The Business On... Matthew Earl, Analyst, Matrix

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The Independent Online

Another teenage scribbler?

Nigel Lawson's famous description of City analysts implied none of them were up to much and followed criticism of his policies when he was Chancellor of the Exchequer. Mr Earl, head of business services research at Matrix, does indeed have something in common with the targets of Mr Lawson's derision: he too is a City analyst who has ruffled feathers.



What has he done?

Like other unpopular analysts – think Meredith Whitney, the American banking specialist, for example – he's upset people with home truths they don't want to hear.



Tell us more.

Last year, Mr Earl caused a sensation with a string of warnings about the prospects for two big outsourcing firms, Connaught and Xchanging, both of which got very upset.



What did they do?

Connaught's chief executive accused Mr Earl of "incompetence" while Xchanging said his research was "inaccurate".



Who was right?

Judge for yourself. Connaught isn't going to be accusing Mr Earl (or anyone else) of incompetence again any time soon because it has collapsed into administration. Xchanging is still in business, but it's worth about half what it was when Mr Earl first spoke out, not least because of a grim profits warning last month.



What does Mr Earl say now?

He's keeping his counsel, presumably because the facts rather speak for themselves. But you might just want to keep an eye on Serco and Capita, two more big outsourcers. Mr Earl has just recommended selling any shares you hold in either company. It's a view that puts him in a minority of one in the City, but with his track record, he's not to be ignored.



What are his credentials?

He's got maths and economics degrees and started out at Royal Bank of Scotland specialising insovereign debt, though with his bearish outlook on the world, maybe best not to ask him what he thinks about the creditworthiness of countries.

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