Haythornthwaite Warmed Up For Centrica Chair

By Mark Kleinman, City Editor

The owner of British Gas is lining up a former head of Network Rail to become its new chairman as it heads towards the next general election braced for a political row over its freedom to set energy prices.

Sky News can exclusively reveal that Centrica is in detailed talks with Rick Haythornthwaite about succeeding Sir Roger Carr at the helm of Britain's biggest gas and electricity retailer.

The negotiations with Mr Haythornthwaite are understood to still be ongoing although an announcement about his appointment could be made as soon as next week. Other candidates are thought to remain in contention for the role.

Once confirmed, the new chairman will probably take over from Sir Roger, who is departing to become chairman of BAE Systems, the defence contractor, in the spring of next year.

Mr Haythornthwaite is a prominent figure in the international business arena. He is chairman of Mastercard Worldwide, the US-based financial services group, and has been a partner at Star Capital Partners, a private equity firm focused on investing in industrial companies.

Centrica's senior independent director, Mary Francis, who has been leading the search for Sir Roger's successor, is understood to have been enticed by Mr Haythornthwaite's strong political connections, enhanced during his chairmanship of Network Rail.

He is also well-versed in the energy industry, having spent more than two decades at companies including BP and Premier Oil.

The announcement of a new chairman of Centrica will be politically-charged given the broad expectation that British Gas will announce a hike of around 8% to gas and electricity prices in the coming weeks.

At last month's Labour conference, Ed Miliband, the party leader, sparked a row with the energy industry by pledging to freeze prices for the 20 months following a May 2015 general election.

Sir Roger condemned Mr Miliband's price freeze pledge, saying it could lead to "ruin" for Centrica, which added:

"If prices were to be controlled against a background of rising costs it would simply not be economically viable for Centrica, or indeed any other energy supplier, to continue to operate and far less to meet the sizeable investment challenge that the industry is facing," it said in response to Mr Miliband's announcement.

"The impact of such a policy would be damaging for the country's long term prosperity and for our customers."

A queue of political figures, including Lord Mandelson, the former Labour Business Secretary, also attacked the price freeze pledge as undermining the party's pro-business credentials, while the Chancellor, George Osborne, said there would be little to prevent utilities

Neil Woodford, Centrica's largest shareholder, added his voice to the tirade of criticism, saying that a Labour government would risk "the lights going out" and  accused Mr Miliband of "economic vandalism at a time when this country needs all the help it can get. It is insane, not least it is also fundamentally dishonest to suggest to the electorate that electricity and gas prices are where they are because of profiteering by the companies."

The timing and scale of energy companies' impending price increases have not been finalised, although one source said the industry was "playing a game of chicken" as the big six providers waited to see which of them would announce first.

Another major task for the new Centrica chairman is likely to be identifying a successor to Sam Laidlaw, the company's chief executive, who has been in charge for more than seven years.

Centrica declined to comment while Mr Haythornthwaite was unavailable for comment.

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HTC One Smartphone Wins At T3 Gadget Awards

By Stuart Duggan, at the T3 Awards

HTC was the big winner at the T3 Gadget Awards, with the company's HTC One smartphone picking up three prizes.

The Android handset beat both Apple's iPhone 5 and Samsung's Galaxy S4 to win Phone of the Year - and also claimed Gadget of the Year and the T3 Design Award.

The Sky+HD 2TB set-top box won Entertainment Gadget of the Year.

Samsung, Apple, Google and Sony were also recognised at the seventh annual T3s at Old Billingsgate in London.

Apple won two awards - Tablet of the Year and Computer of the Year for the iPad Mini and the Mac Book Air 11 inch.

Felix Baumgartner won Tech Moment of the Year

Sony also got two prizes - for Digital Camera and TV of the Year.

Google took home Innovation of the Year for Google Glass, while Samsung was named Tech Brand of the Year.

Other winners included Netflix, which won Digital Media Service of the Year.

Tech Moment of the Year was awarded to Felix Baumgartner for his daring skydive from the edge of space a year ago.

On any other year his fellow nominees would have had a very good chance: the Curiosity Rover reaching Mars, Gangnam Style hitting one billion YouTube views, goal line technology being introduced in football, the battle between the Xbox One and PS4 at E3 and the UK launch of 4G.

The iPad Mini won the award for Tablet of the Year

But it's difficult to compete with a man who fell to Earth from 128,097 feet.

"Fearless Felix" broke the sound barrier during his skydive in October last year, free-falling for four minutes and 19 seconds before landing smoothly in New Mexico.

T3 gave a new award last night with TED curator Chris Anderson getting the first ever Tech Legend prize.

Meanwhile, Michael Acton Smith, the creator of Moshi Monsters, won the Outstanding Contribution to Tech prize.

T3 magazine's editor-in-chief Kieran Alger said: "Chris Anderson's TED initiatives provide inspiration for a generation of enquiring tech minds while Michael Acton Smith's army of Moshi Monsters has brought fun to a mind-boggling 80 million people across the planet.

"They're both hugely deserving recipients."

Jason Bradbury from The Gadget Show was named Tech Personality of the Year.

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Carpetright Boss Quits Amid Profit Warning

High street furnishing chain Carpetright has issued a profit warning and parted company with its chief executive.

The firm said Darren Shapland will step down from his role with immediate effect, replaced by chairman and founder, Lord Harris of Peckham.

Lord Harris will become full-time executive chairman.

Shares slid 10% in early trading, easy to 7% down, as the update dashed hopes in the City that better conditions in the property market were benefiting Carpetright.

The firm added that as a result of a combination of a softer UK market and a further step down in the Netherlands, it was likely full year profit will be significantly below previous expectations.

In the 10 weeks to September 29, sales at stores open more than a year were down 2.5% in the UK and down 7.6% in the Rest of Europe division - made up of the Netherlands, Belgium and Ireland.

Lord Harris described trading conditions in Britain as volatile and in the Netherlands as "extremely difficult".

The company was founded in 1988 with a single outlet in Canning Town, east London, and was floated on the London Stock Exchange five years later.

It now trades from 616 stores, including 474 in the UK and 95 in the Netherlands.

Executive chairman Lord Harris will run the business with Graham Harris, who is currently trading director but will step up to the role of chief operating officer.

Mr Shapland joined Carpetright from Sainsbury's 17 months ago and oversaw a programme of store refurbishments, improved product ranges and increased digital marketing.

Until recently, like-for-like sales were on a positive trend, with annual profits more than double the previous year at £9.7m.

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New Car Sales Accelerate In September

More cars were sold in Britain during September than any month in the last five years, new statistics have revealed.

More than 400,000 new cars were registered, an increase of 12.1% on the same period last year.

The September 63 plate boosted sales and reached a total of 403,136 registrations, the Society of Motor Manufacturers and Traders (SMMT) said.

It was the most prosperous month since March 2008.

Private sales have increased by 16.7% over the year to date.

More than one in seven new cars registered in September was built in the UK.

SMMT chief executive Mike Hawes said: "With over 400,000 new cars registered for the first time in more than five years, the UK market is reflecting growing economic confidence.

Motorists have complained of oil price hikes in 2013

"Robust private demand has played a major role in this growth with customers attracted by exciting increasingly fuel-efficient new models that offer savings in the cost of ownership.

"This is the 19th consecutive month of steady growth and, with fleet and business demand still to reach pre-recession levels, we believe the performance to be sustainable."

He added:"The latest 63-plate should deliver positive results into next year."

The Ford Fiesta was the best-selling model last month.

Britain's road to recovery is expected to outpace the market in Europe, which remains frail.

Barclays' head of retail and wholesale, Richard Lowe, said: "The popularity of the 63-plate helped new car sales soar.

"Attractive finance packages are offering consumers more clarity on running costs, which even with a more promising economic outlook is an important factor for those on a budget.

"As we head into the quieter months, I suspect we'll see sales hold firm, keeping the UK market zooming ahead of our European counterparts."

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Samsung Set For Record Quarterly Profit

Electronics giant Samsung is expected to post a record operating profit of 10.1trn won (£5.8bn) in the third quarter of this year.

The estimate represents a 25% increase from a revised operating profit of 8.06trn (£4.62bn) won a year earlier for the world's top maker of smartphones, memory chips and flat-panel TVs.

Analysts said rising memory chip and semiconductor prices were probably the main growth driver in the July-September period, as Samsung's flagship Galaxy S series struggles in the increasingly saturated high end of the global smartphone market.

Samsung's strength in the market for cheaper smartphones was also a factor, they said.

The third quarter estimate marks a 6% rise from the April-June quarter, when the tech behemoth posted an operating profit of 9.53trn won (£5.51bn).

Sales in the July-September period were expected to be up 13% from the same period last year.

Samsung's key competitor is Apple and its iPhone

The world's largest technology firm by revenue was giving revenue guidance before official results later this month.

Analyst Choi Do-Yeon of Kyobo Securities said: "The semiconductor business seems to be on an uptick while the stagnation in the mobile sector is milder than expected."

The company did not provide a net profit estimate or a breakdown of figures for each of its business units.

But analysts estimate Samsung shipped between 85 million and 89 million smartphones in the third quarter.

In the second quarter, Samsung had a dominant 33.1% share of the global market, while rival Apple trailed in second place with 13.6%, according to researcher Strategy Analytics.

Samsung revealed its hi-tech watch last month

Samsung does not disclose unit sales figures for its phones.

Its shares were up more than 1% early Friday but dipped later in the day to close down slightly.

"Smartphones have been the key driver of profits for Samsung but with their growth now mainly being focused on the mid-to-lower-end segment," analyst Brian Park said.

"Maintaining a status quo seems to be the best scenario for Samsung going forward."

:: Minor rival HTC has reported its first ever quarterly loss, of £63m, in the July- September period after sales were down 33% year-on-year.

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Swiss Watchdog Investigates Foreign Exchanges

The Swiss financial watchdog has launched an investigation into possible manipulation of foreign currency exchange rates by banks in Switzerland and other countries.

The Swiss Financial Market Supervisory Authority - Finma - announced the probe in a brief statement on Friday.

Finma said it was "coordinating closely with authorities in other countries" because "multiple banks around the world" could be implicated.

The regulator said it will give no further details on the probe or name of the banks involved in it.

The trade body representing Switzerland's banks, Swiss Banking, was unable to reveal any further details about the investigation.

Major Swiss banks have paid billions in penalties over banking irregularities in recent years.

American authorities have pursued the banks over secret accounts held by US citizens.

The new Swiss investigation comes after Britain's Financial Conduct Authority (FCA) said it was looking at possible manipulation of benchmark rates by traders.

The FCA regularly works closely with regulators in Switzerland.

Approached by Sky News, the FCA said it was aware of the Swiss investigation but said it was not in a position to comment on the action.

In the wake of Libor manipulation Britain's financial sector risks further damage if London-based are implicated by the Swiss investigation.

The City is the world's biggest foreign currency trading market.

The Bank of International Settlements estimates it size as 41% of global trades.

New York has less than half that figure while financial hubs in Asia have a smaller proportion.

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Twitter IPO: Company Hopes To Raise $1bn

Twitter has unsealed the documents for its initial public offering of stock, saying it hopes to raise up to $1bn.

It generated $317m (£200m) in revenue in 2012, driven largely by advertising.

Twitter had more than 215 million active users as of the end of June, up 44% from the previous year - compared to Facebook's nearly 1.2 billion and LinkedIn's 240 million.

But the company revealed that it lost $69.3m in the first six months of 2013, compared with a loss of $49.1m for the same period last year.

The losses come as Twitter rolls out a massive infrastructure and staffing expansion programme.

The company's total income in 2012 more than doubled from 2011, with 87% of the revenue comes from ad sales.

The San Francisco-based social network unsealed the papers with the Securities and Exchange Commission (SEC) on Thursday.

Last month Twitter announced that it had filed confidential initial public offering (IPO) papers with the SEC to start the process of going public.

The newly released document showed that private investors have ploughed $759m (£470m) into the company and it still has $375m (£230m) cash reserves remaining.

Twitter did not say which stock exchange it plans to list its shares on, however the company said it intends to use the ticker symbol "TWTR".

Facebook is listed on the Nasdaq exchange in New York.

The underwriters of the offering are Goldman Sachs, Morgan Stanley, JP Morgan, BofA Merrill Lynch, Deutsche Bank Securities and CODE Advisors.

Twitter's expansion plans have seen huge growth in staff across Europe, with many based at the regional headquarters in Dublin.

Its UK subsidiary gains all of its revenue from services rendered to the Irish intermediary.

Last year Sky News revealed that its UK company was fined by the business regulator for failing to file accounts on time.

Companies House also dissolved its sister company, TweetDeck, earlier this year for repeated failures to file accounts.

Afterwards, an Irish chartered accountant was made director of Twitter UK and San Francisco-based CEO Dick Costolo resigned his role in the British arm.

:: Twitter recently advertised for a tax manager to "implement and monitor transfer pricing strategy" to minimise the amount of tax paid in its Europe, Middle East and African businesses.

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The Sky News Business Round-Up And Look Ahead

Sky's Naomi Kerbel offers a round-up of what's coming up in the week's business news.

:: Monday October 7

The Help-to-Buy mortgage guarantee scheme launches this week, three months earlier than planned following David Cameron's announcement at the Conservative Party conference.

:: Tuesday October 8

Tuesday is the deadline for applications for institutional and retail investors to make offers to purchase shares in the Royal Mail. It is expected the offer will be between 260p and 330p per share which would give it a market capitalisation of between £2.6bn and £3.3bn.

:: Wednesday October 9

Greggs, the UK high street bakery releases its interim results on Wednesday. It has 1,671 shops with its best seller being the sausage roll, selling approximately 140 million each year.

:: Thursday October 10

G20 finance ministers and central bank governors meet in  Washington DC on Thursday. The U.S economy and budget deadlock is likely to dominate the agenda.

:: Friday October 11

Royal Mail Group is expected to announce the offer price and size for its IPO on Friday with conditional dealings commencing on the London Stock Exchange.

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Help To Buy: Doubts Over Success Of Scheme

By Poppy Trowbridge, Business and Economics Correspondent

The second phase of the government mortgage guarantee scheme Help to Buy is due to launch next week, three months earlier than expected - but experts are sceptical the initiative will help buyers.

Lack of capacity in the housing market, and a statement from one bank saying it cannot confirm whether it will take part in the scheme, means some would-be buyers could be left empty-handed.

Exclusive research by Sky News shows interest from potential buyers has skyrocketed since the Government surprised the market.

Property website Rightmove says clicks on its Help to Buy pages numbered 14,807 on Saturday, the day before last Sunday's surprise announcement.

When David Cameron revealed, on the eve of the Conservative Party conference, that the launch date had been brought forward from January - clicks, measuring potential buyer interest, spiked to 59,571.

Now, almost a week later, they remain far above average at 23,660.

There is concern that pent-up demand cannot be met by existing market services, while Barclays has issued a statement saying it is not able to guarantee a launch date.

The policy offers homebuyers loans of up to 20% towards a property

"Whilst we cannot take a decision over participation in the new scheme before the terms are set, we are encouraged by the tone of the discussions so far," the bank said.

RBS and Natwest however, have said they are ready to take part in the scheme when it goes live and are planning to extend opening hours in many branches to deal with demand.

"From launch date customers will be able to visit any of our 2000 branches or call us to see how we can help them to get ahead on the property ladder through the scheme," said a statement.

Lloyds Banking Group will also be participating in the second stage of Help to Buy - but exact timings are currently unclear.

"We will be introducing a range of products shortly through our Halifax (and Bank of Scotland) brand, enabling customers to benefit from 95% borrowing this year," said a spokesperson.

However, some estate agents are still worried about a lack of capacity to deal with interest in the scheme.

Robert Ellice, of Clarke Hillyer, told Sky News: "At the moment we've got big delays in the whole process anyway, mortgages are still taking a long time to be offered and taking a long time to be verified on values."

Despite the concerns, the government insists that the scheme is still on track to be a success.

A Treasury statement said: "Two major lenders - Lloyds and RBS representing around 30% of total mortgage lending - have already announced that they will be launching new mortgage products because of Help to Buy.

"This is great news for those who can't get on - or move up the property ladder because of the huge cost of deposits."

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Goldman Fund Wins £720m Battle For Hastings

By Mark Kleinman, City Editor

A fund managed by the Wall Street banking giant Goldman Sachs will next week emerge as the biggest shareholder in Hastings, one of Britain's fastest-growing insurance companies.

Sky News understands that GS Capital Partners, Goldman's private equity arm, is to invest £150m in return for just under 50% of Sussex-based Hastings.

The insurer's founders and management will retain the rest of the shares, with Neil Utley, Hastings' chairman, crystallising a fortune worth tens of millions of pounds from the sale of part of his stake.

Hastings will announce the equity investment alongside the launch of a bond issue that will raise approximately £420m.

In total, the transactions will value the insurance company at £720m, making it a strong candidate to enter the FTSE-250 index if it lists on the stock market as expected in several years' time.

Sumit Rajpal, a New York-based managing director at Goldman, is expected to join Hastings' board as part of the deal.

Hastings is focused on an aggressive expansion strategy following an acceleration in earnings before interest, tax, depreciation and amortisation (EBITDA) to roughly £70m last year.

The company has around one million customers, and Gary Hoffman, who joined last year as its chief executive, has stated a target of trebling that number by 2020.

Mr Hoffman led the turnaround of Northern Rock during its period in Government ownership following the run on the mortgage lender in the autumn of 2007 which heralded the start of Britain's banking meltdown.

He then spent two years as chief executive of NBNK Investments, a vehicle set up to acquire retail banking assets, but which was rebuffed in favour of the Co-operative Group in the contest to buy 632 branches from Lloyds Banking Group.

That deal collapsed amid a financial crisis at the Co-Op earlier this year.

Based in Bexhill, East Sussex, Hastings employs more than 1400 people, over 80% of whom are understood to be shareholders in the company.

Hastings' valuation from a deal has been buoyed by its recent financial performance as well as the successful flotation on the London Stock Exchange of rivals such as Direct Line Group, although another competitor, Esure, has seen its shares slide since listing.

Mr Hoffman's arrival last year triggered suggestions that Hastings would also look to go public, but the company has no plans to do so.

Acquired by Insurance Australia Group in 2006, Hastings changed hands again in 2009 when it was subject to Mr Utley's management buyout.

Evercore and Peel Hunt, two City firms, have been advising the company on the talks about a stake sale, while Credit Suisse and JP Morgan have been overseeing the bond issue.

Neither Goldman nor Hastings could be reached for comment on Saturday.

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