PRESS DIGEST - Financial Times - April 22
Thursday April 22 2010
CITY HIT BY BRAIN DRAIN TO AUSTRALIA
Headhunters have suggested the number of British financial services professionals working in Australia will have risen by up to 50 percent by the end of 2010, compared with 2008. Recruitment specialist Kinsey Allen International and Jon Michel Executive Search, its Australian partner, have forecast as many as 69,250 City professionals will be employed in the financial services industry in Victoria and New South Wales by the end of the year. The news comes despite signs of improving conditions in the City jobs market.
CALL FOR WATER SECTOR MERGERS
Tony Wray, the chief executive of water company Severn Trent (SVT.L), has called for greater consolidation within the privatised industry, claiming the glut of companies is not a sustainable model and creates "sub-optimal solutions". Although Wray's suggestions, including water trading between companies, have been put forward before, the timing of Severn Trent's push is being viewed as critical, with an election looming and pledges of industry reform being bandied by the Conservative party. "What's important is that there is diversity and competition -- but equally there needs to be economy of scale," Wray said.
SEC PROBES BHP LINK TO ALLEGED CORRUPTION AT FORMER PROJECTS
The U.S. financial regulator, the Securities and Exchange Commission, is investigating BHP Billiton's (BLT.L) alleged links to potentially corrupt practices in a number of its former projects. The world's largest mining company has revealed little about the nature of the investigation, but has stated that it involves "interactions with government officials" and is part of a wider investigation focusing mainly on mineral exploration permits, either owned or applied for by BHP.
DEUTSCHE BAHN BACKS 1.5 BILLION POUND BID FOR ARRIVA
The supervisory board at German state-owned transport group Deutsche Bahn has approved the 1.5 billion pound ($2.31 billion) takeover bid for UK bus and rail operator Arriva ARI.L. The 775 pence a share deal is likely to be announced on Thursday after the Arriva board unanimously recommended the offer and a due diligence review was successfully completed. Arriva's shares closed at 765.5 pence on Wednesday.
OCADO LINES UP BANKS FOR SUMMER IPO
Ocado is expected to announce the appointment of JPMorgan Cazenove, UBS and Goldman Sachs as advisers for a planned 1 billion pound flotation, likely to occur after the general election in June or July. The online retailer has been preparing for a float after it managed to narrow operating losses by a third and increased gross sales by 25 percent to 427.3 million pounds in the year to November 29. Earnings before tax, interest, depreciation and amortisation were up from 500,000 pounds to 9.2 million pounds.
ROCK CFO QUITS OVER FSA INQUIRY
David Jones, the last remaining member of the old board at nationalised bank Northern Rock, has made a hasty exit after it was revealed he is being investigated by the Financial Services Authority. Last week, the regulatory body said it had fined and banned David Baker and Richard Barclay, two former Northern Rock executives, for misreporting arrears figures on nearly 2,000 mortgages. Jones, who was the bank's finance director prior to its collapse in 2007, is thought to have left the company with immediate effect to focus on the probe, although the FSA has yet to officially name him in connection with its investigations.
PRU PLANS SECONDARY LISTING IN SINGAPORE
In a bid to complement its proposed dual listing in Hong Kong, Prudential (PRU.L) is planning a secondary listing of its shares in Singapore. The financial services company is hoping to have both live ahead of a shareholder vote on its agreed $35.5 billion takeover of AIA, the Asian arm of American insurance group AIG. Last month, the Singapore government's investment fund, GIC, confirmed it would be underwriting a large proportion of Prudential's 21 billion dollar rights issue, which it needs to fund the AIA deal. Rumours of a Thursday announcement regarding the rights issue sent the Pru's shares down almost four percent to 564.25 pence.
AUTONOMY RELISHES RECOVERY PROSPECTS
Autonomy AUTN.L has reported a strong start to the year, with first quarter sales up 50 percent to 194.2 million dollars. The UK's largest software company by market share produces programmes that enable companies to search through unstructured information including emails and word processing documents. This software is increasingly being utilised to ensure companies comply with regulations. With the U.S. financial regulator, the SEC, currently suing investment bank Goldman Sachs for fraud, the IT group hopes other financial institutions will call on their expertise in search technology, further boosting growth. Shares closed up one pence at 17.82 pounds.
MEGGITT EYES CHALLENGE IN AIM TO RESUME GROWTH
Meggitt (MGGT.L) has promised to return to growth in the second half of the year after suffering a "challenging" first six months. Cost-cutting measures mean the aircraft parts manufacturer is on track to exceed its projected run rate of 50 million pounds of cost savings by the end of 2010. Consequently, chief executive Terry Twigger said he believes Meggitt is "particularly well positioned to benefit" from an upturn in civil aerospace markets. Shares closed at 304.6 pence, down 7.8 pence.
GAME OVER AS CHIEFS QUIT RETAILER
Game Group GMG.L announced the departure of Lisa Morgan and Terry Scicluna, the chief executive and chief operating officer, on Wednesday, sending shares down 12 percent. The news that two of the video game retailer's most senior executives were to leave was delivered as Game reported a 28 percent drop in full-year profits from 117.4 million pounds to 84.2 million pounds in the year to the end of January. The move corresponds to a difficult period for the retailer, with increasing pressure from supermarkets and online sites, and an announcement of the closure of up to 130 of its 677 UK stores by 2013. Shares were down 12.05 pence at 89.25 pence on Wednesday. ($1=.6495 Pound)
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