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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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G4S shares tumble as European business disappoints

Category : Business

World’s largest security company loses 11% as it warns on profit margins

Shares in G4S, the company that bungled the security of last year’s Olympics, slumped 11% on Tuesday morning, after it said profit margins would be lower than expected in 2013 because of a difficult first quarter in Europe.

The news will pile further pressure on the firm’s chief executive, Nick Buckles, who was forced to appear before MPs last summer to admit the operation for the 2012 Games was a “humiliating shambles”.

The world’s largest security company, which provides services ranging from manned security guards, to cash transportation and running prisons, pulled forward its trading update to say that group margins would be down 0.6% in the three months to the end of March, and would probably stay lower all year.

G4S is still struggling to recover from 2012 when profits collapsed by a third after the security contractor was forced to pay out £88m over its failure to supply enough guards for the London 2012 Olympics.

The company blamed the drop in margins on challenging conditions in continental Europe. It said prices in its cash solutions arm, which transports and stores money for businesses in the UK and Ireland, were under pressure. G4S was also hit by a £6m charge in Africa after some clients did not pay their bills. It said the proposed closure of 30 prisons in the Netherlands would also have an impact on the business.

“For all of these reasons, and despite ongoing business improvement plans, the first quarter margin trends are expected to continue for the full year,” the company said in a statement.

Overall, revenues grew by 7.5% at constant exchange rates in the first quarter. Organic growth, which strips out the impact of acquisitions, rose by 6% in the group as a whole and by 12% in developing markets.

Caroline de La Soujeole of Cantor Research retained a buy recommendation on the stock, despite the “disappointing” news, citing G4S’s attractive operational and geographical profile. The shares tumbled 32.5p to 273p.

FTSE 100 climbs to new five year highs as mining shares gain on central bank moves

Category : Business

Equities lifted by Australian interest rate cut and hopes of further action from ECB after Draghi comments

Mining stocks are among the main gainers as leading shares rose to a new five year high.

Hopes of further central bank action to boost the global economy have been fuelling share price rises, and with the Reserve Bank of Australia cutting rates and ECB boss Mario Draghi hinting on Monday of more to come if things get no better, that mood is continuing.

Rebecca O’Keeffe, head of investment at Interactive Investor, said:

In recent weeks, every piece of bad news has been tempered by the knowledge of unlimited central bank support, whilst every piece of good news has heralded a wave of new money. So far in May we’ve had the Fed, the ECB and now the RBA, who cut rates overnight, making all the right noises sending markets the multi-year and all time highs, providing investors with continued positive momentum.

With the central bank safety net in place and alternative asset classes unattractive, equities have reaped the rewards, but questions are now starting to be asked about how long equities can continue to provide such stellar returns – in particular during the historically volatile month of May. With some markets, including the Dow, reaching psychological barriers, alongside the period when the weight of new money typically slows, these constraints may well limit the ability of the markets to make significant further gains over the next few weeks.

Controversial Kazakh miner Eurasian Natural Resources Corporation has climbed 19.3p to 312p, Rio Tinto has risen 73p to 3095.5p and Glencore Xstrata has added 7p to 350.95p.

Randgold Resources missed out, dropping 163p to £49.42 as brokers including Numis and Investec cut their target prices following a biggest than forecast fall in earnings reported last week.

HSBC is 21.3p higher at 735.2p after better than expected results but G4S slid 37.3p to 268.2p after the security company warned on margins following a difficult first quarter in Europe.

J Sainsbury is down 2p at 388.9p as it confirmed reports it was in advanced talks with Lloyds Banking Group, up 0.64p to 54.69p, to take full ownership of their joint venture.

Overall the FTSE 100 has climbed 22.02 points to 6543.48.

Letters: Palestinian prisoners

Category : Business

Today, 17 April, is Palestinian Prisoners’ Day. This for me is a day to think about the child prisoners – taken in the middle

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G4S contract loss: payback for Olympics security bungle?

Category : Business

Reason for G4S losing its prison contract is not clear but doubts could undermine confidence in government’s bidding process

Was the Ministry of Justice administering popular justice when it stripped G4S of the contract to run the Wolds prison in east Yorkshire and did not select the firm for its shortlist of bidders for other prison contracts? In other words, was it pay-back for the company’s Olympics security bungle?

It is impossible to be certain. A critical report on Wolds by the chief inspector of prisons, highlighting “clear weaknesses,” could have been sufficient reason in itself to take administration back into the public sector. As for the new contracts, G4S was one of four companies not to be selected for the shortlist: its pitch may just have been poor.

But if G4S has been unofficially blacklisted, the government is on very weak ground. G4S’ failure to provide enough security guards for the Olympics was disgraceful. But that episode has nothing to do with its ability (or not) to run prisons. The two issues should be entirely separate. By all means, hit G4S in the wallet for its Olympics cock-up – but keep the award of prison contracts out of it.

Any confusion on that point would merely undermine confidence in the government’s ability to hand out contracts to the best bidder. And that confidence is not high after the west coast rail debacle.

To be clear, we don’t know why G4S failed in this case because transparency is roughly zero. But the slight tone of bitterness in the company’s response is understandable: “We look forward to discussing the contract award decision with the MoJ within the next few days to determine why we were unsuccessful.”

Quite right. It is not a popular thing to say, but G4S deserves to know if it will receive fair treatment from government in future.

Insurer Resolution rises on dividend hopes, as FTSE moves higher ahead of US election

Category : Business

Merrill Lynch issues buy recommendation on Resolution after 10% share price this year

Resolution, the company set up to buy underperforming life insurers, has fallen 10% so far this year on worries about its structure, its outlook and its strategy.

In comparison the insurance sector is up by nearly 30% over the same period, but analysts at Bank of America Merrill Lynch believe it could be time to buy Resolution’s shares.

In August the company called a halt to takeovers in favour of boosting returns to shareholders from its existing businesses, and raised its dividend by 5%. That could just be the start, said Merrill, which moved its recommendation from neutral to buy and raised its target price from 234p to 264:

We now have greater confidence in the company’s ability to meet our dividend forecasts. And this is the most obvious reason to own the shares, in our view. We think the £300m or so annual dividend cost is comfortably (1.2-1.3 times) covered by free cash flow, especially taking into account the likely £60m annual cash saving we expect from debt restructuring. Moreover, Resolution’s balance sheet is defensively invested and is not overly leveraged (17% gearing). And the company’s capital position looks adequate with more than £3bn economic capital surplus. All of the above suggest limited risk to the dividend outlook, which is far from being priced into the shares, in our opinion.

That backing helped lift Resolution 15.4p higher to 236.6p, making it the biggest riser in the leading index.

Still with insurers, Legal and General was lifted 3.9p to 144.2p by vague talk of a possible bid. Traders suggested Germany’s Allianz as one potential predator, with a price of around 250p a share mentioned.

Overall the FTSE 100 finished 45.84 points better at 5884.90 ahead of the US elections and a Greek vote on its budget and austerity package, due on Wednesday and Sunday. The index has hit a new two week high, thanks to a number of positive corporate updates and despite some poor UK industrial production figures and downbeat eurozone data.

Among the companies reporting, G4S – in trouble recently thanks to the fiasco over its London Olympics contracts – climbed 9.2p to 270p following news of a pick up in business in the third quarter. It saw strong growth in emerging markets and hopes to win further UK contracts despite the Olympics problems.

Marks & Spencer rose 10.8p to 398.7p after its profits came in better than forecast, down 3% in the first half following a recovery in the second quarter.

Chip designers Arm and Imagination Technologies were lifted by news they were carving up technology group MIPS Technologies.

Arm, which added 14.5p to 709.5p, is part of a consortium buying the rights to MIPS’ portfolio of 580 patents, contributing $167.5m to the total $350m purchase price, partly to reduce any future litigation risk.

Separately Imagination, up 9.3p to 474.3p, is buying MIPS’ operating assets, effectively its 160 engineers as well as 82 patents, for $60m. The move is designed to help Imagination become a stronger competitor for Arm.

InterContinental Hotels gained 21p to £15.45 after better than expected third quarter profits of $167m, up 9%. Talks to sell its Barclay hotel in New York continue but it is also seeking new potential buyers of the property.

Heading in the other direction was Babcock International, down 34.5p at 954.5p on profit taking after a positive update. Half year profits rose 13%, with the company benefiting from austerity as governments outsourced business to cut costs.

Standard Chartered fell 14.5p to 1468.5p as Credit Suisse cut its recommendation from neutral to underperform.

Associated British Foods dipped 1p to £13.65 as it sounded a note of caution on the outlook for its sugar business, despite reporting a 17% rise in full year profits to £974m, boosted by another strong performance from its Primark discount fashion chain.

Invensys closed 4.5p higher at 238.9p as analysts at Nomura said the company was likely to boost its dividend payout and could even consider a cash return to investors. The bank began coverage of the rail equipment and controls group with a buy rating and a target price of 330p, both on the outlook for its business and the prospect of it becoming cash rich.

But Premier Oil fell 7.5p to 352.6p after the Spaniards East well in the North Sea- where it owns 28% – was plugged and abandoned as a dry hole. Other companies with stakes in the well include Parkmead, down 1.13p to 14.5p, Serica Energy, 1.25p lower at 28.625p, and Faroe Petroleum, which fell 1.25p to 146.5p.

Finally Armscote Investment Company, a business quoted on ISDX (the former Plus market), was steady at 1.25p as it announced the acquisition of Venn Life Sciences, the raising of £2.5m and a plan to move the resulting business to Aim on 26 November.

Separately, Armscote directors Adam Reynolds and Paul Foulger are part of a consortium paying £4m to Autoclenz, the car valeting company, for its trading business.

G4S should top blacklist of firms that have failed to deliver, say MPs

Category : Business

Commons home affairs committee also says firm should forgo £57m management fee for Olympic security shambles

The private security firm G4S should be the first name on a government blacklist of “high-risk” companies that have failed to deliver public services, a cross-party investigation into the Olympic security shambles has concluded.

The Commons home affairs committee says G4S should forgo its £57m management fee for the contract that it still insists on claiming and has a “moral duty” to pay those people whom it trained but failed to use as venue security guards.

Keith Vaz, the committee chairman, said: “Far from being able to stage two games on two continents at the same time, as they recklessly boasted, G4S could not even stage one. The largest security company in the world, providing a contract to their biggest UK client, turned years of carefully laid preparations into an 11th-hour fiasco.”

He said the government should learn from the experience and establish a register of “high-risk” companies that had failed in the delivery of public services.

The MPs’ recommendation brought an immediate response from the Cabinet Office, which said that since June it had had a policy of taking the performance history of suppliers into account when contracts were being decided.

“While we will not publicly name the companies involved it will mean that suppliers with poor performance may find it more difficult to secure work with [the] government in future,” it said.

G4S has announced a £50m loss on the Olympics contract, which saw nearly 5,000 troops drafted in just before the start of the Games when the company failed to provide enough security guards. Investment analysts have warned that the damage to G4S’s reputation is a “critical medium-term driver” of its fortunes, with rehabilitation likely to take some time.

The damning Commons inquiry says the company itself agreed that the blame for the debacle lay “firmly and solely” with G4S.

“There is no suggestion that Locog [the Olympic organising committee], the Home Office or anybody else involved in the process contributed to the problem in any way. All our witnesses, including those from G4S, were in agreement on this point,” says the MPs’ report, published on Friday.

“It is understandable that G4S, having taken a £50m loss on the Games, alongside a significant fall in its share price, should now seek to minimise the scale of any further losses. But we believe that the company should look to the bigger picture, and its long-standing relationship with its biggest client in the UK: the taxpayer.”

The MPs say the company should waive its £57m management fee, noting that it represents only a fraction of the £759m in other public contracts G4S held in 2010/11. They say such a move would send a strong signal to the public that the company was serious about offering “fair and reasonable redress” when things go badly wrong.

“By doing so, the company would accept, and be seen to accept, responsibility for its failings in respect of this extraordinary and uniquely high-profile contract, and therefore to draw a line between that failure and the continued fulfilment by this important UK company of other contacts, both in the UK and internationally.”

The MPs say they were shocked by the “apparent reluctance” of the company’s chief executive, Nick Buckles, to grasp this point when he appeared before them.

The committee says government departments, police forces and other public bodies should not place too much weight on a company’s size and reputation when deciding future contracts.

Many of those recruited for employment during the Olympics were severely let down by G4S, the MPs add, and the company has a moral duty to pay those who were trained but did not work or were expected to pay for their own uniforms.

The longer-term future of G4S is more likely to be affected by the committee’s call for those who commission police and criminal justice services to examine the track records of prospective providers.

“We recommend that the government establish a register of high-risk providers who have a track record of failure in the delivery of public services. This would provide a single source of information for those conducting procurement exercises about companies which are failing or have failed in the delivery of public contracts,” they conclude.

Conservative party: cheers, fears and falling ratings | Editorial

Category : Business

Mr Johnson may be the Tories’ prince over the water now, but golden summers and victory parades do not last for ever

Boris Johnson is the Conservative politician whom the crowds cheer without reserve. Thunderous applause and chants of Boris, Boris greeted his appearance in the Mall on Monday. He even got them to cheer for G4S. Is

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A G4S guard walks into a bar… and other tales from results presentations

Category : Business

On this week’s agenda: laughter and tears for investors at G4S, Bwin.party, Vedanta and Pinewood Studios

How many G4S security guards does it take to change a lightbulb? Six soldiers and a policeman.

So went the gag on the estimable Popbitch website over the summer, as the gaffe-prone group humiliated itself yet again – this time over its Olympic security contract.

To be scrupulously fair, Popbitch was being rather cruel: writing G4S jokes is quite obviously the company’s domain, so it will now need to reassert its dominance in the field this week when it unveils its half-year results.

All the talk during the presentation will predictably surround how the Olympic debacle impacts the company’s reputation and finances – and while Panmure Gordon analysts reckon the shares are “finely poised”, the same is unlikely to be said of embattled boss Nick Buckles.

Still, as the City waits for his escape, Buckles just keeps on churning the punchlines out, with last week’s farcical reports involving a G4S security guard taking a quick break outside a Poundland before collecting its takings. As he sat in his armed van browsing his newspaper, an impostor dressed in full G4S attire walked into the store, where staff handed over £14,000. They eventually ventured outside to tell the waiting driver how they’d handed the cash to his mate. “What mate?” was the panicked reply.

It seems the house doesn’t always win

In gambling, a martingale is a betting strategy involving the punter doubling his bet after every defeat, the theory being that a win would recover previous losses and deliver a small profit.

In games of roughly even chance such as tossing a coin it sounds vaguely plausible – and no doubt you will have seen it being tried at a roulette table, where advocates argue they are on to a sure thing by betting on either red or black. Inevitably, however, these people are buffoons and the mathematics of the system means the growth of the wagers will bankrupt the gambler (unless he possesses infinite wealth).

Even in the City there are not many quite so rich, and a few mortals are starting to learn the lessons of doubling up on gambling shares following the 2010 merger of PartyGaming and Bwin. At the time, each firm was valued at around £1.1bn, but you can now get the pair for £770m and falling.

The company reports results on Friday in a busy week for the sector (Paddy Power, 888, and Playtech get an outing too), but nobody’s wagering on a change in fortune for Bwin’s investors. Regulatory uncertainties, a weak poker market and higher taxes are stacking the odds against them. No more bets.

The Vedanta meeting will come to order

One wonders if Anil Agarwal, chairman of the mining group Vedanta Resources, has considered hiring the Olympic stadium for his company’s annual meeting this week, rather than squeezing his board, investors and an army of protesters and placards into less spacious facilities in town.

In what promises to be the FTSE 100 miner’s latest sell-out, campaign groups such as Amnesty, Survival and Foil Vedanta (to name just a few) will be highlighting a range of grievances including alleged pollution, poor safety and persistent efforts to mine bauxite in India’s Niyamgiri hills, which are considered sacred by an ancient tribe.

The pinstripe suits of the City, of course, have been heard to sniff at such worthy concerns, but they do tend to take note of words emanating from former Financial Times editors. One of them, Richard Lambert, also has views on the miner, including: “It never occurred to those of us who helped to launch the FTSE 100 that one day it would be providing a cloak of respectability… for companies that challenge the canons of corporate governance, such as Vedanta.” Or, as a company spokesman puts it: “The AGM will be more of the same. The meeting starts. NGOs ask questions for two-and-a-half hours. The company refutes the allegations. Then we all go home.” Simples.

Listen carefully, Bond: this plan B

It was in the 1999 Bond film The World Is Not Enough that 007 admitted to M: “Construction’s not exactly my speciality.” “Quite,” she replied. “The opposite, in fact.”

That all seems rather apt now, as part of that film (just like the new effort, Skyfall, pictured) was shot at Pinewood Studios, the “media village” which happens to be having construction problems of its own. In January it scrapped a £200m plan to build 1,400 homes and a 100-acre set on green belt land at its Buckinghamshire base, after planning permission was refused. Still, Pinewood loves an expensive sequel and the company now hopes to return with a new scheme in the autumn, understood to include eight sound stages, offices and workshops.

That one’s just as likely to rile local campaigners, so expect them to quiz Pinewood chairman Lord Grade at the group’s annual meeting this week, in a nice tale of Joe Public against City grandee. Someone might even make a film about that.

Prison inspectors find drugs and idleness at G4S jail

Category : Business

Chief inspector criticises privately run HMP Wolds as under-fire security firm bids to renew its contract

The chief inspector of prisons has criticised a G4s-run privatised prison for high levels of illegal drug use and significant inmate idleness as its contract is put out to competition.

Inspectors’ spot-checks found that up to 30% of prisoners at the Wolds category-C “training” prison, in east Yorkshire, were on the wings doing nothing during the working day and that few of the education, training and workplaces that did exist were of sufficient quality to engage and develop the skills of inmates.

HMP Wolds became the first privately managed prison in Europe when it opened in April 1992. The current 10-year contract to run the prison is expiring and it is one of nine put out to tender for bids from private security firms and the prison service.

G4S is one of the firms bidding to run the prison. The loss of the contract would be a further blow following G4S’s private security company’s failure to provide enough security staff at the London Olympics.

Ken Clarke, justice secretary, said he wanted this round of prison privatisations to produce not only savings but also to focus on developing his “working prisons” concept and drug treatment regimes.

The report by Nick Hardwick, the chief inspector of prisons, said there had been some improvements at the G4S-run prison since the last inspection in 2010 but serious concerns remained about drugs, lack of staff confidence in tackling poor behaviour, and limited work and training provision.

The inspector said a third of the single cells at the prison, which holds 356 prisoners, had been “doubled up” to hold two prisoners and were too cramped, lacked sufficient furniture and had poorly screened toilets.

But the inspectors reserved their strongest criticism for the lack of meaningful employment opportunities, which they described as one of the principal purposes of a training prison. They say: “In this regard, too little had either changed or improved … training and learning had too low a profile, characterised by frequent interruptions and inactivity.”

The report, published on Wednesday, said it was “very poor” that 14% of inmates were either unallocated to activity or unemployed: “In our spot-checks we found that up to 30% of prisoners were on the wings doing nothing during the working day. Few education, training and work places were of sufficient quality to engage prisoners and develop their skills.”

The inspectors, however, said they were impressed by some of the work that was done at the Wolds, including that of a group of 25 inmates who carried out detailed marketing-related research for high-profile companies using closely monitored internet and telephone access.

They also praised an expanding business set up by the education department, which had trained eight prisoners to create computer-based products such as websites, animated programmes and video productions for business customers.

Michael Spurr, chief executive of the National Offender Management Service, said in response to the report: “The competition process that the Wolds is undergoing can create uncertainty but the director and her staff will continue to work to address the issues highlighted in the report to move the prison forward.”

Cathy James, the prison’s G4S director, said it was encouraging that the report recognised the prison had many strengths as well as challenges. “Few prisoners report feeling unsafe, the levels of violence are low and incidents of self-harm are lower than in similar establishments,” she said.

James added that since the inspection a technology suite had been opened to train prisoners and provide additional purposeful activity.

“In every prison managed by G4S, the care and welfare of those people in our custody is our top priority.

“We will be examining this report closely to see how we can best take forward its recommendations, where appropriate, and continue to build on the improvements already in progress,” she said.

Police chiefs urge ministers to draw lessons from G4S Games debacle

Category : Business

Olympic Security Group concerned there was ‘no one who could press the panic button’

Senior police officers responsible for ensuring security at the Olympics have written to the Home Office urging ministers to learn lessons from the G4S debacle that led to the army being drafted in to help protect the Games.

The Observer understands that the Olympic Security Group (OSG), the elite body with overall responsibility for the policing of the Games, wrote to the Home Office last week outlining a series of “learning points” that needed to be addressed before the UK stages another major sporting event. The group expressed concern that there was no independent regulator of G4S, which meant its progress in meeting targets leading up to the Games had gone largely unmonitored until it was almost too late to take action. “It meant there was nobody who could press a panic button,” explained a source familiar with the group’s thinking.

The OSG also said the fact that there

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