THE TIMES (UK): Special Report: Who is business champ of 2004? Paul Durman introduces the runners and riders for our prestigious annual award: “Gammell was in the right place again in January when Cairn struck an enormous oil reservoir under the Rajasthan desert in India. As further finds suggested Cairn had stumbled on almost a billion barrels of oil, the company’s shares spurted from about £3 to £15. Shell could only look on in embarrassment: it had sold Gammell the rights to the field for a few million pounds.” (ShellNews.net) Posted 13 Dec 04
IT was Franklin D Roosevelt who said: “Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort.”
The business world has seen a lot of creative effort in 2004, and a lot of achievement.
The return of confidence that coincided with the invasion of Iraq in 2003 continued into this year. The American economy was strong, and the barn-storming performance of China, supplying the world with cheap goods, suppressed any fears of inflation.
This was a good environment to be making money. And some of those who are in the running to be The Sunday Times Business Person of 2004 made stupendous amounts this year, sums that would make Croesus weep.
Prominent among them was Philip Green, the retailer who took almost £650m of dividends from BHS and Arcadia — a flourish to compensate him for missing out on buying Marks & Spencer.
Lakshmi Mittal soon put that into context as he took a £1.1 billion dividend from the three-company merger that created the world’s biggest steel producer — and, incidentally, identified Mittal as Britain’s wealthiest resident, with a fortune of £12 billion.
Creating huge wealth is not the only measure of business success. Our award seeks to recognise someone who has had a big impact on the success of his or her organisation, or on the economy as a whole. He or she will be a role model for other entrepreneurs or an inspiration for investors.
The candidates are listed below. Many others were considered before selecting these as our frontrunners. We have even listed a few who should not apply.
Who do you think should win? The Sunday Times business team will choose the winner over the next two weeks, taking into account readers’ views. The winner of the prestigious annual award will be announced in this newspaper on December 26. Send your comments and analysis to firstname.lastname@example.org
Sergey Brin and Larry Page
Despite a troubled flotation, the Google twins had the last laugh. After numerous controversies, Google was forced to slash the price of its shares to $85, valuing the search engine company at a “mere” $25 billion.
Yet, in its first four months as a public company, the shares have more than doubled in value, putting Google on an stratospheric rating rarely seen since the heyday of the dotcom boom.
Google’s first results were much better than expected. Sergey Brin and Larry Page, its founders, are already cashing in by each selling $1.2 billion of shares.
Bob Fuller and Gareth Jones
This time last year Britain’s first 3G mobile-phone company looked an expensive mistake. It had no handsets, few customers and a quickly acquired reputation for appalling service.
With Fuller as chief executive and Jones as chief operating officer, 3 has made more progress this year than virtually anyone thought possible. It has been attracting 300,000 customers a month thanks to cheap ThreePay pre-pay deals, aggressive and quirky marketing and much better phones from LG.
3 will enter 2005 with an estimated 3m customers paying an industry-beating average of £40 a month. Vodafone et al can no longer ignore their upstart rival.
The former Scotland rugby international has made a habit of being in the right place at the right time. Bizarrely, he is a childhood friend of both Tony Blair (they were at Fettes College together) and George W Bush.
Gammell was in the right place again in January when Cairn struck an enormous oil reservoir under the Rajasthan desert in India. As further finds suggested Cairn had stumbled on almost a billion barrels of oil, the company’s shares spurted from about £3 to £15.
Shell could only look on in embarrassment: it had sold Gammell the rights to the field for a few million pounds.
In September, Cairn entered the FTSE 100 as the biggest independent oil producer in Europe. Gammell is fond of talking about oilmen needing “brave pills”. The medicine seems to be working.
Green lost the £9 billion battle for Marks & Spencer — the second time in as many years that he has withdrawn from a major bid — but he continues to generate huge amounts of wealth for his backers, principally himself.
Green took £187.5m of dividends from BHS and £460m from Arcadia, the group that owns Top Shop and Dorothy Perkins. Although Arcadia had to borrow £500m from HBOS to make it possible, the effusive praise from his bank manager Peter Cummings underlines the scale of Green’s achievement in wringing profits from previously underperforming businesses.
While quoted retailers fret about a lack of sales growth, Green just focuses on generating cash.
Roger de Haan
Here’s one fiftysomething who won’t have to worry about the adequacy of his pension. De Haan spent much of the year contemplating a flotation of Saga, the insurance and travel provider, which was founded to cater for the over-fifties by his father.
But a market valuation could not match the stupendous £1.35 billion offered in October by Charterhouse, the private- equity group. The price was almost four times Saga’s annual sales. De Haan is thought to have banked more than £1 billion from the deal. He bought out his younger brother Peter for £80m in July 2002; Peter de Haan will have made another £50m or so from his preference shares.
The hippest chief executive in technology enjoyed spectacular success with both his companies in 2004. Pixar is again filling cinemas with The Incredibles, its latest computer-animated hit.
Even that pales beside the iPod phenomenon, Apple’s Walkman for the 21st century. Aided by the pastel-coloured mini iPod, sales exploded to reach an annual rate of more than $2 billion.
Steve Jobs also brought iTunes to Europe, immediately claiming a 70% share of the legitimate music-downloading market. The sleek new iMac received the best reviews of any computer Apple has ever made.
And he survived a brush with pancreatic cancer in the summer.
Sir Terry Leahy
Performance at Tesco, as if to compound Sainsbury’s woes, seems to get better and better. Its latest quarterly results astonished even its many admirers: international sales up 18.2%, UK sales up 12.3%, and like-for-like growth of 9.8%. Nobody else comes close.
Leahy’s triple triumph comes from out-competing his rivals, a successful international strategy and constantly expanding the range of goods and services sold. The biggest danger is arrogance and complacency.
The creation of Mittal Steel, through a threeway merger of Ispat International, LNM Group and International Steel Group, gave the Indian tycoon control of the world’s biggest producer. The deal, which allowed Mittal to pay himself a £1.1 billion dividend, also shone a light on his stupendous wealth.
With a fortune estimated at £12 billion, he is now Britain’s richest resident. So he can afford the £30m he is said to have spent on his daughter’s wedding (Kylie Minogue does not come cheap) and the £57m he paid to Bernie Ecclestone for a house in Kensington Palace Gardens.
Britain’s most astute housebuilder seems to have done it again — by calling the top of the housing market.
Pidgley’s controversial restructuring of his company could return £1.45 billion to shareholders by 2010 as he liquidates his traditional housebuilding interests to focus on urban-regeneration schemes. Some investors were angered that Pidgley and his team could end up with a 15% stake worth £100m.
But good judgment is worth millions. And the recent weakening in the housing market suggests that Pidgley could scarcely have timed his move better.
Sir John Rose
The aircraft engine maker has given its shareholders a bumpy ride over the years. But Rose has climbed through the turbulence in 2004, with fresh propulsion from the contract to supply engines to Boeing’s new 7E7 Dreamliner — a huge defeat for the rival Pratt & Whitney.
Rolls-Royce is already supplying engines for the Airbus A380 “super-jumbo”, which is the other workhorse for the next generation of commercial air services.
It now has an order book of almost £20 billion, underpinning future profits.