8/6/2019 Cityam 2011-06-03
1/32
Capital Markets Asset Management Private Banking Investment Banking Property Investments Wealth & InvestmentInvestec Bank plc (Reg. no. 489604) and Investec Asset Management Limited (Reg. no. 2036094) are authorised and regulated by the Financial Services Authority and are members of the London Stock Exchange. Registered at 2 Gresham Street, London EC2V 7QP.
The seasons hot ticket. The spotlight is on winning company, head-turning style and, of course, powerful racing.Success through experience, skill and determination is what drives those who take part. Its what propels us too.
The Investec Derby Festival. Unbridled excitement. www.investec.com/derby
Wear to be stylishInvestec Derby Festival, Epsom Downs Racecourse, 3 & 4 June 2011
FTSE 100 5,847.92 -80.69 DOW 12,248.55 -41.59 NASDAQ 2,773.31 +4.12 /$ 1.64 +0.01 / 1.13 -0.01 /$ 1.45 +0.02
VINCENT Tchenguiz, the property tycoon arrested as part of a SeriousFraud Office (SFO) investigation intothe collapse of Icelandic bank Kaupthing, says his legal fees are now costing him 2m a month.
Tchenguiz is fighting three law-suits: the criminal case being builtagainst him, for which he has not
been charged; and two parallel civilactions against the administrators of Kaupthing worth in excess of 1bn.
In an interview with City A.M. Tchenguiz said he dedicates around70 per cent of his time to the cases,
which he says have ravaged his proper-ty empire.
He said: It is not business as usual.Definitely not. We are letting outoffice space and restructuring. Wemight have to shrink back to muchless foreign exchange trading. This hasdone huge damage to my reputation. Ihave deals in South Africa, Canada,Israel, Holland that are all on holdpending this investigation.
He said he has been subject to trial by media and likened his treatment by regulators to the Financial Services Authority investigation into Gartmorestar Guillaume Rambourg.
City A.M.has learned the SFO yester-
day requested more time to answerthe points raised by Tchenguiz in his judicial review papers.
FULL TCHENGUIZ INTERVIEW: P19 Fred Dones firm will be named as the preferred bidder for the Tote
BOOKMAKER Betfred will today benamed as the preferred bidder to buy the Tote, the state-owned betting pool,City A.M.can confirm. The firm is believed to have beaten a
rival approach from former LiverpoolFootball Club chairman Sir MartinBroughtons Sports InvestmentPartners (SIP) vehicle, in a deal that val-ues the Tote at more than 200m.
Sir Martin had appeared to be in poleposition as late as last week, havingsecured the backing of the racingindustry.
But Betfred last night emerged as thefavourite to buy the turf accountant. The sale of the Tote had become a
testing political issue in recent weeks.Sources close to the deal said last nightthe sale had to be considered by PrimeMinister David Cameron, followingearlier talks between culture secretary
Jeremy Hunt and chancellor GeorgeOsborne.
Government lawyers also pored overthe fine print of both bids to avoid any possibility the eventual final decision
would be subject to a legal appeal, with European Union state aid regula-tions proving the most complex obsta-cle.
Although it will become the pre-ferred bidder, Betfred will not immedi-ately get the keys to the Totes 517
betting shops.
BETFRED WINS THERACE FOR THE TOTEBY RICHARD PARTINGTON
POLITICS
www.cityam.comIssue 1,395 Friday 3 June 2011 FREE
DONT MISS OUR EPSOM DERBYSPECIAL EDITION TOMORROW
AT EPSOM, WATERLOO AND LONDON BRID
BUSINESS WITH PERSONALITY
Betfred, which owns more than 750stores, still needs to negotiate the finaldetails with ministers.
Both Betfred and SIP were tasked with meeting strict governmentrequirements for bidders. Any approach for the state-owned
bookmaker is required to provide value for the taxpayer, support for theracing industry and to acknowledgethe interests of the Tote staff.
SIP had won over the racing commu-nity, having secured support from sev-eral powerful racing organisations.
It had planned to float the Tote,handing seats on the board and sharesto racing industry bodies.
In a spiralling chase to secure the Tote, Sir Martin also improved his bid with the offer of an upfront paymentof 77m to the Treasury, as well as animproved 11.5m per year to the racingindustry in perpetuity.
Betfred also fought to woo the racing world, vowing to create a Tote adviso-ry board with seats for industry repre-sentatives.
Led by Fred Done, the winning book-maker is also thought to haveimproved its cash offer to the govern-ment in recent weeks.
It had looked to pay 113m in netproceeds as well as a 27m payment tothe Tote pension fund and a 60m pur-
chase of the Totes debt.Betfred, the government and aspokesperson for SIP all declined tocomment.
Certified Distribution04/04/11 - 01/05/11 is 103,899
BY STEVE DINNEENEXCLUSIVE
Tchenguizspends 2ma month onlegal bills
8/6/2019 Cityam 2011-06-03
2/32
News2 CITYA.M.3 JUNE 201
Groupon eyes$750m floatONLINE daily deal site Groupon filedfor an initial public offering yester-day, hoping to capitalise on the
biggest investor stampede into Webstart-ups since the dot.com bubble
burst a decade ago. The company filed yesterday to
raise up to $750m (458.2m) in itsIPO, an offering that has been widely speculated about for months and
would be among the most closely watched of the year.
Groupon itself, in the filing, cau-tioned that it has incurred losses eversince it was started two and a half
years ago, that its technology may not be ready to handle demand for itsservices, that its expenses are boundto rise, and that the daily deals mar-ket may not even continue to grow.
As with any business in a 30-month-old industry, the path to suc-cess will have twists and turns,moments of brilliance and othermoments of sheer stupidity,Groupon chief executive Andrew Mason, 30, said in a letter to potentialstockholders attached to the filing.
Yesterdays papers did not specify the number of shares to be sold in theIPO, the price range, or the exchange,though it did say the shares wouldtrade under the symbol GRPN. Italso said the $750m figure is prelimi-nary and may change.
BY H ARRY B ANKSTECHNOLOGY
Why crises are good news for the EU
THERE are two kinds of organisations:those that are rewarded for failure
with more power and greater budgets,including most regulators, and thosethat are punished for their mistakes,including private firms operating in areal free-market with no bailouts. TheEuropean Union is very much in thefirst camp. The proposal yesterday by the European Central Bank President
Jean-Claude Trichet that governmentsshould create a finance ministry forthe 17-nation bloc is as brazen as it ispredictable. Each time EU centralisa-tion is shown to fail, with the creation
of an unmanageable new currency zone just one of many such instances,the bureaucrats answer is always tocentralise even further. The EuropeanExchange Rate Mechanism failed the
answer to that was to create the singlecurrency. The Eurozone is now in cri-sis so the answer is to give muchgreater powers to Brussels over nation-al budgets. That wont work either soat this rate in a few decades time we
will have sleepwalked into a gover-nance model that is even more cen-tralised than anything the US wouldever countenance, with Brussels exer-cising more power than Washington.
We are not there yet, of course, butthe EU is driven by the logic of theratchet. Crises are useful because they allow a fresh power grab.
All of this is wrong. What is neededis more experimentation, with suc-cessful projects rewarded and badones penalised. The euro doesnt work so it should be wound down or atleast those countries that are too weak to be members should be made to
leave. If politics were imbued with thesame discipline as that of a function-ing market, with the equivalent of profit and loss, this is what would hap-pen. The fact that it never will is why
we should never rely too much on pol-itics and big government.
DOT.COM BUBBLE The latest, most demented phase yetof the new dot.com bubble is upon us.Groupon, the US-based digital couponsite, announced plans to raise at least$750m on the stock market last night.
The company was founded in 2008;many now believe it to be worth$25bn. Even though it made a loss of over $450m last year, its valuation hassurged from zero three years ago to$1.4bn after a 2010 fundraising to$6bn a few months later when itrejected a takeover approach fromGoogle. Clearly, many investors havelost their marbles while it is true thefirm is growing extraordinarily fast,the kinds of valuations now beingtalked about are several times too
high. The biggest issue is that othercompetitors could enter the marketand thus erode its future growthpotential. But investors are drunk once again. Why do they never learn?
SATURDAY EDITION SPECIALFor those of you going to the races atEpsom tomorrow, we have a treat instore for you: City A.M.s first everSaturday edition, chock-a-block withnews, analysis and insight on theInvestec Derby, as a well as a good doseof business news. We will have hand-distributors at Waterloo and LondonBridge for people taking the trainfrom London and lots of copies atarrival in Epsom Downs and
Tattenham Corner. Bill Esdaile andBen Cleminson, our racing editors,
will be providing readers with the best, punchiest racing content any- where. We are proud to be the officialnewspaper of the 2011 Investec Derby,and hope to see you there.
[email protected] Follow me on Twitter: @allisterheath
RUPERT Murdochs News Corp hasagreed a deal with regulators to buy the remaining shares it does notown of British Sky Broadcasting.
Culture secretary Jeremy Hunt,the minister with responsibility forthe merger decision, will call a sec-ond, one-week consultation process.
He will then decide whether torefer the deal to the CompetitionCommission or grant News Corp per-
mission. The international media conglom-
erate will then sign a series of com-plex broadcasting contracts that willallow for Sky News to be spun-off.
Separating the 24-hour rollingnews channel from BSkyB undercomplete News Corp control is seenas a measure to satisfy regulatorsover concerns of media plurality.
Final merger clearance from thegovernment is not expected to begiven to News Corp until July at theearliest.
BY R ICHARD P ARTINGTONMEDIA
News Corp closes on d Rupert Murdochs News Corp is edging closer to a deal to buy BSkyB
NEWS | IN BRIEF
Chevron UK plant fire kills twoA major explosion at Chevrons oil refin-ery in Pembroke, Wales, has killed atleast two people and injured more,according to local reports. The plant,which Chevron agreed to sell to ValeroEnergy for $1.7bn (1bn) in March, wasat the heart of an explosion and subse-
quent fire yesterday afternoon that wasput out by 10 fire engines.
Sony websites hacked againSony suffered fresh hacking misery yes-terday when the servers for its SonyPictures Entertainment websites wereaccessed, compromising the personaldetails of more than 1m customers.
Templeman to head retail bodyDebenhams chief executive RobTempleman will be announced today asthe new head of UKs leading retailindustry body, the British RetailConsortium. He will replace LukeMayhew, current chairman, in theautumn of this year. Templeman led highstreet giant Debenhams through its IPOin 2006, and was previously head of Halfords Group, Homebase Group, andHarveys Furnishing. RETAIL: P12-P13
EDITORS LETTER
ALLISTER HEATH
7thFloor, Centurion House,24 Monument Street, London, EC3R 8AJTel: 020 7015 1200 Fax: 020 7283 5334Email: [email protected] www.cityam.comEditorialEditor Allister HeathDeputy Editor David HellierNews Editor David CrowNight Editor Katie HopeBusiness Features EditorMarc SidwellLifestyle Editor Zoe StrimpelSports Editor Frank DalleresArt Director Craig GaymerPictures Alice HeppleCommercialSales Director Jeremy SlatteryCommercial Director Harry Owen
Head of Distribution Nick Owen
Editorial StatementThis newspaper adheres to the system of
self-regulation overseen by the Press ComplaintsCommission. The PCC takes complaints about theeditorial content of publications under the EditorsCode of Practice, a copy of which can be found at www.pcc.org.uk
Printed by Newsfax International,Beam Reach 5 Business Park,Marsh Way, Rainham, Essex, RM13 8RS
Distribution helplineIf you have any comments about the distributionof City A.M. Please ring 0207 015 1230, or [email protected]
Groupon chief execAndrew Masonwarned the firm hasincurred losses since itwas founded
LIBYA BET $1BN ON SOCGEN SHARESSocit Gnrale structured a $1bn
bet on its own shares for Libyas sov-ereign wealth fund after the JrmeKerviel fraud, the Financial
Times has learnt.Documents seen by the FT show the transaction theLibyan Investment Authoritys
biggest investment in five years had lost 72 per cent of its value by the middle of last year. The LIA entered into the transaction inearly March 2008, barely a monthafter Mr Kerviels 50bn of rogue trades left the bank withlosses of 5bn. At the time SocGen
was struggling to reassureinvestors and plug a hole in its bal-ance sheet.
KAISERS PREDICT RIOT OF INTERESTIN BESPOKE ALBUMFans of Kaiser Chiefs, the Britishindie rock stalwarts, will on Friday
be invited to create a bespoke versionof their new album choosing track-
listing and cover design in the lat-est attempt by the record industry toadjust to a shift in buying habitsamong music fans. The band,
which has enjoyed success withsongs such as I Predict a Riot andthe chart-topping album Yours Truly,
Angry Mob, released its new album The Future is Medieval not viaiTunes but through a website that
went live at 7am.
NEW STATE SCHOOLS SET FORPRIVATE FINANCE
A wave of 100 new state schoolscould be built using private fundingas part of a strategy to allow theDepartment for Education to cope
with its meagre capital budget, themost pressing problem facingMichael Gove, education secretary. A first tranche of 20 schools wouldopen in 2014-15 under the plans,
which are yet to be agreed by the Treasury.
HOTELS PROFITS A FRACTION OFWHAT THEY CLAIMEDFears over potential financial irregu-larities at von Essen hotels grew yes-terday when it emerged that last
years profits may have been only athird of the figure reported. The
Times understands that administra-tors have reconstructed the 2010accounts to show what appears to beunderlying profits of about 8 mil-lion from turnover of 51 million.
WATCHDOG BACKS BROADGATELISTINGEnglish Heritage will today say that it isrecommending the listing of theBroadgate office complex in the City. Itis thought the architectural watch-dogs recommendation rests on theneed to preserve the sense of spacethat the 32-acre complex created when
it became an exemplar of a new type of office development in the late 1980s.
US FACES CREDIT-RATING REVIEWFROM MOODY'S
A second credit rating agency hasthreatened to put the US underreview for a possible downgradeunless politicians put their squabbles aside and agree to raise thestatutory debt limit. Moody's saidthe world's biggest economy's
AAA-rating is under threat because the country will runout of money unless policymakersagree to increase the limit on thenational debt above the current$14.3 trillion.
LOTUS CUTS JOBS AFTER LOSING OUTON GOVERNMENT FUNDINGSports car manufacturer Lotus is plan-ning up to 99 job cuts at its Norfolk plant after losing out on 27.5m of government funding. Staff at the
Hethel site have been told their jobscould be at risk.
WAMU WINS FIGHT TO KEEPMILLION IN RETIREE SAVINGS
Washington Mutual, the former par-ent of the thrift that went under inthe largest banking collapse in US his-tory, on Wednesday won a court fightto hang on to $69m in retirement sav-ings socked away by rank-and-fileemployees of an acquired thrift,Home Savings of America.
CCB BOSS SEES A FREER YUANChina is likely to accelerate the open-ing of its currency system in the nextfive years as the government seeks tomake the yuan more widely usedinternationally, China ConstructionBank Corp chairman Guo Shuqingsaid. In an interview, the head of Chinas second-largest bank acknowl-edged a bubble in Chinas housingmarket, but argued that limited lever-
age in the property sector would curbthe impact of any downturn in prices.
WHAT THE OTHER PAPERS SAY THIS MORNING
8/6/2019 Cityam 2011-06-03
3/32
GOLDMAN Sachs yesterday admittedthat it has been subpoenaed by theManhattan district attorney as part of a US probe into wrongdoing duringthe financial crisis.
The news caused its shares toplunge 3.4 per cent initially, with itspeers Morgan Stanley and JP MorganChase dropping 1.9 per cent and 2.6per cent respectively as markets fret-ted that the inquiry could draw inother Wall Street giants.
The stock prices recovered in latertrading, but the price movementshowed investors sensitivity to any potential case, which is in the early stages of investigation.
The Department of Justice andManhattan district attorney Cyrus
Vance Jr are compiling evidence after being handed a 600-page report puttogether by a Senate committee thataccused Goldman of misleading itsclients and Congress and called WallStreet a financial snake pit during
the crisis.Goldman will now have to hand
over information relating to the accu-sations, which centre on whether itpersuaded clients to buy mortgage-
backed securities in 2007 and 2008 while also maintaining a short posi-tion in the instruments.
A spokeswoman for the bank, which denies any wrongdoing, said:We dont comment on specific regu-latory or legal issues, but subpoenasare a normal part of the informationrequest process and, of course, when
we receive them we cooperate fully.Meanwhile, Moodys put Bank of
America, Wells Fargo and Citibank onreview for a possible credit ratingsdowngrade because the US govern-ment does not want to bail out evenlarge, systemically important bank-ing groups.
While Moodys said that it wasunlikely the US would successfully eliminate its credit subsidy to banksentirely, it said that the supportassumptions built into these three
banks ratings are unusually high.
Goldman filessubpoenaedby prosecutorBY J ULIET S AMUEL
BANKING
News 3CITYA.M. 3 JUNE 2011
THE PRIVATE equity industry yesterday hit back at claims it was responsiblefor Britains care home crisis.
US private equity firm Blackstone, which owned Southern Cross from2004 to 2006, has been criticised forthe care home operators financial
woes.But the British Venture Capital
Association (BVCA) defended the firm yesterday, saying the accusations werebased on material inaccuracies andmisstatements and defended privateequity funds as significant andresponsible investors in health andsocial care.
At a protest organised by the GMBunion yesterday, Blackstones owner-ship was slammed as a financialexploitation process that does not careif it exploits elderly people in care.
The BVCA said such attacks weregroundless as Southern Cross had
been independently run for five years,after Blackstone floated it in 2006.
It is completely false to state thatBlackstone has stripped the property assets out of Southern Cross, it said.
Only three per cent of the 578 lease-hold properties created leases and soldthe properties during Blackstonesownership. Blackstone had no controlover the amount of debt nor any addi-
tional sales lease-back transactionsafter its ownership period. While the financial crisis showed
the sale-and-lease model to be flawed,Southern Cross management failed tomake the changes needed afterBlackstones exit, taking out develop-ment loans worth 77m fromSeptember 2007 to March 2008 aloneto fund acquisitions.
BVCA chief executive Mark Flormansaid the attacks ignored the impera-tive need for private money in healthand social care as the governmentstruggles to fund all residential care.
Private equity funds provided notonly necessary capital invest-ment butalso intro-d u c i n gm o d e r n
w o r k i n gpractices, hesaid.
With a grow-ing need andc o n s t r a i n e dpublic funding,it is imperativethat private sec-tor investmentcontinues toflow into thesector, he added
yesterday.
Buyout group fights backcare home crisis rowBY A LISON LOCK
HEALTHCARE
Blackstone chief executive Stephen Schwarzman,which sold Southern Cross in 2006, said it wasnot responsible for its financial troubles
8/6/2019 Cityam 2011-06-03
4/32
FOUR more Brits have been infected with a new and deadly form of E.coli, which has killed 18 people acrossEurope and made thousands moreill.
The new infections, which wereconfirmed by the Health Protection
Agency yesterday, bring the totalnumber of British cases to seven.
Of those, three have been contami-nated with the more serioushaemolytic uremic syndrome (HUS),
which attacks the blood and kidneysand can prove fatal.
Experts from the World HealthOrganisation said the strain of E.coli
was completely new and had not been detected before.
And the Chinese authorities saidthe E.coli strain was highly infec-tious and toxic.
All seven of the British cases are
linked to recent travels to Germany, which has been identified as thesource of the outbreak.
In Germany, there have been 1,064cases, with 470 involving the poten-tially deadly HUS complication.
Across Europe, 1,500 people have been infected and 17 have died 16in Germany and one in Sweden.
Authorities in Russia yesterday imposed a ban on imports of fresh
vegetables from the European Unionin response to the growing crisis.Brussels said Russia had acted dispro-portionately.
Meanwhile, Spain threatened toseek damages from Germany or theEU, after Germany incorrectly identi-fied Spanish organic cucumbers asthe source of the outbreak.
Officials in Spain say farmers there were forced to junk thousands of tonnes of cucumbers following theGerman claims, causing total lossesthat could run into millions of Euros.
Seven in UKhit by E.coliBYDAVID C ROW
CONSUMER
A DAMNING report has accused thegovernment of presiding over animmigration system that amounts toan amnesty for asylum seekers.
The influential commons homeaffairs select committee report said it
was clear that the UK Border Agency (UKBA) was still not fit for purpose,despite attempts to bolster Britainsmigration controls.
Figures show that only nine percent of the 403,500 claims processed by the agency since 2006 have beenrejected.
A backlog of about 450,000 appli-cants for asylum emerged in that
year, leading then Labour home sec-retary John Reid to describe the sys-tem as not fit for purpose.
Since then, 161,000 of the appli-cants have been given leave toremain in the UK. The report said thefigure amounts in effect to an
amnesty.It also claimed the UKBA had noidea what happened to tens of thou-sands of other cases.
Committee chairman Keith Vazsaid: The government is set onreducing immigration to the tens of thousands and effectively controllingimmigration.
It will have to ensure that the UK Border Agency begins to focus on theoutcome rather than the processes of their work.
Amnesty for asylum seekersas 160,000 immigrants stayBYR ICHARD P ARTINGTON
POLITICS
News4 CITYA.M.3 JUNE 201
ARE YOU MORE WARY OF EU VEGETABInterviews by Phoebe Torrance and Scarle
Why risk it? News coverage puts the possibil-ity always in the back of your mind. I dontthink food exports should be banned because
it is up to people to make their own decision.
BEN BEAUMONT |CMC MARKETS
It has not been identified that the cucumberis the source so why not trust them. I would-nt go as far as banning European food justbecause of one incident.
DANIEL BROWN |LIBERTY SYNDICATES
Usually I wouldnt look where it comes frombut the news is scaremongering and has defi-nitely made me more vigilant towards buying
organic European food.
SHANE MAY |AXA INSURANCE
In September 2006, theUS Food and DrugAdministration said ithad traced a major out-break of E. coli to aCalifornian Spinachprocessor. By thatautumn, nearly 200cases of illness had beenreported, leading tomore than 100 hospitali-sations and three deaths.
By November 2008,China reported an esti-mated 300,000 childrenhad fallen ill from con-suming milk productstainted with melamine. Ofthose, six children died,due to kidney complica-tions. The chemical wasadded to the milk by pro-ducers to boost its pro-tein content.
In 1996, it was discov-ered there was a humanequivalent of BSEor mad cow disease,originating from Britishcattle. A Europeanban on British beef exports, lifted in 2006,decimated the 500m-a-year UK beef industry. By2003, nearly 90 people inthe UK had died.
8/6/2019 Cityam 2011-06-03
5/32
8/6/2019 Cityam 2011-06-03
6/32
8/6/2019 Cityam 2011-06-03
7/32
8/6/2019 Cityam 2011-06-03
8/32
News8 CITYA.M.3 JUNE 2011
BARCLAYS is edging towards an acqui-sition of one of Spains struggling sav-
ings banks, according to EvolutionSecurities analyst Arturo de Frias.Following chief executive Bob
Diamonds visit to Spain last week, in which he met with Spanish PrimeMinister Jos Luis Rodrguez Zapatero,
de Frias says that Barclays is likely tomove in on one of the countrys trou-
bled cajas in the coming months.It has been our view for some
time that Barclays is likely to make
a sizeable retail acquisition and raisesimultaneously some more capital what we call a deal-cum-rights issue,de Frias wrote in a note to clients.
He added that a string of recenthires in Spain, including former
Bankinter chief Jaime Echegoyen andformer finance minister Pedro Solbes,make it likely that the bank is lookingto expand beyond its current smallretail network in the country.
If Barclays is looking to make a pur-chase, de Frias estimates that it willneed to do a rights issue of 4-5bn, half of which will be used to top up capitalratio. He has a sell recommendationon Barclays as a result.
The Spanish caja space is undergoing broad restructuring as the governmentlooks for ways to plug a capital holethat the Bank of Spain has estimated at 15bn (13.3bn). But observers say it
could be higher, meaning that the statecould offer guarantees to buyers of stricken banks. Potential purchasersare likely to include several privateequity houses as well as banks.
Barclays declined to comment.
Analyst sees Barclays buying cajaBY J ULIET S AMUEL
BANKING
PICKY shoppers going to fewer storeshave hurt big US retailers in May,patchy sales figures from Gap, Targetand Costco showed yesterday.
Gap, the high street clothing chain,reported a four per cent slip in com-parable sales in May, down from aone per cent increase in the samemonth a year earlier.
However, net sales for the company were slightly up in May, hitting$1.06bn (649m), from net sales of $1.05bn during the same period a
year earlier.While net sales increased in May,
we recognise the need for our brandsto consistently deliver at much high-er levels of performance withimproved traffic and greater productacceptance to support our long-term growth strategy, said GlennMurphy, chairman and chief execu-tive officer
High prices for food and petrol, as well as a sluggish economy, hit theprice of raw materials used by thecompanies. Consumer confidencealso took a knock.
Fellow US retail chain Targetreported a rise in sales for May,although slightly short of Wall Streetexpectations.
Sales for the four weeks ending 28May were $4.8bn for the firm, up 3.8per cent from the same period a yearago.
May sales were near the low end of our expected range, driven by amuch slower traffic trend in the sec-ond half of the month, said Targetchief Gregg Steinhafel.
Meanwhile, US warehouse cluboperator Costco beat market expecta-
tions with a 13 per cent rise in May same-store sales.For the four weeks ended 29 May
Costco said net sales surged 17 percent to $7.14bn.
Slow Maysales hit USretail firms
FORMER governor of MassachusettsMitt Romney yesterday officially kicked off his second bid to win theUS Republican presidential nomina-tion.
Romney, 64, a long GOP frontrun-ner in the polls, yesterday joined therace to beat President Obama andtake the White House in 2012.
Romney has made clear his inten-tions to run for the presidentialnomination ever since he was defeat-ed by John McCain in the race to bethe Republican nominee in 2008.
The polls have so far regularly shown Romney to be a leading candi-date, despite in-party criticism of hisstatewide healthcare reform bill,
which became the model forObamas national policy.
The f inancial predictions market,Intrade, shows Romney as the clearfrontrunner, with a rating of 29 percent, well ahead of major rivals TimPawlenty and Jon Huntsman, whoonly polled 19 and 16 per cent,respectively.
A clearer picture as to whetherRomney stands a chance againstObama is unlikely to emerge untilthe start of the primary season inFebruary 2012.
In his opening campaignspeech, Romney told vot-ers: Governmentunder PresidentObama has grownto consumealmost 40 percent of our econ-omy. We are only inches away fromceasing to
be a free-m a r k e te c o n o -my.
Romney inrace for USpresidency
Barclays Bob Diamond visited Spain last week
BY S CARLETT A RCHERUS POLITICS
BY R ICHARD PARTINGTONRETAIL
KEITH Clarke is stepping down aschief executive of engineering con-sultancy WS Atkins after eight years,paving the way for German p hysicistUwe Krueger to take on the role laterthis year.
Clarke has led Atkins since 2003,steering the company through its dif-ficult relationship with LondonUnderground operator Metronet,
which resulted in a 121.3m excep-tional loss for the company in 2007.
The company has since built astrong recovery through contracts
won across the Middle East, and with
its ongoing work at t he London 2012Olympic Park in Stratford.
Clarke began his career as a char-tered architect with a specialism inurban planning, and prior to joining
Atkins held management positionsat Skanska, Trafalgar House andOlympia and York.
His successor has a doctorate in
complex system theory and brain research, and joins fromprivate equity investment firm
Texas Pacific Group.Clarke plans to continue as a
director at Atkins, where he willlook after sustainability andthe companys MiddleEast business.
BY ELIZABETH FOURNIERINFRASTRUCTURE
KEITH CLARKE
All change at WS Atkins as Clarke steps down
8/6/2019 Cityam 2011-06-03
9/32
News 9CITYA.M. 3 JUNE 2011
A US report claims that BP is shirkingits responsibilities for the Gulf of Mexico, where a massive oil spill last
year killed 11 workers and leaked fuelacross the beaches of the coast.
Victims of the spill are worried thata $20bn compensation fund is not
being properly run, the House of Representatives oversight and gov-
ernment reform committee claimedin its report, and the drilling morato-rium put in place after the accidenthas been badly enforced.
The report also strongly criticisedBarack Obamas administration forfailing to take charge of the clean-upand compensation, slamming thePresident for placing the perpetratorof a reckless and unnecessary tragedy
at the helm of the recovery opera-tions.
Failure to fund removal of clean-up equipment debris, uncertainty surrounding mental health services,and frustration associated with thecompensation process are among theconcerns of affected Gulf Coast resi-dents, the report said.
Some politicians representing theGulf regions, including Mississippigovernor Haley Barbour, disagreed
with the findings, arguing that BPhas taken care of those affected.
US claims BP is not meeting Gulf duties
GOOGLES claims that hackers, prob-ably from China, sought to access
the Gmail accounts of senior US offi-cials are very serious and the American government is investigat-ing them, secretary of state Hillary Clinton said yesterday evening.
Clinton said the US government
was very concerned about claimsthat Chinese hackers collected thepasswords of Google users.
She added: These allegations are very serious. We take them seriously,
were looking into them.Google announced on Wednesday that suspected Chinese hackers triedto steal passwords of hundreds of Google email account holders,including senior US government
officials, Chinese activists and jour-nalists.
The claim by the worlds largest web search company sparked anangry response from Beijing, which
said blaming China was unaccept-able.Google and Washington have an
increasingly strained relationship with China over its approach to cen-sorship and cyber security.
US probes Google hackBY H ARRY B ANKS
TECHNOLOGY
AN ALLEGED contract and emails thata New York man says entitle him to ahuge stake in Facebook are forgeries,the online social networks founderMark Zuckerberg said.
In a filing in the US district court inBuffalo, New York, yesterday Zuckerberg said he has declared underoath that he neither signed the allegedcontract with Paul Ceglia, nor wrote orreceived any related emails.
He asked a federal judge to orderCeglia to immediately turn over thealleged original contract and emails,and for permission to inspect Cegliascomputers.
Zuckerberg and Ceglia never dis-cussed Facebook and they never signeda contract concerning Facebook, thefiling said. The contract is a cut-and-paste job, the emails are complete fabri-cations, and this entire lawsuit is afraud.
Christopher Kip Hall, a partner atDLA Piper representing Ceglia, did notimmediately return requests for com-ment.
Yesterdays filing escalates the stakesas Ceglia, a wood pellet salesman from
Wellsville, New York, tries to show hecontracted in 2003 for 50 per cent of Zuckerbergs interest in what becameFacebook, which is privately held.
In yesterdays filing, Zuckerbergacknowledged signing an agreement
with Ceglia, but that it concerned work Zuckerberg did for StreetFax.com, a
website that posted photographs of traffic intersections for use in theinsurance industry. Ceglia sued last
July, saying he made a contract withZuckerberg for an 84 per centFacebook stake.
After he changed law firms, Cegliafiled a complaint that discussed thealleged contract and emails from2003 and 2004 when Zuckerberg wasa student at Harvard University.
ZuckerbergFacebookclaim forge
WPP, the worlds largest advertisinggroup by revenue, said like-for-likesales grew more than six per cent inthe four months to the end of April,
buoyed by the United States and inline with its forecast for the year.
The firm, led by Sir Martin Sorrell,said yesterday its US revenue was upalmost eight per cent in the year todate and British sales grew by morethan seven per cent despite economicpressures, while continental Europe
was up more than three per cent. All advertising groups have been
lifted in the last 12 months by astronger than expected performancein the US market and WPP has alsorebounded well from the downturndue to its strong position in key mar-kets such as India and China.
Separately, WPP said it had boughta majority stake in Brazils largestindependent digital agency F.biz foran undisclosed price. F.biz has 200staff and had revenue of $30.1m reals(11.6m) last year.
WPP said tsunami-hit Japan was itsonly Asian market not to have grownand said the situation was unlikely tochange for most of this year. Political
turmoil in the Middle East was con-tinuing to have an impact, with yearto date revenue flat.
WPP shares closed down almostone per cent at 732p.
WPP growssales as USrevenue rises
SHARES in the worlds second-biggestPC maker Acer have dropped after itsaid it would write off $150m (91.7m)
because an internal audit foundabnormalities in its accounts.
Acers shares fell by seven per centin Taiwan, the maximum allowed by the stock exchange, in response to a
statement that said it needed to setaside the money after an internal
audit revealed the problem. The company also said it would cut
300 jobs in Europe. Acers shares have struggled since it
cut its sales forecasts in March. That caused its stock to plunge 18
per cent within just a few days, andtriggered the resignation of its chief executive.
Less than a month later it reported
a 64 per cent fall in first-quarter netprofit.
Acer tanks on audit issTECHNOLOGY
Hillary Clinton said the claims were very serious
BY H ARRY B ANKS
MEDIA
BY M ARION DAKERS
ENERGY
BY HARRY B ANKS
TECHNOLOGY
ANALYSIS l WPP
p
7 Mar 25 Mar 14 Apr 10 May 31 May
840
700
720
740
760
780
800
820 732.002 Jun
8/6/2019 Cityam 2011-06-03
10/32
The Capitalist10EDITED BYHARRIET DENNYSGot A Story? [email protected] The Capitaliston Twitter: @citycapitalist
CITYA.M. 3 JUNE 2011
WHISKY ATMIDDAY FORABERDEENSPOLAR FEAT
THE WHISKY came out at noon at Aberdeen Asset Management yesterday to christen the boat the fund managersare sponsoring on its voyage into the
Arctic unknown. The Old Pulteney has been designed
to withstand some of the harshest con-ditions on earth, and her six-man crew led by Scottish explorer Jock Wishart
will set off on the Old Pulteney Row tothe Pole expedition on 1 August, travel-ling 450 miles from Resolute Bay inCanada to the Magnetic North Pole toattempt a world first.
The planned route through shifting sea-ice barriers has only become possible afterincreased seasonal melting in the Arcticicecap, so the team will conduct scientificstudies as they create maritime history, to
be fed back to Southampton University. The crew have also become the subject
of a scientific study themselves, to avoidthe men imploding on the monotonous
journey where the explorers will alternaterowing with being cocooned in a con-fined space in the middle of nowhere.
Im not sure why they put the beds soclose together, complained crew member
and 1,000 for a charity of their choice, to be donated to The National Brain Appeal. To enter next years competition, contact Adam, John or Stephen on 0207 469 4180.
SPORTING CHANCERSMEANWHILE, there is still time to place
your bets on Sundays five-a-side DiageoCity Challenge at the Bank of EnglandSports Centre in Roehampton.
The City A.M . team has been namedthe Aston Villa of the contest as 9-1contenders, while team Bank of England is Manchester City at 12-1because of the financial reserves
behind them and the Sky News squadhas been relegated to the Conference,
with Kidderminster-like odds of 20-1. All bets and donations will transfer
directly to The Stroke Association seethe Paddy Power website or www.just-
giving.com/diageocitychallenge.Or come along on the day theres a
free pair of return Ryanair flights to Tenerife to be won in the raffle.Thats actually free, not Ryanair free,assures the events organiser.
Billy Gammon, who described how he andhis fellow rowers have undergone psycho-metric tests to discover which screws areloose and where the tipping points are.Forewarned is forearmed as Wishartsaid: There is no room for a mutiny.
GILBERTS ALL AT SEAMARTIN Gilbert, chief executive of
Aberdeen Asset Management (right), was unable to attend yesterdays whisky-soaked christening outside Boisdalerestaurant in Canary Wharf.
However, the keen sailor is lookingforward to his firms sponsorship of Cowes Week in August, where Gilbertand his head of distribution Chris Ellyattare planning a range of activities for thefunds clients to give them the wholeCowes experience.
The Capitalist hears the more adventur-
ous clients will be able to race in Aberdeens chartered yachts, accompa-nied by professional skippers or they could just take Ellyatt, a lifelong dinghy sailor who competes in the LaserMasters racing circuit.
MATCH OF THE DAYDEUTSCHE Bank challenged HendersonGlobal Investors, AXA, Royal London
Asset Management and CVC CapitalPartners, among others, at yesterdaysfootball tournament organised by KennedyPearce Consulting at thePowerleague ground in Bishopsgate.
But there could only be one winner,and this years five-a-side champions
were Sarasin & Partners, captained by David Evans, who beat Matrix Groupfive-nil in the final to win theKennedyPearce Champions League Cup
The OldPulteney waschristened
with whiskybefore itscrew set off to the Arcticto attempt amartime first
Aberdeen AMs James Thorneley (second from right) raises a toast with the crew of The Old Pulteney
Men of the match: the Sarasin & Partners team
8/6/2019 Cityam 2011-06-03
11/32
News 11CITYA.M. 3 JUNE 2011
WATCH CHAT
SHARE SURF
Movies and TV on demand Skype your friends & family
The things you love Browse the internet
Join in
Visit samsung.com/uk/smarttv to find out more.
2011 Samsung Electronics Co. Ltd. Screen image simulated. Internet connection required. Subscription charge applies to some movies on demand services. Camera required to use Skype available to purchase separately.
A SHOCK change of roles at major City insurers saw Avivas high-flying UK chief executive Mark Hodges leave to
become head of insurance broker Towergate yesterday.
Aviva has moved in highly regardedinsurance veteran Trevor Matthews,formerly of Friends Provident andStandard Life, to replace Hodges.
The move is Avivas second high-pro-file exit in five months after Europeanhead Andrea Moneta left in January.
Both Hodges and Moneta had beentipped as successors to Avivas globalchief executive Andrew Moss. Theirsudden departures may fuel specula-tion that Moss intends to stay in postfor longer than expected.
The extent of this announcementand the complicated nature of it will,
we believe, give rise to some specula-tion about the groups long term lead-ership, said Panmure Gordon analystBarrie Cornes.
Matthews move is also a surprise, ashe told City A.M.in March he was step-
ping down as chief executive of FriendsLife with a view to returning to Sydney
with his family within three years. He was due to start a newly-created post of vice chairman at Friends Life yesterday,after handing the chief executivesreins to Andy Briggs, but will now nottake up the role.
Matthews is seen as a safe pair of hands for Aviva, but until he finisheshis notice period at Friends Life, Aviva
will be without a UK chief executive.Hodges was Avivas chief executive
for 18 months and head of its life oper-ation before that. He will head
Towergate Insurance from 1 Octoberand is expected to lead it to an initialpublic offering. He replaces retiringchief executive Andy Homer, whoremains a non-executive director.
The opportunity to take the lead at Towergate, Europes largest independ-ent insurance intermediarywas irre-sistible, Hodges said.
A Friends Life spokesperson said it would reassign Matthews responsibili-ties to others in Briggs leadershipteam. Briggs started as Friends Lifechief executive on 1 June.
Aviva UK headin shock exitBY A LISON LOCK
INSURANCE
Trevor Matthews is to take the top role at Aviva instead of a job at Friends Life
8/6/2019 Cityam 2011-06-03
12/32
ONLINE clothes retailer Asos yester-day announced plans to launch threenew international websites as itreported a 41 per cent profit rise forthe full year.
The company said it had been boosted by international expansionand said it was on track to deliver ona plan for 1bn of sales by 2015.
Chief executive Nick Robertsonsaid the company would be unveilingsites in Australia, Spain and Italy.
The companys figures for the yearto 31 March showed UK retail sales up25 per cent and international sales up142 per cent, benefitting from thelaunch of United States, French andGerman websites.
Robertson said: Our internationalperformance has been very strong.
We think the Australian site will beparticularly strong because of the dif-ferences in seasons they benefit froma lot of cut price stock.
Robertson said that despite City talk there were no suitors seriously circling to make an offer for the com-
pany, which is investing in growthrather than paying dividends.
Despite yesterdays sales and profitrise the stock took a hit with the AIM-listed companys shares closing 8.3per cent lower at 2,144p yesterday.
The drop was linked by some analyststo a statutory pre-tax profit fall of 23per cent to 15.7m because of 12.9min exceptional charges linked to theintroduction of a new warehouse.Singers Matthew McEeachran said:The exceptional charge for ware-housing is a little bigger than weexpected.
However Robertson said: We havehad a good year and there is growthin the UK and overseas ahead.
Asos sales inoverseas riseBY J OHN DUNNE
RETAIL
Asos co-founder Nick Robertson is steering the retailer to new international markets
Consumer News12
ANALYSIS l ASOS
p
7 Mar 25 Mar 14 Apr 10 May 31 May
2500
1600
1800
1900
1700
2000
21002200
23002400
2,1442 Jun
Beware weight of expectatiBEWARE the weight of great expec-tations. It is hard to quibble withthe performance of Asos, whichgrew annual profits by 41 per centin the year to 31 March; few otherconsumer-facing businesses canmatch that in these tough times.
Strategically, the firm is makinggreat strides. It has grown the num-
ber of its product lines from 36,000to 50,000 and launched three coun-try specific websites in the US,France and Germany (this year it
will launch in Australia, Spain andItaly).
Its development of Facebook stores that tap into social net-
works, as well as its mobile-phoneapplications, has been inspired.
Visitors to its website which is
now one of the top f ive most-visited
fashion sites in the world are up176 per cent; orders have grown 315per cent.
But the ratings for Asos shareshave always been ridiculously sky-high, largely because as an internetretailer the firm attracts the kindof hype that is usually reserved fortech stocks.
Even after yesterdays sell off, which saw the stock shed 8.3 percent, the firms market cap of 1.6bn is almost five times sales.
We like the business but thatmultiple is too rich for us. Nice
business shame about the shareprice.
BOTTOMLINEAnalysis by David Crow
8/6/2019 Cityam 2011-06-03
13/32
JOHN Lewis yesterday reported salesincreases of 30 per cent on tennistables following last weeks photo-graphs of US President Barack Obamaand Prime Minister David Cameronplaying a friendly match.
The pair rolled their sleeves up toplay against students, competing on a
visit to the Globe Academy school inSouth London.
John Lewis sports departmentshave seen a surge in interest in thegame from both men and women
buying tables since the event, which
was part of the Presidents visit to theUK.
KINGFISHER, Europes biggest homeimprovements retailer, said yes-terday a surge in sales of gardenfurniture and barbecues during
warm spring weather had notchanged its cautious outlook onconsumer spending.
The group, which runs marketleader B&Q in Britain as well asCastorama and Brico Depot inFrance, said yesterday shoppers inBritain in particular remainedunder pressure from higher pricesand austerity measures,and the recent flurry inspending was probably
just brought forwardfrom the sum-mer.
Kingfisher,
with 860 stores in eight countries inEurope and Asia, said retail profit
jumped 19 per cent to 174m.Like-for-like sales at B&Q were
up 1.5 per cent, the best perform-ance for seven quarters. But thegross margin was down slightly, because sales were skewed to less
profitable lines.Whilst we have got off to a
good start, it remains our view that this year is likely to be a tough one for all retail-ers, especially in the UK,chief executive Ian Cheshiresaid.
B&Q sold 2,500 miles of hosepipe as Britain enjoyedthe warmest April onrecord. Patriotic shoppersalso snapped up over10,000 royal wedding
gnomes.
FLOORINGS giant Carpetright hasrestructured its board, appointing
Andrew Corden to the board as opera-tions director for Europe as ChristianSollesse, managing director of UK &Ireland, steps down.
Corden joined Carpetright 17 yearsago, and has been responsible for thecompanys European operations since2008 having previously been the salesdirector for Europe since the compa-nys expansion into Europe.
Claire Balmforth, who joined the board at the beginning of May, will
assume the role of operations direc-tor for the UK.
Carpetright inboard shake-upJohn Lewis getsObama boostRETAIL RETAIL
Consumer News 13
ANALYST VIEWS: IS KINGFISHER SET FORGROWTH IN A TOUGH MARKET?Interviews by John Dunne
MATTHEW MCEACHRAN |SINGER CAPITAL MARKETS
Kingfisher has delivered a strong update, capitalising on the favourableweather across Europe. We do not anticipate any major changes to forecasts atthis early stage. We have moved our target price up to reflect the ongoing strate-
gic initiatives and international growth ambitions.
RICHARD HUNTER |HARGREAVES LANSDOWN
The improvement in the net cash position provides a healthy glow,whilst the groups geographical diversity continues to underpin performance. Onthe downside, there were inevitably cautious comments from the management onthe outlook. The consensus remains that the shares are a strong buy.
NICK BUBB |ARDEN
The first-quarter from Kingfisher was expected to be strong, and retailprofit growth of 19 per cent to 174m is certainly good. But it is below our180m forecast and is not as good as the bulls had hoped, and is not good enoughto deliver full-year profit upgrades at this stage.
Kingfisher inBBQ lift butstill cautiousBY J OHN DUNNE
RETAIL
8/6/2019 Cityam 2011-06-03
14/32
Our business mobile customers can call O2 mobiles in the UK at no extra cost. Terms apply, see o2.co.uk
0800 781 1328Visit o2.co.uk/yourbusinessor text FREE to 61002
We give you free calls to everyone on .It helps you keep costs down. And prots up.
Your business can talk to1/3 of the UK for free
8/6/2019 Cityam 2011-06-03
15/32
News 15CITYA.M. 3 JUNE 2011
US designer and marketer The JonesGroup yesterday bought upscale shoeretailer Kurt Geiger for 215m, givingit a foothold in the European retailmarket.
Kurt Geiger, which has been majori-ty owned by private equity houseGraphite Capital since a management
buyout in 2008, had sales of 205m in
the year to April 2011.It has grown rapidly since the buy-out from an own-brand retailer to amulti-channel distributer with conces-sions in department stores, and distri-
bution agreements with brands suchas Gucci and UGG.
The brands relationship with The Jones Group began in 2009 when itsigned a licensing agreement to sellthe companys Nine West brand shoesin the UK.
Kurt Geiger is one of the few pri- vate equity-backed retail companiesthat has managed to expand interna-tionally in the past few years,Graphite Capitals Marcus Gosler toldCity A.M.
We knew the buyer through a long-standing trading relationship, so it
was an obvious fit.Kurt Geiger management team will
stay in place, with Neil Clifford contin-uing as the brands chief executive.
Kurt Geiger is sold to USretail group for 215m
Neil Clifford, far right, will continue to lead the management team at Kurt Geiger
BY E LIZABETH F OURNIERRETAIL
SJ BERWIN partner Martin Bowenled the legal team advising GraphiteCapital on the sale, having workedwith the firm on its buyout of Kurt
Geiger in 2008.He has a strong track record in pri-
vate equity and management buyouts,and also worked for Hermes and othershareholders of Walbrook GroupLimited on its disposal to BarclaysWealth Management.
Graphite also sought legal advicefrom Addleshaw Goddard, and wasadvised on tax matters by Andy Smithat PricewaterhouseCoopers.
MEET THE ADVISERS
MARTINBOWEN
SJ BERWIN
8/6/2019 Cityam 2011-06-03
16/32
POSITIVE growth figures from theconstruction industry provided somerelief for the UKs struggling econom-ic recovery, yesterday.
The building industry edged up toa score of 54 in the purchasing man-agers index (PMI) for May, a modestrebound from Aprils disappointingscore of 53.3.
All PMI scores above the no-change50 mark indicate economic growth.
Input price inflation remained ata historically elevated level, thereport said, despite easing slight-ly from Aprils reading.
It remains to be seen whether a marked expan-sion of commercial projects
will help to replace what has been lost elsewhere in thecoming months, said DavidNoble of the CharteredInstitute of Purchasing andSupply (CIPS), referring toimpending govern-ment spendingcuts. But ithas con-tributed to a
small improvement in confidence .Business expectations grew to a
one year high of 66.8 in the index, with employment growing for thefirst time since June last year.
The employment index measuredits healthiest reading since March2008 (51.3), with commercial sectorconstruction creeping upwards to arespectable 55.8 helping to offset anunwelcome contraction in civil engi-neering activity (46.9).
New order growth was marked,suggesting that increasing levels of output will be sustained, addedSarah Ledger of Markit, which com-
piles the data alongside CIPS.Growth in new orders acceler-
ated to 56.3.But it needs to be borne in
mind that the constructionsector only accounts for 6.8 percent of UK GDP, warnedHoward Archer of IHS GlobalInsight.Progress in the UKs largest sec-
tor services is publishedtoday, with chancellor
George Osborne hop-ing for signs thatthe UKs recovery remains on track.
Growth in UKconstructionoffers relief
Whats the best way tosell your home ina tough market?
A) Rely on
the subliminalselling powerof yellow?
B) Use
PrimeLocation.com,with over 4 millionvisits every month *.
*Monthly average from Oct 2010 Mar 2011.
Make sure your agent has your property on
The Prime Property Website
BY J ULIAN HARRISUK ECONOMY
SPAINS economy was boosted yester-day by data showing a sharp declinein unemployment benefit claims.
Registered unemployment dropped by 1.87 per cent in May, compared to April, official figures showed.
Benefits were down 79,701, to4.19m. Compared to the same timelast year, jobless claims were still up3.04 per cent.
The struggling Eurozone economy suffers the highest unemploymentrate in Europe, exceeding 20 per centof the workforce.
And new car registrations, a bell- wether of economic health, areexpected to have declined in Spain forMay, according to Barclays Capital.
Across the Eurozone, registrationsare unlikely to catch up with their his-torical averages any time soon,BarCaps note claimed.
Sharp fall in Spainsunemployment rate
EUROZONE ECONOMY
WORKERS in London face a far longer com- mute than elsewhere inthe UK, data from theOffice for NationalStatistics revealed yester- day. Londoners are over
five times more likely to
travel for over an hour to get to work. Half thosesurveyed in London take
public transport to work,compared to just nine
per cent across the rest of the country. Only 35 per cent of people working in London drove to work,compared with 76 per cent in the rest of the UK.
News16 CITYA.M.3 JUNE 201
LONDONS WORKERS FACE A LONGER COMMUTE THAN THE
56%in London travel o30 minutes to wor
Rest of the UK
20%take over 30 minutes
to get to work
16%in London trav
over an hour to
Rest of the UK
3%travel for over an
hour to work
NEWS | IN BRIEFBleak American jobs dataFresh claims for unemployment benefitsin America fell last week, but not enoughto assuage fears the labour marketrecovery has taken a step back. Initial
jobless claims slipped 6,000 to a season-ally adjusted 422,000, the LabourDepartment said yesterday, less thaneconomists expectations for a fall to415,000.
US factories new orders declineNew orders received by US factoriesdeclined in April, partly because of asharp drop in demand for transportationgoods, according to a CommerceDepartment report released yesterday.Overall orders fell 1.2 per cent to a sea-sonally adjusted $440.4bn (269.6bn)
after an upwardly revised 3.8 per centrise in March.
Fresh talent floods into LondonA surge in enquiries from relocationagents to London renting firm Cluttonsshows renewed confidence in the capi-tal, the firm said yesterday. Enquiriesare up 20 per cent on last month. Newtalent is flooding into London at a ratenot seen since the height of the market in2007, a spokesperson said.
American oil futures extend fallUS crude futures extended declines yes-terday after an unexpected jump in UScrude inventories, also hurt by an indus-try report that OPEC may increase oiloutput at its meeting next week.
Factory growth slows in CanadaCanadian manufacturing slowed from
April to May, a new purchasing man-agers index showed yesterday.
8/6/2019 Cityam 2011-06-03
17/32
News 17CITYA.M. 3 JUNE 2011
NEWS | IN BRIEF
Kan survives no-confidence votJapanese Prime Minister Naoto Kansurvived a no-confidence vote in parlia-ment yesterday, but the unpopularleader will still struggle to break a poli-cy deadlock given a split in his ownparty and a divided parliament.Opposition parties controlling parlia-
ments upper house have criticised hisresponse to the deadly 11 March earth-quake and tsunami and resultingnuclear crisis, and have threatened toblock bills as long as he is in power.
Impax expects profit increaseAsset management firm Impax, whichfocuses on the alternative energy,water treatment and waste manage-ment industries, yesterday said itexpects revenue and profits to increasein the second half of the year as moreinvestors put money in alternativeclean energy following unrest in theMiddle East and the Japanese nuclearcrisis. Chief executive Ian Simm saidthe firm is confident of inflows intofunds over the next six to nine months.
NAV falls at McKay SecuritiesProperty development and investmentcompany McKay Securities yesterdayannounced a drop of 4.7 per cent in itsnet asset value (NAV) over the lastfinancial year despite an increase in thecompanys real estate portfolio from205.95m to 208.52m. Managingdirector Simon Perkins said the fall inNAV was largely due to a 5.9m one-off swap rates payment in February toreduce the companys notional hedgingfrom 155m to 105m. The firmsshares rose 2.2 per cent yesterday.
JOHNSON Matthey, the worldslargest supplier of catalytic convert-ers, said annual profit rose on the
back of higher vehicle sales and pre-cious metal prices.
However, the FTSE 100 company said it expected Japans earthquaketo hit car production temporarily inthe first half, even though this
would likely be reversed by the sec-ond half.
It also said that higher rare earthprices would adversely impact the
business, particularly in the firsthalf of the current year.
It expects the impact of higherrare earth raw materials used in itscatalyst production -- on its resultsthis year to increase around three orfour times from 5m in the year to
the end of March.Underlying pre-tax profit rose 36
per cent to 345.5m for the group,
which also markets, distributes andrefines precious metals.It took an impairment and restruc-
turing charge of 71.8m relating tothe closure of a manufacturing facil-ity in Brussels and the sale of its
Vertec manufacturing business.Heavy exceptional items and
amortisation (13.2m) were morethan we and the market were expect-ing. We see this as a little disappoint-ing, said Credit Suisse.
Metal priceshelp JohnsonMatthey gainBY H ARRY B ANKS
INDUSTRIALS
HOHN DONATES 1BN TO CHARITY
ONE of Londons most successful hedge fund managers, Chris Hohn, has donated almost 1bn to charity over the past five years. Hohn, who runs The Childrens Investment Fund,donated a total of 42.7m to the Childrens Investment Fund Foundation (CIFF) in the
year to August 2010. The CIFF funds projects to improve the lives of children living in poverty in developing countries.
w w w
. c i t y a m
. c o m
INFRASTRUCTURE investment compa-ny HICL Infrastructure yesterday paid4.6m for a majority stake in theBrentwood Community Hospital pri-
vate finance initiative (PFI) project, boosting its joint venture ownershipof the project to 100 per cent.
The project is a 32-year concessionto design, build, finance and run a 50-
bed hospital in Brentwood, Essex, andtakes HICLs portfolio of UK PFI proj-ects up to 41 investments.
The community hospital was fully financed in June 2006 and construc-tion was completed at the end of
August 2008. In addition to the 75 percent it has now bought from KajimaPartnerships and other minority stake-holders, HICL also owns the remainderof the project through a joint venture
with Kajima.HICL has been on the acquisition
trail in recent months, investing in aSheffield schools PFI last week, andacquiring further PFI projects inOldham and Norwich from engineer-ing firm Kier, as part of the Kajima
joint venture. The consideration paid for the
investment is in line with the current valuation of similar UK PFI projects inthe groups portfolio.
Acquisition spreecontinues at HICL
INFRASTRUCTURE
ANALYSIS l Johnson Matthey
p
7 May 25 Mar 14 Apr 10 May 31 May
2013.002 June
21502100
2050
20001950
19001850
18001750
Johnson Matthey boss Neil Carson was bullish on prospects for the current year
8/6/2019 Cityam 2011-06-03
18/32
News18 CITYA.M. 3 JUNE 201
BRITAINS top shares slid for a sec-ond day as worries over weak economic data drove investorsfrom risky assets ahead of
Fridays US non-farm payroll numbers. The FTSE 100 closed down 80.69
points, or 1.4 per cent, at 5,847.92, with volume 93 per cent of its 90-day average.
The index fell one per cent in theprevious session when a weak US ADPEmployer services report and US man-ufacturing data raised doubts aboutthe pace of economic recovery. US non-farm payrolls will provide more cluesabout prospects for economic growth.
Risk-sensitive mining and energy stocks fell, adding to their declinefrom the previous session, and took
most points off the index.Kingfisher , Europes biggest home
improvements retailer fell one percent after it said the second-quarter
would probably be more challenging. Analysts suggested investors shouldtake profits. On the upside, Serco rose4.4 per cent after Credit Suisse upgrad-ed its target price for the outsourcinggroup to 720p from 670p andincreased its earnings estimates fol-lowing its acquisition of Intelenet.
FTSE falls again as feover economy continu
US stocks flat ahead okey non-farm jobs rep
US stocks ended a volatile trad-ing day mostly flat yesterday asinvestors were reluctant tomake bets a day before a critical
labour market report that could mag-nify fears the economy is slowing.
Bank stocks stabilised after fallingon news that Goldman Sachs was sub-poenaed by New York prosecutorsseeking information on its role lead-ing into the global financial crisis.Goldman's stock fell 1.3 per cent to
$134.38, while the KBW Banks Indexrose 0.2 per cent af ter falling earlier.
Education stocks rallied on heavy volume after US officials relaxedrules that could have cut off tuitionaid to programmes run by for-profitcolleges. DeVry and Apollo Group
were the top two gainers in the S&Pconsumer discretionary sector.
DeVry shot up 14.6 per cent to$61.86, while Apollo surged 11.1 percent to $46.87.
The Dow Jones industrial averagefell 41.59 points, or 0.34 per cent, to12,248.55. The Standard & Poors 500Index dipped 1.61 points, or 0.12 percent, to 1,312.94. The NasdaqComposite Index rose 4.12 points, or0.15 per cent, to close at 2,773.31.
Initial jobless claims slipped 6,000to a seasonally adjusted 422,000 inthe latest week, while economists
polled by Reuters had forecast415,000.
ANALYSIS l FTSE 100
6,100
6,000
5,900
5,800
5,700
5,600
5,5007 Mar 25 M ar 14 Apr 10 May 31 May
5,847.922 Jun
THENEW YORKREPORT
THELONDONREPORT
BEST OF THE BROKERSANALYSIS l Bayerische Motoren Werke AG St
6664
62
6058
56
5452
7Mar 25Mar 14Apr 6May 26May
60.142 Jun
BMWGoldman Sachs rates the carmakerconviction buy and has a targetprice of 120 (106). The broker hraised its earnings forecasts by ninper cent ahead of consensus, andexpects further sales rises.
ANALYSIS l EADS24
23
22
21
20
19
187Mar 25Mar 14Apr 6May 26May
21.392 Jun
EADSRBS rates the defence corporationbuy and has raised its target pricby 2 from 25 (22.08) to 27(23.84). But the broker warns thathe firm may not see earnings risesignificantly until 2015.
ANALYSIS l Voestalpine36.0
34.0
32.0
30.0
28.07Mar 25Mar 14Apr 6May 26May
34.682 Jun
VOESTALPINECiti rates the group a buy and haraised its target price to 40.00(35.32) from 37.00. The broker hraised its earnings per share fore-casts to 1.9 per cent ahead of conssus, following VOEs results.
Evolution SecuritiesThe investment bank has appointedMark Wellesley-Wood as a director inthe corporate finance department andas the head of Evolutions naturalresources team. He joins fromAmbrian Partners, where he was head
of corporate finance.BAE SystemsThe Board of BAE Systems hasappointed Lee McIntire a non-execu-tive director of the company. McIntireis currently chairman and chief execu-tive of consultancy CH2M HILL.
White & CaseThe international law firm has appoint-ed Carl Hugo Parment as a partner inits Stockholm office, joining fromScandinavian bank DnB NOR Bank.
WorldSpreads GroupThe financial market trading companyhas appointed Charlie McCreevy to theboard as a non-executive director.McCreevy currently sits on the board of Ryanair, and is the former EuropeanCommissioner for Single Market andServices. He also served as the Irishfinance minister from 1997 to 2004.
+44 (0)20 7092 0053morganmckinley.com
To appear in CITYMOVES please email your career updates and pictures to [email protected]
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
in association with
Norton RoseJon Harry is joiningthe law firms Parisoffice as a partneron 6 June. Harryled the corporategroup of Hogan
Lovells Paris officefrom 2006 to2009, beforebecoming a corpo-rate specialist practising in Paris,with expertise in cross-border merg-ers and acquisitions.
CITY MOVES |WHOS SWITCHING JOBSEdited by Harriet Dennys
8/6/2019 Cityam 2011-06-03
19/32
News 19CITYA.M. 3 JUNE 2011 WORDS BY STEVE DINNEEN
This isnt over yet: the Mayfairtycoon fighting to clear his nameVincent Tchenguizis ready for thestruggle of his lifeas he battles athome and abroad
AN afternoon with Vincent Tchenguiz makes you realise why cases like the collapse of Icelandic bank Kaupthing take a team of accountants years to unravel.
For nearly 90 minutes, Im bombarded with figures and facts, allegations andclaims. At one point he brings out adossier of colourful Power Point slides thatprovide a glimpse into a Kafkaesque night-mare. One shows a grid filled with wordslike trial, mis-represent and notguilty. Another shows indecipherableconcentric circles plotting the relation-ships between the companies involved inthe case.
Vincent is frank and open throughoutour interview but open like a flood-gate,spewing forth an ocean of informationthat encompasses countless financingdeals across dozens of companies andmultiple law-suits fought in two jurisdic-tions.
He speaks in half-sentences, in anaccent thick enough to stand a spoon in,dipping in and out of near-incomprehensi-
ble business-talk. His company is infec-tious, almost child-like, and he arrives athis Park Lane office with his tie drapedover his shoulders and his shirt billowingopen. The room is filled with blinkingscreens with live readings for the FTSE,S&P, and gold and silver prices. Scatteredaround, almost as an after-thought, are aDamian Hirst skull, model jets and a pho-tograph, on the floor against a wall, of him with Bill Clinton.
As he f lits from subject to subject, some-times in the same breath, he has a way of drawing you in, with a conspiratorial glintin his eye: Let me show you how this isinteresting...
Although no charges have been brought, Vincent is suspected by regula-tors of inflating the value of companiesused as collateral for a 100m loan fromKaupthing, which he denies. The mattercame to a head in March when 130 policeofficers swooped on premises owned by him and his brother Robbie. He is surpris-ingly calm about the morning he wasarrested which he refers to as the SFOthing.
I wasnt that fazed, he says. To behonest it was too early in the morning. I woke up, saw them, took a shower, went inthe car. They were nice guys. They keptasking me questions but it was too early.
However, he is l ess philosophical aboutthe reason for the raids. The way the
inv est igation was conducted was incor-rect. It was too fast, too quick , to o early and too much damage was done. Itshould be regulated so t his kind of thingcant happen.
They have brok en human rights. Allsorts of human rights. Privacy by goinginto the hous e, d amages, trial by media.Ive already been tried in the press and Ihavent even been charged.
He says the arrest and the en sui ngm edia circus has had a devastating affecton his business. His proper ty manage-ment company Peverel was forced intoadministration days a fter the arrests,
when Bank of America demanded therepayment of a 136m loan. His otherinterests have suffered too: We have tocontract. We are letting out office space,restructuring. We might have to shrin k
back to mu ch less foreign exchange trad-
ing. Were a financial company, we rely onfinan ce. We have transactions in South Africa, Canada, Israel and Hol lan d all onhold pending this investigation.
In a classic Vincent ch ang e of direction,he goes on to say he is pleased the situa-tion was handled within the UK. I was
very lucky. If this happened in 90 per centof other countries I probably wouldnthave had the chance to even get out of thepolice station, Id be stuck. Thankfully it
wasnt Russia or the Middle East, places where you dont get another chance.
Vincent is now calling for a judicialreview into his arrest, claiming theSerious Fraud Office (SFO) had no reasonto suspect he would not have cooperated
with the investigation. Moreover, he saysthe raid was illegal as the warrant was fora holding company he owns based a few
blocks down the road. If the review isgranted and upheld the SFO will have toreturn all of the documents it seized, mak-ing a subsequent charge more difficult.
Which would only leave the small mat-ter of his 1bn civil case againstKaupthing and its administrators.
Although far less entwined with the bank
than his brother Robbie who infamously appeared in a glossy Kaupthing maga-zine Vincent was still massively exposed.
In the civil case, Vincent says he wasdefrauded by Kaupthing, claiming it mis-represented its perilous financial state.They were performing share support,
meaning they didnt have any equity,meaning they shouldnt have been a bank.
They withheld information from every- body. It just didnt occur to me that a bank could go bust.
He says the administrators subsequent-ly destroyed the value of his property busi-ness, which he maintains was still viable.Administrators are driven by trying to liq-uidate a structure and they are driven by the legal bills they create, he says. If they had been patient and let us go to market,they would have got their money. Insteadthey decided the best course of action wasno action. Stand still.
I ask if the impact of his arrest couldlead him to start afresh abroad. I dontknow what will happen after. I might con-sider it. For now we are still here. We willstay here until we finish the investiga-tion.
The day after his arrest, Vincent hadplanned a party on his yacht, which wenton in his absence. I wonder if he wasangry he missed it. His answer is typical
Vincent: There will be more parties... Thisisnt over yet, there is a long way to go. Itsinteresting.
Vincent Tchenguiz inhis Mayfair officesearlier this week
Picture: CityA.M./Micha Theiner
I was very lucky thishappened in the UK. If this happened in 90 percent of other countries Iprobably wouldnt havehad the chance to get outof the police station.
I wasnt that fazed. To behonest it was too early inthe morning. I woke up,saw them, took a shower,went in the car. Theywere nice guys. They keptasking me questions.
9/10/2008Iceland takes control of Kaupthing, itsbiggest bank, after already dismissingthe board of directors of Landsbanki,the islands second largest bank byvalue. 9/03/2011The Tchenguiz brothers are held forquestioning for over 12 hours by theSerious Fraud Office after being arrest-ed in connection with the collapse of Icelandic bank Kaupthing. Vincent andRobert were among seven men arrest-
ed in a series of dawn raids acrossLondon. All were released withoutcharge. Robert Tchenguiz had debtswith Kaupthing totalling more than2bn. His credit line was extendedafter the onset of the recession, despitehis portfolio of investments beginningto turn sour. 14/03/2011Vincents property management com-pany Peverel enters administrationafter failing to repay a loan. Bank of America Merrill Lynch demanded
repayment within 24 hours of a124.6m loan plus 11.4m in accruedinterest. The demand, on 10 March,came just a day after Vincent and hisbrother were arrested. 16/03/2011Vincent appoints Stephen Pollard,rogue trader Nick Leesons formerlawyer, as his new legal adviser. 18/05/2011Robert files a judicial review at theHigh Court, branding his arrest unlawful, aggressive and disproportionate.
TIME LINE |TCHENGUIZ AND ICELANDTchenguiz on the arrest Tchenguiz on the UK
8/6/2019 Cityam 2011-06-03
20/32
0800 819 9393 www.bowcrosswest.co.uk
50% OF PHASE 1 SOLD Apartments from 160k ina fantastic central locationBow Cross West Sales and Marketing SuiteThursday, Friday, Monday 10am - 6 pm,Saturday 10am - 5pm, Sunday 11am - 4pm31 Campbell Road, London E3 3AA
Chic one and two bedroom apartments embracing theold with the new to create a truly inspiring place to live
with quick links to the City or West End.2 mins DLR 3 mins District linesecure underground parking available for all properties*
* p r e m
i u m
p a y a b
l e f o r p a r
k i n g
T h i s C G I i s i n d i c a t
i v e o n
l y a n
d m a y
d i f f e r
f r o m
a c t u a l , r
e f e r
t o s a
l e s s t a f
f f o r f u r t
h e r
i n f o r m a t
i o n .
THERES barely a TV minute, orchannel flick that goes by thesedays without a celebrity chef whipping up an organic feast
or gastronomic delight amid seduc-tive lighting and a designer kitchen.
Then theres Masterchef, which hasthrilled millions with its X Factorstyle drama. Theyve collectively inspired a nation of amateur culinary enthusiasts, and as a result say retailers prompted a tidal wave of
spending on professional kitchenequipment. According to John Lewis,sales of premium food processors,mixers and blenders have increased a
whopping 233 per cent in Marchalone as a result of the phenomenon,
with droves willing to spend upwardsof 400 on a luxury gadget. But whatdo the real chefs have in their ownhome kitchens? City A.M. trackeddown five of the UKs hottest chefs toname their must-have kitchen buys.
Donata Huggins speaks to five of theUKs leading culinary experts to findout their own home kitchen must-haves
Living | Kitchens20
4BUTCHERS BLOCK: Tim Hughessays a butchers block is a greatplace to prepare food and adds
to the rustic look he likes in family kitchens: Hard wearing, chunky,preferably antique blocks are best(they dont make them like they usedto). He refutes the idea that these can
be difficult to clean: Nothing salt anda wire brush wont solve. Antiqueblocks can be found on Ebay,www.ebay.com. While new ones can foundthrough the specialist website CountryTrolleys, www.countytrolleys.co.uk
5 JAPANESE MANDOLIN: AlexisGauthier of Gauthier Soho says a Japanese Mandolin, a vegetable slic-ing device, is his favourite domestickitchen contraption: Much like anextremely sharp cheese grater, theMandolin allows you to cut extremely fine-ly. You can cut practically any vegetable onit, including tougher root vegetables just
watch out for your fingers. This contrap-tion will show you how important thedetail is to the f inal product. A wide selectionare available on Amazon, www.amazon.co.uk,ranging from around 30-80
2THERMOMIX MIXER: Daniel Galmiche,head chef at The Vineyard atStockcross, says he couldnt live with-
out a Theromix in his kitchen at home: They are wonderful. It does everything. It is theultimate foodies toy. You can make soups,sauces, ragu, grind nutmeg, make hol-landaise. It does half of the chefs work.
Adding that it is particularly useful if youdont have a huge kitchen since it takes up
very little space: I am one of the few chefsthat doesnt live in a big house, so the size of equipment matters. This specialist product isavailable directly from Thermomix, www.ukther- momix.com, costing 885, including VAT, and canonly be ordered by phone on 01344 622 344
1WINE COOLER: Stephen Tonkin, head chef at the DeanStreet Townhouse, says his custom-made and integrated
wine cooler is indispensable: Stocking up on the right wines and having them stored at the perfect temperature isfantastic. The cooler offers different temperatures for differ-ent drinks: wine bottles are stored at 5C and red at 12C.Its very a great talking point at parties, says Tonkin. John
Lewis stocks a wide range, starting from 199 for seven bottle ownbrand integrated cooler. www.johnlewis.com
Making your kitchen fit for a master3
RANGE COOKER: Thierry LaBorde of ChabrotBistrot dAmis says a decent range cooker is essen-tial to any kitchen, professional or otherwise.
Personally, he said would only be interested in an agadecked with Le Creuset cookware. While Tim Hughes,group chef director of Caprice Holdings, recommendsthe Britannia model: Its the most important thing toget right in a kitchen. Range cookers are fantastic
because they usually have six hobs and two oven com-partments, which is helpful for getting the timingsright. Britannia range cookers cost around 2,000 depending on your requirements. The Britannia website can help you locate
your nearest provider: www.britannialiving.co.uk/range-cook- ers. www.lecreuset.com.
X-MEN: FIRSTCLASSSEE THE REVIEWSSECTION ON PAGE 25
8/6/2019 Cityam 2011-06-03
21/32
*Rental yield is based on plot 316, a 1 bedroom apartment priced at 180,500 with an expected average rental gure of 825pcm, provided by Beresfords Estate Agents. Yield excludes service charge and ground rent. Crest Nicholson cannot give any nancial advice. Train times
are approximate. Prices correct at time of going to press. Exterior photography taken at Base. Typical Crest Nicholson interior.
www.crestnicholson.com/base 0870 757 8384
Last two 1 bedroomapartments pricedfrom 165,000
Register your interestfor BASE 7 now!
These new apartments are ready to move intonow and include contemporary ooring andlight ttings throughout. There is also goodrental demand in the area with potentialgross rental yields achieving up to 6%!*
Ready to move into NOW Great location in the heart of Brentwood
for shopping and eating out Smart and sophisticated interiors with
integrated Bosch appliances Internal landscaped courtyard and
allocated parking Walking distance to Brentwood station
for trains to London Liverpool Street in just 38 minutes
Excellent access to the M25, M11 and A12
Buy to let or buy to liveat Base in BrentwoodBut hurry, only 2 apartments remain
St James Road | Brentwood | CM14 4LZ
Want to know more? Get in touch today on 0870 757 8384
Marketing Suite & Show Apartment open daily 10am to 5pmEmail: base @crestnicholson.com
8/6/2019 Cityam 2011-06-03
22/32
Living | Focus On CITYA.M. 3 JUNE 201122
ST. JOHNSAVENUE, WARLEYPrice: 425,000.This four-bedroomsemi-detached househas a both a front andback garden, a diningroom, living room,kitchen, four bedroomsand has recently hadits bathrooms refitted.Contact: Beresfords on 01277 231515 or go to www.beresfords- group.co.uk
THE GALLERIESPrice: Prices range from168,000 for a one-bed-room apartment to485,000 for a two-bed-room duplex.This grade II listedVictorian building hasbeen converted intoapartments. The commu-nity is gated. The sur-rounding gardens arelandscaped, and many of the homes have far-reaching views overLondon.Contact: City & Country Group on 01277 202122 or go to www.the-gal- leries.net
LANGTONS, SOUTHWEALDPrice: 2.8m.The property has fiveprincipal bedrooms,three bathrooms, threesecondary bedrooms,five reception rooms, akitchen, heated swim-ming pool, tennis court,seven stables, a modernbarn, garaging, a num-ber of original timberoutbuildings, two pad-docks and an orchard.Contact: Savills on 01245 293224 or go to www.savills.co.uk
Q.We are looking into purchasing abuy to let investment. Is there abetter time of year to do this?A.The central London lettings market isseasonal to an extent. Traditionallythe busiest months of the year areJanuary, June, September and October. Themonths to avoid if possible are December,April and August.
In January there is always a glut of peoplelooking that should have moved if theChristmas holidays had not been in the way.September and October are by far the busiestmonths of the year with pretty much all prop-erty having a strong chance of letting quickly.A vast majority of lettings in London revolvearound the academic cycle either beginning orending. Whether it be from high net worthstudents, post graduates, second or third yearbankers/lawyers or high end Corporate ten-ants relocating with their families. Having theproperty in tip top condition and launching itonto the market at the end of August/begin-ning September will increase the chance of abetter quality tenant with a healthy budget.
Q.My husband and I are looking toshort let our property, is thereanything we need to be aware of?A.We have a few basic golden ruleswhen it comes to successfully shortletting a property. Firstly all moniesincluding a security deposit must be paid upfront. This alone is a very good filter when itcomes to the quality of tenant. Second isensuring that you have a very good idea of the profile of your prospective tenant andtheir level of accountability. Nearly all of ourshort term rentals are taken by corporate orcorporate quality tenants therefore minimisethe risk of any bad apples. For all other ten-ants we scrutinise the detail for our clientsand are careful not to recommend proceedinguntil we are sure that we have a good candi-date.
From a presentation point of view, a shortlet property should be fully furnished with allcutlery, crockery and two sets of bed linenand towels provided. It is a very good idea toensure that the property has some kind of cable television package and an absolutemust nowadays is wireless broadband con-nection. These little extras can very often bewhat are needed to clinch that perfect shortlet tenant. My final piece of advice would beto only use agents who are experienced in thenuances of short term rentals.
Tim HassellDRAKER LETTINGS,SPECIALISING INBELGRAVIA, CHELSEA,KENSINGTON AND PIMLIC
Q A&
Commuting to the city:Getting from Brentwood stationto Liverpool Street takes 40minutes. By car, this journey willtake just under an hour. Thosebased at Canary Wharf will findthat their commute is 40 min-
utes by car, missing all the innercity traffic.
Education: The local independ-ent Brentwood School gets goodresults. Last year 95 per cent of its pupils scored A*-C in theirGCSEs. Chelmsford County High,a high performing grammarschool, also gets good results,
but lies around 20 minutes awayfrom the town centre by car.
NEED TO KNOW |AREA INSIGHT
RENTBRENTWOOD, ESSEX BY DONATA HUGGINS
BRENTWOOD |PRICE ACTIONDetached Semi-Detached Terraced Flats
Brentwood 605,211 299,050 243,945 190,913
Essex 369,726 223,912 185,693 140,908
Source: Savills
up
to anglepoise
40%off
recent promotionup
to
authentic
models40 %off
upcoming promotionup
torevolution
50%off
shop now
.com
70 %luxury home &
lifestyle brands
up
to
off
ACHICA is the online members-onlyluxury lifestyle store. Members canindulge in exclusive savings onluxury home & lifestyle brands withnew promotions every day.
join now for free
CURRENT MORTGAGE DEALS BY DONATA HUGGINS
Lender Fixed/Flexible Rate Until apr Maximum Loan to(per cent) (per cent) Value (per cent)
First Direct Flexible 1.99 2 years 3.5 65
ING Direct Flexible 2.04 2 years 3.4 60
Santander Flexible 2.19 2 years 4 60
Yorkshire BS Flexible 2.29 June 2013 4.7 75
Yorkshire BS Fixed 2.79 June 2013 4.8 60
Santander Fixed 2.79 August 2013 3.6 70
Woolwich Fixed 2.98 August 2013 3.6 70
Market Harborough BS Fixed 3.45 June 2014 5 75
Yorkshire BS Fixed 3.59 June 2014 4.9 75Source: MoneySupermarket.com
8/6/2019 Cityam 2011-06-03
23/32
Leading sustainable developments
www.the-galleries.net
Blend into something extraordinary Visit The Galleries in Junefor your chance to winfamily tickets to The Dukeof Essex Polo Cup**See www.cityandcountry.co.ukfor terms & conditions.
1 & 2 bedroom apartments from 217,500 to 485,000Show homes open daily 10am - 5pm
Call 01277 202122 Brentwood, Essex CM14 5GF
Scan with your Smartphoneto visit The Galleries
8/6/2019 Cityam 2011-06-03
24/32
8/6/2019 Cityam 2011-06-03
25/32
Lifest