protected]
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.

24
WEDNESDAY 28 NOVEMBER 2012
PHILIP CROSS
Mark Carneys Canadian legacy has
still not weathered the test of time
appointment as governor. These
notably included regulations by the
Office of the Superintendant of
Financial Institutions and the
Department of Finance (which reject-
ed proposed bank mergers). As the
recovery unfolded, Canadas image
as a safe haven helped attract billions
of dollars of investment from coun-
tries with more troubled financial
systems.
However, Carneys successes need
to be viewed against his failings in
the bully pulpit. His Bank has regu-
larly scolded Canadian households
for borrowing too much, when its
record low interest rates created the
conditions that encouraged record
indebtedness. In the end, it was con-
crete actions taken by the
Department of Finance and the
Canada Mortgage and Housing
Corporation to tighten lending stan-
dards and shorten amortisation peri-
ods that blew the speculative froth
off the housing market. But even
now, households are still borrowing
more for other durable goods. Car
sales are at their highest level since
the recession, for example, as house-
holds continue to take advantage of
low rates.
Carney may also have worn out his
welcome within corporate Canada.
He has hectored the countrys com-
panies for not spending enough and
for holding on to too much dead
money, as he inelegantly put it. In
particular, he singled out the energy
sector for not investing aggressively,
citing the massive opportunities
provided by emerging markets.
The problem is that almost all of
Canadas energy exports go to the
US, where prices for both oil and gas
are much lower than elsewhere in
the world. And the rapid growth of
shale production in the US has added
to the air of uncertainty. ARC
Financial Corp of Calgary projects a
10 to 15 per cent drop in cash flow
for the oil and gas sector next year,
making lower capital spending
inevitable despite the wishes of the
central bank. In these circumstances,
it is not surprising that Carneys
exhortations to spend more were
met by project deferrals and cancella-
tions.
Carneys legacy as a sound steward
of monetary policy has not yet stood
the test of time. After five years of
record low interest rates, he has been
reduced to using words as the main
tool of monetary policy. Carney
should perhaps have listened to the
critique of ultra-easy monetary poli-
cy recently offered by former Bank of
Canada deputy governor William
White. He noted that, while a central
bank could never run out of ammu-
nition, low interest rates were now
causing more damage to some areas
of the economy than they were pre-
venting elsewhere. His concerns cen-
tred on some sectors gorging
themselves on debt, while others
(like pension funds and insurance)
were starved of capital.
Like Alan Greenspan at the Federal
Reserve, Carney has proven adept at
implementing a stimulative mone-
tary policy in response to severe eco-
nomic shocks. Looking forward,
taking away the punch bowl after
the party is getting started by rais-
ing interest rates and unwinding the
extraordinary stimulus of recent
years will prove the difficult part.
Only when this is done can we know
the true legacy of Carney.
Philip Cross is research coordinator at
the Macdonald-Laurier Institute and the
former chief economic analyst at Statistics
Canada. He blogs for the Centre for Policy
Studies at www.cps.org.uk/blog
Greece can borrow on the open
market without support and
guarantees, and at interest rates that
do not cripple the economy. Clearly
we are a long way from that point.
Indeed, on current trends, a
solution will never be reached unless
Greece leaves the euro. According to
the Heritage Foundation/IEAs index
of economic freedom, Greece is the
119th most-free economy in the
world. This is comfortably above
North Korea but on a par with India.
Greece scores particularly poorly on
labour market freedoms.
The real problem is that Greece is
an outlier even within the EU. For
example, an average of 70 per cent of
60-64 year olds in the EU do not
work. But the figure reaches 80 per
cent for the most indebted countries
in Europe (including Greece).
Southern EU countries have also
proven unwilling to deal with
shadow economies that make up
between 20 per cent and 25 per cent
of their national income. These are
structural issues and their causes
can be traced back to dysfunctional
labour markets, high government
spending and regulation.
And this cuts to the heart of the
issue. I am not a fan of Keynesian
solutions to economic problems. But
when you have a country with rigid
labour and product markets, and a
fixed exchange rate, austerity alone
is not the solution.
Yes, more debt needs to be written
off, but the programme of Eurozone
support should be stopped within six
months. We must also see radical
domestic reforms over a decade or
more. At the same time, Greece must
be allowed to issue its own currency.
This could be done with a minor
treaty change that allowed countries
to issue currencies in parallel with
the euro, as long as the country also
withdrew from the Eurozones
decision-making mechanisms.
If this had been done two years
ago when I first proposed the idea
with Alberto Mingardi Greece
might be a very different place today.
But it is never too late to rectify a
mistake. Exchange rate flexibility
ensures that austerity in government
can be delivered while the private
sector recovers. Lower government
borrowing then leads to a lower
exchange rate. But changes to
currency arrangements and can
never be a long-term solution.
Sustained and radical economic
reform is crucial for the Greek
economy to be revived.
Professor Philip Booth is editorial and
programme director at the Institute of
Economic Affairs.
PHILIP BOOTH
Yet another Greek bailout will change nothing without structural reform
MORNING UPDATE
A.M.
25
WEDNESDAY 28 NOVEMBER 2012
The Forum is open for you to take part. Got a sharp comment on
one of todays columns? Do you have another subject you want
to share your opinion on? We want to hear your views.
Email [email protected] or comment at cityam.com/forum
New beginnings
[Re: An unusually brilliant move by
Osborne will give City a huge fillip,
yesterday]
Mark Carney has performed his first
conjuring trick by confounding the
commentators with his surprise
appointment. But to be a successful Bank
of England governor, and to get the UK
economy going, he is going to need a lot
more from his magic box. I wish him the
best of luck.
Martin Ball
Mark Carney has a good reputation in
London and the response to his
appointment has been largely positive.
However, Canadian household and
government debt has seen a significant
increase in recent years, which raises
some concern about Carneys otherwise
extremely impressive record.
Nonetheless, if he can keep Paul Tucker
on board, Carney might be able to accrue
some support from the City. With todays
low interest rates, rising debt and high
unemployment, the new governor will
need all the support he can muster.
Henry Samuel
The right leadership is essential for getting
Britain out of this mess. How can we
encourage all the other parts of govern-
ment to abandon the underperformers
and bring in fresh, strong leadership as
well?
Richard Chadwick
B
RITISH industry needs
accurate information about
future opportunities in the
marketplace so it can
compete for and win
business. That way it can plan ahead
and buy the technology, labour and
skills to match future needs.
One in every seven pounds in this
country is spent by the public sector.
Thats an enormous 230bn spent on
goods and services. So we are deter-
mined to leverage every single penny
of central government expenditure
to back growth and jobs.
For years under Labour, govern-
ment didnt bother to engage proper-
ly with potential suppliers. The
market didnt know what the public
sector wanted and government did-
nt know what the market could pro-
vide. Labours arms length approach
left industry playing a guessing
game, curbing its ability to bid for
and win government contracts.
But Britain is in a global race. The
old approach just wont do. To allow
the country to rise, we have radically
overhauled how central govern-
ments procurement is run.
We are determined to make it easier
for businesses of all sizes to bid for
and win government contracts.
Things are already better than under
Labour. More small to medium-sized
enterprises (SMEs) than ever are win-
ning business with government. But
theres a long way to go.
Much of what we are doing is sensi-
ble like stripping out unnecessary
bureaucracy from the procurement
process, or making sure new contract
opportunities are advertised clearly
online. Weve also introduced a mys-
tery shopper scheme, where business-
es can alert us to poor practice or
obstructive procureaucrats.
It makes commercial sense to nur-
ture our relationships with suppliers
by discussing what business is com-
TOP TWEETS
OECD slashes its global growth forecasts,
warning that the Eurozone debt crisis is the
biggest threat to the world economy.
@sunkyujacklee
Anyone care to say what position UK took in
the Greek debt deal? How much did we lose?
Will there be a statement in Parliament?
@AndrewLilco
Would it not make more sense for insurance
companies and the government to work
together and build better flood defences?
@howardhoward2
Boriss comment on London immigration:
London was founded in 43AD by a bunch of
pushy Italian immigrants!.
@matthewlb
Would easing student visa rules be enough
to attract the best and brightest to Britain?
YES
Boris Johnson is right: students should be removed from net
migration targets. International students are worth billions to
Londons economy through their tuition fees and living expenditure
alone. Their contribution to the capitals intellectual and cultural life
is priceless. Russell Group universities like Imperial, Kings, LSE, UCL
and Queen Mary are world-class because of their openness to new
ideas, students and academics, wherever they come from. Londons
financial services industry, hi-tech start-ups and scientific innovators
all benefit immensely from them. The government is right to crack
down on abuses of the visa system but it is really important not to
put off tomorrows global leaders from studying and working here.
As Boris Johnson says, it would be crazy to allow Indias best and
brightest to choose American and Australian universities over our
own.
Dr Wendy Piatt is director general of the Russell Group.
Wendy Piatt
NO
Sam Bowman
Focusing exclusively on attracting foreign students is not enough.
Any kind of cap on immigration is crazy. Just as with international
trade, more people means more specialisation, which means more
wealth overall. Immigration brings new ideas, skills and workers that
all help grow the economy. A 2006 study found that 50 per cent of
Silicon Valley engineering and tech start-ups were started by
immigrants. Immigrants entering the British workforce do not create
unemployment any more than women joining in the 1950s did. And
far from being a burden on the welfare state, immigrants pay more in
taxes overall than they use in government services. Indeed, Britains
pensions time-bomb can only be addressed by a combination of
privatisation and allowing more immigrants in to support our elderly
population. Londons status as a global city is based on its openness
to new workers. Wed be mad to change that now.
Sam Bowman is policy director at the Adam Smith Institute.
RAPIDresponses
Why government
must be smarter
on procurement
ing up. So today Ive published more
details of future government busi-
ness opportunities over the next five
years, which are worth up to 84bn.
With over 1,700 contracts for the tak-
ing, this will make a real difference to
UK companies, including SMEs. The
government now publishes procure-
ment pipelines for 18 different sec-
tors.
Putting our future buying needs on
display also allows us to be smarter. It
means we can spot strategic needs
and skills gaps. We need new road
and rail to keep the country moving,
so we will need more tunnels and
more people with skills in tunnel
engineering. With both government
and private sector investment, the
first Tunnelling and Construction
Academy in London is now open. Its
training over 400 apprentices who
will be able to work on projects like
Crossrail and High Speed 2. This is
great for UK plc.
Our work to update procurement
pipelines does not stop here. We have
already started working on the next
update for six months time. It will
need to be more comprehensive,
cover more sectors, and be even more
user-friendly.
Getting Britain back on the rise is a
challenge for us all and thats why
every decision must directly con-
tribute to achieving that end. The
more we invest in measures like
these, the more we will help UK busi-
ness grow. This is just the beginning.
Francis Maude is the cabinet office minis-
ter and paymaster general.
FRANCIS MAUDE
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F
UNNY HOW the MPV, once the
auto industrys latest, cleverest
idea, now seems a little old-
fashioned. The compact SUV
has pretty much superseded small
MPVs because they have similar
flexibility for transporting
mountain bikes, flat-pack
furniture, dogs, as well as people
in a trendier 4x4 package.
But it seems theres still a place
for these compact MPVs. Its a prac-
tical option for small families who
live in car-clogged cities and only
occasionally need to ferry a bit of
furniture or garden waste to the
tip; people who need a bit more
extra space than a regular compact
family car.
Its an easier option than an SUV,
particularly if you need to get into
a small space on your street. If
youre in the market for such a car,
then the latest Mercedes-Benz B-
Class is certainly worth a look.
For a start it cuts quite a dash.
Longer, lower, wider and better-look-
ing than the last version, with an
aerodynamic and more fuel-effi-
cient teardrop shape, it looks sporti-
er and more elegant. Add to that the
bulging roof, classy side creases and
blacked-out windows, and you have
a striking car. In Sport trim as my
test car was the five-spoke, 18-inch
wheels all add up to a surprisingly
handsome MPV.
I drove the B200 Blue Efficiency
Sport, powered by a 154hp 1.6-litre
petrol engine mated to a six-speed
manual gearbox. It wont rock your
world in terms of driving thrills,
but the engine is responsive and
its pleasant to drive; fast enough,
if not exactly a speed demon. On
the plus side, this is a car from
which youll get reasonable
mileage.
With a high roof, the interior is far
more spacious than youd expect. I
filled it to the gills with a weekends
worth of family detritus from bug-
gies and travel cots to my wifes
excess baggage and was still com-
fortably able to see out of the win-
dows. Its a decent car for a
week-long family holiday, or for a
thorough one-stop Christmas shop.
The cabin is user-friendly, with
simple dials and switches and an
iPad-style media screen that proj-
ects like a periscope from the dash-
board. The aluminium, chrome and
leather that wrap the inside give it
a luxurious feel. Its comfortable in
the drivers seat, and my two back-
seat drivers assured me that its
pretty homely in the rear too. Its
also packed with Mercedes-Benz
comfort and safety technology, and
you can add even more gizmos if
youre willing to dig into the
options list.
All in all, its ideal if you want a big
family car but a Ford C-Max or VW
Golf Plus just wont cut it. That said,
you might want to check the compe-
tition if youre in the market for an
MPV as this car isnt quite as refined
as youd expect. And it can be sur-
prisingly noisy in the cabin not
exactly what youd expect from a
Mercedez-Benz.
Functional but not the finished article
Despite the current fashion for compact SUVs, the Mercedes-Benz B-Class proves theres still a
place for the MPV. The latest model is perfect for a family who need that extra little bit of space.
27
WEDNESDAY 28 NOVEMBER 2012
LIFE&STYLE
cityam.com
MOTORING
CAR TALK
BY RYAN BORROFF
Dacia know how to give you value for money
It doesn't matter how wealthy you are, bargains are always an attractive
proposition. At just 5,995, Dacia's forthcoming entry-level Sandero
Access model is the UK's most affordable new car and can be had for as
little as 69 per month. Meanwhile, the Dacia Duster SUV starts at just
8,995. Both cars can be pre-ordered online and come with a three
years/60,000 miles warranty.
BY RYAN BORROFF
Do like Usain Bolt and go for gold and bid for the Nissan GT-R
An eBay auction for the one-off gold-painted 'Bolt Gold' Nissan GT-R is
underway. All of the proceeds will go to the Usain Bolt Foundation. The
Olympic gold medalist is a Nissan brand ambassador and honorary
director of excitement. The car features a gold plate embossed with
Bolt's signature and his autograph. The auction ends at 11:59 GMT on
Sunday 2 December.
Ford Fiesta release new technology to aid safer driving
European drivers under the age of 25 are twice as likely to be involved in a
fatal accident. Now MyKey a new technology set to debut in the new Ford
Fiesta in December lets parents restrict their kids' driving habits to
promote safer driving. Parents can cap speed and override deactivation of
safety systems including Electronic Stability Control. It even disables the
audio system if occupants aren't using their seat belts.
THE VERDICT:
DESIGN hhhhi
PERFORMANCE hhhii
PRACTICALITY hhhhi
VALUE FOR MONEY hhhii
THE FACTS:
MERCEDES-BENZ B-CLASS
PRICE: 23,960
0-62MPH: 8.6 secs
TOP SPEED: 137mph
CO2 G/KM: 144g/km
MPG COMBINED: 46.3mpg
Mercedez-Benz B-Class: longer, lower, and better-looking looking than its predecessor
28
TV & GAMES
cityam.com
T
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BBC1
SKY SPORTS 1
7pmTotal Rugby 7.30pmSoccer
Special 10.30pmFIFA Futbol
Mundial 11pmA League of Their
Own 12amTotal Rugby 12.30am
European Tour Weekly 1.30am
Trans World Sport 2.30amFIFA
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Trans World Sport 5amFIFA
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SKY SPORTS 2
7pmFIFA Futbol Mundial 7.30pm
Live Football Special
10.15pm-2.45amFootball First
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7pmFIBA Basketball 7.30pmLive
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Cage Fighter 1amPGA EuroPro
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BRITISH EUROSPORT
6pmLive Football 8pm
Wednesday Selection 8.05pmPolo
9.05pmRiders Club 9.10pm
European Tour Golf 9.40pmGolf
Club 9.45pmSailing 10.15pm
Yacht Club 10.20pmWednesday
Selection 10.35pmSport
Destination 11.35pm-12.30am
Football
ESPN
6.45pmLive Scottish Premier
League Football 9.45pmFrench
Football 11.30pmESPN FC Press
Pass 12amUFC: The Ultimate
Fighter 1amPremier League
World 1.30amESPN Kicks: Serie
A 1.45amESPN Kicks: Extra 2am
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Serie A Review2.45amCycling
3.45amSnowboard FIS World
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UFC: The Ultimate Fighter
5.45am-6amESPN Kicks: Extra
SKY LIVING
7pmCriminal Minds 8pm
Elementary 9pmChicago Fire
10pmGreys Anatomy 11pmBones
1amCriminal Minds 1.50am
Supernatural 2.40amMedium
3.30amBones 4.20amNothing to
Declare 5.10am-6amPassport
Patrol
BBC THREE
7pmYoung Apprentice 8pmGavin
& Stacey 8.30pmSnog, Marry,
Avoid? 9pmBritains Biggest
Beauty Queens 10pmFILMPretty
Woman 1990. 11.55pmFamily Guy
12.40amBritains Biggest Beauty
Queens 1.40amImpractical
Jokers 2.10amRussell Howards
Good News 2.40amHim & Her
3.10am-3.40amSome Girls
E4
7pmHollyoaks 7.30pmHow I Met
Your Mother 8pmThe Big Bang
Theory 8.30pm2 Broke Girls 9pm
The Big Bang Theory 9.30pmThe
Work Experience 10pmThe
Inbetweeners 11.05pmRude Tube:
Rude Tunes 12.10amThe Big Bang
Theory 1.10amHow I Met Your
Mother 1.35amThe Ricky Gervais
Show2.10amThe Cleveland Show
2.35amScrubs 3amMisfits
3.55amThe IT Crowd 4.20am
90210 5am-6amSwitched
HISTORY
7pmStorage Wars 7.30pmPawn
Stars: A 1979 Kiss pinball machine.
8pmStorage Wars 8.30pm
Storage Wars: Texas 9pm
American Restoration 10pm
Mankind: The Story of All of Us
11pmStorage Wars 11.30pm
Pawn Stars 12amAmerican
Restoration 1amMankind: The
Story of All of Us 2amAmerican
Pickers 3amAx Men 4amSwamp
People 5amPawn Stars
5.30am-6amStorage Wars: Texas
DISCOVERY
7pmBear Grylls: Born Survivor
8pmYou Have Been Warned 9pm
Fast n Loud 10pmFirst Week In
11pmWheeler Dealers 12amFast
n Loud 1amFirst Week In 2am
Sons of Guns 3amFast n Loud
3.50amFirst Week In 4.40am
Raging Planet 5.30am-6am
Meerkat Manor
DISCOVERY HOME &
HEALTH
7pmDr Oz 8pmI Didnt Know I
Was Pregnant 9pmIm Pregnant
and a Trucker 9.30pmIm
Pregnant and a Stripper 10pm
Trauma: Life in the ER 11pm
Dominican Conjoined Twins 12am
Im Pregnant and a Trucker
12.30amIm Pregnant and a
Stripper 1amWanted Down Under
2amTrauma: Life in the ER 3am
Dominican Conjoined Twins 4amA
Baby Story 5am-6amBabys
Room
SKY1
8pmThe Glee Project 9pmLast
Resort 10pmFringe 11pmAn Idiot
Abroad 2 1amRoad Wars 2am
Border Invasion USA 2.55am
Road Wars 4.10am-6amStargate
SG-1
BBC2 ITV1 CHANNEL4 CHANNEL5
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&
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6pmBBC News
6.30pmBBC London News
7pmThe One Show; BBC News
8pmSupersized Earth
9pmCHOICE Goodnight
Britain
10pmBBC News
10.25pmRegional News
10.35pmThe National Lottery
Draws 10.45pmMatch of the Day;
National Lottery Update 12.15am
FILMThe Ghost and the Darkness.
1996. 1.55amWeatherview2am
Sign Zone: See Hear 2.30amIan
Hislops Stiff Upper Lip An
Emotional History of Britain
3.30amGreat British Food Revival
4.30am-6amBBC News
6pmEggheads: Quiz show,
hosted by Jeremy Vine.
6.30pmStrictly Come Dancing
It Takes Two
7pmAntiques Road Trip:
Charles Hanson and David
Barby compete in their final
auction.
8pmMasterChef: The
Professionals
9pmThe Hour
10pmThe Culture Show
10.30pmNewsnight; Weather
11.20pmGreat Continental
Railway Journeys
12.20amBBC News
4am-6amBBC Learning Zone
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale
7.30pmCHOICE Coronation
Street
8.30pmIm a Celebrity Get
Me Out of Here!
10pmITV News at Ten
10.30pmLondon News
10.35pmFILMThe 40 Year
Old Virgin: Comedy, starring
Steve Carell. 2005.
12.45amJackpot247; ITV
News Headlines
3amFILMKiss Kiss Bang Bang.
2005. 4.40am-5.30amITV
Nightscreen
6pmThe Simpsons 6.30pm
Hollyoaks 7pmChannel 4 News
7.55pm4thought.tv 8pmSarah
Beenys Selling Houses 9pmGrand
Designs 10pmCHOICE Secret
State 11.05pmRandom Acts
11.10pmLiving with My Stalker
12.10amMusic on 4: Abbey Road
Studios: In Session 12.40amMusic
on 4: Mumford & Sons: Gentlemen
of the Road 12.55amMusic on 4:
Example at iTunes Festival 2012
Special 1.20amMusic on 4:
Spotlight: Urban 1.35amFILMLe
Quattro Volte: Premiere. Drama,
starring Giuseppe Fuda. 2010.
3.10amSt Elsewhere 3.55amDeal
or No Deal 4.50amCountdown
5.35am-6amMake Do & Mend
6.30pm5 News at 6.30
7pmDallas. JR decides to
move back to Southfork but
a dark cloud looms on the
horizon; 5 News Update
8pmThe Removal Men; 5
News at 9
9pmFILMEraser. 1996.
11.20pmWorlds Craziest
Police Pursuits
12.20amShops, Robbers and
Videotape
1.10am SuperCasino 3.55am
HouseBusters 4.20amHouse
Doctor 4.45amDivine Designs
5.10amWildlife SOS 5.35am-6am
Wildlife SOS
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
digits1-9 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 BREAK
Using only the letters in the Wordwheel, you have
ten minutes to nd 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.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5 6
7 8
9 10 11 12 13 14
15 16 17 18 19
20 21 22
23 24
12 6 7
45
28 30
16 11
15 11
45
10 16
16 24
27 12
45
10 7 8
11
5
6
41
23
34
26
22
24
4
35
3
22
13
18
17
21
29
9
9
29
ACROSS
1 Croatian city on the
Adriatic Sea (5)
4 Popular Mexican
palm-like plant (5)
7 Bureaucratic
procedure (3,4)
8 Assistance (3)
9 Be worthy or
deserving (5)
12 Public dance hall (5)
15 Old Testament
prophet (5)
18 Dripping wet (5)
20 Shortened
forename of
US president
Lincoln (3)
21 Engage in
boisterous, drunken
merrymaking (7)
23 Heave (5)
24 Egyptian water
lily (5)
DOWN
1 Idly play a guitar (5)
2 Hallucinogenic
drug (inits) (3)
3 Crisp bread (5)
4 End resistance (5)
5 Common
crustaceans (5)
6 Relating to
sound (5)
10 Self-esteem (3)
11 Frozen water (3)
13 Articial language,
a simplication of
Esperanto (3)
14 Part of a gear
wheel (3)
15 Has in mind (5)
16 Blaspheme (5)
17 Stony hillside (5)
18 Ability (5)
19 Back gardens (5)
22 Tit for ___,
getting even (3)
R
L
O
N
C T
I
K
E

4

4


4
4
T R A P S I V O R Y
A N I E E
R E I G N S L A S T
T S S H E D I
A B E D U L T R A
R E A T M E A
A D A P T C A M P
S I T E M L I
A G A R R E F I N E
G E A S C
A B O D E L A T H E
1 6 5 1 4 2 1
4 8 9 6 3 5 9 3
4 5 7 1 7
7 1 8 9 2 6 7 5
4 2 1 3 5 9 8 6
6 3 4 9 7 2 8 5 1
8 9 7 6 4 3 1 2
9 5 3 1 8 7 9 3
9 8 1 8 6
8 9 5 1 3 5 2 7
1 6 2 9 5 4 9
4
4
4
4
4
4
4
4
4
The nine-letter word was
CAROUSING
T
E
R
R
E
S
T
R
I
A
L
S
A
T
E
L
L
I
T
E
&
C
A
B
L
E
BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
WEDNESDAY 28 NOVEMBER 2012
GOODNIGHT BRITAIN
BBC1, 9PM
Sian Williams presents the first of two
programmes tackling extreme sleep
disorders, as people across the country
struggle with bedtime behaviour.
CORONATION STREET
ITV1, 7.30PM
Tyrone begs Tommy to drive him to
the coach station so he and Ruby can
flee Weatherfield, while Lewis cons his
way into an invitation to live at Gails.
SECRET STATE
CHANNEL4, 10PM
MI6 briefs Dawkins on the cause of
the plane crash and he takes drastic
steps to stick to his principles. Political
drama, starring Gabriel Byrne.
TVPICK
NORTHAMPTON lock Courtney
Lawes has handed England a timely
boost by returning to the 23-man
squad to face New Zealand at
Twickenham on Saturday.
Lawes was last capped for England
in February against Wales during
the Six Nations but damaged his
knee playing for the Saints against
Saracens in October.
As a result he has not featured in
the autumn internationals yet but
played an hour for Northampton in
their Premiership victory over
London Welsh on Saturday.
Lawes replaces Mouritz Botha in
the squad while the expected change
of uncapped Freddie Burns instead
of the injured Toby Flood completes
an otherwise unchanged squad that
faced South Africa.
Meanwhile England assistant
coach Andy Farrell has urged the
side to upset the odds, insisting his
world champions are beatable.
I would think that our boys will
see this as a massive privilege to be
involved in at such a time in their
development to play against a side
that is really, really experienced and
has been through a lot and made
themselves one of the best sporting
teams at the moment, said Farrell.
They are beatable. This group is
fearless, it could certainly be a great
milestone. You cannot be exceptional
in every single department for the
whole 80 minutes. It is up to us to
make them have an off day and
hopefully be on song ourselves.
Lawes return
boosts fearless
England squad
Red Rose has wilted, says All Black Carter
IN BRIEF
Sunderland fan in racism probe
n FOOTBALL: Police have launched an
investigation after a Sunderland fan
allegedly made a racist gesture at West
Brom striker Romelu Lukaku during
Saturdays match at the Stadium of
Light. Photos appear to show a fan
making monkey gestures.
Dettori to learn drug test fate
n HORSE RACING: Jockey Frankie
Dettori will learn on Tuesday what
punishment he faces for failing a drug
test earlier this year. French horse
racing chiefs last week imposed a
temporary ban on the former Champion
Jockey and will reconvene next week to
deliver their verdict.
Ponting backed for fifth Ashes
n CRICKET: Under-fire Australia
batsman Ricky Ponting has been
backed to face England on a fifth Ashes
tour next year. The Aussies all-time
leading Test run scorer has scored just
20 from his last three innings. But coach
Mickey Arthur said: We want him to go
to the Ashes, there is no doubt.
Olympic change meant Ainslie quit
n SAILING: Four-time gold medallist
Ben Ainslie admits he may not have
retired from Olympic competition if the
Star class had not been axed from the
2016 Games in Rio. The 35-year-old will
now spearhead a British challenge in
next years Americas Cup.
SARACENS have laid the first strips of artificial turf at their new 10,000-capacity home in Barnet as they count down to the move from
Vicarage Road to 20m Allianz Park in February. The 2011 Aviva Premiership champions are set to become the first professional rugby
union club to play their home games on a synthetic surface. City A.M. revealed earlier this year that insurance giant Allianz has agreed
a 9m, six-year deal that covers naming rights for the stadium and shirt sponsorship.
SARRIES LAY GROUNDWORK FOR 20M MOVE
BRITAINS Laura Robson has been
named WTA Tour newcomer of the
year, after a breakthrough season
for the 18-year-old tennis starlet.
The British womens No2, who
narrowly saw off competition from
compatriot and runner-up for the
award Heather Watson, claimed the
accolade following a season in
which she won an Olympic silver
medal, reached the fourth round of
the US Open and became the first
British woman to make a WTA
singles final in 22 years.
Robson rewarded for landmark
year with best newcomer gong
Its a huge honour, said Robson.
I looked at the list of past winners
and its certainly a very impressive
line-up that includes many of my
idols growing up. I hope I can go on
to achieve close to what many of the
past winners have in their careers.
Wimbledon-based Robson has
seen her world ranking climb from
131 to 53 this year, but is still four
places behind British No1, Watson.
Twenty-year-old Watsons season
saw her reach the third round of
Wimbledon and become the first
British woman to win a WTA
tournament last month in Osaka.
BY ALEX SHARP
BY TOM SHEPHERD
NEW Zealand fly-half Dan Carter
has fanned the flames ahead of
their clash with England on
Saturday, insisting they are no
longer good enough to challenge
the southern hemisphere sides.
Stuart Lancasters side have lost
close Tests to Australia and South
Africa in the past fortnight during
a frustrating autumn series,
whereas New Zealand remain
unbeaten since August 2011 and
have already strolled past
Scotland, Italy and Wales this tour.
Carter also expressed surprise at
the decline of England, who have
lost nine consecutive games
against the All Blacks, last
winning in 2003 before going on
to lift the World Cup.
Maybe consistency is whats
been lacking. Theyve got the
players, so talents not an issue.
They can beat any side on their
day, he said. Im surprised they
havent done more since 2003.
Theyve shown the strength of
their side only in patches since.
It was in 2003 that I got the All
Black jersey for the first time,
though unfortunately I didnt get
the chance to get on. England
were in their prime and had a
pretty successful year. They taught
us a lesson at home. We have real
pride in not losing at home and
they took it to us that night.
The 30-year-old missed the 33-10
victory over Wales on Saturday
with Achilles and calf injuries, but
is confident he will return to earn
his 94th cap for the All Blacks.
Hopefully Ill be ready,
nothings changed over the last
couple of days, he added. The
plan was to get through training.
It was pretty light, so I didnt go
over 50 per cent.
Im pretty confident Ill be
right to play. Its the last game of
the year so I want to be part of it.
Carter revealed that lifting the
World Cup last year has inspired
New Zealand to continue setting
the standard in world rugby.
Its a very new squad so it
doesnt feel like theres any less
pressure playing for the All Blacks
now that weve won a World Cup,
he said. Its more the fact of
proving a lot of people wrong in
some way or another.
History has shown that teams
that win the World Cup have
pretty average seasons the
following year. Thats been a big
focus for us this year. We never
look too far ahead and every time
we pull on the All Black jersey its
a chance to add to the legacy.
BY ALEX SHARP
SPORT
29
WEDNESDAY 28 NOVEMBER 2012
cityam.com
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CHELSEA chiefs last night admitted
they were hasty in publicly
accusing referee Mark Clattenburg
of racially abusing John Obi Mikel
but stopped short of issuing an
apology to the official.
Clattenburg was cleared by the
Football Association last week
following an investigation that
concluded the complaint that he
had called Mikel a monkey was
based solely on the testimony of
the Blues Brazilian star Ramires.
The Durham official only
returned to match duty on
Saturday, four weeks after the
controversy flared following
Chelseas 3-2 Premier League defeat
to Manchester United.
The club regrets not having
given more consideration before
issuing a statement on the evening
of Sunday 28th October, read a
joint message issued by Chelsea,
the Premier League and
Professional Game Match Officials
(PGMOL). The club also regrets the
subsequent impact the intense
media scrutiny had on Mark
Clattenburg and his family.
Yesterdays statement followed
peace talks between Blues
chairman Bruce Buck, Premier
League chief executive Richard
Scudamore and referees body
PGMOL on Monday.
It added: The referees accept
that, given Chelsea FC had received
a good faith claim from one of
their employees, the club had an
obligation under FA rules to report
the allegation.
There was recognition by all
parties that the impartiality and
integrity of refereeing in this
country remains paramount.
Chelsea FC made it clear they
would welcome Mark Clattenburg
back to Stamford Bridge in the
future and PGMOL would have no
issue in appointing him to a
Chelsea FC match going forward.
Referees union Prospect
responded by dropping its demand
that Chelsea pay compensation to
Clattenburg, saying that the clubs
use of the word regret was
tantamount to saying sorry.
Chelsea attracted fierce criticism
for their handling of the issue,
which came just weeks after
captain John Terry was handed a
four-game ban for racially abusing
QPR defender Anton Ferdinand.
No apology but
Chelsea admit
ref row regret
QUEENS Park Rangers manager
Harry Redknapp insists the toughest
challenge of his career looks a frac-
tion less trying after inspiring the
Premier Leagues basement club to a
battling draw in his first match in
charge last night.
Goalkeeper Rob Greens outstand-
ing reaction save to thwart a Steven
Fletcher header helped earn their
first away clean sheet in 24 games,
while Shaun Wright-Phillips might
even have snatched all three points.
A Sunderland side with only two
wins in eight months did not rep-
resent the sternest test, and QPR
remain without a league win
all season and eight points
away from safety.
But Redknapps griz-
zled midfield trio of
Samba Diakite,
Stephane Mbia and
Esteban Granero
made them a far
more solid proposi-
tion, fuelling the for-
mer Tottenham
Gritty draw
lifts Harrys
QPR hopes
managers belief that they can avoid
relegation.
Im more optimistic than I was on
Saturday, thats for sure. We well
deserved a draw and I was pleased
with the performance. I liked the
look of us, said Redknapp, who effec-
tively took charge this week.
I went for power in midfield with
the two African boys [Diakite and
Mbia]. You wouldnt want to play
against those two. Diakite looks like
he could be a really good player for
us. Mbia did well too and Granero can
play, so there were positives. The posi-
tion were in is very difficult, but I
can see there are decent players here.
A perfect start for Redknapp beck-
oned when Adel Taarabt looped a
cross to the back post early, but
Djibril Cisse miscued his header.
Before half-time Taarabt found Jamie
Mackie, but Simon Mignolet
was out quickly to smoth-
er and the Moroccans
follow-up was
blocked.
Green expertly
clawed away
Fletchers point-
blank header from a
Sebastian Larsson corner,
yet QPR could still have plun-
dered victory, Granero
launching a counter-attack
that eventually flowed to
Wright Phillips, but his
tame shot was easily
stopped by Mignolet.
Clattenburg was cleared of racism
ARSENAL manager Arsene Wenger
insists it would cost him 60m to
bow to mounting pressure from fans
and splash out on a world-class
player in January.
An estimated transfer kitty of
50m has been topped up by the
150m sponsorship deal the club
signed with airline Emirates last
week. But Wenger has refused to
commit to spending, emphasising
that fees and wages of the most
sought-after stars continue to rise.
I dont know how active we will
be in January. We will be in the
market and if we can find a real top,
top player, we will do it, he said.
There are two aspects to any deal,
one is the transfer [fee] and the other
is the wages. The transfers for these
kinds of players are not at 30m
Soaring fees make Wenger
wary about January spree
today, they are at 50m or 60m and
what has gone through the roof is
the wages of these players.
Wenger, who has forward Theo
Walcott back from injury for
tonights Premier League trip to
Everton, was barracked by fans
during Saturdays 0-0 at Aston Villa.
The Frenchman yesterday
admitted his interest in Crystal
Palace and England forward Wilfried
Zaha, fuelling speculation he could
bid for the 10m-rated youngster
when the transfer window opens.
Wenger has also urged fit-again
midfielder Jack Wilshere to show his
commitment to the club by signing
an extension to a contract due to
expire in 2015. Hes always been
very committed and I hope he will
show that, he said. There is only
one way to show that and it is to
commit your long-term future.
ASTON Villa striker Christian
Bentekes late header secured three
points and lifted them out of the
relegation zone.
The Belgian headed the winner
from a corner on 80 minutes to score
his fifth of the season for Villa, who
left Darren Bent out of the squad for
the second match in succession.
Adam Le Fondre wasted a glorious
chance for Reading, heading over
when unmarked, and a Hal Robson-
Kanu strike was brilliantly blocked
by Brad Guzan in the second half
before Benteke clinched the win.
Benteke rises
to rescue Villa
LIVERPOOL manager Brendan
Rodgers has identified Tottenham
Hotspurs progression into a top-four
side as a blueprint for what his team
can achieve, as the two sides prepare
to meet tonight at White Hart Lane.
The Reds boss acknowledged that
emulating Spurss gradual growth
into contenders for Champions
League football was the most
realistic route for his team.
Tottenham have been building
the group steadily and have worked
their way up the league to become
challengers for those Champions
League positions, said Rodgers. We
are trying to arrive in that position.
Spurs midfielder Mousa Dembele
is in contention to make his first
league start in over a month while
Sandro is also fit, despite being
stretchered off at the weekend.
Spurs a model
for Rodgers
WEDNESDAY 28 NOVEMBER 2012
30
SPORT
cityam.com/sport
BY FRANK DALLERES
BY FRANK DALLERES
Redknapp praised his
hardy midfield trio
SUNDERLAND............................0
QUEENS PARK RANGERS...........0
BY FRANK DALLERES
PREMIER LEAGUE
ASTON VILLA...............................1
READING ...................................0
BY ALEX SHARP
PREMIER LEAGUE
@cityam_sport
BY TOM SHEPHERD
31
STRUGGLING paceman Stuart Broad
is facing a fight to keep his place for
the third Test against India next
week, but England bowling coach
David Saker has vowed to help him
rediscover his form.
Broad, who has been hampered by
a heel injury and a virus during the
current tour, has taken no wickets
for the loss of 157 runs in two match-
es and could be dropped in Kolkata
to make way for Steven Finn.
Finn took four wickets yesterday in
an England Performance
Programme game as he recuperates
from the thigh strain that has pre-
vented him from playing since the
first warm-up match.
Saker said of Broad: Theres a lit-
tle bit of an issue, theres no doubt
about it. He hasnt bowled as we
would have liked, and he would be
the first to admit that.
Hes not the first bowler to come
over here and find it hard. The great
fast bowlers have had success over
here. Stuarts probably not a great yet.
He has to learn ways to become great.
Its a learning time for him.
During my tenure as bowling
coach, I havent had too many players
down in confidence and form. This is
when I have to come to the party. I
hope I can do some stuff over the
next few days that can help.
Batsman Ian Bell, who missed the
second Test due to the birth of his
child, is set to return in place of Jonny
Bairstow, while Saker preached cau-
tion over Finns fitness.
Hes got that X-factor, he said. If
he gets through unscathed and bowls
well, his name will definitely be
talked about for selection.
Broad feels pressure
from fit-again Finn
in battle of pacemen
Im surprised they havent done more since
2003. Theyve shown strength only in patches

cityam.com
WEDNESDAY 28 NOVEMBER 2012
BY FRANK DALLERES
Buy online at fulhamfc.com or call 0843 208 1234 (option 1)
All tickets are subject to availability, terms and conditions apply.
FULHAM FOOTBALL CLUB, CRAVEN COTTAGE
Monday 10th December, Kick-Off 8pm.
Tickets on sale now!
Broad has taken no wickets for the loss of 157 runs in the two Tests in India so far
CRICKET
COMMENT
ANDY LLOYD
Series win would equal Ashes in Australia
C
RICKET fans who got up early
enough to catch Englands
fantastic second Test demolition
of India over the last few days
got a treat, and the good news is that
the best may be yet to come.
So emphatic was the victory in
Mumbai that all momentum has
swung behind England, and there is
no question that they are now in
with a great chance of winning their
first series on Indian soil since 1985.
Taking a series in India against a
team boasting some of the most
famous names in cricket history,
such as Sachin Tendulkar would be
one of the sides best results in living
memory and rank right alongside
claiming the Ashes in Australia.
That the tourists find themselves
in this position is fundamentally
down to performances of the highest
class from four men: Alastair Cook,
Kevin Pietersen, Graeme Swann and
of course Monty Panesar.
We hoped Cook would rise to the
challenge of being captain, and
centuries in both Tests, taking his
tally to 22 tons, is phenomenal
batting. Anyone still questioning his
credentials should be sectioned.
Cook was also a major factor in
bringing Pietersen back from the
wilderness, and KP repaid the favour
in Mumbai with a ton as brilliant as
any hes produced for England.
BLITZED
But as great as those two were, the
spinners were awesome. Any two of
five or six batsmen could have got
the runs England needed, but both
Swann and Panesar had to perform
in a match Cook simply had to win.
Panesar in particular was
outstanding. You always felt he
might freeze when it fell to the
spinners to win a match but he
blitzed decorated India batsmen who
grew up on those pitches and are
experts at playing turn.
Im chuffed for Monty, who has
hugely strengthened his claims for a
Test place in any conditions. Clearly
India is tailor-made for him, but hed
more than rival Tim Bresnan on a
flat pitch at the Oval.
The pace he can get while still
achieving spin was the difference
between the two sides and bodes
very well for the rest of the series.
India went into the first and second
Tests with their confidence sky-high.
Its not any more.
Andy Lloyd is a former England Tests
cricketer. He has also been captain and
chairman of Warwickshire.
Aston Villa 14 3 4 7 11 22 13
Southampton 13 3 2 8 20 30 11
Reading 13 1 6 6 16 23 9
QPR 14 0 5 9 10 26 5
BOTTOM FOUR
TEAM PLD W D L F A PTS
All Blacks star Dan Carter puts boot into England: Page 29
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