The City Diary: Red Letter Days quenches the Dragons' fire
Sunday 03 October 2010
Another year, another thumping loss for Red Letter Days, the aptly named gift business that keeps exposing the panel from the BBC's Dragons' Den.
You'll recall that the company was founded by former Dragon Rachel Elnaugh, who left the show when the business slumped into administration in 2005 – reporting losses of more than £4m. Luckily, her fellow Dragons – Theo Paphitis and Peter Jones – took over and have since been busy proving my hypothesis: that two Dragons can lose more money than just one. The Paphitis / Jones tenure has seen the firm run up extra losses of more than £10m, according to the firm's accounts. Meanwhile, the dynamic duo have also lent the company more than £7m and provided £3m worth of guarantees as security against "the overdraft and other amounts owing to Barclays Bank".
Losses are down, revenues up, but is there any chance of a profit? "When [Paphitis and Jones] bought the business they didn't know how badly it had been run," explains Red Letter Days' third director, Bill Alexander. "We will be profitable in 2010."
This time next year, Rodney ...
Steady on, chaps
And now for Corporate Speak – the first in an occasional series dedicated to the business world's most desperate uses of the English language. The inaugural entry goes to CMC Markets, the spread-betting group founded by one of the City's richest, most self-effacing men, Peter Cruddas, whose latest annual report gushes: "We've created a set of values ... that will unite us as a business, set the standards and empower us to build an exceptional investment brand. We call it 3D thinking from CMC Markets. Dream, Dare, Deliver." What might others call it, I wonder?
Here's a few figures worth reheating:
£693,000 a year: accrued pension entitlement for Sir Fred Goodwin, ex-chief executive of RBS (before being persuaded to hand back a chunk).
£572,000 pa: accrued pension entitlement of ex-HBOS boss Sir James Crosby, designer of the strategy that ended with the bank's bail-out.
£450,000 a year: size of Rolls-Royce boss Sir John Rose's pension after transforming the group into "a genuine global company and a poster child for high value-added British manufacturing".
Green doesn't always mean 'go'
Ireland's five-year credit default swap (the price for insuring against the Celtic Tigger failing to pay its debt) hit a high last week. And analysts at financial information group Markit say Bulgaria's CDS is trading 20 per cent higher than in January, Hungary's is 35 per cent up, and Pakistan's isn't trading at all. Which just reinforces the City maxim: never invest in a country with green in its flag.
Sugar, you're fired!
How forgiving of Lord Sugar to agree to a TV interview with Piers Morgan. The former redtop editor is fond of telling a story that hardly shows him at his most shrewd: as chairman of Tottenham Hotspur, Sugar tried to sign French midfielder Emmanuel Petit. As Sugar gave his target a tour of the ground, Petit took a phone call, hung up, and borrowed cash from Sugar for a taxi – straight to Arsenal, who signed him that afternoon.
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