Start Extract: EasyJet's compact pilot lands on ITV


ITV recruits the Chief Financial Officer of Microfocus

Chris Kennedy, the Microfocus CEO moving to ITV, has no importance for the big challenges.

In the software group, he faced the problematic integration of the HPE business of EUR 8.8 billion, followed by the departure of the then CEO of the software group and a sale that had halved its share price. Now it moves to a broadcaster that is facing constantly decreasing television advertising revenue and intense competition from streaming services such as Netflix.

Why, then, would it do – or even ITV? Partly due to the media and technology careers, which is much more relevant and varied than the Microfocus era: 17 years at EMI for the music business and the role of the CFO at 24 billion pounds of technological expansion Arm Holdings before sold to SoftBank in Japan. But mainly because he spent five years as CFO to ITV's new head, Carolyn McCall, when he was a member of the easyJet.

And this morning he made clear what he was thinking about on a trailer that would look a bit upset if he was looking at the most ITV romcoms cheeses: "Chris was CFO of easyJet plc from 2010 to 2015, during whose share price quadrupled, dividend payments were introduced and the company joined the FTSE 100. For its achievements during this period Chris was voted FTSE 100 CFO [sic] in 2015. "

Probably CFO of the year, not CFO of the FTSE 100. Is it really so good?

Microfocus has hired Brian McArthur-Muscroft to replace Mr Kennedy who agreed to continue to finalize the annual accounts for the 18 months ended October 31st. And these look a little better. This morning, Microfocus said its business continued to meet expectations with "improved revenue growth in the second half of the year". Revenue of the year will be around the best end of the 6% -9% guidance for the season.

Incoming McArthur-Muscroft had previously worked as CFO of PaysafeGroup and CFO of the TeleCity group.

Key numbers:

  • £ 660,000 – Mr Kennedy's annual salary at ITV – plus a pension rate of 9 per cent of the salary and benefit scheme that pays up to 165 per cent of the salary and a long-term incentive scheme that pays 225 per cent of the salary.

Conclusion: And the new Managing Director of Microfocus and the new Chief Executive Officer of ITV have major challenges – but Mr Kennedy looks more attractive.

As the city expected? No, but it's easy to understand why Mrs. Carolyn wanted her easyJet colleague back.

OQ verdict: It joins and feels so good. . . but can co-operation Carolyn McCall-Chris Kennedy do for the price of the ITV share what they did for easyJet? As with the last day's flight from Alicante to Gatwick, it would not be realistic to expect to take off yet.

Schroders approach to the GAM hedge fund business

It comes to something when the most "prized asset" in a fund management company is what can say that its numbers were stable – but that's how bad it was in the Swiss GAM team that hit the crisis.

During the third quarterly transaction update two weeks ago, the assets under management of Systematic's GAM activities remained unchanged at SFB 4.6 billion – while total assets in its investment management business declined from 84.4 SFr billion at the end of the second quarter to 66.8 billion thirds, after a profit warning and the suspension of investment manager Tim Haywood.

It is not surprising that GAM rejected an approach to the systematic division – which includes the Cantab quantitative hedge fund – by the Schroders UK fund manager. As two people familiar with the issue revealed in the Financial Times, GAM turned Schroders because he was worried that selling one of his valuable assets would make a total sale more difficult. GAM has said in recent months that it is exploring all the strategic options to maximize shareholder value, which analysts say, including the direct sale of the Zurich team.

Key numbers:

  • SFr17.6 billion was downgraded to GAM-managed assets, from SFR 84.4 billion at the end of the second quarter to SFR 66.8 billion.

Conclusion: GAM estimates that if it even considers an offer for a systematic business, it will not get a decent price for the rest.

As the city expected? Probably not completely unexpected.

OQ verdict: If there was any doubt what it means "exploring all strategic options to maximize shareholder value," it will not be right now. It does not mean that the business will be sold in part; if they did so, Schroders' approach to Systematic would be taken into account. Probably means direct sale.

Today's Small Talk column from Kate Burgess focuses on Apple IQE technology vendor:

People have the need to cut tall poppies in size. Stock market investors do. Last week, IQE – South Wales technology, whose shares tripled more than two years – moved to the top of the leader board with retailers Debenhams, Marks and Spencer and Pets At Home. The ranking of IQE is stunning, not only because it is a British tech fairy tale that makes gizmos for Apple iPhones, but also because it is a junior market tiddler.

Read the rest of today's Small Talk column here.

The FT Opening quote, with Matthew Vincent's comment, is the early update of Square Mile. You can receive it by e-mail at 8 am with your registration here.


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