Featured Posts

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

Read more

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...

Read more

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

Read more

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...

Read more

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...

Read more

ITV’s results were good – but they were hardly a transformation

Category : Business

ITV Studios was singled out for increasing revenue when it was ‘internal supply – money ITV was spending on itself

ITV’s results last week were unquestionably good and especially good for long-suffering shareholders. Revenues are up, costs are down, debt is paid down, cash is flowing and so are profits – Ebita £500m plus. Chairman Archie Norman and chief executive Adam Crozier – both complete outsiders to broadcasting and ITV, BBC take note – can justifiably take full credit for the company’s performance, which represents quite a turnaround in difficult economic conditions.

The strategy has been essentially the same as that pursued by their predecessors Charles Allen and Michael Grade – reduce ITV’s historic dependence on fickle TV advertising revenues by developing other revenue streams. That means developing online, on-demand, pay TV and, most importantly, the company’s content business ITV Studios. And, indeed, that is what Norman and Crozier claim to be doing with their “transformation” programme.

So much so that last week’s results were headlined “Delivering Growth Through Transformation”, with ITV Studios (ITVS) singled out for delivering a £100m increase in revenues, the lion’s share of the company’s overall increase in non-TV advertising revenue (or non-NAR revenue in the jargon) of £114m. That leaves ITVS delivering what is counted as fully £712m of non-NAR revenue; which is presented as evidence that the strategic objective of weaning the company off TV advertising (which is flat at £1.5bn) is well under way.

However, while there is no doubt ITV is now better-run and more profitable, a closer look at the figures raises questions about whether the “transformation” has thus far had much to do with this improvement. The bulk of the increase in ITVS revenues (£58m of the £100m) is an increase in “internal supply”.

In other words it is money (£350m in total) ITV is spending on itself – ITV channels buying shows from ITVS. All of which is funded by TV advertising, which makes presenting it as “non-NAR” revenue quite a semantic stretch. Look closer still and you will see that £33m of that £58m increase is accounted for by one programme – ITV Daybreak – moving into ITVS from another part of the company. In effect the UK production division of ITV Studios, still by some margin the most significant, has increased its non-ITV production by just £5m. And that also means that the increase (from 55% to 58% in the past year) in the share of ITV commissioning accounted for by ITVS – a key measure for the success of the transformation strategy – could be accounted for almost entirely by the internal transfer of the Daybreak commission.

In one important sense, of course, the overall strategy will be served by more in-house commissioning – since these will be programmes and formats ITV owns and can exploit internationally. But that is a very long game indeed unless you have a global hit like Who Wants to Be a Millionaire? or Big Brother – and they are, by definition, rare.

There are more opportunities to go in-house as ITV looks to refresh Saturday evenings in the light of the gentle but probably significantratings decline of The X Factor and Britain’s Got Talent (both currently independent commissions not owned by ITV); while more long-running returnable drama – think Mr Selfridge doing well around the world – would add to ITV’s commercial strength. And international production too will shortly start to make a bigger contribution if recent acquisitions in Europe and the US pay off. Although in-house commissions that offer greater potential long-term returns internationally, but which might carry greater risk in terms of short-term schedule performance, will no doubt continue to be avoided by ratings conscious commissioners.

ITV is looking better than it has done at any time since the Granada/Carlton merger that created the company back in 2004, but a significant drop in TV advertising spend – which, against most market expectation, hasn’t happened in spite of the parlous state of the economy – would still spoil the shareholders’ long-awaited party.

What does Europe mean to you?

Category : Business

A historian, an entrepreneur, an opera director and a member of a thinktank have their say on Britain on the EU. What does the relationship mean to you?

Norman Stone, historian

Should Britain aim to be at the heart of Europe ? That question was decided when we failed to join the euro, which turns out to be a very good thing. A common currency without common taxation and bonds was not likely to work and the eurozone countries will have to intensify their arrangements if matters are to improve. Britain cannot go along with this: we still have big, worldwide interests that would suffer. In any case, who is convinced that the eurozone, with 25% unemployment in Spain, and a terrible demographic problem, is something to join? The euro project needs serious change if we are to go along with it.

Norman Stone is professor in the Department of International Relations at Bilkent University, Ankara

Imran Amed, entrepreneur

Britain is undoubtedly close to the heart of Europe. Indeed, from a fashion perspective, London offers easy access to Milan and Paris. But Britain’s destiny is as linked to a fast-emerging global economy as it is to Europe. London lies at the centre of the world, with an advantageous timezone and geographic position, while the country’s cultural output has global impact. This is what first drew me to London from Canada – and why I have chosen to set up my business here. Britain’s tradition of openness has made the country a magnet for talented people who bolster London’s status . To maintain this enviable position, Britain must remain open to Europe – and to the world.

Imran Amed is the founder of Business of Fashion, “the Economist of fashion’”

Kasper Holten, opera director

The second act of Mozart’s Le nozze di Figaro ends with sheer genius: starts with two voices, another gets added, then another, and so on until seven people with different agendas are all talking over each other – and it forms perfect harmony. If this could serve as an ideal for European collaboration, it would seem that the ensemble still needs a lot of music rehearsals! As a guest in the UK, it would be inappropriate for me to comment on what is best for Britain. But as a European, my hope is that Britain will make sure that its voice is heard in Europe. The question is not only whether Britain needs Europe, but also whether Europe needs Britain, and the answer is yes. In music, there can be no balance without a mix of voices. Europe needs Britain as a prima donna in its ensemble.

Kasper Holten is director of opera at the Royal Opera, Covent Garden

Anastasia de Waal, policy analyst

As I fear is the case for a large chunk of the population, to date, the topic of the our European Union membership hasn’t elicited quite the interest in me that it should have.

Like recycling, it’s clearly imperative, but somehow it’s always seemed to be the favoured stamping ground of either the dull or rabid.

Last Wednesday, all that changed – with the choice description of the EU as not available a la carte. Suddenly, the debate was in a language we spoke – not French, but food. And yes, not just hoping to dine a la carte, you might well say that David Cameron was trying to order for the whole table.

Food matters aside, renegotiation has an important place, but so does the EU and its other member states.

Anastasia de Waal is deputy director at the thinktank Civitas

Archie Norman | MediaGuardian 100 2012

Category : Business

His strategy may not be original, but the ITV chairman has helped stabilise revenues and boosted the share price

Job: chairman, ITV
Age: 58
Industry: broadcasting
2011 ranking: 35

ITV1′s Titanic flopped, but Archie Norman has steered ITV to calmer waters. The former Tory MP, who spent a decade transforming the once-ailing Asda into the UK’s second largest supermarket chain, has stabilised ITV’s performance and boosted the share price, despite signs of an advertising slowdown in recent months.

A business hit hard by the worst advertising recession in living memory has recovered, thanks in part to the success of ITV Studios at winning new commissions.

Some questions still remain about the degree to which the management’s long-term aim of reducing ITV’s near-total dependence on advertising revenues can be fulfilled.

But while the strategy – to diversify ITV’s revenue streams, focusing on online, subscription services and production to drive growth – is not original, it seems to be working so far.

Canadian Mark Carney in charge of the Bank of England – unthinkable?

Category : Business

Mark Carney, governor of Canada’s central bank, has reportedly been approached as a candidate for the Threadneedle Street job

On 17 August 1931, the Montreal Gazette contained the following report: “Montagu Norman, Great Britain’s ‘man of mystery’ and Governor of the Bank of England, has dropped pressing work on the problem of solving Great Britain’s economic difficulties and boarded the steamer Duchess of York at Southampton for Canada.”

“I have had a very hard time lately,” poor Norman explained as he obeyed his doctor’s orders. “I have not been so well as I would like to be.”

Eight decades later, with another global financial crisis taxing the current governor, the tale of Norman’s crossing appears to be being told in reverse.

Mark Carney, the governor of Canada’s central bank, has reportedly been approached as a potential candidate to shoulder the stress that comes with being the Bank of England governor, when the current incumbent Sir Mervyn King sails off next year.

Rarely are foreigners allowed to command any central bank, so for a 318-year-old institution to attempt the experiment would be a sensation. In the UK we borrow Zimbabwean cricket coaches (thank God), Italian and Swedish football managers (never again) and French or German monarchs. But a Canadian (even one who was accepted at Oxford) ruling Threadneedle Street? Unthinkable. Well, almost. The bookies give Carney a 9% chance of landing the job, even though we don’t know if he actually wants the gig. For now, he remains Canada’s man of mystery.

Odds on the next governor of the Bank of England

Source: Paddy Power

Adair Turner 5/2

Paul Tucker 5/2

John Varley 11/4

Stephen Green 11/4

Gus O’Donnell 5/1

Mark Carney 10/1

Kate Barker 20/1

Hector Sants 25/1

Gordon Brown 200/1

Fred Goodwin 300/1

Harry Redknapp 500/1

George Galloway 500/1

Bryan Adams (Canadian rocker) 1000/1

Knight in a comfy cardie who rescued Peacocks shows he has style

Category : Business

Philip Day, the private owner of the Edinburgh Woollen Mill, rescued more than half of the fashion chain from collapse

Thousands of staff at Peacocks breathed a sigh of relief this week, as a knight in a comfy cardie, Philip Day – the private owner of the Edinburgh Woollen Mill – rescued more than half of the cheap and cheerful fashion chain from collapse.

Day – whose 380 Edinburgh Woollen Mill outlets promise “ageless style” for over-45s – is clearly a man with an eye for a bargain. He has bought up a string of retail basket cases in recent years, including young-fashion chain Jane Norman and home textiles store Rosebys.

But the Peacocks deal has catapulted the 47-year-old entrepreneur into the limelight, a position he had until now avoided despite building an estimated £300m fortune (about the same as the Queen), according to the Sunday Times Rich List.

Brought up in Stockport, Day now lives in Edmond Castle, a Tudor-style country house near Brampton in Cumbria. He likes to shoot pheasant and duck and has sat on the board of the local football club, Carlisle United. Friends describe him as a “strong family man”, married to Debra for 25 years, with two daughters and son.

This week he was at Peacocks’ head office in Cardiff, talking to staff and negotiating with shop landlords in a bid to get better deals on rents so he can take on more of the chain’s stores. He has bought 388 stores, saving 6,000 jobs, but would like a few more of the 224 which have closed down with the loss of 3,000 jobs.

Day says he enjoys turning around failing businesses and likes to focus on the nuts and bolts of retailing, rather than on amassing wealth.

“It is not about building a mighty empire, it’s just about the job and being part of the economy and doing our best for Britain … Perhaps people don’t know how I work but I prefer to roll my sleeves up and get on with my business away from the spotlight.”

In Cumbria, Day is involved in a number of local community projects and is a non-executive director of North Cumbria University Hospitals NHS Trust. However, he has been criticised locally for his handling of ancient woodland at Gelt Woods, where he has established a pheasant shoot.

EWM also attracted attention last year when BBC’s Newsnight programme claimed the wages of some North Korean workers making cashmere sweaters in Mongolia were being paid to the North Korean government.

Day says the accusations were a “load of nonsense” and the company has said it was given proof by the Mongolian factory that wages were being paid directly into workers’ bank accounts.

What it did not dispute was that knitwear labelled as “designed in Scotland” was actually being made in Mongolia.

Day may be publicity shy but his daughter Kirstie has no such qualms. She was crowned Miss Cumbria in 2010 and ended up in the tabloids when it emerged that EWM’s head office had emailed staff in its stores ordering them to vote for her to become Miss England. “I need and expect all stores to register a minimum of 10 votes today and I mean everybody!” said the leaked message.

Day started out on a council estate where he worked in his parents’ newsagents doing several newspaper rounds a day. He did well at school but turned down a place at university in favour of going into business.

Over the next few years he built a career at stalwart British clothing manufacturers including Coats Viyella and Wensum, both suppliers to Marks & Spencer. Then, aged 28, he was head-hunted to join Aquascutum, the British brand known for its smart suits. Day worked at Aquascutum for five years, rising to joint managing director.

In 2001, he left the business to join the Edinburgh Woollen Mill, leading a buyout backed by private equity company Rutland Fund Management. Just over a year later, Day seized control when Royal Bank of Scotland backed his £69m bid to buy out Rutland.

Best known as the home of conservatively styled knitwear and fleeces for middle-aged women, EWM is not the most obvious new home for the cheap chic of Peacocks.

The business was founded as a wool dyeing company in 1946 by Drew Stevenson. Drew’s eldest son David, opened the first retail store in Randolph Place, Edinburgh in 1970 and he helped build the business under Grampian Holdings’ ownership.

By the time Day stepped in, the Edinburgh Woollen Mill was regarded as one of the fustiest brands on the high street and many of its 287 stores were loss-making. Day shook up the business, rebuilding and expanding the chain.

But his ambitions have not stopped there. In 2008 he bought home furnishings company Ponden Mill and home textiles company Rosebys – both of which were rescued from administration. In 2009, EWM acquired ProQuip – a Scottish golfwear brand worn by star golfers including Ian Poulter and Lee Westwood – for about £750,000.

Day also put his own money into DLN Group, owner of Etiquette Formal Hire, a suit and dress rental company. That too was rescued from administration – only to collapse again a year later.

The Peacocks chain is not EWM’s first venture into tight-fitting outfits and disposable fashion favoured by under 30s. Last summer, the knitwear company bought about 60 Jane Norman stores when the fashion chain fell into administration.

Day says the deals have been financed by a small amount of debt and cash from successful investments which has been ploughed it back into new businesses. He suggests, in contrast, that Peacocks’ demise was caused by too much debt and too many of the wrong type of stores in the wrong place.

“We don’t gear the business up, we’ve got very little borrowings,” he says.

The acquisition of Peacocks, backed by Barclays and Santander, is seen as an attempt to increase the scale of EWM’s young-fashion business.

But Day says that Peacocks will be run as a standalone business and stores won’t

Post to Twitter