The Guardian: Davies finds a Seoul mate: “Shell has long been a master of the public relations gaffe, but few compare with the one aired on Saturday evening television, following a candid interview on climate change with likable company chairman Lord Oxburgh. Channel 4 presenter Marcel Theroux told millions of viewers that after his interview he had asked Shell's PR staff when Lord O would retire: "Not soon enough" was the reported answer.” (ShellNews.net) 11 Jan 05
Welsh wizard adds new eastern promise
Tuesday January 11, 2005
Mervyn Davies, the Welshman who runs Standard Chartered, spent his Christmas working in Cape Town. Not, as some might have first imagined, secretly negotiating a deal to buy a South African bank after losing Absa to Barclays. Instead, he was on the phone to South Korea where the US private equity house which owned 50% of Korea First Bank had grown tired of waiting for HSBC to shake hands.
In just a matter of weeks, Davies landed himself a genuinely transformational deal. After Hong Kong, Standard Chartered's mainstay market, Korea will now become the bank's biggest operation. It is a big step that has required a £1bn share placing, almost 10% of Standard Chartered's market value, and a leap of faith by the bank's investors.
After taking the helm from Rana Talwar (who was ousted after a boardroom bust-up) Davies immediately won the City's support for a new 10-point plan and a breather on the acquisitions front, following Talwar's acquisition of Grindlay's in India and parts of Chase's Asian business. Instead of a dash for growth, Davies promised to focus on returns to shareholders and set a target return on equity of 20%.
In the intervening three years, he has done plenty of deals - in Indonesia and China in the past few months alone - but now with KFB he has broken all previous records.
Mr Davies was careful yesterday not to set himself too many new targets. Shareholders, though, are placing all their faith in the Welshman. With a current return on equity of 14% he still has plenty to do.
Pat O'Driscoll may be wishing she had stayed put at Shell no matter how difficult that company's fortunes looked last April when she moved over to head up Northern Foods.
Ms O'Driscoll did warn the City last autumn that Christmas trading at Northern would be tough, but she also gave a decidedly upbeat message about the longer term future. Her firm, she indicated, was a prime target for recovery.
Has the new chief executive been too bullish? Certainly a profit warning is not the best indicator of a company on the mend. Margins at Northern Foods are stuck at about 6% - half that of top peers such as Premier Foods. Improving the position is made especially difficult by the heavy dependence on Marks & Spencer, worth about £500m of revenue.
Under its own new broom, M&S announced cuts in supplier costs of 1.25% last autumn with a further 1.25% to take place this spring. The knock-on effect at companies like Northern is now clear.
As part of a three-year turnaround strategy, Ms O'Driscoll has already announced the closure of two factories and made 1,000 redundancies. There are no immediate plans for further cuts, she insisted yesterday, but more shutdowns must be likely. Yesterday's 4% share price fall would have been worse but for the fact that so many income funds are on the stock register, expecting a yield of close to 6%. There is now bound to be speculation on whether such a dividend payment can be maintained.
Time to go
On the subject of Shell, its share price might finally be making up ground on its arch rival BP, but some old corporate habits refuse to die.
Shell has long been a master of the public relations gaffe, but few compare with the one aired on Saturday evening television, following a candid interview on climate change with likable company chairman Lord Oxburgh.
Channel 4 presenter Marcel Theroux told millions of viewers that after his interview he had asked Shell's PR staff when Lord O would retire: "Not soon enough" was the reported answer.
The hapless flack, who might not have been allowed back into the office by a less forgiving employer, claims not to remember making such a statement. But, in truth, it sounded true to form.
Change of address
There was news yesterday that, for the first time in years, Steve Jobs's keynote address today in San Francisco at the annual Macworld Apple love-in will not be broadcast live over the internet. Instead, aficionados will have to wait a full nine hours before a recording is made available for streamed viewing.
Mac chat boards the world over were immediately clogged up by conspiracy theorists, discussing whether the move might herald a new era of corporate control freakery at Apple. Nine hours is a long time to edit out gaffes and any other unwanted footage.
Alternatively, there was a complicated suggestion that it was all a ruse to get users to download a new (and so far non-existent) version of Apple's Quicktime media player to view the speech.
We have a simpler theory. Since Mr Jobs's last Macworld turn, Apple, thanks to the iPod, has become rather more of a mass market player. On the back of that little music gizmo, a whole new generation of computer users are considering a switch away from Microsoft Windows to Apple's sleek new screens.
In marketing terms, this year's Macworld is a unique sampling opportunity. Yet live webcasts are rarely glitch-free: the last thing this company needs is to display a technical bottleneck that brings the Jobs transmission down.
Click here for ShellNews.net HOME PAGE