Lloyds Banking Group has come under fire from unions for announcing 990 job losses

3:59pm UK, Tuesday February 07, 2012

Lloyds will shut its back office sites in Dudley, Romford, Newcastle-upon-Tyne and Scunthorpe, with the loss of 990 jobs.

The bank, which was bailed out during the 2008 financial crisis and is now 40% owned by the taxpayer, stated the cuts were part of restructuring plans already announced last year.

The latest job losses will fall on the bank’s group operations, executive functions, wholesale and insurance divisions.

Lloyds, which employs just over 100,000 people, stated it would seek to re-deploy staff where possible and compulsory redundancies would be a last resort.

Some 31,000 jobs have gone at the bank since it took over Halifax Bank of Scotland three years ago, incurring major losses.

Lloyds’ CEO waived his bonus for 2011 following a poor performance by the bank

Unions have reacted angrily to the announcement, saying it is a “devastating” blow to workers in areas that could not afford any job losses.

Accord general-secretary Ged Nichols said: “Whilst Accord has informed LBG that it must do everything possible to avoid compulsory redundancies and work with us to provide support and guidance to those affected, the truth is that even those who volunteer to go will find it difficult to find alternative employment in these difficult economic times.”

David Fleming, national officer of Unite, added: “Unite will be holding discussions with the bank, with the objective of minimising the need for job cuts following this further restructuring. The organisation must do more to offer redeployment opportunities to their workers.”

Last June, Lloyds chief executive Antonio Horta-Osorio announced plans to cut 15,000 jobs and halve the bank’s international presence as part of a restructuring designed to save £1.5bn a year by 2014.

Mr Horta-Osorio waived his bonus for 2011 following the bank’s poor performance and his two month’s of medical leave.

source : news.sky.com

The company’s return to the rail sector comes after the recent completion of its non-compete agreement under terms of its deal with former joint venture partner Calibre, which prevented it from providing certain rail services for two years.

Engenium’s movement back into the sector will put it on course to compete for mining-related project work and see it go head-to-head with Calibre.

The return by RDG’s Engenium to the rail sector will see it focus on rail project delivery, particularly in heavy rail infrastructure supporting the mining industry. 

In 2010 Calibre made the move to full ownership of Calibre Engenium which at the time had annual revenue of about $100 million and employed over 300 staff.

The consideration paid by Calibre for full ownership of the JV was not disclosed at the time of the deal.

However Engenium posted profit of $29.9 million from the sale of non-current assets in the 2009/2010 financial year.

Apart from a small amount of equipment, the only non-current asset on its books was its share of the joint venture.  

The Calibre Engenium joint venture was successful in capturing contracts on most of the iron ore expansion projects in the Pilbara between 2005 and 2010.

Engenium managing director, Wayne Peel, stated Engenium was well positioned to expand in the rail sector.

“With offices in Perth, London and now Brisbane we have a dedicated and highly experienced rail teams available in the two most significant mining regions in Australia, WA and Queensland,” he said.

source : www.wabusinessnews.com.au

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9:36pm UK, Monday February 06, 2012

The prime minister’s office has offered no official explanation for the delay.

However, a senior government official told Sky News that Mr Papademos’ decision to push back speaks with the leaders of his coalition government by a day was “not a setback”.

“More time was simply required to iron out a final text of measures being drafted by the prime minister and team of visiting inspectors from the European Union and International Monetary Union,” the official said.

He stated the measures, which had been concurred to “in (their) overwhelming majority,” would be given to the party leaders of Mr Papademos’ coalition government for final review.

An agreement, the official said, “was expected well ahead of Thursday”, when the Eurogroup convene.

Austerity measures in Greece have already caused riots

It is the second time in as many days that Mr Papademos has moved to shore up the support of his socialist, conservative and far-right coalition partners as Greece’s international lenders insist on a new rash of brutal budget cuts – including wage and pension cuts – in exchange for a proposed 130bn euro rescue package.

With Athens facing a 14.4bn euro bond redemption on March 20 – money this cash-strapped country does not have – failure to win cross party agreement this day could push Greece closer to a messy default with global financial impact.

The delay follows a five-hour meeting the prime minister held on Sunday with the party leaders of his coalition concurring on some “basic issues”, including the need to press ahead with spending cuts of 1.5% of gross domestic product, or 3bn euros in 2012.

But, as speaks heated up over what those cuts would entail, party leaders exited Maximus Mansion – the prime minister’s office – with remarks which suggested a hazardous deadlock.

“They are asking for more recession,” stated main opposition New Democracy leader Antonis Samaras of the creditors’ demands.

“I am fighting in every way to avoid this,” he added.

The head of the small far-right Laos party, Georgios Karatzaferis, stated he “will not contribute to a revolutionary explosion arising from impoverishment”.

Greek prime minister Lucas Papademos has delayed crucial austerity speaks twice in as many days

Eurozone ministers had hoped to meet on Monday to finalise details of the mammoth bailout, the second being patched together by the European Union and the International Monetary Fund.

However, patience with the Greeks is quickly waning.

Luxembourg’s Prime Minister Jean Claude Juncker, who also chairs the eurozone’s 17 finance minister group, warned of the dire repercussion Athens faced if it failed to meet lenders’ demands for added austerity.

“If we should determine that everything is going wrong in Greece, then there would not be a new programme, then that would mean that in March a declaration of bankruptcy would occur,” he said.

Pundits and politicians across the political spectrum have riled in response, accusing Europe and its top pay master, Germany, of blackmailing Greece, forcing it to wage even more brutal budget cuts as the sole cure for the country’s debt woes.

“It is beyond clear that in a country in deep recession this particular policy mix of austerity is not working,” Notis Mittarakis, a senior economy strategist with New Democracy said.

Officials privy to the crisis speaks told Sky News that party leaders and their teams were scrambling to find alternative cut backs that could meet or as one official put it “water down” creditors’ demands for lower wages, salary and pension cuts on top of already 30 to 40% slashes sustained in the past two years.

“If these measures are adopted and the government does in fact cave into pressure, then workers will be faced with an armageddon,” warned Thanos Vassilopoulous of Greece’s biggest labour union GSEE.

“We must resist. We must revolt.”

GSEE and Adedy, the civil servants union, have called for a 24-hour nation-wide strike on Tuesday, warning of heightened strike action in response to added austerity.

source : news.sky.com

Shares in Ramelius completed up 2.5 cents, or 2.25 per cent, at $1.135.

The company stated a ramp-up to around-the-clock milling at Mt Magnet would be complete next month.

Ramelius acquired the operation in 2010 from South Africa’s Harmony Gold Mining Company for $40 million.

The company also on Monday reported higher mill throughput and grades at its flagship Wattle Dam mine in WA, producing about 6,000 ounces of the precious metal in January.

“At the current gold price, this represents an operating profit of approximately $6 million for the month,” Ramelius stated in a statement.

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source : www.wabusinessnews.com.au

A rise in US job numbers has helped the world’s largest economy

11:08am UK, Saturday February 04, 2012

The fall in American unemployment also helped European shares, with Britain’s FTSE 100 closing up 1.8% – a six-month high.

Germany’s DAX completed 1.7% higher, while France’s CAC-40 gained 1.5%.

The US Labour Department stated companies hired 243,000 employees in January, the strongest jobs growth in nine months. Analysts had expected the figure would be 140,000.

The news pushed the unemployment rate in America down to a three-year low of 8.3%.

World markets were given a further lift after other figures showed US factory orders rising for a second straight month during December.

The surge in hiring in the world’s largest economy last month drove the technology-based Nasdaq to an 11-year high as optimism grew that the labour market was on a steady path to recovery.

And the Dow jumped 156.82 points to 12,862.23, its highest mark since May 19, 2008, about four months before the Lehman Brothers investment bank collapsed.

The London stock market rallied on Friday

Signs of an improving economy and an absence of bad news from Europe have helped Wall Street stocks rally since last year.

“It is really hard to find something not to like in the jobs report,” stated Andrew Goldberg, market strategist at JP Morgan Funds in New York.

“There is genuine strength in this report with broad-based jobs creation.”

While the news was positive, it will take more months of substantial job gains to maintain momentum and Mr Goldberg warned: “There is a long way to go for this economy.”

He added: “There is no doubt that no matter how good this report is, this is still a lukewarm jobs recovery.”

Analysts have cautioned that the US market is still susceptible to risks such as a worsening debt crisis in Europe or political uncertainty in the Middle East that could push up the oil price.

Worries over Europe’s debt troubles still have the potential to send markets reeling in the months ahead, Lawrence Creatura, an equity portfolio manager at Federated Investors said.

source : news.sky.com

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6:16pm UK, Friday February 03, 2012

In an interview with Sky News, Sir Philip Hampton stated that leading politicians could undermine inward investment in the UK if they continued to demonise business.

He said: “I think we have got to watch it. I think some of the sentiment from Government ministers and [other] politicians recently will not necessarily help confidence in business morale and inward investment.

“We need to recognise that businesses have got to succeed and that when they do so people can get very well paid.

“But overall I think Britain is still a great place to invest, to work and to live. I’d like some of those messages to be more prominent from our political leaders from time to time.”

RBS bosses mis-judged the public mood over pay and bonuses

The comments from the chairman of a company which is 82% owned by the British taxpayer are remarkably frank – but they reflect a growing sense of unease within the business community following the furore over the pay of Stephen Hester, RBS’s chief executive, and the decision to strip his predecessor, Fred Goodwin, of his knighthood.

Sir Philip’s remarks come at the end of a torrid week for RBS, which is braced for further political anger later this month when the bank reports its financial results for 2011.

“We will have some people on very substantial packages but we will have far fewer than in recent years paid at the very highest levels. I would state some of this concentration on bonuses is overblown. Our wage bill for the bank is £8bn-9bn, so actually even though bonuses get all the headlines they are a very small part of the total wage bill,” he told Sky News.

Nonetheless, Sir Philip acknowledged that RBS would have to modify the way it paid its top executives if it is to avoid a similar row erupting in 12 months’ time.

“It’s a difficult issue, clearly – we have had a clear demonstration of the hostile public mood in the last week,” he said.

“We could have got elements of our communications better. Having stated that we are a commercial organisation and we have to pay rates of pay to our top people for this hugely challenging task that are reasonably consistent with the rest of the market otherwise I don’t think we would be able to retain and incentivise the people we need to turn this bank around.”

Former RBS boss Fred Goodwin was stripped of his knighthood

The RBS chairman, who was parachuted into the role alongside Hester in the autumn of 2008 when the bank was bailed out with a £45bn injection of taxpayers’ money, rejected suggestions that pay at the bank was now being set by ministers rather than the RBS board.

“I made the recommendation about the remuneration of Stephen Hester, which was accepted and discussed by the board. We do consult with shareholders including the Government, both as a shareholder and on the political aspects of the decision.

“We haven’t received any direction from government at all. We received their input which we try to take into account when we can.”

Sir Philip denied that Hester had been on the verge of resigning over the decision to relinquish his bonus of 3.6m shares – worth just under £1m at the current share price – but admitted that the RBS board had drawn up plans for his departure.

“All boards of directors have contingency plans for chief executives being ill or leaving for other reasons.

“If you look around the world and try to find candidates to run one of the largest banks in the world in this exceptionally challenging environment, it is no surprise that that’s a very small list indeed of people who are ready, willing and able to do this sort of job.”

He also defended the pay policy of RBS, saying it had been a pioneer in reforming the way bankers are remunerated.

Business secretary Vince Cable called for a crackdown on boardroom pay

“We have led the way in British banking terms in getting our pay structures more appropriately based – bonuses are all in shares, deferred and subject to claw back. We have ticked every corporate governance box, but we clearly are not carrying all our stakeholders along in the decision-making we are doing.

“It’s very important that this bank does have the right people running it. We are hugely important to the British economy and the bank is two-thirds of the size of the economy on its own. We’ve got to get this right and we’ll only get it right with the right people.”

Referring to the crackdown by ministers on boardroom pay across British business, Sir Philip also told Sky News that he concurred with proposals outlined last month by Vince Cable, the Business Secretary.

“I think out-of-hand is too strong [a description for remuneration practices] but the culture of pay is certainly not where it should be. There is a concern that pay is too high, particularly when performance is weak,” he said.

“The banking sector is at the epicentre of that. Returns to bank shareholder have been pretty mediocre to disastrous and yet banker pay has become massive, so there is not a linkage. That is changing.”

source : news.sky.com

The appointment follows Mr Barnaba’s retirement last year from Azure Capital, of which he was co-founder and co-executive chairman, along with his long-time business partner John Poynton.

He adds more firepower to Macquarie’s WA team, following the bank’s recruitment two years ago of leading corporate adviser Michael Ashforth from Gresham.

Macquarie was ranked as one of the top investment banks in WA – alongside UBS and Hartleys – in WA Business News’ 2011 corporate finance survey, based primarily on its prominence in the M&A market.

Azure and Gresham were the top M&A advisers in Perth for most of the past decade, but have slipped a notch following the exits of Messrs Barnaba and Ashforth respectively.

Macquarie stated that Mr Barnaba will work across all of its businesses.

“We are very pleased to welcome Mark to Macquarie,” Macquarie Group chief executive Nicholas Moore stated in a statement.

“Mark brings considerable industry knowledge and experience to the Macquarie team in WA and his appointment will support the continued build out of our activities in the region.”

Mr Barnaba stated “this represents an exciting new chapter in my career”.

“I look forward to working across all of Macquarie’s businesses, from Perth, and to building on the organisation’s already excellent track record of client service.”

Mr Barnaba is also chairman of Western Power and a non-executive director of Fortescue Metals Group and Adept Solutions.

He was chair of the coordinating committee of the recent Commonwealth Business Forum, is a former chairman of the West Coast Eagles, and in 2002 was named First Among Equals in WA Business News’ inaugural 40under40 awards.

source : www.wabusinessnews.com.au

Facebook founder Mark Zuckerberg created a £2.3bn company from his university dorm room

12:20pm UK, Thursday February 02, 2012

On Wednesday, Facebook filed the necessary paper work to become a public company, seeking to raise $5bn (£3.1bn) in the largest floatation ever by an world wide web company on Wall Street.

The California-based website, launched eight years ago by Mark Zuckerberg from his Harvard University dorm room, reported net income of $668m (£422m) last year, up from $372m (£235m) the previous year.

Total revenue almost doubled to $3.7bn (£2.3bn) in 2011, with most of it coming from targeted advertising gleaned from personal information shared by the hundreds of millions of users of the platform.

Kathleen Smith, an IPO investment adviser at Renaissance Capital, said: “The company is more profitable than we had expected.”

$1bn: Profit Facebook made in 2011.900 million: Total number of pages, groups and events on the site.845 million: Number of active users of the site.483 million: Number of these social networkers who log on every day.350 million: Number of active users who access Facebook on a mobile device.250 million: Average number of pics uploaded each day.

Online game developers Zynga accounted for 12% of Facebook’s revenue, with the advertising and virtual coins purchased to play the games contributing $445m (£281m) to the 2011 balance sheet.

The IPO filing revealed that Facebook is the leading social network in all but six countries, notably China and Russia. It has over 845 million users including 483 million who log in daily.

Facebook’s total value is estimated as much as $100bn (£63bn), putting it on a par with McDonald’s, but behind Apple and Google.

Mr Zuckerberg, whose net worth has been estimated at $17.5bn (£11bn) by Forbes magazine, is the largest individual shareholder in Facebook and controls 57% of voting shares, according to the IPO paperwork.

But he was not the highest paid.

Sheryl Sandberg, who was lured away from Google four years ago to serve as Facebook’s chief operating officer, made more than $30.5m (£19.2m) last year while vice president of engineering Mark Schroepfer pulled in $24.7 million (£15.6m).

Mr Zuckerberg’s total package was $1.49 million (£940,000).

20 million: Number of times people install Facebook apps every day.7 million: Quantity of apps and websites integrated with Facebook.3,000: Number of Facebook employees.130: Average amount of friends per user.70: Number of languages on the site28.4%: Proportion of Facebook owned by its CEO Mark Zuckerberg

Facebook shares are not expected to start trading for several months, but the excitement immediately sent stocks up.

Michael Gartenberg, a technology analyst at Gartner, said: “It’s hard to think of an IPO in recent memory – even going back to Google and before that maybe to the Netscape IPO or the Yahoo IPO – to see this type of frenzy.”

He did not anticipate the stock market debut to have much of an impact on the average user, but stated the extra cash would grant the firm to grow and give it a new edge on competitors.

“Facebook going public doesn’t have that much implication for the vast majority of Facebook users unless they plan on buying shares – when they can finally get their hands on them,” Gartenberg said.

“Google did not change for users for the most part when it became public,” he said. “It grew. It expanded out to other services.”

Facebook stated it will list on Wall Street as “FB” but did not set a date for when it would start trading or specify whether it would be on the Nasdaq Stock Market or the New York Stock Exchange.

In a letter accompanying the IPO filing with the US Securities and Exchange Commission (SEC), Mr Zuckerberg, who was just 19 when he founded the network, outlined what he stated were the core values of Facebook and stated it “was not originally created to be a company”.

The Facebook chief executive wrote: “It was built to accomplish a social mission – to make the world more open and connected.”

source : news.sky.com

The company stated this day that Strange Investments has terminated the IP license agreement (signed in January 2010), which permitted the manufacture and use of the GT3000.

Coretrack has stated that it will commence legal action immediately against Strange Investments for loss of earnings and damages.

Strange Investments has alleged Coretrack breached the IP license agreement by fitting improvements or accessories to the rig and promoted and used the GT3000 for its contract at Newcrest’s Telfer gold mine without licensor agreement.

Coretrack disputed the alleged breaches.

However it also confirmed that a review of the performance of the GT3000 drill rig, when deployed at Telfer, found that the rig did not meet its technical and functional specifications.

This followed an announcement last month that the Telfer drilling program had been terminated early.

Coretrack advised that the drill rig would require pricey and time consuming modifications to meet the required level of output.

The termination of the licensing agreement means Coretrack would be unable to secure funding to address the drill rigs’ apparent limitations, required for Newcrest’s specifications.  

Coretrack CEO Bernie Kelly stated the company would look to move away from its Globe Drill business.

“We will now have to immediately downsize Globe Drill and commence the hiring out or selling of our drilling and workshop equipment,” he said.

Globe Drill currently has over $16 million worth of assets, including its GT3000 drill rig.

“Our employees and shareholders, who have invested millions of dollars, will no doubt be extremely disappointed by Mr Strange’s actions at this important stage of Coretrack’s development,” Mr Kelly said.

“Rest assured that we will leave no stone unturned in our efforts to pursue Strange Investments for loss of earnings and damages, on behalf of our shareholders through the courts.”

Coretrack’s share price fell 12 cents to close at 21 cents.

source : www.wabusinessnews.com.au

10:58pm UK, Wednesday February 01, 2012

In its filing with the US Securities and Exchange Commission, Facebook reported a net profit of $668m (£421m) last year on revenue of $3.7bn (£2.3bn).

The world’s largest social network had previously been expected to raise $10bn in what would have been the fourth-largest IPO in US history, after Visa Inc, General Motors, and AT&T Wireless.

But Facebook’s hopes of raising $5bn (£3.1bn) would be the most for an world wide web IPO since Google and its early backers raised $1.9bn (£1bn) in 2004.

The final amount is likely to change during the next three to four months as Facebook’s bankers gauge investor demand.

The world’s largest social network launched eight years ago and was created by Mark Zuckerberg in his dormitory room at Harvard.

The global world wide web phenomenon has more than 800 million members worldwide.

In a letter accompanying the documents, Mr Zuckerberg said: “Simply put: we do not build services to make money; we make money to build better services. And we think this is a good way to build something. These days I think more and more people want to use services from companies that believe in something beyond simply maximizing profits.

“By focusing on our mission and building great services, we believe we will create the most value for our shareholders and partners over the long term – and this in turn will enable us to keep attracting the ideal people and building more great services.

“We do not wake up in the morning with the primary goal of making money, but we comprehend that the ideal way to achieve our mission is to build a strong and valuable company.

“This is how we think about our IPO as well. We’re going public for our employees and our investors. We made a commitment to them when we gave them equity that we had work hard to make it worth a lot and make it liquid, and this IPO is fulfilling our commitment.

“As we become a public company, we are making a similar commitment to our new investors and we will work just as hard to fulfill it.”

Facebook’s long-awaited submission kicks off a months-long process that will culminate in Silicon Valley’s biggest coming-out party since the heyday of the dotcom boom and bust.

The company has appointed Morgan Stanley, Goldman Sachs and JP Morgan its lead underwriters.

Sky News reporter Hannah Thomas-Peter in New York said: “It is interesting that Facebook’s value comes from sharing and knowing a lot about its individual users, but there is a sharing of a different type that is going to have to go now that Mark Zuckerberg and Facebook want to be public.

“They have investors and shareholders that they have obligations to and it means opening the doors to a previously secretive company.

“They will now be under obligation to tell people about their growth, spending, their profits and losses.”

source : news.sky.com