Category: Corporate Finance and M&A/Deals

CFO of the month
Corporate Finance and M&A/DealsFinance

CFO of the month

First of all, could you give us a brief background about Bel Brands USA?

How has your subsidiary contributed to the phenomenal success of the Bel Group? Bel Brands USA were formed in 1970 and are headquartered in Chicago, Illinois. Perhaps the most impressive facts about us is we have doubled growth in the past four years, making the U.S a significant contributor to Bel’s overall $2.8 billion in global sales in 2014. This growth is fuelled by the success of Bel Brands USA’s most popular brands, which are Mini Babybel and The Laughing Cow. As a global leader with over 150 years of industry experience and products ‘Bringing Smiles’ to 400 million consumers annually, Bel has 28 manufacturing sites worldwide, and three of these are in in the United States. These are located in Leitchfield, Kentucky, Little Chute, Wisconsin, as well as our newest plant in Brookings, South Dakota, which opened its doors for production in July, 2014. As a company that is continually focused on innovation and growth, Bel has big plans to expand its portfolio over the coming years to meet the ever changing needs of consumers and continue its mission of “Sharing Smiles” around the world.

As CFO, are there are specific financial undertakings that have been instrumental to your success?

Specifically speaking, I firmly believe that our use of SAP software has been key to our success over the past number of years. We have implemented SAP very successfully since 2010 and this has grown to become the back bone of our company from an ERP standpoint. As a result, we now have a very good level of integration from all functions. We are now at a phase where we are implementing a lot of additional applications that complement SAP, and will achieve more automation and state of the art reporting for our business partners. As such, this will allow them to the best decision possible for the company from a value creation standpoint

Are there any major deals or operations which you believe have helped your company grow and succeed even further?

In terms of deals, we acquired the Boursin brand from Unilever back in 2008 and it’s been a fantastic add to our existing brand portfolio. Since then, we have grown the brand a lot through focusing on our Boursin puck business and also through couple innovations.

At the moment, Bel brands is very excited to announce also the launch of The Laughing Cow—Cheese Dippers, which is currently happening now. We worked really hard to get the dippers cheese snack — soft cheese packages with tiny breadsticks — from Europe to the United States, and this took two years as the company needed to consider what changes would be needed to appeal to consumers in the US. Furthermore, the company is also interested in making another acquisition in the US at some point if the target is relevant to our brand portfolio.

Since your began at Bel Brands USA in 2008, you have been a key contributor in growing Bel Brands from $150 MM in net sales to $400MM. Can you tell us about this, and how your role has evolved throughout this period?

Generally speaking, my key role as the CFO has been building the finance team capabilities. When I joined, finance was accounting only and resources were mainly spread out between our different locations. My initiative was to centralise all finance functions into Chicago, where I revamped the accounting department with strong talents and created an FP&A department (financial planning and analysis) in order to manage budgeting process, partner with our business leaders and provide financial support to all our key business decisions. We have now an efficient and scalable team, with only a limited head count increase since 2008, despite the company doubling in size.

Furthermore, we have also put in place a category finance role to help marketing with innovation, new products and new customer decisions. This partnership has been a tremendous success, and FP&A has been valued as a critical asset to the organisation.

As the US subsidiary of a French listed group, we are not subject to The Sarbanes-Oxley Act, which protects investors from the possibility of fraudulent accounting activities by corporation. Nonetheless, we still have to strengthen our internal control resources and process as it was somehow very limited. In that respect, we have created a dedicated department to build internal control culture within the organisation and also roll out key initiatives, with the right level of balance to controls in order to keep the entrepreneurial spirit and agility we have within our team while putting processes in place. On the whole, we found that this has been working fine and we have great momentum from our company employees working on those initiatives.

Alongside these implementations, we have also put in place a hedging strategy in order to provide cash flow visibility to our shareholders, which is critical given the high volatility we have seen on the commodity markets those past few years (record highs then record lows, etc.). This took a great deal of education as this was first time ever the company was implementing that initiative, but we had strong support from our Paris team.

As a core member of Bel Brands leadership team, what have you done to define and implement company vision, mission and values?

Looking back on my time here, I can honestly say that I very much enjoy being a core member of the Bel Brands leadership team, primarily because it is defined and implemented by a strong vision, mission and set of values that we live by every day. As a member of the U.S. Leadership Team, I am also an ambassador of the Bel Values. Our employer values are “Dare, Commit and Care”, and as a leader, we must be the examples of these values and live by those values. You can display and train your people on the company values but nothing is better than when you walk to talk.

How has the firm grown and developed over the years?

Companies across all industries have had it difficult since the financial crisis, and it hasn’t been a stellar ride for our company either over the past eight years. As in any start-up company, we experienced hyper growth during the first couple years when the priority was to serve customer at any price. Unfortunately growth is hiding a lot of sins and some important topics are put on the side of the road as priority is toward growth.

From my experience, start-ups definitely need to take a step back, build all the key pillars of their organisation, culture, tools and processes and avoid becoming “too big too fast”. This is particularly important as you have to be ready when growth slows to mitigate turmoil and need the flexibility to put the company back to growth in the smoothest and quickest way possible. This involves taking the time to put in place a long term strategy and sticking to it is critical in the company success. In 2013 and 2014, we had a slowdown with one of our business and also some major projects going on with the opening of our new Brookings mega Mini Babybel plant. We are now back to high and sustainable growth, well prepared for the future with strong teams and have delivered a very solid 2015. And the good thing is, we still have a lot of growth potential and very exciting projects on the agenda. I can tell you that ‘routine’ is definitely not a word in Bel Brands dictionary!

Can you tell us a bit about the launch of new products and what this entails?

What has been your experience of launching the various new flavours of the Laughing Cow launched over the years? This year we are proud to have two new launches within our one of our most popular brands—The Laughing Cow. One is a new flavour and one is a completely new product offering within the brands. We introduced the new Asiago cheese flavour and it has been working quite successfully with our consumers. As a company, we make a strategic effort to be aware of new flavour trends and products, so we can provide our consumers with what they want. In our consumer research, we learned that Asiago flavour was very popular, so we are happy that we could develop this flavour within our Laughing Cow brand.

As mentioned earlier, we are very excited about this launch of The Laughing Cow—Cheese Dippers, as it meets the needs of our consumers who love The Laughing Cow, but desired to have the product in a portable format that meets their on-the-go lifestyle.

Finally, what does the future hold for your firm? Bel is a consistently growing company, driven primarily by the strong momentum of its core brands and international sales. This continuous growth reflects the relevance of the company’s sales and marketing strategy, as well as the strength of its distribution network. Our ambition is to double in size by 2025, and to meet this challenge, Bel relies on the power of its brands. We are continually focused on R&D and new product innovation to continue to bring our consumers new products, flavours and cheese formats that will continue to make Bel one of the top three branded cheese makers in the world. We also recognise as a company, that having a presence in new, emerging global markets is key to growing our business internationally.

Finally, what does the future hold for your firm?

Bel is a consistently growing company, driven primarily by the strong momentum of its core brands and international sales. This continuous growth reflects the relevance of the company’s sales and marketing strategy, as well as the strength of its distribution network. Our ambition is to double in size by 2025, and to meet this challenge, Bel relies on the power of its brands. We are continually focused on R&D and new product innovation to continue to bring our consumers new products, flavours and cheese formats that will continue to make Bel one of the top three branded cheese makers in the world. We also recognise as a company, that having a presence in new, emerging global markets is key to growing our business internationally.


CEO of the Month- Paul Kehoe
Corporate Finance and M&A/DealsFinance

CEO of the Month- Paul Kehoe

The airport, which is located in the constantly growing city of Birmingham, sees around 100,000 aircraft movements every year. Paul explains a little more about his role as CEO and how he ensures that each of these movements goes without incident.

“My role as CEO is as chief plate spinner, keeping all of the metaphorical plates spinning, whether they be with regards to security, environment, passenger, local government, or even staff. There are many different aspects to my role, and it’s my overall job to make sure that these different sections of the airport are constantly in harmony.

“No two days are ever the same, there are changes happening all the time within the airport and as such my role changes day by day. My diary is run by a very competent PA, and she feeds me with information and I work from that, managing the company through a series of meetings as the senior ambassador of the company, to get the message out to the world that Birmingham and the surrounding areas are a thriving manufacturing, banking and business region which is growing constantly, and supporting the expansion of the airport.

“Therefore you could call me the principal salesman: selling not only the airport but also the region and its story.”

In addition, one of Paul’s main tasks is leading his team, who are responsible for the day to day running of the airport. Paul explains his management style and how he endeavours to ensure the smooth running of the vast infrastructure over which he presides.

“A large part of my role is managing the team and creating a vision for which they can aim towards, whilst recognising that I do not control all of the rules within the airport, as these are often down to policy makers and other public controlled organisations.

“As such working within the airport can be challenging, but it is a challenge which I believe 90% of the staff working for us relish. As CEO I always look out for staff who will come along on the journey with me and are able to challenge management when they feel appropriate. Additionally, I like my staff to walk the walk: when they say something, they should do it. We have a programme called ‘Great People’, which allows staff to take on additional responsibilities and receive rewards, such as additional bonuses which recognise when they have undertaken tasks which are beyond their role.”

At the airport there are over 8,000 staff, of which just 700 work directly for the airport. The remaining 7,300 are from other firms. Paul explains the role of airport staff and how they function to support these external firms.

“Many of our staff are either in security or back office, and they act as the glue which makes the airport run smoothly, and allows the other staff within the airport to deliver. I find that our staff are highly motivated and ours is a very positive
workspace, which ensures that our staff deliver and are able to support the outside firms working within the airport.”

“In order to work with these firms we have to first persuade them to join us. To do this myself and the aviation development team visit Routes, the international airport convention, once a year, making a 20 minute pitch to
airlines to encourage them to serve the airport. What we sell to them is not the fact that we have a runway or a control tower, because they already know that; what we sell is the fact that we are situated in a growing region, with a strong economy and easy accessibility to regions such as London and Manchester.”

Working with so many firms and dealing with so many different rules and regulations could seem like a challenging task, but as Paul points out, the key is to make it as simple as possible.

“Ultimately I always aim to make everything as simple as possible, because what we are is a transportation mode, we take passengers from one form of transportation and we put them onto another. Our aim is to do that as efficiently
as possible with the least impact on our community, whilst making the most profit possible for our shareholders and asking for the least money from our investors so they get value for money.

“Keeping our message simple is key to running the business, because although the rules and regulations around running an airport can seem quiet challenging, as long as we use a simple approach we can deliver to every one of our stakeholders, which is key. Whilst we aren’t always able to get it right every time we always learn from our mistakes and try and improve all the time.”

Paul adds that the overall mission of the firm is as simple as their message.

“We used to have a highly complicated mission statement, but thinking it over I realised that overall our mission is to deliver across each aspect, whether it is reducing noise, improving services or increasing profit. Most companies say
they will deliver, but ultimately we ensure that we do deliver.

“Many airports want to be the bestof the best airport, however we aim just to ensure that we deliver on what we have promised, because this is the most important factor in securing long term satisfaction for all of our shareholders.”

The biggest challenge in recent years, according to Paul, has been the poor performance of the UK and world economies, and it is one which airports such as his have had to work hard to overcome.

“The poor economic performance of many world economies has seen us going backwards between 2007 and 2010, to a point when we reached a trough in 2010. Now the challenge is to cope with the sudden influx of growth and to maintain that growth within a very uncertain future.

“What we are seeing is significant issues with regards to rising customer service standards, where customers expect more but want to pay less. We are also seeing increasing legislation, mainly with regards to security, which can lead to vast expenditure.

“However, we are seeing a number of growth opportunities worldwide, which is phenomenal considering that many other countries are expanding into aviation development, including India, Indonesia, China and many others. These are generating passengers who want to come to the UK, offering us new opportunities for growth.”

As when this growth occurs new safety and security challenges emerge, but according to Paul this is the airport’s top priority.

“These security and safety challenges mean we have to adapt constantly, putting in increased layers of security and constantly adapting to ensure that we don’t make mistakes and are vigilant at all times, as we want to make sure that passengers have the safest possible journey. We also work with government to ensure that we are always up to date with the latest security laws and regulations.

“We were the first to improve our means of processing bags, for example, to ensure that it is as secure as possible.

“Overall we have always been a very innovative firm, both in terms of security and other aspects of our work, and we aim to stay ahead of any emerging developments as much as possible.

“For example, we have created a revolutionary exploratory area designed within our airport for younger passengers, which attracts younger children and has staff to look after them whilst their parents enjoy the airport.

“The ultimate goal is to be at the forefront of emerging developments and always be as innovative as possible. Some ideas, such as our holographic assistants, have not worked for our passengers, but we have learned from these mistakes and moved on to try new ideas. This approach has kept our airport at the top of the Which? Airport survey, of which we usually come in the top three.”

As an area, Paul believes that Birmingham is going through a renaissance as people realise the city’s proximity to London, which is leading to a revival in manufacturing and other industries.

All of this is bringing increased business to the airport. The region is at the centre of both the UK rail and motorway network, and the Government’s Midlands Powerhouse scheme will help reinvigorate the whole of the Midlands, bringing a number of exciting opportunities, including a HS2 station, as Paul highlights.

“These exciting changes will bring about an integration of road, rail and air, which we have never seen before, and which will provide numerous business opportunities for Birmingham Airport.

“The future looks positive for the airport. As long as GDP remains strong, which it seems to be then we will see continued growth in air travel. So far we have seen 11 new airlines starting to make journeys from Birmingham in the past 12 months, and this looks set to grow in the future. There may be some challenges along the way but as long as we have the right attitude we will be perfectly positioned to take advantage of every growth opportunity that comes our way.”



CEO of the Month
Corporate Finance and M&A/DealsFinance

CEO of the Month

Mr. Vinod Menezes has led Atlantic Subsea with a steady hand at the helm for over 20 years. As the CEO, Mr. Menezes has maximized growth year after year, while maintaining exceptional value to clients. He has been instrumental in providing critical tools to key managers to build great teams within the company.

The company’s success is a well balanced symphony of many parts. Long term relationships built through the years on trust, values and ethics have been key. The company has earned a reputation premium by rendering consistent delivery of honest and quality services to clients, while expecting the same from suppliers.

The company serves a variety of markets ranging from defense, which relies on governmental spending to energy and ports. As some components of the revenue stream are driven by public equity market whims, there is a sense of self hedging between governmental spending and the market environment. Hence at any given time, opportunities for growth are very prevalent. 

Atlantic Subsea is currently in its 23rd year of business. Even though the company has matured, delivering constant and consistent growth does generate its own set of  challenges. Success comes through synergies of corporate team members like key suppliers, bank executives, insurance and surety bond providers. It is critical that all key players are in equitable stride with the company to maintain the equilibrium. Mr. Menezes strives to maintain this balance.

Mr. Menezes emphasizes – “Just as the external corporate team is critical to the growth challenges, talent building and people management is the core of our beliefs. Caring and trusting people are paramount qualities to a value driven company like ours. Well being of our employees, their safety and future are interwoven with our success goals. Every aspect of or service is driven through the psyche of quality, honesty and a quest for improvement. Only when there is a strong consensus within our people of the corporate vision, then only we see an easier path to long term success”.

“Currently, the macroeconomic conditions in the US are favorable. The economy has improved and the market sentiment has been positive. Intermediate term GDP growth stability has been predicted through reliable economic predictors. This sentiment has triggered a positive disposition within the company management”.

Through a span of 2 decades, the company has weathered quite a few storms. It has overcome 3 cycles of economic downturn, only to maintain a steady growth through the years.

“If we manage to maintain a balance between all the key components of the business, we should be assured guaranteed success through the long term. There should be no compromise on rendering quality service and maintaining strong values”













Daman Investments Moves into Sports Apps
Corporate Finance and M&A/DealsFinance

Daman Investments Moves into Sports Apps

Sportlobster, a leading sports app that brings fans together, has secured £2m from leading UAE-based investment company, Daman Investments.

“Sportlobster is in strong growth mode at the moment and this is certainly a reflection of our investment into – and focus on – the product, particularly this year. Our latest funding allows us to further accelerate our competitive lead in a number of ways.” said the company’s CEO and co-founder, Andy Meikle. “Daman sees Sportlobster as an innovative concept and the product is unmatched. This raise and Daman’s continued support will allow us to execute our global strategy.”

Sportlobster’s new product offering and strategy for growth attracted Daman to not only inject capital upfront but use its corporate finance arm to raise future funding.

“We value innovative businesses that provide technology solutions for consumer needs. Sportlobster has a phenomenal team and provides an excellent social platform for a large market of sports fans across the globe.” said Shehab Gargash, Founder and Chairman of Daman Investments.

The investment by Daman Investments will be used to accelerate and support Sportlobster’s latest products and strategic developments from its London-based HQ.

The company which is backed by sporting celebrities including Michael Owen has already recorded a user base of 2.2 million sport fans across the globe. The company is witnessing a strong growth in the number of active users which is now increasing month on month by 60%.

Andy Meikle continues: “As a multi-functional sports app, serving multiple sports, engagement levels are high across the platform, be it through making predictions before events begin, chatting during games with other fans or making use of the blogging functionality. From a commercial perspective, there are multiple ways in which we will generate revenue across the entire platform which will complement the user’s experience and that starts here in the UK working with some of the UK’s biggest gaming companies.”

Sportlobster has appointed Daman Investments as the advisor for future rounds of capital raising. “We are really excited to be part this journey and believe that Sportlobster can become the leading social media platform to cater to over 1.2 billion sport fans across the globe” said Sumit Mehta, Head of Deal Structuring & Advisory at Daman Investments.



Swrve Completes $30mn Financing Round and Acquisition
Corporate Finance and M&A/DealsFinance

Swrve Completes $30mn Financing Round and Acquisition

Swrve, a leader in the mobile marketing engagement space, today announced that it has closed a $30mn funding and acquisition round. Swrve has acquired, a data automation platform for mobile. These two announcements come on the heels of a period of significant growth for the company, including reaching one billion installs of the product.

Swrve, whose platform enables brands to deliver contextually rich and relevant in-app mobile interactions, will use this funding to continue the company’s global expansion and market-leading product innovation. Leading the round is Evolution Media Partners (EMP), a partnership of CAA-backed Evolution Media Capital, TPG Growth and Participant Media, and the Ireland Strategic Investment Fund (ISIF).
Others participating in the oversubscribed round included existing investors Acero Capital, and Atlantic Bridge.

“Swrve solves real problems for real mobile marketers,” said Marco DeMiroz, Managing Director of Evolution Media Partners, who also joins Swrve’s Board of Directors. “We’re thrilled to be investing in Swrve, which is helping to make marketing more powerful, more relevant, more targeted and more effective than ever before, revolutionizing how some of the biggest brands in the world interact with their customers.”

With an existing roster of customers spanning some of best known brand names in the world, Swrve will use this capital primarily to accelerate product development and sales growth, to solidify their market position as a recognized global leader in the mobile marketing engagement space. Recent company milestones include: one billion installs of the Swrve SDK; a successful Q2 followed by a peak Q3 represented by 4x growth from Q3 2014; unprecedented expansion across verticals such as financial services, media and publishing, and entertainment and rapid hiring across its growing employee base in San Francisco, New York, Dublin, London, and continental Europe.

Swrve is also unveiling its new Swrve Amplify product, fueled by the acquisition of marketing and data automation provider Swrve Amplify will enable mobile marketers to build omni-channel marketing campaigns informed by real-time data streams. The result is more relevant, impactful, mobile campaigns that move the needle.

“We’re excited about the simplicity of Swrve Amplify in allowing us to make real-time decisions based on all of our data sets, no matter what silo they live in,” said Adam Warburton, Head of Mobile at Travelex. “We see tremendous value in transforming all of our user data to make an instant connection with our most loyal customers. The ease of reaching these users at the time when they are ready to engage with a brand through Swrve Amplify will be incredibly beneficial to any mobile marketing program.”

According to the September 2015 Forrester report (subscription required for access), Upgrade Your Marketing Plans With Push Notifications And In-App Messaging, “App usage is now mainstream … in the US, 62% of consumers opt to receive push notifications from a select few apps they download on their smartphone.” As a result, Swrve believes that digital marketers need to change the rules of mobile and digital engagement, adopting a personalized approach to marketing that goes beyond generic push notifications and blanket in-app messages that can damage a brand’s reputation. 

KKR Invests in Avendus Capital
Corporate Finance and M&A/DealsFinance

KKR Invests in Avendus Capital

Leading global investment firm KKR and Avendus Capital (“Avendus” or “the Company”), a pre-eminent Indian financial services firm providing customized solutions in the areas of financial advisory and wealth management, today announced the signing of a definitive agreement under which KKR will invest in Avendus to fund the company’s foray into the credit solutions business and to grow its wealth and alternative asset management solutions offerings to its customers.

KKR is making its investment from its Asian Fund II. As a part of this transaction, KKR is purchasing shares from Eastgate Capital and Americorp Ventures, an early investor in Avendus. Further details of the transaction were not disclosed. The transaction is subject to customary regulatory approvals.
Avendus has a strong focus on mid-market companies and the entrepreneurs leading these companies. As these companies grow, they need unique business and financing solutions, and Avendus aims to be the provider of choice for these products and solutions.

Avendus’ existing management team, led by co-founders Ranu Vohra, Gaurav Deepak and Kaushal Aggarwal, will continue to manage the platform’s day-to-day operations and its growth into the new businesses. The three founders bring more than 50 years of combined financial services experience to the firm.

Sanjay Nayar, Member of KKR and CEO of KKR India, said, “India is witnessing unprecedented demand for innovative and integrated financial services products as a result of rising entrepreneurship across sectors. Avendus is a world-class firm built and run by three visionary founders which delivers solutions to meet this demand by offering diverse alternative investment products and wealth advisory services.”

“As Ranu, Gaurav, Kaushal and the Avendus team continue to build on this banking franchise by seeking opportunities to elevate the company to the next level, KKR’s investment will aid this effort by accelerating the build-out of the Company’s highly sought-after investment banking platform which can be benchmarked against the world’s best,” added Mr. Nayar.

Ranu Vohra, Managing Director & CEO at Avendus, said, “Having created a platform which is trusted by entrepreneurs across industries, the mantra now for each of Avendus’ businesses is to ‘scale up’. We have excellent potential to expand our businesses and to become a comprehensive financial services provider to India’s first-generation businesses. KKR’s capital commitment and support will enable us to provide a broader set of synergistic services and products to these clients, which can catalyze their growth. We are very excited about what this partnership means for our clients and colleagues.”

Renewable Energy: What Provides the Best Investment?
Corporate Finance and M&A/DealsFinance

Renewable Energy: What Provides the Best Investment?

A 50kW PV Rooftop project is considered the most attractive technology from an investment perspective and a 5MW Solar PV Park or 10MW Wind Farm have historically been some of the most attractive technologies for investors, but were ranked eighth and ninth respectively. However due to the loss of support under the Renewable Obligation, this has significantly reduced the projected IRR’s for both technologies, thereby extinguishing the potential development value of the sites once consented, and making them relatively unattractive.

Biomass is also an attractive investment, despite recent cuts to the Renewable Heat Incentive (RHI), it was ranked second. Biomass is therefore an excellent opportunity for properties off the gas grid.
A 500kW Wind Turbine is ranked highly at third as it still delivers the highest return on investment for the right site. However Wind has a lower planning approval rate and also low development costs’ score, reflecting the high development costs and risks associated with securing planning for sites.

A 1MW Waste Anaerobic Digestion (AD) and a 500 kW Farm AD were ranked fourth and sixth respectively as operation and maintenance are higher than other renewable energy technologies, and there is volatility of financial support mechanisms, particularly the reductions in the bio-methane injection tariff (RHI).
Ground-Source Heat Pumps (GSHP) are ranked fifth, despite a fair IRR and low risk at planning. This is because, relative to the size of the technology, GSHPs require more investment and a longer timeframe to develop, with less significant income potential for an investor.

A 500 kW Hydro was ranked seventh as projects can require extensive environmental and ecological studies to obtain consent, the planning process can be complex and lengthy, and costs and resource income can vary significantly between sites.

Andrew Watkin, head of energy and marine, Carter Jonas said: “The UK has a fantastic pool of natural resources and we continue to call for the Government to get behind the renewable sector. When considering renewable energy investment opportunities, it is prudent to consider the risks against the potential benefits. To help our clients understand their options when it comes to onshore renewable energy, we grouped the various factors together to show the relative risk versus benefit. 500kW Wind has the highest benefit but also has very high risk, while a 50kW Solar Scheme also has good benefit with significantly less risk. Due to recent changes to incentives, large solar and wind farms now offer investors a much lower benefit. Our research has identified the most attractive renewable technology opportunities available, at the present time, according to key investment factors. However each opportunity will be driven by site specific circumstances and we would always recommend careful assessment and due diligence of individual projects prior to any investment.”

Andrew Watkin added: “As an investment, renewable projects are generally not mature enough to withstand a complete removal of any support mechanism. For renewable energy to be successful without support, several critical changes would need to occur within the industry: reduced costs of installation, reduced cost of grid connection, and increased value for sale of electricity. Overall, the industry needs support from the Government, not opposition with continual regulatory, planning and financial barriers driving investment away from the sector. Needless to say, the best projects will remain the sites with the best resource: solar irradiation, wind speed, and so forth, and the lowest development cost.”

Cinven Acquire Synlab Group
Corporate Finance and M&A/DealsFinance

Cinven Acquire Synlab Group

Private equity firm Cinven announced today that they were acquiring a majority share in the German laboratories group Synlab. Cinven has yet to disclose how large the deal will be, or provide any detail on the monetary aspect of the transaction.

Synlab which provides human and veterinary laboratory services, as well as environmental analysis, operates in 23 European countries, with laboratories in around 300 locations and employing over 7,000 people. In 2014 the group registered sales of approximately €756 million.

 The group will be a useful addition to Cinven’s empire. Last year they acquired a majority share in Labco, the France based diagnostic service providers. Cinven paid an enterprise value of €1.2 billion for the company.

 Alex Leslie, Senior partner in Cinven, highlighted the complimentary nature of the businesses when the deal was announced. ‘We believe that the combination of Labco and synlab, two highly complementary businesses, will provide clear benefits for patients and payors across Europe and will create a European champion in the industry’.

 The CEOs of both Labco and the newly acquired Synlab were equally optimistic about the implications of the deal. Bartl Wimmer the CEO of Synlab indicated that the takeover would have positive effects on the industry. ‘Cinven has an excellent reputation as an investor in the European healthcare sector, and already has substantial experience in the diagnostics sector. We are looking forward to working with them on growing our business and being able to offer more healthcare professionals and patients access to diagnostic services internationally to improve the detection and prevention of diseases’.

 Philippe Charrier, CEO of Labco, added: ‘At Labco, we are excited about having the chance to work together with the synlab team. Our two businesses are highly complementary with little direct geographic overlap and we share Cinven’s vision of creating a European champion in the diagnostics industry’.



Homeplus Negotiations Underway
Corporate Finance and M&A/DealsFinance

Homeplus Negotiations Underway

Tesco PLC in negotiations to sell Korean subsiduary arm Homeplus.

The South Korean supermarket chain Homeplus is being sold by its owners, Tesco PLC. Currently, the Korea Daily Economic has stated that the Orion Confectionery, which specialises in novelty and seasonal products, are keen to be involved in the deal, which would help them enter the superstore market and would enable them to promote their own products through Homeplus. The newspaper speculates that Orion Confectionary would attempt to join American investment firm TPG Capital and form a conglomerate.

The paper also states that MBK Partners, an Asian private equity and investment firm ‘is aggressively pursuing the deal’, owing to a slump in their investment dealings over recent years.

Other names mentioned in connection with the deal include Goldman Sachs Principal Investment Area, Affinity Equity Partners, CVC Capital Partners, the Carlyle Group, and TPG Capital. The Korea Daily Economic also indicated that although Hyundai Department Store and the National Agricultural Cooperative Federation had initially been interested in the deal, they had both ‘refused to participate in the preliminary bidding for reasons that the price was too high.’

Homeplus is the South Korean subsidiary of the British owned supermarket firm Tesco PLC, with the deal to sell Homeplus being underwritten by HSBC. Tesco created Homeplus in 1999 in partnership with Samsung but bought Samsung out in stages, culminating in 2014. Tesco is now the complete owner of Homeplus.

Lloyds Bank: Shares Drop in Price as Government Attempts to Recoup Taxpayer Money
Corporate Finance and M&A/DealsFinance

Lloyds Bank: Shares Drop in Price as Government Attempts to Recoup Taxpayer Money

Lloyds Bank

Shares in Lloyds Banking Group, which were previously owned by the UK Government, are being sold off under pre-election plans to recoup the taxpayer money used to bail out the ailing financial institution during the 2007 to 2009 financial crisis. The price of the shares has dropped to 86.66 pence at the time of writing, which is a reduction of 0.47%, according to the FTSE 500.

UK Financial Investments Limited, which is responsible for the Government’s shares in the bank, announced in a statement issued on June 1st that they were due to allow Morgan Stanley, the agent used to sell the shares, to continue selling them, stating that “the Trading Plan will now terminate no later than 31 December 2015”. The statement also indicated that provision was being made for the for the recouping of money paid for the shares, saying “as with all disposals, delivering value for money for the taxpayer is a key consideration and shares will not be sold below the average price per share paid for them.”

This coincided with a statement from George Osbourne who has been vocal in his desire to privatise the taxpayer-funded banks since coming into power with the collation Government, and who claimed on the 1st June: “This means we have now recovered over £10.5bn in total, more than half of the taxpayers’ money put into Lloyds, and we now own under 19% of the bank”.

The UK Government purchased 43% of the shares in Lloyds Banking Group during the financial crisis. The Government said of UK Financial Investments Limited: “UKFI was set up on 3 November 2008 to manage the UK Government’s investments in banks subscribing to its recapitalisation funds. Its overarching objective is to protect and create value for the taxpayer as shareholder, with due regard to financial stability and promotion of competition.”

deVere Group Launches Tax Consultancy
Corporate Finance and M&A/DealsFinance

deVere Group Launches Tax Consultancy

deVere Group’s Global Head of Tax, Neil Walker, comments: “deVere Tax Consultancy has been established to meet ongoing and growing demand from existing and potential deVere clients.

“Until now, few options were available in the marketplace to meet the specialist, U.S., UK, and/or globally-focused requirements our clients needed.

“With more and more individuals become internationally mobile, and the evolving UK and global tax, legislative and regulatory environments, a fresh approach was required.

“deVere Tax Consultancy is designed with today’s increasingly international individuals, and the new taxation landscapes, in mind.”

He continues: “deVere has sought out the very best technical tax capabilities available to address these developments and combines this with its global infrastructure to exceed clients’ tax expectations.

“Using our worldwide network, we devise, implement and manage innovative tax strategies that enable our clients to successfully navigate the complex tax systems and ensure they are fully compliant whilst taking full advantage of the allowances available to them to reduce their tax burdens.”

Neil Walker who heads deVere Tax Consultancy, which names the preparation of UK and U.S. tax returns amongst its suite of specialist areas, spent almost a decade within Ernst & Young’s expat division.

Of the new role, he says: “It’s incredibly exciting to join a robust global organisation that is dedicated to using its significant resources to enter into an expanding market. We’re committed to helping shape the international tax planning sector and further driving up industry standards.”

CU Bancorp Reports Record First Quarter Earnings of $4.2 Million
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CU Bancorp Reports Record First Quarter Earnings of $4.2 Million

CU Bancorp, the parent company of wholly owned California United Bank, today reported financial results for the first quarter of 2015.

“Net charge-offs in 2014 were 2 basis points of average loans and the Company experienced a net recovery in 2013”

The comparability of financial information for the first quarter of 2015 to the first and fourth quarters of 2014 is affected by the Company’s acquisition of 1st Enterprise Bank (“1st Enterprise”), which was accomplished by a merger of California United Bank with 1st Enterprise (“the merger”), effective November 30, 2014. Operating results for the first quarter of 2015 include three months of combined operations, compared to one month of combined operations in the fourth quarter of 2014.

First Quarter 2015 Highlights

– Net organic loan growth of $67 million in the first quarter.
– Core net income available to common shareholders increased to $4.2 million, up $1.5 million or 56% from the prior quarter.
– Diluted core earnings per share of $0.25, up 25% from previous quarter.
– Net interest income increased to $20.6 million, up $4.9 million or 31% from the prior quarter.
– Net interest margin increased to 3.95% from 3.78% in the prior quarter.
– Core efficiency ratio improved to 62% from 66% in the prior quarter.
– Return on average tangible common equity of 8.23%.
– Tangible book value per share increased $0.28 to $11.65 per share.
– Total assets increased to $2.4 billion, up $142 million or 6% from the prior quarter.
– Total loans increased to $1.7 billion, up $41 million or 2.5% from the prior quarter.
– Total deposits increased to $2.1 billion, up $136 million or 7% from the prior quarter.
– Non-interest bearing demand deposits were 53% of total deposits.
– Continued status as well-capitalized, the highest regulatory category.

First Quarter Year-Over-Year Pro Forma Comparison

The first quarter of 2015 represents the Company’s first complete quarter of combined operations following the acquisition of 1st Enterprise. As such, the Company believes comparisons to the results of legacy CUB’s first quarter of 2014 or the results of the fourth quarter of 2014, which only represented one month of combined operations after the merger, do not provide the most appropriate benchmarks for assessing its performance in the first quarter of 2015. The Company believes it is more relevant to compare its results in the first quarter of 2015 to the pro forma combined results for CU Bancorp and 1st Enterprise in the first quarter of 2014, the last quarter of operations for both entities that was unaffected by merger-related charges. First quarter 2014 pro forma numbers are used for illustrative purposes only.

As the table below shows, excluding merger-related charges and the provision for loan losses, CUB’s net income before the provision for income taxes in the first quarter of 2015 increased 30%, total assets increased 12%, total loans increased 14% and total deposits increased 12% over the pro forma combined results of CU Bancorp and 1st Enterprise in the first quarter of 2014.

Fraud Detection and Prevention Biggest Challenge Facing Businesses in EMEA
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Fraud Detection and Prevention Biggest Challenge Facing Businesses in EMEA

Tracey McDermott, FCA Director of Supervision and Authorisations commented: “Social media is already an important tool for industry to engage with customers and its use is only likely to grow. Financial promotions, whether on social media or traditional media, must give customers the right information and meet our requirements to be fair, clear and not misleading. We have had extensive industry feedback during our consultation. We believe this guidance reflects a sensible approach that allows the industry to innovate using new forms of media and at the same time ensures customers get the right level of protection.”

The Guidance

Firms are reminded that any form of communication (including through social media) is capable of being a financial promotion if it includes an invitation or inducement to engage in financial activity. All communications (including financial promotions) must be fair, clear and not misleading. Promotions that fail to be ‘fair, clear and not misleading’ can pose a risk as they could lead consumers to buy the wrong product – ultimately with unhappy outcomes for them and for firms.

Communications through social media can reach a wide audience very rapidly, so firms should take account of that in their decision to promote through social media, and when deciding the nature of their promotions. Firms should ensure that their original communication would remain fair, clear and not misleading, even if it ends up in front of a non-intended recipient (through others retweeting on Twitter or sharing on Facebook). One way of managing this risk is the use of software that enables advertisers to target particular groups very precisely.

The requirement to be fair and not misleading require balance in how financial products and services are promoted, so that consumers have an appreciation not only of the potential benefits but also of any relevant risks. Firms should consider whether it is appropriate to use character-limited media as a means of promoting complex features of financial products or services. It may be possible to signpost a product or service with a link to more comprehensive information, provided that the promotion remains compliant in itself. Alternatively, it may be more appropriate to use ‘image advertising’ to promote a firm more generally.

Highlights from the conference included:

-Notorious hacker and cyber-security expert, Chema Alonso, providing a hacker’s perspective;

-A representative from the Ministry of the Interior, Government of Spain, discussing cyber-security challenges in Spain;

-José Rodriguez, Chief Inspector, Financial Fraud Section, National Police Corps of Spain, talking about fighting the globalisation of cybercrime;

-Ori Eisen, founder of 41st Parameter revealing how technology can be used to address major trends in cyber-security.

-Charles Butterworth, Managing Director, Experian, on Experian’s fraud and identity strategic roadmap;

-Daniel Zelenski, Managing Director, New Market Development, Experian, EMEA, on Experian’s National Fraud Prevention Scheme, and how businesses can work together to tackle fraud;

-Chris Thomas, Director of Fraud Sales, EMEA, Experian, who led an industry panel discussion on digital evolution and the impact of fraud on the business models across multiple business sectors.

Speaking at the Future of Fraud and Identity event in Spain, Charles Butterworth, Managing Director, Experian, EMEA, said: “It was a great opportunity to be able to bring together so many leading organisations in EMEA to discuss the pressing global issue of fraud, and to gain a real understanding of the fraud challenges facing all industry sectors. Today’s tough economic climate is driving a surge in first party fraud for many organisations, whilst identity theft, the sophistication of fraudsters and cybercrime are also on the increase. Experian offers a range of fraud and identity products and services and we work closely with clients to take a strategic approach to fraud risk management and develop a multi-layered strategy that is commensurate with risk and value throughout the business.”

For further information on the event please see The Future of Fraud and Identity, Spain event video and photos taken during the day.

This week Experian launched a fraud campaign in EMEA to raise awareness of how Experian works with businesses to develop a strategic response to fraud that enables them to define a strong fraud risk strategy; identify and prevent fraud; and review and improve existing fraud strategies to keep up with current and emerging threats.

Inspire Launches Diversity Toolkit for Creating a Diverse Workforce
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Inspire Launches Diversity Toolkit for Creating a Diverse Workforce

The Diversity Toolkit is a series of podcasts with chairmen, CEOs and directors sharing their perspectives on changing corporate culture and building an environment where diversity is welcomed and developed. These personal stories provide businesses of all sizes with ideas, guidance and inspiration for creating a diversity strategy that best fits.

Inspire global head and director at Harvey Nash, Carol Rosati says: “Businesses are starting to recognise diversity as a competitive advantage but many are still thinking about it as a tick box or numbers game. The best policies and procedures will do little to change an organisation unless it is backed up by commitment from the top that is believed by the rest.

The journey will be unique for each business, but the tools in the toolkit offer rare insights and advice from the businesses that dared to think outside the box. We hope their stories of passion, tenacity, learning from mistakes and courage will be an inspiration to those just starting out.”

Executives from PwC, AMV BBDO, Pension Protection Fund, RBS, BNY Mellon, DLA Piper, Atkins Global, Hogan Lovells, Restoration Partners and Eversheds contributed their success secrets. The interviews discuss ten key areas for improving diversity outcomes:

1. Levelling the playing field
2. Knowing the numbers
3. The role of sponsors
4. Building successful networks
5. Laying the foundations of cultural change
6. The S7 model
7. The role of education
8. Unconscious bias
9. Role models
10. The ‘FlexAble’ approach

The toolkit will form part of an on-going series related to Inspire’s ‘Simple Acts’ campaign, which will be launched later this year to encourage more businesses to take simple actions to create a more inclusive workforce.

Daylight Saving Time Means More Business For Landscapers
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Daylight Saving Time Means More Business For Landscapers, But Credit Card Fees Grow Faster Than Weeds

The process of mulching, weeding and planting every spring is a ritual for homeowners. Not many realize, however, that every time they use a credit card to pay their landscapers, banks get a windfall: as much as 4 percent of every payment, far more than it costs the bank to process the transaction. These swipe fees push prices up and cost an average family hundreds of dollars a year, so credit card companies like to keep them hidden from consumers.

But merchants and service companies know swipe fees impact the entire economy. A study by economist Robert J. Schapiro found that after Congress reduced debit-card fees, consumers saved $6 billion in 2012, the first full year after reform took effect. Debit reform also supported more than 37,500 jobs.

The banks also keep their fees hidden from merchants. There is no way a merchant can know how high the swipe fee is on any given card, so the costs of swipe fees are just as unpredictable as the weather, a problem especially concerning for small businesses.

Improvements in technology and increases in volume have lowered the banks’ cost of processing purchases with cards to a few pennies. For debit cards, the cost is only 4 cents, but banks charge merchants 25 cents– a 500 percent markup. For credit cards, the margins can be as high as 10,000 percent.

In comparison, landscaping companies earned an average 10% profit in 2013, according to a Lawn and Landscape Magazine State of the Industry survey.

According to Statista, an online statistics company, the landscaping industry generated about $71 billion in revenues in 2013. If every client paid their landscaper with a credit card, the banks and card companies could have collected as much as $2.84 billion in fees on these payments alone.

Homeowners who participated in 2013 Consumer Spending survey by PLANET, the national trade association representing landscape and lawn care industry, reported spending on average $600 a year on professional lawn care services like mowing, edging and leaf clean-up. This means banks walked away with as much as $24 from each manicured lawn.

The card companies dominate the payment industry and set swipe fees for the banks issuing the cards. But, there’s no question about this: A federal judge recently ruled in a Justice Department case against American Express that card companies charge merchants unfairly high fees and hurt consumers when merchants are forced to pass those costs to them in higher prices.

Yet accepting credit cards is a must for retailers, so they are stuck with these high fees.

“Businesses in America operate in a free market system driven by competition. The card payments industry, where banks and powerful credit card companies are fixing inflated rates, seems to be the only exception,” said Doug Kantor, counsel to the MPC.

New Approach Needed to Tackle Mental Ill-Health at Work
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New Approach Needed to Tackle Mental Ill-Health at Work, Says OECD

Fit Mind, Fit Job: From Evidence to Practice in Mental Health and Work says that around 30% to 40% of all sickness and disability caseloads in OECD countries are related to mental-health problems. The total cost of mental illness is estimated at around 3.5% of GDP in Europe.

The personal costs of mental ill-health are high. People with mild to moderate disorders, such as anxiety or depression, are twice as likely to become unemployed. They also run a much higher risk of living in poverty and social marginalisation.

“Mental health issues exact a high price on individuals, their families, employers and the economy,” said OECD Secretary-General Angel Gurría during a launch event in The Hague. “Policymakers have been too slow to act. Strong political leadership is needed to drive reform and tackle this issue.” (Read full speech here)

Despite growing recognition of the issue in society, considerable social stigma around mental ill health remains. Intervening early is critical, yet in practice it can often take more than ten years between the onset of illness and the first treatment in most countries.

This is worrying, says the OECD, as under‑treatment rates are highest among young people and waiting times for counselling are longest. Any action taken in school or the workplace will have a better, more lasting impact than waiting until people have dropped out of education or the labour market. While a heavy workload and work related stress may add to mental health problems, the evidence shows that staying in school or at work is also part of the solution if appropriate support is provided.

At school, investing in mental health programmes and having professionals with psychological training is found to be effective. Waiting times in the health service for children and adolescents should be as short as possible.

The mismatch between the needs of people suffering from mental ill-health and the services provided to them is one of the biggest problems, according to the report. Current policies are often delivered in silos by health, employment and education services. Creating an integrated system would deliver much better, faster outcomes.

Countries have taken small steps towards an integrated delivery of health and employment services, but they have lacked direction. Better measurement and monitoring of policies and outcomes would enable policy makers to assess their impact more effectively.

Teachers, employers, general practitioners, social workers and employment service caseworkers are often best placed to identify people with mental health issues at an early stage. They need training and a clear pathway to access support from mental health professionals.

Stronger leadership at political and managerial level is needed: in most countries, guidelines and regulations exist but have little impact. Their use should be systematically monitored and non-compliance sanctioned.

Harvey Nash Address Gender Imbalance in Boardrooms
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Harvey Nash Address Gender Imbalance in Boardrooms

Harvey Nash and The University of Hong Kong Business School announce the 2015 instalment of board preparedness programme, to increase gender balance on boards

Harvey Nash, the global executive search and leadership consulting firm and The University of Hong Kong Business School have announced the 2015 instalment of the Women’s Directorship Programme (WDP) to be held in Hong Kong in May and September. The international board preparedness programme, exclusively for women, was created in answer to the worldwide business community’s call to tackle the existing gender imbalance in boardrooms.

Harvey Nash and HKU Business School created the certificated Women’s Directorship Programme in 2013, with the aim of enabling participants to become effective board members and serving to increase the supply of board-ready women executives across geographies and business sectors. 

Led by esteemed faculty members of HKU Business School, the Women’s Directorship Programme offers a unique combination of lectures and academic leadership theories, plus practical insights and real life case studies delivered by international business leaders. The involvement of senior business leaders as guest speakers sets the programme apart, providing unprecedented levels of access to their boardroom insights and experiences.

Donald Brydon, Chairman of Sage Group and Royal Mail, Women’s Directorship Programme guest speaker, said:
“In order to produce a pipeline of exceptional women for boards, we need to have more initiatives like the Women’s Directorship Programme, bringing together academia and practitioners to share their experiences and explain how behaviour in the boardroom is different to behaviour in the rest of your corporate life.”

The 2015 programme includes six modules – including strategic leadership, ethics and compliance, finance and market regulation – taught over two three-day sessions (May 28-30 and September 10-12, 2015). Participants have access to on-going support through the alumni programme and benefit from a global network of peers and senior business leaders.

Albert Ellis, CEO Harvey Nash Group, said: “Through the Women’s Directorship Programme and our partnership with The University of Hong Kong we are committed to creating lasting change across the world, unlocking the talent pipeline and empowering female leaders to gain the confidence and skills needed to secure board positions.”

American Express Survey Reveals UK Businesses Are Maintaining a Prudent Approach
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American Express Survey Reveals UK Businesses Are Maintaining a Prudent Approach

A survey by American Express, investigating business behaviour amongst UK mid-sized companies during the UK’s pre-election period, has revealed that while they are firmly focused on making strategic investments during 2015, the caution typified by the recession era still prevails, with just one in six of the survey respondents saying they will take a more bullish approach to business risk during 2015. The survey, titled “Election Year: Mid-market Business Barometer”, shows an overall attitude of maintaining the status quo.

Meanwhile the impact of the general election has created a ‘corporate green room’ for many of Britain’s mid-sized companies, perhaps as a reaction to the uncertainty over the electoral outcome amongst leading opinion polls. Almost half of the companies surveyed (45%) reported that they may delay some or all key decisions until after the election. Of the 22% who stated that they could delay all of their key decisions, almost half (46%) will hit pause from 1st March onwards. Almost the same number (44%) plan to restart their decision-making process as soon as the election results are known.

These were among the findings released today in the American Express Barometer, a representative sampling of senior finance executives and decision-makers from UK companies with revenues of between £3 and £300 million.
In 2015, UK companies are firmly focused on applying strategic thinking to their businesses and increasing their knowledge base. When asked about their most important resolution for 2015, strategic thinking topped the list. A quarter of respondents identified their intent to spend more time on strategy, while a further 21% prioritised the need to build up their knowledge base in 2015 by learning more about the regulatory environment, risk, social media and marketing.

Third on the list of 2015 resolutions was spending more time with customers, selected by 13% of respondents as their main priority for 2015. These responses illustrate a broader trend across the survey, with businesses focused on developing strong future pipelines rather than actively pushing for, or investing in, immediate growth.

Indications of how this ‘pipeline’ is being built can be seen in survey respondents’ focus on innovation, manifested in mid-sized businesses concentrating on investments in people and technology. 36% of those surveyed said that investment in technology or innovation was their number one investment priority, while 28% selected increasing headcount.

Talent retention, a key focus area for management in the pre-recession era, has once again returned to the agenda of UK company decision makers. When asked about major business concerns for 2015, over a third of survey respondents said they were most concerned about talent retention – ranking higher than concerns about cash flow (23%) or declining market share (21%). This preoccupation with talent retention recalls pre-2007 business priorities and also suggests that businesses will have to compete far harder to recruit talent in the future.

Elsewhere, businesses seemed confident in their decision to maintain the status quo: when asked whether their attitude towards business risk would become more or less bullish this year, a strong majority (63%) said that their attitude to risk would remain the same, echoing the long term approach to business investment that prevails in 2015. Respondents were similarly sanguine about their ability to balance risk with growth, with 59% of respondents saying that they believed that they had taken the ‘right amount’ of business risk to secure growth.

Brendan Walsh, Executive Vice President, Global Corporate Payments, American Express, said: “The survey shows that UK businesses have now found their post-recession equilibrium. Across the board, companies are concentrating on maintaining their solid business foundation by focusing on longer-term strategic targets and increasing theirknowledge base, to ensure they are ideally placed to compete effectively for sustainable business growth both here and overseas.”

How Do Your Career Choices Affect What You Earn Today
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How Do Your Career Choices Affect What You Earn Today, and in 15 Years’ Time?

New statistics published by free salary benchmarking service compare how the average salaries of different professions increase with experience, and highlight some remarkable trends.

Few will be surprised that finance and legal professions offer the highest salaries at all levels of experience. What is more notable is how average salaries in local government, accounting, marketing, HR and media vary by just £5k (less than 16%) for executives with less than 5 years’ experience, but 15+ years into a career the difference between media and local government is as much as £63k, with media executives earning 87% more.

The stats also reveal at what point of their career executives can expect to receive the biggest pay rises. Marketing, media and accounting professionals get their biggest percentage increases after 5 years’ experience (75%, 83% and 67% respectively), while HR professionals see an 85% increase when they reach 10 to 15 years’ experience. In the charity sector average salaries are typically the lowest of the professions compared, which might be expected given the nature of the businesses. However, the stats reveal a huge step up for executives with over 15 years’ experience, usually taking up the top charity management roles.

CEO of, Thomas Drewry said: “Of course money isn’t everything, but the lack of transparency in pay makes it very difficult for individuals to make informed decisions at every stage of their career. Whereas local government roles might often be seen to offer good benefits like pensions and holidays, bonuses play a much bigger part in professions that are judged on performance, and these bonuses only increase as people move higher up in an organisation.”

The study was conducted by leading salary benchmarking website, a platform leading the transparency revolution to give thousands of employees free access to detailed market information, empowering professionals to make better informed career choices. The data has been submitted anonymously and securely by over 40,000 individuals spread across hundreds of different professions, sectors and locations, in order to access free in-depth personalised reports about how their pay compares to peers in their industry and elsewhere.

Study Reveals Impact of Mail on Brands
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Study Reveals Impact of Mail on Brands

A dedicated direct mail campaign, devised by Publicis Chemistry, has been created to promote the findings of the study looking at how people interact with mail, called Mail in the Heart. The campaign targets over 9,000 marketers and agencies.

Scientific experiments found people said they valued something 24 per cent more highly when they can see and touch it compared to when they can see only.

55 per cent of those in the study said that mail gives them a better impression of the company compared to 25 per cent for email. In addition, 57 per cent of respondents said that receiving mail makes them feel more valued while only 17 per cent said the same for email.

Findings from the research also showed that people believe mail makes messages feel more important, with 63 per cent of people saying they take mail more seriously compared to email (18 per cent). Meanwhile, 71 per cent of people said that they opened a letter or brochure from a company they have ordered from before that had arrived in that day’s mail.

The findings are part of Royal Mail MarketReach’s 18-month research programme, The Private Life of Mail, which brings together unprecedented insight into the role of mail in people’s homes, hearts and heads, plus the impact this has on advertisers’ ROI. The full research report can be downloaded from

Mail’s ability to drive an emotional response also significantly impacts ROI. Research from the IPA Effectiveness Awards Databank showed that multi-media campaigns that included mail shifted share of market broadly three times more efficiently than multi-channel plans without mail. And, campaigns that included mail were 27 per cent more likely to deliver top ranking sales performance than campaigns that didn’t.

Furthermore, when asked about attitudes to advertising mail, 62 per cent claimed to reject all advertising mail. Yet when asked about what they had actually done with the mail in their homes at the time of the survey, 64 per cent had opened a piece of advertising mail that day and the majority who did went on to interact with it.

Marketing industry leaders recently joined forces with Royal Mail MarketReach for the ‘MAILMEN’ campaign to promote The Private Life of Mail and demonstrate that mail has a vital role to play in the today’s digital world and continues to be a powerful weapon in the marketer’s armoury. The campaign contains an advert featuring Nik Roope founder of Poke with the following line: “On your 100th birthday, you’d be disappointed if the Queen only sent you an email.”

Jonathan Harman, Managing Director of Royal Mail MarketReach said: “Studying the rates at which people open and interact with mail, we can see that it is much more effective than consumers’ stated attitudes would suggest. It creates an instinctive sense of value being exchanged between the sender and recipient, which the latter may not be aware of.”

Britain on Cusp of 4th Industrial Revolution
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Britain on Cusp of 4th Industrial Revolution, but Manufacturers Warn It Is in Danger of Being Left Behind

However, the UK’s ability to be a frontrunner hangs in the balance. In a stark warning to the next Government six in ten manufacturers (58%) say that the UK is in danger of being left behind:

-Nine in ten manufacturers (88%) say the UK should be taking a leading role in the 4th industrial revolution – 66% say that UK manufacturing’s ability to compete globally will depend on keeping up with advances in technology

-Little over one in ten (14%), however, say the UK is readily equipped for a leading role – the main challenges are the levels of investment required (70%), impact on skills (59%) and keeping on top of technological advances (58%)

-Everything to play for: half of manufacturers (50%) believe that the rapid advance in technology will enable more reshoring of production back to the UK – 63% say there will be increased demand for highly skilled workers

-Over three quarters of manufacturers (78%) say that Government, industry and academia must work together to secure the UK’s role in the 4th industrial revolution.

-Britain’s manufacturers are bracing themselves for the imminent impact of a 4th industrial revolution, but raise grave concerns over the UK’s ability to play a leading role, according to new research out today from EEF, the manufacturers’ organisation.

The revolution – dubbed Industry 4.0 and driven by rapid advances in technology – will become a widespread reality of manufacturing life within the next decade, with eight in ten manufacturers (80%) expecting their business to be affected by 2025[1].

Nine in ten (88%) say the UK should be taking a leading role[3], seeing clear benefits to the sector and the rebalancing of the wider UK economy. But six in ten (58%) warn that the UK risks being left behind[2], potentially knocking back Britain’s burgeoning industrial renaissance and prompting calls for the next Government to ensure the right industrial strategy and support framework is in place.

The research supports a key theme of this year’s National Manufacturing Conference and is published alongside a specially-commissioned report – Manufacturing, Britain’s Future – sponsored by leading technology companies Infor and IBM. The report sets out how the 4th industrial revolution is at hand, and how, in the global battle for dominance, innovative firms can take the lead and help position Britain as the manufacturing and technology hub of Europe.

Seven in ten manufacturers (66%) say that UK manufacturing’s ability to compete globally will depend on keeping up with advances in technology[2]. However, little over one in ten (14%) think that the UK is readily equipped to be a leading player[4].

With Industry 4.0 set to become reality within one investment replacement cycle, seven in ten (70%) see the levels of investment required as the key challenge[5]. Other concerns are the impact on the supply and demand of skills (59%) and keeping on top of technological advances (58%)[5].

Despite these obstacles, there is everything to play for. Almost seven in ten (69%) say the rapid advance in technology will play to Britain’s strength as a high value manufacturer, pointing to benefits such as the ability to produce more bespoke products (56%) and for more rapid and cheaper prototyping (52%)[6]. It will also increase the importance and value of manufacturing within the UK (55%)[6] and result in increased demand for highly skilled workers (63%)[7].

The trend for reshoring is also set for a boost, with half of manufacturers (50%) saying that Industry 4.0 will enable more production to be brought back to the UK[6].

As a result, over three quarters of manufacturers (78%) want to see Government, industry and academia working together to secure the UK’s role in the 4th industrial revolution[2] – 85% agree that Britain needs a long-term industrial strategy spanning consecutive governments if it is to capitalise on the opportunities[8].

Terry Scuoler, CEO of EEF, says: “The 4th industrial revolution will change the global face of manufacturing beyond recognition. The UK must take a leading role if we are to realise our ambitions for a healthy, balanced and growing economy.

“The next decade will bring great and rapid change and the early-adopting nations will maximise the opportunities presented by new technologies and thrive as a result. There will inevitably be winners and losers, which is why we should take note when manufacturers say there is a real danger of the UK being left behind.

“Our sector’s ability to remain on top of the 4th industrial wave hinges on the decisions made now and over the next decade by consecutive governments. We must continue to establish the foundations to support our manufacturing renaissance, particularly alleviating the pressure that Industry 4.0 will place on investment and skills. It is vital that the Government steps up to this challenge and works hand-in-hand with manufacturers and academia to ensure that the UK is not left behind.”

Pam Murphy, Chief Operating Officer at Infor, says: “Industry 4.0 is about connecting an increasingly rich and diverse set of information and using it to unlock new insights. Through embracing the technological change required to achieve these insights, UK manufacturing is well placed to enhance its reputation for productivity and service-led innovation, cement its platform on the global stage, and take a leading role in this new revolution.”

EEF will be revealing its manifesto – Securing a manufacturing renaissance: priorities for Government – at the National Manufacturing Conference on Thursday 26th February.

Dutch-Based Start-up Cloudtract Launches Free Online Contract Management Platform for SMEs
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Dutch-Based Start-up Cloudtract Launches Free Online Contract Management Platform for SMEs

“And we should know,” explains Angelique Schouten, co-founder of Cloudtract. “We forgot to cancel an IT contract and wasted 40.000 euro, paying for a software license we didn’t need anymore. A market study revealed the absence of an easy-to-use solution to store and manage contracts for free.”

Contract management neglected by SMEs

Their research found that most entrepreneurs and SMEs focus on running their day-to-day business and do not, or to a much lesser extent, pay attention to managing their contract administration.

“When we researched contract management behaviour at companies, we concluded that contracts are usually kept in a folder in the corner of an office or at a secretary’s desk. Sometimes a simple spreadsheet or calendar program is used. Especially facility and maintenance contracts lack attention. These contracts regularly do not make money, they just cost money and consequently are not top of mind,” according to Schouten.

The founders of Cloudtract experienced first-hand what it is like to forget to cancel a contract or even try finding all of the contracts. When Schouten started working at an insurance company it took her two months to gather all the contracts that the marketing department signed during the previous years.

“It is shocking to see that we did not know which contracts the marketers had signed and that the IT department had to pay for an unused software license of 40.000 euro,” says Schouten.

Absence of a simple and affordable solution

Both occurrences at the insurance company led to a market study which showed there were two categories of contract management solutions according to Schouten: “Contract management software that is either part of an expensive ERP-software package or an over-engineered pay-per-user license model. Not the solution we were looking for as we only needed a place to store contracts safely and receive an alert.”

Contract management at SMEs often results in unwanted renewed contracts, double contracts or unfavourable conditions. It’s a problem that Cloudtract wants to tackle head-on with its free online platform that makes it easy to securely store contracts and set alerts.

While the ultimate goal of Cloudtract is to offer this solution to businesses and consumers as well, the company has launched its beta version for companies only. It is available in English and more languages will follow shortly.


Late Payments Are Forcing Businesses to Make Tough Decisions
Corporate Finance and M&A/DealsFinance

Late Payments Are Forcing Businesses to Make Tough Decisions

The knock-on effect of this is that business owners have to make tough decisions in order to make it through the month. Some 20 per cent of directors, in companies that experience late payments, say they have taken a cut in salary in order to keep cash inside their businesses.

Over a quarter (26 per cent) are having to use their overdrafts to make ends meet and one in ten are experiencing one or more of the following challenges every month: difficulties in paying staff on time, factoring invoices and difficulties paying regular bills. Some 23 per cent claim the late payment situation is forcing them to pay their own suppliers late.

Phil Orford, chief executive of The Forum of Private Business, said:

“Late payment remains a key issue for many of our members. These latest findings from Bacs also suggest it continues to seriously affect a small business’s ability to fund business growth.

“Being paid late or having to deal with longer payment times can severely hamper any business, large or small. Alarmingly, this culture of late payment has a ripple effect down the whole supply chain with many small firms admitting to paying their suppliers late due to business liquidity issues created by outstanding payments.”

The Bacs research shows that although the overall late payment burden shouldered by UK companies has fallen, the percentage of companies affected by late payments is virtually unchanged.

The Bacs figures reveal that SMEs (companies employing fewer than 250 people) are owed £32.4 billion – down from £39.4 billion in January 2014. Corporates (companies employing 250 or more people) on the other hand are owed around £9.1 billion, up from £6.7 billion in January 2014. In total the amount owed in late payments stands at £41.5 billion, down from £46.1 billion in January 2014.

While the overall figure has fallen, the data shows that 59 per cent of companies surveyed are impacted negatively by late payments. This is in line with January 2014 findings which showed the figure standing at 60 per cent.

These difficulties are made worse by the revelation that SMEs are facing additional costs of around £677.00 a month which are directly attributable to late payments – this equates to around £8.2 billion a year. Of this, some 63 per cent is associated with administration time spent chasing late payments, or around £5.2 billion annually.

The average late payment burden shouldered by SMEs now stands at £31,901. This puts many SMEs perilously close to bankruptcy with £50,000 being the maximum that SMEs in the survey say they could bear before going to the wall. More worryingly, 25 per cent of SMEs state that £20,000 or less is enough to jeopardise their business prospects.

Larger companies with 250 or more employees are faring little better. The Bacs research shows that the number of corporates affected by late payments has remained static (80 per cent) since the last survey in January 2014.

While almost 40 per cent of businesses are aware of government measures to help companies minimise their exposure to late payments, 72 per cent were unconvinced that these measures would speed up payments to them. And some 59 per cent claimed to be unaware of these measures.

Mike Hutchinson from Bacs, said: “The ongoing issue of late payments means that businesses across the UK are facing some tough choices about how to use the cash available to them. They are concentrating on keeping their own businesses afloat rather than paying suppliers, and so the vicious circle continues.

“Taking advantage of automated payments like Direct Debit can go a long way towards helping companies keep control of their monthly cash flow and help them manage their outgoings more efficiently.”

Research Reveals Top 10 Questions New SMEs Have
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Research Reveals Top 10 Questions New SMEs Have

Research by ICAEW’s Business Advice Service has found the most frequently asked questions that people starting new businesses want answered:

1.When should I write a business plan and how do I do it?
2.How much money will I need to set up my business?
3.How can I raise the finance I need for my business plans?
4.How much should I pay myself?
5.How should I approach recruiting new staff?
6.Should I go into partnership with someone else?
7.Do I really need an office?
8.Do I have to set up a limited company?
9.What marketing and advertising should I be considering?
10.How do I find the business support and advice I need?

Clive Lewis, Head of Enterprise at ICAEW said: ‘These questions may seem simple, but starting a new business can be complicated and daunting. A competent professional adviser can help your business make a strong start – a Chartered Accountant is best as they can provide business advice as well as helping with the technicalities of setting up a business. If you need more specialist advice, they’ll also be able to point you the right way.’

Barclays Launches Fintech Accelerator Program in New York
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Barclays Launches Fintech Accelerator Program in New York

The Barclays Accelerator, powered by Techstars, will open in New York in July 2015. The program will provide the opportunity for ten companies to participate in thirteen weeks of intensive networking, mentoring and development, aimed at supporting breakthrough financial technology innovations.

The first Barclays Accelerator program ran in London last year. A range of innovative fintech ideas were developed, including a new credit scoring system, a new money management tool to help people regain control of their finances, and an analytics platform designed to help companies manage risk and reputation.

“At Barclays we recognize that innovation will not solely be driven from within our organization so we are actively embracing the opportunities and expertise of the start-up ecosystem. Our Accelerator enables us to help translate emerging technologies into what could be the future of financial services” said Derek White, Barclays Chief Design and Digital Officer. “Our goal in New York is to help innovators develop new disruptive fintech technologies, particularly in the investment banking, wealth management and credit cards industries. We’re thrilled that we are able to extend our program to New York, a hub for global finance, building upon the successes we have already seen in London.”

The ten companies will be based at new, custom-built premises in Manhattan when they join the program in July. The companies will also have access to a catalogue of Barclays APIs and data to help them build and refine their business models. The program will culminate with a Demo Day in October, when the companies will have the opportunity to pitch their business ideas to industry leaders.

“Through this expanded partnership with Barclays, we’re able to build on the successes of our London accelerator program, now in its second year, by bringing the same level of fintech innovation to New York City,” said David Cohen, Founder and Managing Partner, Techstars. “Companies joining the New York program will have the opportunity to leverage not only the Barclays network but also the vast fintech community that we’ve been building for the last two years.”

From March 2 until May 1, 2015, entrepreneurs and start-up companies worldwide will be able to apply for a place on the program by visiting The program will begin in July 2015 with the Demo Day scheduled for October.

MSPs Urged to Help End the Scandal of Exploitative Umbrella Companies
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MSPs Urged to Help End the Scandal of Exploitative Umbrella Companies

Unite condemned the increasing number of employment agencies and payroll companies involved in what it branded a ‘legalised wages con-trick’.

Since the Westminster government’s finance bill ushered in changes to legislation on self-employment in 2014, umbrella companies have emerged as a way of circumventing tax laws. Rather than using PAYE there has been a mass move to pay workers via these companies which charge for their services.

This has left construction workers badly out of pocket; forced to stump up for the cost of processing wages, and paying employers’ national insurance contributions as well as their own (often totalling as much as 25 per cent of their wages).

The motion titled: ‘The umbrella company contract scam’, (see notes for text) will be debated at 17:00 – there will be a lobby by construction workers at the Scottish parliament an hour earlier at 16:00.

Pat Rafferty, Unite Scottish secretary, commented: “Umbrella companies exploit construction workers pure and simple and that must be stopped. The Westminster government has left these workers in an intolerable situation forced to operate via umbrella companies and no longer considered self-employed.

“In some cases workers now earn less than the minimum wage as a result of these practices. Many have found themselves on zero hour contracts, with no guaranteed employment but unable to work elsewhere because of exclusivity clauses.

“Let’s be clear these arrangements hit morale and productivity and have a negative impact on tax revenues – something the Treasury needs to wake up to.

“I congratulate Neil Findlay for bringing this debate before the Scottish parliament. We call on ministers at Holyrood and Westminster alike to use their powers to put an end to this scandal and give construction workers the fair deal they deserve.”

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Anti-bribery, anti-corruption, and data privacy issues are among the hot topics to be addressed at SCCE’s 2015 European Compliance and Ethics Institute Institute

The SCCE 2015 European Compliance and Ethics Institute (ECEI) will be held 29 March – 1 April 2015, Hilton on Park Lane, London, UK. SCCE’s European Compliance and Ethics Institute is a multi-industry and multi-topic conference offering the latest practices for effectively addressing the wide range of challenges facing the European compliance and ethics community.

“Last year attendees felt the ECEI gathering was becoming their ‘professional home.’ Compliance professionals felt great benefit from sharing, learning, commiserating, and connecting with their peers. The European Compliance and Ethics Institute is a rare opportunity to get the latest insights on a host of compliance concerns from a wide range of industries,” said SCCE Chief Executive Officer Roy Snell.

ECEI hot topics

The hot topic sessions, lead by noted leaders in ethics and compliance to address ECEI, include:
-Data Privacy for Multinationals: How to Build and Implement a Compliance Plan
Speakers: Augusta Speiser, European Compliance Manager, DENTSPLY International and Janine Regan, Solicitor, Charles Russell Speechlys;

-Economic Sanctions Panel – Moderator: Adam Turteltaub, CHC, CCEP, Vice President, SCCE
-Maryann Clifford, Group Ethics & Compliance Officer, BP International Ltd.
-Bruno Jackson, Director Customs & International Trade, BT PLC
-Sheryl Vacca, CCEP, CCEP-I, CHC-F, CHRC, CHPC, Senior Vice President/Chief Compliance & Audit Officer, University of California;

-International Investigation Panel Discussion- Moderator: Gabriel Imperato, Managing Partner, Broad and Cassel
Odell Guyton, JD, CCEP, CCEP-I, SCCE Advisory Board Co-Chair Vice President, Head of Global Compliance, Jabil Circuit, Inc. and Dr. Kyrill Farbmann, EMEA, Compliance and Ethics Manager, International Paper;

-Is an International Anti-bribery Management System Truly Achievable?
Speaker: Judith Irwin, Senior Ethics Officer, Network Rail;

-Emerging Market Risk: It’s Not Just Corruption
Speaker: Gareth Tipton, Director of Compliance and COO, BT Group-Legal, Governance & Compliance;

-Anti-bribery Compliance: What’s in Store for the Future
Speakers: Alexandra Wrage, President, TRACE International, Inc. and Carolyn Lindsey, Senior International Compliance Counsel, NBCUniversal;

-Conflicting Compliance: When Foreign Laws Are at Odds with Anti-Corruption Compliance under the FCPA and UK Bribery Act

Speakers: Winston Chan, Partner, Gibson, Dunn & Crutcher LLP, Lauren Reynolds, Regional Compliance Attorney for Europe, Microsoft, and Thomas Firestone, Senior Counsel, Baker & McKenzie.

Global Firms Face Innovation Bottleneck Through Lack of Communication Skills
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Global Firms Face Innovation Bottleneck Through Lack of Communication Skills

The report shows a drop in confidence when employees share ideas outside of their departments and collaborate with colleagues in other countries, departments and hierarchies.

The study – The innovative company: How multinationals unleash their creative potential – found respondents’ confidence levels drop from 96% when communicating with colleagues in their own departments to 72% with colleagues in other countries. Some 87% of companies agreed cross-cultural collaboration produces innovative ideas, but half said cross-cultural differences make it harder to share ideas with colleagues in different countries.

“You keep hearing the phrase ‘innovate or die’,” said Peter Burman, President of EF Corporate Solutions. “CEOs know this is true and say innovation is their top priority, but clearly they face a bottleneck in innovation as employees lack confidence communicating with colleagues in other countries. Companies have to rethink the skills people need to be confident in sharing ideas across hierarchies, departments and countries.”

The study found 81% of 350 respondents said improving cross-border communication skills in staff would boost their firms’ ability to innovate. Yet nearly 30% of firms surveyed concede their spending here is inadequate or non-existent. The study found while CEOs use idea-sharing processes a lot (95%), engagement tails off outside the c-suite, with managers (78%) and department heads (77%) less likely to use them. This casts doubt on whether formal processes can involve everyone in innovation.

Innovation tops global business priorities

The study found global firms are staking their futures on their ability to innovate. Creating new products and services was a top-three priority for 54% of survey respondents, more important than cutting costs (42%) or investing in talent (33%).

Over three-quarters (76%) of firms plan to increase their investment in innovation further over the coming three years, with almost one-third (31%) set to increase it significantly. More than two-thirds (71%) have ramped up investment in innovation over the last three years, and a quarter (25%) have done so significantly (defined as increasing investment by 20% or more).

Whose responsibility is it anyway?

“Two key skills are highlighted as being central to the development of an innovative corporate culture – those of creativity and international communication,” added Burman. “Governments and business differ in who they believe is responsible for this training.”

Some 55% of executives said it was solely their responsibility to provide training to foster innovation. And more than one-third (37%) said skills provided in their countries are not adequate to improve the ability of the workforce to innovate.

Yet 75% of government officials surveyed said it is not their job to address the creativity skills gap in corporations, leaving this responsibility to the companies themselves. The public officials see the main problem as making adults more aware of the training that is already on offer.

“Governments don’t feel responsible for training the existing workforce,” said Claes Ceder, executive vice president at EF Corporate Solutions. “But they know they have to address the communication-skills gap to ensure students about to graduate are more innovation-ready for tomorrow’s job market. The good news is there is a lot that can be done in a relatively short period of time to address this, but governments have to be prepared to act now.”

Lack of innovation culture

Firms aspire to create a culture of experimentation, but often fail to follow through. In the survey, 30% of respondents said their firms lack a culture that encourages new ideas from everyone; 30% said their companies lack a culture that allows for failure; and 34% said their companies do not allow time for employees to experiment on their own projects. Many companies have formal processes to gather ideas, but these are often ineffective.

The study found that a creative culture is one in which each employee feels encouraged to suggest ideas, and in which there is a high tolerance of failure. But many companies do not take steps to ensure those conditions are present. In an interview for the study, Tammy Lowry, Global Head of Learning and Organisational Effectiveness at Roche, said: “Unfortunately, much training focuses on making ideas ‘right and wrong’ through testing, so that individuals may lose that sense of confidence even as their knowledge increases.”

Growth in Online Christmas Spend Underlines Importance of Online Category Management Expertise
Corporate Finance and M&A/DealsFinance

Growth in Online Christmas Spend Underlines Importance of Online Category Management Expertise, Says Bridgethorne

That’s the message from category, customer and shopper management specialist Bridgethorne <> after Experian and online retail trade association IMRG reported that number of visits made to shopping websites was up 25 per cent on last Christmas Day, to an estimated 142 million. This follows the earlier Centre of Retail Research figures, which forecast a growth of 19.5% online, compared to the £14.5bn spent in 2013. Ecommerce sales, they said, would account for 23.4% of all sales in the six-week Christmas period from mid-November to Christmas.

John Lewis was the first retailer to confirm that online purchases have driven sales growth over the Christmas period. It reported that total like-for-like sales rose 4.8% to £777m in the five weeks to 27 December, with online purchases up 19%

“This Christmas demonstrates that understanding category management online is going to be core,” explains John Nevens, co-founder of Bridgethorne. “Online is not the future, it is the here and now and it continues to evolve. Online will
be the fastest growing channel over the five year period, fuelled by new market entrants, lower delivery charges and greater shopper engagement with mobiletechnology.”

Although a growing proportion of ecommerce sales took place over mobile devices – an estimated 29.8% of all online Christmas sales were over tablets and smartphones, 301% more than at the same time last year – the majority of sales still took place over PC and laptop.

Nevens says that over the next five years, the three fastest growth channels of convenience, discount and online will increase their sales by £31.3bn, equivalent to 110% of market growth.

“Most shoppers shop across all channels and through all media. In a digitised retail world, the shopper dictates the purchase journey, not the retailers. We operate in a multi-channel world so ensuring the shopper’s journey is seamless and consistent across all channels is a priority. Retailers expect suppliers to organise themselves on this basis too. Suppliers must adjust to this new reality. Retailers want to see suppliers having a clear online strategy, being able to deliver the basics, ensuring that their plans are integrated and that their channel plans act as one. “

Nevens says that the challenge facing suppliers, now and in the future, is not only to talk the talk of shopper and category, it’s to walk the walk too and that’s what Bridgethorne is working with clients to do.

British SMEs Thriving and Growing
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British SMEs Thriving and Growing

British SMEs had a strong 2014 with three quarters (75%) improving or maintaining their turnover compared to 2013
180,000 people started running their own business in 2014.

A fifth (21%) of SMEs took on more staff in the past year and 4% employed people for the first time.

One in twenty (4%) SMEs[1] has no insurance cover in place, equivalent to over 200,000 companies across the UK
British SMEs are thriving with business owners reporting that profits are up in the past year and the outlook is positive. SMEs interviewed in the research included sole traders and companies employing up to 250 people.

New research by LV= Broker reveals that three quarters (75%) of SMEs improved or maintained their turnover in the past year. Four in ten (41%) British SMEs have seen their turnover increase in the past 12 months, while a further 34% say turnover remained steady at 2013 levels. In addition, a new generation of SME owners has entered the market as 180,000 people started running their own business in the past twelve months[2].

Employers’ Liability

As well as increasing turnover, SME owners have also created more jobs. A fifth (21%) of SME owners say they have taken on more staff in the past year and 4% have employed people for the first time – equating to at well over 200,000 new jobs[3].

By law, all businesses employing staff must have employers’ liability (EL) insurance as a minimum otherwise they can be fined up to £2,500 a day by the Health and Safety Executive (HSE)[4]. Despite this, the research found that 80,000 SMEs who employ staff have no cover in place, leaving them vulnerable to prosecution and fines[5].

Pubic Liability

As well as being vulnerable to fines from the HSE, business owners with premises open to the public or clients could find themselves heavily out of pocket should someone make a liability claim against them. Almost two thirds (62%) of consumers say they would make a claim against a small business if they slipped over or were injured while on its premises.

Slips and trips can result in expensive compensation claims running to tens of thousands of pounds. Analysis of LV= data shows that the number of liability claims being made against businesses has been steadily increasing in recent years and SME owners need to be prepared for them.

The Insurance Gap

While the economic outlook is very positive for British SMEs, running a business is not without risk. An unforeseen event, such as a fire or flood, can stop trading for days or even weeks while repairs are undertaken and stock replaced. Depending of the type of business, this can spell financial ruin for companies that are unable to continue trading at alternative premises.

Despite this, one in six (15%) SMEs have no financial back-up plan in place if they were unable to trade for any reason and one in twenty (4%) SMEs have no insurance, equivalent to over 200,000 companies across the UK. When asked why, four in ten (38%) of these don’t see the need for any contingency plan, 21% can’t afford one and one in ten (10%) say they plough all their profits back into the business.

The insurance needs of a business will vary according to the type of business and the market it operates in, as well as its turnover, stock levels and whether it employs staff. Those running their own business should seek independent advice from a commercial insurance broker to insure they get the right cover for their business needs.

“SMEs are the lifeblood of the British economy and it is great to see that so many have increased their turnover in the past year and taken on more staff. The research shows that thousands are leaving themselves vulnerable to prosecutions and fines by the HSE for not having appropriate insurance in place. Getting the right advice on cover from a specialist insurance broker is invaluable for business owners and can make the difference between being able continue trading or not should the worst happen.”

Mike Crane, Commercial Lines Director at LV= Broker

UK Small and Medium Business Success May Be Stifled by Skills Shortage and Red Tape
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UK Small and Medium Business Success May Be Stifled by Skills Shortage and Red Tape

With 2015 on the horizon, research commissioned by npower has today revealed that small and medium sized businesses (SMEs) are confident about their business and the economy.

The research of 1,008 SME senior decision makers, in the Manufacturing, Retail, Leisure & Hospitality and Business Services sectors in Britain, showed 50 per cent of those surveyed expect to see an increase in business turnover during the next 12 months, while 46 per cent are confident their business would be able to recruit people with the right skill set during the same period, assuming they were able to pay market rate or above.

However the research did reveal fears over the amount of red tape and taxes imposed upon SME businesses (32 per cent), as well as concerns over the availability of credit and skills, with 49 per cent of businesses worried that tough legislation and regulation will hamper their ability to grow in the next 12 months, potentially putting the brakes on the success of small businesses just as things are looking up.

The study stressed that whilst SME headcount is expected to increase (21 per cent stated this), 28 per cent of SME decision makers are concerned about recruiting talented staff with the right skills. Other barriers to future growth include lack of bank lending, cited by 47 per cent.

The research also highlighted that whilst SMEs are considering the short term success of their business, the long term succession plan is becoming a thing of the past with a staggering 71 per cent of those surveyed saying their businesses have no succession plan in place.

Jason Scagell, Director of npower Business at npower, said: “While we’ve seen a clear acknowledgement of the contribution that SMEs make to UK plc in the recent Autumn Statement as well as through initiatives like Small Business Saturday, this study highlights that there is still some way to go before SMEs can honestly say that they are performing at the level they would like. These businesses are often described as the lifeblood of the UK economy and it’s obviously vital that they get the support they need to develop and grow.”

npower Business customer Chris Simmons, Owner of Chase Golf Club (which includes a Par 72 course, gym, spa, restaurant and pro golf shop), said: “We work hard to ensure that we are continually planning for the future. Whilst the UK is out of recession, as a small to medium sized business owner there are many areas where we are still feeling the pinch – from tax to staff salaries. As we approach 2015, I believe it will be the job of both the Government and larger businesses to ensure that they are doing all they can to support businesses like mine in the UK, by taking steps to reduce the barriers to growth such as red tape and lack of bank lending.”

The Return of M&A: 2014 the Strongest Year Since the Crisis
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The Return of M&A: 2014 the Strongest Year Since the Crisis

Title Here

-Megadeals dominated; 94 high-value global deals over GBP5billion, an 81% increase on 2013;
-Hostile bids increased by 600% from 2013 to 2014;
-Cross-border M&A transactions were at their highest level since 2007;
-Leading sectors were TMT and Life Sciences, closely followed by Energy which had a strong Q1;
-The U.S. and Western Europe, followed by Asia Pacific, were the most active M&A markets; activity in CIS and CEE slowed as a result of the Ukraine crisis.

The prospects for a continued recovery in 2015 are dependant, in part, on the macro-political environment, (in particular (i) what happens in Greece and its effect on the Eurozone more broadly, (ii) Russia, (iii) the general election in the UK, and (iv) North Korea), as the economic fundamentals are sound and there are strong cash reserves on balance sheets, historically low interest rates and relatively stable equity markets.

For the calendar year 2014 there were 3,282 deals overall, worth a total of USD3.12 trillion*, compared with 2263 deals worth USD1.83tn in 2013.

The two regions that drove strong growth in M&A were the U.S and Western Europe, despite the sluggish economic environment in the latter. The U.S accounted for 34% of all activity by volume and 45% by value. The UK was the number one target for U.S outbound acquisitions with a total of 65 transactions, followed by Canada with 28 and Germany with 20. A majority of the deals in the U.S were completed by strategic investors to either extend their portfolios or bolt on new areas of growth.

Despite inconsistent economic growth in Western Europe, overall transaction values were up by nearly USD400bn compared with the same time last year to reach a high of USD863bn. The success was driven by strong Life Sciences and TMT sectors. The UK saw the biggest deal in the insurance industry for 15 years in Q4 with Aviva buying Friends Life for GBP5.6bn. The outlook in Europe is for a diverse M&A market with key deals in 2015 expected in a number of sectors, assuming concerns regarding the macro-political environment do not have a negative effect.

Activity in CEE and the CIS slowed dramatically due to Russia’s economic uncertainty in light of the Ukraine crisis. Transaction volumes were a tenth of their 2013 levels totalling just USD4bn. Russia’s economic situation looks stark as it heads into expected recession this year with a tumbling oil price expected to impact investor confidence, at least in the short-term, and the political uncertainty and sanctions continue.

Across the board, the Life Sciences sector played a central role in propelling overall M&A activity to pre-crisis levels. The value of deals totalled USD530bn and was driven by tax inversion strategies, patent cliffs, companies making strategic disposals and using cash on their balance sheets to invest in smaller biotech companies with active drug development pipelines. The return of the white knight bid was evidenced in the largest deal of the quarter with the USD65bn bid by Actavis for Allergan.

In 2014 Private Equity funds became more active, particularly in the Life Sciences space. While exits remain the priority, more significant buyouts are starting to return. However as larger, strategic deals build momentum, PE funds remain cautious and are unwilling to compete with strategic players paying premia.

TMT businesses around the world are in a state of transformation, and 2014 was a year in which game-changing deals took place. The prospective ramifications of the GBP12.5bn tie-up between BT and EE go beyond the UK at a time when consumers across the world want access to high-quality content irrespective of the device they are using. As delivery systems fragment, many content creators see the benefit of joining forces, evident in the Apollo Global Management and 21st Century Fox joint venture that brought together Endemol, Shine Group and CORE Media Group.

There is optimism for a buoyant 2015 M&A market with continuing strong cash reserves and confidence expected to spur on activity, underpinned by privatisation strategies in a number of markets including Europe and Asia Pacific. With confidence comes increasingly hostile and competitive bids, which was a feature of 2014 that is likely to remain. Shareholder activism will also be part of the deals landscape ahead, not only in the U.S, while the closure of the inversion loophole will see tax-driven deals dry up.

Andrew Ballheimer, Global Co-Head of Corporate at Allen & Overy, commented: “2014 saw the much anticipated return of M&A come to fruition. CEO confidence, relatively cheap financing and low interest rates drove a number of mega, transformative deals. These conditions, along with increasing numbers of hostile takeover attempts, and positive shareholder reaction to M&A, should remain key drivers for deal activity, but there remains uncertainty in the macro-political environment, which may inhibit deal flow.”

The M&A Index provides market insight and commentary by Allen & Overy partners, backed up by independently commissioned quarterly research on (USD100m ) global M&A deal types and analysis of top global outgoing buyers and target markets.

Will pride come before a fall for deal-makers in 2015?
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Will pride come before a fall for deal-makers in 2015?

Acquirers in 2014 set new records for performance, with share prices out-performing non-acquiring companies by an average of 5.8 percentage points (pp), compared to 4.5pp in the prior year. 2014 was also a boom year for M&A in terms of volume according to Towers Watson’s Quarterly Deal Performance Monitor (QDPM) in partnership with Cass Business School, with a total of 928 deals*, an increase of 208 on 2013 figures and the most deals completed in a single year since before the financial crisis.

Asian acquirers were the star performers of the year, maintaining an impressive outperformance above the regional index throughout the year averaging 24.7pp. Their success overshadows the outperformance of acquirers in Europe, which rebounded as forecast in 2014, achieving 4.1pp, and North America at 2pp above their respective regional indexes.

The market returned for larger, more complex, deals in a big way last year. By year end a record-breaking 176 large deals (worth over $1 billion) and 12 mega deals (worth over $10 billion) had been completed. This compares to 120 large and 4 mega completed deals in the prior year.

Steve Allan, Towers Watson’s M&A practice lead in EMEA, said: “Deal activity picked up as we moved through 2014 to a level not seen for many years and is showing no sign of slowing down anytime soon. Market confidence is riding high, even for the complicated larger mergers, but with the more apparent inorganic growth opportunities already taken, we may see some failures making headlines in the near future with the latecomers falling off the crest of the merger-wave.”

Towers Watson’s 2015 M&A predictions:

1. Financial services to rise out of the doldrums

As the age of “banker bashing” fades away, financial services will be one of the sectors to watch with deal volumes slowly picking up. Meanwhile pharmaceuticals will remain one of the main drivers of global deal activity (driven by deal fundamentals rather than financial engineering).

2. Mega-deal comeback to gain more momentum

It was obvious at the end of 2014 that mega-deals were back with a vengeance but their prevalence will become even more significant in the year ahead. As markets remain high, with robust corporate cash balances and low interest rates, expect to see larger, more complex, deals completing at a surprising rate.

3. Asia to dominate the performance league

The runaway success of Asian acquirers last year in terms of share price return is undisputed. Armed with the recipe for success, Asia is set to remain triumphant in 2015 and may even further accelerate its lead ahead of Europe and North America. 

4. We will learn how not to do it

Beware hubris – the early birds have the worm, we may now start to see the “me-too” and the “just-get-it-done” deals. This could be the year that we begin to see more deal-makers getting their fingers burned and by the end of the year we will have a new benchmark deal to hold up as how not to do it.

Steve Allan said: “2015 is likely to be an exciting year for spectators with a continued flurry of activity. For acquirers it will feel more precarious, with the pressure not to get left behind in the race to growth coupled with the fear of not being the one that gets it wrong. It has been proven time and time again that victory comes from thinking beyond the deal in purely financial terms. Companies that recognise the importance of merging hearts and minds, as well as operations, will be the ones to achieve long-term success in deal-making.”

Risky Ground for UK Businesses in 2015
Corporate Finance and M&A/DealsFinance

Risky Ground for UK Businesses in 2015, say Chief Financial Officers

Global risk has risen in recent years and businesses are slowly coming to terms with trading in this new landscape, one in which results for economic indicators can fluctuate greatly.

UK businesses trading internationally face an added currency risk, which is tethered to investor sentiment surrounding economic events.

Despite the mounting global uncertainty, CFOs are still optimistic about growth in investment and earnings this year. Businesses require more help than ever this year, be it through robust currency hedging strategies to minimise risk, or the right guidance on trading in emerging markets.

Best Buy to Sell Five Star Business in China
Corporate Finance and M&A/DealsFinance

Best Buy to Sell Five Star Business in China

Best Buy Co., Inc. today announced that it has entered into a definitive agreement for the sale of its Five Star business to the Jiayuan Group, a prominent China-based real estate firm led by Chairman Yuxing Shen. This sale does not affect Best Buy’s private label operations in China.

“Over the last two years we have worked to improve our business in China and are proud of the progress we have made there,” said Hubert Joly, president and chief executive officer of Best Buy. “We were recently approached by Jiayuan Group, a respected Chinese investment group, which offered to acquire the business with plans to further expand it. The Jiayuan Group has agreed to work with Five Star Chief Operating Officer Yiqing Pan, who will become chief executive officer of Five Star. Mr. Pan has been with the business for many years and has a deep respect for Five Star employees, as well as a vested interest in continuing to work with them to build a stronger presence in China,” Joly said.

“The sale of Five Star does not suggest any similar action in Canada or Mexico. Instead, it allows us to focus even more on our North American business. We will also continue to invest in and grow our China-based private label operations, with brand names that include Dynex, Insignia, Modal, Platinum and Rocketfish,” Joly added.

Best Buy entered the Chinese retail market by purchasing a majority interest in Jiangsu Five Star in 2006 and now operates 184 stores in China, all under the Five Star brand. The transaction, which is subject to regulatory approval, is expected to close in the first quarter of fiscal 2016. The sale of the Five Star business is not expected to have a material impact on the results of operations, financial position or cash flow of Best Buy.

Change in Volvo Executive Team
Corporate Finance and M&A/DealsFinance

Change in Volvo Executive Team

Henry Sténson has been appointed Head of the newly established Group function, Corporate Communication & Sustainability Affairs. Sténson has longstanding experience of management roles at senior executive level in companies including Ericsson and SAS, but has also been employed previously at the Volvo Group in such positions as CIO for Volvo Aero and Volvo Cars. Sténson will take up his position on January 1 and will also join Volvo Group Executive Team.

As previously announced, Corporate Communication & Sustainability Affairs is the name of the new Group function comprising both of the previous functions, Corporate Communication and Sustainability & Public Affairs. In conjunction with publication of the report on the third quarter of 2014, it was announced that the Executive Team would be reduced from the current 16 members to 10 as of January 1.

Volvo has previously announced that the reduction in the number of members is also to take place through a merger of the three sales and marketing organizations in Group Trucks, by no longer including the Heads of Volvo CE and Volvo Financial Services in the Executive Team as of January 1 and by placing the organization of Corporate Process & IT under the Group’s Chief Financial Officer (CFO).