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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to http://pennystockpaycheck.com for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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Franchise Services of North America Inc. Announces Financial Results for the First Quarter Ended December 31, 2012

Category : Stocks, World News

CALGARY, ALBERTA–(Marketwire – March 1, 2013) - FRANCHISE SERVICES OF NORTH AMERICA INC. (TSX VENTURE:FSN) (“FSNA” or the “Company”) announced its financial results for the first quarter ended December 31, 2012. Revenue and the net loss for the quarter ended December 31, 2012 were $2,586,248 and $1,151,696 respectively, as compared to revenue of $2,622,397 and a net loss of $340,305 for the quarter ended December 31, 2011. Net loss includes non-recurring expenses related to the proposed acquisition of the Advantage® Rent-A-Car brand (“Advantage”) of approximately US$918,000 for the quarter ended December 31, 2012 and US$288,000 for the quarter ended December 31, 2011.

Read more here: Franchise Services of North America Inc. Announces Financial Results for the First Quarter Ended December 31, 2012

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‘Major failures’ over rail deal

Category : Business, World News

The collapse of the West Coast Main Line franchise deal was the result of “irresponsible decisions” and “major failures”, says an MPs’ report.

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Not lucky in Kentucky: Yum plunges nearly 10%

Category : Stocks

Even though the company reaffirmed its outlook for 2013, investors were spooked by an alarming 4% decline in same-store sales in China, where Yum operates a substantial KFC franchise.

Read more from the original source: Not lucky in Kentucky: Yum plunges nearly 10%

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Network Rail pleads for more cash as its debt soars

Category : Business

Figures suggest there will be a record 1.5 billion journeys on the railways this year and more money is needed

Network Rail has warned that the smooth running of Britain’s trains will be jeopardised without increased investment to meet demand as passenger numbers and the track operator’s debt continued to grow.

Figures suggest there will be a record 1.5 billion journeys on the railways this year, which Network Rail says is driving increasing investment. Patrick Butcher, group finance director, said: “We borrow to invest to make the railway bigger. With passenger growth of 5% a year, our debt is going to keep increasing.”

Borrowing rose to just over £28bn, up from £27.2bn in six months, although Network Rail said the value of its assets — the railway network — rose with investment and inflation to £45.3bn from £43.1bn.

Critics of the railway structure claimed the debt amounts to a hidden subsidy, on top of the £4bn annually that the Department for Transport puts into the system. Transport commentator Christian Wolmar said Network Rail’s debt was now five times higher than when it was privatised, saying that it “shows that real subsidy is much higher than politicians admit”.

Butcher warned that an impending “capacity crunch” would require further investment to keep services at their current levels of space and reliability. He said that, since the track operator’s formation in 1992, “we’ve taken train punctuality up to 91-92%, costs down 50% and we’re running 20% more trains. But we don’t think you can keep doing that forever”. He said: “We can run more trains, but they will be less reliable. Or you can keep [performance] up, but that will cost more money.”

Network Rail is in the early stage of negotiations with the Office of Rail Regulation over its funding, including the scale of maintenance works and operating costs, for the five years from 2014. In July the then transport minister Justine Greening announced an investment programme worth £9.4bn, including £4.2bn of new schemes and upgrades, to be carried out in that period, but that will be a fraction of the overall settlement.

The government has pledged to make passengers pay more towards the cost of the railways so taxpayers can pay less and – since the McNulty review in 2011 identified apparent possible cost savings of 30-40% in train operations – has demanded further efficiencies.

Network Rail insiders meanwhile fear that the delays in train franchising and procurement will slow planned improvements, as they redevelop stations and track in anticipation of new rolling stock. Siemens has yet to finalise the Thameslink contract announced 18 months ago. The fallout from the west coast fiasco – where three DfT officials were suspended after flaws were found in the franchise bidding process – and the current freeze on new franchises also puts associated investment from train operators at risk. The DfT has yet to agree terms with Virgin for its interim west coast contract, due to start on 9 December.

On Thursday RMT general secretary Bob Crow proposed that Network Rail should have the right to bid for train operating franchises.

Butcher said: “We’ve got the expertise, and could we run trains? Yes.”

However, he added: “We have a prohibition in our licence that prevents us bidding for franchises,” and he said that Network Rail would not be “agitating to have it changed any time soon”.

West coast mainline investigation searches for Richard Branson emails

Category : Business

‘Anyone but Virgin founder’ comments sought by inquiry as ministers admit total cost of of fiasco will exceed £40m

The inquiry into the west coast mainline franchise competition has demanded a trawl of Department for Transport emails to search for rumoured “anyone but Branson” comments after finding that bidding companies were treated differently.

The DfT’s permanent secretary, Philip Rutnam, told MPs that although he had no evidence of such emails, both the inquiry, led by Sam Laidlaw, and the civil service’s own internal staff investigation would be checking the correspondence.

Virgin has long suspected that antipathy towards it played a part in the award of the lucrative London-Manchester-Glasgow train service to FirstGroup before the franchise competition was aborted.

Rutnam said he knew of no bias or impropriety, and he – not ministers – had taken the “precautionary” decision to suspend three civil servants.

Questioned by the Commons transport select committee as to why ministers had defended the process as “robust” despite apparent early warnings that it was awry, Rutnam said that while he “would expect that” problems would be relayed to ministers, he could not say if they had been alerted in this case.

Rutnam said that even he himself, as the senior civil servant in the department, was debarred from the decision-making process under confidentiality rules. But he believed that the mistakes now highlighted had been “textbook errors”, and added: “I thought, where is the quality assurance process?” He also questioned whether the rules on anonymity were helpful in the procurement process.

Facing MPs alongside Rutnam at the select committee, the transport secretary, Patrick McLoughlin, admitted that “things went very badly wrong” and that the total cost of the debacle would rise far beyond the £40m already earmarked to compensate bidders.

He said the extra costs would include reimbursing FirstGroup and also Directly Operated Railways for preparatory work done before the decision was made to allow Virgin to continue running the line when its contract expires in December. He did not rule out legal action from FirstGroup, whose shares dropped 20% when the award was overturned.

Despite the shock to his company, FirstGroup’s boss, Tim O’Toole, made a robust defence of rail franchising and the privatised system. Speaking at the Guardian’s annual George Bradshaw address, O’Toole said the rail industry had to “confidently defend the current business model even in the wake of the current fiasco”.

He said: “The rail franchising system has produced spectacular growth and the structure going forward must do the same.”

He warned that the call for shorter franchises – reiterated this week by Labour’s Alistair Darling – was a “kneejerk reaction” and said it should be “tempered by the effort to preserve the advantages of longer franchises”.

The interim report released this week by Laidlaw, Centrica’s chief executive, found that the overstretched department breached its own guidelines and continued to run the franchise competition even after it became aware of problems that made a legal challenge likely. His final report is due by the end of November.

Virgin is negotiating terms of its contract extension for the next 14 months while a two-year franchise is awarded. The government plans to run a long-term competition in that time.

VIDEO: Virgin in West Coast route talks

Category : World News

Virgin Trains will be asked to continue to run services on the West Coast Mainline for at least another nine months following the decision to scrap the latest franchise decision.

See the rest here: VIDEO: Virgin in West Coast route talks

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Top civil servant apologises to Justine Greening over west coast rail debacle

Category : Business

Assessment failures were ‘clearly responsibility of officials and not ministers’, Philip Rutnam tells former transport secretary

The most senior civil servant at the Department for Transport has issued an apology to former transport secretary Justine Greening over his officials’ handling of the west coast mainline franchise.

In a sign of the depth of contrition among senior civil servants, Philip Rutnam made a point of reaching out to Greening, who is said to be livid at the conduct of officials in her former department.

Greening, moved from the transport department in last month’s reshuffle to become the new international development secretary, is understood to have let her displeasure be known in Whitehall. She is particularly angry because she summoned officials to give an explanation after Virgin’s complaint over the decision to strip it of the west coast mainline and award the franchise instead to FirstGroup. Officials initially told Greening they were confident the assessment process was reliable. However, when she asked them to double-check, civil servants reported they had identified one error, but said they were confident it would not have changed the outcome.

This alarmed Greening to such an extent that, at the same meeting on 3 September, one day before the reshuffle, she ordered a full-scale review which was designed to run a fine-tooth comb through the franchise process.

The findings of this review prompted Patrick McLoughlin, who replaced Greening as transport secretary, to abandon the process last week. He said the fault lay “only and squarely within the Department for Transport”. Three officials from his department were later suspended.

In his note to Greening, Rutnam reiterated that the problem was “clearly the responsibility of officials and not ministers” and acknowledged that during the franchise process “both you and Theresa Villiers [then a transport minister] were assured by officials in this department that the process was robust and sound”. That was “manifestly not the case”, added Rutnam.

No 10 said on Thursday that the first the prime minister knew of the severity of the problems with the west coast bid was when McLoughlin made his announcement, a month after the reshuffle on 4 September, in which Villiers was promoted to Northern Ireland secretary.

The apology and Greening’s anger is another example of the often poor relations between ministers in the Conservative-Liberal Democrat coalition and civil servants. The Public and Commercial Services union, which represents one of the three suspended officials, has described the decision as “deplorable, but sadly not out of character” for the government.

The episode has also highlighted questions over the Department for Transport’s practice of only showing ministers anonymised details of franchise bids to ensure they cannot be open to charges of favouritism. Some ministers are concerned that this gives too much power to officials and makes it more difficult for ministers, who are accountable to parliament for the work of their entire department, to maintain proper oversight.

McLoughlin is due to decide on Monday who will run the line while investigations are held before the franchise process begins again.

This will follow two separate investigations also announced by the transport secretary, one into the west coast bid process and the second into the overall franchise system.

The transport department has said that the problems found with the Virgin and First Group bids were focused on assessment of the train companies’ forecasts of passenger numbers and the calculation of inflation. Officials told the Guardian the same mistakes were made in assessing all four original bids for the contract, including two which were dropped at the first stage. However, the decision to suspend the original award suggests that the same error applied to different bid numbers would have differing levels of impact on the assessment.The second reviewwill be led by the chairman of Eurostar, Richard Brown. He is likely to put more focus on ministers since the current franchise system was introduced by the coalition government following a review commissioned by the first coalition transport secretary, Philip Hammond, who was replaced by Greening when he became defence secretary in October 2011.

This railway fiasco reveals all that’s wrong with the Tories | Will Hutton

Category : Business

If you hollow out the state, expensive disasters like the West Coast franchise will become routine

It was an epic debacle. Last week the government withdrew the award of the vast £13bn West Coast rail franchise contract to FirstGroup, acknowledging that its own processes were faulty. Shares in FirstGroup plunged 20%, while the incumbent Virgin Rail and its boss, Sir Richard Branson, could hardly contain their delight. Ministers, releasing the news at midnight to set the terms of the news story, spun that middle-ranking officials were to blame for the cock-up and had been suspended. But £13bn contracts do not get awarded without the approval of ministers and the departmental board.

This is a first order crisis of the state. The structure of a hollowed-out Department for Transport was exposed as dysfunctional – and the proposed inquiry into what went wrong stank from the outset. Led by a current member of the department’s board, the implicit presumption was clear: the board has been let down by bungling underlings and no responsibility fell to anybody at the top.

It’s a massive passing of the buck by frightened and callow politicians and top officials. Bluntly, the permanent secretary should be considering whether his own position is tenable, and so should the former transport secretary Justine Greening and her former minister of state, Theresa Villiers. Too many issues are raised for this to be addressed by blaming hapless, even if faulty, civil servants. The whole new edifice of bidding for rail franchises is tottering.

If there is no trust in the process, meaning that companies can be expected to launch judicial reviews challenging decisions, then the expense will become prohibitive. And if there is no re-allocation of franchises then one of the spurs for innovation is removed. This rail disaster illustrates how crude and ideological the British position on innovation has become. There was one good dimension to rail privatisation: the break-up of monopoly and the creation of multiple operators who could experiment and learn from each other. There was another dimension that was stupid: that in an industry like this the state should be kept out of “enterprise” as much as possible.

Instead, risk should be borne by go-getting private companies which the market would incentivise to innovate and lower prices. Government and the public economy were bad, enterprise and the private economy were good. In this conception there is no interdependence, no co-creation of wealth or no recognition that, of necessity, the state must be involved.

It was a passionate belief in this stupidity that led the then transport secretary Philip Hammond and his sidekick Theresa Villiers to suspend the rail franchise bidding process while they conducted a review into how it could be “improved”. They concluded that rail operating companies should be given yet more latitude to run the service for longer – 15 years – free of Department of Transport “micro-management”. Business freedom should be enlarged.

But Hammond (now at defence) and Villiers (now in Northern Ireland) as ideological conservatives had, and have, no idea about how capitalism operates – about how companies manage risk or what drives innovation. They believe in the crude Thatcherite notions about the magic of markets and individualism. A child could have told them that lengthening the contracts would increase the risk and open up more uncertainty. It also creates huge opportunities to game the system because nobody knows what rail passenger traffic and revenues will be in 12 to 15 years’ time. You can just make it up.

FirstGroup, with immense aplomb and utterly predictability, did just that. In 2026 they predicted they would carry 66 million passengers – Virgin predicted 49 million – so allowing them to justify a higher bid price than Virgin. The riskier the bid, the more money a bidder has to lodge to compensate the government if it all goes wrong: FirstGroup lodged £190m and Virgin insisted it should be more. On Wednesday the government acknowledged that Virgin was right.

The policy change, along with the disengagement of the transport department led directly to the mistake – because it created a fresh uncertainty to the forecasts that the contracting process was ill-equipped to handle. On top of this, a tiny team of underpaid officials faced some of the most expensive and well-paid consultants and lawyers in the world, in a department where the turnover of ministers and top executives is renowned. There was plainly not sufficient in-house knowledge to challenge the riskiness of the FirstGroup forecasts or the size of the bond it calculated it should lodge with the department.

This is another dimension of contemporary conservatism – contempt for the state, its officials and what it does which must necessarily always be deadening, inefficient and wrong. The civil service is to be shrunk and its capability shredded. Officials are lampooned, even by the prime minister, as enemies of enterprise. His salary – £142,500 – is progressively to become the upper limit of civil service pay even though his total package is worth more than £500,000.

Talented people are leaving the public sector in an increasing exodus. Even the head of the Treasury is now worried that his department has become too inexperienced and too shrunken to discharge its responsibilities – a reality even more marked at the Department for Transport where there is a fresh secretary of state and permanent secretary almost every year.

Everything becomes second-rate – the capacity to chase down tax avoiders, convict fraudsters, to negotiate contracts with rail-operating companies or regulate complex banks. The coalition’s jihad against the state costs society and economy vastly. But it is also based on a fantasy. Of course banks need regulating, taxes collected and contracts for infrastructure contracts written. But there is more than that: risk in capitalist enterprise is endemic.

No company, FirstGroup included, can see the future. If we want companies to take risks at the technological and innovative frontier, society has to backstop them and underwrite part of the risk. In the rail industry, with its high infrastructure costs and crucial role as a public service, any system of public procurement that tries to avoid this reality is doomed to failure.

The larger lesson is that if you hollow out the state, not only will expensive disasters like last week’s become routine, we will be unable to stimulate genuine innovation: there simply will not be the officials with the sophistication to judge what risks the state should run in partnership with business. Conservatism is the road to ruin.

Market week: investors dump Tesco stock as analysts remain gloomy

Category : Business

Better than expected US jobs figures helped the FTSE 100 to end the week on a positive note

Tesco fell to a two-month low on Friday in a rising market, as investors checked out of the supermarket group’s shares in the wake of its first profit fall for 20 years.

The company reported half-year figures on Wednesday showing trading profits dropped 10.5% to £1.6bn, prompting concerns about its poor UK performance and growing problems in its international business. It closed down 2.8p at 315.35p on Friday, its worst level since the start of August as analysts queued up to downgrade the business. Kate Calvert and Freddie George at Seymour Pierce said: “The market was prepared for a decline in profits from Tesco, but we believe its first-half results were disappointing even in that context. With no visibility on where UK profitability will bottom and too many of its overseas businesses face trading issues shorter term, we reiterate our reduce recommendation and cut our target price to 290p from 310p.”

Caroline Gulliver at Espirito Santo said: “We believe Tesco is in transition and may well emerge a well-run, mature retailer with operating margins of over 5% and a cashflow yield above 10%. But we are not there yet and with several obstacles on the path we cut our fair value by 10% to 300p and keep our neutral rating.”

Overall the market ended the week on a positive note, boosted by better than expected US jobs figures, with the FTSE 100 finishing 43.24 points higher at 5871.02. Despite continuing concerns about the eurozone crisis – with the problems in Spain, Greece and Portugal far from resolved – the leading index added nearly 130 points over the course of the week.

Commodity companies were among the main gainers on Friday after the US data suggested a brighter picture for the global economy. Eurasian Natural Resources Corporation led the way, up 18.6p to 333.3p after Credit Suisse said its shares could gain ground in the near term after recent weakness.

Fellow Kazakh miner Kazakhmys climbed 31.5p to 738p, while Vedanta Resources rose 36p to £11.01. Evraz, the Russian steelmaker controlled by Chelsea football club owner, Roman Abramovich, recovered from a fall on Thursday in the wake of news it was taking a majority stake in coalminer Raspadskaya. Its shares ended 9p to 254.1p. But engineering and design firm WS Atkins fell nearly 5%, down 34p to 695p after reports that its role in the west coast rail franchise fiasco was being investigated. The franchise was taken away from the winner, FirstGroup, after irregularities in the bidding process. Atkins – along with law firm Eversheds – had reportedly been hired in January to give technical advice on the franchise process. Meanwhile FirstGroup fell 4.5p to 196.1p having lost 20% on the day the franchise was withdrawn.

Elsewhere energy services business Wood Group added 22.5p to 833.5p after an upbeat trading statement, with the company saying it was confident of meeting full year expectations.

AstraZeneca added 7.5p to 2918.5p, as traders suggested Monday’s decision by the new chief executive, Pascal Soriot, to halt its share buyback programme could mean it was on the takeover trail. US group Forest Laboratories was one name mentioned as a possible target. Among the mid-caps, the biggest loser was Kcom. The telecoms group fell 5.6p to 78.75p after reporting lower than expected growth in its business and public sector markets.

Mitchells & Butlers rose 5.6p to 306.6p after Peel Hunt raised its rating from hold to buy. On Thursday horseracing tycoons JP McManus and John Magnier had bought 7m shares in the pubs group through their Elpida vehicle, raising their stake to 22.47%. Joe Lewis, the billionaire currency trader who saw two bids for the business rejected last year, owns 26.3%.

Finally Pursuit Dynamics lost a quarter of its value, down 2.05p to 6.075p after the company said it was seeking new funding as it awaited firm orders for its process technology equipment.

It hopes to provide an update by the end of the month.

In March this year the company raised £9.4m through a rights issue, eight months after an £8m placing.

Civil servant defends rail role

Category : World News

One of the civil servants suspended over flaws in the competition for the West Coast Main Line franchise criticises the Department for Transport.

Originally posted here: Civil servant defends rail role

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