Finance Week articles from February 2005

Finance Week archives from February 2005

RBS finance chief in line for #6.6m payout.(Royal Bank of Scotland )(Brief Article)
February 23, 2005... Royal Bank of Scotland (RBS) group finance director Fred Watt could qualify for a pay package worth nearly 12-and-a-half times his basic salary, despite strong opposition to the group's incentive schemes at last year's Annual General Meeting...

IFRS forces Workspace to breach bank covenant.(Workspace Group)(International Financial Reporting Standards)(Brief Article)
February 23, 2005... Workspace Group is the first company to admit that it will breach a banking covenant when it converts to International Financial Reporting Standards (IFRS). It is understood that a number of finance directors are privately concerned that...

PwC takes share of #20m fees in HHG buyout.(Hugh Osmond)(PricewaterhouseCoopers L.L.P.)(Brief Article)
February 23, 2005... PricewaterhouseCoopers (PwC) is expected to benefit from a share of the #20m worth of advisory fees City entrepreneur Hugh Osmond will pay out on his #1.07bn acquisition of the closed life funds of HHG Plc. The accountancy firm is among...

Unilever to call in outside help.(Brief Article)
February 23, 2005... Unilever is seeking external financial and professional advice on its recently announced strategic review in what is set to be one of the largest mandates of the year. Earlier this month, Unilever announced that it would unify its...

Gartmore sells RSA shares ahead of FSA waiver talks.(Royal and SunAlliance)(Gartmore Investment Management)(Financial Services Authority)(Brief Article)
February 23, 2005... Royal & SunAlliance (RSA) has divided analysts and investors over the potential outcome of its talks with the Financial Services Authority (FSA) on the renewal of a #400m solvency waiver that expired in September. Gartmore Investment...

Whitbread faces pension funding hike.
February 23, 2005... Whitbread may be forced to increase its pension contributions following an upcoming actuarial revaluation of the fund. The leisure and entertainment group's pension deficit currently stands at around #350m before tax, according to...

Exploring the differences.
February 23, 2005... A growing number of listed companies are reporting preliminary financial information based on IFRS, as a precursor to first interim and then annual reporting on an IFRS basis. One of the standards that may have a significant impact on...

General election delays Britvic IPO.(Initial Public Offerings)(Brief Article)
February 23, 2005... The much anticipated flotation of soft drinks business Britvic is likely to be delayed past the summer and may only take place within the first half of 2006 at the earliest. According to well-placed sources, a number of factors have put...

Yell Group sinks extra #17m into pension plan to help plug #60m gap.(Brief Article)
February 23, 2005... Yell Group, the directories business, is pouring an additional #17m into its pension deficit after conceding that its current contribution is failing to bridge the funding gap. The company, which publishes Yellow Pages, last week...

Diageo revises losses from weak dollar up by #20m.
February 23, 2005... Diageo, the world's biggest drinks company, has admitted to under- hedging its exposure to the weak dollar, resulting in a hit of #20m more than expected in 2005-06. The company, which hedges its dollar exposure constantly, had...

Homestyle facing hefty interest rise.(Brief Article)
February 23, 2005... Struggling furniture retailer Homestyle Group must raise #30m in less than six weeks to escape a punitive rise in interest payments from its banks. The loss-making owner of Benson's Beds is currently carrying #70m of debt on turnover...

Global gas sector M&A deals hit #13bn mark.(mergers and acquisitions)(Brief Article)
February 23, 2005... The value of merger and acquisition (M&A) deals in the global gas sector increased by more than seven times in the past year to reach $25.2bn (#13.3bn). The increase was largely fuelled by National Grid Transco's (NGT) #5.8bn disposal of...

BHP Billiton reveals standards clash.
February 23, 2005... BHP Billiton, the mining giant, has highlighted problems facing Anglo- Australian companies about the lack of cohesion between Australian and UK International Financial Reporting Standards (IFRS). As a dual-listed company, BHP Billiton...

Why trustees need better dialogue.
February 23, 2005... Finance directors should not be surprised that pension trustees are taking a growing interest in the management and finances of sponsoring companies. A pension scheme with a sizeable deficit may be its sponsoring company's largest and most...

Royalblue holds fire on IAS 38 compliance.(International Accounting Standard )(Brief Article)
February 23, 2005... Software company Royalblue is adopting a wait and see approach to complying with International Accounting Standard (IAS) 38, which covers product development expenditure. The company says in its full-year results for the 12 months to...

RAC fails to make up pensions shortfall.(Brief Article)
February 23, 2005... RAC, the support services group, has reported an increase in its pension deficit despite attempts to address the shortfall. RAC is one of the few companies to retain an open defined benefit pension scheme. It gave employees the option of...

Pilkington debt rises under IFRS.(International Financial Reporting Standards)(Brief Article)
February 23, 2005... UK glass manufacturer Pilkington took a hit to its balance sheet under International Financial Reporting Standards (IFRS) as net debt rose 23 per cent to #819m and shareholder funds fell 11 per cent to #600m. The company last week...

News Digest: Finance chief quits Luminar after seven years.(Andrew Burns quits from Luminar Leisure)(Brief Article)
February 23, 2005... Luminar, the UK's largest nightclub owner, is losing its finance director. Andrew Burns is leaving after a seven-year stint, although is expected to stay until after the group's full-year results announcement in May. Burns's exit comes...

News Digest: William Sinclair Holdings adds to board line-up.(Peter Williams replace Steve Rowland, Philip Nuttall appoints)(Brief Article)
February 23, 2005... William Sinclair Holdings has announced several changes to the board as part of its restructuring. Peter Williams, former finance director at Winchester Growers, has been made financial director to replace Steve Rowland, who will remain at...

News Digest: Spirax-Sarco appoints non-executive chairman.(Mike Townsend joins Spirax-Sarco Engineering PLC)(Brief Article)
February 23, 2005... Rolls-Royce's former finance director has been named as the new non- executive chairman at Spirax-Sarco Engineering. Mike Townsend, the longest-serving non-executive director at Spirax-Sarco, will become chairman after the company's annual...

News Digest: Lehman Brothers hikes executive salaries.(pay increase)(Brief Article)
February 23, 2005... Lehman Brothers chief financial officer has been awarded a 31 per cent pay increase to $11.5m (#6m) after the investment bank recorded record profit levels. David Goldfarb was among several executives to receive substantial pay increases,...

News Digest: KPMG man takes top finance job at Gatekeeper.(Aaron Neilsen joins Gatekeeper Systems)(Brief Article)
February 23, 2005... Gatekeeper Systems has named its new finance director. Aaron Neilsen, who trained at KPMG, will join the Gatekeeper board, as well as assisting the company through its growth phase. Copyright: Centaur Communications Ltd. and licensors

News Digest: Ex-finance boss admits WorldCom cover-up.(Scott Sullivan Bernie Ebbers in accounting fraud case)(Brief Article)
February 23, 2005... WorldCom's former chief financial officer has admitted that he lied to both internal and external auditors, as well as shareholders, to cover up the $11bn (#5.8bn) accounting fraud that led to the company's collapse. Scott Sullivan, the US...

News Digest: Boeing finance boss faces jail over jobs scandal.(Brief Article)
February 23, 2005... Boeing's former chief financial officer could be facing a prison term after admitting to arranging a job for a high-ranking Air Force official who was working on business for the company. In one of the biggest defence scandals of the...

ASB faces backlash over directors' liabilities.( Accounting Standards Board )(Brief Article)
February 23, 2005... The Accounting Standards Board (ASB) is expected to face widespread criticism over its proposals for Operating and Financial Reviews (OFRs) when it evaluates responses to its exposure draft next week. It is understood questions will be...

Agencies to change default ratings.(credit rating agencies)
February 23, 2005... Credit rating agencies are understood to be revising their ratings methodologies in response to the new capital requirement regime, Basel II. Moody's managing director of risk management services, Andrew Kimball, says the company is...

Cracking down on tax avoidance.
February 23, 2005... The Government announced on February 10 that the following tax avoidance schemes are to be closed with immediate effect: credit for foreign tax paid on trade receipts; use by companies of capital redemption bonds (CRBs) to generate artificial...

Big four cut back on extra work for audit clients.(accounting firms)(Brief Article)
February 23, 2005... The big four accountancy firms have reduced the amount of non-audit fees they earn from audit clients by 10 per cent since 2001. PricewaterhouseCoopers, KPMG, Deloitte and Ernst & Young saw non-audit fees from audit clients fall to 25...

BG Group eyes top spot in LNG sector.(liquefied natural gas)
February 23, 2005... BG Group is attempting to gain a lead in the burgeoning liquefied natural gas (LNG) market as gas continues to increase its share of the global primary energy supply. BG chief executive Frank Chapman announced at last week's full-year...

Prepare now or pay the price.
February 23, 2005... While International Financial Reporting Standards (IFRS) became mandatory for EU-listed companies on January 1 with regard to their consolidated accounts, they did not apply, from a tax perspective, to their entity accounts. For UK...

Spotlight falls on retailers after ethical buying review.(Brief Article)
February 23, 2005... Retail companies will come under increasing pressure to employ ethical supply chain management with the introduction of the operating and financial review (OFR). The OFR, which will come into effect for financial years on or after...

AIM listings fall by half since launch.(Alternative Investment Market)(Brief Article)
February 23, 2005... Almost half of the 854 companies that joined the Alternative Investment Market (AIM) since 2001 have de-listed, according to a new survey. In all, 360 companies, or 42 per cent, have left Aim. Of these, 108 left it altogether, either...

Health Check - St Modwen: Opting for change.(St. Modwen Properties PLC)
February 23, 2005... Birmingham property company St Modwen's year end falls on November 30, meaning it will be one of the last companies to report under International Financial Reporting Standards (IFRS). Despite this, finance director Tim Haywood and his team...

Recovery brings a new lease to the life sector.
February 23, 2005... Last week, entrepreneur Hugh Osmond moved closer to acquiring HHG's closed life fund after rival bidder Resolution dropped out. Will Osmond's defensive management style bring optimism to the life sector? Clare Bettelley reports Pubs...

INTERVIEW - PETER SYDNEY-SMITH: Mining a rich seam.(Interview)
February 23, 2005... After a difficult first year on the London Stock Exchange, Indian mining group Vedanta is gaining the trust of the City with a substantial rise in profits under finance director Peter Sydney-Smith. Helen Kearney spoke to him about the...

Protect the industry, not reputations.
February 23, 2005... It was easy for the media to slam Deloitte's decision to issue a gagging order against the accountancy watchdog, but the real scandal is the industry's failure to self-regulate Two weeks ago, The Times revealed that Deloitte had served...

Time for IT sector to face up to IAS 38.(International Accounting Standards)
February 23, 2005... If this was the year 2000 and International Finance Reporting Standards were already blighting the business world, people would be causing a lot more fuss about IAS 38 then they are now. Back then IT was sexy, it was alluring, it was...

RICHARD NORTHEDGE: The stakes are high in the LSE bidding war.(London Stock Exchange)
February 23, 2005... It's no surprise that rival exchanges from Paris and Frankfurt are going all out to get their hands on the London Stock Exchange. But there's a risk of paying too high a price Of all the interesting bids recently announced to the London...

Technical Analysis: Time to re-examine with-profits funds.
February 23, 2005... With-profits funds have struggled in the face of tumbling equity values and a series of mis-selling allegations. Former Equitable Life chief finance and investment officer Charles Bellringer says the best that life companies can do now for...

Technical Analysis: How to limit the risk of criminal prosecution.(HM Customs and Excise)
February 23, 2005... The merger of the Inland Revenue with HM Customs & Excise is expected to lead to an increased number of prosecutions against those suspected of accounting fraud. But what can finance directors do to reduce their chances of transgressing...

Every little helps in the battle of the supermarkets.
February 23, 2005... Supermarket giant Tesco has trounced its rivals in recent years to become the UK's biggest retailer. But what is the secret of its success? David Benady finds that a number of factors have played a part, including an efficient supply chain...

IHG faces up to reality of a shrinking market.(InterContinental Hotels Group)
February 23, 2005... Alongside the rest of the hotels industry, InterContinental Hotels Group has felt the brunt of September 11, Sars and the war in Iraq. But under finance director Richard Solomons, the company has begun to regain its footing. Roger Baird...

BREAKING AWAY FROM BASS: THE HISTORY OF INTERCONTINENTAL HOTELS GROUP.
February 23, 2005... The InterContinental Hotels Group (IHG) has been in constant transition since it was demerged from its parent company, Six Continents, in April 2003. Six Continents changed its name in 2001 from Bass, which owner William Bass had...

THE BOTTOM LINE: Lenders beware IFRS.(International Financial Reporting Standards)(Brief Article)
February 23, 2005... Talk to bankers about International Financial Reporting Standards (IFRS) and they tend to mutter "it's only accounting" before promptly falling asleep. But those who must wake up to IFRS are the UK's corporate lenders. Property company...

THE BOTTOM LINE: Pay-as-you-like with RBS.(Royal Bank of Scotland PLC)(Brief Article)
February 23, 2005... Anyone with a few spare hours to spare, a calculator, a dictionary and the patience of a saint will have little trouble wading through the Royal Bank of Scotland's (RBS) remuneration policy. The new Combined Code on Corporate Governance...

THE BOTTOM LINE: Unilever goes Dutch.(Unilever Group)(Brief Article)
February 23, 2005... Unilever, the Anglo-Dutch food and household goods giant, would rather swallow its own soap than attract comparisons with Royal Dutch/Shell. But if it decides, following its review of its corporate structure, to drop its dual listing to...

THE BOTTOM LINE: Yell's pension top-up.(Yell Group)(Brief Article)
February 23, 2005... Yell Group has made a brave attempt to brush off the need for a #17m injection into its pension fund. But why has the directories business decided to stump up this level of cash now? Yell's overall pension deficit is #60m, which is...

Somerfield launches irregular dealing probe.(Brief Article)
February 16, 2005... Somerfield has launched an inquiry to unearth irregular dealing on its share register following last week's 190p a share indicative bid from Icelandic group Baugur. The supermarket chain has instructed Dresdner Kleinwort Wasserstein to...

Whitbread to jettison a fifth of its finance staff.(Brief Article)
February 16, 2005... Whitbread, the Marriott Hotels to Pizza Hut group, is set to slash its 300-strong finance department by 20 per cent over the next two years after implementing a new accounting system. According to David Richardson, the soon-to-retire...

Regent Inns cuts jobs in cost-saving drive.(Brief Article)
February 16, 2005... Regent Inns has been forced to make redundancies in its finance department after bringing in a new finance director and executive chairman to turn around the pub and club chain operator. John Leslie, the former finance director at...

Deloitte in Parmalat libel claim.(Brief Article)
February 16, 2005... Two former Grant Thornton partners are suing Deloitte for defamation following comments relating to Parmalat made by global chief executive Bill Parrett in a UK newspaper. Former Grant Thornton Italian chairman Lorenzo Penca and...

Marconi hits performance target on way to recovery.(Brief Article)
February 16, 2005... Telecoms equipment maker Marconi has reached another milestone in its recovery after beating its penultimate performance target. The company last week reported it had hit its fourth target of gaining a market capitalisation of #1bn and...

Unilever redundancies cost #558m.
February 16, 2005... Unilever is understood to have spent e809m (#557.6m) over the fourth quarter in lay-off costs, despite the Anglo-Dutch consumer-goods giant last week refusing to detail how many jobs it has culled. Unilever reported full-year pre-tax...

Changing the presentation of ESOPs.(Employee Share Ownership Trust)
February 16, 2005... For many finance directors currently preparing annual financial statements, this year will be the first time they need to address UITF Abstract 38. The effect of the abstract, which came into effect for accounting periods ending on or...

Accounting changes cost Barclays #50m.(Brief Article)
February 16, 2005... Barclays is facing further charges relating to International Financial Reporting Standards (IFRS) this year as part of its two-year strategy to spread costs. Barclays' group finance director, Naguib Kheraj, says he expects the overall...

New standards threaten Glazer's bid to acquire Manchester United.(International Financial Reporting Standards )
February 16, 2005... International Financial Reporting Standards (IFRS) may provide a stumbling block for Malcolm Glazer's second bid for Manchester United due to the new treatment of preference shares, the key equity portion of his bid. Glazer, whose...

Chelsea hires two big four firms to work on IFRS.(International Financial Reporting Standards)
February 16, 2005... Chelsea Building Society has doubled its preparation for International Financial Reporting Standards (IFRS) by appointing KPMG and PricewaterhouseCoopers (PwC) for the process. Chelsea's decision to use two firms in the move to IFRS...

Hilco left standing as Allders sale goes ahead.(Brief Article)
February 16, 2005... Barclays has swallowed virtually all the proceeds of the sale of 24 of collapsed retailer Allders' stores, with vulture fund Hilco still waiting to realise its investment. As announced on Monday (February 14), Allders' administrator,...

Change to IFRS leaves GSK #394m worse off.(International Financial Reporting Standards )(Brief Article)
February 16, 2005... GlaxoSmithKline (GSK), the pharmaceutical giant, has taken a #394m hit to its full-year earnings under International Financial Reporting Standards (IFRS). The company attributes this to two standards. FRS 19, which tightens up the...

PIRC calls for chairmen to quit audit.(Pensions & Investment Research Consultants)
February 16, 2005... Pensions & Investment Research Consultants (PIRC) is calling for company chairmen to be independent of their audit committees, under the Combined Code on Corporate Governance. Speaking at PIRC's 2005 Shareholder Voting Guidelines...

Choosing the right valuation model.
February 16, 2005... Companies will shortly be required to book the fair value of stock options that are used to incentivise staff and pay other providers of services. Directors will need to seek help from share option valuation experts to arrive at their...

Scottish Power's hedge benefit rises to #45m.(Brief Article)
February 16, 2005... Scottish Power is reaping the reward of its much-lauded hedging strategy, although it warns that the majority of the hedge benefit has now been recognised for the year. In its third-quarter results for the nine months to December 31...

ICI uncovers IFRS drop in shareholder funds.(International Financial Reporting Standards)(Brief Article)
February 16, 2005... Chemical giant ICI revealed last week that under International Financial Reporting Standards (IFRS), its shareholders funds would be reduced by #1.6bn. At a briefing where ICI restated its 2004 year-end results under IFRS for investors...

BBA calls for cut in Basel II discretions.(Brief Article)
February 16, 2005... The British Bankers Association (BBA) is lobbying the Financial Services Authority to reduce the number of national discretions in Basel II to minimise the costs and compliance for companies operating on a cross-boarder basis. National...

News International finance chief steps down.(Brief Article)
February 16, 2005... News International has announced that its chief financial officer is leaving the company. Dick Linford, who has held the position for 10 years, will stay until a replacement is found and is expected to stand down at the end of the year....

HP makes finance head interim chief executive.(Hewlett-Packard appointed Robert Wayman as interim chief executive)(Brief Article)
February 16, 2005... Hewlett-Packard has appointed chief financial officer Robert Wayman as interim chief executive. Wayman takes on the role following the departure of chairman and chief executive Carly Fiorina. The US hardware giant has immediately begun a...

Smith & Nephew names Buchanan as non-exec.(appointed John Buchanan as non executive deputy chairman)(Brief Article)
February 16, 2005... Smith & Nephew has named BP's former chief financial officer as its non- executive deputy chairman. John Buchanan, who retired from BP in 2002, also holds non-executive roles at Vodafone, Astrazeneca and BHP Billiton. Copyright:...

Pension deficit fails to mirror market improvement.(Brief Article)
February 16, 2005... FTSE 350 companies last year saw their pension deficit remain constant despite an improvement in the equity capital markets. According to research by Mercer Human Resource Consulting, the forecast deficit for the year to December 31 2004...

Moorhouse replaces Ball as finance chief at DCA.(Department of Constitutional Affairs)(appointed Barbara Moorhouse as director general of finance)(Brief Article)
February 16, 2005... The Department of Constitutional Affairs (DCA) has recruited the former chief financial officer of Kewill Systems as its new director general of finance. Barbara Moorhouse is replacing Simon Ball, who leaves to become finance director at...

Takeover of BFG to land Hoskins #1.3m.(Big Food Group)(Brief Article)
February 16, 2005... Big Food Group's (BFG's) finance director, Bill Hoskins, is set to gain #1.3m as part of a windfall following the company's #326m takeover by acquisitive Icelandic group Baugur. BFG's chief executive, Bill Grimsey, is also one of four...

DCS promotes Gujral to group finance director.(promoted Ben Gujral to group finance director)(Brief Article)
February 16, 2005... DCS Group has promoted the finance director of its transport and logistics business to group finance director. Ben Gujral, who trained at Grant Thornton and worked at KPMG, first joined DCS as group financial controller in 2002 before moving...

Manchester Building Society takes on Gee.(appointed Christopher Gee as finance director)(Brief Article)
February 16, 2005... Manchester Building Society has taken on Christopher Gee as finance director. Gee leaves a similar position at North West law firm Keoghs and previously held senior finance roles at BUPA and SSL International. Copyright: Centaur...

Rolls-Royce takes on #4.8bn hedge facilities.(Brief Article)
February 16, 2005... Rolls-Royce, the aircraft engine manufacturer, has held off the effect of currency fluctuations by securing hedging facilities of around #4.8bn over the next three years to cover dollar revenues. A spokesman at Rolls-Royce says: "This...

Russian ban may breach energy treaty.
February 16, 2005... The Russian government's ban on foreign-owned companies bidding for access to the country's oil and mineral resources may constitute a breach of the multinational Energy Charter Treaty. The treaty, which was signed by 52 countries...

Solving implementation problems.
February 16, 2005... Financial institutions are starting to concentrate on the practicalities of implementing IAS 39. The real difficulties of complying with the standard are now coming to light. Decisions in this area are also linked to the application of...

Private equity houses turn to high street retailers.(Brief Article)
February 16, 2005... Retailers Laura Ashley, French Connection and JD Group are the most popular acquisition targets for private equity companies. The three businesses have the combination of factors that private equity houses find most attractive, according...

Sarbanes-Oxley fees to recede this year.
February 16, 2005... US companies are expecting Sarbanes-Oxley-related fees over 2005 to be lower than last year but to still account for 20 to 80 per cent of their total audit fees. A survey conducted this month by the consultants CFO Executive Board...

The right approach to pension deficits.
February 16, 2005... Companies operating defined benefit pension schemes are getting to grips with pension accounting, particularly the reporting of actuarial surpluses and deficits. With limited exceptions, since January 1 2005, UK companies have had to...

SEC comes under fire for outdated reserve rules.(Securities and Exchange Commission)(Brief Article)
February 16, 2005... Deloitte has criticised the US Securities and Exchange Commission (SEC) over its prescribed method of accounting for oil reserves. The report follows a revelation from BP that, although it has a reserves replacement ratio of 106 per cent...

Start-ups to benefit from Myners' report.
February 16, 2005... New businesses will be able to raise capital more easily following Paul Myners' recommendation to loosen company pre-emption rights. The Marks & Spencer chairman says new guidelines should be drawn up to reflect a case-by-case approach...

Banking on past experience.
February 16, 2005... Kensington's group finance director, Steve Colsell, is confident his experience of International Financial Reporting Standards (IFRS) at former employer Zurich will ensure a smooth conversion for his current group. IFRS for a banking...

Chinese allure fails to draw in mining sector.
February 16, 2005... China may be the world leader in total metal production, yet its imports continue to outstrip exports. With mining companies still wary of any long-term investment in the country, it must exploit its domestic resources to fuel growth. Helen...

INTERVIEW - DAVID RICHARDSON: Last orders.(Interview)
February 16, 2005... David Richardson is on the verge of retiring from Whitbread, which he has helped transform from a traditional pub and brewing business to the hospitality giant it is today. He talks to Dearbail Jordan about the highs and lows and what he...

Sounding the retreat from Section 404.
February 16, 2005... Although William Donaldson talks a good talk on protecting shareholders, it seems that the implementation of Sarbanes-Oxley will be less tough than the SEC chairman implies A fortnight ago, the chairman of the US Securities and Exchange...