ITV hires Microfocus chief financial officer
Chris Kennedy — the chief financial officer of Microfocus who is moving to ITV — clearly doesn’t mind big challenges.
At the software group, he struggled through the problematic integration of the $8.8bn HPE business, followed by the departure of the software group’s then chief executive and a sell-off that halved its share price. Now he is moving to a broadcaster that faces ever-declining TV advertising revenues and fierce competition from streaming services such as Netflix.
So why would he do it — or ITV even want him? Partly because of a media and technology career that is far more relevant and varied than his time at Microfocus: 17 years at music business EMI and the CFO role at £24bn UK tech darling Arm Holdings before it was sold to SoftBank of Japan. But mainly because he spent five years as CFO to ITV’s new boss Carolyn McCall when she was running budget airline easyJet.
And this morning she intimated what she thinks of him. In a trailer that would seem a bit gushing if it previewed the most cheesy of ITV romcoms, the company said: “Chris was CFO at easyJet plc from 2010 to 2015 during which time the share price quadrupled, dividend payments were introduced and the company joined the FTSE 100. For his achievements during this period Chris was voted FTSE 100 CFO [sic] in 2015.”
Presumably CFO of the year, rather than CFO of the entire FTSE 100. Or is he really that good?
Microfocus has hired Brian McArthur-Muscroft to replace Mr Kennedy who has agreed to stay on to finalise the annual accounts for the 18 months ended October 31. And these are looking a bit better. This morning, Microfocus also said its trading had continued in line with expectations with “an improved revenue trajectory in the second half of the year.” Full-year revenue will now be around the better end of the guidance of -6 per cent to -9 per cent for the period.
Incoming Mr McArthur-Muscroft had previously worked as CFO of PaysafeGroup and CFO of TeleCity Group.
- £660,000 — Mr Kennedy’s annual salary at ITV — plus a pension allowance of 9 per cent of salary and bonus plan paying up to a maximum of 165 per cent of salary, and a long-term incentive plan paying up to 225 per cent of salary.
Bottom line: Both the new Microfocus CEO and new ITV CEO have big challenges — but Mr Kennedy’s looks the more appealing.
As the City expected? No, but it is easy to see why Dame Carolyn wanted her easyJet colleague back alongside.
OQ verdict: Reunited and it feels so good . . . but can the Carolyn McCall-Chris Kennedy partnership do for ITV’s share price what they did for easyJet’s? As with the last flight of the day from Alicante to Gatwick, it would be unrealistic to expect it to take off just yet.
Schroders approach for GAM hedge fund business
It comes to something when the most “prized asset” at a fund management company is the one that can report its numbers were flat — but that is how bad it has been at crisis-hit Swiss group GAM.
In its third quarter trading update two weeks ago, assets under management in GAM’s Systematic’s business were unchanged at SFr4.6bn — while overall assets in its investment management business fell from SFr84.4bn at the end of the second quarter to SFr66.8bn in the third, following a profit warning and the suspension of investment director Tim Haywood.
No wonder, then, that GAM has rebuffed an approach for the Systematic division — which includes the Cantab quantitative hedge fund — from UK fund manager Schroders. As two people familiar with the matter have revealed to the Financial Times, GAM turned Schroders down because it was worried that selling one of its prized assets would make an overall sale more difficult. GAM has said in recent months it is exploring all strategic options to maximise shareholder value, which analysts say includes an outright sale of the Zurich-listed group.
- SFr17.6bn fall in GAM investment division assets under management, from SFr84.4bn at the end of the second quarter to SFr66.8bn.
Bottom line: GAM reckons that if it even considers an offer for the Systematic business, it won’t get a decent price for the rest.
As the City expected? Probably not entirely unexpected.
OQ verdict: If anyone was in any doubt what “exploring all strategic options to maximise shareholder value” meant, they won’t be now. It clearly does not mean selling the business off piecemeal — if it did, Schroders’ approach for Systematic would be considered. It most likely means an outright sale.
Today’s Small Talk column by Kate Burgess focuses on Apple tech supplier IQE:
Humans have an urge to cut tall poppies down to size. Stock market investors do it. Last week, IQE — the South Wales technology business whose shares have more than trebled in two years — moved to the top of the short-sellers leader board alongside retailers Debenhams, Marks and Spencer and Pets At Home. IQE’s ranking is surprising, not just because it is a British tech fairytale making gizmos for Apple iPhones, but also because it is a junior market tiddler.
Read the rest of today’s Small Talk column here.
FT Opening Quote, with commentary by Matthew Vincent, is your early Square Mile briefing. You can receive it by email at 8am every morning by signing up here.
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