Finance In Focus
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PSD\'s Finance latest newsletter

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Finance In Focus Document Transcript

  • 1. December 2009/January 2010 Edition PSD The PSD newsletter for Finance Professionals Finance in Focus Welcome to the latest edition of Accountancy & Finance in Focus featuring a collection of articles on current topics written by high profile finance professionals. We hope that they will provide you with some interesting ideas and stimulate thought and debate. We are delighted to have such an impressive list of contributors and are extremely grateful to each of them for their time, commitment and effort in writing these pieces. I would also like to use this edition to put the spotlight on the committed and knowledgeable team of consultants that constitute PSD Finance who have developed an enviable track record of success in middle and senior level recruitment, encompassing all roles from Newly Qualified to Finance Director level as well as Audit, Tax, Treasury and Corporate Finance specialisms. Our expertise in Accountancy & Finance is further enhanced by an in depth knowledge of key sectors including PETER HARDY Banking & Financial Services, Business & Professional Services, Retail, FMCG, Communications, Software Managing Director PSD Services, Consumer Electronics, Leisure-Travel, Property & Construction, Energy & Utilities, Not-for-Profit and peter.hardy@psdgroup.com Manufacturing. PSD operates both permanent and interim teams and has over 50 consultants in the UK. Tel: 0207 970 9701 PSD teams also thrive in Paris, Frankfurt, Munich, Hong Kong and Shanghai. Steve Maley Daniel Bolton Andrew Varty Paul Instone Raz Keoshgerian Steve manages the London & Daniel manages the national Andrew heads up the regional Paul joined PSD in 1998 and is the Raz is jointly responsible for South East team. He has over 10 Finance team based in Manchester Finance team in Manchester which co-manager of the Finance managing PSD's Finance Contracting years experience recruiting senior which operates in the FM Provider, operates across all major industry Contracting team. He has business. He works in the level finance professionals and has Housebuilding & Main Contracting sectors in the Midlands, North & experience of working across Technology and Energy & Utilities had considerable exposure to both sectors. Having been with PSD for Scotland on both a permanent and several sectors and has developed sectors and brings with him a lengthy advertised and executive search over 9 years he has built up a interim basis. Having been at PSD a distinguished reputation as an track record as a high level interim & assignments. He personally focuses significant network in these areas for some 10 years he has built up a finance contracting recruiter. He has expert in the interim & contrcating on both the Energy & Utilities and and has worked with many FTSE substancial array of blue chip been with PSD for 7 years and has finance market. Paul’s own over 10 years financial recruitment Affordable Housing sectors with 100, FTSE 250 and SME clients through his specialism of specialism is in Retail & Leisure, experience, during which time he has particular emphasis on finance businesses at a senior level. recruiting senior finance Financial Services and Not-for- worked extensively with SME's as director & financial controller professionals into the FMCG and Profit sectors. well as a number of FTSE 100 & recruitment. Manufacturing sectors. FTSE 250 companies. steve.maley@psdgroup.com daniel.bolton@psdgroup.com andrew.varty@psdgroup.com paul.instone@psdgroup.com raz.keoshgerian@psdgroup.com Tel: 0207 970 9718 Tel: 0161 234 0364 Tel: 0161 234 0356 Tel: 0207 970 9676 Tel: 0207 970 9738 PSD is an international PSD PSD PSD PSD Other Office recruitment services London Birmingham Manchester Haywards Heath Locations organisation operating at the Middle to Senior 28 Essex Street 85-89 Colmore Row 2nd Floor 7 Perrymount Road Frankfurt Executive level. London Birmingham Abbey House Haywards Heath Munich We offer expert knowledge WC2R 3AT B3 2BB 74 Mosley Street West Sussex Manchester RH16 3TN Paris of our specialist markets: Technology, IT, Finance & M2 3LW Hong Kong Banking, Marketing & Sales, Shanghai Property & Construction, +44 (0)20 7970 9700 +44 (0)121 212 0099 +44 (0)161 234 0300 +44 (0)1293 802000 Customer Contact, Law, london@ birmingham@ manchester@ haywardsheath@ HR and Purchasing. psdgroup.com psdgroup.com psdgroup.com psdgroup.com
  • 2. PSD Finance in Focus How has the current market affected the running of the finance team of the substantial payments business at HSBC Merchant Services? With increasing focus on time critical financial information the finance department has become a more integral business support service. As a result the Finance Director is required to be far more visible across the organisation, to provide guidance, assurance and communication of business direction, tactics and performance, says James Richardson, Finance Directorof HSBC’s Merchant Services HSBC Merchant Services was until recently a This requires an FD to monitor and report part of HSBC. Now a separate business and business performance relative to the tactical a wholly owned subsidiary of Global and strategic direction set by the Board/CEO, Payments Inc it remains HSBC's preferred through production and communication of strategic partner for card processing in the relevant, accurate and timely financial UK. To assess how these changes and the information. current market is affecting business, Jon Holman, Consultant - Banking & Financial Who do you see as the biggest winners Services speaks with James Richardson, FD - and losers in the current payments HSBC's Merchant Services. market? Winners will be those who use the current How has the FD’s role in HSBC been economic challenges to their advantage. changing? Positioning to be even more successful as the My experience is that the FD's role has economic cycle turns by inspiring evolved to require greater front line commitment in people, focussing on the most communication as the business demands day important/valuable activities and driving to day, weekly and monthly guidance by efficiencies. Even more important in uncertain numbers. times, is the support of this by the communication of a clear direction/strategy, What is Global Payments Inc doing to recognising both opportunities and risks gain a competitive advantage and how is prevalent along the way and being flexible the finance team supporting this? enough, through foresight, to adapt. This We haven't changed direction as a result of ensures confidence and creativity grow economic/market events and remain throughout the organisation, whilst focus on focussed on growing our business both the end delivery of a mission and vision is organically and by taking opportunities for retained. business development as they arise. Our Losers will be the companies who succeeded competitive advantage comes from our in the good times by either riding a wave or independence (vs bank acquirers with their luck without focus on, or understanding competing demands), monoline focus and the shareholders in mind. A business exists to of, their core underlying business commitment and expertise of our people to serve customers, but without fundamentals. Having previously found things be flexible and disciplined towards achieving shareholder/investor support even a good easy, these companies don't have the capital our corporate aims. Finance is responsible for organisation could be in jeopardy. This structure, financial discipline, breadth of educating the business through the numbers requires the articulation of business organisational commitment, expertise, to ensure focus on short, medium and long performance through financial information, the knowledge, or culture to drive adaptation to a term goals are aligned and the correct core element of an FD's role. tougher economic reality. decisions are made to support these. Finance Directors need to understand their Being in a position of Finance Director business and wider industry, know how to for a major business, what advice would communicate to a broad spectrum audience you give to any aspiring Finance and be able to use the numbers to drive Director? performance. A Finance Director is the A Finance Directors role starts and ends with Managing Directors/CEO's co-pilot and the numbers. All businesses must focus on navigator and key to supporting the the customer, the FD has to bare organisation in delivery of the CEO's vision.
  • 3. PSD Finance in Focus How did one of Australia’s top Finance Directors adjust to a new life with one of the UK’s top companies? David Marr joined the supermarket giant Tesco in the Summer of 2008, moving to the UK from Sydney, Australia. His role as Divisional FD of Non-Foods was to ensure finance added value to a division, which with a turnover of over £6 billion represented a higher GDP than many developed western nations! Prior to taking up his role with Tesco David loyalty as well as enabling us to provide Culturally, it is a very dynamic, energetic and Marr ran a substantial finance team as tailored offers for them. This has proven to be fast-paced business, able to implement Chief Financial Officer at Australian a great differentiator for Tesco and we're activities or respond to market conditions very Pharmaceuticals Industries, a listed replicating Clubcard across many of our quickly. It's a business that has enjoyed great pharmaceutical wholesaler and health and international businesses. We understand the success over the past decade with an beauty retailer. This followed almost 5 benefits of customer insights and the Finance ambitious future growth strategy. It is a culture years with the Fosters/Southcorp Group, function plays a key role in ensuring these which demands success and is a highly where he had gained excellent front-line insights inform decision-making. rewarding environment for ambitious expertise in both Finance and Sales individuals. The breadth and scale of the Director roles, which have equipped him business, both domestically and internationally, well in his challenge at Tesco. Having experienced a recession previously provides great opportunities for people to what advice would you give to any aspiring broaden their experience and continue to In this interview David provides a Finance Director? progress. fascinating insight into the workings of the supermarket success that is Tesco and Firstly, recessions don't last forever! Naturally what it takes to take advantage of the you need to pay careful attention to current challenging market we face. trading conditions and ensure your business model is appropriate in difficult times but it is just as important to plan ahead so that you are How have you seen the role of Finance well placed to capitalise on the economic Director at Tesco change in light of the recovery. Given the financial climate, not recent market turmoil? surprisingly many businesses are focusing on optimising their Cash position at present and The role of the Finance Director and broader Tesco is no exception. Finance has played a finance function becomes even more important leading role in ensuring our Cash processes in challenging times. The need for accurate are robust, and educating the business on its and insightful information increases significantly increasing importance. and a key role of Finance is to both coach and lead the business in understanding the impacts of decision making. In order to make this as Having moved from a major Australian effective as possible, it's important that business to Tesco what has proved most everyone understands their role and how it can revealing about the cultural differences and add value to the business. how differing businesses are run? The UK retailing market is highly competitive offering customers significant choice. It is What is Tesco currently doing to gain therefore critical that our products are of the competitive advantage and how is finance best quality at the lowest prices and that the supporting this? shopping trip meets our customers' expectations. Given the size of the business, Everything we do is focused around delivering Tesco is managed on a functional basis, which great value products for our customers. We allows great focus across all areas of the place a lot of focus on our Clubcard loyalty business. It is the detail and depth of our program which helps us understand our customer understanding that makes Tesco customers better and which rewards their stand out.
  • 4. PSD Finance in Focus The Challenges of the Interim market are many. How does one of its most experienced practioners cope? Andrew Meyrick is a Qualified Chartered Accountant and has been a professional Interim Manager since the early 1990's having spent his earlier career within a diverse range of businesses including B2B and FMCG sectors. Having formed "Mesmeric", his own company, Andrew has developed a successful interim career spanning nearly 20 years. Why did you choose to become an Interim One of the other trends I have noticed is the shortage that the client may have on a short- Manager? move towards a very specific recruitment term basis which may be required to In 1990 I was working for Labatts as VP market, including sectors and job title in complete certain projects. Europe and after they failed to secure conjunction with the introduction of a more From an intangible perspective, I feel that the additional funding I started to feel that even transactional style of recruitment, which real value comes in the ability to provide an as a permanent employee that there was a increasingly is being used at a more senior unbiased and un-political opinion to offer high large element of exposure and vulnerability. I level as well as for junior level positions. levels of integrity, accountability and delivery decided that I had been fortunate enough to What are the key challenges that an Interim (via a total focus approach) throughout and to gain an extensive range of skills and therefore Manager faces when going into a new client be counted on to provide an honest opinion. wanted to put that into use - the option that I organisation Via this additional coaching, training and felt best suited this was to become an interim When going into a new client, I feel that the empowerment can also be delivered which in consultant. This was based on my view that key is to quickly ascertain the dynamics of the turn, help to raise the levels of staff motivation the interim career path suited my abilities to management team and to work out how and quality of work across both junior and be adaptable as well as enjoying the project cohesive they are; to identify the leader and senior staff. aspects of my previous positions. Increasingly to understand if there are any "preventatives" An established Interim has often gained solid I was feeling more drawn to project based i.e. those who could jeopardise progress. experience to a vast range of projects and deliverables so again this fitted well with my tasks and clients should use the time that Other key traits include remaining visible and background and personality. they have an Interim on-site as a source of approachable throughout the assignment; Lifestyle was also an important consideration getting down to the more granular aspects information on-tap which could help sort and I felt this provided me with the within the business, including working with problems across other areas of the business. opportunity to be more in charge of my own staff at all levels; conducting a quick GAP How do you ensure you keep your skills future. analysis of the situation to provide the client transferable in what could be argued to be an What changes/developments have you seen with a realistic timescale for the project and to increasingly sector specific market? in the Interim market over the last 10 years deliver the bad as well as the good news and I take the view that a product or service is a Over the last 10 years I have seen two key the ability to effectively manage client product or service irrespective of the sector categories of interims emerge: 1) Generic expectations. and that the core basics, when stripped i.e. those having a very broad, adaptable and What value does an Interim Manager add to a down, are generally the same. The key is to commercial skill set. 2) Standard i.e. to cover client organisation? understand the main drivers which are maternity leave or very specific tasks e.g. year There are many benefits of taking on an common to all businesses, i.e. revenue end/systems upgrades. Interim Manager and the benefits can be seen streams, the bottom line and cash flow. I have also seen a definite trend for across both tangible and intangible areas of I feel strongly that sectors are therefore not professional interims to prefer to work the business. unique and that finance and commercial skills through a good intermediary company with From a tangible perspective, an Interim is able are fully transferable strong contacts but also with a secure to deliver against specific goals and targets To be successful however it is essential for financial base to provide a regular payroll for project delivery. More often than not, the any interim manager to do their homework service. Interim coming in would have completed and to extensively research any new sector Additionally, I have increasingly seen the similar assignments in the past and can and client prior to interview and benefit of working through an established therefore draw on their previous experience commencement of role. It is also important recruitment consultancy to provide access to as well as count on the knowledge and to utilise any available network contacts their client base as individually an interim experiences of their network of contacts effectively to gather information and any would not have the resources, including time as/when required. Additionally, an Interim is additional insights. to cover such a vast market. able to fill-in any areas of skills or knowledge
  • 5. PSD Finance in Focus A global perspective on the impact of government spending on Power & Utility Projects Larno Pienaar is Regional Controller for Finance – Power Construction Projects for Alstom Power a global, world leader in integrated power plants for the production of electricity and air quality control systems. Here he examines the ever changing world. Power businesses are traditionally built on to power generation. Going forward, Alstom high value contracts with state utility Power must continue to grow this market companies. What impact are current share, even amid the current economic spending plans of these companies having on climate. It will require a focus on different Alstom Power both immediately and over the regions, active re-entry into these markets long term? and clean technology. As a market leader in If we look at simple economic principles such the reduction of CO2 Emissions, we have as supply and demand, we should not be achieved a very stable platform from which to affected at all. We deal in a commodity that launch into the short and long term future. speaks to the basic needs of people around the globe. It is a demand that exists now and What in your opinion are the critical factors in will continue to do so, regardless of economic maintaining stability though difficult times? climate. Having said that, no one was spared To maintain stability through difficult times, the the effect of the economic crisis. The funding following are critical factors must come from somewhere and as such, unless accompanied by priority sacrifices, The company needs to remain loyal to its there is bound to be a slow down effect of brand, its customers and its shareholders. some proportion for highly geared state It is critical for leadership to be transparent funding. Simplistically, this would be and honest about the severity of the situation governments that rely primarily on labor- but at the same time to stay away from the intensive markets to produce consumer doom and gloom scenarios. goods for export, investment funding and Leadership should cultivate a positive attitude international borrowing against trade account amongst all the employees of the company. deficits. Alstom Power have managed the When factors are external, it is no reflection storm well despite the delays experienced in climate and ensure long term sustainable on the employees' abilities to do their jobs the decision making from customers. We growth. Alstom Power has always focused on and do it well. show continued growth in both the Transport quality in execution and a superior, cost Be prepared for the up-turn and recognize it and the Power sectors. Furthermore, we have effective total solution. This renewed focus on when it happens a backlog of around 29 months worth of quality and alternative client oriented, cost sales at quarter end. This along with the fact effective solutions will stand the company in No matter what our discipline, our business is that the lifecycle of a power plant is measured good stead long after the crisis has gone. and always will be people. We get through in years and not days like a traditional tough times when we manage people and manufacturing concern, puts us in a good their perceptions in line with macro economic Alstom Power's global presence has grown realities. position to deal with the short and long terms extensively within the last few years, how has effects of the current economic climate and to this been achieved and how do you plan on minimize the impact on earnings and growth. capitalising on this growth ? Very simplistically, Alstom Power offered an What, if any, benefits have you witnessed integrated product and service solution to an during the current economic crisis? industry that needed very little In my opinion, the greatest benefit of the encouragement to grow substantially. The current economic crisis is simply that it has company gained market share by not only forced the organization to look at itself and to selling a product the market holds in high assess its strategy to deal with the current regard, but by selling a "one stop" approach
  • 6. PSD Finance in Focus How a major success story has been achieved in the toughest of sectors Balfour Beatty is a an international market leading major contracting business. Operating across a number of key sectors they have continued to despite of the recent downturn and have recently undertaken the acquisition of Parsons Brinckerhoff. Haydn Mursell, the Deputy Group Finance There was a slight hiatus at the end of 2008 Director explains a little more about life at when, in more normal circumstances, we Balfour Beatty and how they have managed would have expected to close four PPP to continue their success in this otherwise projects. Those projects took longer to reach trying time for many major contracting firms. financial close but we did successfully conclude all four projects in the first half of 2009, including the M25 widening scheme, Balfour Beatty is winning a number of key without needing the support of the contracts across various divisions, what is the government's debt fund. secret of your success? Balfour Beatty is focused on infrastructure and there is a continuing need from Being an international organisation, how has customers to upgrade or renew existing the business faired on a global scale? assets and to build new ones. Construction is a local business so Our diversity, in terms of the geographical knowledge of local labour and material supply markets we focus on (UK/Europe, US, Middle is critical. We have established a successful East and Far East) and the market sectors we domestic business in the United States, serve (utilities, roads, health, education, rail, which now accounts for over 30% of Group defence, facilities management etc), has revenue. Over time, the US business should served us extremely well. have the same scale and depth as our UK business. We also have successful operations Have you found your role changing at all in in the Middle East and the Far East, though light of the economic downturn? they are a smaller part of the overall Group. Balfour Beatty has continued to perform What does the future hold for Balfour Beatty? strongly, both operationally and financially. -provides control over the group's assets The resilience of our business model, with We recently announced the acquisition of -delivers cost effectiveness across the group pre-tax profit up 14% at the half year, has Parsons Brinckerhoff, one of the world's -delivers quality financial information on a leading professional services companies. It is been demonstrated in this difficult economic timely basis to support decision making a sizeable transaction and will achieve a environment. -acts as a catalyst for change to support number of strategic goals including The main impact on my job has been to effective performance establishing a global professional services reinforce the focus on cash flow, working and this is no different in a contract driven business of scale and creating a leading capital and liquidity, in addition to sustainable, environment. The ongoing challenge is to position in US civil infrastructure. long term profit delivery. This has required increased levels of internal communication maintain a finance function that has both the The acquisiton completed at the end of with group operating companies, in addition capabilities and the flexibility necessary to October 2009 and we will be focusing on our to the essential regular external meet the desired levels of performance in ability to offer awider range of capabilities to communication managing the expectations of these key areas. customers, to leverage existing relationships the market, as well as investors and banks in Has a general lack of available funding in the and the opportunities that come from a order to secure their long-term support. market had any effect on future projects? broader geographical presence. What is now expected from a finance function There has been a timing impact, more in a contract driven environment? particularly in the private sector, and less so in It has always been the case that the finance the public sector. function which includes all aspects of finance, tax, treasury and, risk management:
  • 7. PSD Which recruitment The PSD service is best for Finance my requirement? Team Over the past 12 months the PSD We are one of the longest established Finance Practice have worked in senior level recruiters in the finance market partnership with a number of housing clients through both and tailor our service to your specific needs retained and non retained assignments, we have listed a So what service can you offer me? assignment is complete (as in the process for selection of clients below: The answer is simple, we offer a broad range Executive Search above). of specific, tailored services. Combined Search & Selection This is a very Home Away Europe CB Richard Ellis So what does that mean for our thorough and effective process that combines Neo Capital Moat Homes clients? both the advertised selection and executive Well first of all our consultants have an expert Vinci Cancer Technology knowledge of the finance market and offer search processes. Taylor Wimpey Tuxedo Ltd highly effective recruitment skills that enable File Search (Contingency) We hold an us to deliver outstanding results and Interserve Facilities Carillion exceptional levels of service. We provide a extensive database of sector relevant Management comprehensive range of recruitment services candidates that provide a quick, effective and Network Rail aimed at the middle-to-senior executive level. immediate recruitment solution. Co-Op RM Education Whether your task is to recruit a number of individuals or to fill a single vacancy, PSD Interim & Contracting PSD can also supply Hyde Group SEEDA provide fast, efficient and effective recruitment quality professionals on an Interim/contract Barratt solutions. Liberata basis. This provides a quick and very effective Developments We offer the following services: Nokia Siemens solution for a short term assignment, specific Shanks Executive Search PSD employs a research Networks facility which tracks the careers of key project or contract position. Lowry Homes Barclays Bank professionals within its specialist markets. Dependant on the role we will suggest one or From the initial briefing meeting, research will a combination of these solutions to produce Kier Grant Thornton be carried out to identify relevant the best result for the client. professionals within the sector. Once the Serco Lendlease client has approved the “long-list” of potential Wincanton candidates confidential approaches are made, RBS In addition to the above services we can also explaining/selling the role. We then interview United Utilities First Base the candidates against an agreed set of offer: competencies and provide a shortlist of c3 – • Salary benchmarking Hertz Travelex 5 outstanding candidates. The client then Visa • Extensive research facilities Lloyds Banking interviews the shortlisted individuals offering the preferred candidate the role. PSD • Media response handling manages the offer process and maintains • Competency based interviewing close contact with the candidate through to We recruit both permanent and the start date. • Skilled screening and interviewing interim finance professionals into Advertised Selection We are a major • Personality Profiling/Psychometric Testing the following areas: advertiser in trade and national press (we are the UK’s largest advertiser in the quality • Interview and conference facilities (London, broadsheets by some distance) and have a Manchester, Birmingham & Hayward’s Heath) Banking & Financial Consumer strong, distinctive advertising style. Once the So which service is best for my requirement? Services Electronics brief is taken we will select the relevant Business & Leisure-Travel media, copyright the advert and handle the Each assignment we handle is unique which is why we offer a broad range of services and Professional Services Property & response. Interviews and selection will take place followed by offer management until the will advise which is most suitable for you. Retail Construction FMCG Energy & Utilities Communications Not-for-Profit Software Services Manufacturing www.psdgroup.com