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December Issue


In This Issue

Company Updates
Take Over Bid
Company Awards
The Glossy
November Issue

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Company Updates

Having carried out research into websites of publicly listed companies, we believe you may be interested in the following changes:

RBS plc - Open Offer to all shareholders in company the chance to buy shares at a cost of 65.5p each. Offer now closed, Government has 58% stake in RBS.

Woolworths Group plc -

26 Nov: Request a suspension of the trading of its shares on the London Stock Exchange.
27 Nov: Shares suspended and announcement made that discussions relating to the potential sale of its retail business have now ended. Discussions remain with BBC Worldwide relating to the possible sale of its 40% interest in 2 Entertain Ltd. Deloitte appointed by the court to find a buyer for Woolworths.

Babcock International Group plc - HQ Relocation 1 December 2008, to 33 Wigmore Street, London W1U 1QX Tel: 020 7355 5300 Fax: 020 7355 5360.

Centrica plc - At a general meeting on 21 November 2008 shareholders of Centrica approved a 3 for 8 Rights Issue at an issue price of 160 pence per share.

Barclays plc - Confirmation that 500m of Reserve Capital Instruments, made available by Qatar Holding LLC and entities representing the beneficial interests of HH Sheikh Mansour Bin Zayed Al Nahyan, have been placed with Barclays institutional investors in full. The Investors have each offered to make available up to 250m of Reserve Capital Instruments for clawback by existing Barclays institutional investors at par.

BHP Billiton plc - Statement made by the UK Takeover Panel Executive agreeing that pre-condition (A) to BHP Billiton's offer for Rio Tinto plc cannot now be satisfied and that, as a result, the UK offer period with respect to Rio Tinto and BHP Billiton ceased with immediate effect.

Land Securities Group Plc - Alison Carnwath appointed Chairman.

Hargreaves Lansdown plc - Results of Annual General Meeting (AGM) 21 November 2008.

Lancashire Holdings Limited - Giles Hussey appointed Director and Chief Executive Officer of the company's Middle East marketing operations.

Salamander Energy plc - Withdrawal of proposed takeover offer for Serica.

Northern Foods plc - Acquisition of the entire issued share capital of Ethnic Cuisine Limited ('Ethnic Cuisine') on 21 November 2008.

Rathbone Brothers plc - Completed the sale of its offshore trust operations in Jersey 15 October 2008.

Rank Group plc - Commencement of search for a successor to Martin Belsham as MD of Blue Square. Rank's chief executive, Ian Burke, will assume direct operational management in the interim.

Rambler Metals and Mining plc - Appointment of Director - John S Thomson.

Charter International plc - Under proposals implemented on 22 October 2008, holders of Charter plc ordinary shares became holders of Charter International plc ordinary shares. Charter plc became a wholly owned subsidiary of Charter International plc and has been re-registered as Charter Limited.

Corporate Communications Awards 2008. Awards for Excellence in Corporate Communications 26 Nov -

Among the awards:

Centrica plc won 'Best Corporate Website' among quoted and unquoted companies - a design aided by Northcote.

J Sainsbury plc won 'Best online annual report' and 'Grand Prix' award of quoted and unquoted companies.


Take Over Bid

Cast your mind back to 1990 and those of you who watched a bit of television, or fans of Bruce Forsyth may recall a short running program known as 'Take Over Bid.' The show only lasted about a year and its repercussions were, to say the least, not too widely felt across Great Britain. Sadly however, the same cannot be said for British industry, as once proud British companies are slowly consumed by foreign competitors able to take advantage of our open market policies.

What is happening to our businesses and why are they being sold off with little or no regard about the requirement for them to stay within these shores? This article isn't about not wanting 'Johnny foreigner' to be able to trade in this country, it is however, going to concentrate on our apparent lack of care of what happens to our companies, whether we should gripe about unfair laws which give foreign competitors the advantage and why, in a world of recession, keeping control really is the best way to safeguard our workforce.

Pilkington, the UK's largest glass making company and number 2 in the world was established in Merseyside 1826. When Nippon Sheet Glass (NSG) increased its stake increase from 10 to 20.6 per cent in October 2001, NSG said that there would be no take over approach, possibly because other previous attempts in the 1990s to buy the company were met with disdain by the workforce and locals who wanted it to remain in British hands. It was finally bought in 2006 by NSG in a 2.2 billion bid for the remaining 80 per cent of the shares.

Another major recent acquisition of a well known British brand was the Peninsular and Orient Steam Navigation Company (P&O). The fourth largest port operator in the world, it was once one of the largest shipping operators. Since 2006, with the exception of its U.S. assets, P&O was bought by Dubai Ports World creating the world's third largest port operator.

Other names of British industry which have fallen into foreign ownership, despite being robust companies include Corus, BAA or GKN Westland to name but a few. Several other British names have also been swallowed up, the current crisis means the 'Price is Right' as shares have plummeted, and as such, Alliance and Leicester has been bought by Santander, also owner of Abbey National.

It's not all one way traffic however as other British companies have been 'Playing their cards Right'. British firm BAE has been buying into the American defence market for a number of years now, whilst Vodafone recently bought into the Indian mobile phone market with its deal to acquire Hutchison Essar. The issues do arise, however, when markets, unlike our own, are not open creating an unfair playing field and opening UK markets to foreign take overs, whilst making it difficult for UK companies to enter into foreign markets. Both China and India are guilty of this, and protectionism is dangerous to Britain when the protectionist countries are becoming so economically powerful and have huge and increasing buying power.

   

There are two schools of thought on buy outs of British companies. The first is that when it comes to production, for example, companies aren't as foot lose as to move to another country as they feel fit, this is far too costly, though could possibly happen over time. The fact that British banks have fallen into foreign hands makes little difference as their foreign owners are unlikely to pull the plug on them, as this would be counter productive. And BAE, despite owning several US defence companies, as previously stated, can only exercise a certain amount of control over these companies. For example, the CEO of BAE isn't even allowed access to many of the manufacturing plants due to tight US national security, so this is another example of how foreign ownership can have little impact.

The other argument however is that foreign ownership puts the British work force at greater risk to exposure, especially in times of recession and the reason is quite simple. Companies tend to save costs by cutting jobs and production and whilst this is the case, trends suggest that it is generally foreign work forces who bear the brunt of such costs as governments put pressure on their indigenous companies to save jobs in their country. If this is the case now, then increasingly work forces across the UK may be feeling under threat. Having control is very important, and extremely critical during a down turn as companies look within their own borders to survive.

Do domestic companies operate as an extension of their governments? Many would argue the answer to this question is yes, especially when it comes to items of strategic importance such as utilities or defence. As a general rule, most Anglo Saxon style free economies, such as those of the United Kingdom and the United States believe it is irrelevant if a company is domestically owned or not. Foreign acquisitions are believed to be part of free trade where borders are open and thus business is made more efficient. The UK is possibly the biggest culprit of this Laissez-faire attitude; over the recent few years the UK has been the main target of cross border take overs and like the recent Pilkington takeover, few people bat an eyelid these days.

All this is damning enough in a stable and peaceful world economy, however, this isn't the world we behold at this moment and to be fair, never was. Many countries do not operate an open attitude when it comes to business, many Asian countries and some European ones are very defensive when it comes to foreign ownership. These countries see the importance both politically and economically of keeping control of their major industries.

Protectionism has been blamed for exacerbating the problems of the Great Depression and most would rightly argue that protectionism on trade by imposing tariff and import quotas would be a dangerous thing; much of our wealth has been built up on free trade. Perhaps the areas that need to be looked at, however, are whether core industries and businesses need to be better protected from foreign aquisition in order to safeguard the British workforce and for the government to keep some control within our own borders.

The question now has to be what can halt the British take over bid in order to retain some degree of sovereignty. Would Bruce Forsyth be proud? 'You Bet' he probably wouldn't.


Awards for Business

Over the past few days, there have been a number of award ceremonies designed to reward companies for going to great lengths to reach out to shareholders and the general public.

Whilst the focus is for these companies to keep themselves in the lime light and remain successful, there are companies who stand proud of their competitors, something which is especially important in increasingly difficult financial circumstances.

   

Investor communication is a continually expanding sector and companies that survive and grow are usually the ones who take time to invest in communication mediums from webcasting to producing clear, concise and accurate company reports, coupled with superior websites.

The companies listed below are those that were successful due to the time and effort spent on corporate relations.

The Investor Relations Society Best Practice Awards:

Information from IR Society

Best Business Review Winner: Anglo American plc

Best Communications of CSR Winner: RSA Insurance Group plc

Most Improved Communication - Annual Report Winner: Tullow Oil

Most Improved Communication - Web Winner: VT Group plc

Best Practice Corporate Website 2008 - FTSE 100 Winner: Imperial Tobacco Group plc

Best Practice Corporate Website 2008 - FTSE 250 Winner: Cookson Group plc

Best Practice Corporate Website 2008 - Small Cap & Aim Winner: GlobeOp Financial Services

Best Practice Corporate Website 2008 - International Winner: Nyrstar

Best Practice Communication Through The Annual Report 2008 (Printed and Online) - FTSE 100 Winner: Legal & General Group plc

Best Practice Communication Through The Annual Report 2008 (Printed and Online) - FTS 250 Winner: Premier Farnell

Best Practice Communication Through The Annual Report 2008 (Printed and Online) - Small Cap & Aim Winner: Robert Wiseman

Best Practice Communication Through The Annual Report 2008 (Printed and Online) - International Winner: BASF SE

Thomson Reuters Extel Awards

Information from IR Society

Best IR Website For Investors - FTSE 100 Winner: BT Group

Best IR Website For Investors - FTSE 250 Winner: Aveva

Best Annual Report For Investors - FTSE 100 Winner: BG Group

Best Annual Report For Investors - FTSE 250 Winner: Provident Financial

Best CFO at IR - FTSE 100 Winner: David Keens, Next

Best CFO at IR - FTSE250 Winner: Peter Williams, Daily Mail and General Trust

Best Overall IR for a UK Company - FTSE 100 Winner: Tesco

Best Overall IR for a UK Company - FTSE 250 Winner: Home Retail Group

Corporate Communications Awards 2008:

Information from Corp Comms Magazine

Sainsbury
Best online annual report
www.j-sainsbury.co.uk/ar08/flash/

Southern Water
Best employee communications
Coming Clean

VINCI
Best CSR Strategy
Be part of it...

Mencap
Agency: Public Life
Best corporate website - not-for-profit and public sector organisations
www.mencap.org.uk

Centrica
Agency: The Group
Best corporate website - quoted and unquoted companies
www.centrica.com

Sightsavers
Best annual report - not-for-profit and public sector organisations
Annual Review

Party Gaming
Agency: Radley Yeldar
Best annual report - quoted and unquoted companies
Annual report 2007

Direct Line, part of RBS Insurance
Agency: Lansons Communications

Best crisis management
Flooding: Managing reputation & long term business risk mitigation

Rio Tinto
Agency: Finsbury
Best financial and business media relations
Defence against BHP Billiton hostile takeover

Chloe Tait
The British Library
Young achiever
Public Affairs Officer

RSA Insurance Group
Best rebranding exercise
Rebrand strategy of Royal & Sun Alliance brand

   

Vodafone
Agency: Threepipe
Best understanding and management of new media
CUT-it-OUT

Surrey County Council
Best corporate publication by a public sector organisation
Jigsaw

Cadbury
Agency: 35 Communications
Best corporate publication by a private sector organisation
Corporate Brochure

Missing People
Agency: Leopard Films
Best use of broadcast as part of a communication strategy
BBC Missing Live

Essex County Council
Best communications by a public sector body
Fighting for Essex's Post Offices Campaign

Help the Aged
Best communications by a not-for-profit organisation
'Just Equal Treatment' campaign

McDonald's Restaurants
Best communications by a private sector company
Championing ''McJobs''

Nick Hindle
McDonald's Restaurants
Corporate communications professional of the year
Vice president, corporate affairs

Help the Aged
Grand Prix - not-for-profit and public sector organisations
'Just Equal Treatment' campaign

J Sainsbury
Agency: SAS
Grand Prix - quoted and unquoted companies
www.j-sainsbury.co.uk/ar08/flash/


The Glossy

It is a legal requirement for all public limited companies to provide its shareholders with an annual report showing its income and balance sheet.

The annual report, found online and often referred to as a glossy, will contain financial details, the company's operations and accomplishments and an overview from the chairman. On top of this, however, the company report also acts as a marketing tool which is what any reader should be mindful of when making an assessment of how well a company is performing.

Annual reports should be written with simplicity in mind so that those without specialist knowledge of finance or of the industry the company operates in, are fully able to understand the report. Key to a good report is consistent presentation of consecutive reports so that comparisons can be made year on year.

   

The annual report should give a clear direction of the company strategy and the direction the company intends on following as well as its objectives. Increasingly, companies are using the annual report as a way of advertising their Green credentials, as government and the general public put pressure on companies to be more eco friendly.

The cash flow statement is an important measure of a company's financial strength and shows where the cash has come from and how it has been used, compared to the previous year.

Another legal requirement is for companies to have their accounts examined by independent auditors, the auditor's report, which is designed to keep a check on the company reports and to look after the shareholder's interest. This is a must read for any shareholder or potential share holder.




Any comments or questions are always welcomed and should be directed to:

Nicholas Ealey Editor

nicholas.ealey@northcote.co.uk