Venture capitalist pledges

75m to Oxford scholarship

A PROMINENT British venture
capitalist and his wife yesterday
pledged 75m to help low-income
students pay for Oxford University
tuition.
Cardiff-born Michael Moritz,
chairman of Silicon Valley fund
Sequoia Capital, has kept up his
reputation for investing in
promising start-ups by
contributing the first 75m to a
fund that will provide up to
11,000 per year to students from
low-income families.
Moritz, who joined Sequoia in
1986 after working as a journalist
in Time magazines San Francisco
office, is known for his early
investments in many prominent US
tech firms, with LinkedIn, PayPal
BY ELIZABETH FOURNIER
and Yahoo in the firms current
portfolio. He also sat on the board
of Google until 2007, having
provided $12.5m of capital to the
then-fledgling internet search
engine in 1999 bagging a place on
the board and a 10 per cent stake in
the firm, which floated with a
market cap of $23bn in 2006.
His wife, Harriet Hayman, is a US
journalist and novelist.
A Christ Church, Oxford alumni,
Moritzs donation will be matched
by the University, helping to build a
scholarship fund worth up to
300m to support disadvantaged
students through their degrees.
Moritz-Heyman Scholars, as they
will be known, will also get
financial support during holidays,
and offered places on internship
programmes to boost their career
prospects.
Army drafted in as security firm fails to hit recruitment target
GOOD LUCK TO EVERYONE RUNNING IN TODAYS RACE AND THANK YOU
FOR HELPING TO RAISE VITAL FUNDS FOR SEEING IS BELIEVING
A CHILD GOES BLIND EVERY MINUTE - 60% OF THEM WILL DIE WITHIN A YEAR
HELP US TO HELP OTHERS SEE BY DONATING 5 TEXT: SCBR12 5 TO 70070
Seeing is Believing is a collaboration between Standard Chartered Bank and International Agency for Prevention of Blindness (IAPB). International Agency for the Prevention of Blindness (IAPB) is a registered UK charity. Registered Charity No. 1100559 (England & Wales)
Michael Moritz is chairman of US venture capital firm Sequoia Capital
WITH just over two weeks until the
official Olympic opening ceremony,
security firm G4S was last night forced
to admit it may not be able to supply
the 10,000 staff it has been contracted
to deliver for the Games.
In a highly embarrassing
admission for the firm, which is
expected to be charged a penalty fare
per venue per day if it fails to meet
agreed staffing levels, it said it had
encountered some issues in relation
to workforce supply.
The London Olympic organising
committee (Locog), the body
responsible for staging the Games,
last night refused to comment on
the potential fines G4S faces if it
does not fulfil the terms of its
contract.
Fears over G4S ability to deliver
sufficient staff has forced the
government to step in, drafting in
3,500 soliders in a last-ditch attempt
BUSINESS WITH PERSONALITY
LONDON2012
days to go
WE LOOK AT THE CROWDFUNDING PHENOMENON
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LORD MAYOR: THE CITY MUST GET ITS HOUSE IN ORDER
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BY KATIE HOPE to secure safety at the Games venues.
A Home Office spokeswoman last
night said it had agreed to help G4S
by revising the level of military
support.
Defence secretary Philip
Hammond will announce more
details about the extra
troops today, the Home
Office said.
Armed forces, who
were already
providing 13,500 staff
for the Games, could
now total 17,000 7,000
more than are currently
serving in Afghanistan.
G4S, which is receiving
284m for its role in
charge of overall
Olympic venue
security, said
the task of
providing
sufficient
security
staff, responsible for searching and
checking people going into the
stadiums and other venues, had
been an unprecedented and very
complex security recruitment,
training and deployment exercise.
Labours shadow Olympics
minister Tessa Jowell said there was
clearly a serious problem.
We must know whether this
affects Army commitments
elsewhere, she added.
Locog last night denied that the
last-minute drafting in of
additional military staff would
impact overall security at the
Games. In a statement, it said the
security plans were big and
complex, but we have the
best brains in the
security business
working on this.
FTSE 100 5,664.48 +0.41 DOW 12,604.53 -48.59 NASDAQ2,887.98 -14.35 /$ 1.55 unc / 1.26 unc /$ 1.22 -0.02
G4S chief executive
Nick Buckles faces
criticism
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
Protests meet 65bn of
extra austerity in Spain
THOUSANDS of protesting miners
clashed with police in Madrid yes-
terday as Prime Minister Mariano
Rajoy announced a fresh round of
spending cuts and tax rises,
designed to shore up the govern-
ments troubled financial position.
Meanwhile the government gave
more detail on its planned bank
bailouts, reassuring investors that
loans from the European Stability
Mechanism will not be senior to pri-
vate loans and outlining the sectors
return to independence.
Rajoy announced another 65bn
(51.3bn) of austerity measures,
including a three percentage point
hike in VAT, taking the sales tax to
21 per cent, as well as cuts to unem-
ployment benefits and another
round of cuts to local government
funds.
The measures overhaul the budget
plan which include 48bn of sav-
ings over the year, as they did not go
far enough to close the govern-
ments sizeable budget deficit.
The deficit hit 8.9 per cent of GDP
last year and the European
Commission has set the govern-
ment targets of 6.3 per cent for
CBI chief attacks lack of growth
The head of Britains biggest employers
group has strongly criticised the
government for the really disappointing
implementation of its growth plan,
asking: Where are the diggers on the
ground? John Cridland, director-general
of the CBI, said members of the
government appeared to be dazzled in
the headlights, resulting in a lack of
progress on its growth plan seven months
after George Osborne set out his plan to
stimulate Britains sluggish economy.
US slashes corn production forecast
The worst drought in the US in 25 years
has wrought havoc on the countrys most
important crops, putting the global
economy at risk of its third food inflation
shock in five years.
Fund risk on convertible bond issues
An important area of global funding for
companies is at risk of drying up as
issuances of convertible bonds hit new
lows. The bonds accounted for nearly half
of funds raised in equity capital markets
at the peak of their popularity nearly a
decade ago.
Heron designer back in the City
The Times understands that WR Berkley
has assembled a site near the Lloyds of
London building and has appointed the
architect Kohn Pedersen Fox to design a
skyscraper.
GSK beats world leader in drug trials
A daily antiretroviral drug for treating HIV
developed by GlaxoSmithKline has beaten
a key rival in clinical trials, giving the
company access to a market worth 2
billion a year.
Strong pound dents exports
Britain's export-led recovery has been
jeopardised by the appreciation of the
pound to a three-and-a-half year high
against the euro, undoing the advantages
gained by slashing interest rates and
launching quantitative easing.
Virgin Galactic spaceship in UK debut
Sir Richard Branson says 529 people have
put down deposits to travel into space
with Virgin Galactic as the company
unveiled its aircraft in the UK for the first
time.
Cartier sees slowdown in China
Cartier, the luxury jewelry brand, is seeing
slowing demand for its high-end watches
in China, the driver behind the recent
boom in luxury watches, its chief
executive said yesterday.
United Technologies nears deal
United Technologies is likely to settle on a
private-equity buyer for two units of its
Hamilton Sundstrand subsidiary in the
coming weeks, a deal that could raise
between $3bn and $4bn, people familiar
with the matter said.
SENIOR officials at the US Federal
Reserve considered voting for more
quantitative easing (QE3) last
month, its minutes revealed last
night, yet investors across the pond
remained unimpressed.
Despite a number of the Federal
Open Market Committee (FOMC)
appearing to lean towards
expansion of its balance sheet,
stocks in New York fell while the
dollar hit a two year high against
the euro.
The minutes do not on the
surface suggest a sizable body of
support for further immediate
action, although it should be borne
in mind that the comments were
made prior to recent data
disappointments, said Peter
Buchanan of CIBC World Markets.
Yet the minutes appeared fairly
dovish. A few members expressed
the view that further policy
stimulus likely would be necessary
to promote satisfactory growth in
employment and stop inflation
falling below target, it said.
Meanwhile US benchmark 10-
year Treasury yields fell to
near-record lows yesterday after a
$21bn sale of new notes saw huge
demand. The unexpectedly strong
sale priced at a record auction low
yield of 1.46 per cent due to the
debts safe haven status among
economic concerns elsewhere.
Traders remain
unconvinced by
Feds QE3 talk
Spain is expected to slow down its government spending as it battles a debt crisis
4
NEWS
BY JULIAN HARRIS
BY TIM WALLACE
To contact the newsdesk email news@cityam.com
C
ORPORATE blunders are like
buses: they arrive all at once. The
latest involve G4S, which doesnt
know whether it will be able to
hire enough guards for the Olympics,
forcing the army to step in. The O2
mobile network suffered some
outages yesterday. Britvic recalled
some of its drinks. All of this follows
the Libor price fixing scandal, which
has engulfed Barclays and many
others; the news that HSBC is about
to be hit by a massive fine in the US
for not doing enough to comply with
money laundering rules; JP Morgans
major trading loss; and
GlaxoSmithklines $3bn fine.
Clearly, it is not just banks that mess
up. Some of these stories especially
the Libor madness were caused by
despicable behaviour; it is vital that
the UK cracks down pitilessly on cor-
porate wrongdoing. In other cases
EDITORS
LETTER
ALLISTER HEATH
Supporters of capitalism must help expose blundering firms
THURSDAY 12 JULY 2012
such as G4S, O2 and Britvic errors or
bad luck seem to be the problem. It is
vital that government contracts be
properly designed to ensure that any
failure to deliver is met by steep fines;
G4S must pay for its errors. More
broadly, there is in fact no evidence
that there has been an increase in cor-
porate malfeasance or corporate
errors but the problems that go
unnoticed during bubble years, when
everybody is drunk on cheap money,
always emerge in the aftermath of a
recession. Scrutiny is always more rig-
orous when the times are tough.
Despite all of these depressing fail-
ings, it is important not to lose faith
in capitalism and also to remember
why those of us who support the free
market do so. The case for capitalism
is not based on the assumption that
humans are flawless or that markets
are perfect. Anybody who believes
that has spent too much time con-
structing meaningless mathematical
models. The real argument is simply
that proper, real, unsubsidised and
undistorted capitalism is less bad
than any other system at harnessing
human beings and giving them the
motivation and ability to do great
things. The forces inherent within
competitive capitalism are better at
weeding out wasteful and incompe-
tent companies and better at reward-
ing good ones. That is why it is key
ished; that is the states job. Corporate
crime is no proof that capitalism
doesnt work, merely a reminder that
policing is an essential part of it.
Supporters of capitalism need to be
unambiguous in their condemnation
of corporate malfeasance. They
should back a real crackdown on
white collar crime. They must help
expose incompetence. They need to
advocate ending corporate welfare
and state guarantees that encourage
excessive risk, especially in finance.
They need to slam government con-
tractors that fail to deliver, and make
sure that proper safeguards are put in
contracts. But the fact that some
firms have disgraced themselves is no
reason to give up on the system that
has delivered prosperity for billions.
that new resolution procedures are
adopted as soon as possible to allow
banks to go bust and be wound down
in a controlled manner, with bonds
converted into equity, to protect tax-
payers and depositors and to ensure
all firms and their management face
the full discipline of the market.
Companies are collections of
human beings; and humans can be
ignorant, greedy and weak. They cer-
tainly make plenty of mistakes in
fact, tens of thousands of companies
get it so wrong that they go bankrupt
every year. That is a sign of the sys-
tems strength, not of its weakness.
Capitalism works because it deals
with failure better than communism.
Angry mobile phone customers can
change network. Crucially, the mar-
ket economy relies on a strict enforce-
ment of the rule of law. Anybody
lying or cheating needs to be pun-
2012, 4.5 per cent for 2013 and
2.8 per cent for 2014.
Markets welcomed the
new plans, sending the
governments 10-year
borrowing costs down
0.234 percentage
points, though
they remain
dangerously
high at 6.577
per cent.
Meanwhile the government pub-
lished a memorandum of under-
standing which gave more detail on
the planned 100bn bank bailout.
The first tranche of the bailout is to
be distributed this month, with a full
audit of banks to be complete by
September and banks which are not
deemed to be viable resolved.
The bailout is likely to represent a
transfer of sovereignty from Spain to
the EU, with control passing from the
government to the European
Commission, although the exact split
of powers is not yet certain.
PM Mariano Rajoy is under EU
pressure to cut the deficit further
The new jobs website for London professionals
CITYAMCAREERS.com
WHAT THE OTHER PAPERS SAY THIS MORNING
A SENIOR former judge has been
hired among a handful of
noteworthy new recruits at the
Serious Fraud Office (SFO) as the
fraught watchdog attempts to
reverse its recent fortunes.
His Honour Judge Geoffrey Rivlin
QC has signed on for a two-year role
advising David Green QC, the FSOs
new director, for an annual salary
of 100,000.
Green, who is just three months
into the job, said the new
appointments are part of a direct
response to the recent reputational
blights plaguing the SFO, which
include a string of mistakes in its
handling the Tchenguiz brothers
investigation.
This is a unique appointment it
is the first time a prosecutor has
appointed a very senior judge as part
of its top management, an SFO
spokesperson told City A.M. It will
help us bring quality assessments to
the cases we work on.
The other recruits announced
yesterday to SFO staff include new
general counsel Alun Milford,
currently the CPS head of organised
crime, and incoming head of policy
Kristin Jones, formerly employed by
the Attorney General.
The SFO will also create four new
casework divisions led by senior civil
servants including Matthew
Wagstaff, head of a fiscal fraud
division at the CPS, and Satnam
Tumani, already on the SFO staff as
its head of anti-corruption. The other
two positions are still to be filled.
SFO bags top
judge on staff
BY LAUREN DAVIDSON
FORMER Barclays operations chief
Jerry del Missier will appear in front
of the Treasury select committee on
Monday afternoon, it was
announced yesterday.
He quit the firm last Monday after
just 11 days in the job, having taken
responsibility for his role in the
Libor-fixing scandal that saw his
long-term colleague Bob Diamond
also resign from the bank.
Other witnesses scheduled to
appear at the same hearing include
Lord Turner, the head of the
BY JAMES WATERSON Financial Services Authority, as well
as the regulators head of its
prudential business unit, Andrew
Bailey and its acting director of
enforcement and financial crime,
Tracy McDermott.
Meanwhile a banking analyst
claimed yesterday that Lloyds
Banking Group could face a bill of
1.5bn relating to the Libor-fixing
scandal. Liberum Capitals Cormac
Leech said the potential litigation
liability is likely to extend well
beyond each banks own customers,
leaving Lloyds open to substantial
claims from class action lawsuits.
INTERDEALER broker ICAP will
bring its cost-cutting programme
forward in a bid to shore up its prof-
its, the firm said yesterday.
In an attempt to placate share-
holders ICAP said it will aim to cut
50m of annual costs by March
2013, rather than March 2014 as pre-
viously announced.
Around a hundred staff have
already left the firms London and
New York offices following last
months round of redundancies.
Meanwhile chairman Michael
Spencer insisted that his company
will not be dragged into the Libor-
fixing scandal, despite suspending
two traders while the investigation
continues.
We, like the majority of other
brokers, I would assume, were
approached by regulators a while
ago to ask us to investigate and look
into our business, particularly in
relation to some clients, the ICAP
chief said. We thought it appropri-
ate to put a couple of staff on
administrative leave as a result of
information that came out.
ICAP revealed that revenue for
the first quarter was down nine per
cent compared to last year, which it
attributed to issues including the
Eurozone crisis, the Queens Jubilee
and regulatory uncertainty.
ICAP reassures
over impact of
Libor scandal
BY JAMES WATERSON
ALMOST every bank which was dan-
gerously undercapitalised in February
has now met regulatory targets, the
European Banking Authority (EBA)
revealed yesterday.
Five months ago the EBA warned
that 31 banks required 76bn (60bn)
between them to meet the nine per
cent core tier one capital target.
The updates from June show an
aggregate increase of 94.4bn, leaving
27 of those banks either above that
level or with advanced plans to reach
the required level.
Of the remaining four banks,
Austrian Volksbank AG, Franco-
Belgian Dexia and German WestLB
AG were all in restructuring pro-
grammes back in February, and
Spains Bankia has gone into a rescue
programme since then.
Our work in strengthening the cap-
ital base of banks is proceeding to
plan, said EBA boss Andrea Enria.
European banks are now in a
stronger position, which should sup-
port lending to the real economy and
Europes banks
hit regulatory
capital targets
BY TIM WALLACE
gradually restore banks access to mar-
ket funding.
The vast majority of the improve-
ment came from retained earnings,
new equity issuance and liability man-
agement, which accounted for 71.6bn
95 per cent of the initial shortfall
and 76 per cent of the total gain.
As a result, the EBA does not believe
the banks push to improve the capital
ratios hit lending to households and
businesses, and did not lead to fire
sales of assets disposal of assets
accounted for 8.1 per cent of the
improvement, and led to a reduction
of 90bn in risk-weighted assets, or 1.8
per cent of the total in September
2011.
But not all of the 27 managed to
reach their capital targets alone
seven are relying on government back-
stop measures to reach the nine per
cent level.
Meanwhile Slovenian bank Nova
KBM reached the nine per cent level
before recognising further credit risk
problems, and has submitted further
plans to meet the target.
THURSDAY 12 JULY 2012
5
NEWS
cityam.com
EBA boss Andrea Enria praised the banks from across Europe for their efforts since February
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HSBC braces for $1bn US penalty
BANKING giant HSBC plans to
acknowledge and apologise for
failing to spot and deal with
money laundering within the
bank during a US Senate panel
hearing next week, according to
an internal memo sent by its chief
executive.
It is right that we are held
accountable and that we take
responsibility for fixing what
went wrong, chief executive offi-
cer Stuart Gulliver said in the
note sent to staff.
In the note, Gulliver admitted
that the banks anti-money laun-
BY KATIE HOPE dering controls meant to prevent
terrorists and other criminals
using its services should have
been stronger.
We failed to spot and deal with
unacceptable behaviour, Gulliver
told staff.
Gullivers mea culpa marks
another dark day for banks, com-
ing just over a week after Barclays
chief executive Bob Diamond was
forced to resign over its role in fix-
ing the Libor rate at which banks
lend to one another.
The US Senate Permanent
Subcommittee on Investigations
has been investigating HSBC for
months as part of an effort by
Congress to probe shadowy money
flows.
Last month ING, the Dutch
bank, paid $619m to settle accusa-
tions it helped Iranian and Cuban
companies move billions of dollars
through the US financial system in
violation of US sanctions.
Some analysts have suggested
HSBCs fine could be far higher
potentially as large as $1bn.
HSBC is also under investigation
by the US Securities and Exchange
Commission and the Justice
Department. Those probes are
examining whether HSBC was vul-
nerable to illicit funds moving
through the bank.
Barclays Del Missier to face
MPs alongside regulators
Erste Group Bank
Raiffeisen Zentralbank
Osterreich
Marfin Popular Bank
Bank of Cyprus
BNP Paribas
BPCE
Societe Generale
Deutsche Bank
Commerzbank
DZ Bank
Norddeutssche Landesbank
Ladesbank Hessen-Thuringen
Unicredit
Banca Monte Dei Paschi De Siena
Banco Popolare
Unione Di Banche Italiane SNS Bank
DNB Nor Bank
Caixa Geral De Depositos
Banco Comercial Portugues
Espirito Santo
Banco BPI
Nova Ljubljanska Banka
Santander
BBVA
Caja de Ahorros y
Pensiones de Barcelona
Banco Popular Espanol
SPAIN
SLOVENIA
AUSTRIA
FRANCE
NETHERLANDS
GERMANY
NORWAY
PORTUGAL
CYPRUS
ITALY
SHARES IN BURBERRY fell more than
seven per cent yesterday after the lux-
ury fashion group blamed a tougher
economic environment and a shift in
US wholesale distribution for a slow-
down in first quarter sales.
The 156-year-old British brand, best
known for its signature check
designs, said revenue rose 11 per cent
to 408m in the three months to 30
June.
That was down from growth of 15
per cent in the fourth quarter and
missed analyst forecasts of 14 per
cent. Retail sales were up six per cent
on a like-for-like basis, below expecta-
tions of eight per cent.
Chief executive Angela Ahrendts
described the firms performance as
robust but said the growth in rev-
enue was delivered against a more
challenging external environment.
Burberry was a stock market darling
last year, lauded for its exposure to
the fast-growing markets in Asia and,
in particular, China.
But its shares have fallen 16 per cent
over the last three months over fears
that Europes debt crisis and slowing
growth in some emerging markets
like China, will catch up with the lux-
ury firm.
Stacey Cartwright Burberrys chief
financial officer, yesterday insisted
that China still presented huge oppor-
tunities for growth, despite retail rev-
Growth slowing
BY KASMIRA JEFFORD
enue from the country dropping to
the mid-teens from about 30 per
cent last year.
We still see enormous opportunity
in China, where the bulk of our stores
were inherited from our former fran-
chisee and they have on average 2,000
square feet per store, she said.
Cartwright said Burberry could have
as many as 100 stores and planned to
increase the average store space to
3,500-4,000 sq ft at a minimum.
Overall, sales growth at so-called
mainline stores in the UK, France,
Germany and the Greater China
region was strong in the period,
Burberry said.
BETHANY HOCKING
INVESTEC
Burberry is ag-
ging a more
challenging external
environment and we
expect the shares to suf-
fer due to this comment
and the small miss. We
note, however, that full
year guidance appears
unchanged and the rst
quarter is Burberrys smallest quarter. This year
is also against the toughest comparatives (com-
paratives progressively weaken through the
year)... We are happy to remain long-term buy-
ers of the stock.

ANALYST VIEWS
SHOULD THE SLOWDOWN IN BURBERRYS SALES
BE A CAUSE FOR CONCERN? Interviews by Kasmira Jefford
THURSDAY 12 JULY 2012
6
NEWS
cityam.com
The new
jobs website
for London
professionals
C
I
T
Y
A
M
C
A
R
E
E
R
S
.
c
o
m
KATE CALVERT
SEYMOUR PIERCE
Despite the lower
than expected
retail comparable sales
growth number, we are
maintaining our 2013 pre-
tax prot forecast of
442m as comparables are
weaker in the second half.
The lack of an upgrade
means we do expect the
shares to be weaker (yesterday) but we see this as
a buying opportunity as we consider Burberry a
strong long term growth story and with signicant
geographical and product mix opportunities as
well as operational leverage to come.

RICHARD HUNTER
HARGREAVES LANSDOWN
Burberryshares
have fallenfoul of
great expectations, as
robust sales growthcame
inshyof analyst estimates.
Ina strange parallel tothe
Chinese economy, where
the slightest slowdownin
growthlters throughtoa
dragoninvestor senti-
ment, Burberryis beingtakeninisolation. If set
against M&Ss update onTuesday, for example, the
numbers are ina different league, as are the
prospects. But the shares valuationis quite full and
weight of expectationis heavy.

Burberry Group PLC

5Jul 6Jul 9Jul 10Jul 11 Jul
1,200
1,250
1,300
1,350
1,400 p 1,189.00
11Jul
7
at Burberry
NEWS
Korea and Italy were among the
weaker markets along with the US,
where the group continues to
phase out wholesale distribution to
smaller department stores.
The group opened six mainline
stores including its fourth store
in Brazil and Russell Street in
Hong Kong and is set to reopen
two large flagships in London
and Chicago later this year.
It plans to spend around 180-
200m this year, with about one
third of it going towards larger for-
mat stores such as its new Regent
Street store opening in the
autumn.
Burberry boss
Angela Ahrendts
(inset) says China
still offers
opportunities
THORNTONS reported a rise in fourth quarter
sales yesterday as it cashed in on demand for all-
things British with its Best of British range of
London bus and Union Jack-themed chocolates.
The confectionary retailer, which is cutting 180
stores to save costs, said total sales for the three
months to the end of June were 24.7m, up eight
per cent compared with a year earlier. It said full-
year profits will be in line with expectations.
Like-for-like sales at its owns stores rose 0.7 per
cent while sales of its branded goods sold through
other retailers such as supermarkets more than
tripled to 9.3m in the nine-week period. But sales
at franchises slumped 24 per cent due to Clinton
Cards collapse, which ran 46 outlets.
Thorntons treated to
rise in quarterly sales
BY KASMIRA JEFFORD
IN BRIEF
Anna Ford to step down from Sainsburys board
nFormer BBC newsreader Anna Ford is to step down as
a non-executive director at Sainsburys after six years in
the role, the supermarket said at its annual general
meeting yesterday. Ford joined Sainsburys in 2006
and headed the retailers corporate social responsibility
committee. She will step down in December.
Tescos Higginson to join Poundland as chairman
nPoundland, the discount chain, has hired Tesco execu-
tive Andrew Higginson as chairman. Higginson, who was
group finance and strategy director at Tesco for 11 years
before taking on the role of head of retailing services offi-
cially retires from the grocer in september. He was also
appointed chairman of N Brown, the catalogue retailer,
last week.
AIRLINES expressed dismay yesterday
that the government could push
back its consultation on increasing
airport capacity until the autumn.
It looks like the government has
stumbled before it has started, said
British Airways owner IAG. While
we prevaricate, other countries
storm ahead. Every delay is another
step backwards for Britain.
Virgin Atlantic also weighed in,
calling the policy long overdue and
arguing that competitors will
continue to race further ahead.
The BCC said the reported delays
beggar belief and will cause the UK
to lose both investment and jobs.
Airline fury as
growth halted
BY LAUREN DAVIDSON
THURSDAY 12 JULY 2012
9
NEWS
cityam.com
VODAFONE was delivered a blow yes-
terday when investor advisory body
Pirc urged shareholders to vote
against the telcos remuneration
report.
But the telecoms giant could still
escape the so-called shareholder
spring which has scalped some of
Britains top companies, as the ABI
and Institutional Shareholder
Services (ISS) both supported
Vodafones pay deal.
Looking ahead to Vodafones annu-
al general meeting on 24 July, Pirc
called the companys executive pay
excessive in both absolute and rela-
tive terms.
Vodafone chief executive Vittorio
Colao was paid 3m in salary, bonus
and other payments last year, plus a
whopping 11m worth of shares
which paid out earlier this month.
While Pirc conceded that
Vodafones remuneration is highly
geared towards variable pay, it said
neither the lower nor the upper per-
formance targets are sufficiently
challenging.
The opposition comes in stark con-
BY LAUREN DAVIDSON
trast to the ABIs report, which last
week issued Vodafones pay deal with
an inoffensive blue top, recom-
mending that shareholders vote in
favour of the proposed remuneration.
ISS also backed the proposed pay
packages, saying no major concerns
have been identified.
The telecoms giant returned
10.2bn to shareholders last year,
making it the top dividend payer in
the FTSE 100.
In separate news, Vodafone
announced late last night that it will
acquire New Zealand-based
TelstraClear for NZ$840m (430m),
adding the countrys second largest
fixed operator to its portfolio.
Vodafone Group PLC
5Jul 6Jul 9Jul 10Jul 11 Jul
180
179
182
183
181
184
p 184.05
11Jul
Vodafones pay
deal opposed
by adviser Pirc
RECRUITER Hays yesterday said its
quarterly net fees rose just two per
cent in its fourth quarter as fears
over the global economy hit
clients.
The rise was at the bottom end
of analyst expectations.
Net fees in Britain and Ireland
plunged nine per cent due largely
to the number of job cuts in the
banking sector.
Hays, which specialises in
BY CITY A.M. REPORTER
placing workers in accountancy,
construction and IT jobs, said the
overall net fee rise in the three
months to the end of June, was
helped by a strong performance in
Germany which offset the impact
of the Eurozone crisis on its
largest division continental
Europe and the rest of the world.
Net fees grew one per cent in
Asia Pacific as tough banking
markets in Asia and soft
conditions in parts of Australia
crimped growth.
Hays sees UK fees plunge as
job cuts in banking sector hit
JP MORGAN is expected to reveal details of millions of dollars worth of clawbacks in stock
options from its top executives tomorrow. Chief executive officer Jamie Dimon, who earlier
this month said clawbacks would be likely, will present the firms second quarter results, as
well as confirm the extent of its trading loss which stemmed from bets on credit derivatives.
JP MORGAN PLOTS STOCK OPTION CLAWBACKS
EU citizens have barely made use
of their right to live and work in
other countries despite ongoing
economic distress and
stratospheric youth
unemployment, according to
Eurostat data released yesterday.
Out of a population of more
than half a billion, just 12.8m EU
citizens live in other member
states only 2.5 per cent of the
population.
This is despite youth
unemployment of over 50 per
cent in Greece and Spain, and
dismal economic prospects as
expressed in business confidence
EU citizens refuse to get on
their bikes despite downturn
BY BEN SOUTHWOOD
and sectoral surveys.
The report also draws attention
to the generally small number of
immigrants in the EU, making up
just 4.1 per cent of the overall
population.
The data showed significant
contrasts across this group:
whereas just 3.9 per cent of the UK
population were citizens of
countries outside the EU, some 5.3
per cent of the inhabitants of Italy
were, as were 5.6 per cent of
German subjects and 7.2 per cent
of those living in Spain.
This came as Turkey reportedly
declared that it was visa-free travel
with EU members it desired
rather than membership.
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EUROPE is in crisis and the UK in
recession, but top analysts at
Goldman Sachs have set aside those
distractions to focus on the really big
story of the year the London
Olympics.
British athletes should bring home
a huge 30 gold medals, up from 19 in
2008, according to the economists
forecast. They studied factors
influencing results at the previous 10
Games and found Britain should
come third in the rankings.
There is some uncertainty around
that forecast but, assuming a normal
distribution, the statisticians are 95
per cent sure the UK will gain
between 28 and 33 gold medals, and a
total of between 61 and 70 medals.
The backing of the home crowd is
one advantage, giving a 54 per cent
boost to the host nation. But the UK
also benefits from its status as a rich
country, a history of political stability
and high levels of technology.
Goldman: Gold
rush for Team
GB at Olympics
S
HAKESPEARE may have
described lawyers as base,
proud, shallow, beggarly, three-
suited, hundred-pound, filthy,
worsted-stocking knaves in King Lear.
But today, City law firm Eversheds
shows that it is not bearing any
grudges with the famous old bard by
launching a sponsorship programme
at the Old Vic, the theatre near
Waterloo that often stages
Shakespearean classics.
The law firm is supporting
the Old Vic New Voices
Twenty School, a talent,
community and education
programme which aims to
support theatrical talent,
inspire young people and
open up theatre to new and
diverse audiences.
The Old Vic is
one of the best-
known and best-
loved theatres in the world.
Since The Old Vic Theatre Company
launched in 2004 with Kevin Spacey as
artistic director, almost two million
people have passed through its doors.
As important to The Old Vic as the
work produced on stage are the
ground breaking initiatives with
schools, young talent and the local
community through the Old Vic New
Voices programme.
Eversheds has a long history of aid-
ing worthwhile causes. The firm
sponsors SportsAid, a charity
which aims to help the next gen-
eration of British athletes suc-
ceed. Its own Eversheds Unlocked
programme aims to encourage
students with academic potential
at state schools realise the possibili-
ty of working in law.
Kevin Spacey is artistic
director of the Old Vic
Got A Story? Email
thecapitalist@cityam.com
11
cityam.com
cityam.com/the-capitalist
THECAPITALIST
ABERDEEN Asset Managements
chief executive Martin Gilbert tees
off in the Pro-am golfing
tournament ahead of the Scottish
Open yesterday.
The pro-am game preceded The
Aberdeen Asset Management
Scottish Open which begins today at
Castle Stuart Golf Links, Inverness.
The 2.5m four-day European
Tour tournament finishes on
Sunday. A host of the worlds top
players are in attendance including
defending champion Luke Donald,
Phil Mickelson, Martin Kaymer, Louis
Oosthuizen and Scotlands own Paul
Lawrie.
This is our first year as title
sponsor of the Aberdeen Asset
Management Scottish Open and we
are delighted to be here on the
stunning Castle Stuart course, said
Gilbert yesterday, hoping beyond
hope that the weather might
improve.
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GILBERTS FIRST SWING IS PAR FOR THE COURSE
GOLDMAN COMMENT: Page 20

THURSDAY 12 JULY 2012
13
NEWS
cityam.com
THE GO-AHEAD for the $53bn
(34bn) mega-merger between min-
ing giant Xstrata and commodities
trader Glencore has been delayed
until at least September, it was
announced yesterday.
Investors had originally been sched-
uled to vote on the deal today but
Xstrata changed the schedule last
week in an attempt to smooth rela-
tions with shareholders who are
fighting for better terms and
reduced payouts to directors.
The vote will now go ahead on 7
September, providing Glencore six
weeks to come to an agreement with
rebel shareholders including Qatar
Holding, who own 11 per cent of
Xstrata.
The investment vehicle, an arm of
the gulf states sovereign wealth
fund, is resolute in its demand for
3.25 new Glencore shares for every
Xstrata share held, up from the 2.8
shares that is currently on offer.
Under takeover rules Glencore has
until two weeks before the vote 24
Xstrata delays
vote on merger
with Glencore
BY JAMES WATERSON
August to alter the terms of its offer.
Although the shareholder vote has
been delayed Xstrata continues to
press ahead with clearing regulatory
hurdles and still expects the deal to
complete in the fourth quarter.
The firm has already been forced to
alter proposals that would have seen
top managers at the mining group
given substantial retention deals that
were not linked to performance.
Glencore also announced yesterday
that it will buy the it would buy
Vales European manganese ferroal-
loys business for $160m, moving into
the production of a key steelmaking
ingredient.
Xstrata PLC
5Jul 6Jul 9Jul 10Jul 11 Jul
840
860
870
850
810
830
820
p
839.00
11Jul
SHARES in soft drink maker
Britvic fell as much as 17 per cent
yesterday, after it warned that the
cost of product recalls announced
last week could hit 25m.
The soft drinks producer
recalled all bottles of Robinsons
Fruit Shoot Regular, Hydro and
Low Sugar after the childrens
drinks were hit by
manufacturing flaws
following a recent and much-
hyped redesign, with safety
concerns raised over the
possibility of the cap
becoming partially or
fully detached.
The company said
yesterday: It is difficult
Britvic slumps as drinks maker
says recall may cost up to 25m
BY JAMIE SUTHERLAND
to be precise as to the full
financial implications given the
developing situation, but
suggested that the recall will cut
between 15m and 25m
from profit before tax
across the current and
next financial year.
The company also said
yesterday that poor
trading meant it expected
to deliver a result for the
current financial year that
is at the bottom end of
market expectations before
taking account of the impact
of the Fruit Shoot recall.
Shares closed down 13 per
cent.
Some Fruit Shoots have been recalled
U
PON nothing has so great and
diligent ingenuity been brought
to bear in all ages and in all
countries, except the most
uncivilised, as upon the invention of
substitutes for water. The great
American cynic Ambrose Bierce
wasnt writing about Britvics Fruit
Shoot brand, but he might as well
have been. Since 2000, the fruit
concentrate on its ingredient list has
persuaded parents that it offers a
healthy alternative to Adams ale,
while its candy-coloured bottles and
sugar/sweetener-laden contents have
given their children no reason to
disabuse them. In 2009, Hall and
Partners found that a bottle of Fruit
Shoot got swigged every 15 seconds.
Not any more. An initial UK recall
of regular Fruit Shoots on 1 July was
extended on 3 July to all brand
variants featuring the new spill-
proof Magicap. Yesterday, the soft
drink company announced that it
will be six months before full
production is resumed.
Britvic isnt exactly dependent on
Fruit Shoot, with five other core
brands in the UK. But the
disappointing news was capped by a
trading update that revealed the
sogginess of the whole market. Its a
rare recovery in waters popularity,
in which both emptier consumer
pockets and a washout of a summer
may be playing a part. In such arid
times for soft drinks, diversification
into Pepsi, 7UP, Robinsons, Tango
and J2O is little help. Predicted pre-
tax losses from the cap fiasco are
equivalent to 18 per cent of 2011
Ebitda, and poor trading will extend
the losses ahead. Still, by the time
the caps are fixed at least the
summer wont be an issue any more.
All of this goes to show that its
not enough to build a business on
serving an eternal human truth.
Few of us like to take our water
neat, but you cant turn demand
into profit without keeping on top
of supply issues as well.
performance. As previously
announced on 27 June, they will
now be paid in shares rather than
cash. This is, however, rather beside
the point.
The pay controversy was always a
subplot to the main storyline of the
troubled merger, which centres on
shareholders unhappy with the
terms they are being offered.
Notably Qatar Holding, with its
10.35 per cent shareholding in
Xstrata, is holding out for a better
exchange rate it wants 3.25 new
shares for old rather than 2.8. Any
changes in Glencores script will
have to be agreed two weeks before
the vote, so look for a cliffhanger in
late August.
Marc Sidwell is City A.M.s managing
editor
STUCK IN DEVELOPMENT HELL
The Glenstrata soap opera continues,
with its will-they/wont-they storyline
beginning to seem a little hackneyed.
The authors of the Eurozone crisis
surely ought to complain that their
classic kicking-the-can-down-the-road
motif is being borrowed without
permission. The announcement
yesterday that the big showdown has
been rescheduled for 7 September
may allow tempers to cool
somewhat, but without further
change to the offer on the table, it
risks only delaying the inevitable.
The announcement was
accompanied by detailed revisions
to the management incentive
awards, which respond to the
widespread complaints that the pay
deals had no connection to
BOTTOM
LINE
MARC SIDWELL
Kicking the soft drink bottletop down the road proves costly
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IN BRIEF
Primary Health closes 75m bond
nPrimary Health Properties, the
owner of more than 150 UK medical
centres, has raised 75m in its debut
retail bond offering, the latest in a raft
of firms tapping individual investors to
fund growth. PHP, which reached its
maximum target a week earlier than
expected is offering a 5.375 per cent
annual rate of return until July 2019.
Derwent buys Victoria office block
nDerwent London has snapped up
another property in Londons Victoria for
29.1m, giving the developer control of
most of an island site near the station
spanning almost 1.2 acres. The company
said yesterday it has agreed to buy the
freehold interest in Francis House, a
57,000 square feet office block on
Francis Street, which adjoins its existing
holdings at Greencoat & Gordon House
and 6-8 Greencoat Place.
Avanti sales above targets
nThe UK-based satellite company said
yesterday it has secured more than 11m
of capacity sales every month for the
past eight months, and so is still on
course to sell all the capacity of its
HYLAS 1 and HYLAS 2 satellites within
three and four years respectively of their
service launches. It expects total rev-
enues of 17.8m for the year to the end
of June, up from 6.1m last year.
LSE and Singapore trade bourses
n The London Stock Exchange has
signed an agreement with SGX, its
Singapore counterpart, to allow the
pairs largest stocks to be traded on
both bourses. LSE members will be
able to trade shares of the SGXs top
36 companies, while Singapore will be
able to buy and sell FTSE 100 shares.
Moneysupermarket earnings up in face of Google threat
MARKETING spending has fallen due
to deteriorating business confidence
and cost-cutting measures, according
to the latest IPA Bellwether report
released this morning.
Advertising budgets were hit by
weaker-than-expected sales and con-
cerns about the strength of the econ-
omy in the last quarter, with
executives confidence in their own
industries falling to -16.8 per cent,
and one in three saying they were
less bold about prospects than at the
start of the year.
The report, based on a survey of 300
British companies, estimated that
marketing spending fell in the last
quarter, with 23 per cent of compa-
nies reporting a budget reduction.
In total 22 per cent of firms sur-
veyed increased spending, meaning
there was a slight reduction overall.
Internet advertising bucked the
trend, especially in search engine
marketing, which saw a 7.4 per cent
rise since the previous quarter. Other
online advertising increased by 5.4
per cent and companies also spent
more on sales promotions in an
attempt to attract thrifty customers.
IPA cited the increased spending on
Ad spend drops
as morale crisis
hits businesses
BY JAMES TITCOMB internet advertising as a means to
quickly grow sales, especially in a
downturn when customers are partic-
ularly cost-conscious.
Executives were more bullish about
their own companys prospects than
the outlook in general, with a slight
increase in confidence.
IPA president Nicola Mendelsohn
said: With renewed concerns sur-
rounding the economy, in particular
the problems surrounding the
Eurozone, its not surprising the
signs are less encouraging.
Chris Williamson, who wrote the
report, said an upturn in business
optimism could soon feed through to
higher marketing spend, and the
Olympics should of course provide a
boost during the third quarter.
DO YOU USE AN E-READER?
Interviews by Jamie Sutherland
I still sometimes buy physical books, but I also
own a Kindle. I enjoy the convenience of it, but I
also like the look and feel of a book. I use both at home,
but I use my Kindle more when Im travelling its just
more convenient. When I go on holiday, Im armed with
my Kindle it reduces the number of books I have to carry.
These views are those of the individuals above andnot necessarily those of their company
DAVID KING
MAVEN

BY JAMES TITCOMB
EBOOK sales have jumped by 70 per
cent at Bloomsbury, the publishing
house announced yesterday, as the
company heralded a seismic shift
in publishing.
The rapid rise in year-on-year
digital sales for the three months to
June means that the publisher now
sells more ebooks than hardback
editions in America.
Print sales fell by two per cent
compared to last year, but were easily
offset by digital market growth.
Chief executive Nigel Newton said
that ebook sales have continued to
grow at a rapid rate and that
Bloomsbury was well placed to
take advantage of this seismic shift
in the book industry.
The Harry Potter publisher said
digital sales of childrens and young
adult books were now growing
faster than those of adult ebooks.
Bloomsbury was quick to enter
the digital market, having
converted much of its catalogue to
ebook form several years ago.
Total ebook sales increased by 54
per cent in the UK last year, and
now make up eight per cent of the
total book market, driven by the
popularity of e-readers such as
Amazons Kindle device.
CITYVIEWS
Bloomsbury Publishing PLC
5Jul 6Jul 9Jul 10Jul 11 Jul
114
116
117
115
p
115.00
11Jul
COMMUNICATIONS firm RLM
Finsbury has topped the league
table of PR advisers by deal value,
according to research released
yesterday.
Data provider Mergermarket
says the company worked on
European M&A deals worth
$95.6bn (61.4bn) in the first half
of 2012, more than any other PR
agency.
In total the firm, which is part
of Sir Martin Sorrells WPP group,
was involved in 34 transactions,
including Glencores massive bid
for Xstrata and GDF Suezs
acquisition of International Power.
Close behind was rival London-
RLM Finsbury is top PR firm for
European M&A activity in 2012
BY JAMES WATERSON
based outfit Brunswick, which
worked on deals worth $92.3bn
but this was spread across 64
transactions.
The $53bn Glencore-Xstrata
merger is so large that it allowed
Aura Financial and Stockwell
Communications to make the top
five on the basis of that deal alone.
Bloomsbury sees ebook sales
surge by 70pc in market shift
GOVERNMENT consultancy firm
Booz Allen Hamilton said
yesterday that it was exploring a
proposal to refinance its debt that
could result in a special dividend
of about $1bn to its shareholders.
Booz Allen, which provides
management and technology
consulting in defence, intelligence
and civil markets, said it was
evaluating possible refinancing of
about $959m of debt under new
credit facilities of up to $1.75bn.
The proceeds from the
refinancing, along with cash on
hand, will be used to fund the
special dividend, Booz Allen said.
The special dividend would
amount to about $7.55 per share,
based on the number of shares
outstanding.
Booz Allen eyes
$1bn dividend
BY CITY A.M. REPORTER
THURSDAY 12 JULY 2012
15
NEWS
cityam.com
Roland Rudd co-founded Finsbury, which merged with RLM in July 2011
PRICE comparison website
Moneysupermarket.com said
yesterday it expects its
earnings for the first half of
the year to rise by 24 per cent
compared with last year.
The group, which compares
prices on savings, loans and
purchases on its site, said it
was predicting a 15 per cent
increase in revenue to about
102m and that adjusted
earnings before interest, tax,
depreciation and amortisation
would be about 28.5m,
which was in line with the
groups prior expectations.
The rise in earnings is
considered especially
impressive since the
comparative period last year
had been boosted by a heavy
advertising campaign
including the sponsorship of
Britains Got Talent.
Last month the company
agreed to the 87m purchase
of personal finance website
MoneySavingExpert, which is
likely to put a dent in the
36.7m cash reserves held by
the company.
The website faces
competition from search
engine giant Google, which
launched a price comparison
service in the UK in May after
spending more than 40m on
the operation. Many of
Moneysupermarket.coms
visitors reach the website
through the search engine.
Shares in the group, which
BY JAMES TITCOMB
Moneysupermarket.com Group PLC
5Jul 6Jul 9Jul 10Jul 11 Jul
126
130
132
134
128
p
134.10
11Jul
had fallen following Googles entry
into price comparison, rose slightly.
Marketing executives business condence
2007 2008 2009 2010 2011 2012
-20
20
40
60
-40
-60
-80
%
n
e
t
b
a
la
n
c
e
0
I would always rather buy physical books,
because then when youve read your book you
can put it on your bookshelf. The rst thing I look at when I
go to somebodys house is their bookshelf. I do have an
ebook reader, because I was given one, but Ive never used
it. People will always enjoy having books on their shelves.
JOSEPH
EDWARDS
FIDELITY

I only ever read physical books; I dont use an

e-reader, but I am interested in buying one. I
havent been particularly put off in the past I just havent
got round to it. I have got an iPad, but I dont read on that.
Im on the verge of swapping over or at least trying it. I
think it will be more convenient when Im travelling.
ROGER NEWMAN
MAHINDRA SATYAM

EUROPE M&A PR RANK

Company Deal value Num of deals
RLM Finsbury $95,634m 34
Brunswick $92,345m 64
FTI Consulting $73,816m 73
Aura Financial $53,465m 1
Stockwell Com $53,465m 1
IN BRIEF
Mondi in $782m Nordenia deal
nSouth Africa's Mondi Group said
yesterday it will buy German
packaging firm Nordenia International
from Oaktree Capital, in a $782m
(502m) deal that will give the paper
maker a bigger presence in consumer
packaging. Mondi will buy 93.4 per
cent of Nordenia from private equity
firm Oaktree and other minority
shareholders in a cash and debt deal.
Nordenia makes more than 90 per
cent of its revenues from the
packaging and components of
consumer products.
SEC votes for stock database
n A divided Securities and Exchange
Commission (SEC) yesterday adopted a
rule designed to bolster its surveillance
of the equities markets by establishing
a central database that stores every
trade order, execution and cancellation.
The rule will bring the SEC one step
closer to having a consolidated audit
trail to better police for market manip-
ulation and insider trading, though the
new database will not be operational in
the near term. The rule would give US
exchanges 270 days to jointly submit a
plan for establishing a consolidated
audit trail. The exchanges and the
Financial Industry Regulatory Authority
(FINRA), as well as their broker mem-
bers, would be required to provide
detailed information to the database.
The exchanges plan will be subject to
SEC approval. If approved, the parties
would need to start reporting data
within one year.
BRITISH pub operator JD
Wetherspoon said yesterday cost
pressures from government legisla-
tion would weigh this year on what
has so far been a solid performance
boosted by major events.
Wetherspoon, whose cut-price
drinks and meal offers had made it
one of the stronger performing pub
chains through the economic down-
turn, said like-for-like sales, which
strip out the impact of new pubs , for
the 11 weeks to 8 July were up 6.1 per
cent, driven by strong trading
around the Jubilee celebrations and
the Euro 2012 championship. Total
sales increased by 11.9 per cent.
However the group said that its
main challenge remained the contin-
uing cost pressures from govern-
ment legislation, which it cited as
increases in excise duty, business
rates and carbon tax.
We expect to achieve a reasonable
outcome for the current financial
year, the company said in a state-
Euro 2012 and
Jubilee joy for
Wetherspoons
BY HARRY BANKS ment.
Since the start of the financial year,
the company has opened 40 new
pubs and closed three pubs.
JD Wetherspoon said its plans, dis-
closed at the start of the year, to open
approximately 20 to 30 pubs in the
next financial year remained on
track.
In the year to date (50 weeks to 8
July 2012), like-for-like sales increased
by three per cent, and overall compa-
ny sales increased by 9.2 per cent.
JD Wetherspoons shares rose 3.8
per cent to 437.9p yesterday.
Panmure Gordon director Callum Stewart
led the team which advised Revolymer on
its fundraising and listing on AIM.
The former army captain said his approach
to investors was well received but with the
company in its infancy there was plenty of
work to do to secure funding.
We are very pleased with the result,
investors were immediately interested.
There are people out there who want to
invest and we have had a lot of success
lately. We have a very good relationship
with the institutional investors.
Adam James, Adam Pollock and Charles
Leigh-Pemberton also worked on the deal.
Panmure has steered through a number of
deals recently, bucking the gloomy eco-
nomic trend.
Last month the company acted for
WANdisco, raising 15m of new money and
placing a further 2.9m of existing shares.
In May, Panmure Gordon acted for
Snoozebox raising 13m. Each of these
IPOs closed oversubscribed and attracted
high quality institutional investors.
Chairman of investment banking at
Panmure Gordon, Tim Linacre, said: It has
been a pleasure to be the broker of choice
for innovative companies like Revolymer,
WANdisco, and Snoozebox. Markets
remain exceptionally difcult but AIM con-
tinues to function. Companies with excel-
lent business models, a compelling story
and strong management teams are still
able to attract outstanding institutional
investors.
Citigate Dewe Rogerson was the media
adviser on the Revolymer deal.
ADVISERS PANMURE GORDON
CALLUM STEWART
DIRECTOR
Shell buys remainder of shares
in Gasnor in its LNG expansion
OIL major Royal Dutch Shell
yesterday announced that it was
paying $74m (47.5m) to buy up
the remaining shares of
Norwegian liquid natural gas
(LNG) supplier Gasnor that it does
not already own.
The company holds 4.1 per cent
of the stock but has signed a
share purchase agreement which
should see it take ownership of
the rest by the third quarter.
The company said the deal was
an important step towards
creating an LNG sales business,
and would offer a reliable new
BY JOHN DUNNE
addition to Shell's commercial
customers fuel mix. Gasnor
supplies LNG to industrial and
marine customers, with three
small scale production plants and
distribution assets including two
tanker ships, a fleet of trucks and
a network of terminals. Through
this acquisition, Shell will
capitalise on Gasnors experience
in LNG sales and marketing,
combining it with its own
customer reach to target
European marine customers ahead
of new environmental regulations
that will come into force from
2015
Colin Abraham, Shells vice
president for Downstream LNG,
said: Shell believes the Liquefied
Natural Gas (LNG) in transport
sector will develop into a sizeable
market and given its industry
leading expertise across the LNG
value chain, the extension into
this market is a good fit for Shell.
The Gasnor acquisition
provides Shell with invaluable
customer and market insight built
up over a number of years.
Subject to Norwegian regulatory
approvals, the transaction is
expected to close in the third
quarter of 2012. Norway was one
of the first European countries to
focus on LNG as a viable fuel.
JD Wetherspoon PLC
5Jul 6Jul 9Jul 10Jul 11 Jul
420
415
430
435
425
440
p
437.90
11Jul
BARRATT Developments has
forecast a big rise in full-year
profit, and said yesterday its drive
to build new homes on higher-
margin land would allow more
progress as long as the housing
market remained relatively stable.
The group said it expected to
post a 41 per cent jump in
operating profit before
exceptional items to around
191m when it reports its full-year
results on 12 September.
Barratt upbeat as profits rise
due to stable housing market
BY A CITY A.M REPORTER
The group has shifted towards
building on high-margin land, a
focus on containing costs and a
significant increase in volumes
with 12,637 completions compared
with 11,078 in the year-earlier
period, chief financial officer
David Thomas said.
We feel we have certainly
outperformed slightly compared
with our expectations and the
markets expectations, Thomas
said, adding that about a third of
completions came from new land
contracts with gross margins
above 20 per cent.
UK Mail said yesterday that
revenues in the first quarter had
climbed by 13 per cent year-on
year.
Adjusting for the increase in
Royal Mail prices brought in on 2
April 2012 underlying group
revenues increased by around 10
per cent.
The company said that its
parcels division had performed
strongly and that overall the
company was trading in line.
The mail business showed good
revenue growth both on an
absolute and an underlying basis.
But it said the courier business
saw its revenues dented.
In its statement UK Mail said:
UK Mail sees revenue climb as
parcels division boosts figures
BY JOHN DUNNE
We remain in a sound financial
position.
We fully expect the economic
backdrop to remain tough in 2012
and the pricing environment to
stay competitive. We are planning
accordingly, with tight control of
our costs continuing to be a key
focus.
We have leading and
differentiated positions in our
markets, a highly competitive
business model, and a strong
balance sheet which gives us
strategic flexibility.
We are therefore confident
that we will come through this
period of significant change in our
industry as one of the strongest
players in the markets in which we
operate.
THURSDAY 12 JULY 2012
16
NEWS
cityam.com
Barratt chief executive Mark Clare said private forward sales were up 35 per cent
Revolymer in AIM debut after
25m fundraising is secured
REVOLYMER, which makes
environmentally friendly chewing
gum, made its full debut on AIM
yesterday after sealing 25m in
fundraising.
The shares were placed with
institutional shareholders at 100p
each, raising 25m.
The money from the placing
will be used to expand the
distribution of its produce in the
US and Europe.
Revolymer says that the gum is
easily removed from the ground
BY JOHN DUNNE
which could cut the costs of
cleaning for local authorities.
Revolymer was founded by Dr
Roger Pettman and Professor
Terence Cosgrove using research
carried out at Bristol University.
Pettman said: I am delighted
with the success of our equity
fund raising and with such strong
demand for the groups shares. I
will be pleased to welcome our
new shareholders to Revolymer
following admission and thank
them for their support.
Revolymer has launched its Rev7
gum in the US and is commencing
the roll out of a similar product in
the EU during 2012. The first
European markets into which the
product will be launched will be
Ireland, Germany and the UK.
Revolymer Plc
08:30 10:00 12:00 14:00 16:30
102.0
104.2
103.1
p
102.50
11Jul
INCOMPETENT managers are
holding back British firms and so
stopping the economic recovery, the
department for business, innovation
and skills (BIS) claimed yesterday,
calling on companies to step up their
management training programmes.
The report found 72 per cent of
organisations in England suffer from
a deficit of management and
leadership skills, with 43 per cent of
managers rating their own line
managers as ineffective.
This army of eight million
managers has a huge impact on this
countrys productivity and global
competitiveness, said Peter Cheese
from the Chartered Institute of
Personnel and Development.
Skills minister John Hayes said
state action is needed to help turn
the situation around.
Improving our leadership and
management capability is
fundamental to creating a culture
where more organisations have the
ambition, confidence, resilience and
skills to respond to compete
successfully, both nationally and
globally, he said. The government
is supporting this process by
providing specific support to those
businesses with the most potential.
Bad managers
hold back UK
GDP recovery
BY TIM WALLACE
UK HOUSE prices may not return to
their peak until well into the 2020s,
claimed a report from PwC yesterday.
House prices reached a peak in
2007 that they may not reach until
2017 in cash terms, and 2024 relative
to consumer prices, the report said.
Average prices are expected to
plateau for the next two years, but
single first-time buyers without
financial assistance are still unlikely
to be able to buy a first property until
they are in their 30s.
Indeed, if required deposits
increase to 20 per cent, then first-
time buyers without financial aid
may be 40 before they can afford to
get a foot on the property ladder,
PwC estimated. By 2010, 84 per cent
of first-time buyers younger than 30
were beneficiaries of financial assis-
tance from relatives or friends, com-
pared to just 38 per cent in 2005.
Housing production has stalled,
which PwC put down to restrictive
House prices to
remain below
peak until 2024
BY BEN SOUTHWOOD
planning laws fostered by so called
Nimbyism.
Building that does get permission is
often away from the highest priced
areas, where it is desired most
owner-occupiers in high price areas
lobby vigorously against expansion of
housing stock, the report said.
PwC argues that the UK needs a
robust supply of rental property, such
as that in some comparable European
countries, partly by allowing
economies of scale in rental property
management.
Lord Mayor: City must gets its
house in order after Libor crisis
THE LORD Mayor of the City of
London last night issued an impas-
sioned plea for the square mile to get
its house in order, as the Libor fixing
scandal threatens to escalate.
Traders guilty of manipulating the
inter-bank lending rate should be
firmly punished, Lord Mayor David
Wootton said, insisting that the rep-
utation of the rest of the industry is
not also dragged through the mud.
The City must be publicly seen to
launch a swift but reasoned debate
BY JULIAN HARRIS
on reforming any areas of wrongdo-
ing, Wootton added, warning that
otherwise it could be hit by harmful
knee-jerk reactions from lawmakers
and authorities.
I was shocked by the behaviour of
the traders and shocked by the cul-
ture their actions suggested,
Wootton told a dinner of senior
judges at Mansion House.
But these actions do not represent
the ethos and commitment of the
300,000 people who work in the City
of London, nor the near two million
who work in financial and related
services across the UK.
If the latest scandal is allowed to
sully the whole financial sector it
could lead to adverse consequences
of overly quick, ill thought out
responses, Wootton warned, adding:
The current debate needs to see
more light and less heat.
We in the City have to be more
active, more engaged and ready to
embrace change and be seen to do
so. Wootton told the judges that
much could be learned from the
legal sector, stressing the importance
of the rule of law.
Annual growth in dwellings per person
2009 2005 2001 1997 1993 1989 1985 1981 1977
0
0.4
1.2
1.4
0.8
1.0
0.2
0.6
-0.2
-0.4
%
EMERGING market growth slowed
in the second quarter, due to
reduced manufacturing growth,
according to HSBCs Emerging
Market Index released yesterday.
The overall index slipped to 53,
from 53.6 50 would indicate no
change with slow
manufacturing growth working
against robust service growth.
Murat Ulgen at HSBC said: The
manufacturing sector remains
Emerging market growth slows
due to manufacturing slump
BY BEN SOUTHWOOD considerably below pre-crisis
levels despite an improvement on
the first quarter.
Flat growth for new orders and
a contraction in new export
orders in manufacturing attest to
the global challenges, he added.
Within the Bric, Brazil and
China reported declines in new
export orders, compared to rises
for India, Russia, Turkey and
South Korea. Similarly Brazil
recorded the slowest growth in
services for three quarters.
THE US trade deficit narrowed in
May, according to data released
yesterday by the Commerce
Department.
The trade deficit stood at
$48.7bn (31.3bn) in May,
compared to the revised April
figure of $50.6bn. This came from
exports that inched up $0.4bn, to
$183.1bn, and imports that shrunk
$1.6bn to $233.3bn.
Michael Moran at Daiwa capital
markets said: Considering the
downturn in Europe and the
slower pace of growth in
developing Asia, the increase in
US trade deficit narrows as oil
prices fall and exports increase
BY BEN SOUTHWOOD
exports could be viewed as
encouraging.
But Paul Ashworth at Capital
Economics argued: The modest
narrowing in the US trade deficit
was mainly due to a drop in the
cost of imported oil.
External trade is likely to
remain a drag on real US economic
growth in the second half of this
year and probably through 2013 as
well, he went on to predict.
The estimates for wholesalers
sales are relatively uncertain, but
show a 0.8 per cent drop in May,
compared to a 5.7 per cent
annualised increase. Inventories
were up 0.3 per cent on the month
and 6.4 per cent on the year.
THURSDAY 12 JULY 2012
17
NEWS
cityam.com
Factories in fast growing economies have been hit by global economic worries
THURSDAY 12 JULY 2012
18
cityam.com
LONDONREPORT
iCon Infrastructure
The infrastructure-focused
investment firm has appointed
Daniel Hales as its director of
finance. He most recently worked
as group finance controller and
director of compliance at RCP
Capital Group, the investment
firm. Hales has also previously
held roles at Goldman Sachs and
KPMG.
Kleinwort Benson
Malcolm Roberts has been appointed managing director of
private banks private wealth management business. He
joins from Rothschild Wealth Management, where he spent
10 years, latterly as a managing director. Roberts has also
held various roles at JP Morgan Private Bank, Fleming
Private Asset Management and Montagu Loebl Stanley.
UBS
Anthony Hartley has been appointed managing director in
the banks pharmaceuticals team, effective September
2012. He joins from Morgan Stanley, where he has worked
for the previous four years. Hartley has over 12 years
experience as a pharmaceuticals-focused banker, and has
also previously worked for Zeneca and Pfizer.
Jupiter Asset Management
Miles Geldard has been promoted to the position of head of
the asset management firms combined fix interest and
multi asset team. He has over 18 years experience in
managing fixed interest strategies and joined Jupiter in
2010. He replaces John Hamilton, who leaves later this year.
KPMG
The professional services firm has announced that Malcolm
Lowe Lauri is joining its global healthcare team, effective 1
September. He has 32 years experience working across the
health service, and has previously served as chief executive
of Peterborough Hospitals Trust, Kings College Hospital
Foundation Trust, and most recently of University Hospitals
of Leicester NHS Trust.
FxPro
James Bannister has been appointed to the board of the
forex broker as a non-executive director. He has many years
of experience in the industry, and was responsible for
establishing Citibanks FX e-commerce products. Bannister
is also a director of C2 Partners.
Ingenious Asset Management
The investment and advisory group has made two senior
hires to its team. Wayne Ellis joins as investment director.
He was previously director of private clients at Merchant
Securities. Mark Doidge joins as business development
manager. He previously worked at Quilter.
WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
Fifth straight
day of decline
for the Dow
T
HE DOW and the Nasdaq lost
ground yesterday as minutes
from the Federal Reserves June
meeting showed policymakers
are open to the idea of more
economic stimulus, but that
conditions might need to worsen
first.
The S&P 500 ended unchanged,
breaking a four-day losing streak,
after paring losses into the close.
Technology and industrials led the
S&Ps losers, as the market was hit by
a number of high-profile earnings
warnings in recent days.
Investors were hoping the Feds June
minutes would suggest the central
bank was getting closer to another
round of stimulus. The lack of clues
prompted selling in all three major
indexes, though stocks pared losses
just ahead of the close.
The Nasdaq was the worst per-
former of the three major indexes.
Network gear maker Adtran warned
about third-quarter revenue, driving
its stock down 15.4 per cent to $23.01
and hitting shares of its rivals.
Juniper Networks fell 1.1 per cent to
$14.68, and Ciena lost 7.9 per cent to
$14.15.
The warning followed weaker fore-
casts earlier this week from chipmak-
ers, including Advanced Micro
Devices. Its stock slid two per cent to
$4.89 yesterday.
Some analysts expect earnings dis-
appointments from major technology
companies this earnings season. They
say estimates for tech names are like-
ly to go down.
The Dow Jones industrial average
shed 48.59 points, or 0.38 per cent, to
end at 12,604.53. The Standard &
Poors 500 Index dipped just 0.02 of a
point to finish at 1,341.45. The Nasdaq
Composite Index slipped 14.35 points,
or 0.49 per cent, to close at 2,887.98. It
was a fifth day of losses for the Dow.
Helping to support the S&P 500
were financials, which gained after
four days of losses. The financial
index was up 0.8 per cent.
Some banks, including JPMorgan
Chase, up one per cent at $34.59, are
due to report results on Friday.
Other earnings warnings included
Hhgregg, an appliance and consumer
electronics retailer, which forecast a
wider-than-expected loss for the first
quarter and cut its full-year outlook.
Its stock sank 36.4 per cent to $7.34.
Rival Best Buy slumped 8.4 per cent
to $19.37.
Among the days economic data, the
US trade deficit narrowed by 3.8 per
cent in May, helped by a rise in
exports, including those bound for
Europe and China. But economists
warned it might not last.
After the close, shares of hotel chain
Marriott International dipped 0.5
per cent to $37.84 following the
release of its results.
Volume was lighter than average.
About 6.02bn shares changed hands
on the New York Stock Exchange, the
Nasdaq and Amex, compared with
the year-to-date daily average of
6.85bn shares.
B
RITAINS top share index ended
flat in low volume yesterday, with
investors uncertain about the
future path for equities due to
concerns over global growth and
corporate earnings.
The FTSE 100 was up 0.41 points, or 0.01
per cent, at 5,664.48, having swung in a 50
point arc during the session, on volume of
less than 65 per cent of the 90-day daily
average.
London has had a remarkably steady if
fairly quiet session, but with volumes
remaining below average there remains an
underlying concern that any shock could
bring back the violent swings seen in
much of the second quarter, said Mike
Mason, a trader at Sucden Financial Private
Clients.
Across the pond, a sales warning from
engine maker Cummins was the latest
worrying signal from the US corporate sec-
tor. The warning from Cummins had a
knock-on effect in London, with Aggreko
shedding 4.3 per cent as traders noted that
the US firm is a big customer of the tempo-
rary power group.
Automotive parts firm GKN and pumps
maker Weir Group were also impacted by
negative sentiment from the Cummins
warning, down 2.6 per cent and four per
cent respectively.
Second-line engineers suffered too, led by
Senior, down 5.6 per cent, with the FTSE
250 index sharply underperforming the
blue chips, closing down 0.9 per cent.
Soft drinks firm Britvic, however, was
the top mid-cap casualty, down 13.4 per
cent as it warned of around a 15-25m hit
on pre-tax profit for the current and next
financial years. It said it has been unable to
speedily resolve issues with the caps on its
Robinsons Fruit Shoot and Fruit Shoot
Hydro products, on which it issued a recall
last week.
British luxury brand Burberry was the
biggest blue chip faller, down 7.4 per cent
as it saw a slowdown in quarterly sales
growth as trading conditions worsened.
Weakness in mining stocks was a drag on
blue chip sentiment, with the sector dent-
ed by a cautious Credit Suisse note, cutting
forecasts for metals and oil prices.
With the relief rally now mostly com-
plete, the next move in commodity prices
is likely to again be driven by develop-
ments in global growth ... This suggests to
us that the balance of near-term risks to
the industrial commodity complex is to
the downside, particularly in light of the
speed and magnitude of the recent
bounce, Credit Suisse said in a note.
However, commodities trader Glencore
and its mining bid target Xstrata bucked
the weaker trend, adding 1.9 per cent and
1.5 per cent respectively.
Xstrata has set 7 September as the date its
shareholders will vote on the planned
$26bn takeover, effectively giving Glencore
and rival investor Qatar Holding six weeks
to hammer out an agreement on the terms
of the offer.
Energy stocks lent their underlying
strength to the blue chips too, benefiting
from firmer crude prices.
Brent and US crude futures were higher
although they pared their gains after the
Energy Information Administration's
weekly oil inventory report showed crude
stocks fell more than expected last week.
Crude prices have fallen sharply over the
second quarter, however, and Bill ONeill of
Merrill Lynch Wealth Management cited
the fall as one of the reasons the bank is
starting to consider opportunities to mar-
ginally increase equity allocation. While
there remain risks to growth, we believe
more accommodative global monetary
policy, alongside the fall back in oil prices
in the second quarter, may lead to the basis
for a gradual turnaround in sentiment,
ONeill said in a note.
Uncertainty over global economy
and corporates sees FTSE end flat
BESTof theBROKERS
Balfour Beatty PLC
5Jul 6Jul 9Jul 10Jul 11Jul
p 315
310
305
300
295
292.00
11 Jul
BALFOUR BEATTY
UBS has downgraded the construction company from buy to
neutral and cut the target price from 340p to 310p citing a less
compelling valuation. The brokerage noted that key comps have de-
rated, particularly in the US and said that although Balfour Beatty
guided to earnings in line with expectations, the mix is slightly worse
with profit drops offset in other operating divisions.
FTSE
5,680
5,700
5,720
5,740
5,640
5,620
5,660
5Jul 6Jul 9Jul 10Jul 11 Jul
5,664.48
11 Jul
DASHBOARD CITY
CITY MOVES
To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
NEW YORK
REPORT
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
in association with
British Sky Broadcasting Group PLC
5Jul 6Jul 9Jul 10Jul 11Jul
p 694
692
690
686
682
684
688
684.00
11 Jul
BSKYB
Numis issued the broadcasters stock with an add rating and a target
price of 815p ahead of its full year results later this month. The broker
said it had moved to buy following the steep fall in the groups shares
following the Premier League announcement, but has now moved back
into add territory following a strong share bounce back. Numis
forecast BSkyB could announce an additional 750m share buyback.
Messaging International PLC
5Jul 6Jul 9Jul 10Jul 11Jul
p 0.86
0.84
0.82
0.78
0.72
0.74
0.76
0.80
0.80
11 Jul
MESSAGING INTERNATIONAL
Seymour Pierce has initiated coverage of Messaging International with a
buy rating and a target price of 2.1p, based on eight times its diluted
earnings per share forecast for 2013. The company has a good track
record of growing earnings through providing customers with
innovative messaging solutions, which we expect to continue, the
brokerage said.
High-pressure environments could leave anyone with poor health
19
cityam.com
PRIVATE EQUITY MANAGING DIRECTOR
SINGAPORE
$150k+ pa
A highly reputable private equity house is look-
ing for an experienced managing director for its
Indonesia-focused fund. Applicants must have
at least 10 years experience in the sector.
http://www.cityamcareers.com/job/19887
UNDERWRITING MANAGER
SOUTH EAST
75k-110k pa
A word-leading insurer requires an underwriter
to develop a portfolio of business within the
sports and leisure sector. Applicants with over-
seas qualifications will be considered.
http://www.cityamcareers.com/job/20003
BUSINESS ANALYST
LONDON
55k-85k pa
A global investment manager requires a busi-
ness analyst to join its foreign exchange team.
The position offers substantial career progres-
sion opportunities.
http://www.cityamcareers.com/job/19432
APPLICATION SECURITY ANALYST
LONDON
55k-85k pa
A leading investment bank urgently requires an
IT professional to support application security
assessment across theinstitution. Applicants
must have excellent technical competency.
http://www.cityamcareers.com/job/18276
HEAD OF SWISS TAX
LONDON
115k-145k pa, plus bonus
A leading bank requires a Swiss tax specialist to
manage the groups tax products across Europe.
Applicants must be top-tier tax professionals
with extensive knowledge and experience.
http://www.cityamcareers.com/job/18274
JOBSoftheWEEK
A
NTONIO Horta-Osorio has been back
as chief executive of Lloyds Bank since
January. His absence began in
November 2011, and was famously
attributed to exhaustion caused by the
pressures of his job. His is a reassuring story
a successful executive, overcome by poor
health, could reveal it to colleagues and
return to his previous role after recovery.
The same tale doesnt replay everywhere.
Despite high-profile campaigns by charities,
illness can have damaging effects on a career
in poor acceptance by colleagues or man-
agers, in limiting the ability to progress fol-
lowing recovery and, in severe cases, the loss
of a cherished job.
But you can manage your career around ill-
ness, whether mental or physical. And you
can assuage the inevitable concern that to
admit incapacity, however treatable, is to
admit defeat. Employers will often have a
more positive reaction than you imagine
and not solely on the level of personal sym-
pathy.
STRESS IN THE CITY
John Binns is a senior partner at Deloitte. In
In sickness and in health: An
illness wont ruin your career
Future and current employers have a stake in your recovery, writes Tom Welsh
2007, he suffered a bout of depression that
left him unable to work for two months. I
assumed that my career would be over, he
says. Its a high-pressure world and, when I
informed the firm about my depression, I
thought it probably wouldnt be possible for
me to work in that environment ever again.
Deloitte felt differently. The message was
that I was valuable. The company was
unconcerned that it would take time for him
to recover. It was more interested in seeing
him return to his role, recovered, and to con-
tinue winning business.
Binns emphasises that its expensive for
many firms if good people leave. Whereas
you may feel that your depression, stress, or
exhaustion might lead your company to cut
you adrift, most managers realise that poor
mental health is often temporary. And many
will work to ensure that both your career,
and the value they derive from your person-
al success, can continue.
Deloitte has since set up a network of nine
partners to offer support to anyone con-
cerned about their mental health. Its
designed to create a wave of recognition
that mental health is a big issue in the City,
according to Binns. And he hopes the innova-
tion will catch on he has spoken with sever-
al large City firms about similar projects.
Organisations are increasingly recognising
that its important to get it right.
REASONABLE ADJUSTMENTS
In a 2010 YouGov survey of adults living with
cancer, four in ten said they had to make
changes to their working life due to their ill-
ness and half of those changed jobs or left
work entirely. Liz Egan, programme manag-
er at Macmillan Cancer Support, says that
employers play a critical role in helping peo-
ple with cancer stay in work, or return after
treatment. She agrees with Binns that it is
likely to be cheaper and easier to help peo-
ple with cancer stay in work than to recruit a
replacement.
But unwell employees have a greater pro-
tection than the self-interest or goodwill of
their management. The Equality Act 2010
classifies cancer and other serious illnesses
as disabilities, and protects employees
against discrimination in the workplace.
Employers are required to make reasonable
adjustments to an employees working life.
And although the precise definition of rea-
sonable is left open to interpretation,
planned adjustments could include flexible
working hours or a gradual reintroduction
to the workplace following extended sick
leave. A serious illness neednt mean a clear-
cut break with previous career progression.
TIME TO REFLECT
Nevertheless, a protracted career hiatus may
prevent some employees from returning to
their previous job. To some extent, the
degree of career damage will depend on
which point of your career you are at. Alex
Lawrie, associate director of specialist mar-
kets at Morgan McKinley, suggests that a six-
month break from a 30 years career is likely
to have a different impact than a similar
period out of a five year career.
But Lawrie advises using some of your time
to take a realistic look at your career aspira-
tions and own abilities. Rest and reflection
may be important for recovery, but a
moment of pause may also assist in reassess-
ing your priorities. What seemed sensible in
the narrow tunnel of your career ascent,
may now appear futile or unnecessary.
And, in any case, a future employer will
likely be unbothered if you took time off due
to events out of your control. In a job inter-
view, it isnt necessary to talk about past
episodes of ill health that are unlikely to
reoccur, says Lawrie. Employers are more
interested in your positive achievements and
future promise, not any unfortunate turn
that made you stumble.
5,000
professional jobs
in total
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positions in
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T
HE US economy is still
stumbling, creating a severe
problem for President Barack
Obamas hopes for re-election
in November. In June, the
private sector created an abysmal
80,000 new jobs. Unemployment
remains high at 8.2 per cent, and
theres little prospect of it dropping
any time soon.
With 117 days to election day,
Americas ongoing economic malaise
remains Obamas greatest electoral
liability, a problem the President
threatens to exacerbate without a
clear and concise message for a
second term. The jobs numbers,
according to the President,
symbolised a step in the right
direction. The White House asked
H
ISTORICALLY, the financial
reward of hosting the
Olympics has been mixed: the
1972 Munich Olympics and
the 1976 Montreal Olympics
made significant losses, while the
Games held in Los Angeles (1984),
Barcelona (1992) and Atlanta (1996)
each made a profit. Moreover, if you
fully account for all of the costs
related to the hosting of a Games
including the cost of constructing
facilities and infrastructure, together
with security and other ancillary costs
it is questionable whether any
Olympics ever truly makes a profit in
a narrow financial sense.
The London 2012 Olympics are
expected to make a profit (in the sense
that revenues will exceed the day-to-
day cost of running the Games), but
this will still leave the UK with a signif-
icant bill for construction and other
ancillary costs.
This caveat aside, the management
and cost effectiveness of the develop-
ment and preparation for the
Olympics generally appear to have
been a success, with the infrastructure
for the Games completed on time and
in association with category sponsors venue sponsor champagne reception sponsor
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cityam.com/forum
Economic output
may be boosted in the
third quarter by 0.3 to
0.4 percentage points
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: theforum@cityam.com
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.

20
THURSDAY 12 JULY 2012
KEVIN DALY
Goldman Sachs: A host of medals
might make up for Olympic costs
below (the 2007) budget.
At the time of Londons successful
bid in 2005, the provisional cost of
hosting the Games was estimated to
be around 3bn. This increased
sharply to 9bn in 2007, when the first
fully-detailed (i.e. realistic) estimates of
the total cost were provided. Since
then, the estimated total cost has fall-
en to 8.5bn, partly reflecting the
impact of the recession in reducing
overall construction costs.
The implications of this expenditure
for public finances have been limited:
8.5bn represents 0.55 per cent of
annual UK GDP, or 1.4 per cent of
annual government revenue
(although the spending itself has been
spread over a number of years). Over
time, a significant portion of the gov-
ernments 8.5bn bill is likely to be
recouped through the sale of land and
other facilities.
While financial management and
good preparation are clearly impor-
tant in establishing a successful
Olympics, a narrow focus on the finan-
cial performance of the Games misses
the wider economic effects both
short- and long-term that hosting
the Olympics can have on the host
nation.
The short-term effects derive from
the expenditure on goods and services
related to the hosting of the Olympics,
which are recorded as output when
the expenditure occurs. The London
Organising Committee of the Olympic
Games (LOCOG) estimates that it is
likely to spend around 2bn in total
in temporary employment of staff,
security with more than half of this
amount (around 0.3 to 0.4 per cent of
GDP) likely to be spent within the
third quarter itself.
Hoteliers, restaurateurs and retailers
are also likely to witness an increase in
output, as they cope with the addition-
al demand from overseas visitors. Set
against this, however, some tourists
may avoid coming to the UK because
of the Olympics, and the output of
other businesses is likely to suffer as a
result of transport disruption.
It is difficult to estimate what the
net effect of the indirect and other off-
setting effects will be. As a central esti-
mate, we have assumed that these
effects will broadly net out and that
the overall short-term effect of staging
the London Olympics will be to boost
UK economic output in the third quar-
ter 2012 by around 0.3 to 0.4 percent-
age points, quarter on quarter, and 1.2
to 1.6 per cent annualised.
The long-term benefits of hosting the
Olympics include the promotion of
London and the UK as tourist venues
and as a potential location for foreign
investment, as well as the lasting
impact on the local community from
regenerating a previously run-down
part of London. By their nature, these
effects are more difficult to estimate
but they are not necessarily less impor-
tant than the short-term effects.
Sporting enthusiasts will argue that
focusing on the financial manage-
ment of an Olympics, or on the eco-
nomic costs and benefits of being the
host nation misses the point.
Much as there are short and long-
term economic effects, there are also
short and long-term benefits for sport.
The long-term benefits take the form
of the facilities that will be left behind
once the Games are over and the pro-
motion of sport in the community.
But, for competitive sporting enthu-
siasts, perhaps the most important
bottom line of hosting the Games is
the short-term benefit they typically
bring by way of a larger medals haul.
On average, the host nation has won
54 per cent more medals than when it
was not hosting. If medals are your
preferred currency, this represents a
high return on investment.
Kevin Daly is UK economist for Goldman
Sachs.
voters not to read too much into
the latest figures, a statement now
beyond ridicule; its the advice used
in 30 previous press releases. David
Plouffe, Obamas senior campaign
adviser, remarked that the jobs
figures were what everybody
expected. Thats the problem.
The economy is now a no-go area
for the President. Unable to run on
his record, Obamas re-election is
entirely focused on negative
campaign advertisements, tokenistic
policy gestures and personal attacks
on Mitt Romney. A full 76 per cent of
Obamas campaign advertisements
are now negative, a startling jump
from 50 per cent in a matter of
weeks. If economic growth remains
sclerotic, these attacks will continue,
especially surrounding Romneys
tenure at Bain Capital and his
apparent lack of tax transparency.
Both lines of attack are reportedly
gaining traction in key swing states
and, thus far, Romney has failed to
launch a comprehensive fight-back.
The economy has already defined
Obama, and now Romney is running
out of time to prevent the Presidents
attacks from defining him.
Obama is now seeking to gain
similar momentum as that garnered
from last years showdown with the
Republican Congress. But rather
than debating the debt ceiling, this
sparring match surrounds Obamas
plans to extend tax cuts for those
earning less than $250,000
(161,000). This is Obamas ongoing
crusade for tax fairness, a not so
subtle dig at his multi-millionaire
opponent. Others would call it
classic identity politics. However,
there is also a great deal of concern
in Democratic circles that the
President could alienate higher
earners and small business owners.
Significantly, 75 per cent of small
business owners, who create 65 per
cent of the countrys new jobs, file as
individuals. A tax hike on job
creators? The Republican counter-
attack writes itself.
The Presidents tax cut extension
is only for 12 months an electoral
gimmick. Romneys alleged opaque
tax arrangements are extremely
damaging and will continue to face
scrutiny, but Obamas politicking is
nakedly transparent. With the
economy on the precipice a few years
ago, one politician counselled that
you dont raise taxes in a recession.
For the time being at least, that same
politician continues to reside in the
White House.
Ewan Watt is a Washington DC-based
consultant. You can follow him on Twitter
on @ewancwatt
THE WHITE
HOUSE RACE
EWAN WATT
Sclerotic jobs figures put the economy off-limits for Obamas campaign
General enquires: 020 8267 4043 | jo.pead@cityamawards.com | Awards night: Wednesday 17 October.
21
Coalition in peril
[Re: Massive revolt by Tory MPs is
beginning of the end for coalition,
yesterday]
The Tories big failure is economic. Why is it
that their biggest insurrection is over
something as marginal as Lords reform?
JohnPage
We dont need a House of Lords. Or a
monarchy for that matter. A unicameral
parliament in a republic, with only 400 MPs,
would be a better solution for Britain. It
would be both cheaper and more efficient.
Bill Forge
Politicians clearly cant be trusted to sort
the Lords out. We need a referendum now.
ClaudiaFaria
Penalising savers
[Re: Should the government consider
removing state benefits from wealthier
pensioners, yesterday]
As a pensioner with a free TV license, and
one who has not taken a holiday since 1989,
I have probably saved enough to disqualify
myself from most benefits. Others, who
have taken a holiday every year, probably
havent. Would the consequences of means-
testing always be fair? In addition, the
whole process would be complex and the
cost enormous. To keep things as simple as
possible, we should leave universal benefits
alone, and prevent the economy from being
lumbered by another army of bureaucrats,
all busily assessing the financial resources of
6m pensioners.
DerekCoggrave
A
TOTAL of 55 of the FTSE 100
chairmen and 53 of their
chief executives now have
their own Wikipedia pages.
Whether they like it or not,
Wikipedia is the prism through
which the world views them. As the
sixth most-visited site on the web, it
is one of the key media phenomena
of our times. The site has 15bn page
views per month and 17m account
holders volunteers have created a
twenty-first century equivalent of
the library of Alexandria.
Wikipedia has fundamentally
altered the way reputation is created.
On Google search results, the
Wikipedia entry pops up on the first
page. For any subject of a Wikipedia
entry, its contents are of immense
importance. Its a nerve-wracking
business the page will be written
largely by anonymous contributors.
There is now a problem. The people
who set the rules at Wikipedia have
significant global influence. But the
organisations stance fails to reflect
this. Tensions have developed
between Wikipedia and the public
relations industry over whether PRs
should directly edit the pages of their
clients. Wikipedia insists that PRs
must not do this and wants PRs to
argue for changes via talk pages.
This would be fine if the process
were fast, easy to engage with and
even-handed. But getting anything
changed on Wikipedia tends to be
slow and arcane. Wikipedia is effec-
tively demanding that organisations
fight back at opponents with one
arm tied behind their back.
Jimmy Wales, Wikipedias co-
founder and public face, does little to
dispel the view, apparently widely
held by Wikipedias overseers, that
PRs are less likely than the rest of the
population to supply accurate infor-
mation. This is ridiculous a PRs
reputation depends on the accuracy
TOP TWEETS
Cameron rolls out the red carpet for financial-
ly oppressed French. Meanwhile Osborne and
Cable tag team to crush the same in the UK.
@London_Photog
I really think Labours stance on Lords reform
smacks of blatant political opportunism of
the worst kind.
@jd_davies
Politicians and voters need to realise that if
we want a sustainable NHS, we must sort out
social care funding.
@PaulJRethink
Spain has built 48 regional airports in the last
20 years. Only 11 make a profit. Thats why
Spain is bankrupt.
@Old_Holborn
Are the coalitions plans to allow the elderly
to defer care costs until death the right step?
YES
These proposals represent a practical and measured approach to the
problem of reforming social care in England. We are pleased that no
decision is being made on the lifetime care cost cap (which would
put a cap on the amount people would pay for care during their
lifetime). We propose a different system of graduated support for
people in different wealth bands. This would be simpler to
implement and fairer to families, individuals and taxpayers. And we
welcome provision of support to unpaid carers, without whom the
social care system would collapse. State support is still required for
the poor and vulnerable, but everyone should be incentivised to
make provision for their future care. We hope that the government
will consider our proposals for long-term care bonds to help the
poorest, flexible pension annuities that take account of personal
social care requirements, and a bigger role for equity release.
Les Mayhew is professor of statistics at Cass Business School.
Les Mayhew
NO
Julia Unwin
While we welcome the publication of the long-awaited social care
white paper, we are deeply frustrated that more progress has not
been made, and that the decision on how to pay for long-term care
has been postponed yet again. The secretary of state, Andrew
Lansley, says this is a watershed moment. It is not. Extending current
practice on deferred payments is sensible, but it is also a sticking
plaster. Andrew Dilnots Commission gave us all hope for a new fair
settlement and achieved wide-spread support it is hugely
disappointing his recommendations are not being acted upon now.
Successive governments have failed to act. Without a sense of
urgency, more of us face insecurity and uncertainty as we age. The
failure to address social care properly will only mean more pressure
on the NHS, thereby destroying all hopes of a sustainable and
functioning health system in the future.
Julia Unwin is chief executive of the Joseph Rowntree Foundation.
RAPIDresponses
Wikipedia fails to
let CEOs defend
against vandals
of the information they supply.
PR people also know that puffery
inserted on a clients page can be
traced back to their IP address. You
cant fool the internet for long and
PR is now, more than ever, about sup-
plying facts that cut through the bab-
ble, rather than providing worthless
spin and artifice.
Wikipedias stance on PR shows the
gulf between its view of itself as a
plucky upstart and its real position
as a highly complex global organisa-
tion. It has largely escaped the regu-
latory and ethical controversies that
have struck Facebook and Google.
But, as a global distributor of infor-
mation, is Wikipedia that different
from companies in closely-regulated
sectors like broadcasting and pub-
lishing?
Wikipedia is the well of informa-
tion from which the world drinks.
With that huge influence comes a
duty to position itself responsibly
and to be properly accountable.
That means doing more to ensure
that duff information about real peo-
ple doesnt linger on the site, as well
as understanding that real people
are entitled to expect accuracy and
fair treatment at all times. It means
acknowledging that, if the worlds
most powerful public forum writes
about you, you are within your rights
to seek professional advice. Its time
for Wikipedia to display the wisdom
and maturity its place in the world
demands.
Rory Godson is the managing partner of
Powerscourt.
THURSDAY 12 JULY 2012
RORY GODSON
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23
TV & GAMES
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occur more than once in a
row or column, but it must
be in a separate block.
COFFEE BREAK
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5 6
7
8
9 10 11
12 13 14 15 16
17
18
19
20 21
18 7
15 7
14 38
13 28
16 9
29
24 13
12 18
28 8
22 16
4 20
29
23
22
11
11
44
14
13
6
12
13
10
6
41
10
27
23
14
30
ACROSS
1 Money risked on
a gamble (5)
4 Fortuitous (5)
7 Shakespeare play (7)
8 Hawaiian greeting (5)
9 Posture (6)
12 One dozen dozen (5)
15 Has in mind (5)
17 Towards the tail
of a ship (6)
18 Crowd actor (5)
19 Plans for attaining a
particular goal (7)
20 Mechanical bar (5)
21 Once more (5)
DOWN
1 Leapt (6)
2 Of an appropriate
or pertinent
nature (7)
3 All together, as
a group (2,5)
5 Sophisticated,
rened (6)
6 Baby cat (6)
10 Loss of memory (7)
11 Musical setting for
a religious text (7)
13 Lay waste to (6)
14 Figurine (6)
16 Sailor (6)
L
O
V
S
A I
B
N
G

4

4
4
T R U C E L I N E D
A H T E I
A N T E R A B I E S
R E T A T M
T H A T N R H E A
E B A N S H E E N
F I S H P B R U T
A C O W E L
C R I S I S C O M E
T S E C O
S C E N E L A M B S
6 8 9 4 9 6 1
2 7 1 4 3 5 9 3
4 2 3 1 9 8
1 6 3 2 4 3 5 1
5 9 6 8 9 6 7 2
8 1 8 2
9 6 7 3 8 5 1 9
7 1 4 2 3 1 2 6
2 5 7 9 8 6
9 8 3 9 6 7 4 8
2 3 1 6 4 3 1
4
4
4
4
4
4
4
4
4
The nine-letter word was
STRIDENCY
T
E
R
R
E
S
T
R
I
A
L
S
A
T
E
L
L
I
T
E
&
C
A
B
L
E
BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
THURSDAY 12 JULY 2012
CASE SENSITIVE
ITV1, 9PM
Part one of two. DS Charlie Zailer
investigates the murder of a music
teachers husband, and uncovers a
twisted saga of thwarted ambition.
BANK OF DAVE
CHANNEL4, 9PM
Part one of two. Documentary
following entrepreneur David Fishwick
as he tries to open his own bank in
Burnley, Lancashire.
THE HOTEL INSPECTOR
CHANNEL5, 9PM
Alex Polizzi visits a hotel and nightclub
in Essex run by members of a family,
who spend more time arguing than
looking after their customers needs.
TVPICK
Nomiku
Raised: $313,000
This handheld piece of kitchenware
promises to turn any household pot
into a sous vide thermal
immersion heater, used to cook
melt-in-the-mouth meat and
vegetables. It has already broken
through its $200,000 target and
hopes to begin shipping its product
in March next year. Three spots
remain for $10,000 donations,
which bestows a meal for 10 people
cooked by the manufacturers.
The Girl Who Would Be King
Raised: $15,000
Kelly Thompson failed to get her novel about
teenaged super-heroines printed by a
traditional publishing
house but thanks to
Kickstarter it will now
undergo at least one
print run. Donating
more unlocks extra
rewards, including
bookmarks, stickers,
original sketches of the heroines and
signed copies of the book.
Amanda Palmer
Raised: $1.2m
The former Dresden Dolls singer, who has had a
strained relationship with record labels, funded a
record through the site by asking fans
to contribute to its production by
pre-ordering it. Nearly 25,000
obliged, making her one of the
most successful artists on the site.
The venture raises interesting
possibilities for musicians to
bypass traditional labels
and get their music
straight to fans.
CROWD FUNDING is the latest buzz-word in Silicon Valley,
with entrepreneurs and mad scientists alike asking the
public for micro-investments of a few dollars (or a few
thousand) to fund the production of their projects.
Kickstarter is the reigning king of the sector, with
thousands of companies raising funds through its website.
Public investments are rewarded based on their value,
ranging from company equity or profit-share schemes to
signed merchandise and one-of-a-kind perks. Companies
are asked to pitch for a specific target. If they reach it
through donations, they get to keep the lot, plus any
surplus. If they fall short, they get nothing (a bit like
Dragons Den). Now it is set to launch in the UK. We take a
look at some of the sites biggest successes.
THURSDAY 12 JULY 2012
cityam.com
24
LIFE&STYLE
WORDS BY
STEVE DINNEEN
AND SOME NOT SO SUCCESSFUL ONES...
BY STEVE DINNEEN
Please Love Me comedy show
Henrietta wanted to raise $6,000 to fund her comedy
show, Please Love Me. Alas the comedian, whose poster is
printed above, failed to get a single backer, proving that
crowd funding isnt a guaranteed source of income.
Virtual World Online
Crowd funding and virtual online communities seem like
natural partners but they dont necessarily mix. Virtual
World Online set itself a target of $75,000 to create a dig-
ital world even better than reality. It got $2.
Exchange food board game
Healthy eating is big. Board games are big. Healthy eat-
ing board games: not so much. The Exchange game
failed to attract a single backer for its food-based time-
waster. $12,000 was a little ambitious.
I Love You Mom T-shirt
Nothing says I love you like a cheaply produced T-shirt
printed in Comic Sans, right? Alas, this project couldnt
even reach its measly target of just $120. Mothers every-
where can breathe a sigh of relief.
TECHNOLOGY
Spike
Raised: $51,000
Spike had the same problem a lot of us
suffer from: love the iPhone, hate
typing on it. So it set itself a Kickstarter
target of $78,000 to manufacture a
clip-on keyboard from its prototype. It
is currently just $27,000 short and
looks set to hit its target.
The Order of the Stick
Raised: $1.25m
Indie comic The Order of the Stick has
smashed its $57,750 target to reprint past
copies of its fantasy-based strips. Those
pledging funding receive different perks,
dependent on how much they pledge,
ranging from fridge magnets for $10 to a
walk-on cameo in the comic for $5,000.
Double Fine Productions
Raised: $3.3m
The niche games producer has already
raised over $3m to develop a new point-
and-click adventure called Double Fine
Adventure. Double Fine Productions is led
by legendary games creator Tim Schafer,
whose previous projects include
Psychonauts and Brutal Legend.
David Lynch Documentary
Raised: $180,000
A group of filmmakers needed an extra push
to complete their documentary about David
Lynch. Fans of the enigmatic director helped
push the project well over its target. Donations
of over $10,000 will receive a signed print by
Lynch himself and tickets to a film festival
with the production team.
Pebble Technology
Raised: $10.3m
Pebble had initially aimed to raise around
$100,000 for its smart-watch but became an
internet sensation after attracting a staggering
$10m of funding, $1m of
which came in the first
24 hours. The Pebble
is an email-connected
watch that allows
joggers to check their
inbox without digging
around for their
mobile phone.
Ministry of Supply
Raised: $320,000
Shirtmaker Ministry of Supply became
the most successful fashion company
on Kickstarter after breaking its target
for its sweat-proof shirts. Its fabric
uses NASA technology to manage
heat and moisture, keeping you cool
all day long and preventing odours.
Its time to Kickstarter your life
1
TBR Report "IBM System x

x86 servers: Meeting the demands of todays enterprises by combining value and support," January 2012.
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Source: Intel

Performance comparison using SPECfp*_rate_base2006 benchmark. Baseline score of 267 on prior generation 2S Intel

Xeon

processor X5690 (3.46GHz, 6-core, 12MB L3, 6.4 GT/s, 130W)

based platform published at www.spec.org as of 6 Sept 2011. Estimated new score of 486 on 2S Intel

Xeon

processor E5-2690 (2.90GHz, 8-core, 20MB L3, 8.0 GT/s, 135W) is based on Intel

internal
measured estimates as of 6 Sept 2011 using two Intel

Xeon

processor E5-2690, Turbo Enabled, EIST Enabled, Hyper-Threading Enabled, 64GB memory (8x8GB DDR3-1600), Red Hat

Enterprise Linux Server

6.1 beta for x86_6, Intel

Compiler 12.1.
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x3500 M4 supports up to 768GB of memory using 32GB LRDIMMs in its 24 memory slots. Previous generation x3500 M3 supports up to 192GB of memory.
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to support 10Gb Ethernet.
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x3500 M4 supports up to 32 internal 2.5" HDD. Previous generation x3500 M3 supports up to twenty four 2.5" HDD.
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Quarterly price quoted is based on IBMs 0% System x Solution Finance offering (FMV lease). Terms & Conditions Apply: Offering availability subject to credit approval; for more details and full Terms and
Conditions please visit: http://www.ibm.com/financing/uk/lifecycle/acquire/xsolutionfinancing.html.
Rates and offerings are subject to change, extension or withdrawal without notice. Prices include VAT at a rate of 20%.
IBM hardware products are manufactured from new parts or new and serviceable used parts. Regardless, our warranty terms apply. For a copy of applicable product warranties, visit
http://www.ibm.com/servers/support/machine_warranties. IBM makes no representation or warranty regarding third-party products or services. IBM, the IBM logo, System Storage and System x are registered
trademarks of International Business Machines Corporation registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. For a current list of IBM
trademarks, see www.ibm.com/legal/copytrade.shtml. Intel, the Intel logo, Xeon and Xeon Inside are trademarks of Intel Corporation in the U.S. and other countries. All prices and savings estimates are subject
to change without notice, may vary according to configuration, are based upon IBMs estimated retail selling prices as of 01/04/2012 and may not include storage, hard drive, operating system or other features.
Reseller prices and savings to end users may vary. Products are subject to availability. This document was developed for offerings in the United Kingdom. IBM may not offer the products, features, or services
discussed in this document in other countries. Contact your IBM representative or IBM Business Partner for the most current pricing in your geographic area. 2012 IBM Corporation. All rights reserved.
Read the white paper
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Field upgradeable with FC or ISCSI host interface cards
Self encrypting drive options available for secure data at rest
DS3512 also available with 3.5" drive support

THURSDAY 12 JULY 2012

26
SPORT
cityam.com/sport @cityam_sport
TEAM Sky cyclist Bradley Wiggins
again distanced himself from the
subject of doping after yesterday
setting a new British record by
retaining the Tour de Frances yellow
jersey for a fourth day and
maintaining his lead.
Frances Thomas Voeckler won the
Tours 10th stage but Wiggins, by
one minute and 53 seconds, remains
the overall leader ahead of 2011
winner Cadel Evans, compatriot
Chris Froome and Italys Vincenzo
Nibali, who respectively lie second,
third and fourth.
Theres one reason why Im in
this position and thats because Ive
worked hard and I shouldnt have to
justify all that other stuff which we
spoke about the other day to certain
parts of the world, said Wiggins. To
me, its them p****** all over
everything Ive done, by just saying
oh yes, hes cheating or whatever.
I deserve every minute of what
Ive been through this last week
or so. Its not like I've just come
from nowhere.
Im tested by the UCI
(International Cycling Union) God
knows how many times a year, God
knows how many times on this race
and the Dauphine. Blood tested in
the morning. What more can I do?
Wiggins wails
in fresh debate
over doping
BY DECLAN WARRINGTON
BRITISH sprint sensation Adam
Gemili again underlined his
exceptional potential by last night
recording 10.05seconds when
winning the World Junior
Championships 100m in Barcelona.
The time was a personal best in
the young sprinters promising
career and edged him 0.12secs
ahead of the United States Aaron
Ernest and 0.23secs in front of
Jamaicas Odean Skeen.
Its a massive stepping stone,
said Gemili, who was once a
footballer on the books of Chelsea,
Reading and Dagenham and
Redbridge but has been selected by
Team GB for the 100m and 4x100m
at London 2012. Just making the
final was an achievement but the
fact I won is so amazing. Its going
to help me a lot at the Olympics.
All I know is that I feel good and I
feel there is a lot more to come.
Gemili secures
personal best
BY DECLAN WARRINGTON
NEW Tottenham manager Andre
Villas-Boas believes the experience
gained from his time at Chelsea will
be crucial in the pursuit of silverware
at White Hart Lane, even though he
feels he need not prove a point over
his sacking.
Chelsea last season dismissed
Villas-Boas with the club out of the
title race and on the brink of elimina-
tion from the Champions League. A
significant obstacle may have already
arisen with the departure of the mid-
fielder Luka Modric appearing immi-
nent, but the Portuguese manager
remains confident he has sufficiently
evolved beyond his previous flaws
and will inspire success at Spurs.
You always learn from experi-
ence, he said. From my understand-
ing the Chelsea experience was
maybe not so gratifying in terms of
success but very gratifying profession-
ally for me.
I learned a couple of things that
maybe Ive done wrong and Ive
learned in a club you have to trust the
right people at the right time.
It is not a mission of restoring my
reputation, its a mission to put
Tottenham back on track with titles.
Since 2008 we havent won any-
thing. It is right we take the club for-
ward, mixing it with titles and with
success. It is a massive opportunity
for me and I am extremely pleased to
be given that opportunity.
Since I stopped there has been a
couple of discussions with other
clubs, a couple of them have even
been made public, but I was always
willing to wait for the right opportu-
nity at the right time.
After Chelsea it was important to
be surrounded by the right commit-
AVB: Ill win Spurs titles
but Ive no point to prove
ment and the right people and I
think I have found that.
The right people for Villas-Boas
now constitute assistant manager
Steffen Freund, who was yesterday
appointed, and director of football
Tim Sherwood, who incidentally
played together for Tottenham and
whose midfield expertise Villas-Boas
may wish to consult. Modrics likely
departure provides a considerable
first challenge for the new manager
to overcome, but compatriot Joao
Moutinho has already been targeted
and could be among those signed.
The interest that we have from
various different clubs shows the
importance of [Modric], Villas-Boas
said. Its fair to say the club respects
Lukas ambitions and his willingness
to move on and he respects the fact
that hes an important player for the
club and can help us move forward.
Ongoing discussions will contin-
ue with these clubs until we reach
an agreement which is acceptable.
[Moutinho] was one of the most
important players at Euro 2012, he
was fantastic. Counting on players of
this quality will always be interest-
ing for us. [But] it doesnt mean hes
the only target.
BY DECLAN WARRINGTON
Tottenham manager Andre Villas-Boas believes he has learnt from his time at Chelsea
T
UESDAYS win reinforced the
view that England are in front of
Australia. It was judgment time
to see where the Australian and
English sides were, with the Ashes
only 12 months away, and England
are miles in front.
Australia brought over some of
their younger players James
Pattinson, Pat Cummings, Matthew
Wade who are all new to English
conditions but I didnt see anything
England need to worry about. Theyll
have to make a massive improvement
in a short period of time if theyre to
trouble us.
Australia are ranked the No1 one-
day team in the world not because of
their performances over the last 12
months, but for their 12 months
before that. The fact is England are
very, very good at home theyre,
right now, the best team in the world
but I still recall us going to India at
the back end of last year and not
winning a game there, so lets not get
over-zealous in our praise. When we
go to the subcontinent, we still
struggle to come out with wins.
Im sure that Andy Flower, Andrew
Strauss and Alastair Cook would all
love to see us go to the subcontinent
and win, and the first test of
that will be when we go for
the Twenty20 in Sri Lanka at
the end of the season. But
were clearly a very
competent side and
confidence is sky high.
A lot had been made of
the abilities of Kevin Pietersen, and
while it may have been down to the
ineptitude of the Australian bowlers,
we didnt miss him at all.
There were also real positives in
Eoin Morgans form when hes
performing hes as good as any No5 or
6 in one-day cricket Ravi Bopara
playing so well again, and Steven Finn
also looking the full package. Hell be
pushing for a place in the Test side.
Everyone will have recognised,
though, that South Africa are
the second best Test team in the world
right now, and Im sure all the focus is
on England getting it right
and playing their best
against them. Its not a given,
because in Dale Steyn and
Graeme Smith theyve
got world-class players
who would get into
any team.
Andy Lloyd is a former
England Test cricketer who
captained, and then later
acted as chairman of,
Warwickshire.
CRICKET
COMMENT
ANDY LLOYD
The Ashes look rosy for England
The next challenge for Alastair Cook is
to inspire victories on the subcontinent
Booth content
over ref change
for Haye fight
BY DECLAN WARRINGTON
DAVID Hayes trainer Adam Booth is
confident that the change of referee
for Saturdays bitter heavyweight
bout with Dereck Chisora is exactly
what his fighter needs to prevail.
It was yesterday revealed that
Puerto Ricos Luis Pabon will be the
third man in the ring after both
Haye and Booth had previously
rejected the 68-year-old Mickey Vann.
Booth had questioned his physical
conditioning and his long history
with Chisoras manager Frank
Warren, but Pabons inclusion has
since significantly placated him.
Im very happy with Luis Pabon,
said Booth. Hes probably one of the
top fight referees in the world he
takes no s***.
Thats what we need. We need a
referee that takes no s*** but that
will also allow the fight to happen.
Dont stop the fight just because
guys have come up close, dont stop
them fighting.
If they start doing things that
arent in the rules of boxing, then
pull them up about it, but Im happy
that Pabon wont break the course of
the fight. Hell let them work up
close, and that will give the fight the
fans really, really need and want to
see. And that will give us the fight
that weve prepared for.
IN
New look strikeforce
Following last seasons loan, Emmanuel
Adebayor is set to sign a permant deal
but another striker could arrive, with
Brazils Leandro Damiao an option.
Steffen Freund as assistant
The former Tottenham and Germany
midfielder has been appointed as
assistant manager in an overhauled
coaching team.
Crouching and squatting
The intense former Chelsea manager has
been known to squat in, and out of, the
dugout during tense
moments.
Luka Modric
After resisting all offers for him last
summer, Tottenhams masterful
midfielder finally looks set to leave.
Possibly Spurs most important player.
Ledley King
The injury-prone defender finally looked
to have played in one match too many
last season. Presently out of contract
but may stay on in a coaching role.
Cockney dialect
The new managers media duties are
likely to be considerably more sober
affairs than under quipmaster Harry
Redknapp. That could also apply to
injuries; Spurs may no longer be down
to the bare bones.
Villas-Boas: What
Spurs can expect
OUT
27
Dereck Chisora is a natural born loser. Hell find a way to lose on Saturday
night. Whenever hes stepped up in class hes been found wanting in life
and in the ring British heavyweight David Haye on opponent Dereck Chisoras chances in their Saturday night fight

cityam.com
THURSDAY 12 JULY 2012
your place at Budokwai for an Olympic judo experience evening with British stars
The Budokwai, the
oldest and most
iconic judo club in Europe,
will host a special Olympic judo
experience evening featuring British
internationals on Tuesday 17 July.
The evening will be delivered by the British Judo
Association the National Governing Body for the
Olympic and Paralympic sport of judo in Great Britain
and will feature demonstrations from current inter-
nationals, a chance to take part with expert tuition
from British coaches and an opportunity to see how
judo can be utilised as a form of self defence.
TERMS AND CONDITIONS
The British Judo Association is the promoter of this
competition. All entrants and prize winners must be over the
age of 18. Entrants must live within the UK and must be
available to attend on Tuesday July 17th 2012 evening. Prizes are
non transferable, no cash alternatives will be offered. The
closing date for the competition is Thursday 12th July 11.59 pm.
Winners drawn randomly fromall the correct entries and the
Editors decision is final.
For your chance to win this fantastic day out for
two simply answer the following question:
WHEN WILL THE 2012 OLYMPIC
OPENING CEREMONY TAKE PLACE?
a. 27th July 2012
b. 3rd August 2012
c. 12th August 2012
W
I
N
CITY A.M. PROMOTION
send your answer and contact number to
win@cityam.com
The Budokwai, which launched in 1918, has been graced by judo masters such as Olympic
champion and three-time world champion Kosei Inoue who recently lived in the capital and
trained at the club for a year as part of a visit on behalf of the Japanese Olympic Movement
and was home to Olympic silver medallists Ray Stevens (1992) and Neil Adams (1980, 1984).
City A.M. has secured fifteen places for this rare opportunity
for a unique and memorable insight into the fascinating
world of judo. See the club where William Hague, Seb Coe
and Guy Ritchie infamously trained together and become
enamoured with judo which is one of the worlds most
widely practiced sports.
IN BRIEF
Flower lauds blooming England
n CRICKET: Coach Andy Flower
believes Englands one-day series
thrashing of Australia proves his team
are improving across all formats. Im
happy not only with the result but
with the way we played, he said.
Fifa chiefs in 14m bribe claim
n FOOTBALL: Ex-Fifa president Joao
Havelange and executive committee
member Ricardo Teixeira received
bribes of up to 14.4m in total from
the world governing bodys former
marketing company ISL, according to
court documents released yesterday.
FORMER Chelsea manager Jose
Mourinho and current team-mate
Ashley Cole defended John Terry in
court yesterday as the ex-England
captain denied racially abusing QPR
footballer Anton Ferdinand.
Mourinho, now in charge of Real
Madrid, did not appear in person on
day three of the high-profile trial at
Westminster Magistrates Court but
submitted a sworn statement that
was read aloud.
The Portuguese coach said: I
never once witnessed any demonstra-
tion of racism or racial abuse or
behaviour. I am certain that John
Terry is not a racist.
Terry is accused of calling
Ferdinand a f****** black c*** during
Chelseas 1-0 Premier League defeat
to QPR at Loftus Road in a west
London derby on 23 October 2011.
He denies committing a racially
aggravated public order offence. If
found guilty, he faces a fine of up to
2,500 but is not at risk of jail. A ver-
dict is expected tomorrow.
Cole became the highest profile
witness to be called when he
appeared in Court One, where he
declared the case should not have
gone this far. I think we shouldnt be
sitting here, he said.
Former Chelsea assistant Ray
Wilkins testified that, in his experi-
ence, Terry had not once reacted to
provocation, while Blues chairman
Bruce Buck said the player had
almost uncanny mental strength.
Earlier prosecutor Duncan Penny
QC submitted that Terry, 31, had
rushed out a statement just hours
after the alleged incident because he
knew he had crossed the line.
Penny said: Youve stuck with this
story since you put it out in the press
and cannot back down.
Terry said he had addressed the
nascent controversy swiftly because
he felt he had nothing to hide. The
case continues.
BY FRANK DALLERES
Old guard run to Terry
in court as Mourinho
and Cole help defence
John Terry (left) received support from Chelsea and England colleague Ashley Cole
:I@:B<K
CM :FLEKP :?J?@G $ ;`m ( (Uxbrie). Hilesex 98
(J5.4 a1ers, A J Str+ass 5O, A R A+ms oJZ). Nctts 44
(J9.Z a1ers). (Oa||far). |arcs. Z45J (8 a1ers, P Hartar
O) 1 Sarre]. (New Rca). Darlam Z4J (O.5 a1ers).
wcrcs OOZ (J5 a1ers). ;`m ) (Olelterlam). Olcacs. 4Z
(49 a1ers) 1 Cssex. (Tle Aeas Bcwl). Hampslire
Ycrlslire. Na p|+] weres+] ae ta r+|r.
:CP;<J;8C< 98EB +' $ >iflg 8 (Amsteleer). |eics
ZO8 (Jo.O a1ers, V A T|arre|] 8o). Hcllar 5 (JZ.
a1ers). le|cs (Zpts) |e+t Ha||+r |] JJ rars. >iflg :
(E|+star) warwicls Sassex. Hatcl abarcre ae tc
rair, Ipt eacl.
:P:C@E>
KFLI ;< =I8E:< $ JkX^\ (' (V+car Be||e+resar
V+|ser|re, 94.5|m). T Vaec||er (|r+) Te+m Earapc+r 4|rs
4om|rs Zosecs. Fm\iXcc1 B w||rs (O|r) S|] Prac]c||r
4J|rs 59m|rs Zsecs, Z O E1+rs (Aas) BVO R+c|r Te+m +t
m|r 5Jsecs, J O |raame (O|r) S|] Prac]c||r +t Z.O.
Results
Im certain that John Terry is not a racist, Mourinho said in a statement read in court
All you
can eat
data
2000
Any network
minutes
5000
Three-to-Three
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5000
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