magazine > summer 2009 > Issue 02
INSIGHT + INFORMATION + LEADERSHIp
entrepreneurs
‘‘It’s about passion’’ Founder of Coffee Republic Sahar Hashemi on the secrets of leadership
inside>
shareholders’ rights Your guide to the new regulations page 9
after the storm How to prepare for post-recession page 22
Foreword words from the front
flashback
making the most of recession When recession hit the US in the 1990s, Sam Walton of Wal-Mart famously said: “I’ve thought about it and decided not to participate.”
John Parker Managing Director, Client Services, Equiniti
I’m not sure I’d go that far about the current state of the UK economy. However, at Equiniti, we have very firmly decided that our participation in this recession is going to be a positive one. As I mentioned when I introduced the last issue, tough times call for leadership and innovation. I believe that Equiniti is taking great strides to provide an increasingly outstanding service to both you and your shareholders – and this issue of the magazine explains how and why. For instance, we look at our new state-of-the-art call centre and website services, the increasingly compelling offer from our ProSearch and Investor Analytics teams, and recent acquisitions: David Venus and ICS Computing (now Equiniti ICS). Finally, I would like to warmly welcome the new Chairman of Equiniti – Sir Neville Simms (see p26). Sir Neville brings a wealth of experience in delivering sophisticated services to corporate and public sector clients and brings an added dimension to our Senior Team. I hope you enjoy the issue.
February Global demand for gold surges by a third to $100bn as investors seek protection from falling financial and stock markets.
March
John Parker Please contact me at: contact@equiniti.com
2 > Equiniti Magazine | summer 2009
The US Government agrees to an additional $30bn of rescue funding for the insurance giant AIG, as it prepares to announce the biggest loss in US corporate history.
contents inside this issue
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ENTREPRENEURS
‘‘It’s about passion’’
Equiniti magazine number 02 Cover photograph by Martin Burton
Founder of Coffee Republic Sahar Hashemi on the secrets of leadership
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regulars 4 First Person
Wayne Story on delivering quality client services
8 In the know
Gold: seen as a safe haven in recession
SAYE advice from Julie Richardson of ifs ProShare; plus Peter Swabey picks through the final text of Companies (Shareholders’ Rights) Regulations 2009
13 Postcard from Westminster Philip Hammond’s take on the economy 25 Question time
April UK interest rates hit an all-time low of 0.5%. The Bank of England reveals plans to stimulate the economy with a £150bn injection of ‘quantitative easing’.
May As the MP expenses scandal hits the news, Virgin Atlantic reports pre-tax profits soaring from £34.8m to £68.4m in the 12 months to February 2009.
June Consultancy Aon estimates that the pension deficit of the UK’s top 200 corporate pension schemes has grown by 82% to £73bn due to a fall in corporate bond yields.
July As economists argue over indications of the green shoots of recovery, Nationwide brings back 125% mortgages for eligible existing customers.
Laura Jackson from newspaper giant Trinity Mirror
26 Snapshots
Equiniti buys BPO specialist ICS
Features 7 The IT factor
Mike Jolliffe on best practice & expertise
10 Sahar Hashemi
The candy queen moves on from Coffee Republic
14 Big numbers The Lloyds-HBOS corporate action
16 David Venus
The client benefits
18 O ur man in the Hague
Michiel Brandjes on life with Royal Dutch Shell
20 Investor Analytics
Do you really know your own shareholders?
22 After the storm How to prepare for economic recovery
Equiniti Magazine has been printed on environmentally responsible paper manufactured using 50% recycled waste and 50% fibre from well managed forests, controlled sources and recycled wood. Equiniti Magazine is published on behalf of Equiniti by White Light Media. Editorial Director: Fraser Allen Creative Director: Eric Campbell www.whitelightmedia.co.uk Members of the APA & PPA
www.equiniti.com > 3
1st
person: wayne story
Client focus has always been a key priority for Equiniti, but with an outstanding background in customer service excellence, Wayne Story has brought fresh momentum. The UK Managing Director reveals all Portrait: graham jepson
What has been keeping you busy this year?
As a leader, it is important to set goals and allow people to contribute. You only succeed by listening to others and respecting their expertise. I passionately believe that customer service delivery is the remit of everyone here 4 > Equiniti Magazine | summer 2009
We’re working on a wide range of initiatives to enhance the service we offer our clients, their shareholders and employees, in terms of response times, quality of information, ensuring accuracy and delivering good value. We have invested heavily in our contact centre. In January, we started a project for replacing the whole of our telephony system. We needed something far more resilient because the business we’re operating today is very different to the business we were operating five years ago. We also wanted to have a much better ability to control our messaging through managing our own interactive voice recognition – we wanted to be able to generate much better management information for ourselves and our clients. This project was completed in April and we have invested £1m to date. The introduction of our state-of-the-art Sirius administration system has also been keeping me busy. There were teething issues when we migrated to Sirius – they are inevitable when you move from a system that has been around for so long, as well as the significant volume involved. However, the benefits are now becoming apparent to our clients.
What are the key benefits of the new telephony system for clients and shareholders? The key benefit is that we now provide a better delivery of service. We have much greater capacity and a wider range of services. For instance, the management information that we can now generate is not only useful for us, it can be very beneficial for our clients. We also now have full digital voice recording – each call to the centre is now digitally recorded so if any issues arise, we can be a lot clearer about tackling it. The new system is very sophisticated and gives us a solid platform
for developing additional features. For instance, screen pop-ups provide specific information for callers that may interest them and each call can be concluded with a client satisfaction poll, so we can receive immediate feedback, which is useful for everyone. We are keen to share the benefits of this system with all of our clients and will be rolling out these additional options later this year. We will also be holding some open days at our contact centre in Birmingham to give clients the opportunity to see the benefits and improvements first hand. Your relationship manager will be contacting you to discuss this and I look forward to meeting you there.
How do you measure the success of other aspects of your operations? The primary measurement metric we use is a scorecard system. The scorecards are reviewed by the operations board and by the main Equiniti board on a weekly and monthly basis respectively. Maintaining a high standard of client service is at the very heart of everything we do. We now spend a lot of our time looking at what we anticipate happening in the next 13 weeks. For instance, events (such as AGM season) might have an impact on our resources, our volume of calls and our service levels. These are all factored into the resource plan and any non-core activities are overlaid so that we can better understand the 'pinch’ points to ensure that we continue to offer a seamless service.
What else are you doing to enhance the 'client focus’ at Equiniti? I’m keen to ensure that our senior operations people are involved in directly helping our customers. A lot more of our senior people are going out to visit clients to understand what’s going on, supplementing the work that the relationship managers do. I passionately
five facts about wayne
1 2 3
If you see me reading a book, it’s most likely to be one of the ‘classics’ – I enjoy Charles Dickens.
My pet hate is rudeness. On Saturday afternoons, you’re most likely to find me coaching children’s football teams in and around my local area.
4 5
My favourite film is the Deer Hunter. If I could choose a holiday destination, it would be anywhere warm – especially the Maldives where I can relax and scuba dive! www.equiniti.com > 5
1st
person: wayne story believe that customer service delivery is the remit of everyone at Equiniti. Every task we undertake should receive the same ethos of service excellence with every member of the Equiniti team sharing the responsibility. We align staff development to ensure that every time a customer interfaces with Equiniti, we offer the same consistent service. We have invested in a quality management framework and I have recently appointed a Senior Quality Manager with the sole objective of further embedding quality management across the business. His team is continually reviewing what we’re doing, how we’re doing it, what issues are arising and what fixes need to take place.
What else are you doing to deliver better value to clients? All the areas I have discussed are driving efficiency to provide a high-value service to our clients. But we’re also always looking at other options to ensure we’re providing our clients with added value. For instance, we recently acquired David Venus [see p16], which will benefit our clients through expert company secretarial services, and we’ve enhanced our Investor Analytics [see p20] offering so clients can develop a better understanding of their shareholder base. Dependent on each client’s objective, we are also able to offer other products such as shareholder programmes to reduce shareholder numbers or enhance relationships with their existing shareholders – or an asset reunification project that allows us to trace and reunite funds to their rightful owners from your register.
Equiniti recently launched a business process outsourcing arm by acquiring Belfast-based ICS Computing. What is the thinking behind this?
Equiniti’s call centre has undergone a full refit with state-of-the-art technology
6 > Equiniti Magazine | summer 2009
I meet clients all the time and I’m always looking for additional services we can offer that will help them. We’re delighted with the acquisition of Equiniti ICS [see p27], which has a wealth of experience in HR, payroll, finance and accounting, and IT services. It’s another excellent offering, and one that will be of interest to the public sector as well as the private sector. I am confident that we will continue to offer excellent service. It is not about standing still, we need to offer relevant services that deliver commercial benefits to our clients.
I meet clients all the time and I’m always looking for additional services we can offer that will help them You only joined Equiniti last year. What has the experience been like so far? I’m very much enjoying the challenge and am pleased with the progress that we’re making. It may be a cliché but we are on a journey of growth. We are becoming leaders in all fields that we operate in and are striving to develop a more integral client business by offering cost-effective solutions. By delivering service excellence through the in-house expertise we have, I am confident that we will be able to deepen successful relationships with our clients. We are making good progress within our business across a number of areas, but we are very ambitious and determined to maintain this momentum – and we are looking forward to the journey ahead.
What’s your approach to leadership and which leaders do you admire? In my opinion a good leader provides the direction whilst empowering his/her team to take responsibility and accountability. As a leader, it is important that you set the goal and allow people to contribute. You will only get the best results by listening to others and respecting their expertise whilst always challenging them to think at the next level. Leaders I most admire include Karren Brady, Birmingham City Football Club’s CEO, or Jack Welch, former CEO of General Electric. Having taken on GE with a market capitalization of about $12bn, Jack Welch turned it into one of the largest and most admired companies in the world, with a market value of about $500bn. He challenged the management to become leaders and pushed them to continually move to the next level. Karren has succeeded in one of the most difficult environments – football. She had a vision, empowered her team and the results speak for themselves.
The IT Factor
Equiniti has developed a reputation as a pioneer in technology. Discover why – and what the benefits of that expertise are to you
“We regard expertise and best practice in IT as fundamental to the business,” says Equiniti’s Head of IT Strategy and Architecture, Mike Jolliffe. “It is at the heart of everything we do and it is key to the quality of service that we provide to our clients.” Just as Wayne Story is leading initiatives to enhance operations at Equiniti, Mike has been driving forward the quality of the company’s IT infrastructure. “We identified the need to change our core processing platform and put in place our Registrars Re-Engineering Project,” says Mike. “This was not just a re-platforming of our systems and infrastructure, it was a complete review of all business processes.” “We are continually looking at ways to improve everything we do and there are three drivers for this: flexibility (and the speed with which we meet responses), processing efficiencies (because of our high data volumes) and cost-effectiveness. Equiniti took the strategy of using the latest technology from Microsoft
when introducing the Sirius system. “We could see at that time that this platform had much to offer in terms of capability and scalability,” says Mike. “We’ve been told that our migration to Sirius has been one of the largest developments in the UK and even Europe. “As with the introduction of many IT platforms on such a large scale, there were a number of teething problems but now both Equiniti and our clients are realising the benefits – and will continue to do so in the coming months and years. “We believe that it is vital to evolve and innovate and by implementing this system we have the confidence to lead the field. ” Another example of this was demonstrated when Equiniti needed a better content management solution for Shareview and adopted the beta
version of SharePoint 2007 to get the very latest product innovations, and exploit skills developed on software licenses that it already had in place. The potential audience size and client profile of Shareview gave it a very high profile at Microsoft and in the SharePoint worldwide community – it was one of the most blogged deployments of SharePoint 2007 when it went live. Indeed, in March 2008, Mike was invited to present at the Microsoft international Sharepoint conference in Seattle to showcase Equiniti’s bestpractice achievements. The relationship with Microsoft is important. “We use the Microsoft platform for our core systems, and are recognised by Microsoft as running a high availability, mission critical system on their technology,” says Mike. “Underpinning all of this work is the end result. And that is about delivering stability and high levels of performance for our clients. We believe that success will be delivered by looking forward and not standing still, through this we will lead our industry and deliver service excellence to all our clients.” www.equiniti.com > 7
In the know:
>How have share plans changed? Looking to untangle the post-budget ramifications for SAYE? Julie Richardson has the facts at her fingertips
In the latter part of 2008, ifs ProShare and its members worked with HMRC as part of its consultation to review some of the administration procedures and processes surrounding SAYE. Following on from this, a number of changes were announced in the last budget which came into effect on 29 April. These included: • The specifying of bonus rates and early leaver rates on SAYE savings, and authorising savings carriers transferred from HM Treasury to HMRC. • A revised mechanism for setting bonus rates and early leaver rates, including the abolition of the annual review on 1 September each year. • Electronic communications with banks and building societies enabled for issuing of revised or updated SAYE notifications with new bonus or interest rates. • Notice period of change in bonus rates given to savings carriers reduced to 15 days. • Clarification given on what will happen if an SAYE invitation straddles a change in SAYE prospectus. In future, companies may use the prospectus in place on the day of the invitation – even if that prospectus changes during the invitation period – providing the closing date for applications is no more than 30 days after the date of the changes. SAYE invitations must still be made in accordance with the plan rules. 8 > Equiniti Magazine | summer 2009
Executive Share Plans There were also changes announced in the budget that will have a particular impact on the administration of executive share plans. These are: • An increase in the top rate of income tax to 50% for those with incomes in excess of £150,000 with effect from 6 April 2010. • The tapering and removal of personal allowances for those with incomes in excess of £100,000 with effect from 6 April 2010. The first point raises the possibility of delays in the exercise process in a scenario where an employee wishes to
exercise an option and then sell sufficient shares solely to cover the exercise cost, income tax and NIC liabilities. Currently, administrators or brokers will often withhold 40% tax, 1% NIC and, sometimes, employer’s NIC – and employees may be able to exercise an option online for straight-through processing, or fax an exercise request to the administrator or broker for dealing that day. However, because income tax and NIC liabilities need to be settled via PAYE, once the higher tax rate comes in, there will need to be an interaction with payroll to determine the tax rate to withhold, potentially holding up the exercise process. The increase in the top rate of income tax is also prompting companies to review and restructure their executive share plans to fall under the capital gains tax regime, currently at a flat rate of 18%. Whilst these types of plans have been in existence for some time, the top rate income tax increase has added extra impetus for reviews. The second bullet point (left) necessitates careful communication with the employee. For example, an employee earning £90,000 making a gain of £25,000 will not only have an income tax and NIC liability on that gain, but will also see their personal allowance wiped out. This will, in turn, increase their total tax liability due in that tax year. • Julie Richardson is Head of Employee Share Ownershp at ifs ProShare.
Explore saye To find out how Equiniti can
support you with these changes or for more information on SAYE plans, email john. daughtrey@equiniti.com or call him on 01903 833259
>Are you ready for 3 August? Peter Swabey picks through the final text of the Companies (Shareholders’ Rights) Regulations 2009
Ever since the Shareholders’ Rights Directive became EU law in 2007, the date 3 August 2009 has been circled in the diaries of company secretaries across the EU as a reminder of the deadline by which the Directive must be implemented. Following a comprehensive public consultation on the UK implementation of the EU Shareholders’ Rights Directive, BERR published the final text of the Companies (Shareholders’ Rights) Regulations 2009 on 3 July 2009 – one month prior to it coming into effect. So how will the new regulations impact companies in the UK? “The UK system is already quite advanced so changes here have been less dramatic than in other EU countries,” says Peter Swabey, Company Secretary at Equiniti. “The introduction of the Shareholders’ Rights Directive has highlighted just how greatly practices differed across the EU.” Regulation 3 states that proxies voting on a show of hands who are appointed by more than one shareholder are now to be allowed to vote both for and against a resolution if that is the effect of the instructions they have been given. Meanwhile, under Regulation 7, if
a proxy is appointed they must act in accordance with instructions from the shareholder. “This is already UK common law, although it might have been helpful if the regulation had clearly stated what happens if they don’t. Our view is that this is a matter between the proxy and the shareholder, and does not affect the validity of the meeting,” says Peter.
14 days notice for the UK Article 5.1 of the Directive requires listed companies to call general meetings on at least 21 clear days notice. However, the UK successfully negotiated the ability to continue to call General Meetings, other
than the Annual General Meeting (AGM), on at least 14 days notice, provided that shareholders have approved such action at the last AGM or a subsequent general meeting, and that the company offers “the facility for shareholders to vote by electronic means accessible to all shareholders”. Under Regulation 12, a clear statutory duty now falls on a company to “cause [any question] to be answered”. However, an answer need not be given if it would “interfere unduly with the preparations for the meeting, or involve the disclosure of confidential information”. A company must allow members to add other matters, as well as resolutions, to the agenda of an AGM under Regulation 18, and the company must circulate such matters. The Directive requires the Member State to set a deadline by which the shareholders may exercise the right but does not specify when that deadline should be. The original proposal was that this should be 14 days but as this would have presented logistical problems for mailing, the Government has decided to set this deadline at six weeks before the meeting. Equiniti will closely observe the implementation of the Shareholders’ Rights Directive in the coming months and assess how well it meets its goal to improve communications between listed companies and their shareholders.
need to know more?
To find out more about the implementation of the Shareholders’ Rights Directive, please contact Peter Swabey on 01903 833488 or send an email to contact@equiniti. com. A longer version of this article will appear in the August issue of the Equiniti Ezine www.equiniti.com > 9
interview sahar hashemi Portrait: colin hattersley
Follow the leader As Britain seeks a new generation of business leaders, what can we learn from an entrepreneur who emerged from the last recession? Liz Barclay interviews Sahar Hashemi Britain 2009. The financial services sector is tainted by the spectacular demise of some of its biggest brands, the Prime Minister is beleaguered with allegations that he lacks vision, and the economy is smothered by the impact of recession. Now more than ever, 10 > Equiniti Magazine | summer 2009
UK plc needs a new generation of business leaders. If Britain’s young business brains require a role model, they could do much worse than look at the proprietor of a new business that specialises in low-calorie sweets. ‘Skinny Candy’ is the name and ‘guilt-free 99 calories’ is the catchline.
However, the brains behind this venture is no novice – and you certainly won't find her parading her idea on Dragon’s Den. The founder of Skinny Candy already has a formidable track record. She is Sahar Hashemi and, together with her brother Bobby, she created the Coffee Republic café chain
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at the tail end of the UK’s last major financial slump. She exited the business in 2001 and has been saddened to see the company struggle in this recession. In July, the company went into administration. Sahar’s background is in law, and she worked as a solicitor in London for five years before embarking on the Coffee Republic adventure in 1997. Within just four years, the chain had 90 branches and became the UK’s fastest growing company in 2002. Twelve years on it was one of the country’s most recognised brands with a turnover of £30 million. This is the story of how she got there – and why she left.
Are you a natural leader? There are different types of leader. I’m an ideas person, an entrepreneurial leader. I have a vision I genuinely believe in and I galvanise and inspire people to follow that lead and buy into that vision. It’s about passion. I have an overriding passion for something and I can inspire that same passion in others. That’s my skill. For me, leadership and entrepreneurialism are synonymous. Particularly in large companies, you have to have people who have bought into the vision.
You started Coffee Republic with your brother Bobby, and you’ve launched the Skinny Candy sugar-free sweets range in partnership with another company. How compatible are ‘leadership’ and ‘partnership’?
pictures: Courtesy of Apple /joel anderson
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Sahar’s background is in law – before starting Coffee Republic she worked as a solicitor for five years
I lead through ideas but managing people is not my strength. With Skinny Candy, I handled the research, sourced suppliers and did the sampling, all of which I love. But when it got bigger and needed an infrastructure I felt I needed help. So now I have a joint venture with Glisten PLC – a big confectionary-making company in Leeds. The Chief Executive Paul Simmonds is the kind of leader I want to grow this brand with. He’s a good leader of the people. I’m the leader of the ideas. It’s the perfect marriage in a way.
But business marriages can break down? Yes – they go through a natural cycle. With Glisten it’s working very well. When I set up Coffee Republic with Bobby he was leading from the business point of view and I was leading from the customer point of view. But I didn’t want to manage people so I left. With Skinny Candy I’ve found the ‘team’ person at Glisten that can make it happen and cover up my weaknesses. And I do the bits he doesn’t want to do.
Do you think leadership has to come from the top? Yes. A leader sets the tone and, through his or her passion, encourages it to seep into every corner of the organisation. It’s about motivating, cajoling and inspiring the rest of the team to buy into your vision and become as passionate as you are about it.
“Recession also creates opportunities for those sharp enough to spot and capture them” What about the other people in a company? When we set up Coffee Republic we took our first employees from Pret-a-Manger. They had such passion and vision and great training for their staff and we had no idea how to train people. That was the DNA for what became Coffee Republic. You’ve got to hire the right people and they become leaders of their parts of the organisation and that creates a culture. You need people with strong belief, who have the ‘whatever it takes’ mentality.
Do you believe that leaders are born or created? Leaders don’t have to be born – they can be created. If you’re doing something you really love then you become a leader, because people love to follow someone who really believes in something. Discover what you’re passionate about and you’ll be a good leader in that field.
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Greatest business leaders of their time? Henry Ford, 1863–1947
Founder of the Ford Motor Company and father of modern assembly lines used in mass production.
Sam Walton, 1918–1992
Sam opened America’s first Wal-Mart store on 2 July 1962 in Arkansas. By its 25th anniversary there were 1,198 Wal-Mart stores across America. Sam stepped down as CEO in 1988.
Anita Roddick, 1942–2007 Businesswoman, human rights activist and environmental campaigner. Anita founded The Body Shop in 1976.
Richard Branson, born 1950 The Virgin king has demonstrated a golden touch with everything from music and trains to airlines and personal finance – although vodka and coke ventures were a little less notable.
Bill Gates, born 1955
Chairman of Microsoft, which he cofounded along with Paul Allen in 1975. Gates topped Forbes’ World’s Richest People List in 2009.
Steve Jobs, born 1955
CEO of Apple, which he established in 1976. He also co-founded Pixar Animation Studios, which has created some of the most successful animated films of all time including Toy Story and Monsters, Inc.
www.equiniti.com > 11
interview sahar hashemi
Is there a risk that passion can turn leaders into bullies? Yes – you can become tyrannical. You have to manage that, and achieve a balance. But what we all look for in a leader is someone who has a clearer vision of the future than we do. Everyone’s worried now and stuck in the mud, and they want to look at Gordon Brown and see a glimmer of hope. You feel that with Barack Obama but not Brown – you feel like he’s stuck in the mud with you. And if you feel people don’t have a vision of something better, you resist them and they have to push their ideas through. I can lead at the kitchen table, I can lead a small team developing the ideas but I can’t manage people. It’s important to know what your threshold is.
What about the impact of a blame culture? If someone is always to blame when something goes wrong, does that stop people from taking responsibility and leading? I’m writing a new book called ‘Switched On’, in which I argue that people have developed a corporate attitude: this is my job and that’s all I’m doing. I won’t take any more responsibility. They switch off, become bored and institutionalised. The book is about what entrepreneurs do naturally, and if employees take on the attributes of entrepreneurs, they become engaged, innovate, create and have more fun. They enjoy their jobs, are better at their jobs, are switched on and everyone wins. I think another problem is that leaders have to get out there into real life with their customers. People become insulated and think it’s all about big offices and boardrooms. Jack Welch, ex CEO of GE, said that in big hierarchical companies your face is to the boss not to the customer and you have to get out there and face the other way round. Find out what the customer wants and lead from the customer’s point of view instead. That’s what I try to do.
Other than Jack Welch, which leaders have you drawn inspiration from? Anita Roddick was amazing – look what she achieved and what she believed in – and Steve Jobs of Apple. He’s come 12 > Equiniti Magazine | summer 2009
Sahar’s latest venture, Skinny Candy, is a joint venture with Glisten PLC
So why did you leave?
“If employees take on the attributes of entrepreneurs, they become engaged, innovate, create and have more fun” through hardships, left and gone back. He’s quoted as saying that you can only see what went wrong after you’ve left, so if you go back you can do things differently and innovate. But I believe that if you keep your eyes open, you’ll constantly be inspired and surprised by leaders all around you.
You left Coffee Republic in 2001 – do you regret your decision? Yes – it was the biggest mistake of my life. I’ve made a multitude of mistakes in my professional life but I left the company I loved so much, too soon. It’s a very difficult separation for an entrepreneur. Leaving the law was a good move. I loved it for five years but in the end it had nothing for me. I would have ended up as a mediocre solicitor if I’d stayed and not been me. I had to move on. That was one of the best moves I made – starting my own business.
I’m action orientated. I wanted to write the book so I took action and left.
You are also involved in a lot of charity work? One of the most interesting ones, which is actually not a charity, is CforC – Corporates for Crisis. It looks at what big companies do in the communities they work in – for example exploration and mining companies in Africa. We’re using leadership skills to help those companies make a real, sustainable difference themselves, on the ground, instead of just paying a cheque to charity.
What advice would you give people with ideas now? Coffee Republic was set up in a recession. The banks wouldn’t lend any money but eventually I got a loan through a government scheme. The same is happening now – the government schemes are starting to make money available for businesses. And it’s a good time because there are empty premises that are cheap. It’s a good time to get going. • ‘Switched On’ will be published by Capstone and is due out in January 2010 • Liz Barclay is a writer, author and BBC Radio 4 presenter and reporter
Following our interview with Labour’s John McFall in the last issue of the magazine, Victoria Masterson crosses the benches to speak to Shadow Chief Secretary to the Treasury, Philip Hammond
Postcard from Westminster for opposition politicians, overseeing public spending is normally a quiet brief. However, these are not normal times and Shadow Chief Secretary to the Treasury Philip Hammond has never been busier. “With the situation we’re in at the moment, public spending is very much at the forefront of the agenda and will be one of the big issues in the next General Election,” claims the former businessman and MP for Runnymede and Weybridge. “With regard to the economy in general, it’s clear that we have been living in quite an unsustainable way for the last five to six years. The Government has been spending more than it takes in tax, households have been encouraged to borrow and the whole economy has been built on a mountain of debt.” The problem is that, while the economy will recover, public finances won't. Fixing them will require painful structural changes to taxation or spending - or both. “Major increases in taxation will erode the UK’s competitiveness in quite a dangerous way,” he suggests. “Therefore the bulk of the burden must fall on public spending restraint, to rebalance the economy.” Hammond went up to Oxford to study Philosophy, Politics and Economics in October 1974 – on the very day that the previous Labour Government was elected. The ensuing economic crash shaped his support for Margaret Thatcher’s approach to controlling growth in public spending and excessive taxation. Hammond became involved in the voluntary side of the Conservative Party and, after a varied career in manufacturing, construction and energy, stood for Parliament in 1994 with a vision to build on the economic reforms of the 1980s. “There’s a lack of simple good housekeeping,” he claims. “In business, it doesn’t matter whether you’re making things, exploring for gas or building buildings, the disciplines remain the same. But I’m still astonished by the extent to which simple business disciplines appear to be missing from many areas of public sector activity.” He points out that any business shrinking
philip hammond Born: 1955, Essex education: Oxford University Family: Married to Susan, three children (and a dog!) Parents: Local government officer and housewife
philip hammond
productivity at 2% a year, as the NHS is, will go bust sooner or later. The Conservatives propose introducing a mechanism called the Office of Budget Responsibility, which will hold the government to account to balance its books over the economic cycle. They would also return to the Bank of England ‘macroprudential regulatory’ powers that it had until 1997 to control the growth of debt in the economy as a whole. “Gordon Brown took them away from the Bank, but he didn’t give them to anyone else, they just disappeared, so no-one was monitoring this explosion of debt,” argues Philip. Hammond believes the PM must accept a share of responsibility for lax regulation in the UK and all of the responsibility for not using the good years to pay back some of Britain’s ballooning public debt. “We have to return to a world in which we live within our means,” he says. www.equiniti.com > 13
feature corporate actions
Anything in the post? Ever wondered how to collect, cash and reconcile 500,000 cheques in one month? Welcome to a behindthe-scenes glimpse of Equiniti’s recent Corporate Action for Lloyds Banking Group Not everyone has struggled for business during the recession. There are stories of pizza delivery companies making record profits, DIY stores doing brisk business and safe manufacturers running out of stock. And whilst the past six months have been very tough for many UK businesses, circumstances have meant that the Equiniti Corporate Actions team has had one of its busiest periods ever. The team has undertaken transactions such as the takeover of British Energy by EDF, rights issues for both Centrica and Banco Santander, and a scheme of arrangement and demerger for Friends Provident. However, the biggest project involved a series of transactions carried out for Lloyds Banking Group. Since December 2008, the Corporate Actions team has delivered an open offer with excess facility, a scheme of arrangement involving the migration of a number of HBOS registers involving a significant number of shareholders and a capitalisation issue for the newlyenlarged register. Following this work, the team was advised that there was to be a further open offer to redeem the £4bn of Preference Shares held by HM Treasury. 14 > Equiniti Magazine | summer 2009
Lloyds open offer in numbers
1.45m Number of shareholders on register
14 Days in which offer
had to be completed
95,000 Number of envelopes
delivered on ONE day
500,000 Number of cheques
that had to be cashed
£1.5bn Funds received through CREST on final day
{
At the end of the project, nearly 1.4m share certificates and cheques were printed and posted
}
Just 95,000 envelopes This open offer differed from the earlier one in a number of ways: • The register size had virtually doubled since the previous open offer – to 1.45 million shareholders. • The FSA had reduced the minimum timetable that companies could choose to adopt for open offers from 21 calendar days to just 14 – and this was the option selected. • This was to be the first open offer in the UK where any shares not taken up by shareholders would be sold through a book-building exercise, with any premium net of expenses to be distributed as a compensatory payment pro-rata to the relevant shareholders. This had been proposed as a potential future development in capital-raising events by the FSA.
Logistical challenge
The first step was for the project steering group, involving Lloyds Banking Group, its advisers and lawyers and the Equiniti Corporate Advice team to set the structure and timetable, and sign off the documentation within just three weeks. Then it was time to begin the Corporate Action itself. The location was provided by large new premises at Holm Oak, Worthing – a vast space that can be separated into sections as required and house a large number of staff. And a large team was certainly required, given the arrival one day alone of 95,000 envelopes. As well as substantial input from Equiniti staff, many of whom volunteered to work after their normal working day, the ranks were bolstered by approximately 230 agency staff, who had to be carefully instructed and managed. “It is vital to keep each section in the process stocked with work, to identify any bottlenecks as they occur, and deal with them immediately,” said Paul Charman, Senior Manager, Management Support. “To leave them can cause problems that take some time to resolve and could jeopardise the
Left: the Lloyds Banking Group HQ in London; Right: in full swing – two views of the Corporate Action counting room organised by Equiniti in Worthing
final provision of figures at the end of the task.”
Cheques and balances
Another big issue was the handling of money. Each application received was accompanied by a cheque (or even three or four in some cases) – the team banked almost 500,000 cheques over the period. Equiniti is looking at online solutions for tackling this process in the future. However, the majority of shareholdings are already held within the CREST system by institutional shareholders – and 90% of the funds received came through this route. Indeed, more than £1.5bn was received through CREST on the final day for acceptance. One of the most important moments of any transaction of this magnitude is the provision of the final figures to the client and their advisers. The shortened timetable also meant that Equiniti received many more applications over the last two or three days than would normally be the case. It was therefore a weekend to remember with numerous meetings and the complex co-ordination of multiple suppliers to incorporate
figures from various sources. However, the project was accomplished and the team successfully balanced the whole offer – not even to the nearest penny, but to the nearest quarter of a penny. The next step was to transfer the funds to HM Treasury... and then there was the small matter of share certificates and compensatory payment cheques to be printed and posted – almost 1.4 million in total. “It was a great team effort from everyone involved,” said Robert Moorhouse, Head of Operations, Group Secretariat, at Lloyds Banking Group. “That includes Lloyds Banking Group, Equiniti and a committed team of additional experts and suppliers. It shows what can be achieved in a relatively short space of time with good planning, expertise and strong relationships.”
If you are planning a complex task... ...or would like some corporate advice, please contact David Farbon on 0207 489 3529 or david.farbon@equiniti.com www.equiniti.com > 15
feature the david venus acquisition
How will the Venus deal help you? John Parker Managing Director, Client Services, Equiniti
David Venus Senior Director, David Venus
As Equiniti Magazine went to to press, news broke of Equiniti’s acquisition of David Venus, a leading firm of Chartered Secretaries. The move, following the acquisition of ICS Computing in May (see p27), underlines Equiniti’s drive to develop a broader portfolio of services helping clients through the recession and beyond. As the ink was still drying on the purchase paperwork, David Venus (Senior Director of David Venus) and John Parker (Managing Director, Client Services, Equiniti) convened to discuss the reasons behind the move – and the benefits it will bring. Business journalist Fraser Allen asks the questions
16 > Equiniti Magazine | summer 2009
What persuaded Equiniti to make this offer to David Venus? John: The acquisition has come in direct response to customer need. We’ve approached clients at senior level and said: “If we had a company secretarial proposition would you be interested in making use of it?” A number of clients have said yes, they would. David: Equiniti works with almost 60% of the FTSE 100. We have tremendous expertise to offer these companies but, as a smaller company, it is not always easy knocking on their doors. Working as part of the Equiniti group changes that proposition and will benefit everyone. Company secretary work is clearly very closely aligned to the services that Equiniti already offer, so it makes sense to be able to offer the entire package to those that want it. John: The two companies complement each other very strongly. We have been focusing on the FTSE 100 end of the market whilst wanting to develop our smaller company offerings for some time, and the strengths of David Venus in that arena will be very valuable. It gives us a much more compelling proposition as a key player across the whole market and takes market leading status to all of the UK. We can tailor our offering with
{
}
David Venus also has a share registration arm, with a number of AIM and PLUS clients
to say that not only can we help with the major corporate action, but we can also support your company secretarial activity is a very compelling argument. The acquisition also means that we have added about 500 David Venus clients to our books, clients who can now tap into the wider Equiniti network of expertise.
But the relationship between Equiniti and David Venus is not an entirely new one? David: Indeed, we did have a joint venture, but there were limitations on where we could take that. What it did establish is that we can work together very well.
What’s happening in terms of employees, buildings and all the other things that are often affected by acquisitions?
Together we’re stronger: Equiniti and David Venus have joined forces
separate delivery models depending on the size and needs of the clients which we believe is an industry first.
illustration: Mark Gabrenya
David: David Venus also has a share registration arm, with a number of AIM and PLUS clients, so we have a good reputation in areas where Equiniti might previously have been regarded as too large.
What’s the attraction from the client’s perspective? David: In the past, the company secretary might have phoned up Equiniti to let them know when a shareholder meeting was going to take place. Now they can also say “we also need some
help in drawing up the notice and documentation” and we can take care of it. The company secretary has one less thing to worry about.
John: If you look at the reputation of Equiniti and David Venus in the market, they occupy very different spaces but they are both synonymous with quality. This acquisition means that David Venus clients will have the benefit of Equiniti’s expertise in Share Registration and Corporate Advice while Equiniti clients will now have specialist company secretariat support. A large number of businesses have been restructuring this year. There’s been a lot of Corporate Action activity and that increases pressure on the in-house company secretarial function. Our ability
John: There are absolutely no planned changes to the existing staff and office arrangements. This has never been about cost synergies or staff reductions. This is about growth opportunities and will support us in delivering a tailored service. We will hopefully be employing substantially more people as we grow the accounts. David: Indeed, I hope it will open up opportunities for staff within each organisation who want to move around and develop fresh skill sets. John: I agree – Equiniti has been through a fair degree of change over the last 12-18 months. We’re investing in enhancing the level of our service – we’re feeling very positive about the future and what we can offer clients throughout the rest of 2009 and beyond.
contact us today: To find out more about Company Secretariat Services or Share Registration, please call 01903 833454 or email contact@equiniti.com
www.equiniti.com > 17
group company secretaRy feature Michiel brandjes xxxx subhead in here xxxx royal dutch shell Portrait: thomas fasting
our man in the hague Lawyer Michiel Brandjes worked all over the world before returning to the Netherlands as Company Secretary at Royal Dutch Shell Tell us a bit about your role I am the Company Secretary and General Counsel Corporate at Royal Dutch Shell. Part of my role is very similar to UK company secretaries in the FTSE 100 companies but there are a couple of differences. Firstly, I am not an Englishtrained chartered secretary – I’m a Dutch lawyer with a US qualification who has spent a lot of time managing legal requirements and large commercial projects around the world. A large part of my job involves heading up the legal department, providing services to finance, corporate affairs and human resources. I’m also responsible for a lot of regulatory disclosure and stock exchange matters, and some occasional major litigation against Royal Dutch Shell.
What are your current priorities? The main priority for me is driven by the global recession and the fall in oil prices. I have to reduce our costs by 20% and yet 18 > Equiniti Magazine | summer 2009
maintain the same level of quality service. This is a big challenge that means looking at our overheads and our suppliers. It’s certainly not easy but it is necessary – we have to get there, so we will get there. It’s a difficult time for everybody, not just at Royal Dutch Shell.
to Ecuador. Everywhere that I have worked has had its own qualities but living in China during a period of such spectacular growth was particularly interesting.
What did you want to do when you left school?
Professionalism is essential but it’s not enough on its own. It needs to be supplemented with diplomacy, a backbone of courage, a degree of independence and an overriding tendency towards common sense. Having said that, I have a lot of admiration for the professional standards that have been laid down in the UK – the quality of professionalism you have among company secretaries is fantastic and sets the UK apart from many other countries. A lot of the credit for that has to go to the Institute of Chartered Secretaries and Administrators.
I had a wonderful plethora of options to explore when I left law school but, as you move on, things tend to narrow down. However, I have been fortunate in being able to do many of the things I wanted to do. For instance, I wanted to see the world and to earn a decent living, and that is what Royal Dutch Shell has provided. I have worked on every continent, spending a total of 10 years living abroad, including Singapore, China and England (in Surrey), which has been fascinating, and have travelled all over the world through business, from Russia
What are the essential qualities of a good company secretary?
{
Michiel was lead counsel for a $4.2bn petrochemical complex in Guangdong Province
}
CV
Current role Company Secretary & General Counsel Corporate, Royal Dutch Shell plc 1998-02 Lead Counsel, Shell North East Asia, Beijing and Hong Kong 1995-1998 Senior Legal Counsel, Shell International Limited, London 1992-95 Head of Legal Department of the Shell Companies in Singapore WHERE DID IT ALL START? Born in 1954 in Dutch New Guinea (now Indonesia). Studied law in Rotterdam and then gained a second Masters of Law at the University of California at Berkeley. Began career as an attorney in Chicago.
Who inspires you?
picture: david fisher/rex features
I meet a lot of very bright, capable and shrewd people in the world of business who I very much respect, but I wouldn’t necessarily say that they inspire me. The people who really inspire me are the ones who make big sacrifices in their personal lives to help others – that is a quality I
The quality of professionalism you have among company secretaries is fantastic and sets the UK apart from many other countries
very much admire. For instance, I find Beat Richner very inspiring. He is a Swiss cellist and doctor who has established children’s hospitals in Cambodia, funded by his cello concerts (see www.beatocello.com).
What is the biggest lesson that you have learned in your career? That is a difficult question to answer. I come from a background with a strong emphasis on intellect, analysis and straight talk, so I would say that the biggest lesson I have learnt is the importance of people skills and communication. It is something that I have tried to brush up on over the years and is something that you can never stop learning.
What would make your job easier? Two things: less unnecessary emails and less office politics.
How do you unwind? That’s easy when you work in a city such as the Hague, which is very bicycle-friendly. My working day always starts and ends with a very scenic, 30-minute bike ride. That is very good for unwinding. I also live in a beautiful spot bordering a nature reserve, so I spend a lot of time gardening and watching the local wildlife – surprises are always appearing on my doorstep! Other than that, I like skiing, sailing, Japanese art and poetry… I have eclectic tastes and interests.
You can invite three people to dinner. Who would they be? Mahatma Ghandi, Winston Churchill and Nelson Mandela. If you are interested in appearing in this feature in the future, please contact contact@equiniti.com
www.equiniti.com > 19
Getting a firmer grip on your shareholder profile is possible through Equiniti’s new Investor Analytics division. Simon McGregor explains the benefits for clients When Simon McGregor was based in South Africa, he used to stage a presentation at the Stock Exchange called ‘Know who is buying and selling your shares’. “It went down a storm,” he says. “I used to get 30 CEOs per session.” The popularity was understandable. Gaining reliable intelligence on who is buying and selling shares in your company is crucial to developing an effective investor relations strategy. McGregor is an expert in this field, and now he is spearheading an innovative move for Equiniti as Managing Director of its new Investor Analytics division. “Equiniti has had an investor relations business since its inception, but there was a lot of scope for offering our clients more,” says Simon. “The task that I have been given is to make our investor relations offering the best available anywhere in the world, and we have already taken great strides in that direction.” So what are the benefits to Equiniti clients? Simon explains all….
Market surveillance
“The first thing that we did here was to make sure that our premium investor report was the best available. With that in place, we looked for gaps in provision in the UK that we could fill. We soon discovered that market surveillance, the kind that analyses daily settled trades and provides a real time rolling update of a listed company’s share ownership, is relatively new in this country. We have now developed that product.” 20 > Equiniti Magazine | summer 2009
SHAR EH
feature investor analytics
ER D L O
Do you really know Proxy solicitation
“The second major improvement has been the introduction of a proxy solicitation programme – that means managing the whole shareholder voting process, from when notice goes out for the shareholders’ meeting, right up to the day of the actual shareholders’ meeting and vote. The aim of proxy solicitation is to ensure our clients have as much knowledge as possible should there be any risk that a resolution will not be passed. We begin from two weeks prior to the meeting, and research likely reactions to proposed resolutions. We then
ascertain whether and when they plan to use a proxy vote, and provide frequent analysis showing proxies received against total votes required for each resolution. In this way we give our client a much clearer picture of what kind of support they can expect to receive. So we can provide intelligence, warning, and time for the company to act should we see any of these resolutions in danger of not being supported. Because we are involved in the compilation, distribution and receiving of the shareholders’ notice and, as the registrar, we are also involved in every stage of the shareholders’ meeting, we
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Take note: as of 1 October 2009, all company registers must be held at either the ROA or at a SAIL
ESTOR V IN MARKET S A UR VE IL
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BETTER KNOWLEDGE
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Gaining reliable intelligence on who is buying and selling shares in your company is crucial to developing an effective investor relations strategy
LA
REPORTS
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DAILY
NC
INVESTOR RELATIONS TRADES
INTELLIGENCE
PROXY SOLICITATION PROGRAMME
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SAIL
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AGM PROXY
PREMIUM INVESTOR REPORTS
s808 REGISTER
SECURE DIRECT ACCESS STORAGE
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Inspection Location (SAIL). As we are already the custodian of our clients’ shareholder registers, Equiniti is able to facilitate the efficient and easy transfer of s808 registers to its premises as a SAIL, ensuring secure storage and compliance with the law. This is an area in which we can really help our clients out in the months to come, and give them peace of mind with minimum disruption.”
Bridging the gap
your shareholders? illustration: Matthew Hertel/Eric campbell
feel it is logical to add the additional service of proxy solicitation.”
Investment analytics
“We had an investor relations department, a reporting department and an AGM proxy department, each located in different areas of the business. It was clear that there would be big benefits for our clients in combining all three operations so that they can feed into each other more effectively. That is how we created our integrated Investor Analytics business. As the share registrar for 675 clients, including almost 60% of the FTSE 100, Equiniti has immediate and direct
access to the register of shareholders, daily settled trades and s793 responses. All other providers have to come to us to ask for this information and as a result cannot turn reports around as quickly or as thoroughly as we can.”
Companies Act 2006 – ROAs and SAILs
“One of the most important changes brought in by the 2006 Companies Act concerns arrangements for inspecting company registers. As of 1 October 2009, all 13 registers must be held together at either the Registered Office Address (ROA) or at a Single Alternative
“One of the central aims of Equiniti’s investor relations business is to provide clients with a better knowledge of their shareholder base and help them to bridge the investment relations gap – the difference between their current share ownership and the profile that best fits their company’s future plans. If you’re a UK company with largely UK-based fund manager shareholders, and you have ambitions to spread that base more in geographical terms, you need to close that gap. Or if you have a spread of shareholders that are coming in for short-term periods, such as Hedge Funds, you might prefer a fund manager base that will support the company more over the long term. Or perhaps your base may be retail-dominant and you want it to have more of an institutional base. Without knowing where that company stands now, it is impossible to determine how big the gap is. Our contribution to the investor relations process is to analyse where that company stands now, determine that gap, and then help to close it.”
If you would like more information: To discover more about Investor Analytics, please contact Simon McGregor on 0207 489 3562 or email contact@equiniti.com
www.equiniti.com > 21
feature the UK economy
After the storm Global enterprise has not only been shaken by economic crisis – it’s also been stirred into action. Business journalist Victoria Masterton examines how some multinationals are planning for the return of brighter skies The rules of the game have permanently changed. So states a recent Ernst & Young survey of 570 leading global companies. While most businesses are still focused on survival, the report identifies a ‘significant minority’ who are looking to take advantage of the financial and economic fallout to pursue new opportunities – albeit with a different game plan. “Given the pressures that these corporates are under, it is remarkable that a slim majority had seen their business either improve or stay static over the past 12 months,” says Steve Varley, UK and Ireland markets leader, Ernst & Young. “The management challenge over the coming year will be to act even more quickly and decisively.” Almost half of those surveyed in E&Y’s Opportunities in adversity: accelerating the change report said that their operating model had been permanently altered by the events of the last 18 months, and that the regulatory framework for business had also fundamentally changed. 56% of the 22 > Equiniti Magazine | summer 2009
executives said their risk management processes had been permanently altered. Other alterations to their business model – price sensitivity, profitability, competitive sensitivity and economic stability – were viewed as more temporary, although a significant minority (more than a fifth in each case) also viewed the changes in these areas as permanent. Looking post-recession, executives were fairly evenly split between expanding into new geographies, increasing strategic alliances, acquisitions, speeding to market and divesting non-core business. “In a similar study in January, we identified that, contrary to expectations, the crisis had actually accelerated reshaping trends,” Varley explains. “This has continued and we are now seeing even more companies with active plans to fundamentally change their business”. Over the last 12 months, global recruitment group Hays plc has reduced its headcount by 1,500 jobs – a fifth of its worldwide workforce – in response to the difficult market conditions. However the company, which has 391 offices in
28 countries, is also investing in gaining market share and strengthening the business for the longer term. “We see fantastic long-term opportunities to take our business model to other countries,” explains Chief Executive Alistair Cox. “In the last six months we’ve opened up in Russia and India. Will those new offices materially impact our bottom line in the next 12
{
Recession: noun A temporary decline in economic activity or prosperity – Oxford Concise Dictionary
}
It’s been a gloomy year for forecasters
“We are seeing more companies with active plans to fundamentally change their business” Steve Varley, UK and Ireland markets leader at Ernst & Young
months? No. But over the next five years those will be seriously big businesses that will be helping our bottom line.” Cox points to the group’s German operation, which has grown ten-fold since its acquisition in 2003 and is now Hays’ third biggest business after the UK and Australia. Half of group profits were from outside the UK last year, up from 5% five years ago.
By sector, Hays is investing more in traditionally defensive markets, particularly the public sector, and is increasing its focus on areas of resilience such as renewable energy, nuclear energy, compliance, risk and insolvency. Cox also sees increasing future opportunities in markets such as healthcare. “The NHS currently employs 1.3m people, but half of those will www.equiniti.com > 23
feature The UK economy
have retired in the next ten years,” he explains. “The UK isn’t turning out enough people to replace them, so either the NHS will have to get smaller through spending cuts, or the retirement age will have to be increased, or visa restrictions relaxed to allow more people to come into the UK, or we as citizens will simply have to put up with poorer services. That’s a sector that’s going to have skills shortages for the long term.” In the meantime, the company’s shortterm mantra is to maximise every pound of profit generated and turn it into cash. This is then used to pay down debt, train staff and invest in technology. Hays is half way through a £40m programme to develop front and back office IT systems that will be “fundamental to building long-term competitive advantages” in the business, Cox says.
On the buses
Transport operator FirstGroup plc also benefits from a diversified portfolio of services across more than one continent. Its operations include UK Bus (FirstGroup is Britain’s largest bus operator, running more than one in five of all local bus services); UK Rail (it is the UK’s largest rail operator, with four passenger franchises); and four operating divisions in North America, including the federally-mandated Yellow School Buses – which carry nearly 4m students every day across the US and Canada – and Greyhound, the only national provider of scheduled intercity coach services in the US and Canada. “It is this diversity that underpins the strength and resilience of the group and mitigates the impact of an uncertain economic environment,” says Chief Executive Moir Lockhead. “Within our large contract-backed businesses, which
FirstGroup now runs North America’s Yellow School Buses
24 > Equiniti Magazine | summer 2009
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Recessions aren’t all bad news Fast food vendors and rock stars have reason to smile What's the connection between Burger King and Playboy? Not much perhaps – except that both international brands were launched during the US recession of 1953. And the lesson? Fast food and escapism are two sectors that not only survive in a recession – they can actually thrive. Earlier this year, McDonald’s, KFC and Domino’s Pizza all announced significant expansion plans in the UK. Meanwhile, as a sign of the times, Playboy has decided to beef up its economics coverage by appointing Duff McKagan as its financial correspondent. Duff, better known as a member of rock band Guns N’
account for 50% of group revenues, we have clear visibility of revenues, despite the challenging and fast-changing conditions. In those areas of the business that are dependent on passenger revenue, we have already taken action to reduce costs, match supply to demand and ensure that the group has a robust, efficient base on which to continue to deliver long-term, profitable growth.” The group-wide cost reduction programme is scheduled to deliver savings of £200m over the next year and includes shedding 3,500 jobs in the US and UK from First’s workforce of 135,000. This will ensure that the group is operating as cost-effectively as possible at a time when passenger revenues are growing at a slower rate. Rachael Borthwick, Group Corporate Communications Director for FirstGroup, suggests it’s not so much the rules of operation as the speed of execution that has changed. “Our view is that the recessionary environment is an opportunity to push forward changes to modernise the business that would be more difficult to do, or would take longer, in a growth economy, when there is more resistance to change,” she says. “For example, when we acquired Greyhound
Roses, has unlikely credentials for the job. He sobered up during the last recession and swapped the wild life for a business course at Seattle University. But recessions aren’t just good news for burger vendors and reformed rock stars. Microsoft and Apple are well-known examples of companies who were launched in recession and, much further back, Procter & Gamble emerged boldly from the economic collapse of 1837. Sadly, there is also another beneficiary of hard times. In July, the Manchester-based insolvency firm Begbies announced that its profits had risen by more than a quarter.
The recessionary environment is an opportunity to push forward changes to modernise the business that would be more difficult to do in a growth economy as part of the Laidlaw (International Inc, 2007) acquisition, it was vastly archaic, with high operating costs and high costs of sales. We always knew we planned to modernise it and make changes, but this sort of environment forces you to look at that much quicker.” First announced in May that the Laidlaw acquisition had been successfully integrated, with $150 million per annum synergy targets achieved early. The North American expansion helped drive groupwide pre-tax profits up 31% to £326.4 million in the year to March 2009. It's not been a bad recession for everyone.
question time: Laura Jackson Laura Jackson, Assistant Company Secretary at newspaper giant Trinity Mirror plc, offers a glimpse into her life – and the lure of archaeology!
post did you Q What hold before joining
Trinity Mirror? before I started at A Shortly Trinity Mirror I took three months out to start my own business – www.shopskivvy.com – a personal shopping and gift service for men. Before that I worked at Rio Tinto plc as a secretarial assistant and prior to that I spent three years at Brambles Industries plc. the best thing Q What’s about running your own business? enjoy having creative A Ilicence and bouncing ideas off my business partner. I even designed our logo from scratch. It allows me to use some of the skills that are not required for my day job. I enjoy getting to meet new people so for me it’s not a job, it’s fun.
the best business Q What’s lesson you’ve learnt so far in your career? assume, check! For me A Don’t nothing is a given. When someone tells me a piece of information, I always check for accuracy. Attention to detail is really important in my role.
challenges do you Q What face during a typical day in the office? is a key A Prioritisation challenge as we deal with a number of different departments across the business, as is keeping up-to-date with regulatory reviews and reforms. It’s also up to us to enhance our profile within the business, so it’s important to get out and about and meet colleagues face-to-face.
portrait: graham jepson
skills are most Q Which integral and valuable
to your role? professionalism, A Confidence, discretion and adaptability. I often deal with high-profile members of the board, other Trinity Mirror employees and shareholders, so I need to know how to adapt the pitch of my communication accordingly.
you could start your Q Ifcareer all over again, what
I often deal with high-profile members of the board, other Trinity Mirror employees and shareholders, so I need to know how to adapt the pitch of my communication accordingly
would you do differently? don’t really think I would A Ichange the path of my career so far, but I would perhaps pursue an entirely different career in the first place. I think I would have liked to be an archaeologist. I did a law and history degree and I found that my love for history really balanced out some of the “black and white” of the law. Archaeology would have combined my love for history, travel and solving problems. Sometimes I’m given projects and asked to track back maybe 40–50 years to find out what a company’s corporate structure would have looked like then. Although time consuming, the reward is worth it! www.equiniti.com > 25
snapshots 2009 figures show ProSearch services are in high demand
Prestigious new Chairman for Equiniti – Sir Neville Simms Former Tarmac Chief’s experience in driving innovation and fulfilling client service expectations will prove invaluable Equiniti are pleased to announce that Sir Neville Simms will be joining us as our new chairman; Neville will be replacing Bob Thian who is moving on to pursue a growing number of international commitments. Equiniti will benefit from Sir Neville’s extensive expertise as a Chairman and board member in terms of strategic input, business development and corporate governance. He is currently Chairman of International Power plc, a post he has held since its demerger in 2000 from National Power. Until 2005 he was Chairman of Carillion plc, the Construction and Business Services group created in 1999 by the demerger from Tarmac plc,where
26 > Equiniti Magazine | summer 2009
he was Group Chief Executive. He has also held a number of significant public sector roles, including member of the Court of the Bank of England (1995-2002) and Chairman of the UK government’s sustainable Procurement Task Force (2005-2007.) Sir Neville has significant experience in long-term contracting and the provision of services to
This appointment will benefit Equiniti as we drive to be leaders in all of our markets sophisticated corporate and public sector clients. As such he is focused on driving innovation and fulfilling client service expectations. This will benefit Equiniti as we drive to be leaders in all of our markets and develop a more integral client business.
At the half-way point of the year, ProSearch is braced for its busiest period to date, as it works to reunite investors with their unclaimed assets. Duncan Stevens, Head of Asset Reunification, explained that almost 20,000 shareholders have already been located as part of a project with mobile phone company O2. “Since the start of the year, ProSearch has been heavily involved in the conclusion of the project for O2 with a greater than expected number of claims continuing to come in many months after the official closing date,” he said. “Of the 25,000 dissenting shareholders that we started out to trace in mid 2008, there are now fewer than 6,800 who remain unclaimed – a success rate to date
of over 72% with a total returned value of £37m.” ProSearch has also been appointed by clients such as Akzo Nobel N.V., AWG Plc and EMI Group Limited. Louise Dinnage of Akzo Nobel UK said the firm had appointed ProSearch to trace over 7,600 former ICI shareholders with unclaimed assets. “It’s early days, but the results are beginning to flow through and we have so far been impressed by the professionalism of the ProSearch team and their joined up approach with Equiniti,” said Louise. “It has been beneficial in making it a smooth process for us and for the claimants.”
Equiniti gets creative
soon be based in a new, creativefocused environment, designed to stimulate the dynamic team’s creativity. Dawn Everett, Head of Creative Services comments: “We are delighted to introduce the benefits of our new service proposition for both the Equiniti business and our valued and prestigious clients. By introducing best practice marketing and communication techniques to your Employee Share plans, the results speak for themselves. “I would be happy to discuss the benefits of our new Creative Services team and explain how our expertise can significantly enhance your employee share plan take up.”
Equiniti is pleased to announce the introduction of a new in-house Creative Services team, which will provide a complete creative design solution, delivering a wealth of creative expertise and innovation to Equiniti’s clients – key elements in the creation of successful, awardwinning employee communications. The service offers graphic design, direct marketing and communication consultancy, ensuring that client schemes are both visually appealing and engaging, strengthening the impact of schemes and increasing take-up and participation. The new team also provides complete end-to-end campaign management and fulfillment including documentation mailing. The Creative Services team will
For more information on ProSearch, contact Duncan Stevens on 01732 741411 or duncan.stevens@ prosearchassets.com
To find out more about the Creative Services Team, call Dawn Everett on 01903 833290 or email dawn.everett@equiniti.com
Did you know?
for your diary
Through Equiniti’s shareholder programmes, just over £215,000 was donated to charity in 2008
Forthcoming dates Equiniti ESP Forum 8–9 September
equiniti by numbers
The Corporate Actions department reveals some of its vital statistics covering January-June 2009
52
The number of tasks completed
4,748,569
The number of shareholders serviced by those completed Corporate Actions
£14.68bn
A 185% rise in total value raised by companies compared to Jan-June 2008
2,463,505
22
The number of rights issues/open offers
Shareholders involved in rights issues/ open offers
£4bn
Value of largest task to date in 2009
For more information on Corporate Actions, please contact David Farbon on 020 7489 3529 or david.farbon@equiniti.com
Equiniti extends expert services ICS Computing, the IT Services organisation, is now part of the Equiniti group Although share registration remains at the core of the Equiniti service, the company's portfolio of expertise has been broadened through the acquisition of ICS Computing (now Equiniti ICS), the Belfast-based IT Services organisation. Equiniti ICS also has offices in London and Newbury (and a development centre in Chennai, India) and offers specialist support in HR & payroll, accounting & distribution and public sector software. The company has a reputation for working closely with IT business partners to create bespoke, tested software solutions and hardware infrastructure. Some of those partners include Compuware, Microsoft, HP, Tower
From left to right: Stephen McVittie – Business Development Manager, Nigel Farr – General Manager and Marie Stephenson – Operations Manager
Software, Citrix Systems, Cisco Systems, Synergex and Websense Enterprise. “With more than 270 clients already supported by 300 expert staff, Equiniti ICS has shown time and again its ability to deliver products and services that support the needs of our clients’ businesses,” said David Mawhinney, Equiniti ICS Managing Director. “We believe the partnership
is a natural one given that both companies are leaders in their fields with unparalleled client bases,” said an Equiniti spokesperson. “The technology expertise of Equiniti ICS and Equiniti’s strong administrative capabilities make a perfect fit.” To find out more about the services offered through Equiniti ICS please email contact@ equiniti.com or call Clare Patterson on 02890 454166
Location: Celtic Manor, Newport, Wales. Info: To book your place now email contact@equiniti. com or call us on 01903 833227 Implementation of Shareholders’ Rights Directive 3 August
The deadline for implementing the Shareholders’ Rights Directive in the UK. For more information, see Peter Swabey’s update on p9. Info: www.berr.gov.uk ifs ProShare Annual Conference & Exhibition 24 September
See ‘events’ on website below. Location: 1 Wimpole Street, London. Home of the Royal Society of Medicine. Info: www.ifsproshare.org ICSA Company Secretaries Conference & Exhibition 30 September
Location: QEII Conference Centre, London. Info: www.icsatraining.co.uk ICSA Corporate Governance Summit 7–8 October
Info: www.icsatraining.co.uk ICSA Awards 18 November
Will you be a winner? Location: The Brewery, London. Info: www.icsaawards.com ifs ProShare Annual Awards 2 December
Location: Grange St Pauls Hotel, London. Info: www.ifsproshare.org
www.equiniti.com > 27
Equiniti Annual ESP Forum 8th & 9th September 2009
Maximise the benefits of your employee share plans
Have you made yours? As Financial Directors and CEOs look closely at the return on investment of all company activities, gaining the most from your employee share plan is more important than ever before. This year, our ESP Forum will support you in this goal. Our sixth annual conference takes place on the 8th and 9th September at the luxurious five star Celtic Manor Hotel, Newport. You will hear from industry experts on a range of key topics including • Managing your plans during the economic downturn • The impact of tax changes and • Utilising new technologies for maximum effect. There are perfect networking opportunities throughout the event culminating in our fantastic gala dinner. At only £399 it's an event not to be missed. This price includes bed, breakfast, luncheon, gala dinner, 1 and a half days of conference sessions, access to a host of leading industry experts and of course all of your conference materials.
To book one of the few remaining places call Laura on 01903 833227 or alternatively, you can email us at marketing@equiniti.com www.equiniti.com
SHARE REGISTRATION + RETAIL INVESTOR SERVICES + EMPLOYEE BENEFITS