the times | Saturday October 11 2014
The French are failing us Osborne attacks lack of discipline Page 68
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FGM
Black gold loses lucre
Business
What to do when oil price falls Tempus, page 73
ASSOCIATED PRESS
Microsoft boss in need of reboot business commentary Andrew Clark
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porting a baggy T-shirt, a hooded sweatshirt and bottle-thick glasses, Microsoft’s 47-year-old boss perfected nerdy teenage shabby chic at an Arizona conference on women in computing. Unfortunately, his attitude, too, channelled youths who spend too much time staring at flickering screens in airless rooms. Women, declared Satya Nadella, shouldn’t ask for pay rises (report, page 50). Instead, they should have faith that the system will reward them in the long term. Such restraint, Mr Nadella conceded, requires superhuman self-control. However, women who adopt this approach will acquire positive “karma” in the eyes of their bosses. “Somebody’s going to know that’s the kind of person that I want to trust; that’s the kind of person that I want to really give more responsibility to,” preached the Indian-born tycoon who, incidentally, is on up to $18 million. Only 29 per cent of Microsoft’s workforce is female, and 17 per cent of its senior executives are women — an imbalance all too common in Silicon Valley, which is almost as male as a Saudi oilrig. This isn’t a legacy issue dating back to less enlightened times; even new kids on the block such as Twitter and Facebook employ a paltry proportion of women. In fairness, Mr Nadella swiftly apologised and admitted that his remarks were “completely wrong”. But they reinforce a perception that software engineers tend to form a uniformly laddish community which can only be accessed by women happy to keep quiet and fit in. Ambassadorial skills are a key part of running an organisation of Microsoft’s size and Mr Nadella needs to think more carefully, in future, before placing foot in mouth.
Cable is all froth
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recisely a year ago, Moya Greene, the Royal Mail’s boss, climbed up to the balcony of the London Stock Exchange to receive a ceremonial cut-glass brick on the morning of the company’s £3.3 billion flotation. Ever since, Vince Cable has been praying for the stock to fall. Humiliatingly for the business secretary, Royal Mail’s shares rocketed from 330p to 616p in their first three months, prompting howls of anguish: the government generated £1.98 billion from the sale but could have collected £3 billion if the offer price had been higher. The stock has since stabilised at 398p, but not before the National Audit Office attacked the “deep caution” in the flotation. According to the government, the early “froth” has come off Royal Mail’s shares, bringing them down to a realistic price. In truth, that
early surge was more than froth: it was relief that a national postal strike had been averted, a broader stock market rally on resolution of a government shutdown in the US and a conviction that the company’s parcels business was healthy. Since then, the outlook has clouded: Royal Mail has cut prices for smaller packages because of fierce competition, profit forecasts have been shaved and a competition investigation is under way in France. Investors who hung on are still sitting on a tidy profit. But Mr Cable’s valuation skills, not to mention those of his advisers, Goldman Sachs and UBS, are a matter of mockery in the City. A career change to stockbroking is off the table — and you wouldn’t want Vince to make you a coffee either, given his generous view of froth.
Feel-good story
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he dusty world of publishing has blown off its cobwebs for a marketing blitz. Unsuspecting shoppers are getting the hard sell on Tracey Emin-designed tote bags, while authors are tweeting selfies at their favourite bookshops. It’s all around Super Thursday — a confected phenomenon by which hundreds of Christmas titles, ranging from John Cleese’s memoir to Paul Hollywood’s latest baking tome, go on sale simultaneously. After a dreadful decade, booksellers claim that things are looking up. They have a point: Nielsen figures show that in the year to September, book sales only fell 2 per cent, compared with an 8.5 per cent drop the preceding year. And in the week to October 4, sales rose by 0.4 per cent. Migration from bookshops to online sellers appears to be peaking — no surprise, then, that Amazon is suddenly opening a New York shop.
Time for quick exit
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quick question for Tesco: why is Philip Clarke still on your payroll? The former chief executive was axed in July when the supermarket belched up a profit warning. Yet he is being kept on his £1.15 million salary until January to “support the transition” to his successor, Dave Lewis. To put it mildly, Mr Clarke was a hapless chief. Not only did he preside over Tesco’s sharpest drop in sales for 20 years, he alienated senior figures around him. Not to mention a £250 million accounting scandal that unfolded on his watch. Tesco’s new boss, who put the kibosh on a Margate superstore yesterday, knows his own mind. It seems outlandish that he needs the costly counsel of his discredited predecessor for “transitional” advice. andrew.clark@thetimes.co.uk
Adele’s repeat success keeps label on song
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t is three and a half years since Adele’s album 21 was released, but it is still paying off for the record label that backed her (Nic Fildes
writes). XL Recordings, jowned by Richard Russell and Beggars Group, shared a £12 million dividend last year purely on back catalogue sales,
according to the label’s accounts. Mr Russell and Beggars Group warned that profit would fall this year, with no new Adele album due for release.
Challenger bank’s float may be sunk Harry Wilson, Patrick Hosking Deirdre Hipwell
Aldermore is facing the embarrassing prospect of being forced to slash the price of its stock market listing or cancel the deal as investors shun the private equity-backed challenger bank’s flotation amid a collapse in equities. Advisers to Aldermore are making efforts to save the initial public offering (IPO) with bankers and the company’s management attempting to persuade American investors to back the flotation after getting a frosty reception from European funds. At the forefront of investors’ minds has been the fall in the FTSE 100, with Britain’s blue-chip index down by 6.5 per cent since Aldermore announced its float on September 22. Yesterday the FTSE closed at 6,334, down 1.4 per cent. In the past three weeks as investor concerns have grown over the ebola outbreak, geopolitical worries and falling oil prices, a number of companies have had to pull their floats. Miller Homes, the Edinburgh-based housebuilder, cancelled its IPO, citing recent financial volatility. Spie, the French energy services group, withdrew its float, which would have been France’s biggest listing since the crisis, on Thursday. Germany’s
property company TLG Immobilie and Scout24, an online classified company, have postponed listings. One institutional fund manager at a major UK investor said that selling shares in challenger banks in present market conditions was “a hard sell” and said it had decided against investing in Aldermore unless it reduced the price. The bank is offering its shares at between 217p and 265p, potentially valuing the business at £875 million. AnaCap Financial Partners, the bank’s
Inside today
World equity markets suffer week of turmoil Page 67
private equity backer, is hoping to use the float to cut its more than 50 per cent stake, while Philip Monks, the lender’s chief executive, and other senior managers are expected to sell some shares. Three City sources said even the bottom of the range price has proved too high for some London-based funds and the price may have to be cut. Some investors said they had indicated that they were willing to buy only at a maximum valuation of 1.5 times Aldermore’s total book value. However,
the lowest price offered values the bank on a multiple of 1.6 times book, too high for some fund managers. Unless demand improves and Aldermore and its backers are able to persuade other investors to back the deal, advisers face having to cut the price or pull the offer. Source close to the deal said there had been no talk of either option and pointed out there was a week to go until the shares were due to be priced. Several investors have yet to indicate whether they would buy the shares, meaning that a deal could still be completed within the present price range. The float is being closely watched by other challenger banks with plans to list. In particular, Virgin Money, which confirmed this month its plans for an IPO, will want market conditions to improve before formally launching its £2 billion stock market listing. Virgin is understood to be looking for a valuation of a minimum of 1.4 times its book value, but initial feedback from some investors has suggested that this could be difficult to achieve. Another bank understood to be following developments is Shawbrook Bank, which is backed by the private equity fund of Royal Bank of Scotland and chaired by Sir George Mathewson, a former chairman of RBS. Aldermore declined to comment.