BUSINESS WITH PERSONALITY
INFLATION SPECIAL
Allister Heath p2, News p3, The Capitalist p15 and Andrew Sentance in the Forum p26
ISSUE 1,819 THURSDAY 14 FEBRUARY 2013
VODAFONE MULLS
£5BN CABLE DEAL
BY MARION DAKERS
VODAFONE yesterday became the lat-
est telecoms giant to join the return to
dealmaking, after the firm was linked
to Germany’s biggest cable operator
Kabel Deutschland.
FTSE 100-listed Vodafone is believed
to be discussing a bid for the firm,
which had a market capitalisation of
€5.6bn (£4.85bn) before the takeover
talk sent its shares up almost nine per
cent. Including debt, the group now
has an enterprise value of €8.9bn.
Executives at Vodafone have not yet
made a decision whether to bid and
have not been in contact with Kabel
Deutschland, but are believed to have
studied the merits of a takeover several
times recently.
Analysts said a deal could enable
Vodafone to sell lucrative bundles of
mobile, fixed-line and TV services in
Europe.
The discussions surfaced a week after
a string of blockbuster deals in the sec-
tor. Virgin Media agreed a $23.3bn
(£15bn) takeover by American firm
Liberty Global, Dell revealed a $24.4bn
buyout led by founder Michael Dell,
and Comcast agreed to take the rest of
NBC Universal for $16.7bn.
A bid for Kabel Deutschland would
mark an acceleration in Vodafone’s
race down the acquisitions trail, as it
looks to spend some of the billions in
long-awaited dividends granted by US
partner Verizon Wireless.
The firm last year paid £1.3bn for
Cable & Wireless Worldwide, a pur-
chase that included more than
FTSE 100  6,359.11 +20.73 DOW M 13,982.91 -35.79 NASDAQ  3,196.88 +10.39 £/$ M 1.55 -0.01 £/€ M 1.16 -0.01 €/$M 1.34 -0.01
OUR ANALYSIS OF SIR MERVYN KING’S LAST REPORT
www.cityam.com
Vittorio Colao has been on the acquisition trail since a dividend windfall from Vodafone’s US partner
20,000km of fibre cables in the UK,
and snapped up New Zealand tele-
coms group TelstraClear for £429m.
“Vodafone have said they have a con-
vergence strategy that includes M&A
and they have indicated that they are
interested in fixed assets,” said Espirito
Santo telecoms analyst Nick Brown.
“Liberty Global potentially could coun-
terbid, but after the Virgin Media deal
it may be a good time for Vodafone to
pursue a bid.”
Chief executive Vittorio Colao said
last week, after revealing a disappoint-
ing two per cent slide in quarterly rev-
enues, that Vodafone would look to
make acquisitions to prop up growth.
The firm already has around 3.4m
internet customers in Germany
through its ownership of Arcor, but
stands apart from its European com-
petitors in focusing on mobile opera-
tions, reducing its ability to offer
package deals and offload data traffic
GADGETS TO
WATCH OUT FOR
onto its own fixed line networks.
Espirito Santo noted that a Vodafone-
Kabel Deutschland tie-up could
prompt scrutiny from the German
antitrust watchdog.
However, analysts at Jefferies said a
deal “would elicit little regulatory con-
cern in our view, not least as it would
create a more viable competitor to
Deutsche Telekom”.
BOTTOMLINE: Page 9, DEALS:Page 7
See Page 30
FREE
US airlines
clinch $11bn
mega-merger
BY JAMES WATERSON
THE WORLD’S biggest airline will be
unveiled this morning after the
boards of American Airlines and US
Airways voted late last night to
merge the two businesses in an
$11bn (£7bn) deal.
The combined company will have
1,500 aircraft, $39bn (£25bn) in
annual revenues and employ more
than 100,000 people.
US Airways chief executive Doug
Parker is expected to head the com-
bined business, which will see
American Airlines exit bankruptcy
proceedings after 15 months.
American’s chief executive Tom
Horton will stay on the board for
another year as non-executive chair-
man. Up to $1bn annual savings are
expected as a result of the deal.
The merger is set to give American
creditors 72 per cent of ownership in
the combined company and US
Airways shareholders the rest. The
company will have a board of 12
members: four from US Airways,
three from American and five to be
designated by the American credi-
tors.
As part of the deal, US Airways will
also leave the Star Alliance to join the
oneworld global airline alliance, of
which American Airlines is already a
member along with British Airways.
US Airways will follow through on
its agreement with American unions
last year that the combined carrier
would be branded American Airlines
and be based in Fort Worth, Texas,
where American is currently based,
sources said. US Airways has its head-
quarters in Tempe, Arizona.
The US airline industry has seen a
spate of consolidation over the last
decade after United merged with
Continental and Delta joined forces
with Northwest.
Certified Distribution
from 31/12/12 to 27/01/13 is 127,008

2 NEWS
Stagnant growth and high inflation crippling take home pay
I
F you have lots of debt, own a
home in London with a mortgage,
are employed and hope that your
wages will rise, you may be one of
the great winners of our age. If you
are self-employed, work in the private
sector, have lots of savings and have
limited control over your income, you
are fast becoming one of the losers.
That, in a nutshell, are the conclu-
sions to be drawn from devastating
data showing the extent and distribu-
tion of falling real wages in the UK –
and the Bank of England’s dramatic,
semi-explicit admission that inflation
is now being allowed to rip. Prices will
continue to rise above the target, with
the Bank blaming all sorts of factors
apart from themselves. That suits
some borrowers just fine but is a dis-
aster for many, who wrongly trusted
the authorities to protect the pound.
Real median wages are now slightly
Real wages tumble to below 2003 levels
BY JULIAN HARRIS
REAL wages have sunk to levels last
seen a decade ago, due to stubborn
inflation and sluggish pay growth.
Including the effects of inflation,
the median average UK wage last
year was even lower than it was in
2003, new data revealed yesterday.
The Office for National Statistics
(ONS) said that the median hourly
wage dropped to £11.21 in 2012 –
below 2003, when it would have
been the equivalent of £11.24 when
adjusted to last year’s price levels.
Real wages peaked in 2009 when
they reached an equivalent of £12.25
per hour, adjusted to 2012 prices –
yet they have been on the decline
since, partly due to the UK’s
stubbornly high inflation.
The consumer price index
measure of inflation was confirmed
earlier this week at 2.7 per cent for
January, the 38th straight month
that it has held above the Bank of
England’s two per cent target.
Yesterday, the ONS figures also
revealed a stark drop in the median
average real wage of the self-
employed. Having touched a peak of
£281 per week in 2006/07, at
constant 2012 prices, it was down to
£212 last year.
And London’s self-employed have
seen their median weekly pay drop
from a high of £378 in 2007/08 to
just £250 in 2012.
“In April-June 2012, self-employed
people comprised 14 per cent of
people in employment in the UK and
18 per cent of people in employment
in London,” the ONS report added.
WHAT THE OTHER PAPERS SAY THIS MORNING
Hedge funds win big on yen bets
Hedge fund giants have made billions
betting against the yen in recent months,
marking a return to form for some blue-
blood investors that stumbled after the
financial crisis. Managers who speculate
on economic shifts by trading currencies,
bonds and derivatives have reaped their
biggest gains in years trading on the
Japanese currency.
Tax avoiders face Whitehall ban
Big companies face being banned from
EDITOR’S
LETTER
ALLISTER HEATH
lower than they were in 2003. Average
private sector wages have been falling
since 2009; they peaked in 2008 but
gains seen in previous years have
been undone. Male full-time employ-
ees resident in London earned £15.54
per hour in 2012, compared with
£16.14 in real terms in 2002 – a drop
of 4 per cent.
Public sector workers have done
best. Their incomes started to fall well
after those of their private sector
counterparts; the drops, when they
UK
2003 2012
£11.24 £11.21
-0.26%
MEDIAN HOURLY WAGE AT 2012 CONSTANT PRICES
LONDON*
2003 2012
£15.74 £15.70
-0.25%
MEDIAN HOURLY WAGE AT 2012 CONSTANT PRICES
*includes workers who commute into London
LONDON’S SELF EMPLOYED
2007-08 2010-11
£378 £250
-33.8%
MEDIAN WEEKLY WAGE AT 2010/11 CONSTANT PRICES
MALE WORKERS IN LONDON
£17.33 £20.22
PRIVATE SECTOR PUBLIC SECTOR
MEDIAN HOURLY WAGE FOR 2012
bidding for major government contracts
under rules aimed at clamping down on
aggressive tax avoidance by some of
Whitehall’s most important suppliers.
Companies will have to sign a declaration
that they have not fallen foul of wide-
ranging tax avoidance rules in the past 10
years before bidding for government
contracts worth £2m or more.
SEC to launch anti-fraud RoboCop
The US securities and exchange
commission is deploying an innovative
computer tool designed to automatically
trigger alerts over suspicious accounting
at publicly traded companies.
Find your next step at
THURSDAY 14 FEBRUARY 2013
happened, were smaller. Between
2010-2012, the decline in median real
earnings averaged 2.1 per cent per
year for full-time male public sector
workers (and rose in cash terms,
despite the supposed pay freeze) com-
pared with a drop of 3.1 per cent per
year for their private sector counter-
parts. Yet again, austerity has been
much harsher in the private sector
than in the public sector.
Astonishingly, median self-
employed income has collapsed by 25
per cent in real terms from peak –
and by an almost incredible 33.8 per
cent in London. So why are the self-
employed doing so badly? Their
income fluctuates much more with
the economic cycle; freelance con-
tracts are short-term and can easily be
renegotiated up or down very quickly.
Their number is up by 367,000 since
2008; far more Brits are working for
REAL UK WAGES
14 £ per hour
12
10
8
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
REAL PUBLIC vs PRIVATE WAGES
18 £ per hour
16
14
12
10
8
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Longer contracts halt phone growth
Sales of mobile phones worldwide have
gone into reverse as the industry’s drive
towards longer contracts has reduced the
need constantly to upgrade a handset.
About 1.75bn were sold last year almost 2
per cent lower than in the previous year.
Bic makes more disposable income
Bic, the maker of disposable pens,
lighters and razors, announced a 10.6 per
cent rise in net profit yesterday, lifting the
figures for 2012 to €263.1m.
CITYAMCAREERS.com
To contact the newsdesk email news@cityam.com
themselves, an excellent development like overtime getting axed); when
as it increases the flexibility in the
labour market and makes people
demand rises, their hours rise before
staff get hired. A final reason may be
freer and more responsible for their measurement error: income is hard
own lives. The increase in numbers (of to quantify in the freelance sector.
around 10 per cent) is one reason for Unless you are lucky, very skilled
the decline in median incomes; new and in an industry where productivi-
entrants probably earn less because
they lost their jobs, couldn’t (or didn’t
ty is increasing (or a firm that is buck-
ing the trend), brace for years of
want to) find an alternative position misery and declining living stan-
but found that they could still earn dards. Deals are back in the City –
something by going freelance. with yesterday’s mulled bid by
Another reason is the collapse in the Vodafone for Kabel Deutschland just
construction industries. Many other the latest – but the financial sector’s
freelance intensive industries – such partial recovery should not be misin-
as personal trainers – are very terpreted for an overall economic
dependent on the earnings of their rebound. For most people, especially
clients; if these fall, the impact on the outside of London and its commuter
self-employed is disproportionate. belt, the grim reality of declining real
Self-employed people who work for wages won’t go away any time soon.
big firms are the easiest buffer: when
demand falls, their hours get allister.heath@cityam.com
chopped before staff get fired (a bit Follow me on Twitter: @allisterheath
REAL LONDON WAGES
18 £ per hour
ALL WORKERS IN LONDON
16
14 WORKERS IN LONDON WHO ALSO LIVE IN THE CAPITAL
12
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
REAL SELF-EMPLOYED WAGES
400 £ per week
PUBLIC SECTOR
MEN
350 LONDON
PUBLIC SECTOR
WOMEN
300
PRIVATE SECTOR
MEN
250 UK
PRIVATE SECTOR
WOMEN
200
2002/03 2004/05 2006/07 2008/09 2010/11
*ALL GRAPHS SHOW MEDIAN AVERAGE
Standard Life to buy Newton arm Apple loses Brazilian ruling
Standard Life is in exclusive discussions to Brazilian regulators yesterday rejected
buy Newton Investment Management’s Apple Inc.'s request to register the iPhone
wealth management division for up to name in that country, setting up a
£90m. The sale, of Newton’s £3.5bn potentially costly legal dispute in one of
wealth portfolio, could be announced the world's fastest-growing smartphone
imminently. markets.
AgustaWestland faces uncertainty Barnes & Noble warns on Nook
Yeovil-based helicopter manufacturer
Barnes & Noble Inc. said on Wednesday
AgustaWestland was facing uncertainty that its Nook business will perform worse
yesterday after the Indian government for the fiscal year ended April 27 than
threatened to cancel a $750m (£482m) forecast as recently as early January.
order because of bribery allegations.
cityam.com
Prices will soar
for three more
years says King
BY TIM WALLACE
GOVERNMENT policies are pushing
prices up beyond the control of the
Bank of England while a lack of sup-
ply side policies from the Treasury
means consumers and firms are
being given little hope of better
growth in future, governor Sir
Mervyn King claimed yesterday.
And he added monetary policy is
becoming less and less effective at
stimulating the economy further,
meaning the government needs to
help rebalance the economy to pre-
pare the country for growth in future.
The outgoing head of the Bank
launched the unusually strong attack
on the government as he explained
why inflation is still running well
above its target – at 2.7 per cent in
January, above the two per cent goal
– and will stay high until 2016.
Sir Mervyn argued green energy
policies are driving up energy prices
Sir Mervyn said loose
monetary policy may
be hitting its limits
while rising university tuition fees are
having a bigger impact than expected.
Between them factors like those add
a full percentage point to inflation,
meaning the Bank would have to
tighten policy unacceptably hard, hit-
ting jobs for no good reason, he said.
“This makes our job more difficult in
the short run, we have to deal with the
consequences,” Sir Mervyn said.
“But it would be a mistake to push
up unemployment to compensate for
a short term rise in prices.”
And the Bank predicts it will be at
least another two years before the
economy grows back to its pre-crisis
size, not because of deficit reduction
but because of a lack of reforms.
“The government should put togeth-
er a package of supply-side reforms to
raise future income expecta-
tions and so raise consumer
spending today,” he argued.
The Treasury rejects Sir
Mervyn’s analysis, arguing it
has kept prices down by freez-
ing fuel duty and helped by
cutting corporation tax.
CAPITALIST: Page 15
THURSDAY 14 FEBRUARY 2013
Ian Davis (above) spent 31 years with management consultancy McKinsey
Rolls-Royce to appoint former
McKinsey boss as new chairman
BY JAMES WATERSON
AND CATHY ADAMS
ROLLS-ROYCE will today unveil ex-
McKinsey boss Ian Davis as its new
chairman, replacing Sir Simon
Robertson who will leave the busi-
ness after eight years.
The announcement will be made
alongside today’s year-end results
which are expected to show the
engineering giant made bumper
profits in 2012, according to Sky
News.
Davis spent 31 years with manage-
ment consultants McKinsey, includ-
ing six years as managing director –
effectively chief executive – between
2003 and 2009.
He is currently a non-executive
director at both BP and Johnson &
Johnson, in addition to work advis-
ing Apax Partners and the govern-
ment’s cabinet office.
Meanwhile Rolls-Royce yesterday
signed a 10-year contract with the
Ministry of Defence for the develop-
ment of submarines, which will help
safeguard up to 2,000 jobs in the UK
and deliver up to £200m worth of
savings to the department.
The contract, worth around £800m
over the next decade, would help
deliver cost savings around the pro-
vision of nuclear propulsion systems
for Britain’s existing and future sub-
marine flotilla.
NEWS 3
EU aims to sign
US trade deal
by end of 2014
BY JAMES WATERSON
THE EUROPEAN UNION will this sum-
mer begin talks with the United States
on producing a free-trade agreement
that would be the biggest such trade
deal in history.
European Commission president
Jose Manuel Barroso made the
announcement after President Obama
backed reducing trade barriers in
Tuesday’s State of the Union address.
Under an outline for the deal, the
two sides expect it to add 0.5 per cent
to the EU economy and 0.4 per cent to
the U.S. economy by 2027 – equiva-
lent to €86bn (£55bn) a year for the
Europeans and €65bn for the US.
The resulting free trade area could
encompass half of world output and a
third of all trade. It is hoped that talks
– which depend upon the agreement
of all EU member states and the US
congress – can be completed at a brisk
pace with a deal signed by the end of
2014.
“If we want to go down this road, we
want to get there on one tank of gas
and we don't want to spend 10 years
negotiating what are well known
issues and not reach a result,” White
House adviser Michael Froman said
yesterday.
Agriculture is likely to produce most
disputes, particularly EU farm subsi-
dies and the use of genetically modi-
fied crops in the US. Other issues
include battle over state aid for aircraft
manufacturers Airbus and Boeing.
cityam.com
LSE tries to turn
tide on exodus
of tech startups
BY MARION DAKERS
THE LONDON Stock Exchange is try-
ing to tempt fast-growing tech firms
away from Silicon Valley by launching
a “high growth segment” with less
onerous listing rules.
The exchange said yesterday that
companies with an annual growth
rate of 20 per cent over three years
will from next month be able to join
the segment of the main market with
a minimum free float of just 10 per
cent.
This compares to the usual require-
ment of a 25 per cent free float.
“Ensuring that the UK’s fastest grow-
ing and most dynamic companies
have access to equity capital is a prior-
ity for London Stock Exchange,” said
chief executive Alexander Justham.
“The High Growth Segment will pro-
vide an additional attractive choice,
giving these companies a launch pad
for further success.”
The changes, backed by the govern-
ment after months of consultations,
should provide investors with easier
access to the UK’s future tech success
stories, said Osborne Clarke corporate
law partner Jonathan King.
“It’s obviously great news for high-
growth companies, but it’s also great
news for private equity houses who, in
light of the more relaxed free float
requirement, have an additional liq-
uidity channel available to them.”
Some market watchers, including
governance body Manifest, questioned
whether such a small free float
requirement would attract long-term
investors to UK firms.
And Deloitte pointed out while tech
firms have abandoned the LSE in the
last three years, smaller companies
already use the junior Alternative
Investment Market as a launch pad.
Around 30 tech firms have listed on
Aim in the past three years, it said,
including software group WANDisco’s
oversubscribed £15m initial public
offering last year.
The scheme mirrors the Jobs Act in
the United States, which last year
streamlined float requirements for
companies generating less than $1bn
(£644m) annual revenues.
Manchester United was criticised for
using the Jobs Act exemptions for its
$234m IPO in New York last summer.
THURSDAY 14 FEBRUARY 2013
NEWS 5
CAPITAL IDEA: TECH VIEWS Britvic-Barr
MICHAEL ACTON SMITH
deal threatens
CHIEF EXECUTIVE OF MIND CANDY
“We are proud to be a British company and love being
based in London. We welcome these new initiatives to
make the London financial markets more attractive to
to fizzle out
the many fast growth tech companies that are based BY MICHAEL BOW
here.” THE proposed £1.4bn merger of soft
drinks giants AG Barr and Britvic
was thrown into disarray yesterday
ERROL DAMELIN after a trading watchdog referred
CHIEF EXECUTIVE OF WONGA the deal to the Competition
Commission (CC).
“If we want to build Googles, Facebooks, and Apples in The current terms of the all share
Britain, our entrepreneurs need the backing of British merger, agreed in November, have
financial institutions. The London Stock Exchange is lis- now been shelved after the Office of
Fair Trading said the range of
tening, and I hope these proposals will create a platform Britvic and Barr’s drinks made its
for fast-growth companies with the character and the merger a threat to competition in
capability to go global.” the £9bn soft drink market.
“We’re in the long grass for at
NEIL RIMER least nine months,” Britvic
CO-FOUNDER OF INDEX VENTURES chairman Gerald Corbett said
“We welcome the LSE’s proposals to help kick-start yesterday, criticising the OFT for its
decision to refer the merger.
London’s IPO market for high growth companies... but these The OFT will release its report
changes are not a panacea. In order to give European growth into the ruling in the coming
companies robust access to public markets, the institutional weeks. Former Britvic chief
investment community need to invest in understanding how executive Paul Moody stepped down
in anticipation of the merger,
growth models work and how they are valued to develop which would have
conviction about owning pieces of these companies.” seen Barr boss
Roger White taking
GREG CLARK over. Yesterday
FINANCIAL SECRETARY TO THE TREASURY Britvic made
managing director
“We are delighted that the London Stock Exchange is of Britvic GB Simon
taking action to ensure that London’s public markets are Litherland chief
organised to help these companies fuel their growth. The executive until the
issue is resolved.
UK has a world leading crop of high growth businesses,
and the announcement is an important step in creating
the right environment for them to IPO in London.” Simon Litherland fills
Paul Moody’s boots
 6 NEWS
Crest Nicholson
hails a jubilant
market return
BY KASMIRA JEFFORD
CREST NICHOLSON made a success-
ful return to the stock market yester-
day, after the 50-year old British
housebuilder completed a listing
which valued it at £553m.
The company, taken private by
Scottish entrepreneur Tom Hunter at
the height of the housing bubble in
2007, priced its shares at 220p, the
upper half of its original range.
As part of the listing, Crest is rais-
ing £224.9m, with £169m going to
existing shareholders Varde
Investment Partners and Deutsche
Bank and £56m going to the compa-
ny to pay down existing debt.
Stephen Stone, who has been chief
executive since 2005 saw the value of
his shares shoot up to £10m after the
listing. Chairman William Rucker,
who is also head of Lazard London
saw his shares valued at £8m.
Crest Nicholson’s return to market
brings an end to a painful five years
for the group that including two
rounds of debt restructuring. US dis-
tressed investment fund Varde
Partners took majority ownership
after buying up its debt in 2011.
The company, which builds homes
mainly in the south of England, also
reported last month it returned to a
pre-tax profit of £62.1m last year, up
from a £27m loss in 2011.
Norton Rose partner Mark Lloyd
Williams who worked on the IPO –
the first on the London Stock
Exchange this year – said: “This
flotation is a litmus test for all those
watching to see if the UK equity
markets have reopened for busi-
ness”.
Crest Nicholson holdings limited PLC
p Crest Nicholson, 50 years of
255.00
13 Feb
256
254
252
250
248
246
244
8am 10am 12pm 2pm 4pm
THURSDAY 14 FEBRUARY 2013
ADVISERS
DEREK
SHAKESPEARE
BARCLAYS
BARCLAYS Capital and HSBC acted as
joint sponsors, joint global co-ordina-
tors and joint bookrunners on Crest
Nicholson’s initial public offering.
Derek Shakespeare, a managing direc-
tor at Barclays’ investment banking
division, is leading the effort for the
bank. He recently advised Redrow
founder and chairman Steve Morgan’s
vehicle Bridgemere and fund manager
Tosca on their bid to take over the
housebuilder, which was eventually
pulled. He is joined by Chris
Madderson, part of the bank’s UK origi-
nation team and Ben West in the equity
syndicates team.
HSBC’s advisory team was led by Nick
Donald, head of equity capital markets
(ECM). His previous deals include act-
ing as joint bookrunner for miner
Lonmin on its $817m rights issue in
November. Simon Cloke, head of diver-
sified industries at HSBC and ECM
director Stuart Dickson worked with
Donald on the deal.
Norton Rose, the law firm also acted for
Crest Nicholson, with corporate part-
ners Mark Lloyd Williams and Tom Vita
leading the team. Norton Rose also
recently advised the consortium led by
Malaysia’s SP Setia that bought
Battersea Power Station last year.
Meanwhile broker Numis is lead man-
ager on the listing while Lazard & Co is
financial adviser to Crest Nicholson.
No Stone unturned by
housebuilding boss
BY DAVID HELLIER
STEPHEN Stone was a happy man
yesterday. But he was, after a
gruelling round of presentations,
also a man with a gravelly
sounding voice.
The chief executive of Crest
Nicholson since 2005, Stone is the
first person to lead a company to
a main stock market listing in
London this year and that’s
required a massive round of
presentations, lunches and
breakfasts that have clearly taken
their toll on the vocal chords.
Born in the east end of London,
Stone never doubted London was
the best place to float his
housebuilding group, which had
been financially restructured by
Deutsche Bank and Varde after a
heavily leveraged deal headed by
Sir Tom Hunter ran into trouble.
“I always thought of London as
the place to float, it’s our home
town after all,” says Stone. “It was
obvious to float here.”
age this year, is based in
Weybridge, Surrey, after all.
After seeing shares in the
housebuilding group, in which
management have a 10 per cent
stake, surge to a premium on the
first day of conditional dealings,
Stephen Stone, Crest Nicholson’s chief
exec, has finished a punishing schedule
cityam.com
his confidence in London seems
to have been well placed.
Certainly he reports no lack of
interest in his group’s story. He
said all the large UK institutions
were interested to hear from him.
Many now think Crest
Nicholson's success will prompt
other companies to revisit their
flotation plans. “The success of
our float is good for the housing
sector and good overall.”
With a bit of luck, Stone might
be able to enjoy a couple of quiet
days to leave him in tip-top
condition for another day in the
spotlight next week.
Unconditional dealings start
on Monday and the housebuilding
boss is in talks
with the
London
Stock
Exchange
about
opening
the
market
that day.
cityam.com THURSDAY 14 FEBRUARY 2013
NEWS 7

Deutsche: Jump
TOP 5 GLOBAL M&A TRANSACTIONS IN 2013 TOP 10 FINANCIAL ADVISERS ON
Deal Value Target Target’s dominant Target/Seller Bidder M&A TRANSACTIONS IN 2013
(£bn) company geography Financial advisers company
Rank House Value (£bn) Deals
13.963 Virgin Media UK Goldman Sachs; Liberty

in market means
JPMorgan Global 1 1 Goldman Sachs 39.908 19
22 JP Morgan Cazenove 37.38 19
13.909 Dell USA Evercore Partners; Silver Lake
Goldman Sachs; Partners 33 Credit Suisse 33.127 15
JPMorgan; Lazard 44 Barclays 24.576 16

deals are back

55 BofA Merrill Lynch 21.742 14
2.703 Copano Energy USA Barclays; Kinder Morgan 66 Lazard 18.863 14
Jefferies & Company Energy Partners
77 Evercore Partners 16.123 8

SOURCE: MERGERMARKET
2.433 Spirit Realty USA Barclays Cole Credit Property 88 RBC Capital Markets 15.016 9
BY TIM WALLACE the industry, there will clearly be hopes Capital Trust II 99
that the sector-wide collapse in jobs will LionTree Advisers 14.45 2
SOARING equities markets are giving a come to an end or even reverse as more
major boost to confidence and should bankers are needed to work on the deals. 2.157
10 Citi
10 8.788 13
Slovensky Plynarensky Slovakia Advising sellers: Energeticky a
lead to a strong recovery in mergers and Deutsche expects mid-sized deals to be Prumyslovy GLOBAL M&A ACTIVITY
acquisitions and in share listings the first to come through as cautious Priemysel Citi; Deutsche Bank;
through 2013, top investment bankers at firms and investors test the market. (49 per cent stake) Morgan Stanley Holding Year to date £129.547bn 1,521
Deutsche Bank said yesterday. Well-trailed deals, like joint venture
Market activity, and thus bank rev- minority unwinds delayed by the finan-
enues, have been falling ever since the cial crisis, should also be early beneficiar-
financial crisis. But Deutsche Bank ies of the new optimism.
reports increasing optimism, forecasting A particularly helpful change is that US
a healthy recovery at last this year. investors are increasingly likely to fund
“There is a lot of positive feeling now activity in the UK and Europe, the
that the Eurozone has stabilised and bankers said, as they become more confi-
that we can now move into a growth dent that they have now seen the bottom
phase,” said UK equity capital markets of the Eurozone crisis.
head Lorcan O’Shea. Private equity groups are also expected
“There is a significant pipeline of IPOs to take advantage of the rising tide to
coming through in the UK.” offload assets they have been sitting on
Although it is too soon to say what through the lean years, as well as seeking
impact this will have on employment in to raise funds in the improved climate.
 8 NEWS
THURSDAY 14 FEBRUARY 2013 cityam.com

Fashion chain John Lewis to

sack managers
Republic enters
BY JAMES WATERSON
DEPARTMENT store chain John Lewis
could sack up to 325 managers from
its stores as part of a staff shake-up

administration
BY KASMIRA JEFFORD
BRITAIN’S already fragile high street
was dealt a fresh blow yesterday after
fashion chain Republic collapsed into
administration.
designed to take into account the
growing importance of online sales.
The partnership, which has a
reputation for looking after its staff,
said it was consulting on the need to
have individual departmental
managers for sections such as
womenswear and furnishings in its
insolvency process,” Kelly said. store. The changes are being made to
The group will continue to trade reflect the growing importance of its
while Ernst & Young try to sell the website, which now produces a
business as a going concern. quarter of total revenue.
Republics’s demise marks the latest
in a string of casualties since the start

Blockbuster to
Ernst & Young, the business adviso- of the year after Jessops, Blockbuster Republic began as a men's denim retailer in 1986 under the Best Jeans brand in Leeds
ry firm, has been appointed as admin- and HMV all entered administration.
istrator and 150 staff at its Leeds US private equity firm TPG bought
ADVISERS
close 164 shops
headquarters were immediately the chain in 2010 for £300m with the
made redundant. aim of doubling the size of the busi- working with private equity investors.
The retailer, which sells youth fash- ness to over 200 stores. Some of the major restructurings Hudson
ion brands including Jack Jones and The firm has twice tried to inject has worked on include Focus DIY, the hard-
SoulCal, runs 121 stores and employs more cash but the retailer has failed to
ALAN HUDSON ware chain owned by private equity firm BY KASMIRA JEFFORD
around 2,500 staff. stem falling sales amid fierce competi- Cerberus, which appointed Ernst & Young as
Hunter Kelly, joint tion and weak demand, particularly ERNST & YOUNG administrators in May 2011 and DTZ, the BLOCKBUSTER, the DVD and games
administrator, said among young consumers. global real estate services firm which fell rental chain, is to close a further 164
Republic was hit by The latest accounts show sales into administration in December 2011. It stores the firm’s administrators said
poor trading declined by 2.3 per cent to £177m in Alan Hudson, partner and head of restruc- was then sold to Australian engineering yesterday, putting a further 800 staff
results in Autumn the year to January 2012. Pre-tax profit turing at Ernst & Young, is acting as joint firm UGL. In 2011, Hudson acted as joint at risk.
and “a sudden and slumped from £27.3m to £3.2m. administrator of the fashion retailer administrator and receiver of London land- Deloitte said the stores will shut
rapid decline in Former Asda boss Andy Bond Republic together with Leeds-based partner mark Battersea Power Station, which was over the coming week as part of a
sales” in January. stepped down as chairman at the end Hunter Kelly and director John Sumpton. then sold a year later to a Malaysian consor- “phased closure” as it continues to
“The impact on of January but a spokesper- A licensed insolvency practitioner, Hudson tium led by SP Setia and Sime Darby for find a buyer for the business and its
cash flows has result- son said it was not related has more than 24 years’ experience of work- £400m. Meanwhile Hunter, a partner since remaining 204 stores. The latest cull
ed in the business to the company entering ing across restructuring and accelerated 1996, has worked on a number of insolven- comes on top of the 168 store
being unable to administration. M&A. He also in the past headed up Ernst & cy appointments including Snackhouse, closures announced last month. The
continue to Young’s transaction advisory services retail once one of the UK’s biggest snackfood chain employed 4,190 staff and ran
operate out- Andy Bond, former team in the UK and now has particular focus makers which collapsed in 2001. 528 stores at the time of its collapse.
side of an chairman of Republic
cityam.com
SocGen shakes
up top brass
after bad year
BY TIM WALLACE
FRENCH bank Société Générale stum-
bled to an unexpectedly large loss in
the final quarter of 2012, financial fig-
ures showed yesterday, dragging
down its full year results.
The group revealed a management
reshuffle as it streamlines its five
main business lines into three in an
drive to cut costs.
SocGen lost €476m (£412m) in the
final three months of the year com-
pared with profit of €100m in the
same period of 2011.
And on the year profits fell 67.5 per
cent to €774m.
The bank managed to drag down
operating expenses by 3.5 per cent,
but operating income fell much more
sharply at 22.4 per cent, resulting in
the weaker figure. Part of the hit
came from a €300m litigation impair-
ment charge in the quarter, while a
goodwill writedown on its NewEdge
joint venture also came in at €390m.
Analysts fear more reforms are need-
ed before the bank returns to health.
“Although management has dealt
convincingly with concerns about
weak capital adequacy and liquidity in
2012, SocGen is still struggling to con-
vince investors that it can achieve
improved returns,” said Espirito
Santo’s Andrew Lim.
Deputy CFO Philippe Heim is replac-
ing his outgoing boss Bertrand Badre,
who is joining the World Bank.
William Kadouch-Chassing will take
the deputy position, while Didier
Haugel and Jean-Luc Parer will jointly
lead the new international retail bank-
ing and financial services division.
Meanwhile investment manage-
ment head Jacques Ripoll is leaving
the bank.
SocGen’s shares dipped 3.57 per cent.
Societe Generale
31.50
33.00 € 13 Feb
32.75
32.50
32.25
32.00
31.75
31.50
31.25
7 Feb 8 Feb 11 Feb 12 Feb 13 Feb
THURSDAY 14 FEBRUARY 2013
ING profits dip on tough year of restructuring
BY TIM WALLACE
DUTCH finance group ING
yesterday announced it is cutting
another 2,400 jobs as it unveiled
a disappointing fourth-quarter
profit figure.
That brings current headcount
cuts to 7,400 which the bank
hopes will save €1bn (£865m) a
year by 2015.
The group made €1.434bn in
the final three months of the
year, up 21 per cent on the year
but below expectations.
Much of that gain was down to
High street red in tooth and claw
I
BOTTOM
T’S simply too tough out there, said
the last official tweet from
@republicfashion, announcing the
LINE
company’s fall into administration.
With inflation still stubbornly high
and the news today of real wages back
at 2003 levels, it is certainly a tough
market. Republic is just the latest
casualty in a post-Christmas cull of
the UK high street, itself following in
the wake of Comet last year and it
doesn’t look likely to be the last
company to suffer. As such, the UK’s
listed retailers look like risky bets for
investors. Yet this is not some
indiscriminate, mass-extinction event.
Those firms that are failing to tightly
control the costs of maintaining a
bricks-and-mortar store network
divestments as the group sells off
non-core units such as its UK
savings arm.
On an underlying basis
profits dipped from €664m to
€184m with the bank tax and
losses on the sale of peripheral
European securities
hurting the group.
Full-year profits
came in at €3.894bn,
down 32.5 per cent.
The slowdown
comes in part from
the ongoing
repayment of the
MARC SIDWELL
while taking advantage of the
migration to online shopping are
suffering most. It’s tough out there,
but it’s also the survival of the fittest.
CABLE TIES
The purchase of Virgin Media by
Liberty Global may be kicking off a
consolidation trend, with Vodafone
NEWS 9
group’s bailout, giving
€1.125bn to the Dutch
government in the year – a
payment which hit the
institution’s core tier one
capital ratio to the tune of
20 basis points. ING still has
€3.4bn of aid to repay
by 2015.
Shares fell 4.04
per cent on the
news.
ING chief Jans
Hommen is paying
back the bailout
now eyeing Germany’s Kabel
Deutschland. However, Vodafone’s
shares fell on the news, suggesting a
dim market reception.
That’s perhaps because it means
pouring more money into a Europe
stuck in the economic doldrums.
Vodafone takes 69 per cent of its
revenue from Europe, and the
Eurozone crisis has hit it hard, even
in a relatively strong market like
Germany. More scale and the ability
to bundle products would increase
revenue but at a price – and in a
declining market the returns risk
being less than stellar. Vodafone is
tied: with so much of its business in
Europe it has to make the best of it.
But it won’t be cheap or easy.
cityam.com
Cough and cold
season boosts
Reckitt figures
BY KASMIRA JEFFORD
A HEAVY flu and cold season in the
US caused misery for many people
but helped Strepsils-maker Reckitt
Benckiser yesterday report a healthy
lift in fourth quarter sales.
Reckitt said sales in Europe and
North America grew three per cent
after “higher incidences of cold and
flu” had boosted demand for prod-
ucts such as Mucinex decongestant.
Total annual revenues rose five per
cent on a like-for-like basis, excluding
non-core pharmaceuticals, to £9.6bn.
Chief executive Rakesh Kapoor said
this year the group would target rev-
enue growth of between five and six
per cent, including acquisitions and
disposals announced to date.
Reckitt has also been shifting its
focus to the fast-growing health and
hygiene sector, with brands such as
Durex condoms and Dettol disinfec-
tant, which it said will account for 72
per cent of net revenue by 2015 – up
from 68 per cent today.
It is also targeting emerging mar-
kets and plans for half of net revenue
in its core business to come from
developing markets by 2015.
Reckitt Benckiser Group PLC
4,419.00
4,500 p
13 Feb
4,450
4,400
4,350
4,300
4,250
4,200
7 Feb 8 Feb 11 Feb 12 Feb 13 Feb
THURSDAY 14 FEBRUARY 2013
NEWS 11
High-frequency
trading firm
Getco struggles
BY JAMES WATERSON
Reckitt Benckiser boss Rakesh Kapoor has overseen operating profit of £2.6bn for 2012
HIGH-FREQUENCY trading business
ANALYST VIEWS
Interviews by Kasmira Jefford
HAS RECKITT BENCKISER
GOT OFF TO A HEALTHY
START TO 2013?
Getco yesterday revealed an 82 per
cent drop in profits for the first nine
months of 2012 thanks to poor
market conditions.
The figures – the first time that
GRAHAM JONES PANMURE GORDON the company has made its financial
“
performance public – were
contained in a filing to the US
Reckitt’s full-year results came in ahead of expectations, with like-for-like securities and exchange made as
growth of six per cent in the fourth quarter better than our 4.2 per cent forecast, with
”
part of its reverse takeover of Knight
the outperformance entirely coming in ENA (Europe, North America) where Capital.
growth was three per cent helped by a favourable cold season. Net profits for the nine months to
30 September were $24.6m (£15.4m)
DARREN SHIRLEY SHORE CAPITAL compared to $134.8m in the same
“
period last year.
With the positive impact of the strong flu season flowing into the first Total revenue dropped from
$719m to $425.3m on the same basis.
quarter...we believe 2013 has started well for Reckitt... We expect the market to
”
Worryingly for investors, this
respond positively to yesterday’s results, whilst recognising some investors
appears to be part of a long-term
may be underwhelmed by management’s full year targets. downward slide since the start of the
financial crisis with full-year
ALICIA FORRY CANACCORD GENUITY
“
revenues peaking at $1.2bn in 2008.
Getco agreed to buy Knight Capital
last year for $1.4bn after it was badly
Reckitt’s results are strong...While our numbers and consensus will clearly
need to come up by around five per cent, we retain our ‘sell’ recommendation, hit by an incident last August when
”
its software malfunctioned, causing
based on valuation, though we acknowledge the progress that has been major volatility on the New York
made in the last year. We still expect competition for Suboxone this year. Stock Exchange.

  
Find your
   next step at
    
CITYAMCAREERS.com

       
 
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 12 NEWS
THURSDAY 14 FEBRUARY 2013 cityam.com

Aviation bosses set out their KINGFISHER LOSING ALTITUDE

stalls for London expansion
BY MARION DAKERS
TRANSPORT bosses locked horns
over how to provide London with
more flights yesterday, as rival
firms ramp up campaigns aimed at
the coalition’s Davies Commission
on the future of air travel.
Gatwick chief executive Stewart
Wingate said his firm will propose
to Davies that the UK should allow
a new runway each at Gatwick and
Stansted, enabling them to
compete with Heathrow.
“Not only will you support the
vast majority of the connectivity
requirements for London and avoid
the need for a hub airport, but to
boot you will also spread the
economic benefits that are driven
by the airports around the city, and
also distribute the environmental
impact caused by aviation,” he told
the London Assembly.
Wingate and EasyJet’s UK
commercial manager Hugh Aitken
argued that existing airports could
create capacity almost immediately.
“We find it surprising that British
Airways is starting flights out of
Heathrow to Alicante and Ibiza this
summer. That’s not effectively using
the hub capacity you have, flying to
places that frankly should be point
to point out of other airports,” said
Aitken.
But Heathrow director of public
policy Nigel Milton said that a well-
connected hub airport is the only
way forward. “All of the evidence
shows that the lack of hub capacity
in London is harming the UK today,”
he said, claiming Heathrow has lost
routes to Amsterdam, Frankfurt and
Paris.
Davies’ panel will spend the next
few months taking submissions,
but will not report until 2015.
TIME is running out for Vijay Mallya’s Kingsfisher Airlines, after the firm’s lenders
decided to take initial steps towards recovering $1.4bn (£901m) of loans in default.
Shares in the firm slumped a further five per cent yesterday after the lenders’ meeting.

Santander may
shut financial
advice division
BY TIM WALLACE
SANTANDER is reviewing the future
of its bancassurance division after it
struggled to train its hundreds of
advisers to meet the new regulations
around the sector, the bank’s UK arm
announced yesterday.
That could lead to the division being
closed, joining the swathe of banks
cutting back on mass advice as a
result of the new Retail Distribution
Review rules.
The bank will continue to provide
advice to existing investment cus-
tomers, but has not yet decided what
will happen to the rest of that busi-
ness.
“There is never a good time to
announce changes such as this and
we are acutely aware of the uncertain-
ty staff are facing,” said a spokesper-
son.
“We are working closely with other
business areas to ensure that many of
those who may be impacted are able
to secure roles in a growing
Santander Group.”
It came as the Financial Services
Authority (FSA) released the results of
its mystery shopping exercise which
found cause for concern in the advice
given to one quarter of customers
looking to invest a lump sum through
a bank or building society – with
Santander believed to have been
referred to the enforcement division
over poor advice and practices.
The FSA said that overall the results
of its mystery shopping exercise were
disappointing.
In 11 per cent of cases the advice was
unsuitable, and in 15 per cent the
advisers had not obtained enough
information to make a proper recom-
mendation.
The FSA’s survey found three main
problems with sales staff; firstly a fail-
ure to assess the level of risk customers
were prepared to take; secondly a fail-
ure to assess the customers individual
financial needs and thirdly failing to
take into account how long the cus-
tomer wanted to hold their invest-
ment for.
“This review shows that customers
are not consistently getting the quality
of advice on their investments that
they should expect when visiting an
adviser in a bank or building society,”
said Clive Adamson of the FSA.
“Whilst we are disappointed by the
results of this review, we are encour-
aged by the action that the firms
involved have taken to rectify the situ-

CITYVIEWS
” ation for their customers.”

ARE YOU WORRIED INFLATION HAS

BEEN ABOVE TARGET FOR SO LONG?
RICHARD WINSTON
BADENOCH & CLARK
” Interviews by Amy-Jo Crowley
On a such a small percentage, when I get my
monthly paycheck I don't think about it and if
you're getting an annual pay rise above the rate of infla-

GLYNIS WIGGINTON
KEMP LITTLE
” tion, then in real terms it's not affecting you.
The rise is very tangible for consumers like me.
The cost of everything has risen dramatically
which results in a significant impact on disposable
income.
ALEX CUNYNGHAME Not for me but when there are general pay
DELOITTE freezes, job cuts –look what’s happening at
Barclays – and increasing costs of living, I can see why it
would be worrying for some.
These views are those of the individuals above and not necessarily those of their company
Find your perfect
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 THE S.U.V OF THE YEAR
FIAT PANDA 4x4

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cityam.com THURSDAY 14 FEBRUARY 2013
15

THECAPITALIST
Got A Story? Email
thecapitalist@cityam.com

cityam.com/the-capitalist EDITED BY CALLY SQUIRES

Governor’s 20 City maverick David Buik slams Many readers may be refraining
from the pleasures of chocolate,
caffeine or booze for Lent. However

Sir Mervyn King’s BoE speech

there is no such abstinence over at
newly-launched alcohol awareness app

year flashback
CITY stalwart David Buik of
Cantor, who is known for his
poetic City commentary – often
quoting the likes of Whitman,
“However having looked at the
tea-leaf remnants made from Sir
Mervyn King’s comments at the
Inflation Report, I would be
DrinkCoach. Creators told The Capitalist
the app is “not about stopping
drinking” but “merely making lifestyle
improvements by providing useful tools
to change behaviour as wanted.” The
invitation for the launch party, to be

doesn’t add up
Shakespeare, Poe and Housman -
was left unimpressed with the
Bank of England governor
yesterday.
“I would hardly describe
myself as the sharpest pin in the
box” opened Buik.
amazed if he did not send out
coded comments that some large
UK banks will need the injection
of substantial capital in the years
to come.” Clearly not won over by
the anniversary reminiscence,
then.
held at the City’s Guildhall, promises
catered food and beverages. Sadly The
Capitalist hears that organisers thought
long and hard, but settled on serving
strictly non-alcoholic drinks only.

WHILST another governor may have
used yesterday’s Inflation Report
press conference to look forward, Sir
Mervyn King took a more nostalgic
approach in his opening remarks.
The Bank of England governor
reminded us that this was the 20th
birthday edition of the Report. Back in
1993, King was serving in the
more lowly position of chief
economist and executive
director at the Bank of
England.
King’s anniversary compar-
isons made yesterday don’t
all bear scrutiny. The
Capitalist won-
ders if King
isn’t being too
optimistic
when he
compares the economic situation now
with 1993. In April 1993 the govern-
ment declared the official end of the
recession after growth reached 0.6 per
cent. But with the latest figures
at –0.3 per cent, there hardly seems to
be the same hope that it will all end
up quite so rosily.
There are similarities though – in
1993 we had a Conservative PM in
John Major. And a Royal scandal –
Princess Diana sued the Daily
Mirror over photographs that were
taken of her at a gym whereas now
the focus is over photographs of the
pregnant Duchess of Cambridge in
an Italian magazine.
At least some things
don’t change.
BoE boss Sir Mervyn King

The date for the 2013 Standard Chartered Great City Race, the annual 5k
running challenge that sees corporate joggers sprint around the closed-off
streets of the City of London, has been set for Thursday 11 July. As in previous
years, over 5,000 workers from the Square Mile are expected to don their running
gear, come rain or shine. This is the ninth year that Standard Chartered have
sponsored the charity dash, which helps to raise awareness and funds for eyesight
charity Seeing is Believing. Ten pounds from every £30 entry fee will be donated
to an eye-care project in Zambia. To register go to www.cityrace.co.uk.

Find your
next step at
CITYAMCAREERS.com
 16 NEWS
Tullow rallies on strong results
as it eyes Kenyan oil discovery
BY CATHY ADAMS
SHARES in Tullow Oil soared
yesterday, as it eyed commercial
production in Kenya.
The FTSE 100-listed oil explorer,
which reported its 2012 results
yesterday, hailed a major basin-
opening discovery in Kenya as one
of its wells reported better-than-
expected flow tests.
The African-focused explorer
yesterday pledged $2bn (£1.3bn) of
spending this year – up from $1bn
last year – to drive exploration-led
growth on more than 40 wells
planned this year, in territories
such as Kenya, Ethiopia and
Norway among others.
Production-wise, it reaffirmed
January’s guidance for 2013 at
between 86,000 and 92,000
barrels of oil equivalent per day.
Operating profit rose five per
cent to $1.18bn, while sales
revenue edged up two per cent to
$2.34bn, despite writing off
$617m (£397m) for unsuccessful
drilling last year.
Chief executive Aiden Heavey
said that the company was
focused on “exploration-led
THURSDAY 14 FEBRUARY 2013 cityam.com
Bakries want a
growth”, and that it would not join quicker probe
into Bumi deal
the “treadmill of production”.
Shares closed up 6.78 per cent.
Tullow Oil PLC
1,280 p 1,260.00
1,260 13 Feb
1,240
1,220 BY CATHY ADAMS in December.
1,200 The Bakries asked that the Takeover
1,180 BUMI shareholder the Bakrie family yes- Panel publish its factual findings
terday called on the Takeover Panel to prior to next Thursday’s meeting, in
1,160 accelerate its inquiry into the deal that “the interest of fairness”.
put the coal miner together in 2011. Bumi shares rocketed yesterday, as
7 Feb 8 Feb 11 Feb 12 Feb 13 Feb “The panel was kept in the dark about the company moved closer to separat-
key facts at the time of the creation of ing from Indonesian arm Bumi
Bumi,” said Nirwan Bakrie, the chair- Resources.
man of the Indonesian Bakrie Group, in Shares closed up 9.7 per cent.
his first statement since the Bumi soap
opera began last year. Bumi PLC
“How this occurred goes to the heart of 460 p 444.80
why the Vallar/Bumi structure has been 13 Feb
so disappointing and also done serious 440
damage to London’s reputation as an 420
honest capital market with emerging
market investors such as ourselves.” 400
The Bakrie group yesterday questioned
380
why the progress with the current probe
has been much slower when compared 360
to the original concert party investiga-
tion, which the Takeover Panel ruled on 7 Feb 8 Feb 11 Feb 12 Feb 13 Feb
cityam.com
IN BRIEF
Total to raise exploration budget
n French oil major Total plans to raise
its exploration budget in 2013 under
an investment policy that takes
advantage of high oil prices and
financing from some large-scale asset
sales. The world’s fifth largest oil
company said it would spend $2.8bn
(£1.8bn) on exploration in 2013, up
from $2.5bn last year.
Citi axes 50 EMEA bankers
n Citigroup has begun axing 50
investment bankers across its Europe,
Middle East and Africa (EMEA) division
as a programme of cutting 11,000 jobs
hits the heart of the investment bank.
Citi announced the global cuts, equal
to about four per cent of the bank's
workforce, in December as part of an
effort to eliminate $1.1bn in annual
costs by 2014.
MetLife hit by derivative losses
n MetLife, the largest US life insurer,
last night reported a 90 per cent fall in
quarterly profits as a result of
derivative losses linked to its credit
spreads. However its operating profit
beat estimates and the company
reported a fall in net income to $96m
(£61m) from $959m a year earlier.
MF Global UK debtors boosted
n Unsecured British debtors of failed
brokerage MF Global are set to receive
an interim payment of 40p in the £1,
according to KPMG who are winding
up the business. Further payments
could be made, depending on the
outcome of lawsuits involving the US
arm of the business.
Shale oil could
add £50bn to
UK GDP by 2035
BY CATHY ADAMS
GLOBAL production of shale oil
could boost the UK economy by
£50bn by 2035, analysis from
PricewaterhouseCoopers reveals
today.
Shale oil, much like shale gas, is a
hydrocarbon produced through
fracking, and resources have been
found worldwide.
Production of shale oil – also called
“tight” oil – has the potential to
reach up to 14m barrels of oil a day
by 2035, which could push global oil
prices down by up to 40 per cent over
the period thanks to the extra sup-
ply, according to PwC’s shale oil
report.
In this scenario, the resource has
the potential to revolutionise the UK
economy, and the development of
shale oil could see UK GDP increase
by between two to 3.3 per cent by
2035, equalling a rise of around £500
to £800 per person.
On a global scale, GDP could rise by
around 2.3 to 3.7 per cent by 2035, or
up to $2.7 trillion (£1.7 trillion) at
today’s values.
The UK – which has a big presence
THURSDAY 14 FEBRUARY 2013
NEWS 17
SHALE OIL HAS POTENTIAL TO REVOLUTIONISE GLOBAL ENERGY MARKETS
2015 2020 2025
2.3m* 5.4m* 9.3m*
in the oilfields services industry in
the North Sea – is already known to
2030
have significant shale gas resources,
and this could be a good indicator of
the potential for tight oil, PwC
11.7m*
suggests.
By exploiting this natural resource,
2035
the UK can contribute to investment,
employment, economic growth and
energy independence, and lower oil
prices mean the UK can become a net
oil importer over time, PwC says.
PwC’s report suggests that shale oil
has the potential to spread away from
13.8m*
the US – where 553,000 barrels were
produced in 2011, up from 110,000
barrels in 2004 – and increase to
almost 12 per cent of the world’s total
oil supply by 2035.
“Lower global oil prices due to
increased shale oil supply could have
a major impact on the future evolu-
tion of the world economy by allow-
ing more output to be produced at
the same cost,” John Hawksworth, * NUMBERS REFER TO
chief economist at PwC and co- BARRELS OF OIL A DAY
author of the report, said yesterday.
“For the UK alone, the benefit of
lower than expected oil prices could
be around £30bn to £50bn at today’s
values.”
cityam.com
African Barrick
warns output
will sink again
BY CATHY ADAMS
SHARES in gold miner African
Barrick Gold sank yesterday as it
posted disappointing results for the
full year, and forecast lower produc-
tion for the fourth year in a row.
The FTSE 250 gold miner said it
expects production to sink for the
fourth consecutive year in 2013, to
between 540,000 and 600,000 ounces
of the yellow metal.
Last year, output came in at
626,000 ounces of gold, down from
688,000 ounces over 2011, primarily
due to the winding down of an old
mine.
African Barrick Gold, which has
four producing mines in Tanzania,
said earnings before interest, tax,
depreciation and amortisation for
the full year were $331m (£213m),
down almost 40 per cent from 2011
and below forecasts.
The crash was a result of lower pro-
duction – hit by a strike at its flag-
ship Bulyanhulu mine and illegal
mining at North Mara – but also cash
costs, which soared 37 per cent from
their 2011 level to $949 per ounce.
Following the collapse of takeover
talks between ABG parent Barrick
Gold and a national Chinese gold
company in January, the Tanzania-
focused company kicked off an opera-
tional review, with emphasis on cost
cutting, which chief executive Greg
Hawkins told City A.M. was a “strong
focus” for this year.
Hawkins added that investors
should “stick with” the company as it
rides through a difficult period.
Analysts from Canaccord Genuity
said that the production target is
“substantially below our estimate”,
while Cailey Barker at Numis said
investors should avoid the company,
adding it is “another disappointing
result from a serial disappointer”.
African Barrick Gold PLC
360 p 302.00
13 Feb
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340
330
320
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7 Feb 8 Feb 11 Feb 12 Feb 13 Feb
THURSDAY 14 FEBRUARY 2013
Byron Grote, to join Anglo American, enjoyed a career with BP spanning 33 years
BP veteran Byron Grote set to
join board of Anglo American
BY CATHY ADAMS
MINER Anglo American has
appointed BP board member
Byron Grote as a non-executive
director.
The appointment of Grote, who
announced last week that he was
to step down as a senior board
member of BP following 33 years
with the oil giant, will be proposed
to shareholders at Anglo’s AGM on
19 April.
He will join the Anglo board’s
audit committee, and after an
induction period, will take over
from David Challen as chairman of
the group.
Grote joined BP in 1987, and has
been a member of the board since
2000. He also served as BP’s chief
financial officer from 2002 to
2011, and has overseen the oil
behemoth through many
acquisitions.
Grote also has a role as non-
executive director of consumer
goods giant Unilever.
Blue chip miner Anglo
American has seen many board
changes over the past few months,
most notably with AngloGold
Ashanti boss Mark Cutifani
appointed chief executive to
replace Cynthia Carroll when she
steps down at the end of April.
NEWS 19
IN BRIEF
Rosneft and Exxon in Arctic tie-up
n Oil giants Rosneft and ExxonMobil
yesterday agreed to expand their
cooperation agreement to include an
extra 600,000 square kilometres of
exploration acreage in the Arctic. The
agreement includes seven new
offshore licences in the Chukchi,
Laptev and Kara seas. Russia’s Rosneft
and the US’s Exxon have already
agreed to jointly tap hydrocarbon
deposits in Russia’s Arctic waters and
in North America.
Finmeccanica names new head
n Italy’s Finmeccanica promoted
company insider Alessandro Pansa to
run the defence group as chief
executive officer after the arrest of its
head for alleged bribery led India to
suspend a $750m (£483m) deal to buy
helicopters. Finmeccanica said Pansa,
the chief operating officer, would step
up to ensure management continuity
following the arrest on Tuesday of
chairman and chief executive Giuseppe
Orsi. Orsi denies any wrongdoing.
Thomson Reuters beats forecasts
n Thomson Reuters posted a better-
than-expected rise in quarterly profit
yesterday and forecast that revenue
would increase in the low single digits
this year. The outlook was largely
anticipated by analysts, who had
forecast a two per cent rise. Adjusted
earnings increased to $497m
(£320m), or 60 cents a share, from
$445m, or 54 cents a share, a year
earlier. Full year revenue rose three
per cent to $12.89bn.
 20 NEWS
Telecity pleases
market with
robust outlook
BY HARRY BANKS
DATA centre operator Telecity yes-
terday posted a 22 per cent rise in
full-year earnings, meeting analyst
expectations, and gave a confident
outlook for 2013 underlined by
robust demand.
The British company bases its facil-
ities in European cities like London,
Amsterdam and Paris, where multi-
ple Internet connections provide
near failsafe services to retailers,
banks, social media sites and video-
on-demand providers.
Chief executive Michael Tobin said
the group was continuing to build
new capacity, which rose to 86
megawatts from 68 last year.
Demand was driven by growth in
online activity, both at home and on
mobile devices, he said.
“You probably watch TV over the
Internet, do some online banking,
do your Sainsbury’s shop, download
a movie or make an Amazon pur-
chase,” he said. “All of these things
are driving growth.”
Telecity, which competes with
Equinix and Interxion, triggered
some concerns among investors last
year about whether a slowdown in
new capacity might be a sign of
cooling demand.
Tobin said yesterday that there
had been delays in opening new
capacity in London and Amsterdam,
US CORPORATE RESULTS
ROUND UP
but that these were caused by diffi-
culties in obtaining planning per-
mission and power supplies rather
than demand weakness.
“Some analysts misinterpreted the
slowdown of capacity growth as a
slowdown of demand,” he said.
“(But) not withstanding all of those
of challenges, we ended the year
with the largest expansion of capaci-
ty in our history.”
Analysts at Berenberg said guid-
ance from management that it
should be able to grow earnings in
line with forecasts of about 20 per
cent for 2013 would reassure the
market.
Milan Radia at Jefferies, mean-
while, who has a “buy” rating on the
stock, said it was a solid set of
results.
Telecity’s adjusted core earnings
rose 22 per cent to £129.5m in the
year to end-December.
Telecity Group PLC
900 p 893.50
13 Feb
880
860
840
820
7 Feb 8 Feb 11 Feb 12 Feb 13 Feb
Deere results beat forecasts Dr Pepper Snapple Group US market helps Hyatt
on strong farm demands outlook disappoints Street Hotels profit top estimates and profit in second quarter
DEERE & Co, the world’s largest farm
equipment maker, reported first-quarter
results above analysts’ expectations
yesterday as farmers geared up to plant the
biggest corn crop in US history following the
worst drought in the US Midwest in 56 years.
The company also raised its forecast for net
income in 2013 to $3.3 bn (£2.05bn) from
$3.2bn. Analysts had estimated $3.26bn on
average. “Relatively high commodity prices
and strong farm incomes are expected to
continue supporting a favorable level of
demand for farm machinery during the
year,” Deere said. The US Agriculture
Department said this week farm income
would soar to a record $127.6bn this year, up
15 per cent. Sales of agriculture and turf
equipment – which make up three-quarters
of Deere’s total revenue – jumped 16 per
cent in the quarter ended 31 January. Total
revenue rose 10 per cent to $7.42bn, well
ahead of the $6.72bn expected.
Net income attributable to Deere rose to
$649.7m, or $1.65 per share, in the first
quarter from $532.9m, or $1.30 per share, a
year earlier.
Lovestruck
here
Kate & Lucas
0 3 .1 0 .1 2 at 6 .0 4 pm
THURSDAY 14 FEBRUARY 2013
BT EXECUTIVE LIV GARFIELD JOINS TESCO BOARD
OLIVIA Garfield, chief executive of BT’s Openreach, is to join the board of Tesco as a non-
executive director, the supermarket giant announced yesterday. Garfield has been with BT
since 2002 and head of its superfast broadband division since 2011. Tesco said she will bring
“valuable experience of new and emerging technologies” when she joins the board in April.
Regulator warns Global-GMG
radio deal may hit competition
BY CITY A.M. REPORTER
GLOBAL Radio’s £70m deal to buy
GMG Radio was yesterday cleared
by the Competition Commission,
but the regulator warned that the
takeover could drive up
advertising prices across the UK.
In London – where Global Radio
runs Heart, LBC, Choice, Gold,
Capital and Xfm – the commission
cleared the deal, which would see
Global take ownership of GMG’s
Cisco sees higher revenue
DR PEPPER Snapple Group forecast profit
for the current year below analysts’
estimates as the soft drink maker expects
raw material costs to continue to constrain
earnings. On a conference call with analysts,
Dr Pepper executives said they expected
packaging and ingredients to increase the
total cost of goods by about two per cent in
2013. Almost half of this increase is due to
the higher cost of apples, while the
remainder is primarily PET used for bottles,
corn for sweeteners and paper board for
packaging, finance chief Marty Ellen said.
The company expects full-year profit of
$3.04 to $3.12 per share and sales growth of
about three per cent, implying revenue of
about $6.17bn. Analysts were looking for a
profit of $3.20 per share on revenue of
$6.17bn. Dr Pepper reported fourth-quarter
SG&A expenses of $555m for the quarter
ended 31 December, up from $553m a year
earlier. The company said total volumes
declined one per cent, with beverage
concentrates declining the most. Profit rose
to $170m, or 81 cents per share, from $166m,
or 77 cents per share, a year earlier.
Smooth Radio.
But in Manchester, Scotland,
Cardiff, Yorkshire, the east
Midlands and north Wales it
cautioned that competition in
local advertising markets could be
affected.
“The CC has found that in many
areas where Global and Real and
Smooth stations currently overlap
and compete, advertisers ... could
face higher costs,” the commission
said in a statement.
HYATT Hotels reported a better-than-
expected fourth-quarter profit and said it
expects a year of solid growth ahead.
Hyatt’s higher exposure to a better-
positioned US market is coming in handy at
a time when it said it sees “headwinds” in
some other markets this year. About three
quarters of Hyatt’s revenue comes from the
United States, where a business-led recovery
has lifted hotel occupancy rates over the
past year.
Hyatt’s results follow better-than-expected
earnings from Starwood Hotels & Resorts
Worldwide last week.
Marriott International is scheduled to report
results on 19 February.
Hyatt reported a 7.5 per cent increase in
revenue per available room (revPAR) in the
fourth quarter ended December.
Total revenue rose one per cent to $1bn
(£643m). Net profit fell to $16m, or nine
cents per share, from $52m, or 31 cents per
share, largely due to one-time items such as
lower tax benefits and investment losses.
Excluding these, it earned 20 cents per
share.
Now it’s your turn to
meet someone amazing
cityam.com
Tui Travel helps
put parent firm
on an even keel
BY MARION DAKERS
TUI Travel’s growing holiday sales
have helped parent firm Tui AG beat
quarterly forecasts and pare losses.
The German firm, which holds 56
per cent of FTSE 100-listed Tui
Travel, said yesterday its turnover
rose 1.4 per cent on last year to
€3.5bn (£3bn), or flat excluding
currency changes, in the first
financial quarter.
It posted an underlying loss of
€141m, four per cent better than a
year ago.
Tui AG, which dramatically
started and then called off merger
talks with Tui Travel last month,
said the UK firm had delivered a
“sound operating performance”.
Tui Travel reported first-quarter
results last week and said more
Europeans were booking all-
inclusive holidays to make the best
use of dwindling incomes.
Yesterday Tui AG said its cruises
business was delivering “substantial
growth”, with revenues up from
€40m last year to €51m, though
operating losses widened to €11m
due to spending on expansion.
TUI Travel PLC
320.0 p 315.90
13 Feb
317.5
315.0
312.5
310.0
307.5
305.0
7 Feb 8 Feb 11 Feb 12 Feb 13 Feb
NETWORK equipment maker Cisco Systems
reported quarterly revenue and earnings last
night that beat Wall Street’s average
estimates.
Revenue rose five per cent for Cisco’s fiscal
second quarter that ended 26 January to
$12.1bn versus a year ago. Analysts, on
average, were expecting $12.06bn.
Income, excluding items, rose 6.2 per cent to
$2.7bn, or 51 cents per share, three cents
above analysts’ average estimate of 48 cents
a share. For the current quarter, Cisco said it
expects revenue in the current period to
grow within a range of four to six per cent
from the same period last year.
Analysts had been expecting Cisco to do
better than forecast and Shaw Wu, an
analyst at Sterne Agee, said that “it’s pretty
much going to boil down to guidance now”.
“They did say they got a benefit from taxes.
When you (take) that out its 50 cents. That
still beat by twp cents,” he said referring to
Cisco’s earnings per share. Cisco’s shares fell
1.2 per cent in after-hours trading to $20.89.
They have risen almost 25 per cent since its
last quarterly earnings report.
cityam.com
Ros Altmann
steps down as
head of Saga
BY BEN SOUTHWOOD
SAGA boss Ros Altmann yesterday
announced she was stepping down as
director-general of the over-50s lobby,
after two and a half years in the role.
The tireless advocate for pensioners,
and fierce critic of quantitative easing
(QE) said she had enjoyed her role, but
wanted to spend more time in
London – Saga is based in Folkestone.
“Saga has decided to restructure its
presence in the advocacy and lobby-
ing space and, after much careful
thought, Ros Altmann is stepping
down as Saga’s Director General,” the
organisation said in a statement.
It said Altmann’s departure
would be a “loss” for the firm.
Altmann said she was proud
of the achievements she’d
made since she took up the
role in September 2010.
“I’m very proud of things
I’ve achieved: changing
the government’s
views on the unfair
increase in the
women’s state pen-
sion age, pushing
for the move back to
THE LARGEST POLO TOURNAMENT IN EUROPE
an 120 per cent drawdown limit, and
putting the problems of QE squarely
on the maps,” she told City A.M.
But she would not rest on her lau-
rels, she said, and planned to return to
an independent advocacy and adviso-
ry role, a position she was in for 17
years before joining Saga. Chief among
her aims is to get policymakers to
reconsider QE, which she believes has
failed.
Altmann rose to fame when she cam-
paigned between 2002 and 2007 for
the Allied Steel and Wire workers who
lost their supposedly fully-funded pen-
sions when the company went into
administration. Her campaign suc-
ceeded when the government was,
in 2008, found guilty by the
Appeal Court of misleading the
pensioners.
Altmann was also a consult-
ant to the Treasury on the
Myners Review on institutional
investment. She is also a non-
executive director at the
London School of
Economics.
Altmann wants to spend
more time in London
HURLINGHAM 7th, 8th & 9th June 2013
hospitality packages available now
+44 (0) 20 7936 5284
THURSDAY 14 FEBRUARY 2013
Business customers have been travelling less due to tough conditions across Europe
Hogg Robinson revenues drop
as business travellers spend less
BY CITY A.M. REPORTER
BUSINESS travel management
company Hogg Robinson said
yesterday the group had
continued to trade in line with
expectations since October last
year, as revenues for the four
months to the end of January fell
by seven per cent.
The firm, which plans trips for
corporate clients, has been hit by
businesses cutting back on travel
spending. Transaction volumes
were down by two per cent, while
the amount that clients spent per
transaction fell by three per cent.
Analysts said they hope Hogg
www.mintpolointhepark.com
Robinson’s push into online
services could help drive
improvements at the firm.
“Increasing adoption by clients
of Hogg Robinson’s on-line travel
management tools, and the
growing level of software sales
will drive medium-term margin
improvement,” said Julian Cater at
Canaccord Genuity.
“Whilst the market backdrop
remains uncertain, Hogg
Robinson continues to make
progress as clients look to the
group for support in helping them
to achieve best value from their
travel budgets,” chief executive
David Radcliffe said yesterday.
NEWS 21
Harvey Nash
lifts dividend
as profits grow
BY AMY CROWLEY
GLOBAL specialist recruiter Harvey
Nash said yesterday it plans to
increase its final dividend by 10 per
cent after it posted a slight increase
in full-year profits, adding that its
full-year results would be ahead of
expectations.
Pre-tax profit at the firm, which
specialises in technology and IT
service roles, is expected to rise to
£8.6m for the year to 31 January
from £8.5m a year earlier.
Revenues are expected to rise by
10.7 per cent to £590m from £533m
over the same period a year earlier,
with gross profit of around £80m
despite challenging market
conditions, the group said.
Harvey Nash put the increase
down to new offices in Hong Kong
and Sydney, the acquisition of the
Talent IT business in Belgium and
increased market share from its
technology and digital segment.
Full-year results for the group,
which said it had increased its debt
facilities with the Royal Bank of
Scotland from £40m to £52m to fund
working capital when
recruitment markets
recover, will be
released this April.
It plans to pay a
final dividend of
1.795p per share.
Harvey Nash is led
by Albert Ellis
 22 NEWS
THURSDAY 14 FEBRUARY 2013 cityam.com

CITY MOVES WHO’S SWITCHING JOBS Edited by Annabel Palmer

in association with

KNG Securities associate in its sports group. Kelham spent seven Legg Mason Alvarez and Marsal
years as senior lawyer on brand protection matters for
The fixed income specialist the London Organising Committee of the Olympic The asset management firm has announced the The professional services firm has announced the
has announced the Games. She will be working closely with Lewis Silkin’s appointment of Joseph A Sullivan as president and appointment of Wayne Grundy as managing director
appointment of Armando La media, brands and technology team. chief executive. Sullivan joined the firm as chief to lead its new European cyber practice. Grundy has 16
Morgia as a head of structured administrative officer in 2008, and has held prior years’ experience working within internet security,
finance. He joins from Hemera executive roles at Dain Bosworth and Piper Jaffray. and joins from Raytheon UK, where he was chief
Capital Management, where USS Investment Management information officer.
he focused on residential
mortgage-backed and Robin Filmer-Wilson will join the investment Metlife
consumer asset-backed management firm as investment manager in private
Shirley Fell has been appointed chief operations Throgmorton
securities. equity co-investments. He has over 14 years’ direct
private equity and investment experience, and started officer, UK at the insurance company. She has over 30 Carolyn Twist will join the accountancy and back office
his career at Brown Brothers Harriman & Co in New years’ experience in the financial services industry, services firm as senior client adviser. Twist has worked
Lewis Silkin York. He was most recently director at TCR Capital, having previously worked for HBOS and Zurich. She at Morgan Stanley for the past 15 years, most recently
Alex Kelham will join the City law firm as senior where he worked on leveraged buyout transactions. will be responsible for IT application development. as executive director and European controller.

+44 (0)20 7092 0053

SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT morganmckinley.com
To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com

IMF demands
details on EU
banking union
BY TIM WALLACE
THE EU must lay out a careful plan
towards a banking union, ironing out
disagreements and preparing thor-
oughly if the new system of regula-
tion is to work smoothly, the
International Monetary Fund (IMF)
warned yesterday.
TICKETS A lack of good staff, a need for
increased cooperation between
ON SALE national authorities and determining
NOW the exact nature of the central reg-
ulator’s powers are all chal-
lenges to the end goal, it said.
The global finance advisor
approves of the aims of the
banking union, as the nation-
al arrangement of financial
supervision, resolution and
safety nets struggled to cope
with the credit crunch.
Banks became
unwilling to lend
across borders to
areas where funding
was scarce and lend-
ing and deposit rates
now vary widely across Europe – some-
thing the IMF is keen to stop happen-
ing again.
“Single supervision should reduce
national distortions, bring a uniform-
ly high standard of oversight, and mit-
igate the buildup of concentrated risk
that compromises stability for all,”
said Rishi Goyal, who wrote the
report. “And moving responsibility for
potential financial support to the
supranational level would de-couple
banks’ prospects from that of sover-
eigns with weak finances, pro-
tect individual sovereigns from
banking sector weaknesses,
and thus enhance confi-
dence.”
But the IMF warned there are
challenges ahead, as bringing
non-euro members into the
union raises tough
questions over the
structure of the safe-
ty net.
The IMF’s Christine Lagarde
approves of the bank plan

Merkel vows to fight tax havens

at next G8 meeting in the UK
BY CITY A.M. REPORTER
CHANCELLOR Angela Merkel took
aim yesterday at multinational
corporations that use tax rules in
In association with Europe and the United States to
avoid payments and said the Group
of Eight (G8) plans to fight tax
For more information visit gauchopolo.com havens.
“It’s not right that giant global
companies have huge sales here (in
Germany), in all of Europe, in the
United States and elsewhere and
then only pay taxes somewhere in a
tiny tax haven,” Merkel said.
“That’s why we’re going to fight
to finally put an end to tax havens
BREWING COMPANY at the G8 meeting this year in Great
Britain,” she said. “The whole
world will have to fight for it
otherwise we won’t accomplish
that.”
Merkel was speaking before a
meeting of finance ministers and
central bankers from the Group of
20 developed and emerging
economies in Moscow.
On Tuesday the Paris-based
Organisation for Economic
Cooperation and Development
called for an urgent overhaul of
international corporate tax rules to
stop big companies escaping
payment of billions of euros to
cash-strapped governments.
Governments face a growing
outcry from voters to force big
companies with extensive
international business to pay more
tax after evidence that many use
differences between national tax
rules to reduce their bill.
The OECD said multinational
companies were increasingly
reporting profits in countries other
than where their main revenues
were generated to avoid taxes.
cityam.com
December sees
factory output
rise in Eurozone
BY BEN SOUTHWOOD
EUROZONE factory output grew for
the first time for five months in
December, but analysts said the
above-expectations rise would not
stop GDP from contracting.
Industrial production grew 0.7
per cent in the final month of
2012, Eurostat said yesterday, the
first month of growth since
August, and almost double consen-
sus expectations.
But Ben May at Capital Economics
echoed many analysts by continu-
ing to forecast a deep fall in the
bloc’s overall output.
“December’s rise in Eurozone
industrial production does not
alter the fact that GDP probably
contracted pretty sharply in the
fourth quarter,” May said.
In fact, industrial woe probably
took about 0.5 percentage points
away from fourth quarter GDP
growth, May said.
“December’s increase reversed
Lift in US manufacturing and
retail sales boost the economy
BY BEN SOUTHWOOD
US RETAIL sales continued their
steady climb in the first month of
2013, according to data out
yesterday.
Like-for-like retail and food
services sales climbed 0.1 per cent
between December and January to
cap off a 4.4 per cent improvement
over the year, the US Census Bureau
said. Looking at the three months
ending with January gave the same
picture of steady but substantial
improvement, with firms shifting
4.5 per cent more than the same
less than a quarter of the falls
recorded over the previous three
months,” May pointed out.
But the small overall improve-
ment hid some much starker moves
in member states.
Ireland enjoyed an 8.5 per cent
increase in industrial output over
the month, as part of a 1.9 per cent
improvement over the year.
By contrast, Spain and Italy both
saw industrial production slide over
6.5 per cent between December
2011 and December 2012.
Eurozone industry shocks by boosting output in December
110 Index of industrial output, 100 = average level in 2005
105
100
95
Euro area,
seasonally adjusted
90 series
85
2003 2007
period a year before.
Car sellers did particular well,
enjoying a 9.4 per cent surge in sales
over the year. Non-store retailers –
catalogues and the internet –
managed a 15.7 per cent boost over
the year, the Census Bureau said.
Manufacturers also enjoyed an
improvement in their business
environment, according to separate
figures from the Census Bureau.
Their sales edged up 0.3 per cent
between November and December
last year, again capping off a more
substantial annual increase of 3.6
per cent.
THURSDAY 14 FEBRUARY 2013
Around a million Londoners drive to work, according to data from the 2011 Census
Fall in the number of London
workers that commute by car
BY JULIAN HARRIS
THE NUMBER of Londoners that
drive to work has dropped by over
seven per cent since the start of
the millenium, according to
Census data released yesterday.
Over 1.1m residents in the
capital used to drive a car or van
to work according to the 2001
Census – yet the figure is now
closer to 1m, data from the 2011
Census has shown.
London has the lowest
proportion of people who drive to
Source: Eurostat
work in the UK, at 26.3 per cent –
down from 33.5 per cent in 2001.
Nearly half (48.3 per cent) arrive
2012
Firms also built up their
inventories slightly – by 0.1 per cent
over the month, contributing to the
overall 5.1 per cent extra
manufacturers had stored compared
to December 2011.
But the data was not entirely
positive. The retail sales bump was
the smallest in three months and
came as payroll taxes reverted to
higher rates. And a third data
release, from the Labor Department,
showed that import prices were
driven up 0.6 per cent in January by
rising oil prices, further impacting
on tight consumer budgets.
NEWS 23
UK has widest
productivity
gap since 1993
BY BEN SOUTHWOOD
LAURA LEAN/CITY A.M.
UK OUTPUT per hour in 2011 was
further below the average of major
economies than at any time since
1993, according to figures released
yesterday.
British output per worker trailed
the G7 average by 21 per cent in
2011, the most recent year for
which there is data, the Office for
National Statistics (ONS) numbers
showed. Output per hour was
some 16 per cent worse than
across the other major
industrialised economies, the ONS
said, the worst figure for 18 years.
And a flat picture for UK output
at work via rail or buses, the 2011 in 2012, combined with a jobs
Census showed. boom, means that these figures
In the south east region outside are expected to worsen. “Certainly
London, however, 57.2 per cent of we can conclude that no growth in
workers drive a car or van for GDP, combined with booming
their daily commute – slightly employment, will lead to lower
down on the 59.2 per cent output per worker,” ITEM’s Nida
recorded in 2001. Ali told City A.M.
Across England and Wales, But the “productivity
driving remains the most common conundrum” was not a UK-only
form of commuting to work, used phenomenon, the ONS claimed –
by 15.3m people, 57.5 per cent of while the UK has trailed the US,
the working population. Japan and Canada’s productivity
Yet only 4.3m people (16.4 per growth since 2007, it has kept
cent of workers) travel by public close to Germany and Italy. The
transport, according to the figures ONS says this means what it calls
from 2011. Around 3.6m walk or the “productivity conundrum” is
cycle to work. not unique to these isles.
Experts predict global growth
is set to return in six months
BY BEN SOUTHWOOD
GLOBAL growth will return with
a bang over the next six months,
100 level that corresponds to the
economic climate in 2005.
These boosts came mainly from
Asia, where worries of an
driven by emerging markets, emerging market slowdown
according to a poll of experts out seemed to have disappeared. The
yesterday. Asian climate indicator rocketed
The Ifo expectations index from 81.6 in the final three
soared from 87.7 in the fourth months of last year to 97.4 this
quarter of 2012 to 107 in the quarter.
first quarter of 2013, the highest But North America and
result for seven quarters, and Western Europe also enjoyed
back to a position suggesting climbing indices, with respective
things would be significantly jumps of 5.9 and 11.1.
better in six months time. “After six months of
Ifo’s climate indicator also stagnation, the prospects for the
climbed significantly, from 82.4 world economy seem to be
to 94.1, although not quite to the brightening,” said Ifo president
long term average of 96 nor the Hans-Werner Sinn.
Find your next step at
 24 NEWS
Peugeot rules
out asset sales
as losses grow
BY HARRY BANKS
PSA Peugeot Citroen vowed to avoid
further asset sales or government
bailouts, insisting that cuts under-
way will be enough for it to recover
from its biggest-ever full-year loss.
Peugeot shares rose yesterday after
the troubled carmaker said it burned
through cash at the expected rate in
2012 and stuck by a pledge to halve
that figure this year, despite weaken-
ing prospects for a European market
recovery.
“The foundations for our rebound
have been laid,” chief executive
Philippe Varin told reporters in Paris,
citing savings that were slightly
ahead of plan.
Peugeot is the worst casualty of a
European auto sales collapse that has
been especially brutal in its core
southern markets. The company’s
share of regional sales fell to 11.7 per
cent last year from 12.4 per cent, as
rivals such as Volkswagen and
Hyundai-Kia gained ground.
The Paris-based company is scrap-
ping 8,000 jobs and an assembly
plant in an attempt to return to
break-even late in 2014 and prof-
itability in the following full year.
The company yesterday unveiled a
€5bn (£4.3bn) net loss, bloated by
€4.74bn in writedowns as its industri-
al operations continue to bleed cash.
Losses at the auto division swelled
to €1.5bn from €92m as group rev-
enue fell 5.2 per cent to €58.4bn.
Divisional cashflow came to a nega-
tive €2.5bn, for a €208m monthly
average.
The earnings slide has fuelled spec-
ulation that chief executive officer
Varin may be forced to consider sell-
ing the Faurecia parts division or seek
a further cash injection – which
could involve Peugeot become partly
state-owned, like rival Renault.
Peugeot SA
6.50 €
6.40
13 Feb
6.25
6.00
5.75
7 Feb 8 Feb 11 Feb 12 Feb 13 Feb
THURSDAY 14 FEBRUARY 2013
James Bond, acted by Daniel Craig (above), supped on Heineken in the latest Skyfall film
Heineken sees growth regions
offsetting weakness in Europe
BY CITY A.M. REPORTER
HEINEKEN, the world’s third-
largest brewer, beat expectations
for 2012 profit yesterday and said
Africa, Asia and the Americas
should drive continued volume and
revenue growth, offsetting weak
European markets.
The brewer also said that savings
should outweigh rising costs.
The brewer of Heineken –
Europe’s best-selling lager, and Sol,
Strongbow and Tiger, said input
prices, including malted barley and
packaging, would rise only slightly
after rising 8.3 per cent last year.
Heineken said it expected to
achieve €525m (£337.7m) of cost
savings under its TCM2 programme
from 2012-14, with €25m of gains
from the acquisition of Asia Pacific
Breweries (APB) now added to its
initial target. It had reached €196m
of savings by the end of December.
Its net profit before one-offs rose
7.1 per cent to €1.70bn, compared
with a forecast for €1.65bn.
Like-for-like net profit rose 1.6
per cent – Heineken had forecast
2012 profit would be flat on that
basis. After taking full control of
Tiger beer maker APB last year, 64
per cent of Heineken’s volume and
59 per cent of its operating profit
comes from emerging markets.
cityam.com
IN BRIEF
Town Centre Securities’ profit falls
n Leeds-based property investment
and development firm Town Centre
Securities yesterday said first half pre-
tax profits were five per cent down on
2011 at £3.8m for the period to 31
December 2012. Its net asset value
(Nav) per share also slipped to 263p,
from 284p in 2011. Chairman and chief
executive Edward Ziff blamed higher
borrowing costs following its 2011
refinancing for the fall. “We retain a
robust financial position,” he added.
Oxford Instruments is on track
n High-tech manufacturer Oxford
Instruments said yesterday that
trading was on track for the full year.
The firm said that the trends it
reported for the first half of the year
had continued into the second half. It
said its nanotechnology tools sector
continued to grow but its industrial
products sector remained soft. “The
board anticipates that Oxford
Instruments will continue to make
good progress,” it added.
International boosts Speedy Hire
n Equipment rental hire firm Speedy
Hire said yesterday trading was on
track for the full year after its
international business grew revenues
37 per cent year-on-year for the third
quarter. In the UK, revenues were up
two per cent year-on-year for the
same period from 1 October last year
to 12 February. “Importantly both
margins and returns have continued to
improve across the group,” the
company said in a statement.
cityam.com THURSDAY 14 FEBRUARY 2013
25

CITYDASHBOARD
In association with
YOUR ONE-
STOP SHOP
BROKER VIEWS AND
MARKET REPORTS

LONDON REPORT BESTof the BROKERS NEW YORK

REPORT
Late rally sees
To appear in Best of the Brokers, email your research to notes@cityam.com
Petrofac Ltd
1,655.00
1,690
1,680
p 13 Feb
Caution keeps
FTSE 100 hit a
1,670
1,660
1,650 volumes low
and Wall St flat
1,640
1,630

five-year high
1,620

U
7 Feb 8 Feb 11 Feb 12 Feb 13 Feb
S stocks drifted in light volume
PETROFAC yesterday, ending little
changed, as investors remained
UBS yesterday upgraded oilfield services group Petrofac from “neutral” to “buy”, cautious after the S&P 500
with the target price increased from 1,575p to 1,875p. “We think Petrofac has a solid index briefly hit its highest intraday
business model within the onshore engineering & construction end market,” the

T
HE FTSE 100 staged a late rally
yesterday when shorts got
squeezed by the continued
resilience of the market on
the back of rising investor
confidence.
Britain’s top share index closed up
20.73 points, or 0.3 per cent, at
6,359.11, and touched an intraday
high of 6,384.70 – its highest in five
years.
The index, however, fell short of its
highest closing level since January 3
2008 with some late profit taking
and strong resistance seen at 6,400,
according to technical analysts.
The latest market rally has
stretched back to November 19 2012
without a correction, squeezing the
bears and fuelling the bulls’ appetite
for equities.
Miner ENRC, up three per cent yes-
terday, has rallied 26 per cent over
the last week as bid rumours refuse
to go away. Vodafone fell 1.1 per cent
on reports it weighing up a bid for
Germany’s Kabel Deutschland, leav-
ing further question marks over its
dividend outlook.
“(There is) limited scope for addi-
tional leverage at Vodafone while
maintaining dividend cover,” Simon
Maughan, strategist at Olive Tree
Securities, said.
Maughan said that while address-
ing it's lack of fixed line ‘back-haul’
capacity by buying Cable & Wireless
in the UK and TelstraClear in New
Zealand, obvious gaps remain for
Vodafone in Germany, Spain and
Italy, and less pressingly in Holland
and Portugal.
Elsewhere on the upside, Tullow
Oil recovered some recent losses, up
6.8 per cent after releasing a set of
Kenyan well test results, which it
said could lead to the country's first
commercial production.
“Whilst this test rate exceeds prior
guidance, some of this positive news
should be in the price, with the stock
trading up after disappointing
announcements yesterday,”
Canaccord Genuity said in a note.
Reckitt Benckiser, maker of
Strepsils throat lozenges and
Mucinex decongestant, was up 1.3
per cent after beating profit fore-
casts. UBS provided a boost for
Petrofac, which rose two per cent
after the investment bank upgraded
the oil services firm to “buy” from
“neutral” after recent underperfor-
mance following a profit warning
from European peer Saipem.
IMI, meanwhile, fell 0.8 per cent
after UBS cut its rating to “sell” from
“neutral”, saying the company faces
severe margin pressures in its service
division, and is not as deserving of its
new multiple as other engineers.
AstraZeneca, BP, Royal Dutch
Shell and Sage Group all restricted
further gains on the index after they
traded without their dividend attrac-
tions.
FTSE
6,400 6,359.11
13 Feb
6,375
6,350
6,325
6,300
6,275
6,250
6,225
7 Feb 8 Feb 11 Feb 12 Feb 13 Feb
level since November 2007.
note said. UBS recommends “deploying cash organically” within other parts of the The S&P 500 was buoyed by General
business in order to avoid the risks associated with M&A activity. Electric after cable company Comcast
said it will buy from GE the the part of
Capita PLC NBCUniversal it didn’t already own
p
831.00 for $16.7bn. Comcast’s stock hit the
840 13 Feb highest since 1999 before closing up 3
per cent at $40.13 and GE gained 3.6
830
per cent to $23.39.
820 The S&P 500 is up 6.6 per cent so far
this year, partly due to stronger-than-
810 expected corporate earnings and a bet-
ter economic outlook. The Dow
800 industrials is about 1 per cent away
from an all-time intraday high,
reached in October 2007.
7 Feb 8 Feb 11 Feb 12 Feb 13 Feb The Dow Jones industrial average fell
35.79 points or 0.26 per cent, to
CAPITA 13,982.91, the S&P 500 gained 0.9 point
Shore Capital have reiterated their “hold” rating on outsourcing firm Capita, with a or 0.06 per cent, to 1,520.33 and the
target price of 810p – below yesterday’s closing price. Although the brokers expects Nasdaq Composite added 10.38 points
“contract news flow to remain positive” it insists “margin concerns persist” ahead of or 0.33 per cent, to 3,196.88. The S&P
full-year results due on 28 February. “We see evidence of changing business models gained 12 per cent in the first three
that weigh on capital requirements,” it adds. months of 2012.
Deere & Co, the world’s largest farm
equipment maker, forecast a modest
Drax Group PLC
625 p
611.50 increase in sales this year despite the
prospect of the biggest corn crop in US
13 Feb history. The forecast fell short of ana-
620 lysts’ expectations, sending shares of
Deere down 3.5 per cent to $90.68.
615 In extended trading, shares of tech-
nology bellwether Cisco Systems fell 2
610 per cent after it posted results.
605
Dr Pepper Snapple fell 5.8 per cent
to $42.69 after it forecast profit for the
current year below analysts’ estimates.
Cliffs Natural Resources lost a fifth
7 Feb 8 Feb 11 Feb 12 Feb 13 Feb of its market value a day after the
DRAX GROUP miner reported a quarterly loss and
slashed its dividend by 76 per cent.
Cantor Fitzgerald yesterday downgraded Yorkshire power station giant Drax from According to the latest Thomson
“reduce” to “sell”, with a target price of 524p. Drax is proceeding with plans to Reuters data, of the 364 companies in
diversify into biomass power generation but the broker fears there are still concerns the S&P 500 that have reported results,
about the plan. “We believe that the plans are not risk free, and the group remains
70.3 per cent have exceeded analysts'
exposed to carbon costs even after the planned unit conversions,” the note said. expectations.

Rising US debt levels are scraping a) Tell yourself you must get on with
redecorating the bedroom

the ceiling again, do you: b) Sell the Wall Street index in anticipation
of a stock market crash

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26
THEFORUM
High inflation is denting recovery:
The Bank of England must act now
I
T’S official. The Bank of England
has confirmed in its latest
Inflation Report that it is unlikely
to get inflation back to target in
the next couple of years. On its
central forecast, the Bank is not
expecting inflation to be back around
the 2 per cent level until late 2015 or
early 2016.
As a result, the UK will have suffered
a decade of almost continuous above-
target inflation since the mid 2000s –
with two major inflation spikes above
5 per cent, and the likelihood that
inflation will rise above 3 per cent
again this year. This has happened
despite the financial crisis and a
major recession, which was originally
expected to create serious deflation-
ary forces in the UK and other major
economies. Deflation has been fore-
stalled, and instead we are suffering
inflation.
To me this is not a surprise. Two
years ago, in my final year as a mem-
ber of the Monetary Policy Committee
(MPC) I warned that we were set for a
persistent period of relatively high UK
inflation. I was branded an inflation
Agree? Disagree? Got a sharp comment?
The Forum wants you to join the debate.
Finance education at school is the first step to empowering future consumers
I
AM sure that you and I have at
least one thing in common: that
one of the most useful skills in
our lives is being able to manage
money – making sure I live within
my means, don’t run up excessive
debts, can pay my mortgage, can
make sure my savings earn interest,
and that my pension is not eaten up
by fees. Not having that skill can lead
not just to being worse off, but to
financial ruin. As debt advice
charities see every day, the lack of
financial capability can devastate
lives. In recent years, runaway
personal debt has caused problems
for individuals and the economy.
But although it is one of my most
important life skills, I was never
taught it at school. Schools should
FOREIGN
Fly from London City Airport to a European city and enjoy a memorable
In association with
ANDREW SENTANCE
“hawk” or “uber-hawk” as a result.
Well, I’m afraid those warnings were
correct. And the Bank of England has
officially acknowledged this in its lat-
est Inflation Report.
The reasons that inflation has
remained stubbornly high are exactly
those which I highlighted in my final
MPC speeches in early 2011, and
they’re still available on the Bank of
England website. First, the Bank of
England’s economic model and fore-
casts vastly overestimated the down-
ward pressure on inflation from spare
capacity in the economy. In particular,
we have seen services prices in the
consumer price index rising at 3 to 4
per cent consistently since 1997. The
recession has made little dent in this
Twitter: @cityamforum on the web: cityam.com/forum
ANTHONY BROWNE
equip children with both intellectual
learning and skills for life outside the
school gates. And one of the most
important and practical skills
throughout life is the ability to
manage money.
That is why in all last week’s hoopla
about changes to GCSEs, there was
one barely-noticed announcement
that particularly pleased me. Michael
Gove, the education secretary, had
THURSDAY 14 FEBRUARY 2013
rate of increase.
Second, strong economic growth in
Asia and other emerging market
economies has continued to push up
global energy and commodity prices.
Despite the impact of the Eurozone
crisis, and disappointing growth in
many western economies, the oil price
is around $115-120, and could well rise
further if the global economy picks up
as forecast this year and next.
Third, the UK has suffered from an
additional surge in import prices due
to the weakness of the pound. In
February 2011, I described this as
Selling England by the Pound – the
title of the classic Genesis rock album
released 40 years ago. The recent
decline in our currency is worrying
from this standpoint. A renewed bout
of sterling weakness would give added
momentum to the rise in inflation,
which the Bank is already forecasting
for the first half of this year.
These arguments were well-aired in
the columns of City A.M. But it is all
very well to say “I told you so”. The
harder question is: what do we do
now?
or by email: theforum@cityam.com Top responses will be reprinted in The Forum.
decided to include financial
education in the national
curriculum, making it a legal
requirement for schools to teach it. It
is something the British Bankers’
Association had been urging the
government to do.
Financial education helps people
balance their finances, avoid costly
debt, save for their future and better
understand their investments. It
empowers customers, giving them
the confidence that they are getting
the best deal from financial services
companies. Unlike many of the skills
taught in school, financial education
benefits everyone throughout their
whole lives. And the lack of it can be
personally disastrous.
For all these reasons, we have
The answer from the outgoing Bank
of England governor Sir Mervyn King
yesterday was the same as he has been
giving throughout the crisis. We have
to keep interest rates low to support
economic growth, and the prospects
for the economy would be worse if we
did anything to curb inflation.
That was exactly the right policy in
‘an additional
The UK has suffered
surge in
import prices due to the
weakness of the pound
the depths of the financial crisis in
2009, but I don’t think it is the right
approach now. Tolerating inflation is
contributing to the squeeze on con-
sumers, which is one of the main neg-
ative factors behind weak growth.
Savers have suffered from low interest
rates for a prolonged period of time
backed the Personal Finance
Education Group (Pfeg) in its
campaign to ensure that every child
and young person has the skills,
knowledge and confidence to manage
their money well. Until now, there
have only been guidelines in place for
four to16 year-olds to learn about
financial education. For primary
schools, the guidelines recommend
that pupils are taught to look after
their money and realise that future
wants and needs may be met through
savings. That is good as far as it goes –
but it is only by including personal
finance in the curriculum that we
can be sure that every school equips
every child with the skills they need.
British banks are already active in
financial education, with many
cityam.com/forum
and are also cutting back on their con-
sumption.
Another concern is the impact of a
very low interest rate policy, accompa-
nied by high inflation, on the value of
the pound. The official Bank of
England view is that a weak pound
helps the rebalancing of the UK econ-
omy towards exports. But we have
seen little evidence of that because UK
exports are not price sensitive and the
UK doesn’t have lots of spare capacity
in exporting industries. Instead, a
weak currency squeezes consumers
and probably does more harm than
good.
In the short term, the MPC is reluc-
tant to take action to keep inflation
on target. But relatively high inflation
and a weak currency are becoming
part of the problem for UK economy,
rather than part of the solution. The
sooner we recognise this, the more
quickly we can plot a course ahead for
a genuine and sustained recovery.
Andrew Sentance is senior economic advis-
er at PwC, and a former member of the
Bank of England’s Monetary Policy
Committee.
running their own schemes. A
number also support the work
carried out in schools by Pfeg, which
trains teachers in financial education.
The industry works with Pfeg’s
Quality Mark accreditation scheme,
ensuring that young people in receipt
of financial education programmes,
or education resources produced by
financial firms, are not being exposed
to marketing.
We now need to ensure that
schools can deliver the necessary
teaching. At a time when the need for
financial education has never been
clearer, the banking industry is keen
to work with the government to
deliver its new commitment.
Anthony Browne is chief executive of the
British Bankers’ Association.
 THURSDAY 14 FEBRUARY 2013
27

WE WANT TO HEAR YOUR VIEWS

E: theforum@cityam.com | Comment: cityam.com/forum | @cityamforum

LETTERS to the editor Crest Nicholson IPO

True entrepreneurs Work placements
[Re: Europe needs to be more relaxed about
entrepreneurs getting filthy rich, yesterday]
Few people have a problem with people like
Google’s Eric Schmidt becoming wealthy if
they have been genuinely entrepreneurial –
BEST OF TWITTER could herald a new
dawn for markets
Sir Mervyn King’s high inflation forecast
[Re: Pope Benedict saw why the capitalist seems deliberate. Kings have historically
system is virtuous, yesterday] debauched the coin to inflate away debts.
Philip Booth’s thoughtful piece mentioned @GuidoFawkes
two central issues – the role of solidarity in
capitalism and what he called “the Did I hear a coded message from Sir Mervyn

creating something new by effort and
ingenuity. But Paul Ormerod doesn’t seem
to recognise a difference between Schmidt
and many of China’s new rich. The latter
define and often administer the laws in their
country. These men and women are part of
an oligarchy – in collusion with political
power. Like Russian oligarchs or Arab
princes, they have taken hold of their
nation’s assets by force or guile, and have
injected no effort or creativity. Why should
we be relaxed about that?
John Hawkes
requirements for justice” in relation to it. As
one who came to the Square Mile in 1964,
my observation is that solidarity is all but
absent from the City and “justice” is a word
rarely if ever considered. The vast majority
of people who work here are decent citizens.
But within a City increasingly dominated by
faceless international corporations, there
has developed a potentially fatal lack of
morality. The key rests with individuals at
every level trying to live out their own values
and beliefs in their work.
Lord Phillips of Sudbury
King that banks may require huge capital
injections in the years to come?
@truemagic68
The elders of my tribe talk of a time when
the Bank of England met its inflation target.
But I think it’s just a story.
@DanHannanMEP
Nobody will be happier about a US-EU trade
partnership than David Cameron. It makes
for a better argument to stay within the EU.
@IanBremmer
I
N THE biggest flotation of the
year so far, the housebuilder
Crest Nicholson has returned to
the stock market. One swallow
doesn’t make a summer, but
given that we have now seen a flock
of the creatures, it’s clear that the
initial public offering (IPO) market is ANDY CROSSLEY
open for business.
The backdrop for such transactions But these criticisms have been taken
is better than it has been for some on board by responsible banks and
years. First, we are talking about qual- advisers; engagement with investors
ity companies, sensibly priced, with now starts earlier in the process, syn-

Should we blame EU policy for the failure

credible management, and Crest dicates are smaller, involving mid-cap
Nicholson ticks all these boxes with specialists for mid-cap stocks, and
panache. It follows Direct Line – more thoughtful pricing has meant
another hugely successful float, that fairer valuations.

to prevent the current horse meat scandal?

has traded well ever since. These are
not like some of the poorly-conceived
and poorly-priced priced companies
that appeared on the market in the
mid-1990s.
Another factor that has lent support
is the significant interest garnered
from retail investors, particularly in
Hong Kong and Singapore. For the UK
model to thrive, weakness in this area

YES NO
Institutional clients are also looking
for new ideas: the lack of IPOs and the
attrition of companies through
takeovers has led to a shrinkage in the
investable equities universe. In partic-
ular, the quoted tech sector has
shrunk dramatically, with Autonomy,
Logica, Misys, Psion, Kewill all ceasing
must be addressed, and individuals’
appetite for IPOs and  equity invest-
ment needs to be rekindled. This
could be done by involving brokers
with long-standing relationships with
retail wealth managers in syndicates,
and by giving them the responsibility
for the intermediaries offer and for

Robert Oulds Diane Dodds

to exist. But now, for the first time in a corralling the offer through their
while, we are seeing flows into equi- platforms. In cases where the UK gov-
ties. With the “Great Rotation” only ernment is the vendor, and for com-
just beginning, this can be expected panies with a well-recognised brand,
Food safety and labelling, and therefore the issue of food fraud, Farmers in my Northern Ireland constituency make the important to continue for the foreseeable future. promotion to retail investors could
comes under the power of the EU. EU law (council regulation decision to adhere to the strictest animal welfare, environmental and Valuations remain attractive, particu- prove very helpful in achieving a suc-
178/2002) clearly states that food producers and retailers, not British traceability rules. This ensures that when the produce leaves the larly relative to other asset classes, cessful float.
civil servants, have the primary responsibility for food safety and farm, the farmer can say it is of a high standard. But in recent days, and the global economy is at last A functioning IPO market is vital to
quality in the UK. And if a product is judged acceptable in one EU consumer confidence in British produce has been eroded by the beginning to recover from the 2008-9 the future of the UK economy.
state, EU rules say it should be accepted in all. This passing of unscrupulous and fraudulent practices of a minority of processors crisis. Businesses must be able to come to
responsibility from Whitehall to Brussels has created a system where and retailers. This isn’t indicative of a problem with the rules. As with A handful of institutions have previ- market to raise capital to fund oppor-
those who have an interest in fraud are being asked to police all aspects of its remit, the EU subjects the agri-food sector to ously criticised IPO processes. tunities, and to create wealth and
themselves. In short, there is a systems failure. The parent excesses of red tape and regulation. Rather, it is a problem faced in BlackRock sent a letter to the invest- jobs. This market is now open. But for
organisation of Britain’s Food Standards Agency (FSA) is the all walks of life – that of the minority bending, breaking and ment banks with concerns about the creation of a really thriving and
European Food Safety Authority, and the FSA solely exists to enforce exploiting the rules. Evaluating enforcement measures across the EU excessive valuations. It encouraged sustainable IPO market, we also need
rules originating from the European Commission. But those rules do and within member states is a must. Those guilty of this deceit must smaller syndicates and opposed fees to broaden the pools of capital, and
not lay responsibility, or adequate resources for testing, with the FSA. face the full force of the law and stringent penalties. based on valuation targets. More the retail investor should have a place
recently, Legal and General has raised alongside the institutional.
It is this slack EU regime that has allowed consumers to be deceived. Diane Dodds is a Democratic Unionist Party MEP and member of the
similar concerns in a submission to Andy Crossley is head of corporate
Robert Oulds is director of the Bruges Group. European Parliament’s Agriculture and Rural Development Committee. the UK Listing Authority. sales/syndication at Peel Hunt.

4th Floor, 33 Queen Street, Editorial Editor Allister Heath | Deputy Editor David Hellier | Managing Editor Marc Sidwell Distribution helpline
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AFFAIRS
weekend together. Visit cityjet.com
cityam.com THURSDAY 14 FEBRUARY 2013
29

LIFE&STYLE FASHION
The white shirt: White Shirt Week is as good a
reason as any to splash out on
a crisp new bespoke shirt

it’s a classic for a S

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very good reason

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30 LIFE&STYLE TECHNOLOGY THURSDAY 14 FEBRUARY 2013 cityam.com

What 2013’s top gadgets might

look like (we really, really hope)
Fantasy gadgets: how graphic artists think the technology of tomorrow might look, by Steve Dinneen
Xbox 720
Microsoft’s as yet unnamed upcoming
console (720 sounds like a reasonable
follow-up to the 360) will almost certainly
look nothing like this artist’s impression. It
is likely to be very Kinect focused, be an
all-in-one entertainment hub and feature
a subscription model for games.

iPad 5
The last generation iPad was a small
improvement on the iPad 3. Expect the
next one to be lighter and thinner, and
some analysts think it could shave 17mm
from the width and 4mm from the height.
It is also likely to feature a far smaller
bevel, more akin to the iPad Mini.

DESIGNED BY TAI CHIEM

Amazon Phone PlayStation 4

Rumours of an Amazon phone, which Much as I like this awesome touchscreen
would sit alongside its Kindle Fire tablets controller, it is unlikely to feature on the
have been rife for a while now but they real PS4. However, the new pad may
could come to fruition this year. If it include an LCD touchscreen. Also expect
arrives it is likely to be cheap, run Android vamped-up cloud services, allowing
(despite some WP8 rumours) and games streaming and ultra high
integrate with Amazon’s cloud service. resolution.

DESIGNED BY ANTONIO DEROSA, ADR-STUDIO.IT

Google Project Glass Apple iWatch

Google’s futuristic augmented reality specs This is already in development,
are well into the development process – according to the rumour mill. Around
Google co-founder Sergey Brin has even 100 Apple staff are said to be developing
worn them out in public a few times. They a watch that can sync with your iPhone
will allow you to overlay maps onto your to display information about whatever
vision, as well as check emails, take you are doing. It may also feature a
photographs and share them with friends. flexible glass front.
 32 TV & GAMES
THURSDAY 14 FEBRUARY 2013 cityam.com

BBC1
BBC1
TERRESTRIAL
6pm BBC News
6.30pm BBC London News
TERRESTRIAL
7pm The One Show: Topical
stories from around the UK.
7.30pm CHOICE EastEnders:
BBC News
8pm Waterloo Road
9pm Crimewatch: An appeal
for help in the search for a boy
who went missing in 1988.
10pm BBC News
10.25pm Regional News
10.35pm Crimewatch Update
10.45pm Question Time
11.45pm This Week
12.30am Skiing Weatherview
12.35am-6am BBC News
BBC2
BBC2
6pm Eggheads: Quiz, hosted by
Jeremy Vine.
6.30pm Flog It! Trade Secrets
7.30pm Great British Menu
8pm The Planners
9pm The Genius of Invention
10pm Charlie Brooker’s Weekly
Wipe
10.30pm Newsnight: Weather
11.20pm The Railway: Keeping
Britain on Track
12.20am Brain Doctors
1.20am The Culture Show 1.50am
Sign Zone: Inside Barclays: Banking
on Bonuses – Panorama 2.20am
Close 4am-6am BBC Learning
Zone
ITV1
ITV CHANNEL4 CHANNEL5
CHANNEL4 CHANNEL5 TV PICK
6pm ITV News London 6pm The Simpsons: Homer is 6pm Home and Away: Heath
6.15pm ITV News hypnotised. 6.30pm Hollyoaks 7pm
and Jamie go on a fishing trip.
6.45pm Emmerdale Channel 4 News 7.55pm 4thought.
6.30pm 5 News at 6.30
tv 8pm Britain’s Secret Shoppers
7.45pm CHOICE UEFA Europa 9pm CHOICE Hugh’s Fish Fight: 7pm Police Interceptors: Two
League Live Save Our Seas 10pm Streak! The officers deal with a suspected
10.10pm ITV News Man Who Can’t Keep His Clothes gunman; 5 News Update
10.40pm ITV News London On 11.05pm Random Acts 11.10pm 8pm Dangerous Drivers’
10.45pm The Jonathan Ross Richard III: The King in the Car School: 5 News at 9
Show: With John C Reilly, Park 12.40am Inside Nature’s 9pm Winter Road Rescue EASTENDERS
Giants: The Whale 1.35am How BBC1, 7.30PM
Hayley Atwell and Adam Ant. 10pm FILM The Matrix
Safe Is Your Child’s Nursery?: Bianca panics when she discovers the
11.45pm The Golden Rules of Channel 4 Dispatches 2.05am Tony Revolutions: Sci-fi sequel,
dresses she and Kat are selling are
TV Robinson’s Gods and Monsters 3am starring Keanu Reeves. 2003. stolen, and Abi tells Jay she wants
12.15am Jackpot247
Time Team 3.55am Deal or No Deal: 12.30am SuperCasino them to sleep together.
3am From the Heart: A Tonight Hollywood Heartthrobs 4.50am 4am House Doctor 4.20am House
Special 3.50am ITV Nightscreen Countdown 5.35am Kirstie’s Doctor 4.45am Michaela’s Wild
5.05am-6am The Jeremy Kyle Vintage Gems 5.45am-6.10am Challenge 5.10am Wildlife SOS
Show Baking Mad with Eric Lanlard 5.35am-6am Wildlife SOS

SKY SPORTS 1 BRITISH EUROSPORT Crime Scene Investigation 12.05am The Big Bang Theory The True Story 2am Sons of Guns
CABLE

7pm Live Premier League Darts 7pm Live Snooker: The Welsh 2.15am Supernatural 3.05am 1am Happy Endings 1.30am The 3am Ben Fogle’s Year of
10.30pm The Footballers’ Open 10pm Snooker: The Welsh Medium 3.55am Bones 4.45am Ricky Gervais Show 2am The Adventures 3.50am Platoon: The
Nothing to Declare 5.10am-6am Cleveland Show 2.20am Micky True Story 4.40am American
SATELLITE& &CABLE

Football Show 12am Ringside Open 11pm European Poker Tour

1am Premier League World
1.30am The Footballers’ Football
Show 3am Ringside 4am The
Rugby Club 5am Premier League
World 5.30am-6am Live
International Twenty20 Cricket
SKY SPORTS 2
5.30pm Netball 7.30pm Premier
SATELLITE
12am Cycling 12.30am-12.45am
GT Academy: Race to Dubai
ESPN
5.30pm Live UEFA Europa
League Football 8pm Live UEFA
Europa League Football 10.30pm
Goal! Bundesliga Preview 11pm
ESPN FC Press Pass 11.30pm
Motorway Patrol
BBC THREE
7pm Top Gear 8pm Don’t Tell the
Bride: Valentine’s 9pm Junior
Doctors: Your Life in Their Hands
10pm Way to Go 10.30pm
EastEnders 11pm Family Guy
11.45pm American Dad!
Flanagan’s Out Out Tour 3.15am Chopper: Senior Versus Junior
The Secret Life of Us 4am Happy 5.30am-6am Meerkat Manor UEFA EUROPA LEAGUE LIVE
Endings 4.25am-6am Made in ITV, 7.45PM
Chelsea DISCOVERY HOME & Tottenham Hotspur v Lyon (Kick-off
HISTORY HEALTH 8.05pm). Matt Smith presents
7pm Portland Babies 8pm Jon coverage of the last-32 first-leg match
7pm Storage Wars 7.30pm Pawn
and Kate Plus 8 9pm A Haunting at White Hart Lane.
Stars 9pm Storage Wars: Texas
10pm My Strange Addiction
10pm Storage Wars 11.30pm

League World 8pm The Rugby
Club 9pm Ringside 10pm WWE:
Late Night – Raw 12am WWE:
NXT 1am Premier League Darts
4.30am America’s Cup
Discovered 5am-6am Ringside
SKY SPORTS 3
7pm Test Cricket 8pm Live PGA
Tour Golf 11pm European Tour
Golf 1am Racemax 2am The
Rugby Club 3am ATP Tour
Uncovered 3.25am-6am Live
Women’s Cricket World Cup
French Ligue 1 Preview 12am
NASCAR Now 12.30am Freestyle
FIS World Cup Magazine 1am
Live NBA Basketball
3.30am-6am Live NBA
Basketball
SKY LIVING
7pm Criminal Minds 8pm Stitch
Me, Lift Me, Tuck Me 9pm The
Spa 9.30pm Mount Pleasant
10.30pm Criminal Minds
11.30pm Bones 12.30am
Caribbean Cops 1.25am CSI:
12.30am Way to Go 1am Junior
Doctors: Your Life in Their Hands
1.55am People Like Us 2.55am
Pramface 3.25am-3.55am Way
to Go
E4
7pm Hollyoaks 7.30pm How I
Met Your Mother 8pm The Big
Bang Theory 8.30pm How I Met
Your Mother 9pm The New
Normal 9.30pm 2 Broke Girls
10pm My Mad Fat Diary 11pm
Micky Flanagan’s Out Out Tour
Pawn Stars 1am Storage Wars 11pm Sex Change Uncut 12am A
2am American Pickers 3am Ice Haunting 1am My Strange
Road Truckers 4am American Addiction 2am Sex Change Uncut
Restoration 5am Pawn Stars 3am Jon and Kate Plus 8 4am
5.30am-6am Storage Wars Baby ER 5am-6am Nanny School
DISCOVERY SKY1
7pm Gold Divers: Under the Ice 8pm Arrow 9pm Hawaii Five-0
8pm Wheeler Dealers 9pm Ben 10pm NCIS: Los Angeles 11pm A HUGH’S FISH FIGHT: SAVE OUR
Fogle’s Year of Adventures 10pm League of Their Own Unseen
SEAS CHANNEL4, 9PM
Platoon: The True Story 11pm 12am Road Wars 2am Cop Squad New series. Hugh Fearnley-
Auction Hunters 11.30pm 3am Armed and Dangerous: Whittingstall continues his campaign
Auction Kings 12am Ben Fogle’s Ultimate Forces 4am-6am to save the world’s diminishing fish
Year of Adventures 1am Platoon: Stargate SG-1 stocks.

COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk 
QUICK CROSSWORD
   

SUDOKU KAKURO
38 22 11 15 10 11 
14 4 4
17 19 
34 21
Place the numbers from 1 to 9 in each empty cell so that 28
Fill the grid so that each 45
each row, each column and each 3x3 block contains all the
block adds up to the total
numbers from 1 to 9 to solve this tricky Sudoku puzzle.   
in the box above or to the 9 9 6
11
left of it. 8 7
 You can only use the 3 27 39 21
digits 1-9 and you must not 10 30    
16
  use the same digit twice in 13 7
a block. The same digit may 24 12
     occur more than once in a 12
22
8
16 16
13

row or column, but it must 45
   be in a separate block.
23 35
    10 5 6
 

   ACROSS DOWN
1 Lines where pieces 1 Drops down (5)
    
  WORDWHEEL V I
of fabric are sewn
together (5)
3 Sketches (5)
2 Tooth with a
broad crown (5)
4 Price of a plane
Using only the letters in the Wordwheel, you have 7 Cleared of weapons such ticket (3,4)
 ten minutes to find as many words as possible,
G S as H-bombs, etc (7,4) 5 Hard outer
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
O
R N
8 Concerned with
religion (6)
covering (5)
6 Nominee (9)
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
10 Use a container
to remove water
9 Belonging to
the present
SOLUTIONS KAKURO is at least one nine-letter word in the wheel. U A flooding a vessel (4) time (7)
11 Jimmy ___, host of TV’s 11 Clique (often
QUICK CROSSWORD 7 2 1 2 6 1 3 7 8 Out of 10 Cats (4) secret) that
D U P E S C O U G H
9 7 6 7 8 3 6 9 SUDOKU          12 Leave in the lurch (6) seeks power
A U W N E
8 6 3 5 9 7 1 4
         15 Piece of armour usually through
R T R I B U T A R Y 2 1 9 2 8 covering the chest (11) intrigue (5)
        
3 5 4 7 5 1 2 3
I N T E R H M
         16 Spring-loaded door 13 Patty Bouvier’s
N C L O V E A 1 4 6 2 1 4 2
WORDWHEEL
G A T E B S A N D 2 7 6 9
         fastener (5) twin sister
8 8 5 9
T P R I M P A
2 1 4 9 4
         17 Method of producing in TV’s The
T T I O W A N
8 1 7 2 5 1 4 3 The nine-letter word was          designs on cloth by Simpsons (5)
C A L I B R A T E C
9 6 7 8 5 2 8 1          covering with wax, 14 Adjust finely (5)
C V
C H E E K
O
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E E
D E R 6 3 2 5 1 5 9 6
PLAYTHING          then dyeing (5)
cityam.com THURSDAY 14 FEBRUARY 2013
SPORT 33

Ashes double is
ALL OUT: CHAMPIONS MISS OUT ON FINAL PLACE IN BRIEF
Fresh delay over Pompey sale
n FOOTBALL: Uncertainty over

our aim, says

Portsmouth’s future was prolonged
yesterday when a High Court hearing
was adjourned for the fourth time. The
Portsmouth Supporters’ Trust remain
administrators PKF’s preferred
bidders despite interest from football

England’s Prior
takeover broker Keith Harris. The
hearing is set to resume next week.

Wales in Lydiate comeback boost

BY JOSH RICHARDS
WICKETKEEPER Matt Prior believes
England possess all the qualities
required to win back-to-back Ashes
series against old adversaries
Australia later this year.
Prior, who played a crucial part
in England’s two previous triumphs
at home and Down Under, is
expected to don the gloves again
when Australia arrive for the five-
Test series starting in July and for
the return meeting, which begins
in Brisbane in November.
And the 30-year-old is confident
his team can outscore their big
rivals in all departments to retain
the prized urn.
“If we prepare and perform as we
want to, there is no reason why we
shouldn’t dominate Australia in
these two Ashes series,” said Prior.
“You look at our dressing room
and the skills we have in our team;
batsmen, bowlers, the spin
department, it’s all there.
“But Ashes series are strange.
There is no such thing as a weak
Australian Test side and we will
have to be on our game to do it.”
Australian cricket is currently
going through a period of
transition following the retirement
of legendary batsmen Mike Hussey
and Ricky Ponting late last year.
The pair’s decision to hang up
their baggy green caps leaves
Australia’s current squad, which is
touring India, boasting only five
players who have played in an
overseas Ashes Test before.
By contrast England are likely to
select squads packed with
experience of playing in multiple
Ashes series and Prior feels his more
senior team-mates can keep
Australia on the back foot.
“There are ways of creating an
intensity out on the pitch, like the
way we hustle around,” he said.
“Then you have our fielders
stopping singles that potentially
could have been a four.
“When you come out to bat
there’s nothing better than
crunching a few cover drives to get
you off and running. But if you
suddenly have cover point diving
and stopping it, it does get to you.”
n RUGBY UNION: Wales expect to
have flanker Dan Lydiate back for next
month’s final RBS Six Nations clash
against England in Cardiff. Lydiate, 25,
has been sidelined since September
with a broken ankle.
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 34 THURSDAY 14 FEBRUARY 2013

SPORT cityam.com/sport @cityam_sport

FOOTBALL
COMMENT
TREVOR STEVEN
It’s United’s to lose now,
Evans and De CHAMPIONS LEAGUE
REAL MADRID.............................1
Gea make case MANCHESTER UNITED ................1

for the defence BY JOSH RICHARDS

MANCHESTER United boss Sir Alex

P
EOPLE like to criticise him
because he is not a big name,
but Jonny Evans showed last
night he has the character to
stand up and be counted in
Manchester United’s biggest games.
The centre-back was strong and
played an important role in
organising an excellent defensive
display against a talented Real
Madrid attack that makes United
firm favourites to qualify.
Evans wasn’t the only one;
goalkeeper David de Gea, one
characteristic flap at a cross aside,
was impeccable back on home soil
and will derive great confidence
from his display.
De Gea could do nothing about
Cristiano Ronaldo’s headed equaliser
but had everything else covered,
summoning a performance that
Jonny Evans helped keep Real at bay
showed why United paid £18m for
the youngster.
Rio Ferdinand was steady
alongside Evans, while right-back
Ferguson believes his team have one
foot in the Champions League
quarter-finals after they held Real
Madrid at the Bernabeu last night.
Danny Welbeck headed the
visitors in front with 20 minutes
played in the last 16, first leg tie, but
United old boy Cristiano Ronaldo
inevitably levelled 10 minutes later.
In an even second half United
went closest to grabbing a winner
when Robin van Persie saw a shot
come back off the post and
Ferguson is confident his side can
now finish the job in the second leg
in three weeks’ time.
“I’ve got to be pleased with the
result. It takes us back to Old
Trafford with a great chance,” said
the 71-year-old Scot.
“I think we’ll score at Old
Trafford, but I know how dangerous
they can be on the counter attack
because I watched them at
Manchester City earlier this season.
“So we still have a big job on our
hands, but it’s within our grasp.”
United keeper David de Gea,
much maligned for some of his
Premier League performances this
season, made several outstanding
saves to deny Real a second.
And Ferguson was full of praise
for the ex-Atletico Madrid stopper’s
performance.
“David de Gea made three or four
great saves,” he said. “But we missed
chances ourselves. It was an
interesting game.”
Real flew out of the traps in front
of an expectant home crowd and
forced a fine finger-tip save from De
Ronaldo’s header beat the otherwise outstanding De Gea to equalise for Real, after Welbeck had put United in front
Gea, who pushed Fabio Coentrao’s matches. The visitors’ lead was soon agility of De Gea with shots from in victory in the 72nd minute. First,
low, curling effort onto the post. wiped out though, when Ronaldo and around the box, but the the Dutchman got in behind the
But United weathered the storm leapt majestically to head Angel Di 22-year-old was equal to everything Madrid defence and saw a powerful
and took a surprise lead through Maria’s left-wing cross into the the home team threw at him. right-footed strike squirm through
Welbeck when the England forward bottom corner. United were forced to soak up the the hands of Real keeper Diego
rose above defender Sergio Ramos to Real continued in the ascendancy pressure for much of the second Lopez and come back off the post.
meet Wayne Rooney’s corner and after the interval, as Ronaldo, Di period, but Van Persie twice went And, as the hosts struggled to
headed in only his second goal in 28 Maria and Coentrao all tested the close to snatching a memorable clear their lines, Van Persie found

Benitez ready to offer goal shy Prove you belong in European

Rafael continues to improve. His
doggedness makes him a worthy
successor to the equally tenacious
Gary Neville.

Torres a helping hand in attack elite, Villas-Boas urges Spurs

First legs are often decisive and
United had much to lose against a
Real side for whom the Champions
League is their clear priority, so I
could understand Sir Alex Ferguson
not being too adventurous and he
will be delighted with the draw.
Ronaldo justified Ferguson’s pre-
match talk of him stepping up to
another level; he was the most
influential player on the pitch by
some distance and looks the biggest
threat to United’s otherwise likely
qualification.
If they can minimise his impact at
Old Trafford, then I’m sure Wayne
Rooney and Robin van Persie, neither
of whom could get into last night’s
game, will be far more effective and
send United into the last eight.
Trevor Steven is a former England
footballer who now works as a media
commentator.
BY JOSH RICHARDS
CHELSEA manager Rafael Benitez is
preparing to deploy winger Victor
Moses as an emergency striker to
ease the burden on misfiring
forward Fernando Torres.
Nigeria international Moses
returned triumphant from the
Africa Cup of Nations this week
and will miss tonight’s
Europa League round of
32, first leg game at
Sparta Prague.
But Benitez has
stated the 22-year-old,
who has not played
for Chelsea since
their FA Cup win at
Southampton on 5 January, could
be thrown back into the action
with Torres having scored just
once in his last 12 matches.
“It’s a problem, but we’ll try
to keep Fernando fit and
hopefully scoring goals,”
said Benitez.
“If we have to manage in a
different way because we
don’t have him we will,
but Victor Moses is
back and he’s an
option to play as a
striker.”
Benitez says Moses can play
as a striker if needed
BY JOSH RICHARDS
TOTTENHAM manager Andre Villas-
Boas believes tonight’s Europa
League clash with Lyon will be a
perfect test of his team’s Champions
League credentials.
Lyon’s appearance in this year’s
Europa League ends 13 consecutive
seasons of playing Champions
League football.
And Villas-Boas, whose Spurs side
currently occupy fourth place in the
Premier League, feels the French
giants are the calibre of opposition
his team could have to try to cope
with next season.
“This could be a test of whether
we’re good enough to play in the
Champions League,” he said. “I
think we’ve been handed the most
difficult draw of this knock-out
phase. This is like a Champions
League tie. It will be a good test for
Tottenham.”
Goalkeeper Hugo Lloris, who
moved from Lyon to Spurs for £8m
in the summer, will have to make
do with a place on the bench
against his former employers in the
last 32, first leg match, with Brad
Friedel set for a rare start.
Striker Jermain Defoe is out with
an ankle injury and midfielder Tom
Huddlestone is missing with knee
trouble. Long-term absentees
Younes Kaboul and Sandro remain
sidelined.

insists Ferguson
himself with space inside the
box again, but this time saw a
miscued shot hooked off the
line by Xabi Alonso with Lopez
beaten.
Khedira and Real substitute
Gonzalo Higuain called De Gea
into action again late on, but
Robson and Watson handed Hunt quits as
South American Fed Cup test Olympic chief
BY FRANK DALLERES
BRITAIN’S women tennis stars
will have to overcome a tricky
trip to Argentina if they are to
achieve promotion to the Fed
Cup’s World Group II, after the
draw was made yesterday.
Judy Murray’s team, which
includes world No41 Heather
Watson and No45 Laura
Robson, are ranked one place
above Argentina but are likely
to feel less at home on the clay
courts.
Watson and Robson both
won singles matches as Great
Britain beat Bulgaria last week
in Israel to set up a shot at
the keeper made two
outstanding reaction saves.
Ronaldo made one last
attempt to steal the limelight
with five minutes remaining,
but the Portugal star’s long-
range free-kick dipped onto the
roof of the net.
qualifying for World Group II,
the competition’s second tier.
Team captain Murray said:
“Argentina away on clay will be
a tough challenge for us but we
have a strong squad and a huge
opportunity to grab a place in
the World Group. Vamos!”
Britain reached the same
stage last year, only to lose 4-1
to Sweden, Robson breaking
down in tears courtside after
her loss to Sofia Arvidsson
confirmed the defeat.
Argentina’s highest ranked
player is world No195 Paula
Ormaechea. They lie 17th in the
Fed Cup rankings, one place
behind Britain.
THURSDAY 14 FEBRUARY 2013 cityam.com 35
‘dominate
There is no reason why we shouldn’t
Australia in these two Ashes series
England wicketkeeper Matt Prior: Cricket, Page 33
Six Nations turns sour for Ireland
as Healy is found guilty of stamp
BY JOSH RICHARDS
PROP Cian Healy will miss Ireland’s
carries the standard punishment of a
five-week suspension.
The committee also allowed a two-
Mourinho: We
next two RBS Six Nations fixtures after week mitigation period, recognising
being found guilty of stamping on that Healy would not have played this
England’s Dan Cole during their 12-6 weekend as Ireland are without a
will score two
defeat in Dublin on Sunday. fixture, therefore the ban will end at
The 25-year-old trod on Cole’s ankle midnight on 10 March.
in the 14th minute of the match at the A statement from the committee
Aviva Stadium after an Ireland maul said: “The committee, having viewed
at Old Trafford collapsed, though match referee
Jerome Garces missed the
incident after allowing the game
to continue with an Irish
the footage of the incident and
listened to the representations by and
on behalf of the player, found that
the stamp should be categorised as a
BY FRANK DALLERES advantage. mid-range offence in terms of
However, Healy was seriousness, which carries a
REAL Madrid manager Jose subsequently cited for sanction of five weeks.”
Mourinho insists his team will the stamp and an Healy will miss Ireland’s
score more than one goal at independent trip to Scotland on
Manchester United in the second disciplinary 24 February and France’s
leg and expects their Champions committee ruled visit to Dublin on 9
League last 16 tie to go right down the Leinster March, their
to the last minute. forward should penultimate fixture.
United’s 1-1 draw in the Spanish be banned for a
capital last night would appear to mid-range Healy will miss Scotland
make them favourites to progress offence, which and France fixtures
to the quarter-finals in a three
weeks’ time, but Mourinho believes
the contest is still wide open.
“The match was very open, but I
haven’t changed my mind, it’s 50-50
and I think it will go down to the
last minute of the second leg,” said
the former Chelsea boss.
“It’s two matches, home and
away. They did well but my players
were together and they gave
everything. They have no
advantage, 1-1 is not a bad result
because everything is still open and
we can score more than one goal
there.”
United’s Spanish goalkeeper
David de Gea was forced to make a
string of excellent saves as Real
mustered 28 attempts on goal to
United’s 13.
Mourinho accused opposite
number Sir Alex Ferguson of
abandoning United’s traditional
emphasis on attack in favour of an
ultra-defensive strategy designed to
frustrate the hosts.
“They changed the way they
played,” he added. “They didn’t put
a foot outside their own half. They
were waiting for a set piece or a
chance on the counter attack. They
had two big chances in the second
half, but they were out of context
because we were chasing forwards.”
BY FRANK DALLERES
THE BRITISH Olympic Association is
in no hurry to appoint a new chief
executive, after Andy Hunt
announced his resignation yesterday.
Hunt, who led Team GB at the
London 2012 Games, their most
successful for more than a century,
is set to leave his post at the end of
February.
But the BOA, which is
implementing a restructure under
new chairman Lord Coe, is not
seeking an immediate replacement
and may not hire one at all.
Hunt follows former director of
sport Sir Clive Woodward in
departing post-London 2012.