Finance Week articles from May 2005

Finance Week archives from May 2005

Investec imposes limit on non-audit fees.(Investec Bank UK Ltd.)(Brief Article)
May 25, 2005... Investec has implemented a formal limit of 30 per cent on the level of non-audit fees its auditors, Ernst & Young and KPMG, can receive. In any year, non-audit fees paid to both firms cannot exceed 30 per cent of the standard audit fee...

Compass attacked over #150m tax evasiveness.(Brief Article)
May 25, 2005... Compass Group has been slammed following the discovery that it will lose #150m over the next three years after a tax loophole it was exploiting was closed down by the Government. Group finance director Andrew Martin told analysts and...

Land Securities incurs #42m bank penalties.(Land Securities Group PLC)(Brief Article)
May 25, 2005... Land Securities has paid its banks #42m in penalties for closing down a series of long-dated interest rate swaps used to protect itself against rising interest rates on its debt. The FTSE 100 property giant has closed down the #900m...

Boots fails to replace Dodd ahead of sale.(Howard Dodd resigns from Boots Healthcare International)(Brief Article)
May 25, 2005... Boots has admitted that it will not be able to find a new finance director in time for the #1bn sale of Boots Healthcare International (BHI) in July. Boots finance director, Howard Dodd, who announced his resignation in March, left the...

O2 slashes interest charge with euro hedging.(Brief Article)
May 25, 2005... O2 has cut the amount it pays in interest by 84 per cent due to its extensive use of foreign exchange hedging. The mobile networks operator has reduced its net interest charge from #58m to #9m in the space of a year under the direction...

Enodis sees off carpet baggers as it presses ahead with US deregister.
May 25, 2005... Enodis is set to change its articles of association to stop opportunistic investors from stymieing the commercial kitchen equipment manufacturing group's plans to deregister in the US. The amendment will force investors who buy stock...

FSA creates team to help build industry links.(United Kingdom. Financial Services Authority)
May 25, 2005... The Financial Services Authority (FSA) has been spurred by International Financial Reporting Standards to set up a specific team to build links with the accounting and auditing industry. The team's remit will include current market...

British Energy recruits for US relisting.(Brief Article)
May 25, 2005... British Energy is strengthening its finance department in anticipation of re-listing in the US within the next 12 months. The recovering electricity generator will bolster all areas of its finance team with experts in US GAAP reporting...

Matthews seeks small business role.(Roger Matthews resigns from J Sainsbury PLC)(Brief Article)
May 25, 2005... J Sainsbury plc's departing finance director has revealed for the first time his plans for the future as he prepares to leave the struggling retail group. Speaking to Finance Week, Roger Matthews says he is looking for a position as...

Credits give Invensys a three-year exemption on tax in UK and the US.(Invensys PLC)
May 25, 2005... Invensys, the loss-making engineering company, will not have to make a tax payment in the UK and the US for the next three years after accumulating #300m worth of tax credits. Adrian Hennah, chief financial officer at Invensys, says: "We...

IFRS changes to expose takeover advisory fees.(International Financial Reporting Standard)
May 25, 2005... Companies will soon be forced to disclose all fees for M&A deals, including sums paid to investment banks, accountancy firms and law firms under new International Financial Reporting Standard (IFRS) proposals. New proposals to amend...

BAA to reorganise its financial structure.(BAA PLC)(Brief Article)
May 25, 2005... BAA, the airport operator, will cut management layers across the group's financial and operational structure. Over the past six months, the company has appointed 180 senior managers and over the following six months the managers will set...

Carpetright swaps finance chiefs with J Sainsbury.(Darren Shapland resigns and appointment of Ian Kenyon )(Brief Article)
May 25, 2005... Carpetright is replacing its group finance director, who is leaving for the top finance job at J Sainsbury, with the supermarket group's own head of financial reporting. In a move understood to be pure coincidence, Sainsbury's head of...

OFT gives complainants greater rights to information on cases.(Office of Fair Trading)(Brief Article)
May 25, 2005... The Office of Fair Trading (OFT), the UK's primary competition regulator, is set to give more rights to companies who make complaints about their competitors, Finance Week can reveal. Under the current system, complainants have relatively...

TECHNICAL UPDATE: Shifting the blame from the individual.(United Kingdom. Health and Safety at Work Act 1974)
May 25, 2005... Charles Clarke's corporate manslaughter bill, published in March, proposes to restore public confidence in the health and safety measures taken by large corporations by making them liable for deaths that occur when those measures fail. ...

Mitchells & Butler reveals effect of FRS 17.(Brief Article)
May 25, 2005... Pub group Mitchells & Butlers has restated its accounts under FRS 17 for the first time while laying out plans for its future pension contribution. Under FRS 17, the group restated its results for 2004, revealing that pre-tax profit...

Credit rating agencies turn negative on BT debt pile.(British Telecommunications PLC)(Brief Article)
May 25, 2005... BT's decision to dump its debt reduction targets has been met with derision from the credit ratings industry. On the back of the announcement that BT would keep net debt at around #7.8bn, rather than reduce it to #7bn as had previously...

Classification change adds to Tomkins' debt.(Brief Article)
May 25, 2005... Tomkins last week became the first UK company to fully report its financials under International Financial Reporting Standards (IFRS), with the controversial standards IAS 32 and 39 creating the biggest impact. The engineering group,...

Westbury seeks regional finance chief.(Westbury PLC)(Brief Article)
May 25, 2005... Westbury, the UK housebuilder, is looking for a regional finance director who will also be trained to lead its commercial unit. The post was vacated by Denise Price, who left the company earlier this month for personal reasons. The...

NEWS DIGEST: Finance director resigns from Incepta.(Mike Butterworth resigns from Incepta Group PLC)(Brief Article)
May 25, 2005... Incepta has announced that its group finance director has resigned. Mike Butterworth resigned as a director of the marketing and communications group, which is being acquired by rival Huntsworth and is about to de-list, with effect from May...

NEWS DIGEST: SP Holdings restructures senior management.(appointment of Matthew Patten and Tony Simpson)(Brief Article)
May 25, 2005... SP Holdings' finance director has left the company following a senior management reorganisation. David Mends, along with chief operating officer Steve Hayward, is departing after Matthew Patten, the former deputy chairman, was named as...

NEWS DIGEST: Tesco finance chief lands bumper pay packet.(Andrew Higginson of Tesco PLC)(Brief Article)
May 25, 2005... Tesco's finance director, Andrew Higginson, was one of six directors to receive payouts after the supermarket giant made profits of #2bn in the last financial year. Higginson was paid #1.8m and the six directors received #11.7m in pay,...

NEWS DIGEST: Egg appoints new non-executive director.(appointment of Philip Broadley)(Egg PLC)(Brief Article)
May 25, 2005... Egg has named Prudential's group finance director as a non-executive. Philip Broadley has been with Prudential, which owns internet bank Egg, since 2000. Prior to joining the company, he was with Arthur Andersen, where he was chief...

NEWS DIGEST: New finance director for Birse Group.(appointment of Gerry Roche )(Brief Article)
May 25, 2005... Birse Group has appointed Gerry Roche as group finance director. Roche is replacing Heather Craven, who is leaving to pursue other opportunities. Roche has been with the company since 1993 and has held a number of financial roles, including...

NEWS DIGEST: Directors earn twice as much as finance chiefs.(Brief Article)
May 25, 2005... UK company directors are paid on average twice as much as finance directors and controllers, according to a survey. Labour union GMB says that company directors take home on average #162,000, which it says is twice as high as the second...

NEWS DIGEST: Shanks Group makes internal finance promotion.(Fraser Welham, Adrian Auer and Peter Johnson appointmented at Shanks Group)(Brief Article)
May 25, 2005... Shanks Group has promoted its finance director for the Belgium region to group finance director. Fraser Welham will take on his new role from June 1 and has been with the company for more than 10 years, including seven years as regional...

Abbey goes live with covered bond first.(Abbey Financial Corp.)(Brief Article)
May 25, 2005... Abbey is in the throes of finalising the terms of its inaugural covered bond issue as part of a e12bn (#8.2bn) UK programme. Abbey, which was acquired by Spanish bank Santander last November, is in discussions about the size and pricing...

Banks relax rules on property lending to boost loan books.(Brief Article)
May 25, 2005... Banks are loosening the covenants for commercial property borrowers by requiring less income to cover interest payments. Figures released in a report detailing commercial property lending in 2004 found that last year, for the first time...

TECHNICAL UPDATE: Budget forces traders into tax rethink.(taxation of foreign equities)
May 25, 2005... UK-based traders of foreign equities are reeling from the hit of a Budget announcement that will increase their UK tax charge. The changes affect all UK traders receiving foreign dividends - essentially anyone trading in foreign equities,...

FEE warns of IFRS hit to dividends.(Federation des Experts Comptables Europeens)(International Financial Reporting Standards)(Brief Article)
May 25, 2005... The Federation des Experts Comptables Europeens (FEE) has warned that dividend payments could be severely affected by International Financial Reporting Standards (IFRS). The Company Act 1985 states that a dividend can only be paid from...

VT Group seeks to raise #20m for PFI project.(private finance initiative)(Brief Article)
May 25, 2005... VT Group is on the verge of tapping the banking market to raise #20m, as part of a consortium bidding for the Future Strategic Tanker Aircraft. The company has a 10 per cent stake in the air-to-air refuelling private finance initiative...

Wellington seizes the initiative on contract certainty compliance.(Wellington Insurance)(Brief Article)
May 25, 2005... Wellington, the Lloyd's insurer, has launched a working party to ensure full compliance with the Financial Services Authority's (FSA) initiative on contract certainty. Wellington is aiming to be one of the first Lloyd's syndicates to...

TECHNICAL UPDATE: Losing opt out will harm UK business.(Working Time Directive)(United Kingdom)
May 25, 2005... Last week, the European Parliament voted to end the UK's 'opt out' on working time. The Working Time Directive contains a number of limitations on the amount of time employees can work, including a maximum 48-hour working week. ...

SEC looks to reduce impact of Sarbox.(Securities and Exchange Commission)(Sarbanes-Oxley Act of 2002)(Brief Article)
May 25, 2005... William Donaldson, chairman of the US Securities and Exchange Commission (SEC), has buckled under further criticism of the Sarbanes- Oxley Act after promising to release new guidance on compliance that could cut costs. According to...

APB moves to tighten up pension audit procedures.(Auditing Practices Board)(Brief Article)
May 25, 2005... The Auditing Practices Board (APB) has issued new guidance for accounting corporate pension schemes, tightening up procedures on auditing schemes. On risk, the APB says auditors should have a sufficient understanding of the control...

IFRS forces pension funds up the agenda.(International Financial Reporting Standards)(Brief Article)
May 25, 2005... Pension fund management now dominates finance directors' agendas as a result of increased transparency under International Financial Reporting Standards. More than 55 per cent of finance directors surveyed by Mercer Human Resource...

HEALTH CHECK - NATIONAL GRID TRANSCO: New standards boost EPS.
May 25, 2005... Like many companies, National Grid Transco last week insisted the transition to International Financial Reporting Standards (IFRS) was purely an accounting change. But, as the company released its comparative figures under the new standards,...

NEWS ANALYSIS: Companies count the cost of reducing the finance team.
May 25, 2005... The current trend for finance directors to cut costs by relocating or making members of their own team redundant - as companies such as 3i, Axa and Diageo have recently done - shows no sign of abating. But is benchmarking the finance...

INTERVIEW - STEVE WEBSTER: Plumb deals.(Wolseley PLC)(Interview)
May 25, 2005... Despite losing out to Travis Perkins in the recent bidding war for Focus Wickes' DIY business, plumbing and heating pipe giant Wolseley still managed to complete #124m worth of M&A transactions last year. Roger Baird speaks to group finance...

COMMENT: BAA delivers blow to UK credibility.
May 25, 2005... Scrapping quarterly reporting on the basis that it takes up too much time ignores the importance of financial discipline and shows little regard for company best practice BAA's decision to ditch quarterly reporting after nearly 20...

Boots must solve FD search for success.(Boots Healthcare International)(finance director resigns)
May 25, 2005... If there was a list of least popular jobs in the City at the moment, Boots' financial controller would come pretty close to the top. The man holding this rather unenviable position is Jim Smart and it was he who faced the baying masses...

RICHARD NORTHEDGE: Icelanders come fishing for British companies.
May 25, 2005... The latest foreign financial invasion has come in the shape of a #2.5bn acquisition spree by Icelandic companies. But it is they and not the British companies who should be wary Iceland: 39,800 square miles; population, 285,000;...

ANALYSIS: The enterprise act has failed to earn respect.(United Kingdom. Enterprise Act 2002)
May 25, 2005... The demise of Ciro Citterio reveals the inadequacy of the Enterprise Act. Rather than saving ailing businesses, it provides the perfect opportunity for self-interested companies to make a quick buck. So why is the model that works in the...

ANALYSIS: THE ENTERPRISE ACT: PROMOTING THE RESCUE CULTURE.(Brief Article)
May 25, 2005... In September 2003, a new regime was unveiled, contained in the Enterprise Act 2002. At the time of the launch, the then DTI minister, Gerry Sutcliffe, unveiled the Government's plans for a new rescue culture. "We want insolvency to be fast,...

ANALYSIS: GOING FOR BROKE.(liquidation)(Brief Article)
May 25, 2005... There were 2,900 liquidations in England and Wales in the first quarter of 2005 on a seasonally adjusted basis. This was a decrease of 1.3 per cent on the previous quarter and a decrease of more than 74 per cent on the same period a year...

ANALYSIS: Credit ratings split the treasurer community.
May 25, 2005... While some corporate treasurers view credit ratings as having little relevance to a company's ability to manage its debt, others say targeting a higher rating should be a key aim for businesses. Nat Mankelow reports The debate over the...

TECHNICAL ANALYSIS: UK companies learn the lessons of Sarbox.
May 25, 2005... Sarbanes-Oxley may not be enforceable outside the US but that has not stopped some UK companies from complying with the regulations. Sean Holohan explains how implementing effective internal controls can benefit a company both in terms of...

BUSINESS MODELS: How Matalan became a victim of its own success.
May 25, 2005... As the retailer that pioneered out-of-town value clothing stores in the UK, Matalan's business had grown steadily for the best part of a decade. But with the likes of Asda and Tesco now getting in on the act, the company has been forced to...

THE BOTTOM LINE: Compass gets its desserts.(Brief Article)
May 25, 2005... Compass, which gets UK taxpayers' money to feed British schoolchildren their lunch, has for the past three years not paid an enormous amount of tax itself. But the food services provider has just had a very profitable tax avoidance...

THE BOTTOM LINE: Flexible spend.(Brief Article)
May 25, 2005... Investec should be applauded for its proactive approach to corporate governance, specifically auditor independence. Investec has a self-imposed limit of 30 per cent for the level of non- audit fees its auditors Ernst & Young and KPMG can...

THE BOTTOM LINE: Busy but unbowed.(Brief Article)
May 25, 2005... Enodis is emerging from a four-year nightmare that has made its chief financial officer, Dave Wrench, one of the busiest men in the City. As well as planning a share buyback, Wrench is embarking on what is one of any finance director's...

THE BOTTOM LINE: Working for clarity.(Brief Article)
May 25, 2005... The disclosure of adviser fees in mergers and acquisitions is going to cause an almighty upheaval. Fees charged by corporate advisers in M&A deals can be stratospheric, sometimes involving a percentage of the overall price paid. ...

Brixton breaks up Industrious finance team.(Brief Article)
May 18, 2005... Brixton Estates, the industrial property group, has closed down the finance department of Industrious, the private landlord it acquired for #675m last November. Brixton's deputy chief executive, Steve Owen, tells Finance Week that 20 of...

Slough bondholders win improved rights.(Brief Article)
May 18, 2005... Bondholders have secured another victory in establishing their rights after Slough Estates offered change of control protection in return for extending its bond repayments, allowing the company to save #9.5m in interest a year. ...

Former Lastminute finance chief in line for #1.6m.(Brief Article)
May 18, 2005... Lastminute.com's former chief financial officer stands to make more than #1.6m if the sale of the online retailer to US group Sabre is approved by shareholders. David Howell, who despite stepping down at the end of April has stayed on...

Travis seeks to cut credit facility.(Brief Article)
May 18, 2005... Travis Perkins' finance director plans to cut the company's #1.2bn credit facility, which it used to buy DIY retailer Wickes, by #500m in four years. The builders' merchants completed the #950m purchase of Wickes in February. Paul...

Managing director role for Reg Vardy finance chief.(Brief Article)
May 18, 2005... Reg Vardy, the car dealership, has promoted its finance director to become the company's first managing director. Robert Forrester will take up his new position on June 1, after first joining the company as finance director in June 2001....

BA outlines nine-year plan to pay off #1.4bn pension deficit.(British Airways PLC)(Brief Article)
May 18, 2005... Airline operator BA has revealed details of its plan aimed at paying off its #1.4bn pension deficit over the next nine years. The move comes as the company has cut costs, sold off assets and improved margins over the past year to March...

Technical Update: Taking a hit to the profit and loss.(International Financial Reporting Standards)
May 18, 2005... Over the past few months, a number of European listed companies have provided investors with restatements of their 2004 annual figures under International Financial Reporting Standards (IFRS). The effect of adopting IFRS as shown in...

BT pension fund to make #400m hedge investment.(Brief Article)
May 18, 2005... The BT pension fund is set to plough #400m into hedge funds as it starts the second tranche of a planned investment announced late last year. BT's fund, managed by Hermes, said it would put 2 per cent of its assets, equivalent to #600m...

Paladin recruits for acquisition drive.(Brief Article)
May 18, 2005... Paladin Resources, the independent oil and gas group, is strengthening its finance team amid speculation that the group will enter the bidding war for rival Edinburgh Oil and Gas. Paladin, which posted record profits in 2004 on the back...

BoI to reduce contributions to staff pension fund despite huge deficit.(Bank of Ireland)(Brief Article)
May 18, 2005... Bank of Ireland (BoI) will cut contributions to its staff pensions fund until 2007, just 12 months after taking a three-year pension holiday, despite the fund showing a e739m (#506m) net deficit under FRS 17. BoI says it will reduce...

GSK rues costly Sarbox compliance programme.(GlaxoSmithKline PLC)(Brief Article)
May 18, 2005... GlaxoSmithKline (GSK) has been forced to pay out #10m on a programme to comply with Sarbanes-Oxley Section 404, which, it revealed, has "added little value". Paul Blackburn, financial controller at GSK and the person mandated with...

3I relocation set to result in job losses.(Brief Article)
May 18, 2005... 3i is implementing a relocation programme within its finance division that could lead to up to 10 staff being axed. 3i's finance director, Simon Ball, says all of the department's 74 finance staff, currently split between Birmingham...

Vue expansion creates new group chief accountant post.(Brief Article)
May 18, 2005... Vue Cinemas, the UK's second largest cinema group, is set to reorganise its finance function by bringing in a group chief accountant to run key areas including the company's treasury function. The new group chief accountant will oversee...

First Group opts for franchise pension fund on balance sheet.
May 18, 2005... Rail and bus company First Group is keeping its #43m rail pension fund deficit on its balance sheet under International Financial Reporting Standards (IFRS), unlike some of its rivals. First Group's finance director, Dean Finch, says:...

Technical Update: Increasing the compliance burden.
May 18, 2005... On July 1 this year, an entirely new public offers regime will be introduced in the UK. The current listing rules and the public offers of securities regulations will be revoked and replaced by a three-part Financial Services Authority...

Aegon shows 12 per cent rise in EEV.(European Embedded Values)(Brief Article)
May 18, 2005... Dutch insurer Aegon has reported a 12 per cent increase in its total embedded value as part of its full-year report and accounts disclosure under European Embedded Values (EEV). The group reported an embedded value of E17.6bn (#12bn)...

Acambis non-execs benefit from IFRS training.(International Financial Reporting Standards)(Brief Article)
May 18, 2005... Pharmaceutical group Acambis has trained up its non-executive directors (NEDs) in International Financial Reporting Standards (IFRS) as the trend grows for companies to educate NEDs in accounting changes. David Lawrence, finance...

ASB gives guidance on key measures for OFRs.(Accounting Standards Board)(operating and financial reviews)
May 18, 2005... The Accounting Standards Board (ASB) has listed seven key measures that must be included in company operating and financial reviews (OFRs). The list, published last week, includes a financial review of the previous year, current...

News Digest: BAE shareholders allow IFRS change for deal.(International Financial Reporting Standards)(BAE Systems Plc)(Brief Article)
May 18, 2005... BAE, the defence contractor, held an extraordinary general meeting last week to enable it to buy US rival United Defence Industries for #2.19bn. Shareholders backed board proposals to amend its articles of association, cutting out...

News Digest: New finance chief for Davis Service Group.(Brief Article)
May 18, 2005... The Davis Service Group has appointed a new finance director. Kevin Quinn, who took up the post on Monday (May 16), held senior financial appointments at Amersham, the medical imaging group, from 1997 to 2004, when it was acquired by GE. He...

News Digest: Extra duties for NXT finance director.(Appointments and Resignations)(Brief Article)
May 18, 2005... NXT, the technology company, has announced that its finance director, Peter Thoms, will assume the role of chief operating officer in addition to his current responsibilities. The move is part of a larger board restructuring that has...

News Digest: Gulf Keystone Petroleum reveals new finance chief.(Brief Article)
May 18, 2005... Gulf Keystone Petroleum, the AIM-listed oil exploration company, has named Caroline Brown as chief financial officer. Brown succeeds Ali Al- Qabandi, who becomes vice president of business development. Brown was formerly finance director of...

News Digest: United Utilities makes board appointment.(Brief Article)
May 18, 2005... United Utilities has secured Tom Drury as an executive director. Drury has been the managing director of Vertex, the group's outsourcing business, since 1996. He was formerly the finance director of United Utilities Water and prior to that...

News Digest: Hume joins TDG as group finance director.(Brief Article)
May 18, 2005... TDG, the logistics and supply chain management company, has appointed Jeffrey Hume as group finance director. Hume was group finance director of Alfred McAlpine from 1998 to 2003 and of Howden Group, the industrial fan suppliers, between...

News Digest: AIT's former finance director accused.(Correction Notice)
May 18, 2005... In last week's issue it was stated that Gareth Bailey, of AIT, was accused at Southwark Crown Court of misleading investors in 2002. We would like to clarify that he is AIT's former finance director. Copyright: Centaur Communications...

AIM oversees influx of mining companies as boom continues.(Alternative Investment Market)(Brief Article)
May 18, 2005... Mining companies made up nearly one sixth of the 130 new listings on Alternative Investment Market (AIM) during the first quarter of 2005, up 110 per cent on the same period last year. There is no sign of a slowdown in the second...

Health Check - Anglo American: IFRS gives rare assets boost.(International Financial Reporting Standards)
May 18, 2005... Anglo American is one of the few companies to see an increase in its net assets under International Financial Reporting Standards (IFRS). Under IAS 1, minority interests are reclassified from 'long-term liabilities' to 'equity',...

Offshore companies to miss out on Reits boom.(Brief Article)
May 18, 2005... Companies that hold their property assets in offshore funds will miss out on the advantages of real estate investment trusts (Reits). Reits, set for introduction in the UK next year, are tax-efficient listed vehicles that most of the...

IASB urged to act on dividend concerns.(International Accounting Standards Board)
May 18, 2005... The International Accounting Standards Board (IASB) is facing renewed pressure to address companies' concerns over the effect of International Reporting Standards (IFRS) on their ability to pay dividends. Last month, the Institute for...

Technical Update: Tax avoidance clampdown starts now.
May 18, 2005... As the Chancellor has found it increasingly necessary to raise revenue without raising headline taxes, what was once thought of as legitimate tax planning has come under more and more scrutiny. A good example of this is the Revenue's...

News Analysis: Companies call for clarity as ifrs deadline looms.(International Financial Reporting Standards )
May 18, 2005... The deadline for reporting under International Financial Reporting Standards is getting ever closer but there are a number of areas that are still some way from clarification. Much to their dismay, finance teams are having to employ a certain...

Interview - Nick Rose Diageo: Maker's marker.(Interview)
May 18, 2005... The finance team at drinks giant Diageo created by Nick Rose is widely praised as a benchmark for other FTSE 100 companies. Naomi Rovnick speaks to the chief financial officer about what sets the team apart and rumours of a bid for Allied...