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Leading Financial
Thinking
BORIS Johnson has said that multina-
tional firms like Starbucks, who have
not paid much UK corporation tax in
recent years, need to do more for UK
society or change their tax arrange-
ments.
Speaking to City A.M. ahead of his
speech at the Confederation of British
Industrys (CBI) annual conference
today, the Mayor of London said:
Starbucks has got a choice to make.
Although it has a duty to shareholders
there is growing public unease that it
can effectively escape tax obligations
in a way that its high street competi-
tors cannot because of its status as a
global corporation.
It needs to reflect very fast and very
seriously on its position...Either it
makes a change in its tax arrange-
ments or does a lot more to visibly
serve society.
Also in his speech the Mayor will
today pledge to fight against more
bank regulation and higher taxes,
while calling for Londoners to take
part in a new age of enterprise.
He said the country must be posi-
tive and stop talking the language of
austerity. The time for hair-shirtism,
vegetarianism and belt-tightening is
past its sell-by date, he added.
Instead Johnson wants to combat
the global threats to Londons position
as an economic powerhouse, such as
additional bureaucracy for City firms:
We cant solve these challenges by
heaping on more regulation. We
shouldnt be out of step with competi-
tive jurisdictions, forcing banks to
compete with one hand tied behind
their back and shoot ourselves in the
foot.
Part of this plan will involve reduc-
ing personal tax rates, in contrast to
the French governments completely
crackers decision to hit high earners
hard.
If Andy Murray had won
Wimbledon he still would have paid
more in tax than any of the other last
16 competitors. Taxation has got to be
lowered, its got to be fair.
Despite last weeks report showing
the number of Londoners working in
financial services has fallen by a third
in the last five years, the Mayor
remains optimistic that other indus-
tries can take up the slack: Dont for-
get that the figures pointed out huge
potential for growth in other indus-
tries. Two hundred years ago London
was globally dominant in shipmaking
and saddlemaking. Things move on
and Londoners will always exploit
whatever provides the most value
added.
As part of this it should be easier for
firms to recruit new staff from abroad:
Were losing Chinese tourists to Paris
because of the visa restrictions and
were losing potential Indian students
to London universities. Its absurd that
we should be forfeiting those potential
markets. Im implacably opposed to
illegal immigration but we need to
allow talent into London.
The mayor of London is set to address the CBI
VIRGIN Atlantic is hoping to break
British Airways traditional domi-
nance of UK short haul air travel,
after being picked to take over a
dozen slots at Heathrow Airport.
Virgin confirmed today that it will
offer flights to Aberdeen and
Edinburgh next year, using the slots
that BA has been forced to give up
on competition grounds.
A spokesperson said the new serv-
ices will compete directly with BA
on price and quality, though they
will not be run on the same no-frills
basis as budget carriers.
The firm has already conducted
focus groups north of the border in
a bid to target customers who
would otherwise fly with BA.
We have fought hard for the right
to fly short haul and take a strong
challenge to British Airways within
these shores, said chief executive
Steve Ridgway.
For 28 years both airlines have
battled for customers all over the
world and it has meant that British
consumers have ultimately had
some of the worlds best flying and
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lowest fares.
The European Commission asked
BA to offload capacity at Heathrow
after it took over loss-making carri-
er BMI last year. It has now decided
Virgin Atlantic should have priority
to take all 12 slots on offer.
Virgin Atlantic, which
made an unsuccessful
bid for BMI, will
finalise prices and
plans for the other
slots at the end of
the month.
The airline had
hoped to
launch a serv-
ice to Moscow
using some of
the capacity,
but last month
lost out to
EasyJet in a
fight for the
right to fly
there.
V i r g i n
Group pres-
ident Sir
R i c h a r d
Br ans on
has met with Russian authorities to
try to expand the number of servic-
es permitted between the two coun-
tries.
Virgin is also in talks with several
potential partners to lease Airbus
A320s for use on the new routes.
British Airways parent group IAG
has more than 50 per cent of the
take-off and landing slots at
Heathrow. Before this deal,
Virgin Atlantic had three per
cent.
BA and the European
Commission declined to
comment yesterday. Aer
Lingus, which had also
expressed an inter-
est in the
Heathrow slots,
said it is await-
ing a copy of
t h e
Commissions
decision on
the rankings.
BY JAMES WATERSON
ALLISTER HEATH: Page 4

MORE: Pages 12-13

Certified Distribution
01/10/12 til 28/10/12 is 129,297
Boris says Starbucks
must do more for UK
BY MARION DAKERS
Sir Richard is
ready for more
routes
ISSUE 1,763 MONDAY 19 NOVEMBER 2012
TAKING ON SKY
THE BOSS OF YOUVIEW TELLS JAMES TITCOMB
WHY IT WAS WORTH THE WAIT See Page 14
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Page 28
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EU makes budget plans without UK
EU officials have begun work on a plan to
create a long-term budget without the
UK in a move that reflects mounting
frustration that Britains demand for a
spending freeze cannot be reconciled
with the rest of the bloc. EU officials and
national diplomats have been studying
the legal and technical feasibility of
devising such a budget, according to
people familiar with the discussions.
Osborne to widen Reits tax incentives
George Osborne is poised to introduce a
major change to the listed commercial
property sector by allowing real estate
investment trusts (Reits) to invest in each
other on a more tax-efficient basis. The
chancellor is set to change the current tax
treatment so that investing in other Reits
will enjoy the same tax freedom as
investing in physical buildings.
Bond investor takes punt on Ireland
A prominent US bond investor has
increased an already aggressive bet on
Irelands recovery from the financial
crisis. Franklin Templeton funds increased
their holdings of Irish bonds by more
than a third to at least 8.4bn in the third
quarter.
No further action on Connaught
Executives who presided over one of
Britains biggest corporate collapses of
recent years will not face action by the
Financial Services Authority. The FSA has
closed an investigation into whether
Connaught bosses broke financial rules.
Rural areas set for Vodafone boost
Mobile phone reception in rural areas is
set to improve after Vodafone acquired a
licence to install powerful microwave
transmitters on its masts in remote areas.
Investors warn bank profits distorted
Britain needs to urgently overhaul its
accounting rules as they are dangerously
distorting bank profits and leading to
confusion over executive pay, some of the
countrys biggest investors and pension
funds have warned.
Business leaders call for simpler tax
Business leaders have overwhelmingly
backed a call to merge National Insurance
with income tax to help reduce costs, drive
up wages and create jobs.
Ad haul bodes well for China
Companies looking to advertise on
China's biggest television network
committed 15.9bn yuan (1.6bn) to run
ads in 2013, up 11 per cent from a year
earlier, signalling confidence in Chinas
economy from marketers and increased
competition for Chinas 1.3bn consumers.
Call of Duty sets sales record
Activision Blizzard said sales of Call of
Duty: Black Ops II, the latest of its war-
simulation games, topped $500m in retail
sales during its first day on the market.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
London houses withstand
UK asking price collapse
LONDONS resilient housing mar-
ket defied a UK-wide fall in asking
prices going into November, data
revealed this morning, driven by
the top end of the market.
The UKs average property asking
prices fell 2.6 per cent in just a
month to hit 236,761, according
to the Rightmove house price
index, a sharp turnaround from
the monthly growth of some 3.5
per cent seen going into October.
But even this rapid decline was-
nt enough to erase the rest of the
years growth. Prices were still up
two per cent compared to
November last year actually
bringing up the annual increase
from last month, showing that last
November saw an even sharper fall.
Though London prices also saw a
sharp fall in the rate of monthly
growth from 4.8 per cent in
October to 1.2 per cent in
November the continued growth
was testament to the robust
strength of the capitals market,
even in spite of difficult underly-
ing economic trends across the
world.
This month sees a modest
increase by London standards,
said Miles Shipside at Rightmove,
though that is something of an
achievement given that new sellers
INTERNATIONAL pressure for a cease-
fire was mounting yesterday after
five days of Palestinian rocket attacks
on Israel and Israeli air strikes on the
Gaza Strip.
An Israeli missile killed at least 11
Palestinian civilians including four
children in Gaza yesterday, medical
officials said, after an attack on a top
militant that brought a three-storey
home crashing down.
Egypt has taken the lead in trying to
broker a ceasefire. Israeli media said a
delegation from Israel had been to
Cairo for talks on ending the fight-
ing. US President Barack Obama said
that while Israel had a right to defend
itself but that it would be prefer-
able for Israel not to invade Gaza.
Israel said 544 rockets fired from
Gaza have hit Israel since Wednesday,
killing three civilians and wounding
dozens. Some 302 were intercepted
and 99 failed to reach Israel and land-
ed inside the Gaza Strip.
Gaza officials said 72 Palestinians,
21 of them children and several
women have been killed in Gaza
since Israels offensive began.
Hundreds have been wounded.
Israels declared goal is to deplete
Gaza arsenals and force the Islamist
Hamas to stop rocket fire that has
bedeviled Israeli border towns for
years and is now displaying greater
range, putting Tel Aviv and Jerusalem
in the crosshairs.
Calls for Gaza
ceasefire after
deaths mount
Strength in the capitals housing market has long made up for weakness in the rest of the UK
4
NEWS
BY CITY A.M. REPORTER
BY BEN SOUTHWOOD
To contact the newsdesk email news@cityam.com
B
RITAINS corporation tax system
is broken. It is arbitrary, opaque,
incomprehensible and unfair.
At best, it is uncompetitive
compared with other countries, such
as Ireland; at worst it is a complete
nightmare of complications and
distorted incentives. Britains tax
system is one of the worst things
about the UK: It needs to be smashed
up and replaced by something
entirely new.
Some streams of income from capi-
tal are taxed, taxed and taxed again,
thanks to levies including income tax
on dividends and capital gains tax,
adding to a crippling total tax rate.
Other streams of income are taxed far
less, thanks to loopholes. This isnt
right or efficient. But you cant have a
tax system based on people voluntari-
ly ignoring the law, which is what
some of those MPs who have been spe-
EDITORS
LETTER
ALLISTER HEATH
We must ditch unfair loopholes and then cut tax overall
MONDAY 19 NOVEMBER 2012
cialising in permanent outrage about
the tax system seem to believe. Their
argument seems to be that there is
nothing that they, merely being MPs
and thus in charge of writing the law,
can possibly do about it. Instead, this
is a moral issue, they claim. This, of
course, is nonsense, in practical terms
at least.
Do you know anybody that voluntar-
ily makes large donations to HMRC?
Neither do I. So those who dont like
the status quo I hate it so much I
chaired the 2020 Tax Commission,
which produced a 417-page report on
the subject need to explain how
exactly they would change the law. If
Vince Cable believes the current situa-
tion is completely unacceptable tax
abuse as he put it yesterday, then his
government needs to change the
rules on the way companies are taxed
and no, that doesnt mean slapping
higher council tax on hard-working
families, seemingly the answer to
every question he is ever asked.
It is possible, as I do, to advocate
much lower overall taxes while
accepting that each and every bizarre
loopholes needs to be ditched. Take
Google and Amazon. Under EU rules
the bulk of their operations are regis-
tered as taking place elsewhere, so
they pay corporation tax overseas.
This is legal, even though Amazon
makes its money from dispatching
leads to less investment, reduced pro-
ductivity growth and lower wages)
and customers the remainder (higher
taxes often lead to higher prices). So
when people say they want to hike
taxes on companies, they are actually
advocating higher tax on investors,
employees and online shoppers.
So yes, we need to get rid of the loop-
holes in the tax system to make sure
that everybody is treated equally
but then we also need to slash taxes
across the board, to boost competi-
tiveness and to help investors, work-
ers and consumers. That is the
missing part of the tax jigsaw puzzle.
The problem is not that taxes are too
low on average, they are too high.
The problem is that they are unfair,
opaque and complex. That must end.
goods from the UK to UK customers;
and Google generates its revenues
from UK advertisers targeting UK con-
sumers. The solution, of course, is to
tear up EU rules and ensure that all
companies of this kind must run all
their UK operations through UK sub-
sidiaries. That way online firms
would be on a level playing field with
John Lewis and others based in the
UK.
But it is important to remember
that shutting loopholes is no free
lunch. Companies are a legal fic-
tion, a bundle of contracts. It is not
they who will pay the additional tax
as companies dont pay any tax logi-
cally and empirically, only the people
that make up the firm do.
Shareholders pick up part of the tab
(they lose some income generated by
their capital), employees another part
(reducing the income from capital
in the capital havent raised prices in
November since 2007.
This contrasts with the national
market as a whole which Shipside
called patchy putting the yearly
rise mainly down to a buoyant
London market.
Theres a two-speed market, with
sellers in the capital seeing near dou-
ble-digit price growth in a year
whilst the average for everywhere
else remains broadly flat.
Despite this weakness across the
country, homeowners are broadly
optimistic that the coming 12
months will see prices increase,
according to a survey from
Countrywide and YouGov out today.
Some 77 per cent of UK homeown-
ers believe their home will either
increase in value or hold its worth
over the next 12 months, the data
showed.
And the survey also gave reason for
optimism about the state of the
mortgage market. Nearly a third of
UK adults who were unsuccessful
when applying for a mortgage from
a bank were able to secure the
required credit from a broker.
The new jobs website for London professionals
CITYAMCAREERS.com
WHAT THE OTHER PAPERS SAY THIS MORNING
IN BRIEF
Cable wants tax on wealthy
Business Secretary Vince Cable said
ministers were looking at ways to raise
taxes on the wealthy in next months
Autumn Statement. Cable told the
BBC he expected the debate about
taxing the wealthy to be resolved in
the next few weeks when chancellor
George Osborne delivers his speech.
The people at the top of society have
got to pay more, Cable said, adding
that property was the obvious place
to go.
Clinton urges end to budget woes
nUS Secretary of State Hillary Clinton
said that reaching an agreement to
resolve Americas budget woes and
the impending fiscal cliff is vital to its
international leadership role.
Clinton said in a speech in Singapore
that she shares the concerns of Asian
leaders over Americas budget woes,
according to reports. Clinton
reportedly plans to retire after
President Barack Obamas first term in
office ends in January.
French conservative vote unclear
nThe result of a tightly fought two-
way contest to choose the next leader
of Frances conservatives remained
unclear yesterday, with both sides
claiming they had won. Jean-Francois
Cope, a disciple of former president
Nicolas Sarkozy, announced his victory
to reporters around 10.30pm, then
former prime minister Francois Fillon
said 20 minutes later he was in the
lead. Cope claimed to be 1,000 votes
ahead, while Fillon said he led by 200.
ICONIC British car maker Jaguar
Land Rover yesterday said it will
start making cars in China for the
first time after striking a deal with
Chery Automobile Company for a
new factory near Shanghai.
The two firms will build the facto-
ry in Changshu, in the province of
Jiangsu, at a cost of 10.9bn renminbi
(1bn), after winning a licence from
the Chinese government to build
Jaguar and Land Rover vehicles in the
country.
The plant, set for completion in
2014, will include a research and
development unit and engine pro-
duction centre.
The joint venture struck between
the two firms, to be called Chery
Jaguar Land Rover Automotive
Company, will design and build cars
specifically focused on the booming
domestic Chinese car market. China
is already the second largest export
market for Jaguar Land Rover, with
51,000 cars sold there in 2011-12.
Jaguar Land
Rover strikes
1bn China deal
BY MICHAEL BOW
Jaguar Land Rover chief executive
Ralf Speth and Chery boss Yin
Tongyao yesterday both praised the
understanding and foresight of
Chinese authorities for giving the
firms a licence.
Together, we will now begin work-
ing in close collaboration on our part-
nership plans to harness the
capabilities of our respective compa-
nies, to produce relevant, advanced
models for Chinese consumers, they
said in a joint statement.
Jaguar Land Rover, which is head-
quartered in Coventry and owned by
Tata Motors, has seen sales of its vehi-
cles boom in China since 2007, when
only 3,000 of its cars were sold there.
It currently has a network of facto-
ries around the world used to assem-
ble cars from parts shipped from the
UK.
The new plant in China will be the
first time the firm has designed and
built cars abroad from scratch.
The company said China would ben-
efit from investment, job creation
and low carbon solutions.
Megafon drafts in Lord Myners
to bolster its UK flotation plans
MEGAFON, the Russian telecoms
group controlled by Arsenal
shareholder Alisher Usmanov,
yesterday bolstered its corporate
governance ahead of a London
flotation with the appointment of
former City minister Paul Myners as
an independent director.
The appointment of such a well
regarded City figure, who was chief
executive of Gartmore Group and
chairman of Marks and Spencer
before taking up a career in politics
BY DAVID HELLIER with the last Labour administration,
is aimed at demonstrating to the
City that the group is determined to
conform to high standards of corpo-
rate governance.
Megafons plans, which
involve raising around
1.5bn, were knocked side-
ways a few weeks ago
when it emerged that
Goldman Sachs was not
on the advisory mandate,
with the investment bank
citing corporate governance con-
cerns as it reason for no longer being
involved. Others in the banking syn-
dicate, which includes Morgan
Stanley, say that Goldmans depar-
ture was more to do with internal
problems in the banks Russian
office. But the controversy has
shone a spotlight on the affairs of
Usmanov. Ivan Tavrin, CEO of
MegaFon said: Lord Myners expe-
rience and track record in manag-
ing and chairing public companies
will be immensely valuable for
us. Megafon recruit Lord Myners
THE system of so-called shadow
banking grew to $67 trillion (42
trillion) globally last year, a new
high, amid calls from the worlds
top policymakers for greater
control of the sector.
A report by the Financial
Stability Board (FSB) yesterday
showed the that shadow banking
is set to thrive, despite regulatory
efforts focused on curbing
traditional bank activities.
Task force says global shadow
banking value hits $67 trillion
BY CITY A.M. REPORTER
The study by the FSB, set up by
the worlds top economies (G20) to
police global finance, said the size
of the total system rose to $67
trillion in 2011, more than the
total economic output of all the
countries in the study. The US had
the largest shadow banking
system, said the FSB, with assets of
$23 trillion in 2011, followed by
the euro area with $22 trillion
and the United Kingdom at $9
trillion.
MONDAY 19 NOVEMBER 2012
5
NEWS
cityam.com
JAGUAR LAND ROVER
TOP EXPORT MARKETS
2011-12
1. North America 58,000 cars
2. China 51,000 cars
3. Russia 16,000 cars
4. Germany 13,000 cars
5. Italy 13,000 cars
6. France 9,000 cars
7. Brazil 9,000 cars
8. Australia 7,500 cars
9. Spain 7,000 cars
10. South Africa 7,000 cars
1. North America 558,000 cars
3. Russia 16,000 ccars
5. Italy 13,000 caarrs
7. Brazil 9,000 caarrs
9. Spain 7,000 caars
T
HE concept of having closure,
weirdly popular in American
culture, is not something BP is
all that familiar with.
But the oil major quite likes the idea.
Its record $4.5bn (2.84bn) penalty and
guilty plea to felony charges went
some way last week to clearing the
way back from the bottom of the Gulf
of Mexico and the depths of public
anger.
BP has been at pains to mend rela-
tions since President Obama was ask-
ing whose ass to kick over the spill
and deriding the firm he branded
British Petroleum (an act of jingoism
made worse by the still unquantified
liabilities of US firms involved such as
Transocean and Halliburton).
Regular readers will remember this
newspapers BP in Crisis logo, wheeled
out almost daily in 2010 for reports of
frantic efforts to end the cascade of
leaks and executive gaffes. BP will be
happy to learn that the logo has long
since vanished from the City A.M.
servers.
But thousands of civil claimants lin-
ing up for their day in court with the
oil firm remain enraged.
They dont fuel America, they fool
America, one fisherman said last
week, telling the BBC that the
Louisiana coastline remains a dead
zone for shrimp fishing, his and
many others livelihoods.
This lawsuit will also include com-
plaints from local governments under
the Clean Water Act, which at their
most severe could total $21bn, if the
firm is found to be grossly negligent.
BP has said it was no more than negli-
gent, and has set aside $3.5bn. It
could take years of courtroom drama
to find out which number was closer.
So talk of a multi-billion pound buy-
back before this case is closed will,
unsurprisingly, not go down well
Stateside.
But with the bulk of the Gulf spills
enormous costs now known, BP has
rightly got an eye on what comes next.
Its share price is still far below the
pre-spill peaks of around 6.50, and
the company is at risk of attracting
hostile bid interest or even more hos-
tile shareholder questions.
Its elaborate partner-hopping in
Russia helps defend the firm from
takeover advances and brings some of
that so-called closure to its lovelorn
association with AAR.
The tie-up with Rosneft looks likely
to replace BPs dividend stream from
TNK-BP and lead to output in the
Russian Arctic in the long-term.
Putting the resulting $12.3bn cash
pile to work in the meantime to reas-
sure shareholders, once it is clear
those affected in the Gulf are going to
be reimbursed, would suit the new
post-spill BPs more cautious stance.
IN BRIEF
Monti clear on reforms
n Italian Prime Minister Mario Monti,
drafted in unelected to haul Italy from
crisis a year ago, said yesterday that a
new government appointed after next
years election would have to keep up
his reform agenda to retain the
confidence of investors.
Monti, who has kept up a carefully
neutral stance about his own role in next
years election, told reporters during a
visit to Kuwait at the weekend that he
could not say what would happen after
the vote, expected on March 10. I
cannot offer guarantees for the future.
Id be happy if we could improve the
present, as I believe we are doing with
the efforts of everyone, Monti said
when asked if he had given assurances
about the reliability of Italy after he
steps down.
MONDAY 19 NOVEMBER 2012
6
NEWS
cityam.com
BOTTOM
LINE
MARION DAKERS
BP would be more than happy to set-
tle the sprawling class action, due to
be heard in February, which has creat-
ed something of a cottage industry of
local litigators and online claims sites
for the victims who opted out of last
years group settlement.
Spending billions on buybacks is a cautious move
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OIL giant BP hopes to use some of its
Russian windfall to pay for a multi-bil-
lion pound share buyback next year.
The FTSE 100-listed firm is thought
to be looking at plans to snap up
shares worth at least 2.5bn to make
sure its investors do not lose out in
the wake of its cash and shares deal to
exit Russian venture TNK-BP.
A buyback could also help lift BPs
share price, which is still lingering
below the highs seen before the Gulf
of Mexico oil spill.
BPs $4.5bn (2.8bn) payment last
week to resolve criminal charges relat-
ed to the explosion and spill at its
Macondo well was bigger than expect-
ed, but gives the firm a clearer picture
of the final cost of the 2010 disaster.
Removing the threat of further
criminal penalties means BP can start
to make plans for the $12.3bn it will
receive after its disposal of a 50 per
cent stake in TNK-BP.
In this deal, unveiled last month, BP
will hold a near-20 per cent stake in
Rosneft, TNK-BPs new owner.
BP eyes share
buyback after
Gulf settlement
BY MARION DAKERS
Chief executive Bob Dudley said last
month that at a minimum, our inten-
tion is to use part of the cash proceeds
to offset any dilution to earnings per
share as a result of this proposed trans-
action.
Analysts have forecast earnings per
share dilution of around three to four
per cent, and have pointed to a buy-
back of between $4bn and $6bn once
the Rosneft sale closes in early 2013.
But the timing of a buyback remains
uncertain, due to a long-awaited civil
class action in the United States over
the Gulf spill that could cost BP bil-
lions. The firm declined to comment.
BP PLC
16Nov 12Nov 13Nov 14Nov 15Nov
427.5
430.0
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7
NEWS
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BP boss Bob Dudley has pledged to offset earnings dilution from TNK-BP sale
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OCADO, the online grocery shop, yes-
terday brushed off market specula-
tion that it is seeking to renegotiate
its debt covenants with its lenders,
saying there was no threat it would
breach its covenants.
A weekend report suggested the
online supermarket, which floated
to much fanfare in 2010, was seeking
to reset its debt or extend the repay-
ment period with its lenders ahead
of a key covenant test at the end of
this month.
However, yesterday the firm saidits
lenders, which include Lloyds
Banking Group, HSBC and Barclays,
were fully supportive of the busi-
ness.
It added that its covenant test
would not take place until early next
year and its 100m loan facility need-
ed to be rolled over in 2014.
The firm is currently the most
shorted stock by hedge funds, accord-
ing to official shorting disclosure fig-
ures published by the Financial
BY MICHAEL BOW
Services Authority, suggesting
investors believe the firm will do
badly in future.
A spokesman said: The lenders are
very supportive and always have
been.
Theres no threat they will breach
the covenant. At some stage the facil-
ity will be reviewed.
Ocados covenants require its net
debt to be less than 3.5 times its earn-
ings. Analysts have been pessimistic
about the firms chances of staying
below the debt ceiling.
Its last set of results in June showed
a debt pile of 71.3m. Projected full
year revenues of 27m by analysts
would be 4.4 times earnings, a breach
of the covenant.
In September, chief executive Tim
Steiner hinted the firm would be
open to selling and leasing back one
of its warehouses to avoid it breach-
ing its debt covenants. Ocado was
founded in 2000 by three former
Goldman Sachs bankers. It recently
took on bespoke investment outfit
Ondra Partners as advisers.
Ocado, led by Tim Steiner, says it will not breach its covenants
MOLESKINE, the iconic black
notebook brand, will file for its
long-awaited stock market debut
later this month as its private
equity owners Syntegra Capital
seek to finally cash in on their
66m (52m) investment.
The Italian company Moleskine
Srl, set up in 1997 to produce
replicas of notebooks used by early
twentieth century bohemian
artists, is set to file for a float on
the Milan stock exchange in a few
weeks, Syntegra partner Marco
Ariello told City A.M. yesterday.
Moleskine set to open book on
stock float as backers cash in
BY MICHAEL BOW The price has not yet been
determined. The firm has
appointed big name investment
banks, including Goldman Sachs
and UBS, to run the sale, it is
understood.
The Moleskine launch will
mirror the IPO of another high
end Italian luxury goods company
Brunello Cucinelli, which floated
in Milan in April.
Syntegra Capital, formerly SG
Capital, bought Moleskine in
October 2006 and sold a 15 per
cent stake to Index Ventures in
January 2011. The firm was valued
at around 200m last year.
MONDAY 19 NOVEMBER 2012
8
NEWS
cityam.com
Classic notebook maker Moleskine is set to float on Italys Borsa Italiana in Milan
Grocer Ocado
dismisses loan
breach fears
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GLENCORE and Xstrata are on track to
win shareholder approval for their
mammoth mining merger tomorrow,
though questions remain over reten-
tion packages for key staff.
Qatar Holding, Xstratas largest
shareholder after Glencore, con-
firmed on Friday that it plans to sup-
port the transaction, but said it does
not feel it appropriate to influence
the outcome of a separate vote on a
140m payout for around 70
unnamed executives at the enlarged
firm.
This has sparked a rethink from
other shareholders, who
plan to vote tactically to
ensure the merger suc-
ceeds, even if the gold-
en handcuffs are
rejected.
The firms are
believed to be exam-
ining other options to
help retain top staff
after the merger.
The meeting tomor-
row for Xstrata
investors is in
two parts:
f i rst,
Glenstrata set
to finally get
the green light
BY MARION DAKERS
they will cast two votes to back the
merger, with and without the reten-
tion package as a crucial element of
the deal. Both options require 75 per
cent approval.
Insiders are confident that Xstrata
investors will support the tie-up, but
due to Qatars absence from the pay
vote, they now expect shareholders to
plump for the merger option that does
not need additional approval for the
staff payouts.
Because the vote on pay only
requires 50 per cent approval, and
Qatar will not be involved, investors
holding around 27 per cent of
Xstratas shares have the power to
block this part.
The firms face a further regulatory
hurdle on Thursday, when
European competition regulators
must decide whether to approve
the tie-up or start an in-depth
probe.
Glencore is said to have offered
concessions such as asset sales in
its zinc business to ease anti-trust
concerns.
Michael Fallon is Minister for Business and Enterprise
BUSINESS groups greeted todays
proposal from the government
that any new regulation would
come in on a one-in, two-out basis
with a resounding cheer.
I congratulate the business
department on its move to lighten
the heavy load of regulation for
British firms, said Simon Walker
at the Institute of Directors (IOD).
Business leaders tell us that the
amount of complex red tape they
have to deal with often makes
taking on new staff or extra orders
just too risky. We simply cannot
afford this to continue if we are to
rebuild the economy based on
Business groups hail coalition
plans to slash regulation burden
BY BEN SOUTHWOOD
healthy growth in the private
sector, the IOD boss said.
Business secretary Michael
Fallon said the new rules will
mean that if a department wants
to introduce a new regulation that
will create one pound of extra
cost, that department has to
remove two pounds of costs
elsewhere.
Dr Adam Marshall at the British
Chambers of Commerce also
welcomed the policy.
Business welcomes the
governments efforts to
deregulate, he said. Unnecessary
red tape costs firms time and
money and can act as a barrier to
growth.
MONDAY 19 NOVEMBER 2012
9
NEWS
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Xstrata boss Mick Davis is
facing a shareholder vote
IN BRIEF
Mandelson wins new Lazard role
n Labour peer Lord Peter Mandelson
has been appointed chairman of Lazard
International the global arm of the
investment bank. Mandelson joined
Lazard as a senior adviser last year, and
is stepping into the role vacated by ex-
UBS banker Ken Costa, who left Lazard
in April 2011 to join the Church of
England. The former Business
Secretarys appointment was added to
the official Register of Lords' Interests
on 31 October. He is also chairman of
Global Counsel, a strategic advisory
firm that he founded in late 2010, and
director of Willbury Limited, which
handles remuneration from his public
speaking work and royalties from his
memoir, The Third Man.
ECB man wants two-year Greek deal
n European Central Bank policymaker
Joerg Asmussen said yesterday the
Eurozone should agree next week on
two years of funding for Greece and
leave further help to be decided later, a
view likely to irk the IMF, which wants a
permanent solution. We should next
week settle the financing for the years
2013 and 2014, but you have to be
honest and say we do not really expect
the country to have access to markets in
2015 and 2016; that means a follow-up
programme would be necessary,
Asmussen told German broadcaster
ZDF. A two-year deal would postpone a
longer-term solution to the Greek debt
crisis until after a September 2013
German general election.
YOUVIEW chief executive Richard
Halton may not have anticipated that
moving into the Northern & Shell
building would involve such frequent
visits from the man who heads up
one of the firms partners, and land-
lord of the building.
The Capitalist hears that Desmond,
who owns Channel 5, has taken
advantage of the proximity, and often
drops by to say hello. Last year
Desmond, after taking a
stake in the venture, said
that YouView is going
to be the biggest thing
in television since Sky
launched. Good to see
him keeping an eye on
things.
Desmond the
cosy neighbour
MAREX Spectron held its annual
charity day last week, in aid of
Shooting Star CHASE, Rays of
Sunshine, Sparks and WellChild.
The firm handed over the phones
to guest traders such as HRH The
Countess of Wessex, HRH Princess
Michael of Kent, Olympic rower Tim
Foster and actor Tony Gardner.
One so-called celebritrader in par-
ticular ought to be praised for his
efforts Francis Boulle, known by
many as the one with the quizzically
raised eyebrows from Made in
Chelsea. While Boulles official CV
cites him as diamond entrepre-
neur he enjoyed a brief foray into
web entrepreneurship, after setting
up the website sexymp.co.uk, which
invites visitors to rank members of
Parliament in order of attractiveness.
The Capitalist hears that Boulle
could soon add a fourth string to his
career bow Marex Spectron board
member Roger Nagioff rated his
skills on the trading floor so highly
that he offered him a job. Sounds
like a match made in heaven.
Left to right: Roger Nagioff, board member ofMarexSpectron; and Francis Boulle,
entrepreneur and cast member of reality television programme Made in Chelsea
Northern & Shell boss Richard Desmond
Left: YouView boss
Richard Halton
10
cityam.com
cityam.com/the-capitalist
THECAPITALIST
RECESSIONARY times appear to
have hit some party budgets
hard if this years Square Mile Masked
Ball was anything to go by. The black
tie affair, which raised money for
childrens charity Rays of Sunshine,
was promised to be filled with the
elite of Londons financial industry.
While last years bash boasted Mayor
Boris Johnson as token party
entertainer, and a proper sit down
dinner, there was barely a canap in
sight at One Mayfair on Thursday
evening. As for the toast of the
banking world...sorry, did someone
mention food again?
Perhaps guests forgot to heed the last
minute email advice from organisers
to: remember to eat beforehand
and disappeared into the night for
sustenance.
OXFORD Street may have Robbie
Williams and Leona Lewis, but
the City has its very own Christmas
lights switch-on superstars, in the form
of the new Lord Mayor and Lady
Mayoress. The pair were out and about
flicking switches in Leadenhall market
and Bow Lane over the weekend, to
officially illuminate the Square Mile.
Lord Mayor Roger Gifford and Lady
Mayoress Clare Gifford were joined by
Sheriffs Jeffrey Evans and Nigel
Pullman on one of their first official
outings since moving into the Mansion
House earlier this month. Undertaking
their responsibilities with a serious
sense of duty, the words: Let there be
light were jubilantly declared.
MONDAY 19 NOVEMBER 2012
EDITED BY CALLY SQUIRES
Got A Story? Email
thecapitalist@cityam.com
Royal and reality stars
get trading for charity
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IN BRIEF
Billabong director mulls buy-out
nAustralian surfwear chain Billabong
International said yesterday one of its
directors wanted to investigate a
possible leveraged buyout of the firm.
The retailer, which had potential
buyers withdraw takeover offers last
month, said Paul Naude would stand
aside from his role as president of the
Americas while he looked at putting
together a buyout proposal. Billabong
shares jumped as much as 17 per cent
on the news. Private equity firms TPG
and Bain Capital withdrew from
$700m bids last month.
EU states act to plug defence gap
nEuropean states will today take a
step towards plugging a gap in their
defences today by agreeing to work
together to boost their air-to-air
refuelling capacity, a major European
shortcoming in last years Libyan war.
A group of European Union countries
will sign a letter of intent at an EU
defence ministers meeting in Brussels
to work together to expand their
aerial refuelling abilities from 2020,
EU officials said, without naming the
countries. Netherlands, France and
Germany have been strong supporters
of expanding Europes capacity.
THE UK needs comprehensive school
reform, the countrys biggest business
lobby said today, in order to boost long-
term growth.
Boosting educational
achievement to match the
standards in Finland and the best
in Europe could add a
percentage point to yearly GDP
growth, the Confederation of
British Industry (CBI) claims,
adding 8 trillion to the economy
over the lifetime of a child
born today.
But despite some
35 piecemeal
reforms identified
by the industry
group, the UK
education system
is still leaving many children behind,
even during primary school.
While 81 per cent of students on free
school meals meet Key Stage 1 maths
standards at age seven, just 67 per
cent meet Key Stage 2 standards
when 11. The CBI demanded a
clear idea of what [the] system
should deliver rather than its
current tick-box approach.
To achieve this, the
Department for Education should
decentralise control over staffing
to headteachers and give more
lesson flexibility to teachers,
while giving Ofsted more
powers to assess and
oversee schools, the CBI
said.
BY BEN SOUTHWOOD
CBIs Cridland calls for
radical school reform
John Lewis said toys such as the Furby were flying off the shelves ahead of Christmas
JOHN LEWIS said online sales
jumped by almost a third last week
compared with the same time last
year, as consumers turned to their
computers and mobile devices to
make their Christmas purchases.
The department store group
reported a 31 per cent year-on-year
rise in online sales in the week to
Saturday 17 November.
John Lewis bumper internet sales
follows figures from industry body
IMRG and Capgemini last week that
consumers will spend 4.6bn online
in the first two weeks of December,
up from 3.7bn last year.
Total sales including stores
increased by 7.6 per cent on the same
week last year to 91.7m, driven by
strong demand for the latest
gadgets, particularly tablets.
John Lewis said sales at its
electrical and home technology
(EHT) category rose 22 per cent
compared with last year.
Other popular products snapped
up last week included cufflinks,
knitwear and outerwear for men
John Lewis enjoys bumper
online sales ahead of Xmas
BY KASMIRA JEFFORD
while luxury watches and handbags
were also top sellers within
womenswear
Scooters, kids technology
products and the Furby the fuzzy
haired speaking toy first launched in
1998 also proved favourite buys for
parents last week.
Andy Street, managing director,
said: After another successful
weeks step up to Christmas, our
online and electrical home
technology sales make it clear there
is real trust in John Lewis as we
approach this critical period.
But Howard Archer, economist at
IHS Global Insight cautioned trading
last week was well below the
overall year-on-year increase of 13.0
per cent in the 15 weeks trading to
10 November. He said: Given that
John Lewis has been very much an
outperformer in the retail sector...
the fact that it is currently seeing
relatively limited underlying sales
growth as Christmas shopping really
gets underway highlights the
difficult outlook that retailers
generally face over the crucial festive
period.
cityam.com
12
NEWS: THE CBI CONFERENCE
John Cridland is CBI
director general
NINTENDO put its Wii U hardware
on sale in the US yesterday, as the
Japanese company aims to improve
its fortunes after a difficult year.
The Wii U, which features an
innovative touchscreen controller, is
the first of the next generation of
machines, with new PlayStation and
Xbox consoles due in the next two
years.
Yesterdays launch featured more
than 30 titles, although the firms
president for North America, Reggie
Fils-Aime, said the Wii U is more
than a games machine. Never
before have so many features been
packed into one game console, he
said, pointing out its on-demand
and web browsing capabilities.
The device received fairly positive
reviews yesterday, and sold out in
many locations, but is not likely to
be as successful as the previous Wii,
which has sold around 100m units.
The Wii U goes on sale in the UK
on 30 November.
Nintendo puts Wii U on sale in
bid to steal a march on rivals
BY JAMES TITCOMB
David Cameron plans changes to
the UKs judicial review system
DAVID Cameron will today
announce plans to shake up the
judicial review process to reduce
delays to new developments and
help build a leaner, faster
government.
The number of judicial review
applications used to challenge a
decision by a public body has
jumped from 160 in 1975 to 11,200
last year. Only around one in six
applications is actually granted,
government figures show.
Speaking to the CBI, the Prime
Minister will argue that costly and
spurious cases clog up the courts,
place a heavy burden on the
taxpayer and also hold up major
infrastructure projects. We
BY KASMIRA JEFFORD urgently need to get a grip on this,
Cameron will say.
He will propose a number of
changes including cutting the three-
month time limit on
applying for a review
and charging more
so people think
twice about time-
wasting.
Reforms to the
judicial process are
part of plans to ensure
Britain continues to
compete in the
global race.
In his
speech he is
expected
to say:
Theres
something else you desperately need
from us and thats speed because
in this global race you are quick or
youre dead. Let me be clear we
have made some massive steps
towards leaner, faster
government...But we need to do
more, because government can still
be far too slow at getting stuff done.
Cameron will also accuse
Whitehall of becoming too risk-
averse at the expense of growth.
Whitehall must undergo a
revolution, just as it did
during the second world war,
he will say.
This country is in the
economic equivalent of
war today and we need
the same spirit.
Satoru Iwata, the Japanese firms president, saw Nintendos first annual loss this year
The Labour party leader will argue that the UK must have a place at the EU table
MONDAY 19 NOVEMBER 2012
13
NEWS
cityam.com
ED MILIBAND will accuse the Prime
Minister David Cameron of putting
Britains national interest at stake by
sleepwalking to the EU exit door in
a speech to the CBI today.
The Labour party leader will say
that Cameron wants to stay in the
EU but has his hands tied by
Eurosceptics in his cabinet.
He will argue that the UK must
remain in the EU to make sure it
voice is heard and to keep its place
in the negotiating room.
But he will also say there are
failures that should be addressed
and that Britain should build
alliances with other countries to
bring about change.
This includes further reform of
the EU budget so that more money is
spent on infrastructure, energy and
innovation.
Ed Miliband: reforming the EU
will require building alliances
KASMIRA JEFFORD
David Cameron is calling for
a leaner, faster government
R
ICHARD Halton has not had
an easy couple of years.
Having taken the reins at
YouView in September 2010
the same year the internet-
connected TV box was originally
pencilled in to go on sale he has
had to deal with questions about
project delays, criticism over the
price of the hardware, and, last
week, a lawsuit threatening to force
YouView to change its name.
However, Halton, who spent 11
years in various BBC TV roles before
joining YouView, remains supremely
confident in the venture, which is
backed by BT, TalkTalk and the UKs
four terrestrial networks. And he is
unapologetic about the delays
YouView has faced.
My line through a couple of diffi-
cult years of waiting and waiting to
put this thing on the market was
that we were only going to put it out
there when its good enough, which I
think people were sympathetic to,
he says, as he cycles rapidly through
the menus displayed on the TV
screen in YouViews office overlook-
ing Tower Bridge.
Halton repeatedly answers the
questions put to him by demonstrat-
ing YouViews capabilities, letting
the technology do the talking, and
he obviously takes pride in what his
team has finally brought out. You
cant launch a platform backed by
BT, BBC, ITV, TalkTalk, Channel 4 etc.
and then it not be brilliant. The mes-
sage is that it was worth waiting for,
it does something that nothing else
on the market does.
But was it really worth the wait?
When it was first announced in 2008
under the codename Project Canvas,
YouView was a unique idea.
After years of setbacks
it is time for YouView
to face up to its rivals
Integrating on-demand services like
the BBCs iPlayer into a Freeview box
was a compelling proposition, and
years ahead of the competition.
However, since then, those services
have found their way into Sky and
Virgin Medias digiboxes, not to men-
tion games consoles, tablets and a
growing range of internet-connected
TVs.
By the time YouView went on sale,
after years of delays and negotiations,
and at a price of 300, many felt it
had missed the boat, despite Lord
Alan Sugar who chairs YouView
claiming the technology will revolu-
tionise TV as much as Rupert
Murdochs BSkyB did.
If YouView did not manage to offer
anything different, then not only
would the multi-million pound proj-
ect be deemed a failure, but BT and
TalkTalk, whose big pushes in the TV
market in recent months have staked
much on YouViews success, would be
dealt severe blows in their bids to
compete against Sky and Virgin.
However, Halton clearly feels he has
a superior product, pointing to the
seamless integration between broad-
cast channels and on-demand video
YouView offers, which was only possi-
ble after years of negotiations with
networks and regulators. The result is
an impressively complete and sleek
product, which Halton contrasts with
the other complicated, messy, catch
up solutions that are out there.
He is effusive about the potential to
expand YouView, which in the four
months since its release has seen two
software upgrades, as well as applica-
tions launched from the likes of Skys
Now TV film streaming service.
YouView now has more than 30
developers working on new projects,
Richard Halton, the chief executive of the BT-backed internet TV
service, tells James Titcomb why his firm has the cutting edge
MONDAY 19 NOVEMBER 2012
14
NEWS
cityam.com
Richard Halton, chief executive of YouView, took charge of the company in 2010
INTERNET TVS STATE OF PLAY
which will include video-on-demand
apps from the likes of Lovefilm, and a
host of new internet channels set to
launch next summer.
Were not remotely finished,
Halton says. And I dont say that
because we launched a product that
wasnt ready, but the thing weve
always said about YouView is that the
thing is going to evolve constantly.
What we will see is a whole new
portfolio of channels launching on
YouView, which will come over the
internet, and that will be huge. At the
moment Freeview is constrained to
70 or so channels, but once you allow
the box to reference a channel that
comes over the internet, that could
be 700, 7000, 7m channels. Were
talking to content owners who have
never had a TV channel before, peo-
ple like the National Theatre who
would love to have a channel on
YouView, theyve got lots of great live
content and archives of footage to
show, so that will be a big change.
The fact that this proposition is
designed to just keep on getting bet-
ter, that gives us this sustainable
advantage over the rest of the market.
And [the content providers] are really
excited, because theyre looking at
this, they love the service, they love
the product, they like the fact that its
backed by the big boys. This is it, this
is the big platform in the UK.
Halton pulls out an iPhone to
demonstrate the latest project his
team have been hatching, an app that
allows users to scan through
YouViews TV schedule and remotely
record programmes, and this is
where his enthusiasm for the tech-
nology really comes across.
Those of us in the office that have
got this, its now how we go and find
out whats on TV tonight. It puts
everything in one place and its very
easy to use. Its brilliant, but this is
just the start. Were coming up with
new ways to develop how you interact
with the box. What well end up
doing is using smartphones and
tablets as a way of innovating the
experience, Halton says, outlining
the potential for networks to provide
additional content on these second
screens via YouView.
But of course, for these develop-
ments to matter, the technology has
to make it into living rooms. And
thankfully for Halton, last week saw
the first signs of a positive uptake.
In the midst of the company losing
a legal battle over its name from
Cambridge-based tech company Your
View (Were not going to change our
name. Its complex, Halton says),
TalkTalk said on Tuesday it was
installing the YouView hardware
which is included in the companys
TV package at a rate of 1,000 a day.
In addition to this, retail figures
have been fantastic Halton says,
and BT is beginning the process of
phasing out installations of its own
boxes in favour of YouViews.
BT in particular is expected to be a
big driver of sales from next summer,
when it launches its sports channel
following this years purchases of
Premier League football and
Premiership rugby rights.
And despite Skys current grip on
much of the TV market, Halton is
bullish about his chances of taking
customers from the satellite operator.
There are always people washing in
and out of Sky, there are a million
people a year leaving, and for that
cohort there is a lot to like about
YouView.
15
NEWS
cityam.com
The service
nYouView is an internet-
connected Freeview box with a
hard disk for recording TV
programmes. It claims to truly
integrate internet TV and
regular TV for the first time.
Scroll back in time on the
programme guide to last
nights television, and press
Play to watch a programme via
an on-demand service such as
BBC iPlayer, or search for a
programme and have a list of
episodes appear on the screen.
Skys on-demand film
subscription service, Now TV,
is also available, with similar
services due next year. The box
on its own retails for 250.
YOUVIEW
BT Vision
nBTs TV service is starting to
pick up traction having bought
Premier League rights from
2013. A box is free on the 18-
a-month TV and internet deal.
TalkTalk
nWith TalkTalks broadband
service being threatened by
Sky, the company is offering TV
deals. YouView is included on
the 14.50 a month package.
TV networks
nThe BBC, ITV, Channel 4 and
Channel 5 are all partners, and
have freed up their on-demand
offerings for YouView.
PARTNERS
BSkyB
nLong the dominant force in
the UKs pay-TV market, Sky
continues to go from strength
to strength, and has overtaken
TalkTalk to become the UKs
third-biggest internet provider.
Also offers on-demand content
like iPlayer, although not to the
same extent as YouView does.
Virgin Media
nVirgin is signing up more of
its users to its internet-
connected TiVo box, which has
a number of apps which
include catch up services. It
also has an extensive fibre
broadband service and a range
of its own on-demand content.
THE RIVALS
SEARCH advertising is proving less
lucrative as people use smartphones
and tablets to browse the web, new
research shows, in a blow to compa-
nies such as Google.
Data from advertising manage-
ment firm Marin Software, seen by
City A.M., show that the price search
engines can charge companies in the
UK for a mobile advert is under half
what they charge on a desktop.
Google and other search engines
charge on a per click basis, so each
time a user selects an advert on
search results, the advertiser pays
out. The average amount a company
pays in the UK for a desktop click is
32p, but on a mobile, search engines
are only able to command an average
of 15p. Tablet ads are worth around
28p per click.
This is a problem for search compa-
nies, due to the seismic shift away
from computers as smartphone
adoption rises.
Rise of mobile
search ads in
UK hits Google
Marin claims that 19 per cent of
search clicks are now registered
through smartphones and tablets, up
from nine per cent at the start of the
year. We expect that to continue to
grow, Marins European commercial
director Jon Myers said. He pointed
out that the cheaper adverts on
smartphones were a real opportuni-
ty for advertisers, but that the con-
version rate for mobiles has not
historically been as good.
Google has itself admitted that the
shift to mobiles is a problem. In its
third-quarter results, the search giant
revealed that the average amount it
charges per click had fallen 15 per
cent year-on-year. This revelation,
along with a fall in profits largely
attributed to its acquisition of
Motorola, sent Googles shares down
nine per cent.
The figures also revealed that the
UK is ahead of its European counter-
parts in mobile web browsing. While
19 per cent of search ad clicks in the
UK are via mobile, this figure is just
10 per cent in the Eurozone.
EXCLUSIVE
BY JAMES TITCOMB
16
NEWS
cityam.com
MOBILE ADVERTS PROVE LESS LUCRATIVE
UK - CLICK SHARE BY DEVICE UK - CLI
UK - SPEND SHARE BY DEVICE
Computers
87%
Comp mp t ut uteers
87%
Computers
81%
Smartphones
10%
Tablets
9%
Tablets
8%
Smartphones
5%
C UUUK CLI
Computers
81%
Smartp
10
Com
nes phones
0%
VE LES
ARE BY DDE
Smartp
Ta T bl bletts
ones phhon
Tabletts
9%
SS
5%
S LUCRATIVE S LUCRATIVE
EVICE
Ta T bl bl bl blet ets Tableets
8% %
nes nes Smartp tphhon
5%
Cost per click on smartphones
is less than half of those for
desktops, at 15p v 32p
Mobiles and tablets account
for 19%of search ad clicks,
up from 9%earlier this year
Google's cost per click fell
15%year-on-year in the third
quarter of the year
Spending on mobile
search adverts has
grown 40%in the
last year
Cost per cl li
n
a
n
Cost per cl
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Mobiles an nd
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Yup, I held on as tight
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PETROL rationing in New York City
will extend at least until Friday,
Mayor Michael Bloomberg said
yesterday.
The odd-even system based on
licence plate numbers, launched to
help cope with dramatic fuel short-
ages after Superstorm Sandy, has
helped reduce long queues for fuel,
but a third of the citys retail sta-
tions are not yet operating, the
mayor said in a statement.
"The odd-even licence plate system
has worked well and helped to
reduce wait times and lines at the
pump, the mayor said.
With 30 per cent of gas stations
still closed and a major travel week
coming, I am extending the success-
ful odd-even system on gas and
diesel fuel purchases to ensure we
do not risk going back to the
extreme queues we saw prior to the
system being implemented.
Officials will re-evaluate how long
to keep the system in place, a City
Hall spokeswoman said.
The region was hard hit by fuel
shortages due to power outages and
inventory stranded at refineries and
terminals that suffered flooding
and major damage. The rationing
started on 9 November.
Bloomberg to
extend petrol
rationing in NY
BY CITY A.M. REPORTER
COMETs administrators will this
week begin pulling down the
shutters on some 40 stores as
eleventh hour talks to save the
stricken electricals giants remaining
stores and brand continue.
Accountancy firm Deloitte, which
was called in earlier this month, said
it is still in talks with a couple of
potential buyers who have expressed
an interest in some of the stores.
The identity of the interested
parties are not known but Maplin,
Home Retail Group and B&M Stores
are all said to have expressed an
interest in converting some of
Comets sites into their own stores.
A source close to the firm added
there were still parties interested in
buying the Comet brand, although
prospects of the companys survival
are rapidly fading.
Comets collapse came just a
month after British sporting goods
retailer JJB Sports fell into
administration with 2,200 staff
made redundant and just 20 stores
rescued through a deal with rival
Sports Direct.
Deloitte announced on Friday that
41 of Comets 236 stores would be
closed by the end of the month with
inevitable redundancies,
threatening up to 1,000 jobs.
The retailer, which employs 6,611
people overall, collapsed into
administration less than a year after
it was acquired by Henry Jacksons
private investment firm OpCapita
for 2 from Darty, formerly known
as Kesa Electricals.
The group, which was reportedly
set to break-even this year, ran into
trouble after suppliers tightened
their terms as the firm attempted to
reach its peak stock requirement in
the run-up to Christmas.
More than 2,100 people have
signed an online petition lodged by
staff urging the government to
examine the way OpCapita and its
boss Jackson ran the company.
Administrator
works to save
Comet stores
BY KASMIRA JEFFORD
More revolts over executive pay are looming
Investors at Sir Martin Sorrells WPP revolted
Lufthansas chief executive is positioning the airline carefully ahead of any talks about change of ownership structure
Mayor Michael Bloomberg
GERMAN flagship carrier Deutsche
Lufthansa is shaping up its
business to have an equal footing
should it take part in any global
merger talks in the future, its chief
executive told a German paper.
Should there be negotiations over
mergers across continents in the
future, we want to be at the table, but
Lufthansa wants to be taken
seriously in any merger talks
BY CITY A.M. REPORTER
at eye level, CEO Christoph Franz
told Frankfurter Allgemeine yester-
day. Talks with Lufthansa over fur-
thering their cooperation will begin
next month.
Speculation about plans for deepen-
ing ties between the airlines was trig-
gered when Turkish Prime Minister
Tayyip Erdogan said he had agreed
with German Chancellor Angela
Merkel to joint management.
MONDAY 19 NOVEMBER 2012
18
NEWS
cityam.com
SHAREHOLDERS could be waiting
until 2013 or 2014 to voice dissent
at companies executive pay
packets, according to research out
yesterday.
While a string of high-profile
investor rebellions at the likes of
WPP and Aviva has caused a stir
this year, shareholders have been
discerning in their protests.
Just 10 of the FTSE 100
companies attracted a protest vote
of 20 per cent or more for their
remuneration reports this year,
down from 34 in 2011,
professional services firm KPMG
said.
Among FTSE 250 firms, 29 saw a
sizeable number of investors
oppose or abstain from votes on
top pay, up slightly from 24 the
previous year.
A number of these were not
solely pay related, but instead
were driven by a combination of
dissatisfaction around corporate
performance and the leadership of
the business, said David Ellis,
head of reward at KPMG.
In many cases this year,
shareholders really were focusing
on the link between pay and
performance.
But alterations due within long-
term incentive plans at a glut of
firms could be a fresh source of
investor friction in the coming
years.
It is our view that the flexing
of shareholder muscle in 2012
may well be a rehearsal for what is
to come, said Ellis.
The last few years has seen only
a relatively small number of new
long-term incentive plans being
proposed to shareholders.
A number of companies have
clearly being waiting to
understand better the economic
and regulatory landscape before
formulating new plans and
consulting with shareholders, he
added.
BY MARION DAKERS
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. ) 3 3 3 4 8
. t i s po e d
Government health care plans have given GPs more choice
THE number of empty shops in the
UK rose to an all-time high in
October, data revealed this morn-
ing, as shoppers deserted the high
street.
Town centre vacancies made up
11.3 per cent of properties during
last month, the data from the
British Retail Consortium (BRC)
and Springboard showed the
highest fraction on record. Last
October, the rate was just 10.2 per
cent across the UK.
This new high in empty shop
numbers really sets alarm bells
ringing, said BRC boss Stephen
Robertson. Its the worst vacancy
rate since the survey began in July
2011 and confirms that financial
challenges for both consumers and
retailers are far from over.
The high street also continued to
suffer from a decline in footfall,
though slightly better results at
shopping centres and out-of-town
locations made up for some of the
downturn.
Total retail footfall was down 2.1
per cent into October, the figures
showed, driven by a 2.6 per cent fall
in high street traffic but with
falls across the board.
The broader picture between
High street hit
by most empty
lots ever seen
BY BEN SOUTHWOOD
August and October this year was
also down though by a more mod-
erate 0.4 per cent compared to the
same period in 2011, with a 0.9 per
cent fall in high street traffic out-
balancing marginal growth in the
other two main sectors.
Many retailers are battling stag-
nating sales and rising costs, and
next years threatened business
rates increase can only make mat-
ters worse, Robertson said.
Robertson has demanded the gov-
ernment freeze rates in order to
breathe life back into our town
centres and ensure the retail indus-
try can play its full role in job cre-
ation.
Greater London stood out from
most of the rest of the country by
enjoying an increase in footfall,
which climbed 1.4 per cent between
the three months to October last
year and the same period in 2012.
The rest of England, barring the
West Midlands, saw footfall decline,
with the East and the South West
the two worst hit regions.
Greater London also benefited
from a vacancy rate of just 7.6 per
cent in contrast to vacancy rates
reaching as high as 15.1 per cent in
Wales, 14.6 per cent in the North of
England and 20 per cent in
Northern Ireland.
DavidMiles supports asset purchases
Squeeze on household finances
eases slightly as Christmas looms
HOUSEHOLD finances are still
tightly under the squeeze in
November, according to data out
today, but deteriorated at the
slowest rate for nearly two years.
Markits household finance
index hit 39.3 in November, it said,
up from 39 in October but still
that would indicate no change
suggesting UK residents are under
pressure in the tough economic
climate.
But despite the gloomy headline
figure it was the highest index
value since December 2010.
BY BEN SOUTHWOOD Novembers survey highlights the
fact that the alleviation of strains
on household finances has
continued as winter approaches,
said Markit economist Tim Moore.
A reduced squeeze on cash
availability helped to stabilise debt
levels, while pressures on savings
were the lowest in two-and-a-half
years. However, expectations for
the year ahead remain subdued, as
the dismal global economic
backdrop means the recent easing
in financial pressures is more a
cause for relief than celebration.
This outlook index climbed from
37.4 in October to 41.8 in
November remaining below
Septembers 44.3, with only 23 per
cent of households expecting their
finances to improve over the
coming 12 months.
Household nances squeeze loosens in November
Jan2009 2010 2011 2012
38
40
42
32
34
36
50=nochangeinhouseholdfinances
Financesvs. onemonthago
THE Bank of England still has the
firepower to boost a sluggish
economy and has scope for further
stimulus with more asset
purchases, policymaker David
Miles said yesterday.
If growth does stay very weak
and inflation stays low and close
to the target level there is more
that we can do, we have not run
out of ammunition, he told Sky
News.
There is the scope for more
quantitative easing ... it remains a
powerful weapon.
Miles has been the strongest
supporter of quantitative easing
asset purchases on the Bank of
England's Monetary Policy
Committee (MPC) since the
departure of policymaker Adam
Posen earlier this year.
Miles said the central bank was
running the most expansionary
monetary policy in its history and
the positive effects would become
evident.
I expect we will see growth pick
up from the very low levels we
have seen over the last year or so,
he said.
Miles: room for
additional QE if
growth is weak
BY CITY A.M. REPORTER
AN INDEPENDENT Scotland
would face a bigger long-
run fiscal adjustment
than the rest of the UK, a
prominent think-tank
forecast yesterday.
Scotland would
face a very similar
budget situation
to the rest of
the UK in the
short run,
according to
the Institute for
Fiscal Studies,
as tax revenues
per head are
close to the UK
Independent Scotland would
face long-run fiscal problems
BY BEN SOUTHWOOD
HEALTHCARE reform has
succeeded in widening the
range of healthcare providers
chosen by GPs, a study
revealed this morning.
Government reforms
intended to boost choice and
competition within the NHS
have resulted in GPs choosing
the independent sector for
3.5 per cent of all first
appointments, the Institute
for Fiscal Studies (IFS) said,
going up to nearly a fifth for
some treatments.
Independent providers
performed some 17 per cent
of elective hernia operations
in 2010-11, while the fraction
going to their nearest NHS
trust for a hip replacement
plunged from 68 per cent in
2005-6 to 54 per cent in 2010-
11. But this trend was not
seen in emergency care
where only NHS trusts
provide services, and where
proximity is crucial.
The use of private
providers to treat NHS
patients is no longer a
marginal policy reform, said
IFS researcher Elaine Kelly.
There has been a significant
shift in market shares over
the past five years from
patients nearest NGS
hospitals to private
providers.
However, despite these
relative shifts, increases in
the number of NHS-funded
treatments over the last five
years have been so substantial
that the total number of
patients treated at NHS
hospitals has not declined.
Anita Charlesworth, chief
economist at the Nuffield
trust, who commissioned the
study, suggested that the data
gave some vindication to
government efforts to
introduce choice in the
health market, but warned
that the overall spending
boom was masking the
market signals to trust-run
treatment centres.
BY BEN SOUTHWOOD
average, while oil and gas pulls in
enough to balance out the 1,200
extra Scotland spends per
resident under First Minister
Alex Salmond.
But in the long-run the
adjustment would be
bigger, as production
from the North Sea cash
cow falls, the think-tank
predicts. Oil and gas
revenues made up more
than a fifth of Scottish
revenue in 2008-9 but just 15
per cent in 2010-11 after
dipping down to 12 per cent
in the 2009-10 tax year.
MONDAY 19 NOVEMBER 2012
21
NEWS
cityam.com
SLI MMI NG
PRACTI CE
Effective and Medically Supervised
by Experienced Doctor
Covent Garden - 020 7240 8600
City - 020 7283 5800
W W W. T B . M D
Call for your FREE FI RST appointment
Monument
West Hampstead - 020 7372 4222
director@tb. md
First Minister Alex Salmond
wants independence
FOOTFALL SLIPS WHILE SHOP VACANCIES RISE TO HIT A NEW HIGH
Sources: British Retail Consortium, Springboard
NORTHERN IRELAND
FOOTFALL, AUG-OCT 2012 COMPARED TO AUG-OCT 2011
VACANCY RATE, OCT 2012
14.4%
20.0%
NORT NORTHERN I
14 14.4%
20.0 20.0%
Sources: British Retail Consor
NORTH & YORKSHIRE
-2.6%
14.6%
K & YORK
-2.6%
14.6% 1114 111
SCOTLAND
-3.9%
9.9%
12
NORTH
SCOTLAND S
-3.9% -3.9
9% 9.9%
WALES
-1.9%
15.1%
-1.9
15.1
EAST
-4.1%
10.9%
-4.1% .1% -4 4444.1%
110.9%
WEST MIDLANDS
4.2%
12.9%
N
%
WALES
1 9
EL E RE ND ND N LAND
WALES
WEST MID WWE WEST MIDLAN EEE WWE W NN
4.2% .2% . 4444. 4
2 9% 22222222 122 12.9% % 12 %% EAST MIDLANDS
-2.9%
9.8%
4.6% 4 14
99
1
9
%%% DD
1%
TT EAST T
4 1 4 1% -4 11 44 1%
9%%%%%%%%%% 9%
1%
TT EASTT
9%%%%%%%%%%%%
%%%%%% DD AST MIDLAND EAS
-2 -2.9% -22 9%
9 8% 8% 99.8% 9.8% 8% 999. . 9
GREATER LONDON
1.4%
7.6%
10 10.9
L GREATER R L GREATER L R L
1.4% 1 4% 1 4%
7.6%
SOUTH WEST
WEIGHTED NATIONAL AVERAGE
-4.0%
10.2%
-0.4% 11.3%
SO SO SOUTH WEST UTH WEST
-4.0% -4 0%
10.2%
SOUTH EAST
-3.2%
8.8%
% 0.9
LLL DONNN O DDO DON DON DDD LOND NN OOOONN OOOONN OON O LOND LOND
SOUTH EAST SSSS
-3.2%
8.8%
FOOTFALL
A
C
FOOTFA
VACANC
IN BRIEF
Daimler extends China focus
nGerman luxury carmaker Daimler
will enlarge its management board to
put a top executive in charge of its
troublesome Chinese car business, a
German magazine reported yesterday.
The additional eighth executive board
seat will be created at the group's
upcoming board meeting, weekly Der
Spiegel reported, without specifying its
sources. A Daimler spokesman declined
to comment. Daimler's Mercedes lags
German premium names BMW and
Audi in China.
Madoff accountant son in suicide
n The son of the accountant of
disgraced financier Bernie Maddoff
has committed suicide in central Ohio.
Jeremy Friehling, whose father David
Friehling of New City, New York
pleaded guity to securities fraud in
2009, was found dead in Columbus,
where he was studying at Ohio State's
medical school, according to police.
Authorities said there was no sign the
Maddoff scandal had anything to do
with the 23-year olds suicide.
No deal reached in SAS crisis talks
n Troubled Scandinavian airline SAS
and unions held vital talks yesterday
aimed at ensuring the companys
survival and avoiding bankruptcy, but
no deal had been reached by the
evening. The Scandinavian airline, hit
by competition from lower-price
rivals, last week announced plans to
cut some salaries by up to 17 per cent
and reduce overall headcount to about
9,000 from 15,000.
RYANAIR may mount a legal chal-
lenge if its bid to buy Irish rival Aer
Lingus is blocked by the European
Union but it will not pursue further
acquisitions if the merger ultimately
fails, its chief executive has told
Rueters news agency.
Michael OLeary is trying for the
third time to buy Irelands once dom-
inant airline, but the European
Union says the deal may curb compe-
tition.
OLeary said that if the effort fails,
the airline will focus on growing
organically and take advantage of
the enormous opportunities created
by the rapid deterioration in the
finances of European legacy airlines
like Iberia and SAS.
If it is not approved I can always
appeal to the European courts... it is
one of the options that would be
available to us, OLeary said.
If they dont allow this, well just
have to give up and grow organical-
ly, he said. The European
Ryanair to grow
organically if
bid is blocked
BY CITY A.M. REPORTER Commission, which is due to make a
decision on whether to approve the
merger early next year, this week sent
Ryanair a list of objections to the tie-
up. The statement was seen by some
analysts as a set-back for Ryanairs bid
but OLeary said the EU move was a
procedural step which did not neces-
sarily mean additional remedies were
required.
Ryanair has already submitted a
package of remedies to the commis-
sion that includes a commitment
from at least two major EU airlines
to set up bases in Dublin as part of a
series of measures to allay concerns
the merger would curb competition.
There is nothing in the objections
that cant, and in our humble opin-
ion wont, be addressed by our reme-
dies package, he said, adding that he
would consider additional steps if
needed.
The fact that Aer Lingus share price
is trading significantly below the bid
price of 1.30 indicates that the mar-
kets is cautious on the deal, O'Leary
said.
Lawyers now expected to give
commercial and legal advice
LAWYERS are increasingly being
called on to make commercial
decisions because of the growing
tide of regulations, a new study
reveals.
A report from KPMG, out today,
shows the views of 320 in-house
general counsel in 32 countries on
issues including relationships with
the board, the risk of regulatory
challenges and managing future
disputes.
It found that although just over a
BY JENNY FORSYTH third (38 per cent) sit on the main
board, 70 per cent agreed that giv-
ing commercial advice to the board
was now just as important as giving
legal advice.
Ninety per cent said the increase
in volume and complexity of regula-
tions was the greatest risk to organ-
isations over the next five years.
While more than half (51 per cent)
of general counsel expected the
number of disputes to rise in the
next five years, 83 per cent those
working in the hi-tech sector fore-
casted an increase.
The report, conducted by research
agency Meridien West, found that
two thirds of general counsel are
more involved in business decisions
than they were five years ago.
However 80 per cent felt their
involvement could reduce the num-
ber of disputes and regulatory issues
faced by the company they work for.
KPMGs Kathryn Britten said:
General counsel are increasingly
being required to act as the barome-
ter for their organisations, gauging
the pressure and helping to scan the
horizon for future threats.
CITY
COMMENT
DAVID HELLIER
THE Twilight vampire sagas final
chapter debuted with a massive
$341m (214.6m) in global movie
ticket sales as devoted fans bid
farewell to blood-sucking spouses
Bella and Edward and one of
Hollywoods biggest franchises.
The Twilight Saga: Breaking
Dawn Part 2 earned an
estimated $141m in the US and
Canada over the weekend, falling
slightly short of a record for the
supernatural romance series
about a human-vampire-werewolf
Final Twilight film heats up the
box office with $341m opening
BY CITY A.M. REPORTER
love triangle.
The total, which includes sales
from late night Thursday
through to yesterday, ranked as
the eight biggest domestic film
debut of all time. Late-night
Thursday screenings comprised
$30.4m of the $141m total.
Fan fever for the fifth Twilight
movie raged high around the
world. Breaking Dawn Part 2
rang up sales of $199.6m from
Thursday to Sunday at theatres in
61 countries for a worldwide
total of $341m, distributor
Summit Entertainment said
yesterday.
MONDAY 19 NOVEMBER 2012
22
NEWS
cityam.com
Taylor Lautner, Kristen Stewart and Robert Pattinsons promotional tour has paid off
Montgomery finally gets chance to prove his worth
I
REMEMBER David Montgomery
from my time at the Independent
newspaper in the early 1990s
when he, alongside Independent
News & Medias Tony OReilly,
controlled the publisher. He used to
occasionally wander around the
paper's Canary Wharf headquarters
on the 18th floor of the tower, where
his presence was rarely welcomed by
journalists who found him cold,
remote and mainly interested in cost-
cutting.
Even at that stage, though, those
who listened to the former editor of
Today newspaper were impressed by
his vision of the media as he grasped
the challenges and opportunities
posed by the growth of the internet.
Montgomery was convinced that
with a better marshalling of resource,
media titles could protect and even
grow their franchises even as circula-
tion revenues declined.
Years after leaving Mirror
Montgomery set up Mecom, a pub-
licly listed group that put together a
series of European newspaper assets
he was determined to make prof-
itable by reducing their costs and by
extending their reach to embrace
more digital products, thereby
attracting digital advertising. His tim-
ing could not have been worse and
Mecom struggled after a major slow-
down in European advertising
growth, not helped by union troubles
in some parts the business and bor-
rowings that were considered too
high for the revenues the business
was bringing in.
But the irrepressible Ulsterman is
back, now gathering support for a
deal, likely to be agreed as early as
this week, for DMGTs regional news-
paper interests, Northcliffe.
Some may wonder why DMGT
would consider selling Northcliffe for
around 100m, given that an earlier
bid at around 1bn was turned down
some years ago. The reason it might
be attracted to an offer is that
Northcliffe, which accounts now for
only around 5-6 per cent of profits,
produces a disproportionate amount
of negative sentiment for the group,
especially amongst US investors.
A new management team, princi-
pally chief executive Martin Morgan
and Steve Daintith, is keen to present
the group as a business to business
player with high growth potential.
Messrs Morgan and Daintith even
recently fought a battle with Lord
Harmsworth to get the name of the
group changed but could not con-
vince him to sever such an emotional
link. But they did manage to oversee a
change of broking advisers in an
attempt to bring fresh thinking into
the mix.
So a sale of Northcliffe makes a lot
of sense strategically, but it will be
interesting to see how a disposal
treats the huge pension liabilities
that are attached to the regional
newspaper assets.
Why Montgomery? There are few in
the newspaper business who have
worked so hard to come to an under-
standing of where future media rev-
enues might come from and how to
attract them from the starting point
of a traditional newspaper set-up.
DMGTs Steve Auckland would be
chief executive of the new group
Local World, which would also have
backing from Trinity Mirror and
Yattendon, leaving Montgomery as
chairman. If this comes off it would
be the ideal opportunity for
Montgomery to prove to a world of
doubters that he's known what hes
been doing all along.
david.hellier@cityam.com
HOSTESS Brands, the bankrupt
maker of Twinkies snack cakes and
Wonder Bread, will this morning
seek a US courts permission to go
out of business after failing to get
wage and benefit cuts from
thousands of its striking bakery
workers.
The 82-year-old Hostess, which has
about $2.5bn (1.5bn) in sales and is
one of the largest wholesale bakers
and distributors of breads and snack
cakes in the United States, filed the
request with the US Bankruptcy
Court in New York early Friday
morning. A hearing on the matter is
set for this morning.
Sweet spell over as Twinkie
maker heads for bankruptcy
BY CITY A.M. REPORTER
The Irving, Texas-based company
said the liquidation would mean
that most of its 18,500 employees
would lose their jobs. Hostess
immediately suspended operations
at all of its 33 plants across the US as
it moves to start selling assets.
Well be selling the brands and as
much of the infrastructure as we
can, said company spokesman Lance
Ignon. There is value in the brands.
But some bakeries will never open
again as bakeries.
Hostess products, particularly the
golden, cream-filled Twinkies cakes,
are deeply ingrained in US pop
culture and have long been packed
in school childrens lunch boxes.
MONDAY 19 NOVEMBER 2012
23
T
HE 1987 crash. The Y2K bug.
The debt ceiling debacle of
2011. All these events, in the
end, turned out to be buying
opportunities for stocks. So will the
fiscal cliff, some investors say as they
watch favourite stocks tumble
during the political give-and-take
happening in Washington.
The first round of talks aimed at
avoiding the fiscal cliff caused a tem-
porary rise in equities on Friday, sig-
nalling Wall Streets recent declines
could be a buying opportunity.
Though shares ended moderately
higher on Friday, it was not enough to
offset losses for the week. The S&P was
down 1.5 per cent, while both the Dow
and the Nasdaq fell 1.8 per cent.
The S&P 500 is down more than five
per cent in the seven sessions that fol-
lowed President Barack Obamas re-
election. Uncertainty arose as
attention turned to Washingtons task
of dealing with mandated tax hikes
and spending cuts that could take the
US economy back into recession.
Some see the move as an overreac-
tion to hyperbolic headlines about pol-
icy gridlock in Washington, believing
stocks may start to rebound ahead of
the Thanksgiving holiday on Thursday.
Not long ago the S&P was on target
for its second-best year in the last 10,
riding a 17 per cent advance in 2012.
Thats been halved to about eight per
cent.
Investors have been selling the years
winners. Apple is down 25 per cent
from its peak. General Electric is
down 14 per cent; Google has lost 16
percent. Overall, the stocks that make
up the top 10 per cent of performers in
the month prior to Election Day have
been the worst performers since,
according to Bespoke Investment
Group of Harrison, New York.
M
INUTES from the Bank of
Englands November monetary
policy committee (MPC) meeting
will this week give further clues
about the appetite for further quantitative
easing (QE) and the extent to which the
recent rise in inflation has affected the
committees decision making.
The release is due out on Wednesday,
along with public sector net borrowing fig-
ures.
Howard Archer, of IHS Global Insight,
said: Sir Mervyn King indicated at the
Inflation Report press conference that the
worsened inflation outlook was a prime
factor, but it will be interesting to see just
how worried the MPC were over the
growth outlook and how they see the
Funding for Lending Scheme developing
and what hopes they have for it over the
coming months.
Other economic news this week will
include Rightmove House Prices for
November, which show a further slump in
asking prices, and CBI industrial trends
data, due to be released on Thursday.
In corporate news, Majestic Wine, Mitie
Group and Ruspetro will all update the
market today. Tomorrow sees final reports
from Enterprise Inns and easyJet, whose
shares have been in the ascent over the
year. Big Yellow Group, British Land and
Homeserve will also give interim results.
On Wednesday contract group Compass
Group will give investors food for thought
with its year-end figures, while Halfords,
Intermediate Capital Group, QinetiQand
UK Mail Group will also report.
On Thursday Daily Mail and General
Trust (DMGT), Mothercare and SABMiller
are all set to update the market.
BESTof theBROKERS
Compass Group PLC
12Nov 13Nov 14Nov 15Nov 16Nov
p 705
700
695
690
685
692.00
16 Nov
COMPASS
Panmure Gordon has a
buy rating on the
outsourcing firm and an
820p price target ahead
of results on Wednesday.
The broker expects eight
per cent operating profit
growth.
DASHBOARD CITY
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
cityam.com
FTSE
16Nov 12Nov 13Nov 14Nov 15Nov
5,800
5,775
5,750
5,725
5,675
5,650
5,625
5,700
5,605.59
16 Nov
WM Morrison Supermarkets PLC
12Nov 13Nov 14Nov 15Nov 16Nov
p 267.5
265.0
262.5
260.0
257.5
256.20
16 Nov
WM MORRISON
UBS has cut its rating
from buy to neutral
and slashed its target
from 340p to 270p. The
broker thinks the
supermarkets trading
underperformance is
getting worse.
Mothercare PLC
12Nov 13Nov 14Nov 15Nov 16Nov
p 302
300
298
296
294
292
290
288
294.50
16 Nov
MOTHERCARE
Peel Hunt rates the
retailer hold and has a
target of 200p. The
broker thinks Mothercare
will unveil half-year losses
of 5.3m on Thursday,
and sees a risk of a full-
year profit warning.
Boost ETP
The investment product provider
has appointed Richard Kent
(right) as head of product
operations and Jose Poncela as
senior in-house counsel. Kent
joins from UBS, where he was a
director in its equity and fund-
linked derivatives team. He has
also worked for Barclays Capital.
Poncela has held roles at Nomura
International, UBS and La Caixa in Spain.
Mayer Brown
Martin Wright has been appointed as a real estate partner in
the law firms London office. He joins from Ashurst, where
he has served as partner for more than 15 years. Wright
advises on property investment and development.
Alvarez & Marsal
The professional services firm has appointed Jurgen Zapf as
a managing director to lead its transaction advisory group
practice. He joins after 20 years at Ernst & Young, where he
was a partner and co-founder of its transactions
department in Munich.
CMS Legal
The law firm has announced a new leadership structure for
its UK private equity group. James Grimwood, currently
global private equity leader, will now also lead CMSs UK
private equity team. Additionally, David Butts and Graham
Conlon will co-lead the firms international private equity
sector group.
Shire
Jeff Jonas has been appointed president of the
biopharmaceutical companys regenerative medicine
business. He joined the company in 2008 as leader of
speciality pharmaceuticals research and development.
Barratt Developments
The property developer has appointed Nina Bibby to its
board as a non-executive director. She is global chief
marketing officer at Barclaycard, and has also held senior
roles at InterContinental Hotels.
WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
CITY MOVES
in association with
LONDONREPORT in association with
To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
THE
WEEK AHEAD
in association with
So-called fiscal
cliff could lead
to opportunity
Bank minutes to show appetite for
QE as public borrowing is revealed
I
N the past month, post-Olympics
euphoria has been replaced by a
more sober atmosphere.
Downgraded growth forecasts
and increased inflation
expectations paint a decidedly mixed
picture of the state of the economy.
And to add to the woes, last week
the Centre for Economics and
Business Research claimed that the
number of financial services jobs in
London has dropped below New
York, and will slip behind Hong Kong
by 2015.
Although this data does not
correspond with other surveys, the
City is clearly undergoing a
readjustment, as certain parts of the
industry adapt to a challenging
economic environment. Investment
C
HINA has announced its new
leadership line-up. Its a
hugely significant event for
the worlds second largest
economy indeed. for the
world more generally. The new (and
old) faces revealed last week will run
the country for the next ten years.
And their programme is certainly
ambitious. On his first day in office,
Chinas Communist partys new gen-
eral secretary, Xi Jinping, described
his task in the following terms: Our
people have an ardent love for life.
They wish to have better education,
more stable jobs, more income,
greater social security, better medical
and health care, improved housing
conditions, and a better environment.
They want their children to have
sound growth, have good jobs and
lead a more enjoyable life. To meet
their desire for a happy life is our mis-
sion. It is only hard work that creates
all happiness in the world.
To add to this, outgoing President
Hu Jintao called on the country to
double its economy and the levels of
per capita income by 2020.
cityam.com/forum
Outgoing President
Hu Jintao called on
China to double its per
capita income by 2020
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.

24
MONDAY 19 NOVEMBER 2012
RODERIC WYE
Chinas new leaders may struggle
to fulfill their immense ambitions
This is an impressive and wide rang-
ing set of priorities. The most signifi-
cant question, therefore, is whether
the new leadership can live up to
these ambitions and the huge expec-
tations they create among the
Chinese people.
The immediate economic outlook is
more difficult than it has been for a
while. The global economy is still suf-
fering from the fallout of the finan-
cial crisis. Chinas number two
trading partner, the EU, has just re-
entered recession. Chinas own econo-
my has been showing the strain and
growing at a slower pace until recent-
ly. The first priority for Chinas new
leadership will be to get the Chinese
economy back on to a path of sustain-
able development.
This will not simply be a matter of
numbers. On past experience, it
would be risky to bet against China
doubling the size of its economy
again. But its growth model needs to
turn towards a significantly greater
dependence on consumption for
growth rather than the investment
led, export-oriented model of the past.
The Chinese have recognised this,
but have made little progress.
Further reforms will be necessary
across the economy especially in the
financial sector, and in the over-domi-
nant state-run enterprises. Such a
challenge will call for firm and deter-
mined leadership.
Meanwhile other problems loom
large. China is entering a period of
demographic crisis, with its popula-
tion rapidly ageing. Similarly, the
environmental and social costs of
rapid development are generating
more and more dissent. The list is
long.
Nor is it simply a matter of econom-
ics. Corruption and a widening
wealth gap between rich and poor
threaten to undermine the
Communist partys legitimacy.
Chinas own leaders describe the war
on corruption as a matter of life and
death. But these same rulers desper-
ately need to show more accountabil-
ity and transparency. Without doing
so, corruption is only likely to get
worse. The problem is that the
Communist party is hugely reluctant
to concede any form of political
power or influence to anyone else.
Political reform where it does take
place is designed more to improve the
partys internal governance than to
open up the political system.
The decisions Chinas new leaders
make will have huge implications, not
only for the 1.3bn people in China,
but for the rest of the world as well.
China has become a vital part of the
global economy, and is a key player in
almost all of the global challenges we
face, ranging from climate change to
improving global governance.
As Xi Jinping also said: Just as
China needs to learn more about the
world, so does the world need to learn
more about China.
We need to take China more serious-
ly, and to treat it more as a normal, if
increasingly powerful, country. There
are differences between us, including
most obviously over values and
human rights. But these do not pre-
clude us having more informed and
sustained engagement with China.
Only thus can we help ensure that
the decisions Chinas new rulers take
and the policies they follow are of
benefit both to China and to the
world more widely.
Roderic Wye is associate fellow for
Chatham Houses Asia programme. He is
also a former head of the Asia research
group at the Foreign and Commonwealth
Office.
banking, in particular, is facing up to
a new regulatory landscape. The
impact of tougher capital and
leverage requirements can be seen in
recent job cuts at UBS and Deutsche
Bank.
London will be affected by this
global trend given the considerable
presence of these institutions here.
But to misquote Mark Twain, the
reports of the Citys death have been
greatly exaggerated.
The success of a financial centre is
not just defined by headcount.
London remains the leading
international financial centre. It
accounts for the largest share of the
worlds foreign exchange trading at
38.1 per cent, compared with 17.9 per
cent for New York and 5.6 per cent
for Singapore.
Even as parts of the financial
services industry downscale, others
including insurance and fund
management are expanding.
Londons role as an international
centre for renminbi trading also
offers significant growth potential.
This is important nationally.
Contrary to public perception, the
majority of financial services jobs
located in London are outside the
City, and most of the industrys jobs
in the UK are outside London. JP
Morgan, for example, is the biggest
employer in Bournemouth; Deutsche
Bank has a considerable presence in
Birmingham; Citigroup has a
significant interest in Belfast.
So what is good for the City is
good for London and vice versa. And
what is good for London is good for
the country and vice versa.
Of course, the physical City
remains the recognised centre of the
industry and provides the range of
services that continue to make it
internationally attractive even as
the cluster evolves to increasingly
encompass technology, media and
other sectors.
Over the next few years, we will
have a tough job defending Londons
position against Singapore, Hong
Kong, Shanghai and other financial
centres serving the rapidly growing
Asian economies. This will be against
a backdrop of some uncertainty in
respect of Britains position in
Europe. But Londons position
remains a strong one because of its
openness, expertise and stability. We
will continue to promote Londons
position as the worlds leading
financial centre, not for its own sake
but because of the contribution that
it makes to Londons and Britains
economy.
Mark Boleat is chairman of the policy
and resources committee at the City of
London Corporation.
CITY
MATTERS
MARK BOLEAT
The City is successfully adapting to a new role among its global competitors
MORNING UPDATE
A.M.
25
MONDAY 19 NOVEMBER 2012
The Forum is open for you to take part. Got a sharp comment on
one of todays columns? Do you have another subject you want
to share your opinion on? We want to hear your views.
Email theforum@cityam.com or comment at cityam.com/forum
Reform agendas
[Re: Will the new Chinese leadership
implement necessary economic and
political reforms? Friday]
Maintaining the status quo isnt an option. It
would jeopardise the future of the
Communist party. But the party has a habit
of reinventing itself and I am cautiously
optimistic that it will again. Success will
depend on two things. First, there needs to
be a more widespread crackdown on
corruption within the party. More heads
need to roll beside that of former regional
part leader, Bo Xilai. Second, government
dominance in key sectors such as banking
needs to be dramatically curtailed. Then the
country can find new sources for economic
growth and for the private sector to
flourish. Over the past three decades, China
has gone from an impoverished nation to
the worlds second largest economy. Its
been an astonishing transformation, but the
current challenges need to be dealt with for
this to continue.
James Gruber, founder, Asia Confidential
[Re: We need a new entrepreneurial revolu-
tion to rescue Britain, Friday]
We also need to encourage a wider culture
that supports entrepreneurial risk-taking.
Not every entrepreneur will make it big; but
if all are driven by their own passions then
that is something for our society to recog-
nise, encourage, celebrate, and make cultur-
ally worthy.
Radhika Chadwick, chief executive, Resonant
Strategy
A
S GEORGE Osborne
approaches his Autumn
Statement, theres reason to
hope he may finally do
something about a tax
albatross that hangs around the
necks of employers and workers
alike: national insurance.
A consultation on integrating
national insurance with income tax
was first announced in the 2012
Budget, scheduled for this summer
and then postponed until the
autumn. Its November now, and it
still hasnt been launched. Theres
also been no word on the white paper
on state pensions reform, which may
involve decoupling pensions from
national insurance contributions.
These long delays suggest reform
may finally be on the cards at last.
The case for radical reform is over-
whelming. National insurance is
complex, opaque and costly. How
many people know how much tax
they have to pay? It cant be healthy
for so much smoke and so many mir-
rors to be put in the way of people
seeing their true tax burden.
And its not as if maddening differ-
ences in the rules between income
tax and national insurance serve a
higher purpose. Quite the opposite.
On top of scratching our heads while
we try to do our sums, employers
have to spend more on accountants
and more on legal advice. These are
not costs they welcome.
A survey of members by the
Institute of Directors found 79 per
cent agreed that national insurance
and income tax should be fully
merged. Employers national insur-
ance contributions often mean the
difference between hiring extra staff
or battening down the hatches. Its
not called the jobs tax for nothing.
The 2020 Tax Commission, a joint
TaxPayers Alliance and Institute of
Directors project, today publishes a
TOP TWEETS
China needs to take the reins of economic
growth. Reshaping the Chinese economy is
one of the key challenges for Xi Jinping.
@Driegacy1
A clearly disappointing turnout but the
untold story of the police commisioner
elections is how many independent won.
@SWWren
So, despite the promises that wed get our
money back, taxpayers have lost more than
60bn in the bank bailouts.
@DanHannanMEP
I suspect we will live to regret creating these
police commissioners. I regret voting for the
Bill.
@Conor_BurnsMP
Syria, the Gaza conflict and the rest: Is the
Middle East crisis spiralling out of control?
YES
The situation in the Middle East is spinning dangerously out of
control. The government ought to be playing a key diplomatic role in
protecting human rights. Wed like to see them stressing the human
cost of further escalation in the Middle East, and warning all
combatants in Syria that there will be a day of reckoning for human
rights abuses. If theres one single thing the UK should be doing over
the region its stressing the need for accountability over war crimes
and other abuses. The UK should make clear that there will be no
impunity for those that commit human rights abuses, whether its
armed groups or government forces. Meanwhile, with refugee flows
from Syria reaching a staggering scale, the UK should be working to
ensure that more is done to alleviate the pressure on neighbouring
countries like Turkey and Jordan.
Allan Hogarth is head of policy and government affairs at Amnesty
International UK.
Allan Hogarth
NO
Michael Stephens
Western States should be wary about the consequences of
intervening in the affairs of the Middle East, especially by overtly
supporting the region with military aid. In Syria specifically,
mechanisms to stop the spread of arms to rebel factions are still not
at an advanced stage. Supplying military equipment will only
escalate the problem further. This will lead to a more intense war,
simply with better weapons and more money; the stalemate will
remain. A far better option would be the limited insertion of Arab
Special forces to target tanks, and in particular aircraft, which is
where the Syrian President Assad retains a qualitative edge. If
Western states sent their military forces to the region, many would
regard them as neo-imperialists. It is likely that, if they were to
undertake a mission like this, the policy would backfire badly.
Michael Stephens is researcher for the Royal United Services
Institute in Qatar.
RAPIDresponses
A radical proposal
to rid Britain of its
painful tax on jobs
detailed three step guide, showing
the realistic and practical measures
needed to dismantle the system.
Firstly, we should make it transpar-
ent as soon as possible. From April
2013, lets call national insurance
what it is (another income tax); lets
stop pretending employers national
insurance isnt ultimately paid by
workers; and lets be upfront and put
it on payslips.
Secondly, from 2015 we should rad-
ically simplify the rules so that only
one set remain, applying to both
income tax and national insurance.
Finally, from April 2017, lets scrap
national insurance entirely and, for
earnings on labour only, amend
income tax rates so that everyone
pays the same amount and nobody
has to pay more. Pensioners and
investors shouldnt have to pay more
tax on savings, dividends and pen-
sions just because were going to be
honest about the true tax bill on
wages and salaries.
Reform should go hand-in-hand
with rate cuts and more generous
tax-free allowances to ensure that
everyone benefits. And cutting
national insurance is the sort of seri-
ous supply-side measure our splutter-
ing economy and worrying
unemployment queues need. Our tax
system is fiendishly complicated and
urgently needs major reform. Well
soon find out whether Osborne will
grab the devil by the horns.
Rory Meakin is head of tax policy at the
TaxPayers Alliance and lead researcher to
the 2020 Tax Commission.
RORY MEAKIN
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gleaming gold.
THE PRACTICALITIES
There are three avenues open to gold
investors. The first is physical gold.
This is the lowest risk option as there
is no counter-party risk, but there are
storage costs to consider.
The second option is an
exchange-traded fund (ETF),
which can be synthetically or
physically backed. The latter
option is lower risk, as syn-
thetic ETFs give the
investor counter-party
risk with the financial
institutions who are
providing deriva-
tives. An ETF
enables you to
purchase the
gold in small-
er quantities,
thus trading it
more easily.
I
NFLATION is a silent thief that can
rob the value of your investment
capital. The consumer price index
rose by 2.7 per cent in the year to
October, up from 2.2 per cent in
September. Though some argue that
it will come down again, it has
overshot the Bank of Englands 2 per
cent target for 35 months. Some, like
investment manager Henderson,
forecast that it will exceed 3 per cent
in 2013.
Inflation erodes the purchasing
power of your money. Most investors
dont realise the impact that it has on
their investments over the long-term,
says Ben Yearsley of Charles Stanley. A
2 purchase today would only have
cost 1 in 1992. And investors should-
nt forget that if your investments
grow by 2 per cent, and inflation is 3
per cent, you will have lost 1 per cent
in real terms.
THE PROBLEM FOR INVESTORS
Investors often put money into cash
Instant Savings Accounts (Isas), believ-
ing them to be a safe store of wealth.
They allow you to earn interest tax-
free, but make sure you consider their
returns against inflation.
According to MoneySupermarket,
Buckinghamshire Building Societys
Chiltern Gold Nuggets cash Isa is the
highest paying Isa, offering 3.50 per
cent annual equivalent rate (AER).
However, it doesnt allow transfers in,
and the maximum monthly contribu-
tion is only 470. There are other
restrictions: only one penalty-free
withdrawal is allowed per tax year; any
more and youll only receive a woeful
0.1 per cent AER. If inflation spiked, it
would also offer little cushion to
ensure a positive real return. Other
Isas have smaller cushions and more
restrictions, like locking your capital
away for long periods.
But Isas still offer better real returns
than an ordinary savings account.
MoneySupermarket suggests that
there are only 11 ordinary savings
accounts that allow basic rate taxpay-
ers to beat inflation, and they are all
fixed rate bond accounts (crucially for
City A.M. readers, there arent any for
higher rate taxpayers). Inflation proof-
ing your portfolio with bond accounts
is not wise, says Yearsley: You are buy-
ing a fixed-stream of income, and
inflation is the worst thing for that.
Paying tax on your interest will eat
further into your investments real
value. You will need to earn 3.39 per
Guard yourself against the
dangers of biting inflation
G
LOBAL gold demand may be on
the decline down 11 per cent,
or 138.9 tonnes from the third
quarter of 2011. But it has had a
series of highs since the economic
downturn.
Gold is the classic store of value.
Its traditionally seen as a safe haven
in troubled times, providing a hedge
against inflation and the debasement
of currencies. Today, continued and
unpredictable inflation may mean
investors should consider holding
gold to diversify away from the dimin-
ishing purchasing power of tradition-
al currencies. The money supply is
continuing to increase rapidly, but the
amount of gold in circulation rises at
a comparatively pedestrian rate,
roughly 1-1.5 per cent per annum.
DIFFERING OPINIONS
But gold needs to be looked at in one
of two ways: either as an investment
option or as portfolio protection. If
youre buying gold as an insurance
policy, you need to be in a position
where you wont mind if the price of
gold plummets. Because your other
assets would probably go up as sys-
temic risk recedes, says Alasdair
MacLeod of Gold Money.
THE PROS AND CONS
One benefit of gold is that it is fully
commoditised, and as an investment
it is not at risk of government interfer-
ence, says Catherine Raw, director at
BlackRock Gold. But the downsides
are that gold is only worth the
amount that people are willing to pay
for it. It has no essential price tag.
Another inherent disadvantage with
any precious or base metal is that
your returns are exclusively depend-
ent on movements in prices.
According to Jason Hollands of
Bestinvest, unlike a share that may
pay a dividend or a bond which pays a
coupon, there is no yield on a bar of
The final option is gold equities,
which can open the door for growth
and dividends. But the performance
of gold mining stocks is now greatly
disconnected from the price of gold,
says Petroparlovsk founder Peter
Hambro. So in the long run you will
make a profit, but in the short
term, if you are looking for
stability, you should stick
with the physical option.
The huge growth of
the exchange traded
products market in
recent years has enabled
investors to readily trade
the physical price of gold
itself, leading to great
volatility in gold bullion
prices. So if you choose the
equity avenue, you are purchas-
ing gold cheaply, but as a more
unstable investment. Physical
MONDAY 19 NOVEMBER 2012
cityam.com
PERSONAL FINANCE MANAGEMENT WEALTH
cent AER to gain any real saving bene-
fit, higher rate taxpayers will need 4.51
per cent, and top rate taxpayers will
need 5.41 per cent.
TAKING A RISK
Jason Witcombe of Evolve Financial
Planning says that while investments
like cash Isas and bonds are important,
you will need to look further to beat
inflation. Much depends on your
objectives. Identify why inflation is a
problem and concentrate on the medi-
um term. Those closer to retirement,
typically with higher fixed-income
allocations, could focus on inflation-
linked products, which aim to protect
capital and income in real terms.
Some advisers recommend corporate
bonds, but their popularity has made
them expensive. For example, the
M&G UK Inflation Linked Corporate
Bond fund, which can be held in a
stocks and shares Isa, has grown
income by 4 per cent over the last 12
months, but it has an initial charge of
3 per cent.
Those with a longer timeframe could
consider equity-income funds, which
invest in high-quality companies with
strong track records of dividend
growth. Equity income should be the
bedrock of most investors portfolios,
says Yearsley. One popular option is
the Invesco Perpetual High Income
fund. It has grown at an annualised
rate of 11 per cent over the last five
years, and currently yields 4.24 per
cent. It can also be held in a stocks and
shares Isa.
Of course, these funds can be risky,
offer less certainty and dont guaran-
tee returns. But inflation means that
cash sitting in your bank account isnt
safe either. Take risk, and accept that
cash isnt safe itself, says Witcombe.
He also advises being mindful of costs
associated with investing. Just as the
compounding effect of inflation is
important, so is the compounding
effect of costs. He favours low-cost
equity trackers, such as the Vanguard
FTSE UK Equity Index fund, tracking
the FTSE All-Share Index.
The investment environment
demands that investors step outside of
their comfort zone if they want to beat
inflation. This certainly wont suit
everybody. But catching the inflation-
ary thief will never be without risk.
Why going for gold could be a wise investment choice
gold sells at around $1,713 (1,070) per
ounce. But it costs Petropavlovsk just
under $1,000 (630) to find, mine, pro-
duce and deliver gold, considerably
lower than the market price.
MAKING A DECISION
If you want a high-risk portfolio, gold
might not be the way to go. It is a
good choice if you are concerned
about real returns on cash in the
bank, but want a low-risk investment.
But it is also a good counter-balance to
other things in your portfolio, which
is why MacLeod advises having a lit-
tle bit of gold, roughly 5-10 per cent.
Gold demand may be down from this
time last year, but it remained above
the five-year quarterly average of 984.7
tonnes. The cost of producing gold is
constantly increasing in money
terms, so the chances of it coming
down in price are lower, in Hambros
view, than the chances of it going up.
Dont let the beast eat away at the value of your investments, warns Yogesh Chandarana
You may not strike lucky but the precious metal still has its place in an investors portfolio, writes Annabel Palmer
G
E
T
T
Y
27
Worth its weight in gold?
Chiltern Golden Nuggets
Isa, Buckinghamshire
Building Society
5 Year Fixed Cash Isa,
United Trust Bank
2 Year Fixed Rate Isa,
Santander
60 Day Notice Isa,
Coventry Building
Society
Regular Saver Isa,
Skipton Building Society
3.5% variable
Paid yearly
3.35% fixed
Paid yearly
3.3% fixed
Paid yearly
3.25% variable
Paid yearly
3.25%
Paid on maturity
Instant access, one
penalty-free with-
drawal.
Only allows transfers
in. Locks capital for 5
years to earn interest.
Locks capital for 2
years to earn interest.
60 day notice to
withdraw funds.
12-month bond.
10
5,000
500
1
1
Account
name
Interest
rate (AER
Minimum
investment Consider
Inflation is like a
thief in the night.
Isas that currently beat inflation
28
MONDAY 19 NOVEMBER 2012
cityam.com
I
T WAS the worst speech Ive
ever heard. The proud winner
of an entrepreneurial award
thanked the judges for their
clever choice and then pranced
around the stage, spouting his
amazing life-story.
He had struggled to grow up in
poverty, living between an abattoir
and a brothel. At an early age he
started a business, borrowing from
his mum who recognised him as a
business prodigy. She risked it all,
mortgaging the family home to give
him the seed capital. His business
grew over a couple of decades and
he never put a foot wrong, and had
just sold out for a cool billion or
two. It was all pure genius
apparently, and there was, of
course, no need to thank anyone
not the odd mentor or school
teacher, not any faithful staff and
certainly not his own mum. What
was nice to know was that there
was absolutely no luck involved.
If he had been interested in
other people at all, he may have
noticed he lost the audience very
early on. By the end of his speech,
they had lost interest and started
to chat loudly between themselves.
I sat opposite his latest platinum
blonde trophy girlfriend, who
made Dolly Parton look flat-
chested. I wasn't bored by his
speech though, I was fascinated.
Business-wise, I decided there was
nothing at all to learn from or
admire about this man, and that it
was incredible he had succeeded
despite not knowing any of his own
weaknesses. As an occasional
public speaker myself, it was also
a great counter-example of being
interesting or relevant.
By contrast, in terms of
inspiration, I often
ponder what I believe is
the greatest ever single
human achievement:
Ludwig Van Beethovens
Ninth Symphony.
Ludwig was almost
totally deaf when
he composed it.
Although
classical music
is mostly a mystery to me,
Beethoven was in financial
difficulty, as I understand it. He
was also unpopular after the
controversy of seizing his nephew
from the boys mother after the
father, Beethovens brother, had
died. He then apparently
mistreated the child. When the
Ninth was performed publicly for
the first time in 1824, Beethoven
was bizarrely, but nicely, the
token conductor, with some help
from the real conductor. And
the most moving part of the
story is that, at the finale, he
had to be turned towards the
audience, which was going crazy.
He hadnt heard them, but
was able to see the arms
and handkerchiefs waving wildly. I
try to imagine how he felt. A
victorious fist-pump or high five?
Did he feel he had taken a risk? The
Ninth was the first major
symphony to include singing, with
the Ode to Joy.
Even in business I feel you learn
more from these real human
stories with adversity and mistakes.
And you learn you cant please
everyone. One contemporary critic
of Beethoven stated That Ode to
Joy, talk about vulgarity! And the
text! Completely puerile! Perhaps
thats more applicable to some
entrepreneur speeches.
Richard Farleigh has operated as a
business angel for many years, backing
more early-stage companies than anyone
else in the UK.
www.farleigh.com
Tom Welsh speaks with Dana Elemara, founder of a food business with an important difference
T
HE argan tree isnt found in
many suburban gardens.
Native to southwest Morocco
and the Israeli Negev, it grows
knotted and thorny, thriving
only in harsh semi-desert
environments. But Dana Elemara,
organic food enthusiast, import-
exporter, and supplier to the
cosmetics industry, found a way to
capitalise on this exotic survivor.
Formerly of Goldman Sachs,
Elemara came to entrepreneurship
by chance. Never her first choice of
career, Goldman was an easy option
after a maths degree. I needed to be
the best at what I do, and I was never
going to be the best at Goldman
Sachs, says Elemara. The idea for her
business was similarly unplanned. I
hadnt heard of argan oil before a
family friend started raving about it a
couple years ago. I found it by acci-
dent. Her inspiration, however tenu-
ous, was quick to take hold.
The result a company called
Arganic is an eccentric mix of styl-
ish organic food start-up (the chef
Yotam Ottolenghi is a fan of her prod-
uct) and import-export commodity
business. Food is what interests
Elemara (argan is an expensive olive
oil equivalent), but the oils industri-
al application in the cosmetic indus-
try is where she makes her money.
Its fine to supply restaurants, but
they only ever order one litre at a
time, she says.
Its easy to be sceptical of Arganic.
Wheres the scalability? Whats to
stop cosmetic companies buying
direct from the oils rural Moroccan
producers? Is this a long-term busi-
ness model? Isnt it all a little niche?
But Elemara is persuasive. Her story
is a lesson in determination and of
the importance of remaining open-
minded. She found her producer
after a barnstorming search of the
Moroccan wilds. She shrugs off the
difficulties of a woman doing busi-
ness in North Africa. And she didnt
access outside finance. Despite her
previous professional career, she
raised the seed money by working on
commission selling Christmas toys
at Hamleys toy store.
There were difficulties, of course.
There were always reasons why my
business might have failed, she says.
But I knew it was unique. Elemara
now has exclusive rights to distribute
argan oil in the UK from her
Moroccan producer.
She is dogmatic about the impor-
tance of staying receptive to wider
Oil baron: How to profit
from a chance discovery
Founded: January 2012
Company name: Arganic
Age: 27
Lives: Maida Vale
Previous jobs: Analyst at Goldman
Sachs, management consultant in
Dubai
Reading: I dont have much time to
read, but the last book I read was
Any Human Heart by William Boyd
Talents: Painting (I had a painting
published in The Times when I was
younger), mathematics, cooking,
roller-blading
Heroes: I dont have any heroes,
but look up to Johnny Earl (who
started the cult t-shirt brand
Johnny Cupcakes), the late Vidal
Sassoon and Jo Malone.
Motto: Dont be invisible, always
make an impression, and be
someone who gets remembered
First ambition: To change the world
Awards: Great Taste Award 2012,
BBC Good Food Champion 2012,
Shell LiveWire Young
Entrepreneur of the Year 2012
finalist.
Dana models her new product
ENTREPRENEURS
Deaf to all criticism: Finding inspiration in some unlikely places
DANA ELEMARA
uses for a product or service. Im
obsessed with food, she says. But
start-ups have to cast their nets wide-
ly to pounce on any potential
avenue of making profit, any fresh
new way of applying their idea.
Elemaras attitude to finance is also
unorthodox. I wanted to avoid out-
side investors, she says. I was afraid
of someone trying to change my idea
and my approach. Of course, for
many start-ups, venture capital can
be vital and the advice of an experi-
enced investment partner could
prove the difference between suc-
cesss or failure. But it could also
result in unwelcome entanglement.
Elemara, however, points to alterna-
tives to official ties. Ignore a hell of a
lot of people, she says. But listen to
those with experience. For her, this
meant getting involved with both her
local business centre and Shell
LiveWire. The latter is a competition
that has been running in the UK since
1982. It also offers free online services
to young entrepreneurs.
It could be particularly useful for
London-based entrepreneurs, says
Elemara. Businesses in the north east
or Scotland, they get so much support.
But Londoners are left to fend for
themselves. Shell gives out four
monthly prizes of 1,000 (one of which
Elemara won). But more important to
her was the process of applying for the
award. Having to give speeches, hav-
ing to submit a business plan, it really
helped me focus on the core purpose
of my business and idea.
Arganic isnt a particularly innova-
tive business, nor is it necessarily
unique. But Elemaras breezy confi-
dence is evidence of how the difficul-
ties that stack up against new
entrepreneurs are rarely insurmount-
able. So many businesses fail, she
says. But Im still positive.
CV
of a SERIAL
ENTREPRENEUR
RICHARD FARLEIGH
CONFESSIONS
Y
OUVE found your niche, youve
written your business plan, youve
arranged suitable financing. Surely
thats the hard part done? All that
remains is the difficult work of
growing your company, making your sales,
and pleasing your customers.
Unfortunately, its not true. Before a
business is even registered, every
entrepreneur becomes enmeshed in
Britains complex, opaque, difficult and
punitive tax system. If you want to hire staff,
theres a tax implication. If you buy
equipment for your business, theres a tax
implication. If you get outside investment,
theres a tax implication.
Thats why its so essential to get advice
or at least to brush up on the facts yourself.
No business should fail because of some
measly tax technicality.
And that preparation should start early
as early as the legal form you choose for
your business. Are you going to set up as a
limited company, partnership, or sole
trader? Sole traders pay income tax on their
profits, while limited companies are liable
for corporation tax. But though rates can be
different, your legal form also has
implications on your liability if the business
fails.
As Rob Young, tax and incentives partner
at Taylor Wessing points out, theres also a
tax angle to how you choose to fund your
start-up. The UK tax regime tends to be
less aggressive when equity is acquired in
the life of a business, he says. Some of the
more generous tax breaks depend on
shares being held for a minimum period.
So whether youre considering investing in a
business, selling out, or asking for help from
elsewhere, its still vital to consider the tax
angle.
Finally, make sure you look out for some
of the benefits built into the tax system.
Dont forget the government is apparently
desperate to encourage entrepreneurship.
You may be able to obtain tax credits for
any pre-trade activity. Research and
development, for example, can offer actual
cash rebates from HMRC in certain
circumstances.
Twitter: @TWWelsh
Taxing times for
Britains start-ups
INNOVATION
DIARY
TOM WELSH
Beethoven wasnt blind to
positive reactions
LIFE&STYLE
MONDAY 19 NOVEMBER 2012
29
cityam.com
WATCHES
The new Casio Edifice is right on time
FORMULA 1 drivers have never shied away
from lending their faces to major watch
campaigns and now Casio has launched a
watch it says is inspired by the workings of
a formula 1 car.
The official racing partner to team Red
Bull has created a limited edition of its
EQW-A111ORB, incorporating the
distinctive blue and red team colours as
well as the firms logo.
Shigenori Itoh, chairman and chief
executive of Casio America, said: We
recognized that Red Bull Racing's fast-
paced, energetic culture and drive to
succeed were the perfect elements for the
inspiration and development of our
newest Edifice timepiece.
Casio has been an Official Partner of
Red Bull Racing since 2009 and we look
forward to collaborating on additional
timepieces in the future that continue to
evoke a sense of velocity and motorsports
energy."
The solar powered watch has a power
saving function allows the it to power
down when not exposed to light for a
certain period of time, as well as 100m
water resistance, countdown timer, daily
alarm, tachymeter, and world time for 29
cities. It also tells the correct time down to
a 1/20th of a second and the built in
stopwatch records up to ten different lap
times, memorising your personal best.
Breitling brands it like Beckham
David Beckham has netted a long-term deal with the Swiss luxury watchmaker. Naomi Mdudu takes stock.
The watch comes with either a stainless steel or leather strap and is available at www.edifice-watches.co.uk with prices starting from 330
The new campaign was shot on the runway of the Mojave Air & Space Port in California
Photographer Anthony Mandler in action on set
D
AVID BECKHAM has lent his
face to brands ranging from
Adidas to Emporio Armani
and now Breitling has joined in
on the action by confirming it has
partnered with the sports star for its
latest campaign.
The ads, shot by world-renowned
photographer Anthony Mandler, see
the 37-year-old sporting a leather
aviator jacket and the Swiss
watchmakers Transocean
Chronograph Unitime watch in front
of a private jet a nod to the watch-
makers long history of developing
some of the best watches for the
aviation world.
Ive always been a long-time
admirer of Breitling, Beckham
explained. As a company they create
not only the highest-performance
watches but also timeless designs that
have inspired generations. It was a
natural choice for me to partner with
this fantastic brand.
The new watch is intended to be a
nod to its classic Transocean styles
from the 1950s and 1960s and taps
into the technology incorporated in its
spring/summer 2012 SSR model. It
comes with a double disc time
function that allows permanent
readings of all 24 time zones and is
equipped with the brands patented
Manufacture Breitling Calibre B05
technology, which operates at 28,000
vibrations per hour, giving it an
over 70 hour power reserve.
The watch is priced at 8,460 and
is available now.
Beckham showing off the new
Chronograph Unitime
MONDAY 19 NOVEMBER 2012
30
cityam.com
There is room for two on
H
opping over a grate steaming
with hot air from the metro
system below, I stroll past the
gleaming plate glass wrapped
around the ground floor of the
towering skyscrapers of downtown.
As I swing open the door of the citys
chicest fashion boutique, the rooftop
bar next door breaks through the
traffic noise with an eruption of
laughter, drowning out the honking
yellow cabs and clacking heels.
Sound like New York? Well, its not:
its Philadelphia. The east coasts sec-
ond largest city may be less renowned
than the Big Apple but it is fast gar-
nering a cultural and fashion scene to
make even the most hardened New
Yorker sit up and pay attention.
My first taste of Philly fashion is at
Joan Shepps inimitable boutique on
Walnut Street and its a memorable
one. Joan herself is here to point out
the gems in her collection of impecca-
bly classy pieces from Marni, Phillip
Lim, Amelia Toro and Ann
Demuelemeester. She has an excel-
lent eye and I am sorely tempted by a
bag from high-end American design-
er Reed Krakoff but decide I should at
least wait for the jetlag to subside
before clobbering my credit card.
I spend the next few days visiting
boutiques including Bus Stop (for
shoes), Briar Vintage (for mens fash-
ions) and Art in the Age (for fashion-
forward T-shirts and chic
homewares). Thanks to
Pennsylvanias lack of sales tax on
essential items, which includes of
course clothes and shoes, I shop up
a storm and return to my hotel each
day laden with bags.
By night, the streets of Philadelphia
really begin to fill and returning to
Walnut Street I find restaurants and
bars to rival anything New York has to
offer. At Urban Enoteca I feast on plat-
ters groaning with delicious cheeses
and charcuterie, washed down with a
cracking Californian cabernet, while
at Alma de Cuba I drink the tastiest
mojitos I can remember outside of
Cuba itself. Around the corner, on the
37th floor of Two Liberty Place, I raise
a glass of moscato to the view below
a chequerboard of city blocks marked
out by endless lines of red and white
taillights.
Now indoctrinated into the
nightlife of the City of Brotherly
Love, I am let into its dirty little
secret: tucked away down narrow
alleyways and beneath the sidewalk
in hidden basements are some of
Americas best speakeasies. These are
places where youll be welcomed
with a knowing smile and served
good stiff drinks and concoctions
youll never remember.
As the snaking queues to its door
attest, the citys best is Franklin
Mortgage and Investment. This base-
ment bar on 18th street is named
after the company that served as the
front for what was, in the 1920s, the
largest illicit booze ring in the US and
inside I find contemporary dcor
right down to the lightbulbs and
artists masquerading as bartenders.
These dangerous men will mix you
anything from a Red Viper to a
Cripple Creek, but I plumped for
what turned out to be a very honestly
titled The End of You, a cocktail of
gins, cynar liqueur and vermouth
that made the room spin and the
night end with a bang.
Fortunately Philly also offers the
antidote to this sort of excess in the
form of further excess. The next
morning I head to brunch at Lacroix
on Rittenhouse Square, where the all-
you-can-eat buffet includes every-
thing from sushi and salads to a
chocolate fountain and of course
bacon and eggs. Although everything
is self-service, the hot food is served
up in the kitchen itself and I find
myself entranced watching a chef
making pastries with a concentration
that reminds me of those fashion
boutique owners putting the finish-
ing touches to their displays.
This sort of near-neurotic attention
to detail is starting to seem like
something Philly excels at and, on
visiting the Barnes Collection on the
citys Museum Mile, I start to under-
stand why.
The Barnes Collection began with a
man who had an unwavering desire
to get things just right. This world-
class collection of post-impressionist
and early modern paintings, African
sculpture, metalwork and decorative
arts was collected by Albert C Barnes
throughout his lifetime and on his
death in 1951 it was given over to a
Board of Trustees on the express
instruction that it was never moved
from its site in Merion, on the out-
skirts of the city.
Well, today, here it is on the
Benjamin Franklin Parkway, miles
from its original location and yet, in
a way, nothing has been moved. Every
single wall from the original building
has been recreated exactly, right
down to the paint colour. Moving the
New York may have
the reputation, says
Helen Ochyra, but
Philadelphia is a
real fashion and
culture hub, too
Thanks to Pennsylvanias lack of sales tax on essential items,
which includes of course clothes and shoes, you may find yourself
spending rather more than you had intended before you set off.

LIFE&STYLE TRAVEL
MONDAY 19 NOVEMBER 2012
31
Why Madrid should
be on your wish-list
the USs east coast MADRID has beautiful architecture and amazing gal-
leries but no commanding coliseum or sparkling
Eiffel tower. Instead you can experience laid-back tapas
culture, boundless nightlife, fine dining, high-art and
fashion, all within the space of a weekend. Whats
more, this vibrant capital is on our doorstep, with
direct flights to Madrid from London City in less than
two and a half hours. Here are our top six reasons why
Madrid should be on your city-break wish list.
#1 CLAP TO FIERY FLAMENCO BEATS
Flamenco might bring to mind a colourful, vibrant
dance but its passion derives from the stories of suffer-
ing endured by the Andlucian gypsies. To see its full
blown fiery passion find a tablao (a venue that offers
live flamenco shows, often with dinner and drinks)
and get set to stay up long past midnight.
There is certainly enough Flamenco for everyone and
few are disappointed with the performances at Casa
Patas (10, Calle Caizares, Centro). For a younger vibe,
try Sunday nights at bohemian El Juglar and for a
party atmosphere visit the city during the Caja Madrid
Flamenco Festival, which takes place every year in
February.
#2 DEVELOP A SHOE FETISH
Spain is one of the biggest footwear producers in
Europe and the regions of Valencia and Alicante are
dominated by shoe factories. For authentic Spanish
footwear look for the Zapatos de Espana (shoes from
Spain) label. Head to Augusto Figueroa in Chueca for
factory goods or Salamanca for gorgeous leather
goods from well-known brands such as the elegant
Loewe company, Farrutx or Camper.
#3 CRAWL THE CAF SCENE
Madrid is full of the fascinating drinking haunts of
great social and literary figures of past and present.
The cramped Caf Real (Plaza de Isabel II) was a popu-
lar intellectual hang out in the 80s and is a great place
for a coffee and cake. Caf Restaurant el Espejo (31,
Paseo de Recoletos) attracted a similar crowd with its
bow-tied service and dominating mirrors and chande-
liers, which it still maintains today.
Todays cool intelligentsia frequent the former mem-
bers-only club Caf del Circulo de Bellas Artes (42 Calle
Alcala). This elegant caf also boasts a fair share of
chandeliers, along with 1920s-style high ceilings, artis-
tic statues and pillars. Its a great spot to spend a couple
of hours people-watching on the ever-moving Alcala
street outside.
#4 BE A DESIGN GEEK
Whilst reminders of the past are everywhere in
Madrid, modern design and innovation will demand
your attention from the moment you arrive in the air-
port. The award-winning new terminal 4 building at
Barajas Airport was designed by Richard Rogers to give
passengers a stress- free start to their journey, with
careful use of illumination through glass panes
instead of walls and numerous domes in the roof
which allow natural light to pass through.
The Reina Sofia museum (MNCARS) has become a
symbol of modern Madrid. Formerly the Madrid
General Hospital, the building became the Museum of
Spanish Contemporary Art in 1992. Its been continu-
ally adapted to house its growing collections and activ-
ities, with its Jean Nouvel-designed extension
inaugurated in 2005.
#5 FIND A NEW FAVOURITE TIPPLE
Spanish red wines are some of the best in the world,
and in Madrid youll find plenty of opportunities to
try its famed Riojas and Penedeses, along with the tra-
ditional, underrated wines from the vineyards of
Madrid province. Look out for the prize winning red
and white Jess Daz wines of Colmenar de Oreja win-
ery. Tour companies arrange wine tasting trips or cre-
ate your own by visiting the citys many informative
bodegas (wine shops). Frequent tasting and wine sam-
pling courses are held at Reserva y Cata (13, Conde de
Xiquena), and the impressive 19th-century bodega,
Mariano Madrueo (3, Postigo de San Martin), has an
overwhelming selection of wines, spirits and liqueurs.
#7 PIG OUT ON GOURMET PORK
Pork is big business in Spain and its gourmet varieties,
most recently cuts from its mountain living, acorn eat-
ing Ibrico pigs, can be found in top-class restaurants all
over the world. In the capital youll find a massive array
of pork delights, from traditional specialties such as
Cochinillo (suckling pig) and duelos y quebrantes, a
dish with scrambled eggs, ham, bacon and chorizo, to
the dozens of hams dangling from the ceilings of the
many Museos del Jamn (Ham Museums).
For more insider tips, see what Madrid resident Erin Ridley
has to say about the citys hotspots in her 24 hours in Madrid
guide. London City Airport has flights from London to Madrid.
LIFE&STYLE TRAVEL
Barnes may have caused controversy,
but the experience of visiting is spell-
binding and Barnes vision shines
through. In the end, Philadelphia got
it right.
On Museum Mile you will also find
the Philadelphia Museum of Art (visit-
ed mostly by Rocky fans keen to run
up its famous steps) and the brand
new Rodin Museum. But youll need
to head back out of town for the citys
newest cultural icon. A quiet street
lined with unremarkable mid 19th-
century tenements in previously
down-at-heel East Kensington has
been brought to life by the worlds
first pizza museum. Part pizzeria,
part museum, Pizza Brain is the
worlds largest collection of pizza
memorabilia a fact verified by the
Guinness Book of Records and
includes everything from pizza-relat-
ed VHS tapes (Mystic Pizza, Pizza
Man) to whole walls of magazine cov-
ers, film posters and vintage adverts
for pizza joints.
It is without doubt the most colour-
ful, bizarre museum I have ever seen
and the pizzas good too. Tucking
into a slice I ask owner Brian Dwyer:
why Philly? Why not build his temple
to pizza in New York? I think Philly is
the perfect place to do this, he says,
Its fertile ground for esoteric ideas.
And I fell in love with it. Well, Brian,
so did I.
Images clockwise from
top left: The Barnes
Foundation building;
the Philly skyline by
night; a yellow cab
outside the stock
exchange, reminiscent
of New York; Briar
Vintage, one of the
trendy fashion outlets;
Museum Street; The
Liberty Bell; the statue
of Sylvester Stallones
Rocky, who lived in
Philly
n British Airways has four nights
room-only at the 4* Sofitel
Philadelphia from 849 person,
based on two sharing and including
return British Airways flights from
Heathrow. For reservations visit
ba.com/philadelphia or call 0844
493 0758.
For more information on
Philadelphia visit
www.philadelphiaUSA.travel or call
0115 922 9255.
NEED TO KNOW
32
TV & GAMES
cityam.com
T
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BBC1
SKY SPORTS 1
7pmLive Monday Night Football
11pmNetbusters 11.30pmSPL
Round-Up 12amSoccer AM: The
Best Bits 1amMonday Night
Football 3.30amWatersports
World 4.30amMax Power
5.30am-6amFIFA Futbol
Mundial
SKY SPORTS 2
5.30pmTest Cricket 7.30pm
Sporting Greats 8pmIronman
Triathlon 8.30pmTest Cricket
10.30pmNASCAR 11.30pm
Ironman Triathlon 12amTest
Cricket 2am-4amShow
Jumping
SKY SPORTS 3
7pmNASCAR 8pmNFL 10pm
WWE: Late Night Bottom Line
11pmWWE: Late Night
Afterburn 12amWWE: NXT
1am-4.15amLive WWE: Late
Night Raw
BRITISH EUROSPORT
6.30pmEurogoals 7.15pm
World Superbikes 8.15pm
British Superbikes 9.15pm
MotoGP 10.15pmSnooker
12am-12.45amEurogoals
ESPN
6.15pmFC Press Pass 7.15pm
Game of the Week 7.45pmLive
Serie A 9.45pmFrench Ligue 1
Review10.45pmESPN Kicks:
Scottish Football 11.30pmESPN
FC Press Pass 12amUFC: The
Ultimate Fighter 1amPremier
League Review2amBundesliga
Review Show3amFrench Ligue
1 Review4amESPN Kicks:
Scottish Football 4.15am-6am
International Rugby Union
SKY LIVING
7pmCriminal Minds 8pm
Nothing to Declare UK 8.30pm
Show Me Your Wardrobe 9pm
Americas Next Top Model
10pmCriminal Minds 11pm
Bones 12amSun, Sea and
A&E 1amSmash 1.50am
Supernatural 2.40amMedium
3.30amBones 4.20amNothing
to Declare 5.10am-6am
Passport Patrol
BBC THREE
7pmSnog, Marry, Avoid? 8pm
Junior Doctors: Your Life in Their
Hands 9pmI Want to Change
My Body 10.30pmEastEnders
11pmFamily Guy 11.45pm
American Dad! 12.30amI Want
to Change My Body 2amRussell
Howards Good News 2.30am
Impractical Jokers 3am-4am
Unsafe Sex in the City
E4
7pmHollyoaks 7.30pmHow I
Met Your Mother 8pmNew Girl
8.30pmSuburgatory 9pmBig
Bang Theory 9.30pm2 Broke
Girls 10pmMade in Chelsea
11.05pmFresh Meat 12amThe
Work Experience 12.30amBig
Bang Theory 1.30amHow I Met
Your Mother 2amScrubs
2.30amFresh Meat 3.15amMy
Name Is Earl 4am90210
4.40am-6amSwitched
HISTORY
7pmStorage Wars 7.30pm
Pawn Stars 9.30pmCajun
Pawn Stars 10pmAmerican
Pickers 11pmStorage Wars
11.30pmPawn Stars 12.30am
Cajun Pawn Stars 1amAmerican
Pickers 3amAx Men 4am
Swamp People 5amPawn Stars
5.30am-6amStorage Wars:
Texas
DISCOVERY
7pmBattle Castle with Dan
Snow8pmFifth Gear 9pmHow
We Invented The World 10pm
American Guns 11pmWheeler
Dealers 12amHow We Invented
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3amHow We Invented The
World 3.50amAmerican Guns
4.40amDiscovery Atlas
5.30am-6amMeerkat Manor
DISCOVERY HOME &
HEALTH
7pmDr Oz 8pmI Didnt Know I
Was Pregnant 9pmTrauma: Life
in the ER 10pmHospital Sydney
11pmEmergency: Life in the ER
12amTrauma: Life in the ER
1amWanted Down Under 2am
Hospital Sydney 3am
Emergency: Life in the ER 4amA
Baby Story 5am-6amBabys
Room
SKY1
8pmArrow9pmRoad Wars
10pmGame of Thrones 11.15pm
Fringe 12.15amRoad Wars
1.15amMiami SWAT 2.05am
Road Wars 4.10am-6am
Stargate SG-1
BBC2 ITV1 CHANNEL4 CHANNEL5
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6pmBBC News
6.30pmBBC London News
7pmThe One Show
7.30pmInside Out: BBC News
8pmEastEnders
8.30pmUndercover: How to
Dodge Tax Panorama
9pmRichard Hammonds
Miracles of Nature
10pmBBC News
10.25pmRegional News 10.35pm
CHOICE Four Born Every Second:
11.35pmFILMSeraphim Falls
2006. 1.20amWeatherview
1.25amSign Zone: Question Time
2.25amSign Zone: The Choir: Sing
While You Work 3.25amWartime
Farm4.25am-6amBBC News
6pmEggheads
6.30pmStrictly Come Dancing
It Takes Two
7pmCelebrity Antiques Road
Trip: With Kate Silverton and
David Hamilton.
8pmUniversity Challenge
8.30pmMasterChef: The
Professionals
9pmThe Dark Charisma of
Adolf Hitler
10pmNever Mind the
Buzzcocks
10.30pmNewsnight: Weather
11.20pmDragons Den
12.20amBBC News
4am-6amBBC Learning Zone
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale
7.30pmCoronation Street
8pmLittle England
8.30pmCoronation Street
9pmIm a Celebrity Get Me
Out of Here!
10pmITV News at Ten
10.30pmLondon News
10.35pmThe Agenda
11.10pmFILMCoogans Bluff.
1968.
12.45amJackpot247: News 3am
Champions League Weekly 3.25am
ITV Nightscreen 4.35am-5.30am
The Jeremy Kyle Show
6pmThe Simpsons
6.30pmHollyoaks
7pmChannel 4 News
7.55pm4thought.tv
8pmMPs: Are They Still At It?
Channel 4 Dispatches
8.30pmCHOICE Stephen Fry:
Gadget Man
9pm999: Whats Your
Emergency?
10pm8 Out of 10 Cats 10.50pm
Full English 11.20pmRory Peck
Awards 2012 11.25pmAlan Carr:
Chatty Man 12.30amSecret State
1.25amDerren Brown 2.20amThe
Good Wife 3amFILMMoonfleet
1955. 4.30amSupernanny US
5.10am-6.05amDeal or No Deal
6pmHome and Away
6.30pm5 News at 6.30
7pmWild Things with Dominic
Monaghan: 5 News Update
8pmCHOICE The All New
Gadget Show: 5 News at 9
9pmFILMThe Contract:
Thriller, starring John Cusack
and Morgan Freeman. 2006.
11.05pmFILMA Few Good
Men: Military courtroom
drama, with Tom Cruise. 1992.
1.30amSuperCasino 3.55am
HouseBusters 4.20amHouse
Doctor 4.45amDivine Designs
5.10amWildlife SOS 5.35am-6am
Wildlife SOS
Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
COFFEE BREAK
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5
6 7 8
9
10 11 12
13 14
15 16 17 18
19 20
35 18
45
7 17
10 24
12 14
21 6
12 10
22 8
28 24
45
23 15
27
11
15
12
33
19
31
12
9
30
11
10
10
14
10
28
16
32
29
4
20
13
ACROSS
1 Range (5)
3 Robbery at
gunpoint (5)
6 Devoured (5)
7 Leaf which adorns
the Canadian ag (5)
10 Strongroom in which
valuables may be
securely stored (4-7)
13 Machine with a
revolving drum
used in making
concrete (6,5)
15 Third planet from
the sun (5)
18 Trousers (5)
19 Formal title used
when addressing
a woman (5)
20 Small, round
and gleaming
(of eyes) (5)
DOWN
1 Vehicles used to
travel over snow (5)
2 Law established
by following earlier
judicial decisions (9)
3 Border of cloth
doubled back and
stitched down (3)
4 Little rascal (3)
5 Provide a
remedy (5)
8 Find repugnant (9)
9 Last
Commandment(5)
11 Veneration (3)
12 Coat a cake
with sugar (3)
13 Dairy product (5)
14 Corroded (5)
16 Visual receptor
cell sensitive to
dimlight (3)
N
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M
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K I T T Y S C A M P
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P A V E B A N T E R
O E C U R R G
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S P E C I A L
L H A S A G N A R L
I T R N A B O
S K I N N Y S E L F
T L E T T
2 9 1 2 1 3 7
6 8 9 9 7 8 6 5
4 2 2 4 1
5 8 3 1 7 4 9 2 6
8 7 6 4 9 5 4 2
7 9 3 2
2 7 7 9 6 3 8 5
3 6 2 5 8 9 4 7 1
9 3 8 8 1
2 4 1 3 5 6 1 8
4
4
4
4
4
4
4
4
The nine-letter word was
UNBLOCKED
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
MONDAY 19 NOVEMBER 2012
FOUR BORN EVERY SECOND
BBC1, 10.35PM
Documentary on birth and infant
mortality around the world, revealing
how the circumstances of each babys
delivery will determine its life story.
STEPHEN FRY: GADGET MAN
CHANNEL 4, 8.30PM
New series. The actor and broadcaster
shares his passion for technology,
trying out all the gizmos and
prototypes he can lay his hands on.
THE ALL NEWGADGET SHOW
CHANNEL 5, 8.00PM
Jason Bradbury and Pollyanna
Woodward head to Israel, where they
visit annual Kinnernet networking
event for technology enthusiasts.
TVPICK
IN BRIEF
Upbeat Froch eyes revenge fights
nBOXING: Britains Carl Froch has set
his sights on Mikkel Kessler and Andre
Ward after defending his IBF super-
middleweight title on Saturday night.
Kessler and Ward are the only two
boxers to have beaten Froch, who
wants to give himself a chance to gain
revenge on the pair in fights that may
be arranged for next year.
Czechs take Davis Cup from Spain
nTENNIS: Defending champions
Spain lost the Davis Cup last night to a
Czech side that was cheered on by its
home crowd in Prague. A four set win
by Radek Stepanek against Nicolas
Almagro gave the Czech Republic a
3-2 victory. Stepanek won 6-4 7-6 (7-
0) 3-6 6-3 to deliver the Czechs first
Davis Cup win as an independent state.
European Tour record for Jimenez
nGOLF: Spains Miguel Angel
Jimenez yesterday became the oldest
winner of a European Tour event by
taking the Hong Kong Open title.
Jimenez, who pipped Swedens
Fredrik Andersson by one stroke to
finish 15 under par, was 48 years and
318 days old as he lifted the trophy.
COOK MILESTONES
nCooks ton made him the first man
to score centuries in his first three
Tests as England captain, following
hundreds as stand-in leader in
Bangladesh in 2010
nHis 21st Test century puts him ahead
of Graham Gooch, level with Andrew
Strauss and Kevin Pietersen, and one
behind Geoff Boycott, Colin Cowdery
and Wally Hammond
ENGLAND batting coach Graham
Gooch hailed Alastair Cooks greatest
ever innings after the captains defi-
ant 168 not out took the first Test
against India in Ahmedabad into a
fifth and final day.
Cooks 21st Test century and Matt
Priors unbeaten 84 gave the tourists
a sliver of hope of snatching a draw
from the jaws of defeat, following a
chastening start to the four-match
series. England stood on 340-5 at
stumps a lead of just 10 runs and
Gooch, who has mentored Cook at
Essex and the national team, believes
it was the best display he has wit-
nessed from the new skipper.
Some players blossom under the
captaincy as a performer, and he has
certainly blossomed under that
responsibility here, said former
England captain Gooch.
It was great commitment from
our guys and great fighting spirit.
There was belief in their own ability,
and Alastair led from the front as
captain.
It will do him the world of good
to put that score on the board, show-
ing what he is capable of and what
Cooks captains innings
takes Test the distance
this team is capable of. I think that
was as good an innings as Ive seen
him play, because he was under great
pressure after a poor first-innings per-
formance from the team.
England began day four 219 runs
behind the hosts, and hopes of mak-
ing them bat again looked bleak
when batsman Ian Bell (59) and all-
rounder Samit Patel (0) fell to Umesh
Yadav in successive balls.
Stadium row has gone on too long, Boris
Cooks unbeaten century helped England
to 340-5 at stumps on day four
ENGLANDS Luke Donald climbed
above Tiger Woods and into second
place in the world golf rankings with
a comfortable victory at the Dunlop
Phoenix tournament in Japan
yesterday.
Donalds final-round 68 left him
16 under par and five strokes clear of
nearest challenger Hideki
Matsuyama. Three birdies and an
eagle outweighted two bogeys and
earned him a first title since May.
Win lifts Luke
above Woods
BRITAINS Laura Trott admitted to
not being fit, despite winning her
second gold of the Track Cycling
World Cup in Glasgow yesterday.
The Olympic champion pipped
Australias Ashlee Ankudinoff to
the omnium title, 48 hours after
winning the team pursuit with
Dani King and Elinor Barker.
Its so hard coming back from
the Olympics. Im not fit, Im not
going to lie, said Trott. I dont
even know what Im doing here.
Unfit Trott bags
track gold No2
BY FRANK DALLERES
SPORT
33
MONDAY 19 NOVEMBER 2012
cityam.com
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minimalistic brown dial and the dark brown alligator leather strap make it a classically elegant design. With the screw-in
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with Pellaton winding system and the integrated shock absorber. Unfortunately, this watch isnt timeless when it comes to
buying one: its limited quantity of 500 wont last long at our retailers. Mechanical movement | Pellaton automatic winding system |
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resistant 12 bar | Case height 14.5 mm | Diameter 42.5 mm | Limited edition of 500 watches in stainless steel | IWC. Engineered for men.
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T
HE rage has abated but the
anger inside still burns after the
announcement last week that it
might take until after the
Games of Rio in 2016 for the Olympic
Stadium to be operational, under
whatever guise. This is depressing,
outrageous, scandalous, shameful.
The told you so brigade who
were silenced so magnificently in
the summer have now found their
voice again. I told you thered be no
legacy. I told you it would be a
white elephant.
So Boris, now is the time if ever
there was one, to show a bit of
statesmanship and force the issues
to a head. Some wishy-washy
comments last week showed
alarming evidence that your
enthusiasm for all things Olympic
might be on the wane, with your eye
perhaps moving on to other greater
personal ambitions. You and
probably only you, can drive this
impasse to a solution before a
moribund stadium stands as a
complete betrayal of what our most
golden of summers has stood for.
JOYOUS
The arguments about its future have
not changed for months, even years.
The Olympic Park will be a
wonderful open space for public
recreation, with the swimming pool
resonating endlessly to the sounds of
a thousand screeching children,
many of whom will doubtless
become Olympians in the future.
But at its heart sits the setting for
all those joyous ceremonies and
unforgettable drama. A stadium that
should be alive to the sound of sport
as often and as soon as possible. Not
sitting waiting for a tenant like a
dilapidated tenement in Hackney.
Weve heard all the arguments a
million times about whether West
Ham should move in, and what
happens to the World Athletics
Championships in 2017.
The fact remains there is nothing
new to say, and how dare all the
stakeholders allow this farce to
drag on any longer.
So Mr Mayor, please call a summit
of all parties. At the Guildhall. In a
pub. Anywhere. And throw away the
key. And dont let anybody out until
you have reached an agreement that
wont please everyone, but which
will at least ensure that new life is
breathed into a stadium into which
we all made such a huge emotional
investment. We need a decision.
Right or wrong. But we need it soon.
SPORT
COMMENT
JOHN INVERDALE
In association with
BY FRANK DALLERES
BY FRANK DALLERES
BRITAINS Lewis Hamilton did his old
nemesis Fernando Alonso a huge
favour in last nights American Grand
Prix, by pipping the Ferrari drivers
championship rival Sebastian Vettel
to the chequered flag.
Hamiltons superb win in Texas has
set up a thrilling finale to the
Formula One season as Alonso and
Vettel will go head to head in Brazil
this weekend to decide who wins the
drivers championship.
I am not fighting for the champi-
onship [myself] so it is more exciting
for these guys but I can have fun,
Hamilton said after winning in one
hour, 35 minutes and 55 seconds
just 0.6 seconds ahead of Vettel.
To be able to beat Red Bull and
Sebastian is definitely a tough chal-
lenge but we managed to do it.
With Alonso coming third, the
result marked the first time that the
three racing giants have shared a
podium. Vettel now leads Alonso by
13 points with only one race to go.
Had Hamilton not overtaken Vettel on
lap 42 and won the race, Vettel would
instead be taking a 20 point lead into
the final race.
It was not possible to keep the pace
with these two guys. This podium is
like a victory for us, Alonso said.
The Spaniards relationship with
Hamilton has been far from smooth
over the years, dating back to when
the pair clashed while both were at
McLaren. Reportedly not on speaking
terms with Hamilton, Alonso left
McLaren at the end of 2007.
But Hamilton, who leaves McLaren
to join Mercedes at the end of the sea-
son, has boosted Alonsos hopes of
claiming a third championship title.
Alonso began the race in controver-
sial fashion as his team attracted a
five-place penalty for team-mate
Felipe Massa so that their top driver
Hamiltons US victory
aids his old foe Alonso
could start in seventh crucially on
the cleaner side of the track.
Alonso took immediate advantage,
moving up to fourth place during the
first section of the opening lap.
Hamilton starting in second, on
the dirty side of the track slipped
behind Red Bulls Mark Webber, yet
regained second place by lap four.
From there he chased the leader and
on lap 42 benefited from traffic that
delayed Vettels progress. Using his
drag reduction system (DRS),
Hamilton swept into the lead and held
onto it for the remaining 14 laps.
A forced retirement for Webber gave
Alonso his podium, while further back
Hamiltons team-mate and compatriot
Jenson Button enjoyed a brilliant race.
Despite starting 12th on the grid and
being hit by a bad pit-stop half-way in,
Buttons tyre strategy combined with
some exhilarating overtaking to see
him end in fifth place, behind Massa.
Black Cats beat Fulham but confirm death
threats made to McClean over poppy shirt
SUNDERLAND manager Martin
ONeill saw his team grab their
second win in 19 league games
yesterday, but confirmed after the
match that James McClean was sent
death threats following the wingers
decision not to wear a poppy on his
shirt the previous week.
Three second half goals from
Steven Fletcher, Carlos Cuellar and
Stephane Sessegnon gave
Sunderland victory despite Fulham
being level at one stage through
substitute Mladen Petric, after
captain Brede Hangeland was given
a straight red in the first half.
Yet ONeill was forced to dwell on
a less welcome turn of events after
the game, during which McClean
came on as a second half substitute.
James has lived with a lot of
things hes getting death threats
now as well too, so that doesnt
help, ONeill said.
Ireland international McClean is
believed to have been the subject of
online threats after he played at
Everton last Saturday the day
before Remembrance Day without
a poppy on his shirt.
James will deal with it, ONeill
said yesterday, referring to possible
booing from sections of the crowd.
Its a free choice here in this world,
its a free choice, he added, giving
support to his players decision.
ONeills Sunderland side visited
Fulham seeking only their second
win of the Premier League season.
On the half hour mark their chances
were given a boost as a two-footed
lunge by Hangeland resulted in
referee Lee Probert sending off the
big Norwegian centre-back.
Ten men Fulham battled on and
five minutes into the second half a
John Arne Riise effort deflected onto
the bar. But Sunderland went
straight up the other end with Adam
Johnson curling a pass from the left
wing behind Fulham substitute
Philippe Senderos, for Fletcher to
pounce with a deadly, calm finish.
Ten minutes later Fulham drew
level as Petric slammed home
Damien Duffs low cross, but the
Black Cats hit straight back as
Cuellar rose above Steve Sidwell to
head a corner in off the post.
And Sessegnon sealed the win
with a breathtaking 69th minute
strike from over 20 yards out.
Lewis Hamilton celebrates beside Sebastian Vettel and Fernando Alonso, after winning his second US Grand Prix out of two attempts
TOTTENHAM manager Andre Villas-
Boas insists a 5-2 defeat at local rivals
Arsenal will not inflict lasting
damage on their attempts to beat
them to a Champions League place.
The Gunners overtook Spurs in the
Premier League with Saturdays
emphatic win against 10 men,
although Villas-Boas is adamant his
team will take heart from their
performance.
When you are poor, it can do
damage, but when you play like this
I dont think it can, said the former
Chelsea boss, who also shipped five
against Arsenal at Stamford Bridge a
year ago.
We felt we had a go. We felt
things that could have fallen our
way fell Arsenals way. We
compliment them for the result but
we have a lot of belief in each other.
Loss wont kill
season AVB
BY FRANK DALLERES
QPR owner Tony Fernandes failed
to give his customary backing to
manager Mark Hughes after
Saturdays 3-1 loss at fellow
strugglers Southampton left them
anchored to the bottom of the
Premier League.
Defeat in the game dubbed El
Sackico, due to the pressure on
both teams bosses, leaves winless
Rangers with just four points from
12 games and Fernandes, who has
repeatedly pledged support to
Hughes, dismayed.
He wrote on Twitter: I feel
gutted. Ive put my heart and soul
into this with my other
shareholders. And done all we can
to give support to players and all
management. I can only apologise
to QPR fans. Everyone including me
let the fans down. Many of us need
a hard look at themselves.
Defeat turns up
heat on Hughes
BY FRANK DALLERES
WEST HAM boss Sam Allardyce has
urged his high-flying team to give
themselves a boost before a tricky
run of fixtures by beating Stoke
tonight at Upton Park.
The Hammers have made a fine
start on their return to the Premier
League, with five wins and 18
points from 11 games, but face
Tottenham, Manchester United,
Chelsea and Liverpool in the next
four games.
The tough phase has already
begun for us and, after Stoke on
Monday we go into a run against
the other big boys, said Allardyce,
whose men took a point off
champions Manchester City and
beat Newcastle.
Weve coped very well so far and
I hope we continue to cope on
Monday night because thats a big
game for us.
Allardyce eyes
Potters boost
BY FRANK DALLERES
MONDAY 19 NOVEMBER 2012
34
SPORT
cityam.com/sport
BY JULIAN HARRIS
@cityam_sport
FULHAM......................................1
SUNDERLAND ............................3
BY JULIAN HARRIS
AT CRAVEN COTTAGE
PREMIER LEAGUE
FORMULA ONE FINALE
Drivers Championship 2012
1. Sebastian Vettel (Red Bull) 273 points
2. Fernando Alonso (Ferrari) 260 points
US Grand Prix Result
1. Lewis Hamilton (McLaren) 1h 35m 55s
2. Sebastian Vettel (Red Bull) 1:35:56
3. Fernando Alonso (Ferrari) 1:36:34
35
That it might take until after the Rio Games of 2016 for
Londons Olympic Stadium to be operational is depressing,
outrageous, scandalous, and shameful.

cityam.com
MONDAY 19 NOVEMBER 2012
WING Chris Ashton blasted
Englands wastefulness after
Saturdays 20-14 defeat to resurgent
Australia at Twickenham dented
their hopes of being top seeds for the
2015 Rugby World Cup.
Stuart Lancasters men failed to
score a single point after half time,
despite dominating the closing
stages and forgoing several kickable
penalties in search of a decisive
second try. No8 Thomas Waldrom
dropped the ball over the line while
centre Manu Tuilagi, who scored
Englands only try, infuriated Ashton
by opting to go it alone rather than
release him.
I think we cost ourselves the
game. We had enough possession in
their 22 and we just didnt take our
chances, said Ashton.
I think the right decisions were
made from those penalties [to go for
touch or quick taps]. I thought we
had them but we just couldnt find
that finishing pass. Toby Flood tried
to find me through the back and if
the pass had gone to hand I would
have been through a hole. And then
Thomas Waldrom dropped the ball
over the line.
You have to take your chances.
Our attack was better [than in last
weeks win against Fiji] but we are
lacking that clinical edge. We put
ourselves in a position to win that
game and that was the frustrating
thing.
Full-back Berrick Barnes kicked 15
points and wing Nick Cummins
scores the Wallabies only try as they
restored pride following their 33-6
drubbing in France just seven days
earlier. It means England are
unlikely to be among the top four
seeds when the draw for the 2015
World Cup on home soil is made
next month and leaves them anxious
to bounce back in the remaining
autumn internationals against
South Africa and New Zealand.
Forward Tom Wood, who
impressed when he came off the
bench, said: Australia have set a
precedent that when things go
wrong and you are written off, that
is they way to bounce back and that
is what we must try and do.
The right things were said after
the game about being harder on
ourselves and not letting chances
like that slip. Its about when you get
a chance at international level, nail
it. Itll be a huge physical challenge
next week. We have to get our head
around that and face them head on.
BY FRANK DALLERES
Our lack of killer instinct cost us
against Australia, says Ashton
TWICKENHAM
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LONDON Wasps recovered from last
weeks defeat at Cardiff Blues to see
off Worcester Warriors 28-19
yesterday at Adams Park.
Tries from Simon McIntyre, Jack
Wallace and Charlie Davies saw
them past the Warriors to keep their
LV= Cup hopes alive.
Elsewhere a strong London Irish
side lost 22-15 at Leicester thanks to a
great kicking display from George
Ford. The young fly-half racked up 17
points in addition to Rob Andrews
try as Irish failed to capitalise on
Boris Stankovichs sending off.
Gloucester No8 Ben Morgan scored
a hat-trick as they trampled London
Welsh 46-20 on Saturday.
Harlequins battled past Bath 21-12
on Friday night with five penalties
from Ben Botica and two more from
youngster Louis Grimoldby.
Saracens suffered a narrow loss
away to Sale Sharks, Rob Millers late
penalty edging out Mark McCalls
men in a 25-23 win.
The LV= Cup. Watch the next
generation break through. For tickets and
info, visit www.lv.com/rugby
Wasps bounce
back with win
over Worcester
BY JAMES PHILLIPS
WORLD Cup-winning former
England boss Sir Clive
Woodward has laid the blame for
Saturdays defeat to Australia
squarely at the feet of head coach
Stuart Lancaster.
Woodward criticised England
for choosing line-outs and tap-
penalties ahead of kickable
chances in the closing stages of
the 20-14 loss, and depicted that
flawed decision-making as a
failure of coaching.
The biggest thing is trying to be
smart ahead of the game. If on a
Thursday you gave the players the
situation you are 20-14 down
with 22 minutes to go, you have a
penalty, the ball is slow, what do
you do? the right decision is to
kick for goal and reduce the
points to just three.
If you go for the line-out or go
for the try you have to score and if
you dont you give huge
momentum to the defending
team. The key is not making
decisions in the heat of battle, it is
getting these things in players
heads before you go on the pitch,
so you know what is going to
happen in every single situation.
That is the secret to coaching.
Woodward said failing to beat
an under-strength Australia was a
big chance lost. There is a big
opportunity for Stuart Lancaster
to make his mark this week, he
added. He has to turn it around
and go into South Africa, when
theyll be underdogs, to see if they
can put in a performance.
Ashton could not add to Tuilagis try as England failed to build on last weeks win
John Inverdale: Page 33