Finance Week articles from February 2006

Finance Week archives from February 2006

Mitchells & Butlers weighs up Reit conversion.
February 8, 2006... Mitchells & Butlers is considering hiving off its #3.5bn property portfolio into a Real Estate Investment Trust (Reit) to focus on pub management. The group's finance director, Karim Naffah, says he is weighing up its options ahead of...

BAE ties up deal to prevent breach of bond covenants.
February 8, 2006... By Hugh Tomlinson BAE Systems has pre-empted breaching its covenants on two outstanding bonds under International Financial Reporting Standards (IFRS) after persuading investors to remove its #2.6bn pension deficit from the original...

Shell finance director to double pay with bonus.
February 8, 2006... Shell finance director Peter Voser is set to reap a reward of more than #1m, buoyed by his first ever bonus at the group, after the oil giant last week delivered record-breaking income of $22.9bn (#13bn). Voser, who was not eligible for...

CFS to apply Basel II to insurance business.
February 8, 2006... Co-operative Financial Services (CFS) is set to become the first UK group to apply the new European credit risk framework, Basel II, across its insurance business. CFS, advised by KPMG, its auditor, and Ernst & Young, is currently...

Compass shareholders urged to vote out pay plan.
February 8, 2006... Shareholders of Compass Group, the troubled caterer, are being advised to vote against changes to the company's remuneration plans due to the lack of targets associated with the long-term incentive plan (LTIP). Both Research...

Colt US reporting vote fuels talk of SEC deregistration.
February 8, 2006... Colt Telecom, the loss-making business telecoms supplier, is seeking bondholder approval to change its US reporting requirements, removing its obligation to file periodic reports with the Securities and Exchange Commission (SEC). ...

ARM Holdings doubles size of US finance team in Artisan integration.(and alsom appoints John McAdoo)(Brief Article)
February 8, 2006... ARM Holdings, the microchip designer, has doubled the size of its US- based finance function to 300 staff as part of the integration of Artisan Components, the business it acquired for #522m just over a year ago. Tim Score, chief...

PROFIT WARNING MAY FORCE C&W FINANCE CHIEF TO QUIT.(Charles Herlinger)(Cable & Wireless )(Brief Article)
February 8, 2006... Charles Herlinger, the chief financial officer of Cable & Wireless (C&W), is expected to follow in the footsteps of his chief executive and leave the telecoms giant after last week issuing its second profit warning in three months. ...

Spirit undergoes executive exodus after sale to Punch.(Benedict Smith resigns)(Brief Article)
February 8, 2006... Spirit Group finance director Benedict Smith has left the business following its #2.7bn sale to Punch Taverns. Smith and a number of other executives departed from Spirit last week. Punch finance director Robert McDonald tells...

Utd Utilities finance chief appointed to Thus board.
February 8, 2006... United Utilities' finance director will take on a non-executive directorship at Thus Group following a sale between the two last week. Thus bought United Utilities' telecoms arm, Your Communications, resulting in the utility becoming...

Compass turns to City for alternative investors.
February 8, 2006... Compass Finance is in the throes of lobbying City institutions to replace existing investors who are expected to exit their holdings in March. Mark Walker, who was appointed finance director of the loan and remortgage broker last...

Egg finance chief replaced for the third time in boardroom reshuffle.
February 8, 2006... Egg, the UK internet bank, has appointed its third chief financial officer in just eight months as part of its latest executive board shake-up. Kieran Coleman, finance director of Egg since October 2004, has been promoted to the role of...

Corus increases pension contributions five-fold.
February 8, 2006... Corus, the Anglo-Dutch steel group, will restart contributions into its pension fund at five times the previous rate after taking a three-year payment holiday on the back of a massive surplus. In a series of changes partly designed to...

Carpetright takes MFI space in expansion plan.
February 8, 2006... Carpetright has taken advantage of the tough home improvements market by opening six concessions within out-of-town stores owned by struggling retailers MFI and Homebase. Carpetright's finance director, Ian Kenyon, says that three...

Sage brings executive pay into line with sector average.
February 8, 2006... Sage Group's finance director received a 42.4 per cent boost to his pay package last year after a formal review of the company's remuneration arrangements found executive directors' base salaries had fallen behind its peer average. ...

BA increases liquidity with new credit facilities.
February 8, 2006... The quarterly results show net debt at #2.2bn, continuing its steady decline from a 2001 peak of #6.6bn. "The business is still highly cash- generative so we will keep paying down debt throughout the year," says Williams. He adds that...

F&C calls for better monitoring of emerging markets companies.
February 8, 2006... F&C Asset Management is urging investors to lobby emerging markets companies listing in the UK to ensure they have adequate anti-bribery and corruption policies in place. Karina Litvack, director, head of governance & socially...

TECHNICAL UPDATE: PENSION DEFICITS.
February 8, 2006... Employing a range of strategies can bring down costs As one employer after another hits the headlines over its pension problems, it is clear that businesses need to take urgent steps to control their pension costs. While there is no...

Center Parcs appoints interim finance chief.
February 8, 2006... Center Parcs has named group finance manager Chris Todd as interim finance director following the resignation of the incumbent in December last year. Simon Lane will leave the business on March 1 to join William Hill, the betting shop...

S&N recruits new finance director from Invensys.
February 8, 2006... Smith & Nephew has taken on Invensys's chief financial officer to replace its retiring finance director, Peter Hooley. Adrian Hennah, who has been with engineering group Invensys for four years, is likely to take a pay cut in his new...

Saint-Gobain rejects BPB's IT integration.(Compagnie de Saint-Gobain S.A)(Brief Article)
February 8, 2006... Saint-Gobain has snubbed BPB's plans to implement a new Oracle IT system by terminating the project at a cost of nearly #9m. The French building materials group, which bought BPB for #3.9bn last December, says the system is "not as...

Jarvis finance chief takes on dual role.
February 8, 2006... Jarvis Hotels' new chief executive is facing a heavily increased workload as he continues to head up the finance function. The company's chairman, John Jarvis, has confirmed that there are no immediate plans to seek a replacement...

NEWS DIGEST: Prison for Gate Gourmet ex-finance chief.
February 8, 2006... The former finance director at Gate Gourmet has been jailed for 12 months after stealing #30,000 from the catering group. Ravinder Dhillon, who was sacked from Gate Gourmet in March 2005 and was paid #110,000 a year, transferred monies from...

NEWS DIGEST: New RBS finance director awarded #4.6m.
February 8, 2006... Royal Bank of Scotland (RBS) has awarded its new finance director #4.6m to make up for what he would have earned at Citigroup, where he was group treasurer. Guy Whittaker, who has taken over from incumbent Fred Watt, will receive a #1.2m...

NEWS DIGEST: Compass restructures after investigation.
February 8, 2006... Compass has restructured the systems and controls at its Eurest Support Services arm after a three-month investigation into its dealings with the United Nations (UN). The investigation, run by Freshfields Bruckhaus Deringer and Ernst &...

NEWS DIGEST: Provalis finance chief set to step down.
February 8, 2006... Provalis has announced that its finance director is stepping down from the group. Peter Bream, along with chairman Frank Harding, will be replaced by director of finance Mark Keen and non-executive director Alan Aikman respectively. At the...

NEWS DIGEST: DTI reveals increase in insolvencies.(Department of Trade and Industry)(Brief Article)
February 8, 2006... Corporate insolvencies increased by 6 per cent in 2005 compared with the previous year, according to the Department of Trade and Industry. Although the number of companies becoming insolvent in the final quarter of the year declined by 5.5...

Minerva leads speculative debt revival.
February 8, 2006... Minerva is at the forefront of the re-emergence of speculative debt after securing a #275m senior debt facility to finance its development of The Walbrook, a 440,000 sq ft freehold office site in the City. Of the total #275m borrowing,...

Companies at risk of breaching loan covenants due to increased leverage.
February 8, 2006... The number of companies breaching their covenants increased in the European leveraged loan market in 2005 as softer trading environments and increased leverage left a rising number of companies at risk. Ratings agency Standard & Poor's...

Liberty finance director leaves for new retail role.
February 8, 2006... Liberty's finance director and chief operating officer has resigned after 18 months at the Regent Street store. Fraser Allan is leaving the company on March 31 to become chief executive at Linley, the furniture group founded by Lord...

IFRS forces St Ives into holiday pay restructure.
February 8, 2006... St Ives has extended the calculation of its holiday pay provisions from casual staff to all employees after restating its accounts under International Financial Reporting Standards (IFRS), resulting in a first-time charge of #485,000. ...

BAA revisits City for bond issues.
February 8, 2006... BAA has issued three bonds totalling almost #2bn to pay down some existing borrowings and finance its ongoing building programmes. A E1bn (#689m) bond will accrue 3.785 per cent interest, expiring in 2012. A 2018 bond of E750m (#509.5m)...

Basel II forces banks into rethink over asset-backed security strategy.
February 8, 2006... Banks are expected to revise the structures of their asset-backed securities (ABS) in a bid to maximise capital under Basel II, the new European credit risk framework. JP Morgan, the US investment bank, predicts that the use of...

Poor IT implementation costs companies billions.
February 8, 2006... Billions of pounds are being wasted every year through poor IT implementation as technical issues continue to dominate projects at the expense of changing the way people work. A new report warns that the 'best-intentioned' IT projects...

Businesses answer proposals on Reits.
February 8, 2006... Companies last week submitted their response to the Government's Pre- Budget Report on the introduction UK Real Estate Investment Trusts (Reits). The Government asked for submissions on its proposals for conversion of single companies...

NEWS ANALYSIS: UK may follow SEC clamp down on Mickey Mouse pay.
February 8, 2006... Disney chief executive Michael Eisner pocketed more than #450m over a 12-year period when the company was struggling, yet no one knew until it was too late to act. Perry Williams looks at the moves that are afoot to bring transparency to...

West LB's ratings war of works and broken trust.
February 8, 2006... West LB's bust-up with rating agency Fitch could not have come at a worse, or better, time - depending which side of the fence you sit on. It emerged last week that the German bank had canned Fitch's contract after it made comments on...

COMMENT: Sidestepping the rules on takeover trash-talking.
February 8, 2006... The Takeover Code has ensured that bids are conducted in a gentlemanly fashion. But a loophole in the legislation has led to a re-emergence of the scurrilous practices of the past The chairman of Arcelor, defending the steel company...

INTERVIEW - LINDA LILLIS: Dicing with debt.
February 8, 2006... Its doomed attempts to break Las Vegas pushed London Clubs International's share price below 10p. Finance director Linda Lillis tells Matthew Martin how she turned around the fortunes of the company and how UK gaming deregulation will help...

Managing LCI's finance team.
February 8, 2006... Lillis heads an international finance team, with the majority of the staff based in South Africa. The total number of finance staff is just under 100, with 25 based in the UK and 40 in South Africa. The UK finance team is based in Brick...

How legislation will affect the gambling market.
February 8, 2006... The Gambling Act 2005 will result in massive changes to the casino industry, the most significant of which will be changes to the licensing regime and rules on entry to casinos. Last October, the first changes under the Act came into...

PENSIONS STRATEGY: Solving the pensions puzzle.
February 8, 2006... Now more than ever companies are having to pay attention to their pension deficits. As a result, choosing the best pension scheme, for both employees and the company, has become a vital strategic decision for a business. Stephanie Spicer...

PENSIONS STRATEGY: Union view.
February 8, 2006... When a final salary scheme is in trouble, you start off the usual negotiation stances of how schemes can continue. Smart pension or salary sacrifice solutions as a way of the employer paying the pension contributions and deducting from the...

PENSIONS STRATEGY: Investment view.
February 8, 2006... The real yield on the 50-year index-linked gilt has fallen to only 0.5 per cent. This has highlighted the difficult position of UK pension funds. Funds that need to buy bonds to decrease their interest rate exposure should think about...

THE BOTTOM LINE: Reit good planning.
February 8, 2006... Responding to queries at Mitchells & Butlers' annual general meeting last week, finance director Karim Naffah said the company was evaluating the options that Real Estate Investment Trusts (Reits) present for maximising returns from the...

THE BOTTOM LINE: Insurance policy.(Co-operative Financial Services)
February 8, 2006... Co-operative Financial Services (CFS) is yet another example of a mutual striving to punch above its weight. It plans to devise a strategy for applying the new European banking regulation Basel II to its insurance business, Co-operative...

THE BOTTOM LINE: Reserving judgement.
February 8, 2006... The announcement last week of record profits for Shell was expected to keep even the most jaded investor happy. But investors, concerned at the Anglo-Dutch firm's reserve-replacement ratio, were only partly impressed and its share...

Compass challenges KPMG over share charge.
February 1, 2006... Compass Finance is locked in a row with its auditor, KPMG, over whether the company faces a #5m deduction in shareholder funds next year following a stock repurchase deal. The clash has been sparked by the group's repurchase of...

Mitchells & Butlers forced by IFRS to amend articles.
February 1, 2006... Mitchells & Butlers is being forced to amend its articles of association as implementing International Financial Reporting Standards (IFRS) will reduce its borrowing limit by more than #700m. The debt limit currently available to finance...

Qinetiq finance chief to reap #1.5m from float.(Douglas Webb)(Brief Article)
February 1, 2006... Douglas Webb, chief financial officer of Qinetiq, could see his stake in the company valued at almost #1.5m when its controversial flotation is completed next month. The defence research group expects to float at between 165p and 205p...

SCI breaches corporate governance code on NEDs.
February 1, 2006... SCI Entertainment is flouting corporate governance rules by installing its former finance director and the chief executive of its financial public relations agency as non-executive directors (NEDs). Former finance director Nigel Wayne...

Luminar to cut debt facility to reduce costs.
February 1, 2006... Luminar is set to begin negotiating with its banks about reducing the nightclub operator's #250m debt facility, in a bid to save on costs. The move follows the company's decision to increase its capital expenditure over the next...

Pennon fights criticism over share consolidation proposal.
February 1, 2006... Water utility Pennon Group has called an extraordinary general meeting (EGM) to approve a controversial buy-back and share consolidation that has raised concerns from a UK water users group. Pennon, owner of South West Water, said in...

Alpha Airports begins investigation into potential #2.5m fraud loss.
February 1, 2006... Alpha Airports has announced that it may have been the victim of a fraud that could cost the company up to #2.5m. The airports retail group is now consulting with its lawyers to ascertain the full extent of the company's losses and the...

DMGT under fire over pay and corporate governance.
February 1, 2006... Daily Mail & General Trust (DMGT) is facing opposition to both its proposed remuneration and elements of its corporate governance. Ahead of DMGT's annual general meeting, Pensions Investment Research Consultants (Pirc) has highlighted...

Gate Gourmet to enlarge senior UK finance team.
February 1, 2006... Gate Gourmet is on a recruitment drive to bolster its UK finance team, despite the high-profile redundancies of last summer. The airline caterer is recruiting eight senior finance staff as part of a wide-ranging restructuring of the...

Northumbrian picks RBC for bond issue.
February 1, 2006... Northumbrian Water has dropped Barclays Capital in favour of non- syndicate lender Royal Bank of Canada (RBC) for a new #60m bond issue. Barclays Capital carried out the utility's last #150m issue in October. However, Northumbrian says...

BOC set to make #80m inroad into pension deficit after bonds struggle.
February 1, 2006... Industrial gases company BOC will inject #80m into its pension fund this year after blaming low bond yields for its #455m European deficit. The company, which last week spurned an offer by German rival Linde, traditionally pays #30m a...

Northern Rock cuts tax by timing pension payments.
February 1, 2006... Northern Rock has reduced its corporation tax bill for 2007 by staggering additional contributions into its staff pension fund. Under new tax rules, companies can receive tax relief on twice the amount of their previous year's...

Land Sec selects JP Morgan and BarCap.
February 1, 2006... Land Securities has awarded JP Morgan Cazenove and Barclays Capital frontline roles on its five-year fixed #300m bond issue. The two banks are joined by Citigroup as joint lead arrangers on the bond, which pays 4.625 per cent interest on...

Berkeley Berry Birch to raise #5m to cut capital deficit.
February 1, 2006... Berkeley Berry Birch, the financial services distribution group, is expected to raise around #5m through a combination of debt and equity in an effort to reduce its #8m regulatory capital deficit. The plan is part of a strategy to help...

Crest Nicholson to scale down finance team in savings drive.
February 1, 2006... Crest Nicholson has outlined plans to trim #10m off its cost base per year by slimming down the finance team and improving the construction and design process. The construction group's finance director, Peter Darby, will be in charge...

Technical update: EU Pensions Directive.
February 1, 2006... Cross-border pension schemes come at a high price The EU Pensions Directive introduces a framework that enables EU companies to operate a pension scheme across two or more member states - a 'cross-border' scheme. If employers in two...

F&C to lose finance chief in third senior departure.(Ian Paterson Brown resigns from F&C Asset Management )(Brief Article)
February 1, 2006... F&C Asset Management's chief financial officer will step down from the board following the company's annual general meeting in May. Ian Paterson Brown, who has worked for the group for more than 24 years, was also head of its Scottish...

CAT takes pre-emption rights issue to shareholders.
February 1, 2006... Cambridge Antibody Technology (CAT) is hoping to pass a controversial pre-emption rights resolution at this week's annual general meeting (AGM) following a Government review of the process last year. CAT is seeking an authority at its...

Old Mutual seeks respite from quarterly reporting.(Old Mutual South Africa)
February 1, 2006... Old Mutual, the Anglo-South African insurer, is in discussions with the Swedish financial supervisory authority, Finansinspektionen, about a possible exclusion from its quarterly reporting requirement. Old Mutual plans to have a...

Britvic bolsters finance function.
February 1, 2006... Britvic, the recently floated soft drinks business, is in the process of beefing up its finance team because of the increased financial scrutiny it faces as a public company. The company is looking to recruit three new senior finance...

NEWS DIGEST: Premier Farnell finance chief to join Provident.(Andrew Fisher joins Provident Financial)(Brief Article)
February 1, 2006... Premier Farnell is losing its group finance director of 11 years to Provident Financial. Andrew Fisher will remain at Premier Farnell until May 16 and the following day an annual general meeting (AGM) will be held at Provident Financial,...

NEWS DIGEST: Cambrian allows finance director to step down.
February 1, 2006... Cambrian Mining has accepted its finance director's resignation. Jo Malin was found guilty of market abuse by the Financial Services Authority and fined #25,000 for twice buying shares in Cambrian before the company made announcements....

NEWS DIGEST: Instore finance chief set to depart.(Gary Brown)(Brief Article)
February 1, 2006... Instore, the group that operates the discount retail chain Poundstretcher, has announced that its group finance director is stepping down. Gary Brown, who joined the group in 2003, is leaving "to pursue other interests which will allow him...

NEWS DIGEST: IBM prepares to tackle pension deficit.
February 1, 2006... IBM has outlined new proposals to deal with its #4.2bn pension deficit. However, the computer giant has declined to give out details until a consultation has been completed. The company said earlier last month that it intended to close its...

NEWS DIGEST: Mothercare takes on finance director.(Neil Harrington )(Brief Article)
February 1, 2006... Mothercare has confirmed that Neil Harrington has joined the company as finance director as of January 30. The retailer announced at the beginning of December last year that Harrington would be moving to the group to replace Steven Glew,...

NEWS DIGEST: Prudential drops JP Morgan for Goldmans.(Goldman Sachs )(Brief Article)
February 1, 2006... Prudential has joined the growing throng of companies changing their corporate brokers in recent months by dropping JP Morgan Cazenove and naming Goldman Sachs in its place. JP Morgan Cazenove had acted for the company for 10 years before...

Pension funds move to cut equity risk.
February 1, 2006... Almost a third of pension funds have reduced their weighting in shares in preference for bonds over the past year to minimise the potential for widening liabilities. Research from the National Association of Pension Funds (NAPF)...

MITIE brings in new group finance director from Serco.(Suzanne Baxter )(Brief Article)
February 1, 2006... MITIE, the support services company, has appointed Suzanne Baxter as group finance director following the promotion of Ruby McGregor-Smith to the position of chief operating officer. Baxter will take up the position on April 10, when...

Companies unable to produce accurate financial forecasts.
February 1, 2006... Businesses throughout the UK, France, Germany and the US are struggling to produce accurate financial forecasts due to difficulties in collecting information. More than half of 281 businesses questioned as part of a survey commissioned...

RBS splits corporate banking divisions.
February 1, 2006... Royal Bank of Scotland (RBS) has restructured its Corporate Banking & Financial Markets (CBFM) division by dividing it into two teams. The new unit, which reported a 16 per cent rise in income to #4.3bn in the first half of 2005, has...

Companies to assess conflicts of interest.
February 1, 2006... Investment companies will have to create 'conflicts of interest' policies as part of their preparations for the new European Markets in Financial Instruments Directive (Mifid). The directive, which is due for implementation on November...

Fitch predicts raft of restatements as corporates get to grips with IFRS.
February 1, 2006... UK corporates could be faced with restating International Financial Reporting Standard (IFRS) accounts in the next few years after effectively reporting 'into a vacuum' last year. According to credit rating agency Fitch Ratings, widescale...

Sony takes on finance chief for UK and Europe.(Philip Mellor )
February 1, 2006... Sony Pictures Home Entertainment has created the role of UK finance director and vice-president finance Europe to oversee the function throughout the region. Philip Mellor joins the business just as Sony has finished implementing a...

India relaxes rules on retail ownership.(Brief Article)
February 1, 2006... UK retailers planning to expand into India are set to benefit from the Indian government's decision to relax restrictions on the level of direct investment granted to international companies. Single-brand international retailers will...

ANALYSIS: Sainsbury's sets the benchmark for part-time worker pensions.
February 1, 2006... J Sainsbury has already put aside a sum to cover pension payouts to part-time staff, while Wm Morrison is currently in talks with unions on the issue. But as Matt Goodburn explains, it is not just companies in the retail sector that need to...

Issue of data protection finally comes to the fore.
February 1, 2006... Last week's security breach at O2 ought to provide yet another warning to all UK company boards about the future of data security. It emerged that accounts, addresses and bills of the mobile giant's customers could be viewed by others...

COMMENT: Why Vodafone is right to speculate to accumulate.
February 1, 2006... Knowingly paying over the odds for a business may seem an irrational move but Vodafone's #2.56bn takeover of Telsim could prove to be a smart piece of long-term strategic thinking Can paying through the nose ever be justified? Alright,...