Outlook: Staples beginning to stretch the City's credulity at Amey

Allen's challenge; Marching back

Amey has gone from Greek tragedy to Oscar Wilde farce with barely an interlude in between. It is unfortunate to lose one finance director but to lose two? Well, that smacks of a little more than carelessness. Certainly the markets took that view and punished the Amey share price accordingly.

The business has now lost 93 per cent of its value since March when Amey upset the PFI applecart by admitting that its prior year profits were a work of fiction and adopting much more stringent accounting policies.

Five months later David Miller, the architect of the new accounting treatment, announced his resignation and now his successor Michael Kayser is leaving after just five weeks in the job to be replaced on a stop-gap basis by a partner parachuted in from the accountants Deloitte & Touche.

Clash of personalities, old boy, says the Amey camp. He just wasn't temperamentally suited to the cut and thrust of the support services sector. Rubbish, say Mr Kayser's supporters and the majority of impartial opinion in the City.

The suspicion, of course, is that Mr Kayser has found some more nasties lurking in the woodshed and has decided not to stick around when they come popping out of the accounts. One finance director's item of expense is another's cost to be capitalised on the balance sheet and quietly written off later.

At the very least, it is clear that the way Mr Kayser had been used to doing things in his previous incarnations with Laporte and Doncasters was not going to pass muster at Amey.

Speciality chemicals and widgets are simply to account for. They leave the factory and the sale is booked. PFI projects, with their lengthy bidding procedures and even longer payback periods are trickier to deal with.

If Brian Staples, Amey's chief executive, had not been in such a blinding hurry to get his man, then perhaps the two sides would have realised they were not the perfect match before a contract was signed.

Amazing as it may seem, Amey now has two more finance directors on the payroll than it needs since both Mr Miller and Mr Kayser are technically contracted to remain in employment until the end of the year to help out their respective successors. Will the Amey board now decide that its chief executive is surplus to requirements as well? We can only guess at what comes next. As Oscar said: "I can believe anything provided it is incredible."

Allen's challenge

Getting Charles Allen and Michael Green to sit around a table and agree terms was supposed to be the hard part. But in fact the merger of Granada and Carlton to create a de facto single ITV company has been achieved with remarkable ease.

The difficult bit now lies in securing regulatory approval for the deal, which, as it stands, drives a coach and horses through both the broadcasting rules and competition law. The first should be simple to negotiate as the Government's Communications Bill will abolish the curbs on audience share and ownership of the two London ITV franchises which have so far prevented a Granada-Carlton get-together.

The second obstacle promises to be harder to overcome. ITV is not the power in the land it once was and its share of TV advertising has slowly shrunk as other terrestrial and paid-for platforms have made inroads into the monopoly. Nevertheless, Granada and Carlton together will still boast the kind of market share that makes regulators wince and a combination of their respective airtime sales houses will enable the merged company to dictate terms to advertisers.

To get the deal through the Competition Commission will therefore require a united front on the part of the chairman and chief executive. Mr Allen and Mr Green have promised not to do their version of I'm a Television Executive ... Get me Out of Here, at least until they have regulatory clearance.

The commission will be asked to buy the argument that having a single ITV will actually be good for viewers and advertisers because it will create a virtuous circle of increased investment in programming, leading to bigger audiences generating greater advertising demand leading to more investment.

There is a lot of merit in this, especially when the competition in ITV is no longer one another, but the BBC, Sky, Channel 4 and Channel 5.

The sticky point is what to do with the two airtime houses owned by Granada and Carlton. Mr Allen will have to shred the evidence he submitted to the commission when Carlton and United attempted to merge two years ago and Granada objected on the grounds that separating their sales houses from the two ITV companies would amount to little more than "tinkering".

Granada and Carlton have let it be known they would be happy to demerge one of their two sales houses. But the view among some of the competition lawyers is that to stand a better than evens chance of getting regulatory approval, Mr Allen and Mr Green will have to demerge both.

The Government does not care very much for Granada or Carlton in the wake of the ITV Digital fiasco but it is in no one's interest to see the network enfeebled any further. For that reason alone, the merger will probably get clearance but not before Messrs Allen and Green have been put through the regulatory equivalent of Survivor.

Marching back

Is Boots starting to find its feet again? It was only back in May that chief executive Steve Russell started making noises about a "back to basics" strategy though, of course, he didn't dare call it that.

What he meant was that Boots was going to spend more time on getting the retail nuts and bolts right at Boots the Chemists – right product, right place, right time, right price – and less on new-fangled services like in-store dentistry, aromatherapy and Botox injections.

Now he seems to be going further. Buoyed by better sales growth at the 1,400 Boots stores he is pushing for more new product launches and brand extensions on names like Clearasil. The company is also expanding out of town and has sought confidential guidance from the Office of Fair Trading on its trial joint venture with J Sainsbury. A ruling is expected within days.

Perhaps the most telling change is in Mr Russell himself, who seems more relaxed, more confident, relieved, perhaps, that he is back on the familiar retail ground on which he has fought for 30 years rather than out there without a road map seeking a way into services. He clearly believes there is more poke left in the Boots engine than was previously believed,

There is a sense of mea culpa too. Yes, we spent too much on pursuing services, overseas expansion and internet ideas. Yes, we allowed our stores to become run down and yes we've underspent in the London area, which may only account for about 5 per cent of sales but much more in terms of image.

But at least the mistakes have been less expensive than before. At the fag end of the 1980s boom Boots blew nearly £1bn on Ward White believing its chemists chain was ex-growth. In the end all the bits, like Halfords, Fads and Do It All, were flogged off. This time round all it requires is a little injection of faith, rather than Botox.

m.harrison@independent.co.uk