MPs say watchdog should have prevented RBS bailout

POLITICIANS have slammed the

Financial Services Authority (FSA)
for doing nothing during RBSs
disastrous takeover of ABN Amro,
and are calling for tougher rules to
prevent similar failures.
The Treasury Select Committee
(TSC) said in a report today that the
BY MARION DAKERS
FSA should and could have
intervened to block the 2007 deal
that led to RBS requiring a 45bn
government bailout a year later.
The committee dismissed claims
by ex-FSA boss Hector Sants that the
watchdog had no power to step in,
adding: We need a regulator with
the self-confidence to intervene, even
if it might cause some
destabilisation in the short-term.
MPs also tore into the FSAs initial
report into the collapse, which was
just 298 words long when it was
published in 2010, saying it exposed
serious flaws in the culture and
governance of the regulator.
The FSA will be split in two from
2013, and the MPs want the new
Prudential Regulatory Authority
(PRA) to be required by law to
approve major bank mergers and
acquisitions.
It is crucial that the PRA takes on
board an important lesson from this
report there is no substitute for the
exercise of judgement, said TSC
chairman Andrew Tyrie.
The committee would also like
regulators to consider greater
powers to ban directors who are
deemed responsible for bank
failures. They expressed
considerable surprise that only
one RBS exec, global banking head
Jonny Cameron, has been punished
in this way.
The FSA said yesterday it has put
in place a completely new model of
supervision since the crisis.
BUSINESS WITH PERSONALITY
Google halts
trades as its
profits drop
GOOGLE suspended trading last
night after its disappointing
results were accidentally released
before they were due.
Wall Street was shocked when
the companys third-quarter
earnings were released by RR
Donnelley, the company that
publishes Googles results, at
around 6pm GMT more than
two hours earlier than scheduled.
Google said it had suspended
shares while it worked to finish
the partially-written release,
which included the line
PENDING LARRY QUOTE where
a statement from Google chief
Larry Page was meant to be.
The shock of the release along
with disappointment at the
companys performance sent
the companys shares down nine
per cent before Google demanded
trading be halted. The firm
unfroze shares at 8.20pm and the
stock rebounded slightly, ending
the day eight per cent down.
Google saw profits drop 20 per
cent to $2.2bn (1.4bn) in the
three months to October, largely
due to poor performance at
Motorola, the mobile phone
manufacturer it acquired last year
for $12.5bn. The companys
turnover was $14.1bn a 45 per
cent year-on-year rise but some
$500m less than expected while
revenue in the UK was $1.2bn.
However, the results were also
worrying because they signalled a
slowdown in advertising spend.
The average cost paid to Google
per click on its adverts fell 15 per
cent, possibly reflecting worries
about the impact of search ads as
more people use mobile phones to
access the web.
New Barclays chief Antony Jenkins has set aside another 700m to cover PPI misselling claims, in an attempt to finally get on top of the crisis
BARCLAYS put aside another 700m
yesterday to deal with soaring pay-
ment protection insurance (PPI) mis-
selling claims, as analysts warned that
other banks would also have to
increase their provisions.
Analysts expect the four biggest
banks to have set aside an additional
2.2bn over the last quarter to cover
PPI misselling, taking the total for the
sector as a whole to close to 12bn.
Yesterdays news takes Barclays
expected payout to 2bn. The indus-
trys total earmarked for compensa-
tion has now smashed the 10bn
mark, with many in the City now
expecting this figure to increase by at
least another 20 per cent.
More costs are expected to come
from regulators Libor probes and US
investigations into banks breaking
sanctions against Iran.
Analysts yesterday said Barclays is
just the first of many UK banks which
will need to put yet more cash aside to
cover the compensation claims.
We expect UK banks to take PPI pro-
visions of 2.2bn, said Nomuras
Chintan Joshi.
He forecasts Lloyds will set aside an
additional 1bn, RBS an extra 350m
and HSBC 150m more.
As Barclays has acted preemptively,
we assume slightly higher claims for it
than industry trends would suggest,
he explained.
Lloyds has long made clear it may
have to raise PPI provisions beyond the
4.275bn already announced.
As we said in our half year results
www.cityam.com FREE
there remain a number of uncertain-
ties as to the eventual costs of redress
and we continue to monitor the posi-
tion, said a spokesperson.
RBS, which has already set aside
1.325bn, declined to comment. HSBC,
which has earmarked 1.096bn, was
not available for comment.
Barclays said in a statement it has
experienced higher than previously
anticipated levels of PPI claim volumes
since the end of the first half.
The bank has paid out 0.9bn in PPI
compensation so far, 69 per cent of the
1.3bn that was previously set aside. It
is thought that aggressive marketing
by claims management firms is one
reason for the recent spike in claims.
And it warned the extra costs of PPI
claims and a 1.1bn own credit
charge together totalling 1.8bn
mean it expects to make a loss of
roughly 100m in the third quarter.
Barclays currently expects the
group adjusted profit before tax,
which excludes the impact of own
credit (expected to be a charge of
1.1bn) and the provision for PPI
redress, for the three months ended
30 September 2012 to be broadly in
line with current market consensus of
1.7 billion. The banks shares ended
the day down 1.51 per cent.
One reason for Barclays setting aside
such a large sum is thought to be that
new chief executive Antony Jenkins
wants to draw a line under the scan-
dal, so it does not continue to tarnish
the banks brand or hit his leadership.
TIM BURTON RETURNS TO FORM WITH FRANKENWEENIE
BY JAMES TITCOMB
FTSE 100 5,917.05 +6.14 DOW M13,548.94 -8.06 NASDAQM3,072.87 -31.26 /$ 1.61 unc / 1.23 unc /$ 1.31 unc
BY TIM WALLACE
MISSELLINGSET TO
COSTBANKS12BN
THE KING OF KOOK
ISSUE 1,742 FRIDAY 19 OCTOBER 2012
CAMERONS
ENERGY ERROR
See Pages 2, 20
See review Page 22
Certified Distribution
27/08/12 til 30/09/12 is 128,785
ALLISTER HEATH: Page 2

allister.heath@cityam.com
Follow me on Twitter: @allisterheath
DAVID Cameron yesterday indicated
that he would stick to his pledge and
legislate to bring down energy bills,
despite a day of chaos that followed
the apparently unplanned policy
announcement.
On Wednesday the Prime Minister
told the House of Commons that his
government will be legislating so
that energy companies have to give
the lowest tariff to their customers.
This announcement came as a
surprise to energy suppliers,
regulators, and the Department of
Energy and Climate Change.
Downing Street initially struggled
to explain how the policy would be
implemented, while price
comparison website uSwitch warned
that a one-size-fits-all tariff structure
could cause gas and electricity
suppliers to withdraw cheap tariffs.
Meanwhile energy secretary Ed
Davey yesterday pressed ahead with
a scheduled speech to the CBI that
ignored the Prime Ministers plans.
But last night Cameron told
reporters in Brussels that legislation
was still on the cards: Were going
to use the Energy Bill to ensure
customers get lowest tariffs.
It is understood that one proposal
would involve automatic switching
between contracts for customers
who pay by direct debit, with the
ability to opt-out of such a plan.
Cameron vows
no U-turn on
energy prices
BY JAMES WATERSON
Planning laws reformed
in quest to boost growth
BUSINESS groups yesterday wel-
comed the publication of the gov-
ernments Growth and
Infrastructure Bill, which aims to
kick-start economic growth by mak-
ing it easier to build new houses
and invest in infrastructure.
One of the changes will enable
energy generation firms to improve
their plans by incorporating new
technology without having to re-
apply for full planning permission.
There will also be major invest-
ment in super-fast broadband and
change to the law in the hope of
encouraging a 160m investment in
the nations gas distribution net-
work.
Meanwhile some firms are set to
benefit while others will lose out
from a delay in commercial proper-
ty revaluations, which was due in
2015. Current values date from 2008
so postponement to 2017 will affect
firms differently depending on
whether property prices have risen
or fallen since then in their area.
Previously announced proposals
that have made it into the draft leg-
islation include removing the obli-
gation on some housebuilders to
contribute to community projects,
introducing a fast-track planning
process for large projects and reduc-
ing the red tape associated with
ArcelorMittal explores iron ore sale
ArcelorMittal is exploring the sale of a
stake in its $10bn Canadian iron ore
business, as the worlds biggest steel
company struggles to cope with the
downturn in its key commodity. People
familiar with the matter said ArcelorMittal
had appointed advisers and had been
sounding out potential buyers of a stake
in the business, formerly known as
Qubec Cartier Mining. The entire
business, which produced about 15m
tonnes of iron ore concentrate last year,
could be worth $8bn-$10bn.
Walmart probed in India
Walmart, the worlds largest retailer by
sales, is being investigated in India over
accusations that it secretly invested in
supermarkets, flouting a ban on foreign
direct investment in the sector.
Oxford chief criticises buyouts
University of Oxfords investment chief
Sandra Robertson startled the audience at
the British Private Equity and Venture
Capital Associations annual summit on
Thursday, accusing managers of failing
their clients by charging excessive fees
and delivering lacklustre returns.
Morgan abandons Redrow buy talks
Plans by Steve Morgan to take the
housebuilder Redrow private in a 562m
deal were in tatters yesterday after he
ended negotiations. The entrepreneur
made a provisional 152p-a-share
approach in August.
Adelphi to sell at huge markdown
A landmark Art Deco building in London
that was bought at the top of the market
by Dubais ruling Maktoum family is to be
sold for about 260m.
Sainsburys in hall of shame
Sainsbury's has been criticised for an
unacceptable extension to the time it
takes to pay its suppliers. The Forum of
Private Business has put Sainsburys in its
hall of shame for slow payers.
Worlds oldest bank cut to junk
The world's oldest bank has been cut to
"junk" by Moodys. Monte Paschi was the
only Italian lender to fail the European
Banking Authority's stress tests.
Facebook capitalise on India surge
India is becoming a critical testing ground
for Facebook as it strives to cash in on
growth in emerging markets and better
target mobile-phone userstwo
increasingly pressing goals for the social-
networking firm.
Failed US deals stir China tensions
A series of scuttled deals is rankling
Chinese firms trying to invest in US
businesses and throwing fuel on an
increasingly tense trade relationship.
Cameron pledged to slash bureaucracy and give firms the confidence to invest
2
NEWS
BY JAMES WATERSON
To contact the newsdesk email news@cityam.com
Y
ESTERDAY was a terrible day for
Google, a firm used to success.
Its slump in profits came as a
shock to the markets. It
shouldnt have: the company is
merely becoming more normal,
especially following its decision to
overpay for Motorola, and normal
firms dont do as well as
revolutionary, super-smart start-ups.
As proof of Googles coming of age,
take this astonishing statistic from its
SEC filings: it now employs 53,546
people globally, on a full time equiva-
lent basis. That is more than the
40,400 employed by Rolls-Royce, the
British industrial giant often held up
as a model by the UK government.
Googles revenues per click fell by 15
per cent, a worrying sign for the firm,
though overall the firm reported
turnover up by a still super-normal 45
per cent year on year, allowing it to
EDITORS
LETTER
ALLISTER HEATH
Googles awful day reminds us it is becoming less special
FRIDAY 19 OCTOBER 2012
notch up its first quarter with rev-
enues of over $14bn. The bigger pic-
ture, as demonstrated by Googles
huge payroll, is that the fastest-grow-
ing new companies a small subset of
all start-ups, known as gazelles are
those that end up creating the jobs.
The problem is not setting up compa-
nies; it is growing them successfully
and turning them into gazelles.
It is easy to set up a tech firm on
Silicon Roundabout; it is very hard to
turn one into a viable SME; and it is
extraordinarily hard to turn one into
a new Google. The best way for any
country to return to prosperity is to
lay down a legal and macroeconomic
framework that makes it as easy as
possible for small firms to grow,
including by raising equity and let
entrepreneurs do the rest.
AMBULANCE CHASING
Misselling is always wrong and must
be punished, like all other kinds of
fraud. But the way compensation and
claims for the PPI fiasco are being
handled is appalling. Many victims
are rightly being paid back but we
have also seen the emergence of a
dubious industry of ambulance
chasers that keep bombarding the
public with dodgy text messages.
Worse, it is clear that many individ-
uals have put in fraudulent claims;
because banking records dont go far
some of the property portfolio owned
by the Greater London Authority. Let
us hope he delivers on this the
biggest problem facing new schools is
finding buildings and then getting
planning permission, with councils
often blocking educational entrepre-
neurs. A growing population means
that an extra 90,000 school places will
be needed by 2016.
Other initiatives being unveiled by
the Mayor include a new London
Schools Excellence Fund, to help tack-
le underperformance, and a new
scheme to identify and celebrate suc-
cessful schools, especially in poor
areas, with a view to share best prac-
tice. Illiteracy and innumeracy are
national scandals that must urgently
be tackled.
back enough, fanciful allegations are
not being contested. What started out
as an attempt to tackle an injustice
and make right millions of genuine
victims is turning into a free for all
that will cost bank shareholders
including pension funds billions of
pounds too much. Fraud and lies are
always wrong, regardless of who they
are conducted by.
FIGHTING ILLITERACY
Another vital issue that needs to be
resolved to make the UK more com-
petitive is education. Boris Johnsons
latest foray in that area he will be
announcing several initiatives today
is welcome. The best will be his plan
to set up a unit called New Schools for
London, to identify fresh sites for free
schools. Working closely with the bor-
oughs and Department for Education,
the Mayor wants to use land and
gaining planning permission.
There will also be the introduction
of employee-owner status that will
enable workers to swap employment
rights for shares in their firm.
Corin Taylor of the The Institute of
Directors said he was pleased with
the draft legislation: Measures such
as allowing developers to improve
their plans mid-way through the
process without having to start from
scratch, making sure those putting
forward plans only need to fill out the
relevant paperwork, and removing
unaffordable extra obligations could
all help to bring forward stalled devel-
opment and attract more investment
into construction.
The CBIs Nicola Walker added:
These legislative proposals should
help to streamline and speed up the
planning process, unblocking devel-
opment and allowing companies to
invest, grow and create jobs.
Prime Minister David Cameron said:
The Bill is all about helping our
country compete in the global race
and building an aspiration nation
where we back those who want to get
on life.
n Sites where development has stalled
can be unlocked by removing the
obligation to provide economically
unrealistic community contributions to
local projects or affordable housing.
n Reductions to the planning burden by
only requiring applicants to submit
relevant documents to their local council.
n Nationally-important developments
such as large infrastructure projects will
have the ability to by-pass the local
planning process and receive a verdict
within 12 months.
n Measures to make it easier for councils
to sell surplus land held for planning
purposes, helping to get brownfield sites
back into use.
n Removal of overlapping planning
consent schemes.
n Making it easier for electricity-
generating firms to update their
technology mid-build by ending the need
to re-apply for full planning permission.
n Postponing a planned revaluation of
commercial property for business rates,
currently based on 2008 property prices,
until at least 2017.
n Introducing an employee-owner
scheme where firms issue new contracts
offering staff equity in return for giving
up some of their rights.
n Removing red tape that delays the
introduction of super-fast broadband to
homes, especially in the countryside.
n Developers will be able to appeal
directly to the planning inspectorate if
they feel that a council is too slow.
n Changing the law to allow energy
regulator Ofgem to hold an innovation
competition, in the hope of attracting
160m of investment for the gas network.
WHATS IN THE BILL?
THE FORUM: Page 20
n n
The new jobs website for London professionals
CITYAMCAREERS.com
WHAT THE OTHER PAPERS SAY THIS MORNING
MICROSOFT, the worlds largest
software company, last night posted
a greater-than-expected quarterly
profit fall of 22 per cent, as sales of
computers running its Windows
operating system dipped.
The sharp decline surprised
investors, who had underestimated
the effect of weak personal
computer sales, sending Microsofts
shares down more than two per
cent in after hours trading.
Microsoft said fiscal first quarter
profit fell to $4.47bn (2.78bn) from
$5.74bn in the year ago quarter.
Some revenue was deferred ahead
of upcoming releases of its core
Windows and Office products.
Microsoft sales
dip hits profits
Nat Rothschild
IN YESTERDAYS article Nat Rothschild
shared 10m Bumi expenses we stated
that Nat Rothschild had personally
received $4.9m in expenses from
Bumi and used the money to
purchase a private jet. This was
incorrect and the payment was
reimbursement for
third party expenses,
approved by Bumis
audit committee and
in fact structured in
such a way as to save
the company $2m.
We apologise to Mr
Rothschild for any
embarrassment
caused.
BY CITY A.M. REPORTER
EUROZONE leaders thrashed out a
deal over the timing of a new banking
union last night, after a day of fierce
protests in Greece marred negotia-
tions taking place in Brussels.
Senior politicians from euro area
states agreed on the objective of com-
pleting the legal framework by the end
of the year with implementation in
the course of 2013.
Germany had previously appeared to
clash with some other key states such
as France, due to its reluctance
to hurry through the new
measures.
The first day of the
crunch EU summit
which continues
today was disturbed
by violent anti-austerity
demonstrations in
Athens. Some trouble-
makers hurled objects
at the police, who used
teargas to disperse the
crowd.
Banking union
plan agreed by
Eurozone chiefs
BY JULIAN HARRIS Almost 40,000 protesters marched in
the Greek capital to complain to the
EU. And the protests coincided with a
ruling by the Council of Europe that
reforms to Greek labour law were ille-
gal because they violated workers
rights, as trade unions had claimed.
Meanwhile in fellow crisis-struck
Eurozone state Spain, yields fell dur-
ing an auction of government debt.
Yields on 10-year Spanish debt
exceeded 7.6 per cent in late July, but
after yesterdays auction the yield was
5.42 per cent, 8.5 basis points lower on
the day and the lowest for more than
six months.
However, a more worrying data
release showed that Spanish house-
holds and companies defaulted on
their debts in record numbers in
August.
Loans that fell into arrears in
August increased by 5.3bn
(4.3bn) from July, reaching
178bn according to the
worrying figures, which
were published by
the Bank of Spain.
A protester wears a gas
mask in Athens yesterday
OPCAPITA is in talks with three
potential suitors over the sale of
electronics retailer Comet, which
it acquired less than nine months
ago.
The turnaround specialist is
exploring a sale after receiving
several unsolicited approaches. A
person close to the deal told City
A.M. the group is now holding
talks with three interested parties
including trade buyers from
overseas and the UK.
Talks are still at an early stage
and no bank has been mandated
yet to conduct the sale process.
Comet owner Opcapita in talks
to sell the electronics retailer
BY KASMIRA JEFFORD Opcapita acquired the business
in February for 2 from Kesa
Electricals now known as Darty
which also paid a 50m dowry to
offload the troubled retailer.
Comets chairman John Clare,
the former boss of rival Dixons,
said earlier this year that the
group had made around 50m in
savings and hoped to break even
this year.
The group has cut staff numbers
from 8,500 to about 7,000, in part
by replacing full-time workers
with part-time staff, closing a call
centre in Hull and outsourcing
services previously performed in-
house such as repairs. VOXPOPS:
Page 6

FRIDAY 19 OCTOBER 2012
3
NEWS
cityam.com
Comets owners are exploring the sale of the brand and its 240 stores
US INVESTMENT bank Morgan Stanley
reported a loss in the third quarter
due to a multi-billion dollar account-
ing charge. However underlying prof-
its improved, with bond trading
revenues particularly strong.
The bank lost $1.03bn in the three-
month period, largely because of the
$2.3bn charge which hit the bank
after a downgrade. That represents a
swing into the red from a profit of
$2.13bn in the same period last year.
Expenses were up: compensation
rose from $3.6bn to $3.9bn, and non-
pay expenses from $2.5bn to $2.8bn.
But bond trading revenues jumped 33
per cent to $1.5bn, while asset man-
agement revenues more than tripled
on the year to $631m, taking the unit
from a $118m loss to a $198m profit.
The rebound in fixed income and
BY TIM WALLACE
commodities sales and trading indi-
cates that clients have re-engaged after
the uncertainty of the rating review in
the previous quarter, said chief execu-
tive and chairman James Gorman.
We are beginning to unlock the full
potential of the global wealth manage-
ment franchise.
Headcount fell seven per cent on the
year to 57,726.
BP HAS received a cash and shares
bid for its 50 per cent stake in TNK-
BP from Russian state-controlled
oil producer Rosneft, it is
understood, putting Rosneft close
to dominating Russias oil industry.
Sources said that Rosneft earlier
this week agreed a bid for Russian
consortium AARs 50 per cent
stake in TNK-BP, the countrys
third-largest oil producer.
It is thought that Rosnefts bid
submitted to BP values TNK-BP in
its entirety at over $50bn
(31bn). BP is expected to
consider the offer at a
board meeting scheduled
for this morning.
BY CATHY ADAMS
BP said last month that it would
consider buying a stake in Rosneft
following a sale of TNK-BP,
although the value of that stake is
as yet unknown.
City A.M. understands that BP
and AAR could each take minority
stakes in Rosneft. Chief executive
Igor Sechin is in London to
hammer out details of a potential
deal. AAR, owned by four Russian
tycoons, has confirmed it would
not bid for BPs stake of TNK-BP,
opening the way for Rosneft to
make an offer.
Andrew Neff, senior energy
analyst at IHS Energy, said if
Rosneft ends up with 100 per cent
of TNK-BP, it would boost the
state-owned firm above
ExxonMobil as the worlds largest
publicly-traded oil producer.
Morgan Stanley
18Oct 12Oct 15Oct 16Oct 17Oct
17.40
18.00
17.80
17.60
18.40
18.20
$
17.79
18Oct
Head of Rosneft Igor
Sechin is in London
BOTTOM LINE: Page 6

4
NEWS
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Morgan Stanley swings into red
after downgrade costs it $2.3bn
Rosneft to buy
BPs TNK stake
in $26bn deal
ONE of the worlds biggest hedge
funds, Man Group, shed client money
for the fifth consecutive quarter this
summer, as investors continued to
turn their back on alternative strate-
gies, according to results published
yesterday.
Shares in the group crashed nearly
ten per cent yesterday to close down
83.4p on the results, as Man contin-
ues its push to turn the firm around.
Clients pulled out a net $2.2bn over
the three months to the end of
September, compared with $1.4bn
the previous quarter, and the compa-
ny warned yesterday that there were
few signs of improvement.
Assets under management for Man,
which bought funds firm FRM in July,
grew by 14 per cent to $60bn, mainly
due to an $8.3bn boost from FRM
assets.
The performance of its quantitative
arm AHL, which accounts for about
65 per cent of the firms revenues,
stabilised after a torrid time between
February and June.
AHL made large gains in the finan-
Man Group sees
fifth quarter of
fund outflows
BY MICHAEL BOW
cial crisis but lost 6.4 per cent last
year. This year it has fallen 0.6 per
cent.
Peter Clarke, Man chief executive,
said: The flow environment contin-
ues to be challenging and this was
reflected in lower sales in the quarter.
Investor sentiment, and consequently
the outlook for flows, continues to be
subdued.
Man, a former FTSE100 member,
has been shedding assets since the
credit crisis in a bid to boost its per-
formance. In July, the firm
announced another $100m a year of
cost cuts, bringing savings since 2010
to $250m.
Man Group PLC
18Oct 12Oct 15Oct 16Oct 17Oct
87.5
85.0
92.5
90.0
95.0 p
83.40
18Oct
PRIVATE BANK Arbuthnot Latham
expanded loans and deposits in a
controlled manner in the third
quarter, according to its trading
update published yesterday,
allowing it to take on more staff
including a new head of private
banking.
The group prides itself on keeping
traditional banking standards,
allowing it to avoid the excesses of
the boom years and keep growing.
Its retail arm Secure Trust also
recorded growth, raising 36m in
deposits in early August.
The group is working on its
Funding for Lending scheme (FLS)
application to take advantage of the
cheap funds on offer from the Bank
of England. But it received some
drag from unfounded PPI claims.
Secure Trust Bank is being
inundated with entirely spurious
claims originated by claims
management companies,
the update said.
The operational
impact of having to
response to huge volumes
of baseless claims is
an unwelcome
distraction.
Arbuthnot still
expanding at
a steady pace
BY TIM WALLACE
SHARES in asset manager Jupiter
Fund Management hit a 16 month
high yesterday after it reported
579m of net new money over the
past quarter.
The investment house, which
runs 79 per cent of its assets in
equities, saw 795m of new money
invested into its mutual funds
despite the current trend for
retail investors to avoid equities.
A 170m fall in segregated
mandates and 46m less from
private clients led to total net
inflows of 579m. Market
movements of 1bn helped
Jupiter hits share price high as
attracts 579m in fresh inflows
BY MICHAEL BOW increase assets by 1.6bn, boosting
total assets managed to 23.4bn.
Shares in the firm closed up three
per cent yesterday at 272p their
highest since mid-June 2011.
Jupiter chief executive Edward
Bonham Carter said: During the
difficult flow environment in the
first half of the year, we continued
to position the business for
growth.
It was therefore pleasing to see
an acceleration in mutual fund
inflows.
Data from the Investment
Management Association shows
retail flows into equities were
negative in August.
FRIDAY 19 OCTOBER 2012
5
NEWS
cityam.com
Jupiter Fund Management is led by chief executive officer Edward Bonham Carter
Henry Angest,
boss of
Arbuthnot
THE TAX gap narrowed as a propor-
tion of total tax liabilities in the 2010-
11 tax year, Her Majestys Revenue and
Customs (HRMC) said yesterday (see
graph, below), despite widening in
absolute terms.
The proportion of total estimated
tax liabilities the taxman missed
slipped from 7.1 per cent to 6.7 per
cent, which HMRC touts as impressive
compared to other countries that
publish tax gap figures.
Mexico had a tax gap of 23 per cent
over the year, HMRC said, while the
US missed 14 per cent of potential tax
income and Sweden 10 per cent.
HMRC boss Lin Homer put the pro-
portional reduction down to determi-
nation, and promised to spend more
and make compliance easier, in order
to narrow the gap further.
We are devoting increasing
resources to pursuing those who do
not pay the tax they owe, while mak-
ing it easier for people and business to
comply with their tax obligations,
Homer said.
The tax gap, which measures the dif-
ference between tax collected and
anticipated liabilities, was 32bn in
2010-11, up in absolute terms from
31bn the year before, data from
HMRC showed, driven by increased
evasion of VAT after its rate rose from
15 per cent to 17.5 per cent and then
Tax gap shrinks
but higher VAT
limits revenues
BY BEN SOUTHWOOD
later to 20 per cent.
The tax gap is estimated not only
based on illegal tax evasion, the hid-
den economy and criminal attacks
but also tax avoidance which HMRC
defines separately from legitimate
tax planning.
Tax avoidance is bending the rules
of the tax system to gain a tax advan-
tage that Parliament never intended,
the report reads.
The biggest area of contribution to
the tax gap were the direct personal
taxes national insurance contribu-
tions, capital gains tax and income
tax which made up 45 per cent of
the overall 32bn wedge. Corporation
tax made up just 13 per cent while
VAT made up 30 per cent. Duties on
alcohol and tobacco made up 10 per
cent of the tax gap.
The total tax gap from large employ-
ers was 1.5 per cent of large employer
liabilities or 2.1bn.
DO YOU THINK SPAIN SHOULD ASK FOR A
BAILOUT? Interviews by Faiza Malik and Amelia Brust
There must be some help given to countries
like Spain. Countries need to get together
and see how everyone can come out of a bad
situation with minimal losses.
These views are those of the individuals above andnot necessarily those of their company
DARIN BURROWS
RULLION BUILD

Yes. I dont think they have a choice. I

have properties in Spain. I have
witnessed the decline in the economy of Spain and
it is very worrying.
JAMES GRIBBON
MONTAGU EVANS
No, I dont think they should get a
bailout. I just think theyre going to have
to keep bailing countries out all the time. We can
only do so much.
JONATHAN SMITH
O2

h
as,
e
s
tat
ne
at
e
BOTTOM
LINE
MARC SIDWELL
CITYVIEWS
FRIDAY 19 OCTOBER 2012
6
NEWS
cityam.com
M
ONEY isnt everything. As the
elaborate negotiations over
TNK-BPs ownership continue,
BP finds itself in a sticky
strategic position, despite a generous
offer for its stake.
The apparent $28bn bid from
Rosneft for BPs 50 per cent TNK-BP
stake looks attractively priced and
would enable the UK oil major to
extricate itself from a less-than-ideal
relationship with AAR, the oligarch-
owned group that currently holds
the other half of TNK-BP.
But thats only worthwhile if BP
doesnt jump from frying pan to fire
in Russia. Leaving the tycoons of AAR
behind means getting into bed with
majority state-owned Rosneft and an
uneasy alliance with Vladimir Putin.
When it comes to Rosneft, BP
probably has to hold its nose: it
would need to weigh its options
carefully before getting out of Russia
altogether, given the risk of being
left out of important upcoming
Arctic opportunities and the impact
the absence of TNK-BP would have on
its production base.
In Russia, Putins return to the
presidency in May for a six-year term
has made the states side a safer bet
than some of the oligarchs with
whom Putin is not known for his
cordial relationships. As Rosneft
moves toward either partial or full
ownership of TNK-BP, it should be
increasingly clear to BP which side
its bread is buttered. A stake in
Rosneft looks like the smart choice
for keeping a foothold in this part of
the world. Indeed, BP and Rosneft
were already exploring options to
work together last year, even though
those plans ultimately fell through.
One big reason for BPs eagerness
to work with Russia lies in the
Russian Arctic, where offshore
drilling is just getting underway. The
opening-up of this resource-rich,
virgin territory brings talk of Russia
being able to double its oil reserves.
Involvement in the black gold rush
makes sense for BP, especially as the
current output of TNK-BP is around a
quarter of its production. Getting
out of Russia wouldnt just risk BP
missing out on future opportunities:
it would be a significant reduction
in its present business.
But whatever the final terms of
the deal with Rosneft, BP is not likely
to end up with more than a 20 per
cent stake, perhaps as low as 10 per
cent. In either case, it wont be
enough to give it any leverage. It
could prove as uncomfortable being
along for the ride with Putins
Russia, with its questionable
democracy and terrible human
rights record, as it has been sharing
house space with oligarchs.
Nor is Arctic drilling without its
problems. Last month, not another
green pressure group but the chief
executive of Total warned that the
environmental risks are too high.
The last thing BPs reputation
needs is involvement in an oil spill in
one of the worlds last pristine
environments. And even without
such a disaster, protesters can still
bring unwanted publicity
Gazproms Arctic platform was
invaded by Greenpeace in August.
The stakes are high and none of
the options are easy. BP probably
cant afford to give up on Russia, but
the danger of contamination, either
political or environmental, makes it
a risky commitment.
BP weighs the risks of contamination from Russian oil
Tax gap as a percentage of liabilities
Source: HRMC
08-09 09-10 10-11 04-05 06-07 05-06 07-08
p
e
r
c
e
n
t
o
f
lia
b
ilit
ie
s
8.2
7.8
7.6
7.4
7.2
7.0
6.8
6.6
6.25%
Sterling Bonds due 2019
JOINT LEAD MANAGERS: Investec Bank plc and Numis Securities Limited
AUTHORISED DISTRIBUTORS:
Barclays Stockbrokers
www.barclaysstockbrokers.co.uk/Investment-Choices/IPO
Stocktrade (a division of Brewin Dolphin Ltd) www.stocktrade.co.uk
Killik & Co www.killik.com/bonds
Peel Hunt www.peelhunt.com
Redmayne-Bentley www.redmayne.co.uk/stmodwen
Selftrade (execution only) www.selftrade.co.uk/stmodwen
Smith & Williamson Securities
www.sm|th.w||||amson.oo.uk/fxed-|noome-dea||ng-serv|oe
WH Ireland www.wh-ireland.co.uk
St. Modwen is offering the 6.25% Sterling Bonds due 2019
(the Bonds), which are available to buy until noon on 31
October 2012.*
The Bonds pay a fxed gross rate of |nterest of 6.25% per
year until 2019. Interest is paid twice a year in arrears on
7 May and 7 November with the investment paid back in full
on 7 November 2019.
The minimum initial investment is 2,000; the Bonds can be
bought and sold in multiples of 100 face value after that.
Investors should be aware of the risks relating to an
investment in the Bonds, some of which are set out under
Important Information below.
The Bonds are expeoted to be adm|tted to trad|ng on the
|ondon Stook Exohange`s regu|ated market and through
the Order book for Retail Bonds of the London Stock
Exohange. Th|s |s expeoted to ooour on 8 November 2012,
following which investors will be able to check the current
trad|ng pr|oe on the |ondon Stook Exohange webs|te and
buy and sell their Bonds in the open market at any time
during market hours (subject to normal market conditions).
To buy the Bonds, you need to contact your stockbroker or any of the authorised
distributors listed above.
For more information visit www.stmodwen.co.uk/bonds
This document does not constitute an offer or solicitation of an offer to buy or sell securities
in any jurisdiction. The contents of this advertisement, which has been prepared by St.
Modwen Properties PLC, has been approved solely for the purposes of section 21(2)(b) of
the Financial Services and Markets Act 2000 by Investec Bank plc and Numis Securities
Limited (together, the Joint Lead Managers) which are authorised and regulated by the
Financial Services Authority. This is an advertisement and is not a prospectus for the
purposes of EU Directive 2003/71/EC, as amended (the Directive) or Part VI of the Financial
Services and Markets Act 2000. A prospectus has been prepared and made available to the
public in accordance with the Directive. Investors should not purchase any Bonds referred
to |n th|s advert|sement exoept on the bas|s of |nformat|on oonta|ned |n the Prospeotus.
Investors may obtain copies of the Prospectus at www.stmodwen.co.uk/bonds and in hard
oopy at the reg|stered offoe of St. Modwen Propert|es P|O at S|r Stan|ey O|arke House,
7 Ridgeway, Quinton Business Park, Quinton, Birmingham B32 1AF. Before buying any
Bonds you should make sure that you fully understand the risks, which are set out in full in
the Prospectus relating to the Bonds, and determine that the investment is appropriate for
you on the basis of all the information contained in the Prospectus. None of St. Modwen
Propert|es P|O or the Jo|nt |ead Managers prov|de |ega|, tax, aooount|ng or |nvestment
advice in relation to the Bonds and they are not responsible for any advice you may receive
from any third party. You should be aware that investing in securities involves a variety of
risks and you should seek independent advice if in any doubt as to the suitability of this
investment for your circumstances.
Investec Bank plc and Numis Securities Limited are acting as the Joint Lead Managers
on this issue.
Please refer to the information booklet dated 17 October 2012 and the Prospectus dated
17 October 2012 (the Prospectus).
St. Modwen Properties PLC is the legal entity that will issue the Bonds and references to St.
Modwen in this advertisement are references to St. Modwen Properties PLC.
* St. Modwen retains the right to close the offer of the Bonds early, in conjunction
with the Joint Lead Managers.
Important Information
Investors should note that the market price of the Bonds could fall during the life of the
investment. If you choose to sell the Bonds before maturity you may get back less than
your original investment. Furthermore, in the event that St. Modwen defaults or becomes
insolvent, you may lose some or all of your investment. The Bonds are not covered by the
UK Financial Services Compensation Scheme in the event of the failure of St. Modwen.
Add|t|ona| r|sks and other |mportant |nformat|on are set out |n the Prospeotus (as defned
below). If you are in any doubt as to the suitability of the Bonds for your circumstances,
you shou|d seek |ndependent adv|oe from a tax adv|ser or |nvestment profess|ona|, as
appropriate, and from your stockbroker.
The information contained herein may only be released, published or distributed in the United Kingdom, Jersey, Guernsey and the Isle of Man. The information contained herein is not for release, publication or distribution
in or into the United States, Australia, Canada, the Republic of Ireland, Japan, South Africa or any other jurisdiction where it is unlawful to distribute this document.
St. Modwen Properties PLC is the UKs leading regeneration specialist and constituent of the
FTSE250 index. St. Modwen has a UK property portfolio which is valued at 1.1 billion, comprises
5,800 acres and is split into income-producing investments, residential land and commercial
land and development. St. Modwen has a 25 year track record of adding value to its landbank
by managing schemes through the planning process, remediating contaminated land and active
asset management.
COMPANIES will be required to pub-
lish the number of women and men
they employ in an attempt to weed out
sexism and ensure women are not
excluded for top jobs, the government
announced yesterday.
The rule change due to be intro-
duced in October 2013 is part of a
wide-ranging set of reforms to report-
ing guidelines that will affect
all listed firms.
In an attempt to
remove the clutter from
annual reports, compa-
nies will also be
required to issue a con-
cise stand-alone state-
ment detailing overall
strategy, risks and
basic performance
measures.
Firms forced to
state number of
female workers
BY JAMES WATERSON Over a period of years reports have
become longer, more complex and
increasingly difficult for shareholders
to navigate, said business minister Jo
Swinson. There are many examples of
excellent reporting, but there is still
room for improvement. [These]
reforms will encourage companies to
produce innovative and engaging
reports, in line with current business
best practice.
PwCs Charles Bowman welcomed
the new guidelines on concise report-
ing: Our own analysis of the FTSE
350s accounts has shown that many
companies have found articulating
their business model difficult.
However, a company lives or dies by
how well they can articulate
their business model and
what they stand for it
seems that some larger
companies have lost
sight of this.
THE BANK of England is more transparent and accountable now than at any time in its
318-year history, executive director Andrew Haldane said yesterday. Think back twenty
years. Then, there were no quarterly Inflation Reports, no six-monthly Financial Stability
Reports and certainly no press conferences to accompany both, he said, hitting back at
critics who believe the Bank is too unaccountable given its enormous new powers.
Twenty years ago there were no minutes of the deliberations of the Banks committees.
HALDANE HITS BACK AT ACCOUNTABILITY CRITICS
DEBATE: Page 21

8
NEWS
cityam.com
Vince Cable wants to
simplify annual reports
MORNING UPDATE
Sign up to
our 10:30am
newsletter at
cityam.com
LAGER giant SABMillers progress in
key emerging markets has slowed in
recent months, taking the shine off
strong growth in Europe, the compa-
ny said yesterday.
The Peroni and Grolsch maker said
the amount of beer it has sold rose
four per cent year-on-year in the com-
panys last six months. However,
more significant was that lager vol-
ume sales in Latin America and
Africa were significantly lower than
expectations, showing that growth
in SABMillers most important mar-
kets is slipping.
Latin American lager sales grew
four per cent, while Africa was up six
per cent, below estimates of 5.5 and
8.5 per cent respectively, which the
company put down to weaker con-
sumer sentiment. Latin America is
SABMillers largest market, account-
ing for a third of sales.
European growth was more posi-
tive, with the volume of lager sold up
nine per cent, although this was
partly down to price reductions and
the effect of Euro 2012
Performance at the firms US arm,
SABMiller loses
its fizz in crucial
growth markets
BY JAMES TITCOMB
MillerCoors, was also disappointing.
Sales slipped 2.4 per cent in the peri-
od due to less demand for cheaper
beers and the firms Miller Lite brand.
SABMillers slowing growth disap-
pointed the City, sending shares
down around 1.5 per cent in trading
yesterday. The company will not
release full sales figures until
November but said revenue grew
eight per cent when currency fluctu-
ations, disposals and acquisitions
were stripped out. Soft drink volumes
were up six per cent.
The firm, which gains around 70
per cent of sales from fast-growing
markets, saw one in four sharehold-
ers revolt over pay in July.
SABMiller PLC
18Oct 12Oct 15Oct 16Oct 17Oct
2,620
2,600
2,660
2,640
2,680
2,700 p
2,599.00
18Oct
FRIDAY 19 OCTOBER 2012
9
NEWS
cityam.com
INSIDE
TRACK
W
HILE London continues to
struggle to create an
attractive environment for
companies in search of
fresh equity, the last thing it needs is
a daily diet of allegations and
counter-allegations about a deal,
lauded as a triumph by banks such
as JP Morgan, Credit Suisse and
Evolution (before its sale to Investec)
only two and a bit years ago.
But that is what we are all being
treated to now as Bumi, the mining
group created by Nat Rothschild,
which raised around 700m in the
markets at a time when funds were
still quite hard to attract, is torn apart
by boardroom battles.
Shares in Bumi that were once
worth more than 1,000p are now
worth only around 200p as the mar-
kets react to internal divisions and
charges of financial irregularities at
the companys Indonesian arm.
Investors who thought they were
backing a copper-plated vessel have
found it has a leaking hull instead.
The whole Bumi concept arose
because Rothschild believed that by
putting together Indonesian assets
with UK management and top corpo-
rate governance, he could wring sub-
stantially more profit out of the oper-
ation. He was warned by some at the
time that by teaming up with the
Bakrie family he was biting off more
than he could chew but he chose to
go ahead all the same.
Rothschilds woes in Indonesia
come as the London markets toy with
the Russian question again, as a host
of Russian companies head for share
listings and they are another
reminder to investors of the need for
top corporate governance.
Sberbank has already succeeded in
raising $5.2bn with a London-Moscow
secondary public offering. And MD
Medical Group, a healthcare group,
completed a placement, though it
raised only a modest $311m.
But earlier this week Russias
Promsvyazbank pulled its $500m
London-Moscow offering after the
lender was unable to fill order books
at its desired price range. The decision
to pull the deal is a setback for
Russian IPO hopefuls, who are
attempting to stage a return to equity
capital markets this autumn for the
first time in more than a year.
In such uncertain markets, with
investors naturally dismayed by the
Bumi affair, there could not have
been a worse time for Goldman Sachs
to have stepped back from the syndi-
cate advising Megafon, the Russian
telecoms business, from its intended
London flotation, with sources citing
corporate governance concerns.
Importantly Morgan Stanley
remains on the Megafon advisory
team, but Goldman Sachs absence
and the reasons given for it, albeit in
an unsourced manner has only
unnerved potential investors further.
In the circumstances, the Direct
Line flotation, advised on by
Goldman, Morgan Stanley and UBS,
turned out to be a success.
Although the business itself is seen
as low growth and highly competi-
tive, Direct Line is a standard UK cor-
porate, with UK levels of corporate
governance.
Banking sources speak about ten-
sion between advisers during the
roadshow about how best to value the
business and how to educate the insti-
tutional investors, but in the end the
issue got away. That was the boost the
listings market needed to counter so
much of the gloom.
david.hellier@cityam.com
Follow me @hellierd
Bumi will reinforce the need for better governance
Whilst Europe volumes appear strong, we note the mention of growth
in the economy segment, increased promotional spend and resetting of price
points, which to us, means the mix is negative and therefore margins
will be lower. We downgrade from buy to hold.
ANALYST VIEWS

While the company is clearly doing a great job of balancing the price-
mix/volume equation, indications of a volume softening, particularly in Latin
America, could result in some negative market attention. However, we
continue our buy rating with a target price of 2,990p.

We see SABMiller as a strong company with excellent medium term

growth prospects, but the outlook for the shares is more subdued over the next
three to six months. We are holders of the stock and take 2,750p as our
target given somewhat weaker than expected current trading.

HAS SABMILLERS UPDATE

MADE A DIFFERENCE TO
YOUR RECOMMENDATION? Interviews by James Titcomb
PHIL CARROLL SHORE CAPITAL

DIRK VAN VLAANDEREN JEFFERIES

EDDY HARGREAVES CANACCORD

DAVID HELLIER
IN BRIEF
Newsweek ditches print edition
nNewsweek, the prominent US
weekly magazine, announced
yesterday it will end its print edition
early next year in favour of digital
content. Editor Tina Brown said the
80-year-old publication, which
merged with news website The Daily
Beast last year was switching due to
challenging economics. Brown
predicted both editorial and business
job losses but did not specify how
many. The Newsweek website saw a
70 per cent increase in visits last year.
Mecom continues to suffer
nEuropean newspaper publisher
Mecom said yesterday revenue in the
last three months had dropped 10 per
cent on the same period last year. The
London-listed company, which is
going through a period of transition as
chief executive Tom Toumazis leaves,
continues to make a loss and is
undergoing a strategic review of the
business ahead of a breakup of the
company. While circulation has
remained relatively steady,
advertising revenues fell 20 per cent.
UBM profits rise on strong growth
nMedia and marketing services
company UBM said adjusted operating
profit rose 11 per cent so far this year
on strong growth in its events
business, and reiterated its forecast
for the full year. UBM, which organises
exhibitions, trade shows and
conferences, said adjusted operating
profit for the nine months ended 30
September rose to 141.7m from
127.5m a year earlier. Revenue rose
around four per cent to 734.6m
THE OLYMPICS resulted in less
money being wagered at high street
betting shops, Ladbrokes said yester-
day, as more people stayed at home
to watch the coverage of the Games.
The company said amounts spent
in its betting shops fell 4.9 per cent
in the three months to October on
the same period last year, a dip it
also blamed on a number of horse
racing events being cancelled.
However, the firm continued to
perform relatively well, with
turnover rising 3.9 per cent.
Operating profit however, was fairly
flat at 49.2m
Ladbrokes was especially vulnera-
ble to the decline in high street per-
formance, since its online operations
are far behind those of its rivals.
The company is undergoing a radi-
cal revamp of its website, a process
which has been repeatedly delayed.
However, the bookie did say that it
had begun to roll out the new site, a
process it intends to finish in the
new year. The company fired its digi-
Olympic effect
weighs heavy
on Ladbrokes
BY JAMES TITCOMB
tal head Richard Ames in August
over delays to the roll-out.
Digital will be the main driver of
sentiment, and the jury is still out,
Nick Batram of Peel Hunt said.
The disappointing Olympics news
did not spook investors however,
with the companys share price rela-
tively unchanged yesterday.
You had 24 hours of free, high-
quality TV sports and it went on for
four or five weeks. People were
watching that rather than going to
betting shops, said Ladbrokes boss
Richard Glynn. Its a once in a life-
time thing.
Ofcom launches probe into bill
hikes from mobile phone firms
THE BROADCASTING regulator is
investigating mobile phone
companies over price hikes, after
concerns surfaced about networks
raising bills mid-contract without
notifying customers.
Ofcom said yesterday that a
review into the fairness of contract
terms identified a number of
issues with the effectiveness of the
BY JAMES TITCOMB
current rules with which
communications providers have to
comply.
Under current rules, telecoms
firms have to warn customers a
month in advance of a change in
bills that would cause material
detriment and give them the
opportunity to switch networks.
However, this material detriment is
not clearly defined, with some
companies understanding it as
anything more than a 10 per cent
hike. Orange, T-Mobile and Three
have all raised prices this year by
between 3.6 and 4.3 per cent.
Ofcom said it had examined 1,644
complaints and had considered
evidence from Which?. The
advocacy group is running a Fixed
Means Fixed campaign.
The regulators consultation also
covers internet, television and
phone companies.
Ladbrokes PLC
18Oct 12Oct 15Oct 16Oct 17Oct
177
179
178
181
180
182
183
p 181.00
18Oct
SALES of Nokias flagship
smartphones failed to impress
over the summer ahead of the
launch of the crucial next
generation of models, although
figures released by the Finnish
firm yesterday showed that
cheaper models performed well.
Nokia posted a loss of 969m
(787m) in the three months to
October, its sixth successive
quarterly deficit, although the
firm actually performed better
than the markets gloomy
expectations.
Nokia posts 787m loss as sales
falter ahead of crucial period
BY JAMES TITCOMB All eyes are now on the success
of the next iteration of the high-
end Lumia smartphones, which
will run the forthcoming
Windows 8 operating system.
Chief executive Stephen Elop
told investors he was encouraged
by the level of interest in the new
phones, and claimed he has the
backing of mobile phone
networks, which are concerned
about the dominance of Apple and
Samsung.
Nokia sold 2.9m Lumia phones
in the three-month period, around
10 per cent of the smartphones
Apple is expected to have sold.
FRIDAY 19 OCTOBER 2012
11
NEWS
cityam.com
Chief executive Stephen Elop is counting on the success of the next round of phones
APPLE failed yesterday to overturn
a UK court judgement ruling that
Samsungs Galaxy Tab had not
copied the iPad and ordering the
Californian firm to run newspaper
adverts saying so.
The Court of Appeal upheld the
High Courts July verdict that
Samsung did not infringe on
Apples intellectual property, in
part because Samsungs device was
not as cool. Apple is now likely
to apply for an extra appeal in the
Apple loses UK court battle on
claims Samsung copied iPad
BY JAMES TITCOMB
Supreme Court. Given the huge
popularity of the iPad and the
high stakes involved in this
dispute it is likely that Apple will
seek permission to appeal,
intellectual property expert Simon
Clark of law firm Berwin Leighton
Paisner said. He added that
further UK disputes from both
sides over Samsung handsets and
the iPhone are likely.
Samsung said: Apple was not
the first to design a tablet with a
rectangular shape and rounded
corners.
FRIDAY 19 OCTOBER 2012
13
NEWS
cityam.com
MOTHERCARE yesterday said its
embattled UK business was showing
some signs of recovery as it managed
to stem the decline in like-for-like
sales in the first half.
Chief executive Simon Calver, who
was parachuted into the company ear-
lier this year, launched a three year
turnaround plan in May pledging to
be ruthless on costs and bring its UK
business back to acceptable levels of
profit by 2015.
Calver yesterday said the strategy
was showing early signs of progress,
with UK like-for-like sales up 0.3 per
cent in the second quarter of the year
to 13 October compared with a fall of
6.7 per cent in the previous quarter.
Its still early days but were encour-
aged that the UK is beginning to
respond positively to the actions
taken, Calver said.
Mothercare closed 31 UK stores in
the first half, part of Calvers strategy
to reduce the total to 200. He has also
cut clothing prices, price matched
competitors in home and travel cate-
gories and launched new ranges like
the Little Bird range from Jools Oliver,
wife of TV chef Jamie Oliver.
Total UK sales fell 8.3 per cent in the
First baby steps
towards growth
for Mothercare
BY KASMIRA JEFFORD
first half of the year as a result of the
store closures. But its online business
returned to growth, with sales up 0.9
per cent, following the introduction of
a new website, Direct in Home.
International sales increased by 10.8
per cent, as growth in Asia Pacific, the
Middle East & Africa performed at the
top end of expectations, helping to off-
set weaker trading in Europe.
Shares rose 10.65 per cent on the
news but analysts remained skeptical.
We do not believe Mothercare is an
easy fix and brand repositions tend to
take longer than expected. It will be
difficult to make Mothercare relevant
again for the modern mother as it has
strong competition from Amazon and
the supermarkets, Seymour Pierce
analysts said in a note.
CENTER PARCS GROUP PAYS 260M DIVIDEND
CENTER Parcs UK Group, the Blackstone owned holding company of the UK holiday park
chain, yesterday reported a 102p interim dividend per share totalling 260.8m for the
year ending 26 April 2012 . The holding company showed a 197.5m pre tax profit.
Mothercare PLC
18Oct 12Oct 15Oct 16Oct 17Oct
220
250
240
230
270
260
280
290 p
257.25
18Oct
SHARES in Booker rose more than
six per cent yesterday after the
food wholesaler shrugged off the
poor summer weather and
reported better-than-expected
profits.
The group,which runs over 170
branches supplying caterers,
convenience stores, grocers,
restaurants and pubs, said pre-tax
profit rose to 51m in the 24
weeks to 14 September, up from
45m a year earlier. Revenues rose
3.3 per cent to about 1.9bn.
Total like-for-like sales grew 3.1
per cent, with comparable tobacco
Booker posts profit jump and
awaits clearance on Makro deal
BY KASMIRA JEFFORD
sales increasing 1.8 per cent.
The results exclude Makro, the
loss-making UK business which
Booker bought from German
retailer Metro in July.
Makro will be held as a separate
business until UK regulators give
the go-ahead to the deal. Booker
said that subject to clearance, the
deal should give the group
capacity to grow to being a 6bn
turnover business.
Together we are seeking to
become the UKs leading
wholesaler to caterers, retailers
and small and medium sized
enterprises with a wide range of
foods and non foods, Booker said.
SOFT drinks group Britvic, maker
of the J2O and Tango brands,
yesterday blamed a recall of its
Robinsons Fruit Shoot drinks
earlier this summer for hitting its
full-year revenue.
Withdrawing the bottles, due to
faulty non-spill caps, cost the
company 25m, and dented
revenue growth by an estimated
two per cent.
Group revenue for the 12 months
to 30 September was just over
1.2bn for the year, a decline of 0.8
BY FAIZA MALIK
per cent on 2011.
Volumes fell 1.6 per cent.
The FTSE 250 company, which has
bottling agreements with PepsiCo
brands Pepsi and 7UP in Britain
and Ireland, said it was confident
about meeting full-year targets.
We continue to place a strong
emphasis on cash generation and
rigorous cost management across
the group, chief executive Paul
Moody said in a trading update
yesterday.
Britvic is currently in talks
with Scottish Irn-Bru maker AG
Barr over a potential 1.3bn
merger. Yesterday the
company said talks were
ongoing.
Poor summer weather
affected final quarter
trading in Britain and
Ireland, where revenue
slid by 4.3 per cent and 8.5
per cent.
Shares in Britvic, which
have risen by nearly 12 per
cent since the beginning
of 2012, slipped slightly
yesterday to close at 360p,
valuing the company at
868.8m.
Britvic confident despite costly
Fruit Shoot recall hitting results
BROKERS at Finncap had a rather
amusing surprise earlier this week when
the picture below first surfaced, and a
highly photogenic member of their
corporate team was unexpectedly
thrown into the public eye.
The City brokers, preparing to float an
electric scooter business next month,
had hosted a launch party for said
scooter firm a few weeks ago at City
favourite Corney & Barrow in Paternoster
Square. Having successfully pimped their
ride to the gathered press they thought
nothing more of it. However
weeks later the whole team
were extremely tickled to see,
not a
professional
model
draped over
the scooter, but
their very own
broker Mia
Gardener.
The Capitalist is
told that give
us a ride jokes
have had the
office in giggles
ever since.
Mystery City
rider revealed
WITH the sun shining so
marvellously on
Wednesday, what better
day could have arisen to
bunk off work, in order
to dodge some bunkers,
on the green fairways of
Sunningdale golf club in
Berkshire.
City and celebrity play-
ers alike turned out in
their plus fours for the
15th Tullow Oil charity
golf day.
Besides the enjoyable
Im on a golf course not
deskbound haha brag-
ging rights, players were
there to raise money for
the annual events benefi-
ciary charity, CLIC Sargent.
In total over 168,000 was raised
for the charity, which provides sup-
port for cancer sufferers and their
families.
Rugby player Nick Easter, who was
playing with Stephen Bristow from
Citi, said: I had a fantastic day but
unfortunately my team probably
had the record for the highest
amount of non-scoring holes, the
record for the shortest drive, and the
record for furthest from the pin.
Sir Steve Redgraves team led the
celebrity pack finishing the round
one under par, and his group also
won the overall team competition.
Ian Springett, chief financial
officer of Tullow Oil, was left
dazzled by Redgraves sporting
prowess, afterwards com-
menting: Steve is not only
an excellent rower but an
excellent putter as
well.
However Jeff Knight, chief
executive of Knight
Security, had a little more
trouble with his golfing
partner: Playing with
Kenny Dalglish was amazing
but we could have done with
an interpreter at times to
understand his golfing
advice thats why we
missed so many putts.
Left to right: Rowen Pestana,
Merrill Lynch; Mark Morgans,
Knight Security; Kenny Dalglish,
former manager of Liverpool FC
and Jeff Knight, Knight Security
Left to right: Sir Steven Redgrave,
Olympic gold medallist rower;
Matthew Donaldson, Deloitte;
Ian Springett, Tullow Oil and
Simon Robey, Morgan Stanley
Finncaps Mia
Gardener with
the e-scooter
Harlequins back row
player, Nick Easter
14
cityam.com
cityam.com/the-capitalist
THECAPITALIST
While most definitely being all
in favour of Inspiring Women,
the topic of a conference that The
Capitalist was invited to yesterday,
one nevertheless had to pause for
laughter while reading this
particular agenda. With speakers
including Charlotte Crosswell,
president of Nasdaq OMX, The
Capitalist had high hopes of serious
debate, until inspecting the
programme a little more carefully.
Sessions on offer were touted as
Nice Girls Dont Ask, The Power
of Sheconomics and Why Still So
Lonely at the Top? The Capitalist
couldnt help but wonder if this was
a genuine gender equality mission,
or an early April Fool.
For anybody escaping the City
this weekend, for business not
pleasure mind you, The Capitalist
would advise taking heed from the
selection of most bizarre travel
requests compiled by Travelodge.
All were made by fellow businessmen
and women while jetsetting for work.
In times of a recession it may not be
wise to ask loudly at the concierge
desk: Can we land a helicopter on the
roof of the hotel? Or indeed: Can
my Shetland Pony stay in my room
with me? However The Capitalist
particularly enjoyed the final obscure
request. Surely senior bankers arent
so out of touch these days, that can I
use my Oyster card to book a
limousine? could be genuine?
FRIDAY 19 OCTOBER 2012
EDITED BY CALLY SQUIRES
Got A Story? Email
thecapitalist@cityam.com
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For the first time ever, were opening our doors to host
our first live trading workshop. And youre invited.
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Losses can exceed your initial deposit.
A sunny day at Sunningdale
SHARES in transport group Go-
Ahead leapt 5.8 per cent yesterday as
it reported strong trading and ambi-
tious growth plans for its UK bus
business.
The firm told investors that it aims
to organically grow operating profits
in buses to 100m over the next
three years, up from the 70m it gen-
erated this year.
Go-Ahead also reassured the mar-
ket with a fresh commitment to the
UK rail industry, in spite of ongoing
delays to all franchise competitions
in the wake of the West Coast Main
Line cancellation.
Go-Ahead looks forward to work-
ing with the review team to help
shape the future of UK rail franchis-
ing, it said in an update.
Go-Aheads rail business saw an
uptick in passengers during the
Olympics, though the firm said it
would not give a lift to profits.
Its Southern franchise reported
nine per cent revenue growth
between 1 July and 17 October with
no rise in passenger journeys, while
Southeastern posted a 16 per cent
jump in revenues on nine per cent
more passenger journeys.
Go-Aheads bus
plan impresses
as revenues rise
BY MARION DAKERS
London Midland delivered 17 per
cent passenger revenue growth on
seven per cent more journeys.
London bus services also saw a big
boost during the Olympics. Total rev-
enues jumped 21 per cent, or 13 per
cent excluding acquisitions. Go-
Ahead said that stripping out the
effect of the Games, revenue rose 14
per cent.
The FTSE 250-listed companys bus
business outside London posted nine
per cent year-on-year revenue growth,
or five per cent excluding acquisi-
tions.
Go-Ahead has given a clear unam-
biguous message that should allay
any investor concerns about what
happens after rail, said Investec ana-
lyst John Lawson.
DERWENT SECURES TICKETMASTER AS TENANT
PROPERTY developer Derwent London said yesterday it has let 10-4 Pentonville Road in
North London to Ticketmaster. The ticketing giant will pay 1.9m per annum to lease
the whole of 4 Pentonville Rd and the top five floors of 10 Pentonville Rd for 12 years.
Go-Ahead Group PLC
18Oct 12Oct 15Oct 16Oct 17Oct
1,280
1,320
1,300
1,360
1,340
1,380
1,400 p 1,365.00
18Oct
FRIDAY 19 OCTOBER 2012
15
NEWS
cityam.com
www.BarclaysATPWorldTourFinals.com
5 -12 November
The O2
FOR CORPORATE HOSPITALITY, PLEASE CONTACT IMG ON 020 8233 5888 OR ATPTennis@imgworld.com
The players shown are for illustrative purposes only. Qualication and participation subject to ATP rules.
Getty Images: Clive Rose, Mike Hewitt, Kiyoshi Ota, Mark Dadswell. MEDIA PARTNERS
IT ALL ENDS HERE
FINAL TICKETS REMAINING
FOR THE SEASON FINALE
A BRITISH life insurer has been
fined 600,000 after admitting to
governance failings that
potentially affected 114,000
policies and 1.2bn of assets.
The UK division of Sun Life
Financial of Canada, part of the
global Sun Life Financial group,
admitted that it made mistakes
relating to its with-profits pension
funds in 2008 and 2009.
During that period the with-
profits committee undertook two
substantial transactions without
referring them to the board of
directors.
FSA issues 600,000 fine to
Sun Life Financial of Canada
BY JAMES WATERSON
Tracey McDermott, director of
enforcement at the Financial
Services Authority, said: It is
essential that insurers operating
with-profits funds ensure
policyholders are properly
protected.
The firm fell below the
standard required. Its with-profits
committee and board, who had
primary responsibility for the fair
treatment of policyholders, were
not adequately consulted on two
significant transactions.
Sun Life Financial of Canadas
British division operates as a
closed book and has not accepted
new business since 2010.
Jardine Lloyd Thompson sees
reinsurance profits slowdown
INSURANCE broker Jardine Lloyd
Thompson (JLT) yesterday said
that profits from its reinsurance
business are set to fall this year.
Despite delivering good
revenue growth the unit has
encountered difficulties, as large
insurers become more reluctant
to pass on risk.
This, together with our
continued investment in the
business, means that we now
expect trading profit in this
division to be lower in 2012 than
BY JAMES WATERSON
in 2011, the firm said in a
statement.
However overall revenue growth
at JLT between 1 July and 17
October was described as in line
with expectations, assisted by
growth in the Latin America and
Asian markets.
Speaking ahead of an investor
presentation, Panmure Gordon
analyst Barrie Cornes reiterated
his hold rating and said he
believes the firm is fully valued
and vulnerable to any
disappointment, compounded by
the lack of liquidity.
JLT also confirmed that Mike
Reynolds will start work as group
finance director on 26 November.
Jardine Lloyd Thompson Group PLC
18Oct 12Oct 15Oct 16Oct 17Oct
740
760
750
770
780
p 750.00
18Oct
Unemployment bounces back up
2011 2012
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
NumberofNewClaimsperweek
NotSeasonallyAdjusted
SeasonallyAdjusted
Chinese Premier Wen
Jiabao sets economic policy
FRIDAY 19 OCTOBER 2012
16
NEWS
cityam.com
IN BRIEF
State spending hit by info lack
nThe government is hampered in its
spending decisions by a lack of
information, a report from finance
watchdog the National Audit Office
said yesterday. Departments are failing
to properly integrate their budgets
with their corporate plans one result
of which is a wide gulf in the efficiency
of capital project spending. In 2010s
spending review approved projects had
net present values of between minus
6.9 per pound and 133.5 per pound.
Rents slip back in Greater London
nRents in Greater London slid in the
third quarter, data from Move With Us
claimed yesterday, but they remained
more expensive than the same period
a year earlier. By the end of the third
quarter, rents in greater London were
4.9 per cent down on the previous
quarter at 2,273, but this left them
3.3 per cent up on rents a year before.
This was a much faster pace of decline
than Great Britain as a whole, where
rents edged down 0.2 per cent.
Insurer delay doubles readiness
nDelaying Solvency II regulations for
insurers by one year would more than
double the number of firms ready for it,
research from Ernst & Young suggested
yesterday. In a poll of 160 large
insurance companies across Europe, 43
per cent indicated they would not be
ready for regulations in 2014 but 90 per
cent said they would be ready by 2015.
The UK and Netherlands are the best
prepared for the implementation of the
laws, with Germany and Italy behind.
RETAIL SALES climbed in September,
data showed yesterday, defying their
flat long-term trend.
Sales volumes grew 0.6 per cent
between August and September, the
Office for National Statistics said,
after a 0.1 per cent fall between July
and August. This means 2.5 per cent
more goods are being sold than a
year before.
The amount spent on this volume
of goods increased 1.1 per cent into
last month, according to the data, up
from 0.2 per cent growth into
August, so that seasonally adjusted
sales values were 3.2 per cent higher
than a year before.
Shehan Mohamed at the Centre for
Economics and Business Research
said the improvement in the figures
suggested the UK was on its way back
to GDP growth.
Robust increases in retail sales in
the past few months suggests con-
sumer spending growth could be
positive in the third quarter,
Mohamed said.
Boost for GDP
as retail sales
bounce back
BY BEN SOUTHWOOD
We therefore could expect mildly
positive growth in that quarter in our
central case scenario, he added.
Other data out yesterday suggested,
contrary to usual experience, that
London was doing worse than the
country as a whole.
Domestic demand was weak in the
third quarter, survey data from the
London Chamber of Commerce and
Industry showed yesterday, as its
domestic sales index dropped from
minus three to minus 13.
But London remained confident,
and business continued to rate their
prospects for the coming year highly.
China grows slower than yearly
target for first time since crash
CHINAS economy grew more
slowly than its yearly forecast for
the first time since the depths of
the financial crisis, data showed
yesterday, but some signs suggest
China may be able to reverse its
slowdown.
GDP grew 7.4 per cent in the
third quarter, compared to a year
earlier, the National Bureau of
Statistics (NBS) said, just under
the 7.5 per cent target for 2012 as
a whole, set by policymakers
headed by Premier Wen Jiabao
But analysts were reassured by
the relatively slight drop from
BY BEN SOUTHWOOD
growth in the first half of the year
which was 7.8 per cent
and said this new data
assuaged worries that
China was heading for
serious stagnation.
Those fearing a hard
landing will be able to
sleep a little better
tonight, said Alistair
Thornton at IHS
Global Insight.
And the NBS
said that one
below-target
quarter would
not cause the
worlds second
largest economy to miss its yearly
forecast. We have 7.7 per cent
growth in September, which laid
a solid foundation for achieving
the full-year growth target, a
NBS spokesperson claimed. So
we are confident that we can
achieve 7.5 per cent full-year
growth or above.
Extra evidence for his case
comes from industrial
production, retail sales
and investment data
all of which came in
above forecast.
Volumes up in September but overall trend is at
Index level 2009=100
Amount bought
2000 2006 2012
120
110
100
90
80
70
NEW unemployment insurance
claims in the US rocketed last week,
data from the Department of Labor
revealed yesterday.
Seasonally-adjusted new claims
soared 46,000, bringing the total
from 342,000 in the week ending 6
October to 388,000 in the week
ending 13 October reversing
months of small improvements.
This adjusted figure came from a
29,129 increase in actually recorded
new claims, pushing them up to
359,048 last week just above last
years 357,562.
But the department warned that
figures from the last two weeks
may not be comparable with
previous data due to a change in
US new claims jump threatens
positive unemployment trend
BY BEN SOUTHWOOD
the way one state reported its data.
And the four-week moving
average edged up just 750, staying
well below the figure for the prior
year. Total unemployment for a
week prior also fell, from 3.28m
to 3.25m, suggesting the jump
might be a short-term blip.
Bank data reveals loans drop
despite Funding for Lending
NET lending was negative in August,
statistics showed yesterday, with
more businesses paying off debt
than taking more out.
The net monthly flow of lending
to businesses was minus 2.2bn in
the month, according to Bank of
England data.
The total stock of lending shrunk
2.2 per cent at an annualised rate in
the three months to August, and the
last 12 months have seen net
lending 3.1 per cent lower than the
12 months before.
This fall came despite the
BY BEN SOUTHWOOD
governments flagship Funding for
Lending scheme (FLS) designed to
boost lending which began at the
start of August.
John Walker, chairman of the
Federation of Small Businesses, said
that it was too soon for FLS to have
had an impact, but wondered why
the National Loan Guarantee
Scheme launched in March with a
similar goal had failed to boost
lending.
Consumer credit also sagged in
August, though at a slower rate the
net monthly flow was minus 0.1bn,
bringing the annualised three
month growth rate down to minus
0.6 per cent.
This came as other data showed a
collapse in mortgage lending. Gross
mortgage lending dived 1.3bn in
September, the Council of Mortgage
Lenders (CML) said, a fall of 10 per
cent, putting last months lending a
full 15 per cent lower than the same
month a year earlier. In total,
11.6bn was loaned to homebuyers
and people remortgaging over the
month. But CML top economist Bob
Pannell said the drop might be due
to a one-off Olympic effect, and not
necessarily underlying weakness.
TOUGH capital requirements are
the main cause of falling bank
lending across Europe, according
to a major new study out yesterday.
Deloittes study of 19 institutions
found 71 per cent cutting lending
to raise capital in order to hit
regulatory targets.
Deleveraging is particularly
marked because banks are
struggling to sell off non-core
assets as the weak economic
environment has hit valuations.
Liquidity rules are also an
important factor according to 53
per cent of banks, particularly
among those in the Eurozone.
But UK regulator Andrew Bailey
Deloitte says that new capital
rules are hitting levels of loans
BY TIM WALLACE
insisted on Wednesday that
targeting capital levels rather than
ratios means banks should be able
to increase lending and capital.
Fifty-three per cent of banks
expect to improve capital ratios by
up to 100 basis points (bps) through
deleveraging, while 12 per cent
forecast a rise of 150bps or more.
European Union state aid rules
and sovereign bail-out programmes
and changes in business strategy
induced by the plethora of reforms
faced by the banking sector are also
important drivers, said Deloittes
Vivian Pereira.
Banks in countries under the
IMF/EU/ECB programmes also have
additional pressures to deleverage.
Source: Santander UK
LONDONERS SPEND 4,000
3,762
Average UK spend per year on kids essentials
=
Over 18 years
London annual total
MONTHLY LONDON
BREAKDOWN
106.30
33.50
Food & drink
Entertainment
65.40
Holidays
50.00
Transportation
37.10
Activities
17.90
Babysitting
23.30
Toys and gifts
PER YEAR ON KIDS
IN BRIEF
Hochschild on track for full year
nSouth America-focused miner
Hochschild yesterday said silver
output for the third quarter came in at
5.1m ounces, as it reaffirmed its 2012
production guidance of 20m ounces of
silver. The FTSE 250 miner reported
strong brownfield exploration results
over the quarter, at both new and
existing sites, including the discovery
of a new vein in the San Jose area in
Argentina. It added that its financial
position remained strong.
No Games boost for Eurostar
nEurostar said yesterday the
Olympics had not given a boost to its
traffic figures, as tourists took more
trips during the Games but stayed
away in July. Around 2.6m passengers
travelled on the cross-Channel rail
service in the quarter, flat on a year
ago, while sales revenues fell five per
cent to 188m due to currency
movements. The firm also said it is
spending 700m on refurbishing its
28 trains and buying 10 new ones.
Chinese sales lift Renishaw
nBritish engineer Renishaw more
than doubled its first quarter profit
after strong demand in its core
Chinese market. The group, which
supplies products used in industries
from manufacturing to dentistry,
reported pre-tax profit of 28.3m for
the three months to the end of
September, up 108 per cent on the
same period last year. UK revenues
rose 27 per cent. Total group revenue
grew by 36 per cent in the period.
RUSSIAN steelmaker Evraz yesterday
posted a three per cent drop in steel
production year on year over the
three months to September.
The FTSE 250 firm cited lower pro-
duction at the Vitkovice steel opera-
tions in the Czech Republic and
Highveld in South Africa for the drop
in output. Evraz this month tem-
porarily shut down production at
Vitkovice due to low demand.
Evraz added that prices for most
steel groups had fallen, due to ongo-
ing uncertainty in global steel mar-
kets and falling prices of iron ore and
coking coal.
Over the third quarter, North
American steel output remained flat
quarter on quarter at 611m tonnes,
while production of the metal at its
South African mill dropped almost
50 per cent to 78m tonnes. Output
from Europe dropped almost 59 per
cent thanks to a poor performance
from its Czech Republic operations.
Elsewhere, coking coal production
increased by 20 per cent and steam
Russias Evraz
hurt by lower
steel output
BY CATHY ADAMS
coal production by 27 per cent quar-
ter on quarter.
Evraz, which has seen a 7.7 per
cent rise in construction products
output to 1.3m tonnes during the
period, said its operations will be
affected by seasonal trends in the
fourth quarter, including the slow-
down in construction in Russia.
Analyst Cailey Barker at Numis
labelled Evrazs third quarter
results slightly negative.
Earlier this month Evraz
announced it had bought a control-
ling stake in Raspadskaya, Russias
largest coking coal firm.
Cairn hails portfolio progress
as it confirms Morocco drilling
CAIRN Energy yesterday said that it
was continuing to rebalance the
business to deliver growth as it eyed
exploration opportunities.
The explorer has just acquired
two frontier exploration blocks in
Morocco, with the first well
targeted in the fourth quarter of
next year, it said in an interim
management statement.
The FTSE 100 oil and gas firm is
also focused on the Pitu block off
the North-West coast of Greenland,
targeting initial drilling in 2014.
Cairn added that over the next
12 months, it is targeting a ramp-
BY CATHY ADAMS
up in its North Sea operations, and
said yesterday it is looking to
participate in multiple exploration
and appraisal wells. Over the year,
six wells have been drilled and
three are currently operating.
The Greater Catcher area of the
North Sea, in which Cairn owns a
30 per cent stake, has some
excellent quality reserves, the
explorer added.
Analyst Sanjeev Bahl at Numis
said yesterday: We believe the
companys re-balanced portfolio,
which continues to evolve, provides
the foundations for sustainable
growth. The asset base consists of
lower risk development and
appraisal opportunities as well as
higher impact, operated exploration
opportunities that have the
potential to create significant value
for shareholders.
EVRAZ PLC
18Oct 12Oct 15Oct 16Oct 17Oct
235
230
245
240
255
250
260
265 p
258.9
18Oct
UP TO 11,000 Gold Fields workers
could be dismissed this morning if
they refuse to return to work to
end a five-week strike at the South
African miners KDC West
operation.
The five-week strike, which has
cost Gold Fields around ZAR1.3bn
(93m) in revenue, has lost the
precious metal miner around
65,000 ounces of gold.
Earlier this week Gold Fields
issued a final ultimatum to the
striking employees at KDC West,
which said if they did not report
for the last shift of the day at 2pm
Gold Fields could fire 11,000
miners if they refuse to work
BY CATHY ADAMS
yesterday, they would face
immediate dismissal.
The ultimatum affects 11,000 of
the 15,000 miners at the KDC
West.
The South African firm said
yesterday that there was a full
turnout at its Beatrix 4 shaft, and
2,800 striking employees reported
for work there yesterday. All 6,200
employees at the 1, 2 and 3 shafts
returned to work earlier in the
week.
Anglo American Platinum said
yesterday it would hold off
dismissing striking employees at
its Union and Amandelbult mines
to talk to the unions.
FRIDAY 19 OCTOBER 2012
17
NEWS
cityam.com
More than 80,000 South African miners have downed tools since August during strikes
BLACKROCK, the worlds biggest
fund manager, yesterday overcame
tough market conditions to close a
65m initial public offering (IPO)
for a US equity income trust set to
list in London.
The fund manager said the
BlackRock North American
Income Trust, which will invest in
American equities, would list on
the main market of the London
Stock Exchange on 24 October.
Despite the close, BlackRock
missed its original target to raise
100m, blaming uncertainty over
the US Presidential election on 6
November. BlackRock specialist
client group chairman Jonathan
Ruck Keene said the IPO was a
BlackRock rides out fundraising
storm to float US income trust
BY MICHAEL BOW
tremendous achievement in the
face of current markets, and
indicated the firm would still push
to hit 100m at a later date.
Following this initial offering,
we anticipate issuing further
equity in the near future as clouds
lift over current US electoral
uncertainty, he said.
With falling trading volumes
and investor confidence low, firms
have been struggling to float
trusts over the past year, with the
BlackRock fund just the fourth
investment trust to list in London
this year.
The trust will be run from New
York by the firms equity income
team headed up by industry
stalwarts Bob Shearer and
Kathleen Anderson.
AkzoNobel swings to a 2.4bn
net loss as Dulux dogs the firm
DUTCH paintmaker AkzoNobel
yesterday plunged to a quarterly
net loss of 2.4bn (1.95bn) after
taking a 2.5bn writedown on its
2008 purchase of Dulux paint
maker ICI.
The worlds biggest paint
manufacturer is also looking for
more cost cuts on top of the
500m of savings announced last
year to cope with weak consumer
and construction markets.
Revenues for the quarter rose six
per cent on last year to 4.28bn,
driven by currency movements
BY CITY A.M. REPORTER
and price rises, while volumes
declined three per cent as cash-
conscious Europeans put off
redecorating.
Excluding the large writedown,
AkzoNobel posted underlying
earnings of 540m, up seven per
cent on a year ago.
The principal concern remains
the decorative paint markets in
Europe. The impairment taken in
this quarter is a reflection of these
concerns and our realistic
assessment of the markets going
forward, said chief financial
officer Keith Nichols.
Nichols is standing in for Ton
Buechner, who took over as chief
executive in April and has been on
medical leave since September.
Buechner, recovering from
exhaustion, is expected to return
to work around the end of the year,
the firm said yesterday.
Nichols told analysts on a
conference call that AkzoNobels
dividend policy remained
unchanged, countering some
suggestions the payout might have
to be cut.
Shares in the firm closed down
3.98 per cent at 42.78 yesterday.
NESTLES sales growth slowed
more than expected in the first
nine months of the year as demand
cooled in the emerging markets
driving the worlds biggest food
company.
Underlying sales growth at the
maker of KitKat chocolate bars and
Maggi soup slowed to 6.1 per cent
from 6.6 per cent in the first half.
Growth in Asia, Oceania and
Africa, which accounted for about
one fifth of sales, fell to 9.4 per
cent from 11.6 per cent.
Strong emerging market
demand has been helping Nestle
and rival Unilever buck a more
negative trend set by its French
Sales growth eases at Nestle as
demand cools in Asian markets
BY CITY A.M. REPORTER
and US peers Danone and Procter
& Gamble. Unilever reports results
on 25 October.
Speaking at a news conference in
Shanghai, Nestle chief executive
Paul Bulcke said there was some
nervousness about emerging
markets, noting that China was not
meeting potential. But he was
optimistic for its future growth.
The Chinese economy grew by
7.4 per cent in the third quarter,
data showed earlier yesterday, a
sharp slowdown from previous
years.
Nestles growth in Europe
slowed to 1.9 per cent from 2.4 per
cent and was steady in the
Americas region at 5.5 per cent.
Cairn Energy PLC
18Oct 12Oct 15Oct 16Oct 17Oct
286
284
290
288
292
294 p
292.00
18Oct
FRIDAY 19 OCTOBER 2012
18
Weak Google
earnings drag
Wall St lower
U
S stocks fell yesterday, with
technology stocks hit hard
after Googles surprisingly
weak earnings released
prematurely during the trading
day disappointed investors.
Shares of Google lost 8 per cent the
stocks worst day since 20 January to
close at $695 after the Internet giants
third-quarter results showed earnings
and revenue fell short of forecasts. The
earnings report had not been expected
until after the markets close. Trading
of the stock was halted at 12:50 p.m.
after Google had fallen as much as 10.5
per cent to a session low of $676.
Trading resumed at 3:20 p.m.
After the midday snafu and the
stocks slide, Google was the biggest
drag on the S&P 500. Tech stocks suf-
fered, with the S&P 500 information
technology index losing 1.53 per cent.
Shares of IBM, which disappointed
investors a day earlier, lost 2.8 per cent
to close at $194.96 and pull the Dow
lower.
Its a huge impact on the market,
and especially the tech stocks, said
Paul Nolte, managing director at
Dearborn Partners in Chicago. What
happened to Google is a continuation
in the tech sector of some very poor
earnings numbers. But were not see-
ing the same lack of performance
across the board from other sectors.
The Dow Jones industrial average
dipped 8.06 points, or 0.06 per cent, to
close at 13,548.94. The Standard &
Poors 500 Index shed 3.57 points, or
0.24 per cent, to 1,457.34. The Nasdaq
Composite Index fell 31.26 points, or
1.01 per cent, to end at 3,072.87.
The days declines snapped the S&P
500s three-day string of gains, which
had pushed the benchmark index up
2.3 per cent through Wednesdays
close.
B
RITAINS top share index rose to a
seven-month closing high ysterday,
bolstered by mining stocks on a
reassuring economic outlook from
top metals consumer China.
Chinese economic growth slowed to 7.4
per cent year-on-year during the third
quarter, as expected, but industrial
output and retail sales data for
September beat forecasts, paving the way
for improvement in the final months of
the year.
Kazakhmys, Rio Tinto and Eurasian
Natural Resources led the miners higher,
enjoying respective gains of 2.7 per cent,
2.4 per cent, and 2.2 per cent.
The UK benchmark ended the session
6.14 points, or 0.1 per cent, firmer at
5,917.05, its highest close since 19 March.
GKNwas among the top risers on the
FTSE 100, up 3.4 per cent in heavy trading
volume, with traders citing takeover
rumours and bargain hunting after
recent falls.
One London-based trader pointed to talk
of a 350p a share bid from a Chinese
suitor and three traders also mentioned
vague bid talk but with no firm details.
There could be something there. It is on
a lot of broker M&A watchlists, Manoj
Ladwa, head of trading at TJ Markets, said.
As investors shifted into riskier assets
such as the miners, defensive stocks
found themselves firmly out of favour,
with tobaccos and brewers the worst off.
Weakness was seen among banks, with
sentiment surrounding the sector dented
after Barclays set aside another 700m to
cover the cost of compensation for mis-
selling insurance policies (PPI). Barclays
fell 1.5 per cent during the day.
BESTof theBROKERS
Aviva PLC
12Oct 15Oct 16Oct 17Oct 18Oct
p 350
345
340
335
330
345.00
18 Oct
AVIVA
Morgan Stanley rates the
insurer overweight
and cheers it as one of
the key picks in the
sector, but has moved its
target price from 406p
to 404p after fine-tuning
earnings forecasts.
DASHBOARD CITY
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
cityam.com
FTSE
12Oct 15 Oct 16Oct 17Oct 18Oct
5,940
5,920
5,900
5,880
5,860
5,840
5,820
5,800
5,917.05
18 Oct
Xchanging PLC
12Oct 15Oct 16Oct 17Oct 18Oct
p 119.0
118.5
118.0
117.5
117.0
116.5
116.0
117.00
18 Oct
XCHANGING
Panmure Gordon has
upgraded the IT and
outsourcing firm from
sell to hold and
hiked its target from 75p
to 115p, pleased with the
firms turnaround
progress.
Lloyds Banking Group PLC
12Oct 15Oct 16Oct 17Oct 18Oct
p
43
42
41
40
39
41.87
18 Oct
LLOYDS
Investec has cut the
banking group to sell
with a target price of
36p, noting scepticism
about the speed of the
firms recovery and
warning about additional
PPI charges.
Barclays
Mike Rigby has been appointed
head of manufacturing, transport
and logistics in Barclayss
corporate banking division. He
joined the bank in 2008, and was
previously corporate director in
the manufacturing team. Rigby
has also held roles at HSBC.
Ernst & Young
John Clarke has been appointed partner in the professional
services firms operational transaction services practice. He
was most recently a senior adviser at the Boston Consulting
Group, and has also served as global chief technology
officer at Tesco and global chief information officer at Nokia.
Neuberger Berman
The investment management firm has appointed Khalid
Murgian as managing director, head of Middle East and
North Africa (MENA). He was previously head of MENA and
new markets at Goldman Sachs Asset Management, and has
also worked as head of business development, Middle East
at Threadneedle Asset Management.
KPMG
Alan Downey has been appointed head of public sector for
Europe and the Middle East at the professional services firm.
He joined KPMG in 1989, and he currently leads the firms
UK public sector practice. Downey was previously a senior
civil servant, focusing on organisational change.
Linklaters
The law firm has announced that Pieter Riemer will become
its regional managing partner for Western Europe. He is a
corporate and mergers and acquisitions specialist. Riemer
joined Linklaters in 2005 as a partner, and he has over 20
years experience advising on corporate finance matters.
RIMES
The data services provider has appointed Andrew Knowles
as head of business development for compliance services.
He joins from JP Morgan, where he managed its compliance
reporting services product. Knowles has also worked for
Northern Trust.
WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
CITY MOVES
To appear in CITYMOVES please email your career updates
in association with
LONDONREPORT
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REPORT
in association with
in association with
Positive Chinese data sees the FTSE
grow to highest level since March
D
ONT paint Mick Jagger too
black. The Rolling Stones
have come in for criticism
over high ticket prices for
their fiftieth anniversary
gigs at the O2, which go on sale this
morning. But I have some sympathy
for the devil. While the cost may
have disappointed some of the
veteran rock bands passionate fans,
its a gesture of economic honesty
for which they should be respected,
not reviled. It reflects the
exceptional demand for their music,
and the realities of a music industry
in which most revenues must be
earned from concert performances
rather than recording sales.
The Stones remain a global
phenomenon: popular for fifty years
I
T IS always disappointing for
politicians when a confused
announcement turns a popular
idea into a communications
disaster. George Osborne
experienced that pain earlier this year
when he announced a freeze in fuel
duty and, thanks to the timing, the
front pages the next days were about
U-turns and not lower taxes. At Prime
Ministers Questions this week, the
Prime Minister announced that the
government would be legislating so
that energy companies have to give
the lowest tariff to their customers.
The press has been absolutely
scathing. Ministers have refused to
admit he simply misspoke and tried to
pretend that he simply restated a far
more moderate policy announced ear-
lier by Nick Clegg. That policy was,
although so far unclear, to encourage
firms to offer lower prices, particularly
to vulnerable customers.
The basic concern is that few cus-
tomers switch their energy supplier. As
anyone who has ever shopped around
for mobile phone contracts will know,
throwing your weight around as a con-
cityam.com/forum
Britain will have to
invest 186bn to meet
environmental targets
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: theforum@cityam.com
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.

20
FRIDAY 19 OCTOBER 2012
MATTHEW SINCLAIR
The reason Cameron is wrong in
humiliating energy tariff debacle
sumer normally results in a better
deal. And, if you ask, there may be a
deal that better reflects your habits as
a consumer so you pay a lower price.
The basic idea behind the govern-
ments plan is to force the energy com-
panies to pretend you are shopping
around. Stop them discriminating
between the most and least discerning
customers. Forcing companies to pre-
tend there is greater competition than
there actually is marks a departure
from the approach taken in areas like
banking, where the aim is to try to
make it easier for people to switch.
But the problem is that margins in
the retail sector just arent that big a
deal. They fluctuate, but the latest esti-
mate of the rolling net margin on a
dual fuel customer is 45 a year. That
is about 3 per cent of a typical 1,310
bill. Even if they can drive companies
to cut retail margins massively, the dif-
ference it will make to family budgets
will be limited.
By contrast, wholesale gas prices,
environmental regulations and VAT
(even at the lower rate applied to
domestic heat and power) are far more
important. If the government really
wants to help families struggling with
their energy bills, they could do some-
thing about that.
Wholesale gas prices have fallen
sharply in the United States with the
development of shale gas. The
Institute of Directors recently released
a major report setting out the differ-
ence it has made. From a 2005 low, the
production of natural gas in the
United States has increased by 28 per
cent. Most of that is shale, with pro-
duction increasing from 0.39 trillion
cubic feet in 2000 to around 5 trillion
cubic feet in 2010. Natural gas prices
there are now around a third of those
in the UK.
We dont know for sure if shale gas
can deliver the same returns here.
Estimates are uncertain. In 2010, the
British Geological Survey estimated
the UKs onshore shale reserves at 5.3
trillion cubic feet. But according to the
Institute of Directors they are set to
revise that up later this year, potential-
ly as high as 200 trillion cubic feet.
Owen Patersons commitment, as sec-
retary of state at the Department for
Environment, to speed the develop-
ment of shale gas is a far more mean-
ingful contribution to lower energy
prices than trying to force down ener-
gy sector margins.
But even if he succeeds, energy tar-
gets are set to add a lot more to energy
prices over the rest of this decade.
Britain will struggle to meet the
toughest target in the European Union
to increase the use of renewable ener-
gy by 2020. If we persist with that tar-
get, it will mean a lot more extremely
expensive offshore wind and add a
huge amount to bills.
In September 2010, Citigroup esti-
mated that Britain would have to
invest 229bn (186bn) to meet envi-
ronmental targets, against just 91 bil-
lion for the natural replacement and
renewable of ageing infrastructure. By
contrast, to meet environmental tar-
gets Germany would only have to
invest 87bn and France just 60bn.
Paying for all that investment will
require higher prices. If politicians
dont make a clear decision and ditch
the renewable energy target, we will
all end up with the bill.
The real mistake of the energy com-
panies, the criticism they really
deserve, is that they supported all of
the energy policies that have created
this huge need to invest. It could easily
be their own downfall as political pres-
sures build towards fresh demands for
a windfall tax. Camerons confusion is
just a small part of that ugly political
process.
Matthew Sinclair is chief executive of the
TaxPayers Alliance.
and still, as their new single Doom
and Gloom confirms, able to snarl
out a tune that can resonate with
everyone from teenagers nodding
along to the lyric all is darkness in
my room to those who were
teenagers the first time around
now a bit more interested in the
songs political references, and its
understanding of the afterglow of
success in lines like Battle to the
rich and you worry about the poor.
Proof for me that the Stones
deserve the prices they can
command comes in the economic
and poetic intelligence of a lyric in
the song that doesnt seem to have
gathered much attention. At the
end of the third verse come these
four remarkable lines. Im running
out of water,/ So I better prime the
pump;/ Im trying to stay sober/ But
I end up drunk.
The lines are subtle enough to be
misunderstood by a casual listener
either as somehow a continuation
of Jaggers reference to shale gas
fracking earlier in the verse, or as a
literal rock-and-roll reference to the
temptations of the bottle. But this is
surely a masterfully distilled case
against economic stimulus.
Priming the pump, a metaphor
invented by President Hoover in the
1930s, is still a common stand-in for
the Keynesian idea of spending
money in order to get the economy
flowing. Jagger isnt singing about
conventional drunks. He is
explaining that politicians sticky
fingers may return to the till in
search of a bigger bang with good
intentions, but with a disastrous
aftermath. Spending money you
cant afford is a route to the gutter.
You cant always get what you want.
The achievements of popular
culture are rarely given their
intellectual due. Perhaps the money
such works earn is considered
reward enough. But compression,
insight and wit deserve recognition.
Just as Bob Dylans literary quality is
championed by critic Christopher
Ricks, and Camille Paglia celebrates
the visual ballet of Star Wars, we
should acknowledge satiric
achievement in unexpected places.
That can be the skewering of
ineffective politicians on hit TV
show The Thick of It: What have we
done in three years? In that time,
Apple have launched two iPhones,
three iPads and their boss is a dead
guy! And it can be Jagger, dancing
despite the tightening of the screws,
defying economic doom and gloom
with a few well-chosen words.
Marc Sidwell is managing editor of
City A.M.
THE LONG
VIEW
MARC SIDWELL
You cant always get what you want but the Rolling Stones defy the gloom
MORNING UPDATE
A.M.
21
FRIDAY 19 OCTOBER 2012
The Forum is open for you to take part. Got a sharp comment on
one of todays columns? Do you have another subject you want
to share your opinion on? We want to hear your views.
Email theforum@cityam.com or comment at cityam.com/forum
Greek reform
[Re: Greece must stop hitting snooze and
wake up to economic reform, yesterday]
Although Matthew Melchiorre is right to
criticise Greeces politicians for failing to
reform their state, he misses a bigger issue.
Politicians arent operating in a vacuum.
Much of the Greek public quite unlike the
Estonians or Irish doesnt accept the
importance of reducing the deficit. The
classic illustration is chronic tax avoidance. A
recent study suggested that the average
income of a Greek worker is 1.92 times larger
than is reported to the government
shrinking the countrys tax base by $34bn
(21bn). And the success of far-right and
far-left anti-austerity parties just confirms
this lacklustre willingness to sort Greece out.
Emil Sells
Londons airports
[Re: As Gatwick looks to build a second
runway, does expansion make good
business sense?, yesterday]
Another runway at Gatwick is a second best
solution. Gatwick is further from London
than Heathrow and has fewer infrastructural
connections. Increasing capacity is also not a
zero sum game. Heathrow is an international
hub airport, and many travellers fly into
London to take a subsequent trip elsewhere.
Business people will not want to arrive at
Gatwick, travel to Heathrow and then take
their connecting flight. Only expanding our
existing hub Heathrow will allow
Britains airports to compete with
international rivals like Charles de Gaulle in
Paris.
Michael Grantley
T
ODAY is the twenty-fifth
anniversary of Black Monday,
when stock markets around
the world spectacularly
crashed and the FTSE 100
plunged from over 2,300 to depths
of near 1,500. Although 1987 is long
ago, and weve reasonably moved on
to consider more recent financial
disasters, Britains return to
confidence then holds lessons for
politicians and business leaders
today.
Those working in the City and the
public more broadly have always
remained resilient and have fought
through crises with optimism and
hope. And finance has consistently
been the backbone of subsequent
recovery. Although we talk about the
need to reorientate our economy,
finances invisible earnings have
always been disproportionate to
other sectors.
However, we may have underesti-
mated the angst caused by the more
recent demise of the banking sector.
This is somewhat understandable. Of
the millions employed directly or
indirectly in financial services, only a
few were responsible for the events
of 2007 and 2008. None of us wants
to take responsibility for events that
were outside our control.
But this angst does need to be dealt
with and confidence must be
restored to and in the financial sys-
tem if Britain is to return to growth.
The problem, however, is a lack of
resolve on the part of those in posi-
tions of political power. Politicians
are regarded with a level of disdain
unheard of in the late 1980s, and are
doing nothing to educate the public
in the painful changes Britain now
needs to undergo.
A decade ago, government profliga-
cy and an overindulgence of credit by
consumers nearly pushed the world
over the precipice and into the abyss.
TOP TWEETS
People who shop around for the best energy
deal should be rewarded with lower prices.
People who dont should pay more.
@Heresy_Corner
I see Labour is waffling about energy prices.
Never forget that, thanks to Ed Miliband, a
large portion of your bill is green taxes.
@Rich_I
If energy companies are forced to charge
the lowest tariff, surely they will increase
prices across the board.
@lloyd_m_brown
Were sitting on hundreds of years worth of
coal. We must look properly at clean coal in
the battle against increasing energy prices.
@MarkSpencerMP
Is the coalition right to force firms to disclose
the number of senior women they employ?
YES
Gender diversity in business leadership offers opportunities for new
perspectives, innovative thinking, and increased competitiveness.
Our research has found a clear and positive correlation between
women board directors and enhanced corporate financial
performance, particularly when the commitment to gender diverse
leadership is sustained over time. But the impact of women board
directors extends beyond the financial benefits. A recent study we
conducted with researchers from Harvard Business School found
that firms with more women leaders are, on average, linked with
higher quality corporate social responsibility initiatives.
Transparency in the number of women in business leadership in
fact, throughout an organisation may lead to a better
understanding of how to achieve gender parity and help to leverage
the talented pool of women ready to lead.
Eleanor Tabi Haller-Jorden is general manager of Catalyst Europe.
Eleanor Tabi Haller-Jorden
NO
Thomas de Freitas
Lord Daviess review into women on boards has done a disservice to
female professionals. In saying we should have women on boards for
equalitys sake and with the government now requiring companies
to publish their gender breakdown, thus guaranteeing they hire for
PR reasons not for the greater good of business he has patronised
any woman with corporate aspirations. Imposing quotas risks
sacrificing quality to hit arbitrary targets. In this case, it coerces
people to hire in the name of political correctness, presupposing
women are not good enough to earn board positions of their own
accord. Women are eminently capable and should be on boards
because they deserve to be there. I want to see more women at the
top not because firms feel duty-bound to hire them but because they
are right for the job in the same manner as their male counterparts.
Thomas de Freitas is managing director of Communicate
Recruitment Solutions.
RAPIDresponses
Black Monday and
why confidence is
the key to revival
Consequently there is a price to pay.
But people dont like taking their
medicine. Governments are also not
good at administering it, or articulat-
ing the reasons why the medicine is
necessary. Leadership is essential.
Now it is sorely lacking.
Some understand how critical lead-
ership is. But more UK politicians
should take one leaf out of David
Camerons book. When he travels
abroad, he sells UK Plc with gusto,
drive, verve and a smile. He is upbeat.
If we can bring back confidence,
recovery will surely follow. While
inertia will drive this country
beyond recession and into depres-
sion.
But make no mistake, London still
aspires to be the financial capital of
the world, despite New York having
taken hold of the bid in terms of
implementing banking regulation
and the Dodd-Frank recommenda-
tions more quickly than its peers in
the EU and the UK.
Financial and insurance services
contributed 125.4bn in gross value
added to the UK economy in 2011.
The public must learn to live with
the financial sector if it wants to see
a strong recovery. London is the cen-
tre of the time zone, English is the
international financial language of
the world, and London is better
equipped to drive recovery than any
other financial centre.
We recovered from Black Monday;
we can recover from this latest crisis.
David Buik is spokesperson for Cantor
Index.
DAVID BUICK
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LIFE&STYLE
FRIDAY 19 OCTOBER 2012
22
cityam.com
GOING OUT
FILM
FRANKENWEENIE
Cert PG | By Steve Dinneen
hhhhi
FILM
GINGER AND ROSA
Cert 12A | By Steve Dinneen
hhhii
WHERE
TO DRINK
TIM BADHAM
AUTUMNS BOOMof London launches
continues apace, with Barbarella set to
open on the Fulham Road this week.
Formerly one of the go-to spots for
Londons luminaries, Groucho Club
maestro Jack Freud has enlisted
clublands foremost names and
undertaken a 2m refurbishment to
restore Barbarella to its former glory, with
dinner, drinks and dancing featuring
prominently in their plans.
Nearby, Fulham Roads other newest
nightspot Dukebox is already drawing a
chic party crowd. The design weds the
industrial NYC glamour with fantastical
British gracenotes, including carousel
horses, while staff members don 18th
century military coats as uniforms.
Ensuring they continue to stay on top
of the pile, Chelsea contenders Raffles
and Boujis have undergone extensive
renovations to keep things contemporary.
The Ignite Group has been especially busy
as they are concurrently launching
Boujiss sister venue in Hong Kong,
paying homage to its British heritage
while conveying the metropolitan chic of
its new environment. Supperclub founder
Mark Cutler recently launched Honky
Tonk in Chelsea, a New York-inspired
restaurant and bar, with white reclaimed
swimming pool tiles, Japanese ship lights
and beer and tobacco infused cocktails.
Elsewhere on Sohos Kingly Street,
BitterSweet has opened by the team
behind Dirty Martini, with a design that
channels Art Deco by way of the future
and a reasonably priced cocktail menu
that gives bitters pride of place. For an
authentically Lyonnaise experience this
side of the Channel, Edwins French Wine
Bar in Shoreditch features stunning
wines, privately imported by owner
Edwin Chan, with 3,000 bottles from 70
different producers at incredibly low
prices. Right around the corner, XOYO
has turned the former XO Bar into the
Shoreditch Butchery, a rough-and-ready
hangout with lots of corrugated iron and
street art from Banksy-associate
Alexandre Farto.
For something to see, catch the
worlds sexiest burlesque show, Crazy
Horse Forever Crazy in its purpose-
built, antique mirrored Spiegel tent on
the South Bank, housing four bars and
some of the most gorgeous dancers on
the planet. Sticking with theatrics, the St
James Theatre has recently opened,
featuring two bars that are perfect for a
pre or post theatre restorative. Tim
Badham is the founder of Innerplace,
Londons leading entertainment
concierge service. www.innerplace.co.uk
London launch
boom rolls on
The interior of Boujis in Chelsea
Burton is back to his best
O
NLY TIM Burton could have
got away with making
Frankenweenie. I can just
hear the pitch: I want to
shoot a feature-length, black and
white, stop-motion animation about
a dead dog.
Frankenweenie, though, is
undoubtedly the most lovingly craft-
ed feature-length, black and white,
stop-motion animation about a dead
dog ever to grace the silver screen. It
sees Burton at the top of his game,
entirely in control of a medium thor-
oughly mastered from his work on
The Nightmare Before Christmas and
Corpse Bride. In fact, it ticks so many
Tim Burton boxes that at times it
plays a bit like a highlights reel of his
greatest hits. The stretched
and pinched hero bears
more than a passing
resemblance to The
Nightmare Before Christmass
Jack Skellington; New Holland,
the small town where the drama
takes place, is a carbon copy of the
white picket-fenced suburban
America of Edward Scissorhands;
there is the obligatory melancholy
girl-next-door character, who this
time actually lives next-door. New
Holland is filled with the saucer-eyed,
conspicuously kooky, off-kilter senti-
mentalism that Burton has built a
career on and yet it all feels remark-
ably fresh.
It follows the young science geek
Victor, who refuses to accept his
beloved dog Sparky is dead, despite
having personally buried him follow-
ing a car accident. Using his scientific
prowess and harnessing the strange
powers that surround New Holland,
Victor jolts Sparky back from the
dead an idea that turns out better
than you would have expected, until
his classmates get wind of it.
The story, of course, plays second
fiddle to the characters themselves.
Victors classmates are a veritable
whos who of the horror world, loose-
ly based on figures including Bram
Stokers Renfield and Lurch from the
Adams family.
The attention to detail is incredible
it is gloriously apparent that
Frankenweenie is crafted by someone
with a burning, insatiable passion for
cinema (the opening sequence sees
Victor shooting Godzilla-esque home
videos starring the soon-to-be-depart-
ed Sparky and the only live action
footage comes when Victors parents
Ginger and Rosa is an interesting but flawed film that doesnt
GINGER AND Rosa weaves a rather
implausible coming of age tale
about two teenage friends with the
post-war fear of The Bomb,
resulting in a film that is seemingly
sentimental but has a surprisingly
cynical heart.
Ginger is a bright girl from a
bohemian family who is terrified
the world may about to end. She
attends CND meetings but soon
discovers that wherever she goes,
she is faced with leery men who
only want to sleep with her. Her
father is the exception: a
conscientious objector who claims
to shun the patriarchal norms
and bourgeois deathtraps of
society (but still likes his dinner
cooked for him) he wants to
sleep with her best mate, Rosa,
instead.
It soon becomes clear that
Gingers fear of the bomb is tied up
with her squirming mess of
unresolved family issues, which all
adds up to a quietly but relentlessly
bitter movie. Throw in the
backdrop of post-war desolation
and the whole affair starts to give
off a faint whiff of spoiled milk.
A mature performance from Elle
Fanning as Ginger gives director
Sally Potters film a likeable face,
although even she cant mitigate
for some of the clumsier lines
(How can anyone be happy when
we know about the bomb?).
Christina Hendricks shows there
is more to her than Mad Mens Joan
and a gigantic chest, with a
touching portrayal of a woman
struggling to cope with domesticity
and a wayward husband (although
her English accent suffers the
occasional diversion into a kind of
T
HE 56th Annual BFI London
Film Festival was has been a
showcase for some of the
worlds hottest young
directors, as well as some more
established personalities such as
Tim Burton, whose Frankenweenie,
reviewed above, opened the event.
The festival is bigger than ever
this year, with new venues being
added in locations including
Shoreditch, Hackney, Bloomsbury
and Islington.
The awards for this years best
films will be announced on Sunday.
Until then, check out our guide to
the must-see movies on this
weekend.
By Amelia Brust
The best of the fest: must see flicks this weekend
A LIARS AUTOBIOGRAPHY 3D
The late Python Graham Chapmans creative,
saucy and much too silly life told by most of
the remaining actors is a welcome vacation
from the grimness of most festival films.
Tomorrow, 3pm, Vue Leicester Square
WHITE ELEPHANT
Pablo Trapero directs the story of Catholic
priests in a Buenos Aires slums, surrounded
by duelling dangers of druglords and police
in a sharp documentary-style narrative.
Tomorrow, 6.30pm, Vue Leicester Square
I CARRIED YOU HOME
Sisters reunite to bury their mother in
Padung Besa, forcing an opening of
grievances of their broken relationship in
director Tongpong Chantarangkul s debut.
Tomorrow, 6.35pm, Curzon Mayfair
FRIDAY 19 OCTOBER 2012
23
with horror romp
are watching Christopher Lee as
Dracula on the TV). In a career lit-
tered with pop culture references,
Frankenweenie is Burtons ultimate
paean to schlocky 1950s B-movies and
the era of Hammer Horror. The
machine Victor builds in his attic to
raise Sparky a Rube Goldberg-
esque creation is particularly, won-
derfully kitsch.
Thankfully, it is more than just a
navel-gazing pat-on-the-back for
geeks who can spot the references.
Frankenweenie is also a touching
tale of a childs struggle to accept
the concept of death. At times
Burton pulls pretty hard on the
heartstrings but the creepily comic
script ensures it never slides into
slushy sentimentalism.
It also looks fantastic: the anima-
tion is flawless and the high-con-
trast black and white stock gives
the whole thing a surreal, sinister
edge.
After the critical (if not box
office) mauling Burton received for
his previous two movies (Dark
Shadows and Alice in Wonderland),
Frankenweenie a pure expression of
the inside of his mind, unfettered by
others material has come at a good
time, proving the king of kook hasnt
lost his touch.
FILM
BEATS OF THE SOUTHERN WILD
Cert 12A | By Naomi Mdudu
hhiii
BEATS OF the Southern Wild is one of
those films that will splits opinions.
Having heard about the great
splash it made at the
Sundance Film Festival earlier
this year, I was expecting
something special. Instead I
got a film that required me
to dig deep and prove myself
the utter professional purely
for having the ability to see it
through to the end.
Nine year-old Quvenzhan
Wallis plays a six-year-old
girl living in a bayou
community under threat
by rising water levels. The
tale follows her as her drunken father
Wink, too proud to leave and relocate to
higher grounds, prepares her for a life of
survival on her own.
Those taken in by the wider context will
no doubt be interested in the fact that it
was loosely inspired by Hurricane Katrina
and explores the resilience and
strength that communities have
responded with to the threat of
natural disaster. Sadly, though,
neither that, nor the themes of
survival and human natures
ability to overcome adversity,
are enough to carry the lead-
heavy narrative.
A stellar performance by Wallis
makes Beats impossible to
completely write off not
even the harshest critic
could be unmoved as we
see her prematurely come
of age and look after her
drying father as the
series of events unfold
but thats all this film
has to offer.
Dig deep for this lame movie
Alice Englert and Elle Fanning as Rosa and Ginger
quite deliver
quasi-Australian).
The cinematography is stunning,
with post-war Britain captured in
all its squalid glory and scenes set
in Gingers fathers boat are
particularly sumptuous.
While certainly never dull,
Ginger and Rosas opening frames,
in which documentary footage of
the Hiroshima bomb is shown, are a
rather ambitious statement of intent
that Potters film never quite lives
up to.
Frankenweenie stands
shoulder to shoulder
with the very best of
Tim Burtons work
Quvenzhan Wallis is the
films sole saving grace
at the 56th Annual BFI London Film Festival
LA SIRGA
19-year-old Alicia ventures through the
Andes to reconnect with a long-lost uncle,
promising to help him renovate a failing
hostel, and sleepwalking along the way.
Tomorrow, 9pm, Curzon Mayfair
THE MANXMAN
Hitchcocks restored 1929 silent film, in which
childhood friends fall into a tragic love
triangle on the Isle of Man, is a gem of his
early filmography.
Tomorrow, 8.30pm, Empire Leicester Square
IT WAS THE SON
When a young girl is wounded in the crossfire
of Palermo gangs, her family, gets carried
away with the promised government
compensation.
Tomorrow, 12.30pm, Odeon West End
24
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Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
COFFEE BREAK
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5 6 7
8
9
10 11 12 13
14
15 16 17
18 19 20
21 22 23 24
25
26
27
35 7
45
6 29
9 22
11 12
8 24
14 10
38 16
19 16
45
23 15
27
22
15
11
32
14
28
8
14
10
18
12
30
9
9
31
21
29
29
12
10
13
ACROSS
4 Hate coupled
with disgust (5)
8 Not decorated (9)
9 Consumption (3)
10 Vile, despicable (5)
13 Marks left by old
wounds (5)
14 Thin strip of wood
or metal (4)
15 Tube to carry
rainwater away (9)
19 Rear-facing point
on an arrow (4)
21 Machine for
bundling hay (5)
24 Confused
scufe (5)
25 Large nation
(inits) (3)
26 Respect (9)
27 Antarctic
explorer (5)
DOWN
1 Adult male elephants (5)
2 Large, spotted feline of
tropical America (6)
3 Replicate (4)
4 Burden of
responsibility (4)
5 Give an account of (8)
6 Estimation (4)
7 Residence of a
clergyman (5)
11 Ancient (3)
12 Scenery and other
properties of a dramatic
production (5,3)
16 Upright fence picket (6)
17 Before, poetically (3)
18 Follows orders (5)
20 Cap made of
soft cloth (5)
22 Board game (4)
23 Vessel made of
planks (4)
24 Female horse (4)
N
G
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K

4



4

F A N O U T E L
R N H E R N I A
A R R I V E C Y
U E C O M M E R C E
D U V E T Y Y R
O E G O P
L L R P E T A L
I N T E S T I N E O
M I W A R D E R
B O N S A I O R
S G G U L L E Y
2 4 2 1 3 7 9
6 3 4 8 2 9 1 5 7
7 9 5 8 7 9
8 1 2 3 2 4 1
9 2 5 1 4 7 3 8 6
9 6 9 5
1 2 6 3 7 8 4 9 5
9 4 8 1 4 7 4
6 7 9 8 6 5
5 1 3 7 9 6 4 8 2
9 3 2 5 1 3 1
4
4
4
4
4
4
4
4
4
The nine-letter word was
GOLDCREST
T
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S
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S
A
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&
C
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
FRIDAY 19 OCTOBER 2012
THE GRAHAMNORTON SHOW
BBC1, 10.35PM
Graham returns with a stellar line-up,
as Arnold Schwarzenegger cosies up
on the sofa with Miranda Hart and
Ronnie Corbett.
QUEEN OF TIGERS: NATURAL ...
BBC2, 9PM
Wildlife cameraman Colin Stafford-
Johnson returns to India to follow the
progress of tiger Machli and chart the
extraordinary milestones in her life.
STAND UP TO CANCER
CHANNEL 4, 7.30PM
A celebrity-packed night of
entertainment, fundraising and science
that concludes Channel 4s campaign
to raise cancer awareness.
TVPICK
RARELY has racing been
simultaneously so excited and
disappointed as it will be
around 4.00pm tomorrow at
Ascot for QIPCO British
Champions Day, when Sir
Henry Cecils magnificent
Frankel takes to the turf for
what will almost certainly be
his final race.
In two wonderful seasons the
son of Galileo has staked his
claim to be called the greatest
thoroughbred of all time with
breathtaking performances
that have seen Frankel remain
unbeaten in 13 races and pick
up over 2.2 million in prize
money. Huge winning margins
have been the norm and its
unlikely we will ever witness a
horse like this again.
However, the mighty colt
faces his biggest test tomorrow
in the QIPCO Champion Stakes
(4.05pm) when he faces the
second best horse in the world,
Cirrus Des Aigles, and the high-
class Coral Eclipse and former
King George winner Nathaniel.
Cirrus Des Aigles is one of
the most admirable horses in
training and he has a fantastic
record with cut in the ground.
Madame Corine Barande
Barbes gelding has won his last
four races on ground described
as very soft or heavy by at least
eight lengths and returns to
Ascot the defending champion
having lowered the colours
of hot favourite So You Think
last year.
Frankels odds make him
redundant from a betting
perspective, even if he is the
most likely
winner, so backing CIRRUS
DES AIGLES each-way at 4/1
with Coral is a bet to nothing.
At worst he should fill the
place behind Frankel and at
best he could produce a
stunning upset.
The bookies have taken
few chances with Frankels
price but Ladbrokes offer of
5/4 for FRANKEL TO WIN BY
UNDER SIX LENGTHS looks
very tempting.
The opening QIPCO British
Champions Long Distance Cup
(1.45pm) looks a good
opportunity for OPINION POLL
to go one better than his second
in this race last year. Godolphin
have given the son of Halling a
light campaign and he hasnt
been seen since a good second
in the Ascot Gold Cup. He loves
cut in the ground and the 3/1
with Coral is worth taking.
Fame And Glory beat
Opinion Poll in this last year
but the former Irish Derby
winner is too hard to predict
these days and has been a
disappointing favourite on his
last two starts.
John Gosden will be looking
to wrap up the trainers title
tomorrow afternoon and his
Aiken can add some money to
his haul. The Selkirk colt is a
class act on this ground and
is two from three at the
Berkshire track but looks a
little short now.
James Fanshawe won the
QIPCO British Champions
Sprint Stakes (2.20pm) last year
with Deacon Blues and saddles
the favourite this year in the
shape of Haydock Sprint Cup
winner Society Rock. He is the
most likely winner, with
conditions in his favour and a
good record at Ascot.
Yet, at around 3/1, I will
oppose him. He ran a stinker in
this race last year and normally
pops up when hes relatively
unfancied rather than when
the market is behind him.
My choice, SIRIUS
PROSPECT, is 14/1 with Paddy
Power but Dean Ivorys charge
has a great chance. The four-
year-old was one of the most
progressive sprinters in Britain
last season before badly losing
his way. That was until his last
two starts where he ran into
third both times. Last time at
York he was a huge eyecatcher,
missing the start by about six
lengths but absolutely flying at
the death.
If he can break on level
terms, Sirius Prospect has the
turn of foot to go close in an
average looking race.
The QIPCO British Champions
Fillies and Mares Stakes
(2.55pm), has a trappy feel to it
and I wouldnt get too heavily
involved. I was keen on Great
Heavens for this before she was
rerouted to the Arc two weeks
ago. Nathaniels sister loves this
ground but she had a hard race
in Paris and she might be
vulnerable to SAPPHIRE.
Dermot Welds challenger
has to concede 4lb but is
unbeaten in three races at a
mile and a half. She loves
testing ground, arrives from
Ireland fresher than most and
7/2 with Coral is appealing.
Finally, Excelebration, for so
long the bridesmaid to Frankel,
will go for a third Group One
success in the Queen Elizabeth
Stakes sponsored by QIPCO
at 3.30pm. Aidan OBriens
star miler is a 4/6 shot to do
so but whether he quite
warrants quotes as short as
that Im not sure.
On official ratings he only
has one pound in hand of
Cityscape, who is 9/2, and, in a
race where there is no
confirmed front-runner, it
could be a messy contest.
The possible lack of pace
would also hinder CARLTON
HOUSE but at 10/1 with Coral
he is worth chancing. The
Queen will be in attendance
tomorrow and she could end up
presenting the prize to herself.
Sir Michael Stoutes yard is in
better form than it has been for
a long time and the son of
Street Cry has had a light
campaign. His ability to stay
further than this trip could
stand him in good stead.
You can follow me on
Twitter @BillEsdaile for all my
views on what promises to be a
historic day.
Regarded by many as the worlds greatest ever racehorse, Frankel is set for his final appearance at Ascot tomorrow
25
THEPUNTER
RACING TRADER
BILL ESDAILE PREVIEWS TOMORROWS QIPCO BRITISH CHAMPIONS DAY
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LIVE WEEKEND FOOTBALL
TONIGHTS LIVE FOOTBALL
7/5 Shefeld Wed 5/2 Draw Leeds 7/4
Championship, Kick-off 7.45pm, Live on Sky Sports
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8/1 D. Sturridge (C)
8/1 E. Hazard (C)
FIRST GOALSCORER
15/8 Burnley 12/5 Draw Blackpool 11/8
Championship, Kick-off 5.20pm, Live on Sky Sports
9/2 C. Austin (Bu)
6/1 T. Ince (Bl)
6/1 K. Phillips (Bl)
13/2 M. Paterson (Bu)
13/2 N. Delfouneso (Bl)
7/1 S. Vokes (Bu)
FIRST GOALSCORER
5/1 Norwich 3/1 Draw Arsenal 8/15
Premier League, Kick-off 5.30pm, Live on ESPN
9/2 O. Giroud (A)
5/1 L. Podolski (A)
13/2 Gervinho (A)
7/1 S. Morison (N)
7/1 G. Holt (N)
9/1 S. Jackson (N)
FIRST GOALSCORER
RED CARD REFUND: Applies to First / Last Goalscorer and
correct score markets on Live domestic matches. Others on request.
Prices subject to uctuation.
n Pointers
OPINION POLL 1.45pm Ascot
(tomorrow)
SIRIUS PROSPECT e/w 2.20pm Ascot
(tomorrow)
SAPPHIRE 2.55pm Ascot
(tomorrow)
CARLTON HOUSE e/w 3.30pm Ascot
(tomorrow)
CIRRUS DES AIGLES e/w 4.05pm Ascot
(tomorrow)
FRANKEL TO WIN BY LESS THAN SIX LENGTHS
(5/4)
I HAD my finest hour in the
saddle at Ascot and it always
holds a special place in my
heart. But Frankel is the star
of the show in tomorrows
QIPCO British Champions
Day, not me!
As we all know, he is an
absolutely incredible horse
and nothing will beat him. I
ride the German-trained
Pastorius and the best we
can all hope for is a place.
People keep asking me what
I think about Frankel, but
the honest answer is I dont
know; Ive only ever seen
his backside!
This is my favourite track
and I hope to be doing a
flying dismount after the
first when I team up with
Gold Cup winner, Colour
Vision. Hes a really tough
horse and although the
ground wont be ideal, it
will put more emphasis on
stamina which is what he
has in abundance.
Opinion Poll is perhaps
the fresher Godolphin
horse, but I beat him in
the Gold Cup and I
wouldnt swap my fellow
for anything. We should
go close.
The Sprint looks wide
open and Im back on Jimmy
Styles who I won the Ayr
Gold Cup with back in 2009.
He won last time out at
Deauville and if you take
out Society Rock and Wizz
Kid, there doesnt seem
much between the
others, so Id give him an
each-way squeak.
The Fillies and Mares is
also tough to call and I ride
Testosterone for Ed Dunlop.
Id be happy if we could
finish in the money.
Tomorrow is all about
Frankel, though, so lets just
sit back and treasure this
horse one last time.
FRANKIES
THOUGHTS
FRANKIE DETTORI
Racing gears up
to say farewell
to Frankel at
QIPCO British
Champions Day
England turn
to Pietersen
for India tour
CHELSEA were denounced last night
by equality campaigners for refusing
to come clean over their punishment
of captain John Terry for his race-
row confrontation with QPRs
Anton Ferdinand.
The European champions said
they had taken disciplinary action
against Terry, in addition to his four-
match ban and 220,000 fine from
the Football Association, but would
keep the details confidential.
It came hours after Terry
announced he would not appeal the
FA sanctions and issued an apology
to everyone for the language I used
in the explosive Premier League fix-
ture of October 2011.
But Lord Herman Ousely, chair-
man of Kick It Out, criticised
Chelseas secretive policy and
warned the club, who have been
urged to strip Terry of the captaincy,
needed to be transparent about their
stance on racism or risk further
damage to their image.
I believe Chelsea need to be open
about the action they have taken. A
lot of people will be dissatisfied that
Chelsea have not been much more
up front about the standards they set
and the values they have, he said.
If they are not prepared to say, it
will further damage the trust of
those people who still have suspi-
cions about Chelseas sincerity in
dealing with this matter.
I do welcome what they have said,
but they need to be saying more and
doing more if they are going to win
back the confidence of people who
have lost trust in them rather than to
sit back and be silent.
Chelsea had earlier broken their
silence on the long-running matter
by welcoming Terrys decision to
apologise for saying f***ing black
c*** and forgoing an appeal against
the FAs independent panel decision.
The board has taken further disci-
plinary action in addition to the four-
match suspension and 220,000 fine
imposed by the FA, a club statement
read. In accordance with our long-
standing policy, that disciplinary
action will remain confidential.
Terry, who lost the England cap-
taincy and then last month quit inter-
national football over the row, has
consistently denied racially abusing
Ferdinand and was acquitted in a
criminal trial in July. The FA panel,
while accepting Terry was not a
racist, ruled that his defence that he
merely repeated the words, thinking
he had been accused of using them
improbable, implausible, contrived.
Some 361 days after the incident,
Terry finally apologised yesterday.
Although Im disappointed with
the FA judgment, I accept that the
language I used, regardless of the con-
text, is not acceptable on the football
field or indeed in any walk of life, he
said in a statement.
Terry will miss tomorrows trip to
Tottenham, and matches with
Manchester United and Swansea.
Fellow Blues defender Ashley Cole,
meanwhile, was yesterday fined
90,000 by the FA for a tweet refer-
ring to them as a bunch of tw**s.
SARACENS centre Brad Barritt
believes that he and his team-mates
will relish competing at the unique
location of the King Baudouin
Stadium in Brussels at home to
Racing Metro on Saturday and that
a win in the Heineken Cup fixture
is imperative.
Both teams have won their
previous matches and are among
the tournaments strongest and
Barritt, who is also aware of the
value of performing with Englands
autumn internationals imminent,
consequently believes his team-
mates need to maintain the same
clinical approach displayed in the
45-0 victory away to Edinburgh.
In the Heineken Cup, theres not
many second chances, so being a
home game for us, its imperative
that we win, Barritt said. Players
obviously thrive on the pressure so
the bigger the game, the bigger the
person that stands up. We cant wait
for the challenge.
I think the team thrive on getting
themselves up to play at different
venues, and its awesome to spread
rugby to new frontiers. Hopefully
the locals in Brussels get behind us
and we can play to a really big,
receptive audience.
This is as big as it comes in club
rugby. Over the past three seasons
weve always enjoyed going to these
historic stadiums, whether its
Welford Road, the Shed, we really
enjoy the challenge of playing at
these fortresses.
Racing Metro have a very talented
squad. Brendan Venters favourite
Sireli Bobo is obviously a key
individual for them but theyre
definitely not a one-man team,
theyre scattered with talent.
[At this level] you get less and
less chances, when they come you
need to take them. Racing are a very
strong team so when we get these
chances you need to take them.
BRITAINS Mark Cavendish has
confirmed he is quitting Team
Sky after just one season in favour
of joining Belgian outfit Omega
Pharma-Quick Step on a three-
year contract.
The 27-year-old joined Bradley
Wiggins in Dave Brailsfords stellar
line-up less than a year ago but
admitted to frustrations during the
summer that the teams tactics did
not suit him.
Cavendish, who won the Tour de
Frances green jersey and the road
racing World Championship in 2011,
confirmed his switch on Twitter
yesterday. He is thought to have
parted from Team Sky amicably,
albeit prematurely.
Cavendish in
Team Sky exit
BY FRANK DALLERES
FRIDAY 19 OCTOBER 2012
26
SPORT
cityam.com/sport
BY DECLAN WARRINGTON
BY DECLAN WARRINGTON
@cityam_sport
Barritt keen for Racing victory
when Sarries travel to Brussels
Blues criticised
for secrecy over
Terry race row
punishment
BY FRANK DALLERES
John Terry is unavailable for games against Tottenham, Manchester United and Swansea
ENGLAND have recalled
controversial batsman Kevin
Pietersen for the upcoming tour of
India following talks with Andy
Flower and Alastair Cook.
The coach and Test captain met
Pietersen alongside other senior
players to discuss his potential
international future following
the South Africa text messaging
scandal but after recently signing
a new England contract he is to
finally return.
The meetings were constructive
and cordial and all outstanding
issues have been resolved, said Hugh
Morris, the England team's
managing director.
All the England players and
management are now keen to draw a
line under this matter and fully
focus on the cricketing challenge
that lies ahead in India.
It was in August that Pietersen was
dropped after the sending of
provocative text messages to South
Africa players about then-England
captain Andrew Strauss during the
summer Test series against the
Proteas but it was an incident for
which he later apologised and which
the English Cricket Board accepted
was not derogatory.
We are pleased to welcome
a player of Kevins proven
international calibre back into
the Test squad for such an
important Test series, said ECB
national selector Geoff Miller of the
player who is competing for the
Delhi Daredevils in the Champions
League in South Africa.
As we anticipate that Ian Bell
will return home for the birth of
his first child around the time of
the second Test in Mumbai, the
team will benefit from having an
extra batsman in the squad and all
players who were originally selected
for the tour will fly out as planned
next week.
Kevin will join up with the squad
as soon as his Champions League
commitments are complete.
England are to next week fly to
Abu Dhabi before the four-Test tour
of India from 30 November, but it
remains a possibility that Pietersen
will not join them until their
training camp in Dubai if Delhis
Champions League participation
continues until the October 28 final.
Englands first warm-up match is
scheduled for Mumbai on 30
November, where they will also play
the second Test.
England have recalled Kevin Pietersen
EXCLUSIVE
27
IN BRIEF
Axe relegation, says McGeechan
nRUGBY UNION: Coaching great Sir
Ian McGeechan, leading a review of
elite rugby in England, has called for
promotion and relegation to be
scrapped from the Premiership.
Shake-up for domestic format
n CRICKET: County Championship
matches will start on Sundays while
the Clydesdale Bank will change from
a 40- to 50-over format from 2014.
THE sold out signs are already
firmly in place outside Ascot
Racecourse ahead of tomorrows
Qipco British Champions Day, as
32,000 horseracing fans prepare
to descend on Berkshire to get
one last glimpse of Frankel before
he takes up stud duties.
It is difficult to evaluate the
true Frankel factor but a capped
growth just shy of 25 per cent
on last years attendance
is testament to how an equine
freak on the verge of making
it 14 wins from 14 career
starts has captured the
publics imagination.
Yet, as racing prepares itself for
life without its star, one leading
figure is unconcerned about the
situation. Frankel has helped our
sport head news bulletins and go
beyond the racing pages, Simon
Bazalgette, chief executive
of The Jockey Club,
racings largest
commercial group,
told City A.M. Hell
be talked about
for years to come,
but fortunately
were a sport
where when
one star
retires, others tend to burst on
the scene.
British racing certainly does
seem to be on the up having
welcomed a record 6.15m people
through its gates last season,
making it the second most
attended national sport behind
football. Despite the economic
climate, it has attracted the long-
term support of global brands
such as Investec and Qatari
firm QIPCO, as well as Jaguar
and Goldsmiths.
Therefore, the BBCs
apparent decision to step away
from a sport it has had such a
loyal association with for
more than 50 years
surprised many.
After a bidding
process earlier
this year, Channel
4 was awarded
British racings
terrestrial TV rights for an
exclusive four-year period.
Bazalgette, however, is quick to
point out that it was racing that
chose Channel 4 rather than the
other way around.
Sometimes I hear it suggested
that the BBC pulled out of
racing, he adds. Far from it,
despite budget cuts, the BBC
offered to pay more to keep their
existing rights. But they found
themselves outbid, financially
and in terms of how far Channel 4
is proposing to go to in
promoting our sport across
multiple platforms and in new,
engaging ways, all year round.
So, the BBCs loss will almost
certainly be Channel 4s gain and
Bazalgette is confident racing has
backed the right horse. If you
want to make big progress you
have to make bold choices and
thats what weve done.
He was a B-grade bowler that got his arse
whipped by Australia that many times its not
funny

cityam.com
FRIDAY 19 OCTOBER 2012
BY BILL ESDAILE
Racing bullish on life
after Frankel, insists
chief of Jockey Club
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CHARLTON manager Chris Powell
has condemned the decision of
European footballs governing body
Uefa to charge both The Football
Association and its Serbian
equivalent for the violent scenes and
racist behaviour witnessed during
Tuesdays fixture between the two
nations U21 sides.
Disciplinary proceedings have
been opened against Serbia for racist
chanting directed towards Englands
black players and the improper
conduct of Serbias team but it is
the action taken against the FA for
the improper conduct of the
England players to which Powell
understandably objects.
Its just disgraceful, said Powell,
one of the Football Leagues few
black managers. If anyone can give
me any rhyme or reason why they
are going to charge England they are
very welcome to tell me. It is quite
disgraceful. Its about time they
make a stand, but will Uefa make
one? I very much doubt it. They are
letting down countries like us.
Powell blasts
Uefa over
Serbia racism
BY DECLAN WARRINGTON
Ex-Australia batsman Matthew Hayden savages James Anderson
Simon
Bazalgette is
CEO of The
Jockey Club