BUSINESS WITH PERSONALITY
GEARING UP FOR
WILL AND KATE
EMBRACE THE MOOD P29
Issue 1,369 Thursday 21 April 2011
APPLE TRIUMPHS
AS SALES ROCKET
TECHNOLOGY
▲
BY ALISON LOCK
APPLE smashed market expectations
with another blockbuster set of
results yesterday as soaring demand
for its gadgets caused profits to
almost double.
Record sales of iPhones and Mac
computers pushed its profits up 95
per cent to $5.99bn (£3.7bn) in its sec-
ond quarter results, from $3.07bn in
the same period in 2010 – while rev-
enues rose 83 per cent to $24.7bn.
Apple, which launched its upgrad-
ed iPad 2 last month, sold 4.7m of its
tablets in the three months, while
customers bought 3.8m of its re-
launched MacBook Air and Pro com-
puters, up 28 per cent on 2010.
Customers also snapped up 18.65m
iPhones, a whopping 113 per cent
increase on 2010 and up from 16.24m
in the previous quarter.
Peter Oppenheimer, Apple’s chief
financial officer, said the results “set
a new all time quarterly record for
iPhone sales” and said they “continue
to be thrilled with the momentum”
of interest in iPads.
iPhone sales were significantly
higher than growth elsewhere in the
global smartphone market, he said,
as sales in China and the US went “off
the charts”. Greater China saw a 250
per cent growth in orders year-on-
year, which “catapulted” sales from
the region up to $5bn, he said.
In the US, its deal to allow operator
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Al Fayed
bids for
Pinewood
▲
MEDIA
BY STEVE DINNEEN
Verizon to offer the phone saw MOHAMED al Fayed is understood to
sales revenues jump 155 per cent be the second mystery bidder in talks
83%
revenue growth
year-on-year – three times the
growth of the smartphone market.
Analysts questioned why iPad sales
to buy James Bond studio Pinewood.
The colourful owner of Fulham
Football Club is thought to have sig-
weren’t higher. Sales of about 6.3m nalled his interest in making an
year-on-year had been expected and it moved approach for the iconic studios.
7.33m in the previous quarter to It follows an £87.8m bid for the
January. Concerns focused on lack of whole firm from Peel Holdings, run by
95%
profit growth
stock of the new iPad 2 at many retail-
ers.
Oppenheimer said demand for the
billionaire investor John Whittaker.
Pinewood declined to name the bid-
der but City sources told City A.M. it is
new iPad 2 “has been staggering” and likely to be a high-worth individual
year-on-year
iPads admitted orders had exceeded expec-
tations. “We are amazed at how we
rather than a trade or private equity
backed offer.
4.69m
sold in
are still backed up on orders,” he said.
The only decline in Apple’s product
line was seen in sales of iPods, its
portable MP3 player, with a 17 per
The “unconnected third party” has
not yet made a formal offer for the
company. Pinewood stock rose almost
six per cent on the news yesterday.
cent fall year-on-year. Sales dropped to Earlier this month, Pinewood con-
the quarter 9.02m, from 10.89m in 2010, and firmed an offer of 190p per share from
from 19.45m in the previous quarter. Peel, but made no fur-
Apple, which sources hundreds of ther comment.
its parts from Japan, said the devastat- The Al Fayed bid,
ing earthquake would have some revealed by Sky News,
effect on its supply chain for compo- follows a troubled
nents in the next quarter. None is period for
expected later on in the year but it Pinewood, whose
iPhones cautioned that the situation second-largest
iPods
18.65m
remained uncertain. shareholder
9.02m
The results mark a second quar- Crystal Amber
ter of $6bn profit for the electron- last year made
sold in the quarter ics giant, after January saw profits a public
sold in the quarter rise 78 per cent. Chief executive demand for
113 per cent Steve Jobs (pictured), who was not chairman
growth 17 per cent fall on last night’s conference call with Michael
year-on-year year-on-year analysts, said in a statement that
Apple was “firing on all cylinders”.
Grade
leave
to
the
*all figures refer to second quarter ALLISTER HEATH: P2 company.
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 2 News
We need a proper education industry
EDITOR’S LETTER
ALLISTER HEATH
IT is time to harness the profit motive
to sort out the UK’s schools. That may
sound hopelessly radical – but the
seeds of a revolution have already
been planted, and the green shoots
they are generating remarkably prom-
ising. Britain’s current crop of private
schools are not all charities. As a
report out today from the Adam
Smith Institute demonstrates, there
are already 489 profit-making schools
in England, and these are overwhelm-
ingly non-selective, secular, and con-
centrated in metropolitan areas.
Remarkably, 41 per cent of these
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News Editor David Crow
Night Editor Katie Hope
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WHAT THE OTHER PAPERS SAY THIS MORNING
CHINA TO ALTER TAXES IN ATTEMPT
TO CUT WEALTH GAP
China is to lift the exemption thresh-
old for personal income tax payments
in an effort to redistribute the spoils
of rapid growth and reduce a widen-
ing wealth gap. The level at which
Chinese citizens must pay income tax
will be raised from Rmb2,000 ($305) a
month to Rmb3,000, the finance min-
istry said on Wednesday.
NEW HSBC CHIEF PLANS RADICAL
SHAKE-UP
HSBC’s new chief executive is prepar-
ing a radical shake-up of the normally
staid bank, slashing costs and reallo-
cating capital in an effort to boost
profitability and also resuscitate its
flagging US operation. Stuart Gulliver
has told associates he is determined
to overhaul the culture of a group
that has sometimes been run as a
loosely connected federation of local
schools operate on fees less than or on
a par with the national average per-
pupil funding in the state sector. Both
this subset of inexpensive for-profit
schools, and for-profit schools in gen-
eral, significantly outperforms the
independent sector as a whole in
Ofsted inspections.
It is clear that the profit motive and
high educational achievement can go
hand in hand, as also demonstrated in
countries such as Sweden, where prof-
it-making chains run many state-
financed schools. They are seen by the
Swedish political left as a way of
ensuring better opportunities. The
2002-2011 profit margins at the likes
of Kunskapsskolan, one top chain, or
its rival Internationella Engelska
Skolan, are five to eight per cent.
In Britain, the larger chains include
Cognita, which runs 42 schools in
England (46 establishments in total
across the UK, including nurseries),
the Alpha Plus Group, which runs 16
schools and GEMS, which operates 12
schools. A number of overseas-based
FSA probe for
Pru advisers
ENFORCEMENT
▲
BY ALISON LOCK
ADVISERS to Prudential’s failed $35bn
(£21.5bn) bid for AIA last year are being
probed by the City regulator over con-
cerns about the standards of their work
on the deal.
Prudential was ordered by the
Financial Services Authority to start an
investigation into whether the three
banks advising it on the takeover,
which involved plans for a $20bn rights
issue, had met the correct standards, a
source confirmed to City A.M. last night.
City A.M. understands that the
inquiry, which focuses on advisers
Credit Suisse, HSBC and JPMorgan and
not the insurer itself, was a conse-
quence of the size and profile of the
failed deal.
Law firm Clifford Chance is produc-
ing the report for Prudential.
fiefdoms.
NAMA TO STEP UP SALES OF PROPERTY
IN UK
Ireland’s National Asset Management
Agency, the “bad bank” set up to take
over the toxic property loans of the
country’s banks, intends to aggres-
sively step up sales of property backed
by bad Irish debt in the UK.
RWE IN WARNING ON PLANT
STOPPAGES
RWE is the only one of Germany’s
four nuclear companies to make good
on its threat to file a suit against the
government’s moratorium. Hans
Hirt, head of corporate governance at
Hermes, said: “We see a danger that
this confrontation will expose RWE
to significant acceptance and reputa-
tion risks in its important sales mar-
ket Germany”. The meeting came a
day after RWE’s main shareholders
spoke out in an internal meeting
against Mr Grossmann’s strategy of
retaining nuclear power.
chains have also moved in to main-
stream statutory-age provision. These
include Beaconhouse, which acquired
Newlands School, Seaford, in
September 2009; International
Education Systems, which bought
Grantham Preparatory, and Schiller
International University Group, which
opened Wickham Court School,
Bromley, a few years ago. The report
also identifies 11 for-profit chains of
between three and five schools. It is
not just UK-based and global groups
that are entering the market: firms
that specialise in providing nurseries
are also diversifying. Kent-based nurs-
ery provider Kinder Nurseries, with
nine day nurseries, opened its own pri-
mary – Meredale Independent School,
Rainham – a few years back. Happy
Child, having opened its first prep
school, Aston House School, has gone
on to acquire three others.
The existence of this nascent indus-
try is a great opportunity for the gov-
ernment. Michael Gove, the secretary
of state, is quietly introducing revolu-
The FSA can order a Section 166
report, known as skilled persons
reports, wherever it feels companies did
not give appropriate advice or provide
adequate systems and controls. They do
not necessarily result in enforcement
action but can lead to recommenda-
tions for change.
The three banks entered the deal at
different stages of the bid for Asian
insurer AIA, with Credit Suisse advising
the early negotiations and JP Morgan
hired as the deal progressed. HSBC
advised the later stages ahead of the
deal’s announcement.
Prudential chief exec
Tidjane Thiam, who
oversaw the takeover
bid for AIA that fell
apart last June
JAPAN EARTHQUAKE AND TSUNAMI
FORCES TOYOTA TO CUT PRODUCTION
AT UK PLANT
Toyota has put one of its UK factories
on short-time working after a short-
age of car parts following the recent
earthquake and tsunami in Japan.
Toyota will close Burnaston factory in
Derbyshire for two days each week in
May. Workers also agreed to limit pro-
duction to half a shift on the other
three days.
RAJARATNAM IS DAMNED BY HIS
OWN WORDS, TRIAL TOLD
Alleged insider dealer Raj Rajaratnam
was damned “in his own words”, a
prosecutor told jurors at the start of
closing arguments in the hedge-fund
manager’s trial. Assistant US attorney
Reed Brodsky said government wire-
taps of Rajaratnam’s phone calls pro-
vided “devastating evidence of the
defendant’s crimes”.
tionary and welcome changes. Large
numbers of schools are being turned
into academies, self-governing state
schools. Over time, Gove’s excellent
reforms will begin to reverse the cata-
strophic decline of British primary
and secondary education. But while
the rise of the academies is a success,
the coalition needs to do more to
encourage the creation of new free
schools, also fully financed by the
state but set up by parents, teachers
and local communities, the first of
which will open in September.
As the report argues, the best way to
achieve this is for the government to
allow profit-making companies to
open, build and run free schools, with-
out the need for a charitable vehicle or
trust framework, as currently
required. Harnessing the profit
motive – and beginning the long
process of turning education into a
proper, modern industry – is the only
way forward.
allister.heath@cityam.com
Follow me on twitter: @allisterheath
Vodafone chief executive Vittorio Colao may float its India unit
Vodafone eyes India IPO
TELECOMS
▲
BY ALISON LOCK
VODAFONE is to look into a possible
IPO of its majority-owned Indian ven-
ture Vodafone Essar, it said yesterday.
Chief executive Vittorio Colao said
in an interview that the firm would
consider the move in the next nine to
12 months.
It follows the mobile operator’s
withdrawal from the partnership of
Essar Group, which has opted to exer-
cise an option to sell a 33 per cent
PLAYBOY PLAYMATE DESTINY DAVIS
STANDS BY HER MAN'S $250,000 BAIL
Chad Elie, the Las Vegas businessman
who married a former Playboy play-
mate the day after being arrested in a
US online gambling bust, has been
released on $250,000 (£152,000) bail
after pleading not guilty to all
charges. The 31-year old was arrested
in Nevada last Friday in a US crack-
down against PokerStars, Full Tilt
Poker and Absolute Poker.
REBUILDING JAPAN: COUNTRY FIGHTS
TO KEEP THE LIGHTS ON...BY TURNING
THEM OFF
The man from Tokyo Electric Power
Company slumped wearily into a
chair and reached for a cup of coffee.
Since the earthquake struck on March
11, he has been living on just a few
hours of sleep a day. Tepco, the villain
of Japan’s nuclear crisis, is fighting
battles on all fronts.
CITYA.M. 21 APRIL 2011
NEWS | IN BRIEF
Schneider vetos bid for Tyco
French engineering giant Schneider
Electric ruled out a takeover of Tyco
International yesterday. Chief executive
Jean-Pascal Tricoire said Schneider does
not plan any purchases larger than a
"few billion euros" over the next year.
Bid rumours last week said Schneider
had held early discussions about buying
Tyco, which has a market value of
around $23bn (£14.1bn), but Scheider
said there was “no plan” for large deals.
However, he said the company’s priority
was “bolt-on acquisitions” worth a few
tens of millions to one billion euros.
Ensco sees profits fall by 66pc
Offshore driller Ensco reported a 66 per
cent fall in first-quarter profit yesterday
as it said day rates for its rigs fell.
London-based Ensco, poised to become
the world's second-largest offshore
driller following its $7bn (£4.3bn)
takeover of Pride International, said it
was also affected by a seven per cent
decline in usage of the rigs. Net profit
fell to $64.6m from $189.8m a year
before, while revenue fell 19.4 per cent
to $362m. The results came exactly a
year after BP’s Gulf of Mexico blow-out.
Picture: REUTERS
stake in the venture.
Vodafone will pay in the region of
$5bn (£3bn) in cash for Essar Group’s
stake, which will boost its holding in
the entity to around 75 per cent.
It is thought the IPO decision will
rest on the outcome of a long-running
tax case with Indian authorities
worth around $2.6bn.
The action relates to the $11.2bn
purchase of Hutchison Telecom’s
operations in 2007. If the case is lost
Vodafone may reconsider its invest-
ment in India.
BOEING TO FIGHT ORDER TO MOVE 787
The National Labor Relations Board
Wednesday said aircraft maker
Boeing Co. violated federal labor law
by building a second production line
for its 787 Dreamliner at a non-union
factory in South Carolina, siding with
union workers in Washington state
who charged the decision was retalia-
tion for their past strikes.
RAILROADS RIDING STRONG VOLUME
GAINS
Two of the North America’s largest
railroads steamed ahead in the first
quarter, hauling more coal, automo-
biles and industrial chemicals despite
winter-related slowdowns. Union
Pacific yesterday posted a 24 per cent
rise in first-quarter earnings, citing
higher volumes across all its key mar-
kets. A day earlier, rival CSX reported
a 30 per cent gain in its first-quarter
profit.
CITYA.M. 21 APRIL 2011
Banks fight refunds in £3.2bn Dow at 3-year
payment protection ruling high as gold
▲
BANKING
BY JULIET SAMUEL AND ALISON LOCK
RETAIL banks were dealt a blow yester-
day after the High Court rejected their
judicial review, which protested the
FSA’s implementation of what they say
is “retrospective” justice.
The decision could cost the industry
up to £3.2bn in compensation paid out
to customers whom the FSA says could
have been mis-sold Payment
Protection Insurance (PPI), cover that
can take over the payment of a loan for
a period should the borrower lose
their job.
In response to a high volume of
complaints relating to PPI, the FSA
issued new guidance on the product
last year and told firms to enforce it in
relation to all of the 1.5m complaints
received since the FSA took over regu-
lation of the product in 2005.
Banks say this is unfair. The British
Bankers’ Association (BBA), which
brought the case on behalf of the
industry, said “The additional require-
ments in the policy statement effec-
tively apply new standards to past
sales.”
The BBA said it was “disappointed”
and was considering whether to
appeal against the ruling.
Lloyds Banking Group is believed to
be particularly affected: it issued a
statement to the market immediately
News 3
The BBA, headed
passes $1,500
saying that the ruling “could be
material to the group’s financial by Angela
position”, although it would not Knight (left),
estimate the precise impact. said it was
The FSA says that while the “disappoint-
guidance issued last year is new, ed” and was
the principles that the guidance considering
is meant to explain have been in whether to
appeal
▲
place the whole time. WORLD ECONOMY Montgomery Scott in Philadelphia.
Ash Saluja, a partner at CMS against the BY JULIAN HARRIS Spot gold hit a high of $1,505 as
Cameron McKenna, said there ruling mounting evidence of increasing infla-
were serious concerns about GOLD soared to over $1,500 (£914) an tion in major Asian economies was
the current system. ounce for the first time in history yes- echoed in Latin America. Silver also
“The role of the terday, as the rush to “safe havens” continued its rise, rising to $44.79 an
F i n a n c i a l continued amid fears over global infla- ounce during the day.
Ombudsman tion and economic uncertainty. “There is an awful lot of bad news in
Service as a retro- Yet the knock to US confidence from the price,” said Simon Weeks of the
spective stan- this week’s Standard and Poor’s nega- Bank of Nova Scotia. “The S&P com-
dard setter is not tive outlook seemed to be forgotten ment the other day has given us the
an appropriate already on Wall Street, as the Dow final kicker to get up here.”
basis for deal- Jones surged 186.79 points to close at The dollar continued to sink, threat-
ing with multi- 12,453.54 – its highest level since June ening to drop below 2009’s lows of
billion pound 2008. The technology-focused Nasdaq 74.17 in the US Dollar Index. The
compensa- index, meanwhile, had its biggest one- Australian dollar soared to an all time
tion,” he said. day jump in six months boosted by high against the US dollar, stretching
“The banks strong technology firm results. beyond $1.06.
are right to A rebound in home sales in March MARKETS:P24; ECONOMICS: P20-21
object; we announced by the National
should not Association of Realtors (NAR) boosted FAST FACTS | WORLD MARKETS
have a rule- confidence, along with a raft of solid
book to which earnings and profit outlooks. ● Spot gold hit a high of $1,505.40 an ounce.
back-dated “It isn’t just the good reports, but ● Silver hit a high of $44.79 an ounce.
rules can effec- also the encouraging comments about ● The Dow Jones Industrial Average closed at
tively be added in how things look for the remainder of 12,453.54 – its highest level since June 2008.
order to justify com- the year,” said Mark Luschini, chief ● The dollar sank below 75 (US Dollar Index).
pensation.” investment strategist at Janney
 4 News
Spanish yields
rise as debt
fears spread
▲
EUROZONE
BY JULIET SAMUEL
SPAIN saw yields rise at its latest bond
auction yesterday, raising fears that
Eurozone debt contagion could
spread to a country widely considered
too big to bail out.
Madrid sold €3.37bn (£3bn) of ten
and 13-year dated bonds, at the top
end of its target range on the back of
solid demand, but it had to pay 31
basis points more for the cash than at
its last equivalent sale in March.
Ten-year yields reached 5.47 per
cent versus 5.16 per cent in March.
Spanish yields continue to creep up
in defiance of widespread claims that
Madrid is a bulwark against any fur-
ther spread of the debt panic grip-
ping the Eurozone. “Spain spreads
are widening and wobbling,” said
Newedge’s Bill Blain. “We all know
that if Spain falls… game over.”
Meanwhile, the growing expecta-
tion of a Greek default drove up the
cost of insuring Athens’ debt still fur-
ther to over 1740.7 basis points, up
144.1 points from yesterday’s close.
Greek two-year benchmark bonds
also reached a record yield of 21.114
per cent yesterday, as some traders
said that markets were awash with
rumours that European officials
might try to use the Easter break to
organise a restructuring of Greece’s
finances, despite EU claims that any
default would have to be unilateral.
Others have pointed out that since
Athens issued most of its debt, it can
default unilaterally if it chooses. The
euro reacted well to the Spanish sales,
rising 1.2 per cent against the dollar.
ANALYSIS l Greek 2-year bond spread
1800
bps
1700
1600
1500
1400
1300
1200
1100 Source: Tradeweb
Jan 1 Mar 15 Mar 29 Apr 12
EU budget commissioner Janusz Lewandowski lays out his plans
Osborne attacks above
inflation EU budget hike
EU ECONOMY
▲
BY ALISON LOCK
CHANCELLOR George Osborne
slammed European plans for the EU
budget yesterday.
The above-inflation 4.9 per cent
spending increase adds €6.2bn
(£5.5bn) to the EU’s proposed budget
to take it to €132.7bn.
Osborne said the government was
“not prepared to accept the kind of
budget proposal that has been put
Picture: Getty
forward today” and said there needed
to be “a reality check in Brussels” to
bring spending in line with mem-
bers’ own austerity plans. “The pro-
posal from the Commission for a big
budget rise is completely unaccept-
able,” he said in a BBC interview.
EU budget commissioner Janusz
Lewandowski said it was needed to
maintain EU grants. “We cannot pun-
ish our citizens, companies, local and
regional authorities who have a right
to get their bills paid,” he said.
CITYA.M. 21 APRIL 2011
Switzerland to
toughen bank
capital rules
REGULATION
▲
THE SWISS government has pushed
ahead with plans to make UBS and
Credit Suisse reach tough new capital
standards, saying the benefit to the
economy outweighed costs to the
banks.
As it finalised legislation to go to par-
liament, the Swiss cabinet said the gen-
eral thrust of a draft law it issued in
December was unchanged but it had
made a few minor changes following a
consultation period.
Finance minister Eveline Widmer-
Schlumpf said Switzerland was com-
pelled to take a tougher line on bank
regulation than other countries as UBS
and Credit Suisse were so big that any
failure could bring down the Alpine
economy.
“There will be adjustment costs for
the banks but all in all the net effect
will be positive,” she told a news confer-
ence. “I am convinced that the Swiss
banking sector will be the winner.”
The government has proposed both
big banks will need an equity Tier 1
capital ratio of at least ten per cent, ver-
sus the seven per cent minimum set
under the Basel III global standards
which begin to take effect in 2013.
Both UBS and the powerful right-
wing Swiss People’s Party (SVP) have
warned the plan risks making UBS and
Credit Suisse less competitive.
CITYA.M. 21 APRIL 2011
Tesco snaps
up web movie
firm Blinkbox
MEDIA
▲
BY STEVE DINNEEN
TESCO yesterday announced the
shock acquisition of video on demand
service Blinkbox.
The cost of the deal for 80 per cent
of the firm was not disclosed but one
industry source told City A.M. the
price is likely to have been low, based
on his knowledge of Blinkbox’s finan-
cial figures.
Tesco has bought the stake from
Eden Ventures and Nordic Venture
Partners. The remaining 20 per cent
will stay with the current manage-
ment team, including founder and
chief executive Michael Comish.
A Tesco spokesman told City A.M. it
will acquire the management shares
subject to them meeting perform-
ance criteria.
Marriott falls
short despite
revenue boost
▲
LEISURE
HOTEL chain Marriott International
reported a bigger quarterly profit as a
more robust global economy boosted
demand for lodging yesterday.
The company, which operates the
Marriott, Courtyard and Residence
Inn brands, reported earnings of
$101m (£61.6m), compared with prof-
its of $83m last year.
Revenue per average room rose 6.5
per cent during the quarter, the com-
pany said.
But its shares fell as analysts were
expecting bigger profits.
Tesco added that management will
be incentivised to remain in place
until year four.
Richard Brasher, Tesco UK chief
executive, said, “Whether customers
want to own the DVD, download a
digital movie, stream a rental or all
three, Tesco is committed to giving
customers choice.
“The acquisition of Blinkbox,
together with a range of other servic-
es currently in development, means
we can link physical purchase of a
product to the building of digital col-
lections in a new and seamless way.”
Blinkbox, which launched in 2008,
was set up by former Channel 4 and
Vodafone executives. Comish said:
“This partnership represents another
step forward, bringing the leading
movie streaming service together with
the UK’s biggest retailer.”
E*Trade profit up
on market unrest
TRADING
ONLINE broker E*Trade Financial
swung to a profit and beat expecta-
tions in the first-quarter, it
announced yesterday.
Loan loss provisions fell 40 per cent
from the previous quarter to $116m
(£70.7m), suggesting the US firm is
more confident about its mortgage
loan performance and the economy.
Daily trading, meanwhile, jumped
14 per cent from last year, as unrest in
North Africa and the disaster in Japan
roiled markets and spurred E*Trade’s
retail investors in the first three
Grocer takes
on Amazon in
film rentals
TESCO’s acquisition of Blinkbox
could see it go head-to-head with
Amazon in a clash of the retail
titans.
Amazon recently bought movie
rental site LoveFilm and is keen to
develop its online movie streaming
operations.
It is understood Amazon plans to
integrate LoveFilm into its Amazon
Prime subscription service, giving
its premium customers access to
the movie database with no extra
charge.
One industry watcher told City
A.M. this could give a Tesco-backed
Blinkbox an advantage in the cut-
throat industry.
The sale of movie rights is notori-
ously expensive for subscription
services, especially with major play-
er Sky owning new-release rights in
the UK. However, single-watch pay-
per-view services such as those
offered by Blinkbox attract lower
rights charges. Tesco looks intent
on conquering every sector.
This looks like a smart way into
movies.
months of 2011. Trading has fallen
five per cent so far in April from
March, E*Trade said.
The company’s shares jumped near-
ly five per cent to $16.70 in after-
hours trading last night, their highest
in two months.
Chief executive Steven Freiberg,
who took the reins a year ago, said
E*Trade was now “well positioned for
growth”.
E*Trade reported a net profit of
$45m, compared with a loss of $48m
a year ago. Revenue was unchanged
at $537m.
News 5
IN ASSOCIATION WITH
CITY VIEWS: WOULD YOU BANK
WITH TESCO?
Interviews by Eric Wilkens and Eugenio Montesano
Save or Borrow peer to peer at RateSetter.com
www.RateSetter.com Customer Phoneline: 08442490115
RAFE HEYDEL-MANKOO | MERCER
“Yes – the ease of having the bank on site with the
supermarkets makes it convenient. Also, because of its
volume it has the ability to cut costs compared to
other banks, which makes it attractive.”
ALASTAIR GRAHAM | GARP
“Yes, it has simple and straightforward products
that are understood by the public. If this
translates into the banking products then it will
be successful.”
JAMES ALDRICH | ORACLE
“Yes, Tesco has a huge capital and it can translate
that into its banks. But it’ll have to convince its
customers: I don't think I'd switch, and
people tend to stay with the same bank.”
High expenses take shine
off earnings rise at AmEx
▲
CONSUMER
first-quarter, up from $885m a year
FIRST-quarter profit at American earlier.
Express rose 33 per cent from a year Revenues rose seven per cent from
ago, beating expectations, the firm a year earlier, slightly more than
said yesterday. expected, to $7.03bn.
But its expenses soared 19 per cent The biggest increases in expenses
to $5.2bn (£3.2bn), knocking shares in came from what the company spends
the credit card lender and processing on its rewards programs for cus-
network down 1.8 per cent. tomers. Marketing expenses also rose
The company’s wealthy customers 15 per cent.
spent more on their credit cards than “If they are actually picking up
a year earlier, but expenses outpaced some competitive advantage by
American Express’s revenue growth spending now, I’ll be delighted,” said
as it spent more on rewards programs Michael Holland, chairman of share-
for its customers. holder Holland & Co. “They don’t
The New York-based company said have a history of being wasteful with
yesterday it earned $1.18bn in the expenditures, but time will tell.”
CITYA.M. 21 APRIL 2011 News 7

LONDON'S UP AND COMING SKYSCRAPERS

The City still prefers high-rise

▲
PROPERTY for the developer of the Shard, Tower, said he was surprised about
BY ERIC WILKENS which will be London’s tallest Shuttleworth’s comments.
building when it is completed in “While the ‘age of bling’ might
PROPERTY developers and architects 2012, disagreed and said high-rises be over for skyscrapers and high-
across the City yesterday refuted are a more logical use of land, rises, we really need to evaluate
architect Ken Shuttleworth’s com- regardless of price. whether skyscrapers should be
ments that the “age of bling” for sky- “London is unbelievably spread bling in the first place.”
The Cheesegrater
The Walkie Talkie

scrapers is over. out and it’s because of the low-rise Chris Wilkinson, director of
Riverside South
Shuttleworth, who designed the development in the city. It shows Wilkinson Eyre Architects, added:
Gherkin building in 2004, created that the city isn’t using the land “It is nonsense to say that the age
Heron Tower

The Pinnacle
no set completion date

completing May 2012

London Bridge Tower,
a stir by saying the 40-story tower properly. Building more towers of the skyscraper is coming to an
completing mid-2014

completing mid 2014

completed Mar 2011

Leadenhall Building,

Bishopsgate Tower,

The Shard
would never get off the ground maximises the precious use of end when it has only just begun.
completing 2013
110 Bishopsgate,
20 Fenchurch St

today. “Money now drives every- space in London.” “Towers are inherently economi-
Canary Whaf,

thing, so if you can build some- While five new skyscrapers will cal in terms of land use and can be
thing for half the price, you will,” join the London skyline by 2014, designed as sustainable, low ener-
he said. Paul Katz, managing principal of gy users, so their future is
But Baron Phillips, spokesman KPF, the designer of the Heron assured.”

Nasdaq could
spend a year
on NYSE fight
cerned that the deal could be
▲

FINANCIAL MARKETS
blocked by competition regulators as
BY ALISON LOCK
it would give the combined entity
NASDAQ OMX chief executive Robert about 52 per cent of the entire US
Greifeld said he was willing to fight equities market, he said. Nasdaq has
for a year to gain his prize of a merg- given “reams of data” about the plan
er with the NYSE Euronext yesterday. to the US Justice Department and he
Speaking at Nasdaq OMX’s first- added that he had already held two
quarter results, Greifeld said it and face-to-face meetings with officials
partner IntercontinentalExchange at the department.
would pursue their bid, a rival to Nasdaq’s results showed it had
NYSE Euronext’s planned tie-up with shrugged off the costs of the merger
Deutsche Boerse, to the “endgame”. bid to date to deliver record net prof-
He said the two exchanges hoped it per share. It rose 42 per cent to
to add to the current offer – sweet- $0.61 from the $0.43 generated in
ened on Tuesday by an additional first-quarter 2010. Group revenues
$350m (£215m) break fee and the rose 15 per cent to $415m, from
promise of cash to shareholders $360m in 2010, despite gaining only
immediately – to make it “fully a 19 per cent share of the US equities
reflective” of NYSE Euronext’s value. market between its three platforms.
“We are keenly aware that we The group squeezed higher profits
were uninvited,” Greifeld said on the from its cash equities business, driv-
group’s results call. “But that has the ing net revenues to $62m from $55m
ability to change as we put things on in 2010 despite seeing shares traded
the table that obviously are attrac- in the quarter fall to 94.8bn, from
tive to shareholders [and that] will 126.2bn in 2010.
also be attractive to the NYSE board.” Derivatives trading also proved
Greifeld said he would continue to lucrative, with the business yester-
try to convince NYSE shareholders of day reporting a 31 per cent rise in
the benefits of the unsolicited bid. trading revenues to $80m, from
Investors were primarily con- $61m in 2010.

Banks defend dark pools in row

with bourses over trading share
(Mifid) rules that would force greater
▲

FINANCIAL MARKETS
transparency requirements on off-
INVESTMENT banks yesterday exchange venues, such as “broker
launched a fresh defence of “dark crossing networks” operated by
pool” share trading, saying the prac- AFME members.
tice is not nearly as widespread as Yet the new figure argues against
suggested by Europe’s stock the size of the off-exchange, or over-
exchanges and should therefore pose the-counter (OTC) market, which
few regulatory concerns. AFME says ought to be a key consid-
Only 16 per cent of trading takes eration for rulemakers to consider.
place in European off-exchange Managing director of equities at
trades, according to the Association AFME Christian Krohn said: “In light
for Financial Markets in Europe of the ongoing Mifid review and reg-
(AFME), as opposed to the 40 per cent ulatory proposals around OTC trad-
quoted by bourses. ing, it is critical that policy makers
European lawmakers are currently have a full and accurate understand-
considering changes to Markets in ing of the nature and scale of the
Financial Instruments Directive OTC market.”
 8 News CITYA.M. 21 APRIL 2011

Allied Irish Bank

Fresh lawsuit haircut protested
a year after BANKING

▲
BONDHOLDERS of Allied Irish Banks
yesterday launched a challenge

BP Gulf spill
against Irish government plans to cut
80 per cent of the bonds’ value.
Ireland’s government won a High
Court order last week to change the
terms of €2.6bn (£2.3bn) worth of
Wells Fargo chief exec John Stumpf reported rising income but shares fell Pic: Bloomberg AIB’s subordinated bonds. Investors
including Carlos Abadi, director of

Wells Fargo hit as drop in

Abadi & Co Securities, plan to appeal
▲

ENERGY but politicians in Louisiana, which the decision. Aurelius Capital

BY MARION DAKERS bore the brunt of the damage, were Management also lodged an applica-
yesterday keen to stress that the region tion to block the court order.

its revenues disappoints

THE ONE year anniversary of the
Deepwater Horizon disaster was yester-
day marked by a minute’s silence and
a fresh round of legal action against oil
major BP.
BP’s 80,000 employees held a
minute’s silence at 10am yesterday to
remains open for business.
“The bottom line is there is a lot of
work that needs to be done, but the
vast majority of our waters are clean,
open and ready for our fishermen,”
said Louisiana’s Republican governor
Fidessa signs
Bobby Jindal at a ceremony to mark BANKING Wells Fargo’s first-quarter net
new customers
▲

commemorate the 11 workers who the event’s anniversary. BY HARRY BANKS income for common stockholders
died in the blast last April, which “We’re inviting America to come rose to $3.57bn (£2.2bn), or 67 cents
spewed an estimated 5m barrels of oil down here, have a great time, enjoy WELLS Fargo, the fourth-largest US per share, from $2.37bn, or 45 cents
into the Gulf of Mexico. our seafood and be part of the greatest bank, posted a decline in revenue per share, a year earlier. Revenue fell FINANCIAL SERVICES

Halliburton, a US contractor work-
ing on the deepwater rig, has filed a
lawsuit against BP Exploration &
Production claiming breach of con-
tract, according to court documents
filed in Harris County, Texas.
Halliburton claims that its contract
with BP exempted it from certain lia-
bilities linked to any accident, yet it
has been hit by numerous lawsuits
from those affected by the worst off-
shore oil spill in US history.
It is still too early to know the long-
term damage to the Gulf’s ecosystem,
rebirth you will ever see.”
BP has paid out about $5bn (£3bn)
in claims for economic losses through
a spill fund administered by Kenneth
Feinberg. The spill wiped about $70bn
from BP’s market value and spelled
the end for chief executive Tony
Hayward.
“At BP we regret that the accident
happened and the impact it has had
on the environment of the Gulf Coast
and the people living there,” Bob
Dudley, who took over as chief execu-
tive in October, wrote yesterday.
▲
sending its shares down 4.9 per cent as five per cent to $20.33bn.
a bank known for outsmarting rivals The bank cut the amount of money TRADING platform technology
turned in an average performance. it set aside for bad loans to $2.21bn provider Fidessa said it had signed “sig-
Net earnings rose 50.5 per cent, but from $5.33bn a year earlier. It also nificant new orders” since the start of
gains were driven mainly by setting released $1bn, pre-tax, from reserves. the year and expected to maintain its
aside less money to cover bad loans. “It’s a simple issue of their revenue margins and revenues in 2011.
The bank’s loan book shrank as out- being weak and their earnings before Fidessa recorded good growth
standing loans to consumers declined taxes and provisions being down sig- despite the disruption of the Japanese
and loans to companies did not grow nificantly. I think that’s why the stock crisis, although it expects financial
enough to compensate. is down,” said Keith Davis, an analyst markets to remain difficult through-
Credit quality improved for the at Farr, Miller & Washington. out this year, it said in its interim
bank, as it did for rivals, but investors Wells Fargo was one of the biggest management statement. Slow hiring
are less clear about where future prof- mortgage lenders in the US in the meant it would spend less than antic-
it growth will come from. years leading up to the housing crisis. ipated on business development.

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 The Capitalist
10
IT’S A GAS
FOR CLARE
AT BANKER
BRIEFING
HOW can money be the same as gas? It’s a
good question, and one that bankers were
giving serious thought yesterday at a
lunchtime talk at Clifford Chance by
Clare Spottiswoode, member of the
Independent Commission on Banking.
The former gas regulator had been
briefed to update 34 high-powered
bankers, including Antony Jenkins, group
chief executive of global retail banking at
Barclays; Dame Mary Marsh, director of
HSBC; and Richard Doe, chief executive of
ING Direct, on the ICB’s policies.
However, Spottiswoode’s colourful util-
ities past meant many of her examples to
support her arguments for more competi-
tion in banking were about gas, leaving
the money men struggling to relate as
they digested their three-course lunch.
But the briefing wasn’t just hot air.
Even though the bankers “gave as good as
they got”, according to a source, they
insisted they were unafraid of new banks
entering the market. As long as the sector
remains profitable so it survives, that is.
DIAMOND IS FOREVER
MEANWHILE, Barclays chief executive Bob
Clockwise from top left: Antony Jenkins, Clare Spottiswoode, Richard Doe, Dame Mary Marsh
Diamond dropped in to Clifford Chance
that same morning for breakfast.
Diamond was short on time – he had to
prepare for hosting last night’s cocktail
party at his Chelsea home for New York
Democrat senator Kirsten Gillibrand – but
he managed to tell 12 top lawyers why
they should support the Mayor’s Fund for
London, of which he is a personal donor.
The briefing notes stressed there was
“definitely no obligation to donate”, but
The Capitalist hears the high-rolling guests
have all been approached for £50,000,
which would make them a corporate
sponsor of the fund and a member of
Boris Johnson’s MFL Business Club.
EDITED BY CITYA.M. 21 APRIL 2011
HARRIET DENNYS
Got A Story? Email
thecapitalist@cityam.com
Follow The Capitalist
on Twitter: @citycapitalist
Spottiswoode
Picture: Micha Theiner/City A.M.
drew on her
colourful gas
past to make
her lunchtime
briefing for
senior banks Party time: active fundraiser Bob Diamond
even more Perloff also defends bankers’ bonuses,
claiming they benefit the country at
persuasive large. “A million-pound bonus earner pro-
vides the pensions for 150 little old ladies,
Pictures: REX, PA
wherewithal for 75 asylum seekers or the
education of 150 other people’s children.”
An elaborate way of justifying the £8m
bonus hike for Panthers’ directors in 2010
perhaps, but an effective one nonetheless.
Let’s hope the exclusive guest list from
THE ONLY WAY IS ESSEX
ACCOUNTANCY giant PwC doesn’t like to
Linklaters, Macfarlanes, Clifford share – especially not its annual tennis
Chance, Olswang and Simmons & weekend at the Five Lakes resort in Essex,
Simmons cough up. where it usually has the run of the place.
So imagine the 40 accountants’ horror
when they turned up, tennis rackets in
EYE OF THE TIGER hand, only to discover the hotel had dou-
NEVER mind the numbers, the ble-booked the courts with rival KPMG.
highlights of Panther Securities’ Relations were initially frosty, with
preliminary results are the notes KPMG declining the offer of a joint tennis
by chairman Andrew Perloff, in challenge, but – helped by lashings of
which he asks shareholders to sup- alcohol – they later accepted the invita-
port the company’s £25,000 donation tion to PwC’s fancy dress party (senior
to the Tory party to prevent “the old manager at PwC Andy Collings pictured
bunch of spendthrifts taking over the left). “It’s a small world in accounting,”
country’s finances again”. said a mole, who stayed to the 3am end.
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CITYA.M. 21 APRIL 2011 News 13

The City must prove itself to the banker bashers

VIEW FROM CITY HALL
ANTHONY BROWNE
WELL, that’s it then. The government
and industry have declared a covert
ceasefire. The war on bankers is now
over. Or is it?
The Independent Commission on
Banking’s interim report was more
benign for the competitiveness of the
industry, and London as a financial
capital, than we had been led to
believe. The rhetoric from the govern-
ment is now more emollient – they
openly recognise that it is in Britain’s
interest to be host to the world’s
financial capital.
But there is a big elephant in the
room – the mood of the public. And
there the news is far from good: the
public do not think the war is over. In
fact, unpublished research for
theCityUK, the financial services rep-
resentative body, shows that public
hostility to bankers is actually increas-
ing. The general mood is said to be
“vitriolic”.
The problem is that many people
are genuinely suffering. Even if the
economy staggers back to its feet, this
is going to be a more difficult year
than last year. Real incomes are
falling as pay lags behind inflation,
and taxes are rising to fill in the gov-
ernment deficit. VAT is up, as are fuel
prices. The middle is being squeezed.
Since the beginning of the financial
year, the public sector cuts are turn-
ing from theory to reality. Across
local and national government, work-
ers are losing their jobs, libraries are
closing and services being with-
drawn. The government had no alter-
native, but rebalancing the books was
never going to be pain-free.
This is a time of anxiety for the
public, and they are looking for some-
one to blame. Bankers – or financial
service workers in general – are the
obvious culprits. And exactly how are
they sharing the pain? Well, the
financial services industry took its hit
three years ago, and is now leading
the country in recovery. Business is
getting brisker, profits are rising,
banks are hiring again – and, as RBS’s
Stephen Hester can testify, bonuses
are being paid. For the public, this is a
red rag to a bull. Even arguments that
we need financial services because of
all the jobs they create apparently fail
to win people over.
The industry cannot let up in the
face of this continuing public hostili-
ty: it has to show to the public the
benefits they bring. Partly that is
about ensuring their customers are
satisfied, but also about proving their
benefit to the country by deed as well
as word. As the Mayor put it last year,
the masters of the universe need to
show they are servants of society.
Until they convince the public of
that, the war won’t end.
Anthony Browne is an adviser to the
Mayor of London

Lawyers eye
IPO market
to raise funds
that law firms are currently blocked
▲

LEGAL
BY RICHARD PARTINGTON
A SWATHE of City law firms are said
to be considering plans to list on the
stock market, ahead of sweeping
changes to the way they are funded
due later this year.
Personal injury specialist Irwin
Mitchell fired the starting gun yester-
day, after it revealed it had hired
investment bank Espirito Santo to
advise it on its funding options.
It is thought to be considering an
initial public offering (IPO), or cash
from private equity.
The firm, which is around the 25th
biggest legal practice in the country,
is the first to openly declare its inten-
tions to take advantage of changes to
the Legal Services Act due in October.
Irwin Mitchell is believed to be
looking for £50m, and could use the
cash to upgrade its IT systems or hit
the acquisition trail.
The new rules, dubbed “Tesco law”
to open up high street-style availabili-
ty of legal services, will allow external
sources of equity funding – a stream
from tapping.
“I’ve long been a proponent of this
kind of thing. I believe it will force the
market to change,” said Paul Maher,
founding shareholder and London
chairman of law firm Greenberg
Traurig Maher.
“Most significant law firms will
have either thought about it and dis-
missed it, thought and decided they
want to do it reasonably soon, or
looked at it and decided it needs to be
in their thinking.”
Irwin Mitchell’s move could also
spark other City firms to do the same.
“There are a lot of conversations
going on at the moment and discus-
sions,” one banker close to the deal
said.
Yet bigger law firms might not be
keen on a change, as it could impact
on their business outside of the UK.
Baker & McKenzie’s London manag-
ing partner Gary Senior said: “For an
international firm to do this would be
very challenging. Where it might be
permitted in the UK, it could have dif-
ficulties if it was practising overseas.”

LAW FIRMS LIKELY TO CONSIDER AN IPO

● Has made noises in the past. This firm
emerged as an exciting technology-focused
Olswang powerhouse as the internet took off. It’s been
treading water as a mid-sized practice since.
● Comes up with kooky and exciting strate-
Berwin Leighton gies, so a punt on a new funding model, such
as an IPO, might not be too outlandish for
Paisner this growing firm to take on board.
● Lost its way recently, despite being a high-
ly capable and well respected firm. Taking on
SJ Berwin cash from external investors could give it a
capital boost to square up to its rivals.
● Successful medium-sized law practice
Mischon without an international presence. A
smoothly-run firm that the banks couldn’t
de Reya afford to miss having a chat with.
● A leading City law firm without an inter-
Lawrence national presence. It could exploit the IPO
market to grow in the UK without facing
Graham regulatory problems abroad.
● Might not be the first to act although
Greenberg could weigh the idea. Founding shareholder
Paul Maher is a known fan of the prospect
Traurig Maher of publicly quoted law firms.
CITYA.M. 21 APRIL 2011 News 15

Forex
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Carlos Slim (left) and Rupert Murdoch could team up on a Formula 1 bid Pictures: REUTERS

Murdoch looks
to F1 takeover
it. They have never talked about selling Alpari research
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MEDIA
BY STEVE DINNEEN though.”
One person with knowledge of the
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Formula One, despite its boss Bernie CVC would be forced to listen if News
Ecclestone saying the owners will not Corp were willing to pay enough.
sell, sources sais yesterday.. He said: “Never say never, CVC is a
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ested in selling,” Ecclestone told negotiating rights. However, F1 was products. They may not be suitable for you as they carry a high degree of risk to your capital and you can
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term. in 2006 for $1.8bn (£1.1bn).
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for sure they would have called me and
they haven’t.”
F1 chief executive alpari.co.uk/research
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of Bristol Bay. The Pebble Mine would dispose
of up to 9 billion tonnes of toxic mine waste in the
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The plan is opposed by nearly 80% of Bristol
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CITYA.M. 21 APRIL 2011
AIG’s Chartis
sells $3.5bn
asbestos risk
▲
INSURANCE
BY ALISON LOCK
WARREN Buffett’s Berkshire
Hathaway struck a deal with US insur-
er American International Group (AIG)
yesterday to take a package of high-risk
asbestos insurance policies held by AIG
subsidiary Chartis off its books.
AIG has paid Berkshire-owned
National Indemnity, the US’s largest
reinsurer, $1.65bn (£1bn) for a retroac-
tive insurance policy that will cover up
to $3.5bn of claims associated with the
policies.
The hefty upfront fee remains a
preferable option for AIG compared
with the ongoing risk of the policies,
which have dogged Chartis for years
and already cost it billions.
AIG currently holds large reserves of
capital on its books as protection
against potential claims. Releasing
some of these will give it a $200m
deferred pre-tax gain to be recorded in
the second-quarter of 2011, it said.
AIG took a charge of more than
$4bn in the fourth-quarter of 2010
because Chartis exposure to years-old
claims was far higher than expected.
The reinsurance policy, which
shares the risk of huge claims made on
the asbestos policies, allows AIG to
reassure investors it has its financial
base under control as it prepares to sell
the US government’s 92 per cent stake
back to the market.
National Indemnity has become a
partner of choice for insurers looking
to limit their asbestos exposure in
exchange for hefty up-front fees. Last
July CNA Financial did a similar deal
for a $2bn payment, while in 2006
Lloyd’s of London affiliate Equitas
transferred its liabilities to NI.
FAST FACTS | AIG
● Is 92 per cent owned by the US government
following an $85bn bailout in 2008.
● Will pay National Indemnity $1.65bn to cover
$3.5bn of asbestos insurance policy claims.
● Sees a $200m gain from reserve releases.
ADVISER: GOLDMAN SACHS
THOMAS
VANDEVER
GOLDMAN SACHS
GOLDMAN Sachs advised Hanover on
the deal, with Thomas Vandever leading
the team.
Vandever joined Goldman in 1999.
A partner with the bank since
2006, he has worked in the financial
US insurer Hanover buys
Chaucer for £131m cash
INSURANCE
▲
BY ALISON LOCK
CHAUCER Insurance yesterday agreed
its sale to US group Hanover
Insurance for £131m in what
Chaucer’s chief executive Bob
Stuchbery described as “a great deal
for shareholders”.
Lloyd’s insurer Chaucer accepted
Hanover’s 56p per share cash offer,
which comprises a 53.3p per share
offer and a 2.7p per share full-year
2010 dividend. The offer values it
about £10m higher than yesterday’s
£303m market capitalisation.
Stuchbery said the deal was “a
great complementary fit with
institutions group for six years before
moving to the Americas financing
group in 2005, and is managing direc-
tor of the investment banking division.
His expertise spans advisory, private
equity, and derivative transactions. He
holds an MBA from Columbia Business
School and a BA from the University of
Pennsylvania.
Vandever was joined by Nimesh
Khiroya, executive director in the UK
team.
Chaucer was advised on the deal by
Kinmont and Willis Capital Markets &
Advisory.
Hanover”, which has no UK presence
and wants greater exposure to spe-
cialty insurance lines such as the
energy and marine insurance that
Chaucer writes. “This is a deal about
growth opportunity,” he added. “This
is a deal that looks to see both compa-
nies benefit from that growth.”
Chaucer’s major shareholders,
including BlackRock, JO Hambro and
Artemis support the deal but
Pamplona said it would oppose the
deal as the price was too low.
Chaucer had been approached by
Guy Hands’ firm Terra Firma with an
offer but Stuchbery said Hanover had
offered the highest price.
News 17
Yorkshire and
N&P agree to
merger deal
FINANCIAL SERVICES
▲
EMBATTLED building society
Norwich & Peterborough has agreed
merger terms with the Yorkshire
Building Society, just days after it was
forced to pay £1.4m by the Financial
Services authority
The East Anglian mutual will
merge with its larger rival to create a
group with assets of around £34bn,
three million members and 224
branches.
Yorkshire said it would honour
N&P’s pledge to pay compensation to
customers who it advised to invest in
Keydata’s structured products before
the provider went bust, losing
investors millions.
N&P was earlier this week fined by
the FSA for mis-selling products oper-
ated by the now-collapsed Keydata.
The combined society, which will
be known as Yorkshire Building
Society, will be focused on the tradi-
tional building society business of
residential mortgages and savings
and will be principally retail funded.
Yorkshire Building Society chief
executive Iain Cornish said: “We will
build on N&P’s strong brand and the
value it has delivered to its members,
while gaining the opportunity to con-
sider developing our own products in
areas where N&P has complementary
capabilities and expertise.”
 18 Consumer News CITYA.M. 21 APRIL 2011

Virgin Media’s revenues grow

but new customer rate slows
However, the slow customer growth The results hit analyst forecasts,
▲

TELECOMS ANALYSIS l Home Retail

BY STEVE DINNEEN
VIRGIN MEDIA yesterday reported a
5.7 per cent jump in revenues despite
a drop of almost 50 per cent in new
customer additions.
The company added just 20,200
was offset by Virgin’s average spend
per user increasing as customers took
more of its services and signed up to
faster broadband.
The average Virgin Media customer
now spends £46.16 a month, up 2.6
per cent on the year before but slight-
although Evolution Securities analyst 240
Steve Malcolm said the second-quarter p
220.80
could offer a sterner test, with price 20 Apr
rises coinciding with tax hikes for the 220
middle classes. But he noted Virgin
has “proved its resilience”.
Virgin also announced yesterday it 200

new users this quarter, down from
38,300 last year. Its TV customer addi-
tions were even more anaemic, with
just 10,100 new ones – a 70 per cent
year-on-year drop.
ly down on the final quarter of last will begin trials of a new superfast
year. This pushed revenues up to internet service offering download 180
£982m, with earnings rising 7.6 per speeds of up to 1.5Gbps. It is being test- 24 Jan 11 Feb 3 Mar 23 Mar 12 Apr
cent to £376m. Free cash-flow doubled ed at the new Silicon Roundabout site
year-on-year to £100m. in east London. Argos’ managing director Sara Weller will step down in June

Argos dents
Home Retail
Retail Group – which also includes

▲
RETAIL
BY JOHN DUNNE
HOME Retail Group boss Terry Duddy
yesterday unveiled a massive shake-
up at its Argos chain with dozens of
new ranges and the launch of a
home shopping TV channel.
The chief executive admitted that
a profit slump at the discount retail-
er had been triggered by a downturn
in high street spending but that
more could be done to breathe new
life into the business.
He said that he would personally
run the Argos business after the com-
pany announced that managing
director Sara Weller would stand
down in June due to ill health. Home
Homebase – reported a 9.5 per cent
drop in pre-tax profit to £265.2m in
the year to 26 February. Argos saw
like-for-like sales drop 5.6 per cent in
the same period, while Homebase saw
same-store sales decline 0.3 per cent.
“The consumer environment is
tough and those hard stretched fam-
ilies who shop at Argos have been
hit.”
He said that Argos would be offer-
ing children’s clothes ranges. And a
Sky shopping channel complete with
celebrity presenters will be launched
in the summer to sell Argos goods.
Duddy dismissed speculation over
the company being a potential
takeover target.

When times are hard it’s easy to impress

SHAREHOLDERS may have been
handed a carrot today in the form
of a reinstated dividend, but long-
term a return to the stick is looking
more and more likely.
Argos has been underperforming
for Home Retail Group since
Christmas 2008, and unless Terry
Duddy really throws his weight
the company added £173m to its
value in one day of trading despite
losing £30m over Christmas.
Trading in line with expecta-
tions doesn’t sound like much
when forecasts have you down 13
per cent. But shares in the group
still jumped more than four per
cent today, despite brokers continu-

329*
behind it that’s unlikely to change ing to back away from the stock
Singapore £
from anytime soon. with haste.
But with retail gloom showing no Sometimes least worst might just
£ 359*
Phuket from
discrimination when it comes to its
target any improvement in fortune,
be enough.

however small, is likely to get a

Bangkok £ 379*
from thumbs up from investors.
In January this year, for example, BOTTOMLINE
Bali £ 379*
from
Analysis by Elizabth Fournier

£ 409**
Perth
Melbourne
from

£ 439**
from
Waitrose takes the challenge to
Christchurch £ 459**
from
Ocado with warehouse opening
shops inside the M25 from July.
▲

RETAIL
WAITROSE is setting itself up to
directly compete with Ocado, by
opening a massive “virtual shop” in
west London to step up the delivery of
orders from its website in the capital.
Waitrose will use the the ware-
house in Acton to store goods ready
for dispatch. The supermarket has a
clause in its contract with Ocado that
enables it to deliver from any of its
This was a key part of a new 10-year
supply agreement signed by the two
companies last May which allows
Ocado to continue delivering
Waitrose groceries.
Mark Price, the managing director
of Waitrose, said: “This is a significant
step in the development of our multi-
channel offer, and will play an impor-
tant role in the continued growth of
our e-commerce sales.”
CITYA.M. 21 APRIL 2011
ANALYST VIEWS: IS THERE LIFE AFTER BART BECHT?
ANDREW WOOD | BERNSTEIN
“ Fears by some investors that the depar-
ture of Bart Becht heralded a disappointing quar-
ter are unfounded. Growth was led by continued
strong growth in the developing markets …with
flat growth in Europe not being the disaster that
” ”
some had feared. We are not surprised to
see the stock react positively
KEITH BOWMAN | HARGREAVES LANSDOWN
“
The business model continues to be emulated by rivals, whilst the chief executive designate has clearly played his
part in generating current group successes. For now, with the company’s ability to deliver without negatively surprising,
market consensus opinion has been lowered to ‘strong hold/cautious buy’.
Reckitt profit
rises despite
Becht’s exit
▲
RETAIL
BY JOHN DUNNE
RECKITT Benckiser beat first-quarter
earnings forecasts – boosted by its
recent SSL acquisition – after last
week’s shock news that chief execu-
tive Bart Becht was to retire sent its
shares tumbling.
The British maker of Cillit Bang
cleaners and Nurofen painkillers,
which took over Durex condoms and
Scholl sandals maker SSL late last year,
said it was sticking to its financial
goals for 2011 as it aimed to outper-
form its markets.
Reckitt’s pre-tax profit rose 4.7 per
cent to £486m in the first three
months of 2011.
Net revenues in the first-quarter
were up by 14 per cent from the same
period the previous year at £2.28bn.
Sales in developing markets rose 14
per cent on a like-for-like basis.
Reckitt is looking to offset increased
costs for inputs such as crude oil, plas-
tics, palm oil and rubber with price
rises and cost savings, and looks for
growth in emerging markets as it
faces tough markets in Europe and
North America, which account for
nearly two-thirds of group sales.
Tate & Lyle sells Ideal Shopping
Vietnam branch agrees takeover
▲
CONSUMER
TATE & LYLE yesterday announced that
it has agreed to sell its Vietnamese
sugar business in a cash deal worth
£33m, subject to regulatory approval.
The sale to Vietnam firm TH Milk
Food Joint Stock Company is part of
the firm’s efforts to address its debt
pile.
The transaction is conditional on
the Vietnamese government approv-
ing the deal.
It also potentially requires Tate &
Lyle’s partner in the business, Mitr
Phol Saturn Investments, to forego its
right to buy the business.
Consumer News 19
MARTIN DEBOO | INVESTEC
By John Dunne
Heineken sales in
“ Reckitt has delivered a solid quarter one
that has steadied nerves after last week’s surprise
news. What is clear is that it is the market's valu-
ation on Suboxone film that is going to be the
prime influence on the share price over the next
acquisitions boost
Equis and other brands from Mexico’s
▲
six months or so. Soft growth for dish- CONSUMER
BY JOHN DUNNE FEMSA. Operating profit was also
washing and fabric care is a concern. boosted 20 per cent by the Dos Equis
HEINEKEN said yesterday it will purchase.
raise its advertising spending this Comparing like-for-like, sales were
year as it reported a 22 per cent up 3.6 per cent, Heineken said, as it
increase in first-quarter sales. sold larger volumes of beer despite
Net profit was €151m (£133.5m) at lower prices in its wholesale business.
the world’s second largest brewer. The company said its brewing costs
”
It said sales grew 22 per cent to were in line with expectations despite
€3.59bn from a year ago, mostly due the sharp rise in grain prices. Volumes
to the company’s acquisition of Dos were down in Greece and Spain.
“Reckitt Benckiser got off to a
strong start in the first-quarter of
2011,” said Becht in a results statement
yesterday.
The group, which also makes Air
Wick air fresheners, Vanish fabric
cleaners and Finish dishwasher prod-
ucts, reported that first-quarter earn-
ings rose ten per cent to 52.2p a share,
beating a company-compiled consen-
sus of 51.8p.
Reckitt reiterated its 2011 goals to
see underlying sales rise to four per
cent and profit growth above that
from its businesses, excluding SSL but
including its Suboxone drugs unit.
First-quarter sales and profit on this
basis rose five and ten per cent respec-
tively.
ANALYSIS l Reckitt Benckiser
3,500 p
3,302.00
20 Apr
3,300
3,100
2,900
24 Jan 11 Feb 3 Mar 23 Mar 12 Apr
Melbourne £
from417*
Gold Coast £
417*
Perth
from
£
from274*
Christchurch £
from441*
M&A
TV CHANNEL Ideal Shopping’s man-
agement is teaming up with the pri-
vate equity group Inflexion to buy the
company.
Ideal announced last year that it
was reviewing its options.
It said yesterday that its independ-
ent directors have agreed a sale worth
220p a share with Bidco, a vehicle
that brings together Ideal directors
Mike Hancox and Ian Jebson with
Inflexion. Inflexion’s current portfo-
lio includes the clothing label Jack
Wills. Ideal has been trading in line
with expectations.
 20 Economics CITYA.M. 21 APRIL 2011

Gross mortgage
No rate rise in lending springs
sight for King back in March

and his doves

▲
UK ECONOMY
BY EUGENIO MONTESANO
MORTGAGE lending bounced back in
March from the previous month but is
still two per cent lower than a year ago,
data from the Council of Mortgage
Lenders (CML) showed yesterday.
▲

UK ECONOMY
BY JULIAN HARRIS
TWO thirds of the Bank of England’s
monetary policy committee (MPC) still
oppose moves to normalise interest
rates, despite rising price pressures.
The Bank expects inflation in the
coming months to exceed its February
predictions, it said yesterday.
“There remained a significant risk
that inflation would exceed five per
cent,” the MPC’s minutes revealed.
However, voting at the Bank’s April
meeting showed no change from the
previous two months, and analysts see
little prospect of the MPC changing its
dovish approach in the near term.
“We no longer expect a 0.25 per
cent hike in May and instead forecast
the first rate increase to be in August,”
Barclays Capital responded.
“Crucially, there is no phrase in the
MPC’s minutes which suggests mem-
bers are awaiting the May Inflation
Report meeting as a trigger to vote for
a hike,” noted Citigroup’s Michael
Saunders.
“The absence of any such phrase
this time reinforces the likelihood
that the MPC will probably not hike in
May unless new upside risks to
growth or inflation emerge.”
Only three of the nine-member
panel voted for a rise in rates: Andrew
Sentance again favouring a 0.5 per
cent hike, and Martin Weale and
Spencer Dale both voting for a 0.25
per cent tightening.
Weale and Spencer “regarded the
matter as finely balanced… given the
weakness of the real economy and the
uncertainty facing the outlook,” the
minutes said.
“Clearly Dale and Weale are closer
to those voting for no change than
they are to Sentance on the basis of
these minutes,” commented Sam Hill
of RBC Capital Markets.
May’s meeting marks the end of
arch-hawk Andrew Sentance’s term
on the MPC. Sentance will be replaced
by Goldman Sachs economist Ben
Broadbent.
Chief dove Adam Posen continued
to vote for more quantitative easing.
Evidence of a seasonal recovery for
the UK’s housing sector is emerging, as
gross mortgage lending rose 21 per
cent from £9.3bn in February to
£11.3bn last month.
Yet analysts say the outlook remains
sluggish, with lending down £200m
compared to March 2010 and sales still
hampered by a squeeze on funding for
first-time buyers.
“Let’s not be fooled into thinking
the market is blossoming,” said Peter
Rollings, chief executive of estate
agent Marsh and Parsons.
“In London there’s no shortage of
demand from would-be buyers, but
unless more assistance from lenders
comes their way, the first rung on the
property ladder will remain far from
reach for thousands,” he added.
Remortgage approvals in February
were the highest for more than two
years, with the CML citing expecta-
tions of imminent interest rate hikes.
Yet inflation expectations dropped
sharply to 2.9 per cent in April from 3.5
per cent in March, a Citigroup and
Mervyn King expects inflation to fall to target in the medium term Picture: REUTERS YouGov survey showed yesterday.

ADVERTORIAL

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Savers have been some of the hardest hit by the
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CITYA.M. 21 APRIL 2011 Economics 21

American home sales are

set for bumpy recovery
6.3 per cent lower – yet this partially sales), while ‘healthy’ sales are
▲

US ECONOMY
BY JULIAN HARRIS
HOME sales in the US bounced back in
March, reflecting “uneven recovery”
in the housing sector, data showed yes-
terday.
Sales of existing homes jumped 3.7
per cent compared to February,
exceeding expectations, the National
Association of Realtors (NAR) said.
Compared to March 2010, sales were
reflects elevated transactions this time
last year, due to tax credits for home-
buyers, the NAR claimed.
“Existing-home sales have risen in
six of the past eight months, so we’re
clearly on a recovery path,” said NAR’s
bullish economist, Lawrence Yun.
However, ING’s Teunis Brosens dis-
agreed: “March sales growth is mostly
due to the growing number of dis-
tressed sales (foreclosures and short
stalling,” Brosens said.
“We expect the housing market to
lag, rather than lead the recovery this
year and next.”
Rising inflation may be prompting
stronger demand for homes, said NAR
president Ron Phipps.
“The typical buyer today plans to
stay in a home for 10 years, while rents
are projected to rise at faster rates over
the next few years,” Phipps said. Sales of existing US homes sprang back in March Picture: REUTERS

Earthquake and tsunami

“The awards are a good experience,
shatter Japan’s exports an excellent atmosphere with a real
month, the steepest drop since the
sense of achievement and excitement”
▲

ASIA ECONOMY
BY JULIAN HARRIS
THE HORRIFIC earthquake and tsuna-
mi in Japan last month knocked the
country’s exports more than expected,
official data revealed yesterday.
Disruptions to supply chains saw
exports drop 2.2 per cent from a year
earlier, a heavier fall than the 1.1 per
cent to 1.5 per cent decline anticipated
by many economists. It was also the
first decline in exports for 16 months.
The decline reduced Japan’s trade
surplus, which came in at 196.5bn yen
(£1.45bn) – its lowest level in two years.
“The seasonally-adjusted fall was
much starker,” said David Rea of
Capital Economics. “Export trade val-
ues plummeted 7.7 per cent month on
global financial crisis caused three dou- Sir Roger Carr, Chairman, Centrica (Dealmaker of the Year)
ble-digit month on month declines in a
row.”
Shipments to China rose an annual
3.8 per cent while shipments to the US
fell 3.4 per cent.
“The pace of fall in exports will likely
accelerate in April as automakers’ pro-
duction lines have not returned to nor-
mal,” said Yoshimasa Maruyama,
economist at the Itochu Economic
Research Institute in Tokyo.
“On the other hand, imports will
probably stay at a higher level in com-
ing months as energy imports increase
in both volume terms and value due to
price increases. Imports of goods need-
ed for production and reconstruction
are also seen rising,” Maruyama added.

NEWS | IN BRIEF
Inflation pressures ease in Germany Swedish Riksbank pushes up rates
Producer price inflation in Germany unex-
pectedly eased in March, down to an annu-
alised rate of 6.2 per cent, from February’s
peak of 6.4 per cent. However, compared to
February producer prices were up 0.4 per
cent. Consumer goods prices grew by 0.3
per cent on the month, the highest rate for
consumer goods since September 2008.
Fuel-driven costs were the main factors
behind the inflation, along with mining.
The Swedish crown slipped against the
euro yesterday morning, after the central
bank raised interest rates, as expected.
Rates moved up 0.25 per cent, to 1.75 per
cent. The Riksbank kept its forecasts
unchanged, predicting three more interest
hikes this year. Citigroup experts predict a
rate of four per cent by mid-2013. The euro
rose to around 8.9350 Swedish crowns
from 8.9115 before the rate decision. What will you say?
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 22 News
NEWS | IN BRIEF
ARM surges on Intel results
ARM led the FTSE gainers yesterday, ris-
ing 5.65 per cent, after blockbuster
results from its processor rival Intel. The
US firm predicted second-quarter sales of
around $12.8bn (£7.8bn), fuelling appetite
for chip designer ARM. The Cambridge-
based group has made strong gains since
Microsoft unveiled its latest round of soft-
ware running on its processors. Microsoft
recently showcased the new version of its
Internet Explorer browser running on an
ARM-designed chip.
Sony retires the PSPgo console
Sony yesterday confirmed it will cease
production of its PSPgo handheld con-
sole to focus on the upcoming Next
Generation Portable (NGP). The PGSPgo,
priced at an eye-watering £220, has
failed to set the market alight since its
2009 release and the arrival of
Nintendo’s new portable 3DS console
seems to have hammered the final nail
into its coffin. The 3DS beat Nintendo
records for the fastest selling portable.
Lombard aims to raise £25m
AIM-listed Lombard Medical
Technologies said yesterday it plans to
raise up to £25.3m through a placing
organised by Evolution Securities and
Eden Financial. Lombard will use the
money to fund the launch and regulatory
approval of Aorfix, a stent graft that
avoids the need for surgery.
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BHP Billiton chief executive Marius Kloppers warned on coal output
BHP Billiton warns coal
output damaged by rains
MINING
▲
BY HARRY BANKS
BHP BILLITON, the world’s biggest
miner, warned yesterday that persist-
ent rains in Australia were delaying a
recovery in its coal operations after a
devastating March quarter cut pro-
duction by nearly a fifth.
BHP Billiton is the latest miner to
caution investors to brace for a dra-
matic fall in Australian coal exports
this year, as the full impact of floods
Picture: GETTY
in Australia’s eastern Queensland
state becomes clearer.
BHP Billiton’s iron ore mines in
Western Australia, which were also hit
by rains, recorded a modest seven per
cent year-on-year rise in March quarter
output, setting the division on course
for a record year, it said. Iron ore is its
top revenue earner, followed by coal.
It has already earmarked nearly
$10bn (£6.1bn) of a planned $80bn
spending spree over the next five years
to expand iron ore and coal mining.
Blow for BT as judge
supports piracy law
TECHNOLOGY
▲
BY STEVE DINNEEN
BT AND TalkTalk have lost a land-
mark legal case attempting to halt
the Digital Economy Act.
A judge dismissed their argu-
ments on all but one of the legal
points they had made.
The decision could lead to thou-
sands of internet users suspected of
copyright infringement being bom-
barded with warning letters and
even having their connections sev-
ered.
Representatives of the music
industry welcomed the ruling,
which they say will help protect
their sliding revenues.
A BT spokesman said: “We are
disappointed with the outcome of
Broadcaster ProSieben sells assets
as owners mull exit from the firm
▲
MEDIA
GERMAN broadcaster ProSieben has
sold its Belgian and Dutch assets for
€1.23bn (£1.1bn), allowing it to pay
down debt ahead of a possible exit
by its owners.
ProSieben, controlled by private
equity firms KKR and Permira, said
yesterday it has sold the unit to a
consortium led by Finnish media
group Sanoma. The sale comes four
years after Munich-based ProSieben
bought SBS Broadcasting as it tried
and failed to create a pan-European
rival to RTL Group.
Sage announces a
restructuring after
Europe boss quits
MEDIA
▲
BY STEVE DINNEEN
ACCOUNTANCY software firm Sage
Group said yesterday it will reorganise
its business into three distinct
regions – Europe, North
America and Asia,
Australia, Middle East and
Africa (AAMEA) – follow-
ing the news that
Northern Europe chief
executive Paul Stobart
(pictured) intends to
leave the firm.
Álvaro Ramírez, chief
executive of the firm’s
Southern Europe divi-
sion, will assume
responsibility
for the
whole of
Europe with
the judicial review. We are review-
ing this long and complex judge-
ment. Protecting our customers is
our number one priority and we
will consider our options once we
have fully understood the implica-
tions for our customers and busi-
nesses.
“This was always about seeking
clarity on certain points of law and
we have to consider whether this
judgment achieves these aims.”
A TalkTalk spokesman said the
firms are “disappointed” but also
said the firm will appeal against
the decision.
BT and TalkTalk mounted a legal
challenge against the act after it
was passed during “wash-up” – the
period between one parliament
being dissolved and another being
The deal saddled the German
group with a pile of debt, which
stood at €3.02bn by the end of 2010,
and led chief executive Thomas
Ebeling to start a strategic review.
ProSieben aims to improve its ratio
of net debt to EBITDA to 1.5-2.5 in
the short to medium term, from 3.3
times at the end of last year.
Cleaning up its balance sheet is
seen as a precondition to a potential
exit by owners KKR and Permira.
The two private equity companies
own about 88 per cent of
ProSieben’s common shares and 18
per cent of preferred shares, which
CITYA.M. 21 APRIL 2011
immediate effect. It is not clear when
a replacement will be named.
The group’s interim results for the
six months ending 31 March will be
reported under the new structure on
4 May.
Its half-year results are expected to
continue the positive trend seen in
its first-quarter. The firm says a
recovery in spending by small busi-
nesses continued this year after it
returned to revenue growth for
the first time since 2007 in the
final quarter of 2010.
Sage, which sells software to
6.3m small and medium-sized busi-
nesses, also says it wants to
refocus investor
attention on its
future prospects
after a damaging
court battle with
US rival Oracle.
formed. It was passed last April by
189 votes to 47 after a two hour
debate despite public outcry over
its possible implications.
Lawyers for BT and TalkTalk said
they are particularly concerned
about a clause that could force
internet service providers to sus-
pend accounts of users suspected
of repeatedly infringing copyright.
They argued it could affect inno-
cent internet users and will pass
unfair administration costs on to
them. Another point of contention
is that the onus is on internet users
to prove their innocence if they are
suspected of copyright infringe-
ment. The government says the
costs will be split between copy-
right holders, who will pay 75 per
cent, and ISPs.
lack voting rights, via investment
vehicle Lavena Holding. Only the
preferred stock is currently listed.
ANALYSIS l ProSieben
25
€
18.54
23 20 Apr
21
19
17
31 Jan 14 Feb 28 Feb14 Mar28 Mar11 Apr
CITYA.M. 21 APRIL 2011
Catlin’s Japan
losses could
reach $200m
INSURANCE
▲
BY HARRY BANKS
CATLIN Group yesterday estimated its
losses from the Japanese earthquake
and tsunami will be around $200m
(£122m), net of reinsurance and rein-
statements.
The insurer also admitted that the
estimate – which is based on total
insured losses of between $20bn and
$30bn – is subject to a considerable
degree of uncertainty as the full scale
of damage is not yet known.
Catlin had previously estimated
that its losses from other first-quarter
catastrophes would amount to
$175m.
These figures included the January
floods in Australia, and the February
earthquake in Christchurch, New
Zealand.
Bunzl on M&A
trail after 12pc
rise in revenues
▲
SUPPORT SERVICES
DISTRIBUTION group Bunzl has fund-
ing of more than £200m to spend on
acquisitions to consolidate the mar-
kets in which it operates, chief execu-
tive Michael Roney said yesterday.
The London-headquartered compa-
ny has reported a strong start to 2011,
with revenues up 12 per cent in the
first quarter year-on-year.
Bunzl, which provides retailers
with not-for-sale goods such as packag-
ing and display material, has acquired
a number of companies in the last
year, helping boost group revenues.
Catlin said in a statement: “This
estimate is subject to a considerable
degree of uncertainty as the full scale
of human and economic damage is
not yet known.
“It will be many months until the
total amount of insured damage aris-
ing from this catastrophe can be esti-
mated with precision.”
ANALYSIS l Catlin 380.50
400 p 20 Apr
380
360
340
24 Jan 11 Feb 3 Mar 22 Mar 12 Apr
Cost savings and
sales lift Meggitt
AEROSPACE
BRITISH aerospace equipment sup-
plier Meggitt said its orders jumped
15 per cent in the first-quarter com-
pared to last year, indicating good
growth perspectives for 2011.
The FTSE 250 firm reported its
revenues were up 12 per cent, bol-
stered by a market recovery that
was driven mainly by soaring civil
aerospace orders.
“Within the period we saw dou-
ble digit revenue growth in all mar-
ket segments. We expect to deliver
good organic growth in 2011 and we
Rosneft president Eduard Khudainatov has bought extra shares
Russian oil group Rosneft
launches a share buyback
ENERGY
▲
BY HARRY BANKS
RUSSIA’S top crude producer, Rosneft,
announced a share buyback pro-
gramme yesterday as the company
continues to negotiate its $16bn
(£10bn) share swap deal with BP.
Rosneft said it will start with
$100m to $200m worth of shares buy-
back in coming months, sending its
share price up 1.7 per cent.
The company also said that its pres-
are well positioned for the long
term,” the company said in its inter-
im management statement.
The company, which earlier this
year acquired a component busi-
ness from US firm Danaher for
$685m, said it had exceeded its cost
savings target of £50m per year by
the end of 2010 and had lifted its
target to £57m by the end of 2011.
Shares in Meggitt, which have
fallen eight per cent in 2011, rose
two per cent to close at 352p yester-
day, valuing the firm at more than
£2.6bn.
Picture: GETTY
ident, Eduard Khudainatov, and two
management board members have
bought $27m worth of shares.
Meanwhile, Russian Prime Minister
Vladimir Putin said after his annual
parliamentary address yesterday that
both Rosneft and TNK-BP would bene-
fit from co-operating with BP in its
bid to explore oil deposits in the
Arctic.
Rosneft last week agreed to extend
the deadline for its landmark deal
with BP until 16 May.
Peugeot Citroen reports
demand in new markets
▲
AUTOMOTIVE
FRENCH carmaker Peugeot Citroen
yesterday said strong demand in
emerging markets helped it offset
supply chain problems in Japan in the
first-quarter, leading to a better-than-
expected 10.2 per cent rise in revenue.
The group stuck to its 2011 objec-
tives yesterday but said there would
be a likely hit of up to €150m
(£132.7m) to automotive recurring
operating profit in the first-half as a
result of the Japanese earthquake and
tsunami.
“Output in Japan has yet to return
to normal and the group is carefully
tracking the situation,” Peugeot said
News 23
NEWS | IN BRIEF
Centrica in Caribbean tie-up
Centrica, the largest supplier of gas to
UK households, has signed a sharing
deal for the production of hydrocarbons
with Trinidad and Tobago, the
Caribbean’s leading oil and natural gas
producer. The British energy giant will
construct a floating liquefied natural gas
facility along with Trinidad and Tobago’s
state-owned integrated energy company
Petrotrin.
Chemring makes £55m purchase
British military equipment maker
Chemring is to spend £55m buying a
business that supplies the US military
with devices for detecting chemical and
biological threats. Chemring said in a
statement yesterday that it had agreed
to buy the Detection Systems operations
and other related assets from General
Dynamics Corporation in a cash deal
that will be funded through the issue of
new shares.
Xstrata expands copper project
Mining group Xstrata is buying up cop-
per projects in Queensland, Australia for
A$175m (£113.7m) to help expand its
nearby production operations, the firm
said yesterday. Xstrata is buying the
tenements from Exco and expects initial
production to start in the second-half of
2012, once open pit mining at the Ernest
Henry mine has ended. The acquisition
and expansion is expected to create
100 full-time jobs and up to 401,000
tonnes of contained copper metal.
in its quarterly revenue statement.
The impact on profit was partly
due to delivery problems at parts sup-
plier Hitachi and partly from the cost
of adjusting its supply chain, it said.
Peugeot said it had “reduced visibil-
ity” on second-quarter results, but
finance chief Frederic Saint Geours
later said it was not expecting new
production problems linked to Japan.
First-quarter group revenue rose to
€15.41bn, beating the average esti-
mate of €14.9bn in a poll of eight ana-
lysts. This was the final quarter to
benefit from a government pro-
gramme to give bonuses to car own-
ers who traded in their old models.

 

 
    

  


 
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 24 News
CITY MOVES | WHO’S SWITCHING JOBS
Barclays Corporate
Barclays Corporate has appointed Tan Kah Chye
as head of trade and working capital, joining
from Standard Chartered Bank in Singapore,
where he held the position of global head of
trade finance for the past six years. At Barclays,
Chye will use his experience in senior trade
finance roles in Asia and Europe to develop the
bank’s trade business in Asia and the US. Chye
has also held senior trade finance positions with
Deutsche Bank, JP Morgan Chase and Citibank.
Insolvency Practitioners Association for the next year. Brazzill is
Patrick Brazzill has been named presi- an executive director at Ernst & Young,
dent of the Insolvency Practitioners where he leads the liquidations and
To appear in CITYMOVES please email your career
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
updates and pictures to citymoves@cityam.com
BEST OF THE BROKERS
ANALYSIS l Berkeley 1,059.00 ANALYSIS l BP
p
1,100 p 20 Apr 500
480
1,000
460
900
440
24 Jan 11 Feb 3 Mar 23 Mar 12 Apr 24 Jan
BERKELEY GROUP BP
HSBC has upgraded the housebuilder’s rating from “neutral” to “over- JP Morgan Cazenove rates the oil major “overweight” with a target price of
weight” and has raised its target price by 340p to £12.30. The broker has 575p. A year since the Deepwater Horizon disaster in the Gulf of Mexico,
raised its forecasts and ratings for a number of British residential property the broker thinks BP is suffering from a fresh value gap in its share price
firms after government support for new builds in the Budget and a grow- following its attempts to do a deal with Rosneft in Russia. JP Morgan
ing resilience in prices. HSBC sees most of the value limited to firms with a thinks BP shares are trading at a 45 per cent discount to the sum of the
strong presence in the south east of England, like Berkeley. parts value, even including the $20bn set aside for the oil spill.
A string of strong earnings Results surprises
reports sends FTSE jumping push US shares up
Xstrata added 4.9 per cent as JP
THELONDON Morgan upgraded its rating on the
firm to “overweight” from “neutral”,
REPORT
citing its outlook and potential bene-
fits from part-owner Glencore’s list-
ing on the FTSE.
BHP Billiton climbed 2.6 per cent
C
OMMODITY stocks helped after it boosted its quarterly produc-
power the FTSE 100 index tion of iron ore.
sharply higher yesterday, while Integrated oils also rose. BP added
earnings from Reckitt Benckiser three per cent as Russian prime min-
and Home Retail, following US tech ister Vladimir Putin tried to soothe
bellwether Intel, boosted risk BP’s worries about its future in the
appetite. country, after the British firm’s Arctic
The FTSE 100 closed up 125.39 exploration and share swap deal with
points, or 2.1 per cent, at 6,022.26 fol- Rosneft deadlocked.
lowing a 0.5 per cent gain on Tuesday. Earnings optimism helped lift
This wiped out Monday’s 2.1 per cent London’s blue chips, with ARM
drop, driven by the S&P ratings Holdings up 5.7 per cent after strong
agency cutting its US credit outlook results from US tech firm Intel.
to negative. Reckitt Benckiser rose 3.9 per cent
“Recent volatility has created a per- after the British consumer goods
fect scenario for investors and fund group beat first-quarter earnings fore-
managers to top up holdings at beat- casts just days after the shock retire-
en down prices,” said Jimmy Yates, ment of its chief executive Bart Becht
head of equities at CMC Markets. sent the shares tumbling.
Sovereign debt worries and global FTSE 250 firm Home Retail Group
political unrest has seen investors gained 5.5 per cent after assuaging
pour funds into commodities. Gold investors’ fears with in-line results,
hit $1,500 an ounce for the first time which helped propel peer Kingfisher
in its history and oil held near multi- up 3.8 per cent.
year highs around $122 a barrel. A ratings upgrade to “outperform”
Data overnight in China helped from “sector perform” by RBC Capital
sentiment. Shore Capital analysts Markets helped lift aerospace parts
said the Conference Board leading manufacturer GKN 5.6 per cent.
index showed signs that the pace of HSBC raised earnings estimates,
slowdown in the Chinese economy is ratings and target prices for some UK
moderating, which should help min- housebuilders, which the broker said
ers start to pick up market leadership. should benefit from new-build price
Miners were strong performers. resilience and government interven-
strategic exit routes practice, and
worked as an examiner at the
Insolvency Service for four years.
Barclays Wealth
The wealth manager has made two
hires in its investment advisory team.
Jean-Pierre Casey, who previously
worked as head of regulatory policy at
the firm, has been appointed as director
and Adrian J Eisenberg, who previously
worked at Guggenheim Investment
Advisors, joins as vice president.
Hastings Direct
Michael Lee will join as the new manag-
ing director of insurer services in late
11 Feb 3 Mar 23 Mar
tion.
Among the firms HSBC upgraded
were FTSE 250 firms Persimmon and
Bovis Homes, up 1.6 and 1.7 per cent
respectively, which helped boost
appetite for FTSE 100 peer Wolseley,
up 3.8 per cent.
Technical analysts warned that
recent volatility is likely to continue.
“[Has] the leading index already
put in a short-term bottom? It really
is too soon to tell. Technical evidence
pointed towards more volatile, chop-
py trading for the FTSE and that is
still very much the case,” a technical
analyst said.
BAE Systems, Legal & General,
Reed Elsevier and Resolution all
traded ex-dividend.
Wall Street was up strongly as the
UK market closed with signs that
confidence in the recovery of the
world's biggest economy was grow-
ing.
Sales of previously owned US
homes rose more than expected in
March.
ANALYSIS l FTSE
6,100 6,022.26
20 Apr
6,000
5,900
5,800
5,700
5,600
24 Jan 11 Feb 3 Mar 23 Mar
Edited by Harriet Dennys
June, ahead of the company’s planned
IPO next year. Lee spent almost a
decade with Provident Insurance, and
also co-founded Southern Rock
Holdings, moving to Gibraltar as man-
aging director of Southern Rock
Insurance Company.
BOA Merrill Lynch
Anupam Gupta has joined as managing
director and head of CEEMEA structur-
ing, based in London. Gupta joins from
JP Morgan where he was global head
of emerging markets stucturing.
Macquarie Capital
Macquarie Capital has appointed Simon
To appear in Best of the Brokers email your research to notes@cityam.com
ANALYSIS l Pearson
466.25 1,160 p
20 Apr
1,120
1,080
1,040
1,000
12 Apr 24 Jan 11 Feb
PEARSON
Nomura rates the publishing group “reduce” with a target price of £10.36
ahead of the firm’s interim management statement and shareholder meet-
ing next Thursday. The broker expects first-half trading to be tough, with
some weak links such as North American Education sales having the poten-
tial to drag results below Nomura’s forecasts for the full-year. The broker
predicts two per cent organic growth during 2011.
THENEW YORK
REPORT
B
IG earnings surprises gave a pos-
itive turn to investor sentiment
yesterday, propelling US stocks
to their best day in a month
and lifting the Dow to its highest in
almost three years.
Investors had been set up for a
series of disappointments but got an
unexpected treat from blue chips
Intel and United Technologies, spark-
ing a broad-based rally that puts equi-
ties on the path for more gains in
coming weeks.
The Dow Jones industrial average
gained 186.79 points, or 1.52 per cent,
to 12,453.54. The Standard & Poor’s
500 rose 17.74 points, or 1.35 per cent,
to 1,330.36. The Nasdaq Composite
added 57.54 points, or 2.10 per cent, to
2,802.51.
The Nasdaq posted its largest daily
percentage gain since October while
the Dow hit its highest close since
early June 2008. The broad S&P 500
had its best performance in a month.
The S&P 500 broke decidedly above
its 20-day moving average, setting a
near-term target at 1,340, according
to its Bollinger bands chart, a techni-
cal indicator that tracks momentum
and volatility.
12 Apr “Until yesterday, earnings were
CITYA.M. 21 APRIL 2011
in association with
Wilde as senior managing director and
head of power and utilities coverage in
Europe. Wilde joins Macquarie from
Royal Bank of Scotland, where he was
managing director and co-head of
EMEA energy and resources.
Duke Street
The European private equity firm has
appointed two operating partners:
Martin Robinson, a specialist in the
leisure sector who is currently chair-
man of Center Parcs and a supervising
board director of Disneyland Paris, and
Johanna Waterous, a retail and con-
sumer expert with more than 20 years’
experience at McKinsey.
+44 (0)20 7557 7245
morganmckinley.com
1,129.00
20 Apr
3 Mar 23 Mar 12 Apr
lacklustre, not too exciting, even dis-
appointing,” said Nick Kalivas, senior
equity index analyst at MF Global. He
said the last round of reports “shifted
the psychology quite significantly”.
Intel rose 7.8 per cent while United
Tech gained 4.3 per cent.
Among companies adding to the
positive tone were VMware, Freeport-
McMoRan Copper & Gold and EMC,
which also raised its profit view.
The PHLX Semiconductor index
jumped 4.3 per cent, the largest per-
centage gain since early July.
About 7.6bn shares traded on the
New York Stock Exchange, NYSE
Amex and Nasdaq, below last year’s
estimated daily average of 8.47bn.
Advancing stocks outnumbered
declining ones on the NYSE by a ratio
of nearly five to one, while on the
Nasdaq, about 10 stocks rose for every
three that fell.
Sales of previously owned US
homes rose more than expected in
March, a trade group said yesterday,
suggesting the housing market’s
downward trend may be close to hit-
ting a bottom.The PHLX housing sec-
tor index rose 1.2 per cent with home
builder DR Horton up three per cent.
On the downside, International
Business Machines slipped 0.4 per
cent after reporting a drop in sign-
ings of new business at its global serv-
ices division during the first quarter.
However, the Dow component’s profit
and revenue came in above analysts’
projections and it raised its full-year
profit view.
 Wealth Management | Funds
25

Investors find
IN FOCUS | TOP 10 EMERGING MARKET FUNDS SOURCE:MORNINGSTAR
UK REGISTERED 18/04/08 RANK LATEST DOMICILE PORTFOLIO MANAGEMENT
INVESTMENT FUNDS: – 19/4/11 PORTFOLIO MANAGER GROUP
EMERGING MARKETS PERFORM. SIZE (£M)
CHANGE (%)

growth in fund
TOP 10
Aberdeen Global Emerging Markets Eq D2 59.83 1 5,267.9 LUX Management Team Aberdeen Asset Managers
PM Em Mkts Small Cap A (dist)-GBP 58.31 2 295.22 LUX Greg Mattiko JP Morgan Asset Management
Aberdeen Emerging Markets A Acc 58.29 3 2,469.09 LUX Management Team Aberdeen Asset Managers
McInroy & Wood Emerging Markets 55.58 4 36.54 UK Francis Seymour McInroy & Wood Portfolios

returns on the
First State Global Emerging Markets A 51.83 5 702.81 UK Jonathan Asante First State Investments (UK)
First State Global Emerg Mkts Ldrs A 49.67 6 1,818.80 UK David Gait First State Investments (UK)
Dimensional Emerging Mkts Core Eq Inc 45.94 7 221.34 UK Management Team Dimensional Fund Advisors
Marlborough Emerging Markets Trust 34.44 8 19.34 UK James Smith Marlborough Fund Managers
Baring Emerging Markets Inst Acc 33.43 9 128.6 UK Paul Wimborne Baring Asset Management
Cap Int Emerging Markets Fund Xd GBP 31.88 10 5,214.45 UK Management Team Capital International

African plains
There are hopes for steady returns after
the dust has settled, writes Craig Drake

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OLLOWING the unrest that has
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growing number of Bric funds on
offer. But with African countries mak-
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growing economies last year,
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The revolutions in the MENA,
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Management, “emerging market Your home may be repossessed if you do not keep up repayments on your mortgage.
countries will benefit from sustain-
able long-term trends in the coming
AC20863

* Awarded Best Direct Lender by What Mortgage in July 2010.

years and infrastructure will play a first direct credit facilities are subject to status. Rates correct as at 6 April 2011. Because we want to make sure
significant part in future growth. we’re doing a good job, we may monitor and/or record our calls. © HSBC Bank plc 2011. All Rights Reserved.
Urbanisation is driving increased pro- first direct 40 Wakefield Road, Leeds LS98 1FD.
ductivity and prosperity across emerg-
26 Wealth Management | Travel Money CITYA.M. 21 APRIL 2011

Waste your cash

on holiday gifts –
not on currency
Donata Huggins finds out how to get the
most from your travel money this Easter

B
RITS waste £245m of precious
holiday money every year when
they buy their currency outside
of the UK, MoneyCorp research
more costly pre-paid card option.
These cards are loaded up with the
amount of cash you want to spend
while you’re away. And if you lose it,

BIG
shows. And that doesn’t even count
the cash wasted by those buying it in
the UK at uncompetitive prices. While
most of us know we’ll be ripped off if
we wait until we get to the airport to
change our cash, fewer people know
how to get the best deal.
Moneysavingexpert.com has done the
research and it turns out that there are
most providers will replace the card
with all funds intact for a fee of
around £10. Moneysavingexpert.com’s
favourites are the Fair FX, Caxton FX
and Travelex Cash Passport cards. The
charges vary on each of these. While
Fair FX offers the lowest fees, we love
Caxton FX for its free cash machine
withdrawals and the low cost it

ON THE HORIZON
Picking successful stocks that will perform over the
long-term requires an eye on the distant future.
We like to think we’re rather good at taking the
longer view.
Our flagship fund, the Scottish Mortgage
Investment Trust searches out investment
opportunities from the bottom-up rather
than taking a lofty, top-down view of the
markets. And time is the key. We always
view results in a five year context and
are absolutely committed to maintaining
a measured and considered long-term
approach.
Please remember that changing stock market
conditions and currency exchange rates will
affect the value of investment in the fund and
any income from it. You may not get back the
amount invested.
three good ways to get the best rates.
These are specialist credit cards, pre-
paid cards or shopping around for the
best priced pre-ordered currency.
Moneysavingexpert.com says the
best of the three is “the perfect plastic”
– a specialist credit card. While most
ordinary cards add 3 per cent to the
exchange rate and insert a few other
charges, specialist cards do not. This
can make an enormous difference.
Compare the fees charged on
spending £1,000 a year on foreign cur-
rency and withdrawing a further £750
in cash, using an Intelligent Finance
debit card with the Halifax Clarity
credit card: Intelligent Finance
charges over £120, while Halifax
Clarity asks for just £8.
Lewis explains that simply finding a
regular bank account that offers cheap
spending abroad isn’t worth it: “The
real question is, do you want to
change bank account or just get cheap
spending abroad? If the latter, you
could just get a credit card and set up
a direct debit to clear the balance each
month.” Clearing the balance, he
stresses, is extremely important.
Otherwise, you could be stung by
punitive fees. The best – and worst – of
these cards are ranked on the right.
The security conscious and those
suffering from a bad credit rating,
however, might prefer the slightly
PERSONAL FINANCE NEWS
BY DONATA HUGGINS
BURGLARS TO CASH IN ON WEDDING
While the UK celebrates the royal wed-
ding, AXA, the home insurers, predict a
potentially huge surge in burglaries and
accidental damage insurance claims.
AXA’s research predicts that over four
in ten of us will be away from our
homes for the royal wedding while a
further 21 per cent will throw open our
doors for a party with friends and fami-
ly, providing burglars with perfect con-
ditions for a lucrative weekend.
charges for its customer service
helpline.
Cash may not be the most cost effec-
tive or safe way to get your hands on
foreign currency, but it is pretty essen-
tial. With rates changing all the time,
it is best to log yourself on to
www.travelmoneymax.com, compare
the prices and then get it delivered to
your home. Don’t panic, you haven’t
run out of time. You can still order
cash online and collect it at the
airport. Sounds silly, but it’ll cut the
cost quite substantially.
THE BEST AND WORST FOREIGN
EXCHANGE CREDIT CARDS
The best cards for spending abroad:
l Halifax Clarity (credit card)
l Sainsbury’s Gold (credit card)
l Fair FX (pre pay card)
l Caxton FX (pre pay card)
l Travelex Cash Passport (pre pay card)
The worst for spending abroad:
l Halifax Debit Card
l Lloyds Debit Card
l IF Debit Card
Source: Moneysavingexpert.com
THIRD OF BRITS ON HOLIDAY NEXT WEEK
Over a third (34 per cent) of British
workers have either taken holiday or are
planning to take holiday between the
bank holiday weekends for Easter, the
royal wedding and May Day, according
to research conducted by Lloyds TSB.
With 11 days holiday available for just
three days annual leave for a full time
worker, it is no wonder so many are
keen to make the most of this opportuni-
ty to relax.

WEDDINGS NOW PAID FOR BY COUPLES IPHONES NOT COVERED BY INSURANCE

Call 0800 027 5227 or visit www.scottishmortgageit.com Today’s engaged couples are taking
greater financial control over their wed-
The Scottish Mortgage Investment Trust is available ding. With nearly two thirds (61 per
as a Share Plan or an ISA cent) footing the majority of the costs
themselves, they are saving more and
spending less ahead of their big day,
according to research from Tesco Bank.
We may record your call. Baillie Gifford Savings Management Limited is the manager of the Baillie Gifford Investment Trust The research highlights a shift in the
Share Plan and Investment Trust ISA and is wholly owned by Baillie Gifford & Co, which is the manager and secretary of
the Scottish Mortgage Investment Trust PLC. Baillie Gifford Savings Management Limited, Calton Square, 1 Greenside way in which weddings are paid for –
Row, Edinburgh EH1 3AN. just one in five (20 per cent) of those
due to marry will get financial support
from the bride’s family.
While 99 per cent of mobile phone insur-
ance policies cover theft of normal hand-
sets and smartphones, only 74 per cent
of mobile phone insurance policies cover
the theft of iPhones, according to finan-
cial research firm Defaqto. Brian Brown,
Defaqto’s head of research, warned: “It
is essential that people match the fea-
tures and benefits they require from a
mobile phone insurance product with
those provided by the policy they
choose.”
CITYA.M. 21 APRIL 2011 Wealth Management | Isas 27

Now is the time to

transfer old Isas
Ignorance is not bliss if trying to save, says Philip Salter

M
ILLIONS of consumers know all
about the benefits of sheltering
savings under the umbrella of a
tax-free Individual Savings
Account (Isa), and for good reason.
However, many people are losing hand
over fist on previous years’ cash Isas and
paying unnecessary charges on shares Isas.
Transferring both is easy; although there
are a few things you should know before
making the move.
WATCH YOUR RATE
Consumer Focus recently revealed that
the average interest rate for cash Isas is a
staggeringly low 0.43 per cent. This is
because rates often plummet after the
first year. To put this into an inflationary
context, if you had held cash in an Isa
earning 0.43 per cent from 2001 to 2010, it
would have lost around 17.7 per cent of its
value, based on retail price index (RPI)
inflation figures. You should keep an eye
on your Isas throughout the financial year.
Although base rates have been at 0.5 per
cent since March 2009, at some point they
will go up. Because most cash Isa rates are
variable, hikes in the base rate could make
another provider more comparatively
attractive.
KNOW THE TRANSFER RULES Many have their cash
The most important thing to remember Isas in rubbish
when transferring an Isa is not to with- accounts
draw it. “If you take the money out and
move it yourself, it will lose its tax-free sta- Picture: ALAMY
tus,” warns Michelle Slade of Moneyfacts.
The process of transferring is easy. Martin
Lewis at MoneySavingExpert.com directs
investors to “speak to the new provider
and fill out a transfer form. This will usu-
ally include a note you can send to your
existing Isa company. Your new company
should then sort it all out, including mov-
ing the money over for you.”
According to Perry Braithwaite of the
Investment Management Association
(IMA), “subscriptions to a stocks and shares
Isa can only be transferred to another er, without breaching the one–Isa-of-each- solidating all Isas under one roof means
stocks and shares Isa,” while “subscrip- type-a-tax-year rule,” says Braithwaite. that in all likelihood, Isa charges will be
tions to a cash Isa can be transferred to reduced,” says Harrison.
another cash Isa, or to a stocks and shares CONSOLIDATE SHARES ISAS Daniel Kahneman won the Nobel Prize
Isa.” If you have some cash under an Isa For shares Isas, Georgette Harrison of for Economics on the back of prospect the-
umbrella, but want to move it into shares, Selftrade advises that savers “always check ory. It argues that people feel more pain
you can do so even if you took it out this that the receiving broker can cater for from losing something they already had,
year. “This means that the investor is your existing investments, especially if than happiness on gaining something
regarded as never having subscribed to the holding overseas stocks.” Unless there is a they didn’t. Given how much is lost on the
cash Isa. Within the overall subscription strategic reason for holding lots of differ- average cash Isa, this suggests either an
limit, therefore, the investor may sub- ent shares Isas, consolidation might be uninformed public or an incomplete theo-
scribe to a cash Isa later in the current worth considering. “Many Isa providers ry. Either way, now is the time to do your
year, with the same or a different manag- charge an annual management fee, so con- bit to help prove the theory right.

A top tax-free rate

for our savers. LOYALTY ISA
Just as we promised
With the launch of our seven Savings Promises, we made a real commitment
to help our customers make the most of their savings.
One of the Promises, number 2, said ‘we will reward existing savers with
4.20
3 Year Loyalty Fixed Rate ISA
%
AER
TAX-FREE

exclusive savings products’.2 ~
4gR[dbXeT[h
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bPeTab
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WPeT

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db

And because we believe in keeping our promises, we’re delighted to introduce U^a
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this exclusive Loyalty Fixed Rate ISA, offering a very competitive savings rate – ~
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and because it’s a cash ISA, it’s tax-free too.
~
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We recognise the importance of rewarding our existing customers and ~
<X]X\d\
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with no shareholders to worry about, we’re able to do something about it. =^c
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RPbW
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With no shareholders our only focus is you

SAVINGS
PROMISE

2
ASK us in branch VISIT nationwide.co.uk

1
Excludes accounts held with Cheshire Building Society, Derbyshire Building Society and Dunfermline Building Society. 2Product eligibility criteria may vary.
Loyalty ISA is a cash ISA. Our Savings Promises will form part of your savings account terms and conditions. These Savings Promises DO NOT apply to accounts opened with Cheshire Building Society, Derbyshire Building Society and Dunfermline Building Society. Minimum opening
age 16 years. AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. Tax-free is the contractual rate of interest payable where interest is exempt from Income Tax. Tax information is based on our current
understanding of the current tax legislation and HM Revenue & Customs practice, both of which may change. The rate advertised is a limited offer and may be withdrawn without notice. Rate correct as at 06/04/2011. Applications are required. Standard terms and conditions available on
request. Nationwide Building Society, Nationwide House, Pipers Way, Swindon, Wiltshire SN38 1NW.
 28 Wealth Management | Markets CITYA.M. 21 APRIL 2011

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Lifestyle
Royal A right
WEDDING
Ditch the cynicism. It’s time to get in the mood, says Zoe Strimpel
W
e at City A.M. can be a
cynical bunch. We con-
fess there have been
moments in the run-
up to the royal wedding on 29 April that
have made us roll our eyes, such as T
Mobile’s yawnsome wedding spoof video
and the release of the awful-looking
William & Kate: The Movie. Others,
though, have raised woops of joy, such as
the delivery of a Will and Kate
commemorative dishtowel and
royal wedding sushi plate.
But in the end, cynicism
won’t make us happy – nor
you either. So we say: just
give up and get into the
spirit of the royal nup-
tials. Here are seven ways
to do it.
1 Get in touch with
your inner Sloane.
Start geographically, and
head to the King’s Road,
where you should stop by
Crazy Larry’s and of course,
Public, Will’s best mate Guy
Pelly’s latest venture. Pucci
Pizza on King’s Road is also a
Sloaney must for sustenance
(be sure not to eat more than a bite or
two, though). Nip into Peter Jones, too, for
some Kate-style gifts. Life’s not just
about drinking and shopping, one
must take exercise, too, so enroll in
ZARA PHILLIPS’ 29
FAVOURITE BIT OF
PORTUGAL
IN TRAVEL ON TUESDAY
Clockwise from right: polo lessons, the royal sport of choice
a royal pillow from (start at www.polo.co.uk).
Mydeco.com (£90);
high tea on the ter-
race at the Goring
Hotel; Windsor Castle;
Will and Kate fairy
2 Party like a royal. Line your stomach
with high tea at the Goring Hotel in
Belgravia, where the Middletons will be
cakes from Lola’s staying for the wedding. Then head out
Cupcakes; the into the Kensington night, aided by a mag-
Princess Catherine num of Snow Queen vodka at Boujis, Kate
Engagement Doll, £35 and Will’s notorious favourite haunt,
at Hamleys, and Kate before heading on to the speakeasy Bart’s
herself, at the Day-Glo on Sloane Avenue, where the super-sweet
Charity Roller Disco at cocktail list will knock you out, royally.
the Renaissance
Rooms in Vauxhall in
2008.
3 Take your kids
around Eton and
Marlborough – if
you want them
to mix with roy-
alty and walk (£20). Then there’s a
in the foot-
steps of Will
and Kate,
special edition Austin
Reed tie, Will and
Kate teabags (avail-
that is. Eton’s able at
imposing Q u i n te s s e n t i a l ly
brickwork Gifts) and even a Will
and glorious and Kate condom –
quandrangles available at some cen-
make for a love- tral London newsagents.
ly day out, while And don’t forget the Yo!
Marlborough’s in a Sushi wedding plate, the
lovely Wiltshire mar- dishtowel and the doll.
ket town. Eton is so
close to Windsor Castle it
would be criminal not to pop into the
royal residence. 6 Dress like you’re entitled to the
throne. Wear a sheer dress with
your pants showing, as Kate was when she
first enticed Will, and preferably go roller
4 Embrace patriot-
ism. Spend a night
at the Union Jack room
discoing at the same time, another of
Kate’s favourite activities. Or if you’re a
bloke, head to Gieves and Hawkes – the
at the newly opened tailor who made Will’s RAF – and wed-
Zetter Hotel in ding – uniform. Even David Cameron will
Clerkenwell, where union be going to the wedding in tails – the com-
jack bunting decks the bed. moner look that he displayed on his
thezetter.com recent EasyJet holiday so last season.
5 Stock up on commemo-
rative tat. Come on –
you know you want a selection
7 Throw a street party. Stock up on cakes
by Fiona Cairns (www.fionacairns.com)
who is making the royal wedding cake.
of wedding mugs. Harvey Nicks We think it’s worth making a one-off wed-
has a particulary fetching one ding cocktail, too: elderflower cordial,
with “Quince William and Skate champagne, gin and a splash of strawber-
Middleton” written on the side ry jam. A Kate Royale.
 30 Lifestyle | Technology CITYA.M. 21 APRIL 2011

WHAT’S NEW IN The best of...

British
GADGETS AND
TECHNOLOGY
BY TIMOTHY BARBER
NICK
BOOTH
TECH TALK
UK companies produce some of the most advanced audio
technology in the world. Timothy Barber pays his respects Voicemail a
T problem? Say
ECH enthusiasts like to think themselves a pret- ting rooms. No, this is about talking highly-specialised,
ty unflappable bunch, but just now we can’t help cost-of-a-car technology for dedicated audiophiles.
coming over all patriotic. The fact is, one of the Companies like Meridian, KEF and Naim have been
little-celebrated things at which the Brits are breaking boundaries, patenting technology and lead-

hello to Hullo
world-leaders is high-end audio technology. We’re not ing the way in these areas for years. Today, wiping away
talking the kind of thing most people have in their sit- a proud tear, we salute them. Atten-SHUN!

WONDER WATCHES FOR GADGET JUNKIES

I
F you work in a financial institution, your
At last month’s BaselWorld Watch & Jewellery employer is obliged to record all your
fair in Switzerland, the annual shindig in which mobile calls, texts and instant messages.
the world’s watch companies get together to Even your personal calls, your compliance
show off their latest creations, the watches that officer will argue, are covered by the FSA reg-
held particular appeal for gadget fans ranged ulations.
from the disarmingly simple to the unbelievably NAIM AUDIO So why not give the nosy jobsworth some-
complicated. thing to think about as he snoops on your pri-
Audiophiles regard the CD players
In the simple (red) corner there was Bell &
Salisbury-based Naim produces as being
MERIDIAN vate life? Get creative with your messaging!
Ross, a company known for its chunky, military- Download some clever messaging apps for
style aviation timepieces. Its BR 01 Red Radar among the finest on the planet, and peo- Meridian is the daddy of the British audiophile your smart phone. A search in the
looks like the kind of thing you’d find in the con- ple happily pay five figure sums to own industry. Founded in 1977 and based in Marketplace portal, for example, uncovers a
trol deck of a submarine, and consists of three them. The company makes all manner of Cambridgeshire, it’s most famous for its spectacu- free app called Hullomail.
discs rotating at different speeds – the outer disc Hullomail was designed to improve on the
shows the hours, the middle the minutes and the ultra-high-end music systems, including lar digital active loud speakers that have to be seen dreadful default voice messaging service that
inner the seconds. Simple, but very cool. this award-winning integrated player. and heard to be believed. The latest Meridian cre- most mobiles use. It takes forever to listen to
Over in the complicated-and-then-some cor- Naim is also behind the in-car audio sys- ation, the Audio Core 200 comes with dinky mini the backlog of messages on one’s mobile,
ner, we have the Opus 11 from Harry Winston, tems for Bentley cars. versions of the speakers. especially if your contacts leave long rambling
one of the most remarkable feats of engineering £5,250 www.meridian.co.uk dictations which never speed up until they
and design anyone will ever strap to their wrist.
£2,495 www.naimaudio.com blurt out the contact number at the end.
Designed by horologist extraordinaire Denis Using Hullomail, you get the message record-
Giguet, it uses rotating, revolving placards to ORBITSOUND ed and forwarded to your phone and your
“explode” the centrally-displayed hour time desktop PC.
every 60 minutes, re-ordering into the new hour. The new kid on the block, Orbitsound This makes message management much
Minutes are shown in rotating disks in separate launched in 2008 specialising in “spatial quicker and more convenient. Even if you lose
housing. Only 111 are being made. stereo” – using very clever tech to cre- your mobile, you can still pick up your mes-
www.bellross.com; www.harrywinston.com ate a surround sound effect that doesn’t sages on your computer. It might even make
your personal messages pass under the radar
depend on placing multiple speakers of your nosy compliance officer. You can
around the room. The T12 Soundbar is record messages and send them to friends
designed for use on home cinema sys- VITA AUDIO too. These sound files might even be a way to
KEF tems, and also has an iPod dock func- escape his attention.
Vita Audio was founded five And if someone’s making bothersome calls,
tion. Nifty.
Based in Maidstone in Kent – the name years ago by Brit loudspeaker you can publish the recordings of them on the
£299 www.orbitsound.com web. The Facebook link makes it really easy. (I
stands for Kent Engineering & Foundry maker Ruark, with the aim of cre-
once exposed a death threat-making telecoms
– KEF was founded in 1961 in a Nissen ating cool compact audio systems boss this way.)
hut on the premises of a metal working and radios. The newly-launched Hullomail also lets you personalise your
business. It’s now producing exemplary R4i integrated music centre sums greeting for every caller. This is great for man-
audio-gear, including the T-series of up Vita Audio’s amalgamation of aging both your customers and your personal
ultra-thin speakers which use unique retro-cool design and top audio life. In fact, your smart phone can play a dif-
ferent message for everyone in your contacts
British technology. quality. book. Make sure you record a really ripe one
£1,700 www.kef.com £630 www.vitaaudio.com for the compliance jobsworth at your work.
Nick Booth edits www.mobbed-online.com

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CITYA.M. 21 APRIL 2011
A jazz sensation
comes to town
Boisdale Canary Wharf is the
UK’s hottest jazz destination, live
and on air, says Susan Sherwin
T
HE glittering opening of Boisdale in
Canary Wharf last week was one of
the most exciting in the Docklands
in a long while.
One of the main attractions of the new
Boisdale is its superlative jazz offering, in
conjunction with Jazz FM and Aberdeen
Asset Management. Jazz FM’s Discovery
Show, supported by City firm Aberdeen
Asset Management, is live every
Wednesday night at Boisdale of Canary
Wharf. Each week the Discovery Show
searches far and wide to find the very best
undiscovered talent in Blues, Soul, Funk
and Jazz.
“This is a first for Jazz FM,” says Jazz FM’s
Chief Exec, Richard Wheatly. “We are
always looking for new ways to both sup-
port the extraordinary wealth of new jazz
talent coming out of the UK and explore
innovative programming formats. The
Discovery Show will offer a perfect plat-
form to do just that.”
The Discovery Show was launched on 14
April by revered musician Jools Holland,
UNC
OVE
RING
UNDERV
E VERY WEDNESDAY 8PM
FOLLOW US FOR} SHOW UPDATES ON:
FACEBOOK.COM/ THEDISCOVERYSHOW
T WIT TER.COM/DISCOVERYSHOWUK
Lifestyle 31
Boisdale’s “Patron of Music”. The first night
played host to Kate Threlfall, a singer-song-
writer-pianist from Liverpool, who possess-
es a voice of sheer beauty and unbelievable
soul, and Bad Ass Brass, fresh from success
after winning a Facebook competition to
perform at the St. Lucia Jazz Festival.
This is the third initiative that Aberdeen
Top: the jazz stage at Asset Management has partnered with Jazz
Boisdale Canary FM. Aberdeen’s global head of marketing,
Wharf; bottom left: Piers Currie, adds: “It fits with our own
Jools Holland in front investment philosophy that always aims to
of the whisky bar at unearth undervalued quality. The
Boisdale; bottom Discovery Show builds on an existing rela-
right: bassist Johanes tionship we have already with Jazz FM that
Refsdal with Kate includes the “Jazz in the City” weekly City
Threlfall’s band programme. Jazz lovers are also universal
which appeals to us as a global business.”
If you’d rather be there in person, the
week of 27 April features two extremely tal-
ented bands, Vintage Trouble and Anthony
Strong. Both are absolutely not to be
missed, and are among the most exciting
jazz performers in the world today.
Need to know: Where? Boisdale, Canary
Wharf, Cabot Square. When? Every Wednesday.
What time? Doors at 6pm, music starts at 9pm.
How can I get tickets? www.boisdale.co.uk/tickets.
Where can I listen to the recorded show? 9pm
every Tuesday on Jazz FM (DAB radio) or at
www.jazzfm.com. For more information, go to
www.jazzfm.com
The Discovery Show
features world-class
jazz, blues, funk and
soul performances
by unknown jazz acts
that merit discovery
by the British jazz
loving public.
BROADC A ST
EVERY TUESDAY
S AT 9 PM
Y GEM
UALIT ON JA ZZ FM
ALUED BUT HIGH-Q
OF C ANARY WHARF
C ABOT PL ACE, C ANARY WHARF, E 14 4 QT
PROUDLY SUPPORTED BY:
 32 Lifestyle | TV& Games CITYA.M. 21 APRIL 2011

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK

TERRESTRIAL
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Stop Pimping Our Kids 8pm Gladiator: The True Story:
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Ridley Scott’s film: 5 News at 9
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9pm CHOICE Most Shocking BBC1, 8PM
Talent Show Moments
Snowbombing Road Trip 2011 Anne Robinson, Matt Allwright and
12.25am The JD Set: London 12am SuperCasino Chris Hollins investigate a holiday
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3.05am Unreported World 3.30am Decorate 4.55am Animal Rescue
Decoding Da Vinci 5.20am Truel Squad 5.10am Wildlife SOS
5.35am-6.20am Countdown 5.35am-6am House Doctor

SKY SPORTS 1 BRITISH EUROSPORT 4.20am Nothing to Declare 2am Shameless 2.55am Ugly DISCOVERY HOME &
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7pm Live Premier League Darts
10.30pm Ringside 11.30pm Time
of Our Lives 12.30am Premier
League World 1am Premier
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5.30am-6am Aerobics Oz Style
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Championship 10pm Boxing
12am-12.30am MotoGP
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7pm Goal! 7.30pm Live
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Premier League Review 10pm
The Ultimate Fighter 11pm NBA
Tonight 11.30pm NBA Action
12am ESPN Kicks: Extra 12.15am
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ESPN Press Pass 1am Live Major
League Soccer 3am ESPN Kicks:
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3.30am AMA Supercross
5.30am-6am Planet Speed
SKY LIVING
7pm CSI: Crime Scene
Investigation: A youngster goes
missing. 8pm Chuck 9pm 16 &
Pregnant 10pm Katie 11pm
Criminal Minds 12am Ghost
Whisperer 1am CSI: Crime Scene
Investigation 2.40am Charmed
5.10am-6am Maury
BBC THREE
7pm Top Gear 8pm Police
Academy UK 9pm Misbehaving
Mums-to-Be 10pm EastEnders
10.30pm Russell Howard’s Good
News 11pm Family Guy 11.45pm
Misbehaving Mums-to-Be
12.45am Russell Howard’s Good
News 1.15am Is Breast Best?
Cherry Healey Investigates
2.15am Police Academy UK
3.15am So What If My Baby Is
Born Like Me? 4.15am-5.10am Is
Breast Best? Cherry Healey
Investigates
E4
7pm Hollyoaks: Suspicion falls on
Dodger for the Price Slice
robbery. 7.30pm Friends 9pm
Glory Daze 10pm The
Inbetweeners 11pm Shameless
12.10am My Name Is Earl
1.05am The Inbetweeners
Betty 3.35am Beehive 4am The
Class 4.20am-6am Switched HEALTH
7pm A Baby Story 8pm 18 Kids
HISTORY and Counting 9pm I Didn’t Know
7pm America: The Story of the I Was Pregnant 10pm I’m
US 8pm IRT Deadliest Roads Pregnant and 55 Years Old A HISTORY OF CELTIC BRITAIN
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Snapped: Women Who Kill 12am Addicted 11pm A&E 12am I Neil Oliver charts the brutal battles
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the US 4am The Universe and Counting 4am Bringing
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8pm Wheeler Dealers 9pm Flying SKY1
Wild Alaska 10pm HMS Ark 8pm Hawaii Five-0 9pm Martina
Royal 11.30pm Disaster Cole’s The Runaway 10pm House
Eyewitness 12am Bear Grylls: 11pm NCIS: Los Angeles 12am
Born Survivor 1am Trawler Wars Customs UK 1am Road Wars MOST SHOCKING TALENT SHOW
2am Future Weapons 3am 1.50am Border Invasion USA MOMENTS CHANNEL5, 9PM
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The First World War 4am Factor 4.20am Myths, Magic and and controversial contestants from
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QUICK CROSSWORD
   

SUDOKU KAKURO
39 23 11 34 9 27 
11 11 15
12 8 
15 7
Place the numbers from 1 to 9 in each empty cell so that each 19  
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 45
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 7 22 12
  
above or to the left of it. 6 23
You can only use the digits 1-9 20 15  
    and you must not use the
20 38 22
10 30   
same digit twice in a block. 16
  The same digit may occur 13 10  
19 13 29
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column, but it must be in a
6
11
8
16
8

45
   separate block. 
24 35
    4 9 13


   ACROSS DOWN
1 Ocean floor (6) 1 Fibre used for
 
  WORDWHEEL A B
6 Dictates (6)
7 Thin layers of rock
making rope (5)
2 Annoy (6)
Using only the letters in the Wordwheel, you have used for roofing (6) 3 Sleep in a convenient
    ten minutes to find as many words as possible,
S N place (4)
8 Refuse to work,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters E as a protest (6) 4 Makes up one’s mind (7)

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
I R 10 Fails to win (5)
13 Tread roughly (7)
5 County which borders
the Thames estuary
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
M U 16 Display stand for
and the North Sea (5)
9 Use a keyboard (4)
QUICK CROSSWORD 9 5 8 6 8 7 2 9
a painting (5)

S O C I A L B D
3 1 4 2 2 5 1 3 SUDOKU          18 Borne on the water (6)
11 Emanating from
stars (7)
7 9 8 9
        
E R O D I O U S
8 3 7 9 1 6 3 2 20 Cipher used by
T H I N G S P V          12 Epic tale (4)
T S A T E L I E R 1 2 6 5 8 3 9 7 4 Germany during
        
E D I T S A T 4 1 2 World War II (6) 14 Women (6)
WORDWHEEL
E S A P I E N T E         
1 3 9 8 7 4 5 2 6
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9 6 8 7 7 8 5 9
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I D Y L L I C E O         
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2 6 3 1 The nine-letter word was 22 Muslim place of 17 Depart, go (5)
S A F A R I S Y 8 4 7 9 2 9 4 8         
R U S C R E A M 3 1 2 8 1 7 3 2
LABYRINTH         
worship (6)
19 School period (4)
 Sport
Newcastle hard knocks fail
to deter dignified Hughton
Spurs hero on Toon, race and why Harry
deserves England job. By Frank Dalleres
I
F football’s marketing men want
an antidote to the bad examples
set by Wayne Rooney snarling
into the nearest TV camera and
managers furiously haranguing offi-
cials, then they could do far worse
than Chris Hughton.
The former Newcastle boss was dig-
nity personified when unceremoni-
ously dumped by the Tyneside club in
December, despite hauling them
back into the top flight in his first
campaign and making a decent start
to the season.
Hughton refused to criticise
Newcastle’s maverick owner, the
sportswear businessman Mike Ashley,
for a decision that baffled pundits
and even now, four months on,
betrays only a hint of the turmoil he
must have felt.
“There are lots of emotions, as
always when you leave a club you
don’t want to leave. But what I’ve
done – and I think it’s the correct way
to be – is kept most of those emotions
to myself,” Hughton tells City A.M.
“The reality is you can’t do any-
thing about it. All you can do is learn
from the experience and want to be
better. And I think that when I left
the club I didn’t particularly have to
say too much, because an awful lot
was said for me.”
His players were quick to express
dismay at the ousting of Hughton, a
Tottenham defender and then coach
who joined the Newcastle backroom
set-up in 2008 before being handed
the reins after relegation a year later.
For some the episode would have
left a bitter taste – Kevin Keegan, one
of his predecessors, sued the club
after falling out with Ashley and quit-
ting – yet Hughton still recalls his
time at St James’ Park fondly.
“There’s no doubt it’s a club I did-
n’t want to leave; I enjoyed a very
good period there. But I’m also realis-
tic: there were some difficult times
there too,” says the Stratford-born 52-
SPORT | IN BRIEF
Malinga omitted by Sri Lanka
CRICKET: Sri Lanka will be without fast
bowler Lasith Malinga and all-rounder
Angelo Mathews for the upcoming Test
series in England. Malinga is being saved
for the one-day series while Mathews
misses out on a place in the 16-man
squad with a quad injury. Their absence
leaves Sri Lanka’s bowling attack short
of experience, with Dilhara Fernando as
the leading seam bowler.
Kaymer: McIlroy will recover
GOLF: World No1 Martin Kaymer
believes Rory McIlroy will be in con-
tention for Majors in the future despite
his final-day collapse at the Masters ear-
lier this month. Kaymer says the
Northern Irishman, who is only 21, has
youth on his side and will be in con-
tention for Majors “many, many times”.
“Everybody has to learn how to be in the
position that he has been in. He is a fan-
tastic player,” Kaymer said.
year-old. “I think those experiences
improved me as a coach and a manag-
er. It was a wonderful task for me to
bring the team back up again and do
well enough in the Barclays Premier
League. It’s a fantastic club and I’ve
got far more good memories than
bad memories.”
Far from being put off manage-
ment by his first permanent role,
the softly-spoken Hughton is itch-
ing to start his next project. He had
talks with West Brom before they
plumped for Roy Hodgson in
February, is hoping more doors
will open in the summer, and is
willing to take charge in the
Championship again if a top
flight outfit does not come call-
ing.
“I’m very open. For me what’s
important is to get back in. I know
how many good managers are out of
work and how difficult jobs are to
come by,” he adds. “I very much
enjoyed the experience and the job
that I did and of course you miss it, so
I’m looking to get back in as quickly
as possible.”
BLACK MANAGERS
Hughton is one of the very few black
players to make the step into manage-
ment – only one, Charlton’s Chris
Powell, is currently employed in the
entire professional game. But while
acknowledging the unacceptable sta-
tistic, he does not believe his race will
hinder his job prospects.
“I don’t think it’s an issue,” he says.
“It’s disappointing there aren’t more
black managers at any level and I
know this is something that’s being
addressed. But I feel my long period
as a coach put me in very good stead
for management. I enjoyed Newcastle
and think most people would look at
that as opposed to anything else.”
Hughton, who left Spurs in 2007,
knows more than most about life at
White Hart Lane and believes Harry
Pietersen’s totally committed to England, says Gough
Former England
star tells James
Goldman KP will
be around for years
FORMER England bowler Darren
Gough has dismissed suggestions
that Kevin Pietersen needs to reaf-
firm his commitment to his adopted
country, but admits no longer being
considered as the side’s talisman has
had an adverse affect on his game.
Gough’s former Yorkshire and
England team-mate Michael Vaughan
last week suggested South African-
born Pietersen had become “distract-
ed” and “needed to convince
supporters he’s desperate to play for
England”. Pietersen’s form has deteri-
33
WASPS STAR POWELL’S
FUTURE IN DOUBT
FORWARD IN HOT WATER OVER
BAR-ROOM BRAWL: PAGE 34
THREE BACKROOM STAFF WHO
REVELLED IN STEP UP TO TOP JOB...
Jose Mourinho First
hired as a translator,
he worked his way
up to a big break at
Benfica. Has since
won major trophies
with Porto, Chelsea,
and Inter Milan. Now
at Real Madrid
Steve McClaren No2
to Sir Alex Ferguson
when Man Utd won
the treble, he won
League Cup and got
to Uefa Cup final as
Middlesbrough boss,
earning him an ill-
fated England stint
Nigel Adkins Physio
Adkins took charge
at Scunthorpe when
Brian Laws left. He
took them up, then
down, then up again,
and moved on to the
more high-profile
Southampton
Hughton started out at Spurs
...AND THREE COACHES WHO
FLOPPED IN MANAGEMENT
Brian Kidd Sir Alex’s
No2 during the 90s,
Kidd was given the
chance to step up at
Blackburn but led
them to relegation
and hasn’t managed
ever again
Sammy Lee Former
Liverpool player and
coach Lee was No2
to Sam Allardyce at
Bolton and replaced
him when he left but
Hughton took Newcastle up and is looking for a new role Pics: GETTY, ACTION IMAGES was sacked after just
one win in 11 games
Redknapp has since taken the north shout about it, but must have done
Londoners to new heights. enough to earn another shot at the Chris Hutchings
“This is the best Spurs squad that I Premier League soon. Twice he took over
can remember,” he says. “Any acco- Chris Hughton was speaking on behalf of when his old boss
lades Harry has got regarding one day Barclays Ticket Office, which is giving fans Paul Jewell left, first
being England manager are solely the chance to win a pair of free Barclays
at Bradford and then
down to the job he’s done at Premier League tickets every 90 minutes
Tottenham.” throughout the 2010-11 Barclays Premier Wigan; twice he was
While Redknapp ponders his next League season. Request a receipt from any sacked after just 12
career move, Hughton does so too, in Barclays ATM to enter, or visit www.bar- miserable matches
his own modest manner. He won’t claysticketoffice.com
orated since he was relieved of the
England captaincy over two years ago
Alastair Cook did in Australia scoring
all those runs and Eoin Morgan now
there comes a time when you need to
change the way you play.
in controversial circumstances – he’s
passed three figures in Test matches
looks like being our most reliable
one-day batsman. There are other
“Even the greats like Sachin
Tendulkar go through those periods.
only once since 2009 and is without a
one-day international century for
players now that have kicked on and
gone in front of him.
Like Kevin he’s had to deal with a cou-
ple of serious injuries. He’s always
almost two-and-a-half years – and
Gough sympathises with
“It must be hard to adjust and
still be his normal buoyant self
come back stronger and been able to
sustain a career at the top for two
Pietersen’s fall from grace. in the dressing room.” decades. There’s no reason why Kevin
“Kevin Pietersen is one hundred If Pietersen is to rediscover his can’t come back a better player.”
per cent committed to playing best form Gough believes he Gough also backed Pietersen as the
for England,” said Gough. needs to become less pre- ideal candidate to replace Andrew
“There’s no doubt in my dictable at the crease and Strauss, should he decide to quit the
mind he’ll still be playing follow the lead of Sachin one-day captaincy. “I think it would
for England five or six Tendulkar, who has never give Kevin a real shot in the arm if he
years from now. been afraid to make was given the job,” said Gough. “He
“Of course it’s diffi- adjustments in his does things a little differently, thinks
cult for him when he’s technique in order to outside the box and had a decent
always been consid- increase his longevity. record in the short time he had in the
ered the big cheese. “Kevin’s got to the stage now job before.”
Now it looks like peo- where he’s realised bowlers Darren Gough is supporting the launch of
ple are overtaking have worked him out,” he said. Plusnet Fibre Optic Broadband. To find out
him. Look what You get that in your career and more go to plus.net/fibre
 34 Sport CITYA.M. 21 APRIL 2011

+++ DRAMA AS LONDON’S TOP CLUBS JOCKEY FOR POSITION IN THE TOP FOUR +++

MANCHESTER 1
LONDON 0
Banned Wasps star Powell Picture: PA

Powell’s future
at Wasps hangs
in the balance Thrilling derby draw is no use to
Arsenal or Spurs in bids for the
▲

RUGBY UNION
WASPS are considering the future of
title and Champions League spot
their suspended Wales star Andy
Powell, who was involved in a bar
room fight with a group of football
fans on Monday.
The 29-year-old, who has been
charged with bringing the club into
disrepute along with England inter-
national Tim Payne, faces a discipli-
nary hearing next week.
Powell risked angering his employ-
ers still further on Tuesday by break- Van der Vaart struck
ing his silence on the incident which twice to deny Arsenal a
he claimed saw him lose “two pints of win at White Hart Lane
blood”.
Wasps are considering terminating Picture: PA
the player’s contract, but Powell has
gained an ally in the shape of
Damien Hopley the chairman of the val. Earlier, Rafael van der Vaart’s going forward. Huddlestone’s was an neatly slotted past Heurelho Gomes,
Professional Rugby Players’ fine strike came in between well amazing goal. but Van der Vaart blasted Tottenham
Association. TOTTENHAM 3 taken goals from Theo Walcott and “Our mental strength is outstand- level 82 seconds later with a shot
He said: “I am urging caution from Samir Nasri, but it was Tom ing. We have faced criticism but this that fizzed in at the near post.
all parties concerned before they start Huddlestone’s 44th minute thunder- team deserves much more.” Arsenal regained their composure
castigating the payers involved before
the full facts are known.”
ARSENAL 3 bolt which changed the contest.
Spurs bossed large periods of the
Despite the encouraging nature of
their latest act of north London
and advantage 10 minutes later
when Nasri’s low drive flew past an
second-half and it was no surprise derby escapology, Harry Redknapp unsighted Gomes and Van Persie
▲

PREMIER LEAGUE when Van der Vaart’s penalty lev- was the more pessimistic of the two looked to have sealed victory when

SPORT BY JAMES GOLDMAN

ARSENAL manager Arsene Wenger

elled matters to earn his side a point
which may have scuppered Arsenal’s
title hopes, but in truth does little to
managers, insisting City, who hold a
two-point advantage, are strong
favourites to claim fourth place and
he thumped home from close range
after his initial header had been
clawed out by Gomes.

FOOTBALL refused to concede the title to

Manchester United despite seeing his
side throw away a two-goal lead
bridge the gap between them and
fourth placed Manchester City.
Despite the loss of two points, a
entry into the Champions League.
“City were favourites at the start of
the year because of their squad,” said
A weak clearance from Cesc
Fabregas, however, fell
Huddlestone a minute before the
to

against north London rivals Spurs
CHRIS for the second time this season.
On this occasion they at least
HUGHTON hung on for a point, but they will
feel they should have collected a
INTERVIEW maximum haul once Robin van
Persie had lashed them into a 3-1
PAGE 33 lead four minutes before the inter-
defiant Wenger said: “It’s not over.
We’ll fight. In the second half we
dropped physically because we had a
difficult game on Sunday. We’ve had
two games in three days, our recov-
ery was a bit short.
“We came here to score goals and
played a team who are very good
Redknapp. “We finished a couple of break and the England midfielder
points above them last year and
they’ve spent about £150m. But I
thumped home a magnificent strike
from 25 yards.
can’t ask for more. The spirit we’ve
got is fantastic. We never give up.”
And Spurs earned a point when
Van der Vaart converted from the
The tone for a memorable night
was set in the fifth minute by
spot with 20 minutes left after
Wojciech Szczesny brought down
Walcott, who sprinted clear and substitute Aaron Lennon.

THERE’S RUGBY

THEN THERE’S BARBARIANS RUGBY

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 CITYA.M. 21 APRIL 2011
+++ DRAMA AS LONDON’S TOP CLUBS JOCKEY FOR POSITION IN THE TOP FOUR +++
THE RUN-IN | FIVE KEY CLASHES
CHELSEA V TOTTENHAM, 30 APRIL
If Tottenham are to make the top four
again, just as last season, they’ll have to
do it the hard way. This time last year
they beat Arsenal and Chelsea at home
in the space of four days. They’ll have to
something similar if they are to over-
haul Manchester City.
ARSENAL V MAN UTD, 1 MAY
The title may have gone, but Arsenal’s
hopes of automatic qualification for
next season’s Champions League may
depend on a positive result here should
their recent slide continue. Nothing
about their recent head-to-head record
against United will give them hope of
securing a much needed victory here.
MAN UTD V CHELSEA, 8 MAY
This could well turn out to be the game
that sees United clinch the title, in a role
reversal from last season when
Chelsea’s 2-1 win at Old Trafford saw
them all but reclaim the Premier League
crown.
MAN CITY V TOTTENHAM, 10 MAY
Roberto Mancini’s men will be out for
revenge. In last season’s corresponding
fixture, the penultimate game of that
campaign, Peter Crouch’s late goal gave
Spurs a 1-0 win which saw them qualify
for Europe’s premier club competition
for the first time, at City’s expense.
LIVERPOOL V SPURS, 15 MAY
The Merseysiders are still clinging on to
the hope that sixth place will offer
them a place in next season’s Europa
League. A trip to Anfield was not such a
daunting prospect earlier this season,
but the return of Kenny Dalglish and
January signings of Luis Suarez and
Andy Carroll have changed that. Spurs
have a quite appalling record there, too.
TOP SIX
TEAM PLD W D L F A PTS
Man Utd 33 20 10 3 70 32 70
Chelsea 33 19 7 7 61 27 64
Arsenal 33 18 10 5 66 34 64
Man City 32 16 8 8 50 30 56
Tottenham 32 14 12 6 47 39 54
Liverpool 33 14 7 12 46 39 49
Platini apology over price Haye and Klitschko name
of European final tickets the date for showdown
▲
FOOTBALL
BY TOM CLARKE
EUROPEAN chief Michel Platini has
apologised for the high prices of tick-
ets to this year’s Champions League
final at Wembley and has said that
Uefa, the governing body, will look to
introduce a cheaper ticket category
for families in the future.
Fans reacted with outrage when
Uefa announced the cheapest tickets
available for the final on 28 May
would cost £150 plus an additional
administration fee of £26. The cheap-
est package for one adult and one
child costs £338.
Uefa president Platini, who was in
London yesterday for the handover of
the Champions League trophy, said:
“It was a mistake. But it is not easy to
decide the price of the tickets in the
Malouda double has
Chelsea dreaming
Blues back up to second
after comfortable win
and Ancelotti now eyes
late bid to defend their
title, by Frank Dalleres
CHELSEA 3 the quadruple head-to-head over the
BIRMINGHAM 1 League later this month.
CHELSEA manager Carlo Ancelotti
admits his side might just be back in
with a chance of snatching the
Premier League title from under the
noses of Manchester United after
surging into second place.
Two goals from Florent Malouda
and a fine strike by Salomon Kalou
despatched Birmingham and lifted
the resurgent champions ahead of
Arsenal and within six points of the
leaders, who they still have to play.
“There are five games until the
end of the season, our aim is to
win every game and after that we
can see where we are in the table,”
said Ancelotti. “In football I’ve
learned that everything can happen
in the game until the final whistle.
You can win or lose in the last
minute.
“We thought that one month ago
we had a little chance to come back
and fight for the title. Now, we are
happy because we have reached sec-
ond place and we will see what hap-
pens in the next five games.”
Chelsea went into the game with
five wins and a draw from their last
six league games and continued in
that vein instantly, Malouda apply-
ing the final touch virtually on the
goal-line to Didier Drogba’s header
after just two minutes.
Champions League final.”
The Frenchman added that tickets
for the final were now being sold for
far more than Uefa originally
charged.
He added: “We received 200,000
requests for 10,000 tickets and now
on the black market these tickets are
10 times the price we decided.
“Perhaps in the future we have to
have another category for families
that is less expensive. It was not a
good communication and I apologise
about that.”
In the build-up to the final, the
Champions League trophy will be on
display at various venues in London
from today until Friday 20 May, start-
ing at Duke of York Square and taking
in Spitalfields Market (28-30 April)
and Canary Wharf (5-6 May) ending
up at City Hall (17-18 May).
Malouda and Kalou were Chelsea’s goalscorers
Fernando Torres, the £50m British
record signing who is still without a
goal for Chelsea, was left on the
bench but Kalou provided ample
stardust with a fine strike to put
Ancelotti’s men two goals ahead.
With 25 minutes played, the
Ivorian turned towards goal 30 yards
out, drifted past three Birmingham
challenges and thumped an in-
swinging drive that flew past Ben
Foster via his left-hand post.
The visitors, just five above the rel-
BOXING
BY TOM CLARKE
BRITISH world heavyweight champi-
on David Haye’s unification bout
with Wladimir Klitschko will be held
on 2 July at Hamburg’s Imtech Arena,
it was confirmed yesterday.
The fight has taken many months
to organise but Klitschko’s manager
Bernd Boente finally announced the
venue and date for the eagerly-antici-
pated clash between WBA champion
Haye, 30, and IBF and WBO title-hold-
er Klitschko, 35.
“The fight will be July 2 in
Hamburg. It is confirmed 100 per
cent,” Boente said.
“We had different options and held
negotiations in other countries.
Switzerland was in play, Ukraine and
different options in Germany.”
Pictures: PA
egation zone, could only keep
Chelsea and Malouda at bay until
just after the hour, when substitute
Ryan Bertrand swung in a left-wing
cross and the France winger headed
home emphatically.
There was still time for Sebastian
Larsson to slam home a consolation
penalty, awarded for a David Luiz
trip on Matt Derbyshire, but only
after the Swede had argued with
team-mate Craig Gardner over who
would take the spot-kick.
Boente confirmed that all options
were discussed with Haye’s manager
Adam Booth and the decision to go to
Hamburg was made together earlier
this week. The Imtech Arena has a
capacity of 57,000.
Negotiations have been difficult
ever since Haye withdrew from a
scheduled fight in 2009 but the two
camps eventually reached an agree-
ment last month
The Ukrainian has been recovering
from an abdominal injury he suf-
fered in December but, despite the
fact the fight could have been on 25
June or 2 July, Boente denied that the
injury was a factor in the later date
being chosen.
“The date had nothing to do with
Wladimir’s stomach injury,” he said.
“In Hamburg, only 2 July was possible
because of various concerts.”
Sport 35
SPORT | IN BRIEF
West Ham’s Cole fined for tweet
FOOTBALL: West Ham striker Carlton
Cole has been fined and warned about
his future conduct by the Football
Association over comments he made on
Twitter on the night of England’s match
with Ghana. Cole tweeted of the large
number of Ghana fans at Wembley on
the night of the game: “Immigration has
surrounded the Wembley premises.”
Cole was charged with improper con-
duct and received a £20,000 fine.
Ronaldo wins the cup for Real
FOOTBALL: Cristiano Ronaldo’s extra-
time header won the Copa del Rey for
Real Madrid, their first win in the com-
petition since 1993, against Barcelona in
Valencia. The world's most expensive
footballer rose high to meet Angel di
Maria's cross and powered his header
past stand-in Barca keeper Jose Manuel
Pinto in the first period of extra time.
The win secured Jose Mourinho’s first
trophy as Real Madrid boss and, follow-
ing Saturday’s 1-1 La Liga draw at the
Bernabeu, gave Real the advantage in
next month with arch-rivals Barca. The
two clubs meet again in the Champions
Dott beats King but backs Higgins
SNOOKER: Graeme Dott eased past
mark King 10-7 to reach round two at
The Crucible. But Scotsman Dott sees
compatriot John Higgins as favourite for
this year's title. “It’s fair to say John
Higgins would be favourite, because of
the way he's been playing," Dott said.
Dott held off King, who set the highest
break of this year's championship with
138, to clinch a second-round match
against Ali Carter.
Results
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email sport@cityam.com
CitiFX Pro
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