The succession question was raised again last week when John Dowd, Morrisons’ managing director, was forced to retire through ill-health. This week the group named Marie Melnyk and Bob Stott as joint managing directors.The company, which has been criticised by some analysts for the lack of non-executive directors on its board, said it was reviewing its policy but had no plans to make appointments in the immediate future.A well-known follower of the “keep it simple” approach to business, Sir Kenneth joined the debate on company audits in the wake of the Andersen-Enron affair. “Accountancy services are getting more and more complex and a little more clarity wouldn’t go amiss,” he said Asked about his view on Morrisons’ auditors, KPMG Sir Kenneth said: “They’re alright. They can add up.”Morrisons proposed a final dividend of 1.84p, taking the payout for the year to 2.2p, up 22 per cent on 2000 The shares rose 6.75p to 212.75p ABN Amro raised its price target on the shares to 225p.. Hopes for a recovery in the technology sector suffered a fresh setback yesterday after Xansa, the IT services group, issued its second profit warning in three months and revealed a further 100 lay-offs Shares in the company fell 14 per cent. Shares in the company fell 14 per cent.
The company said the degree to which its clients were suspending “discretionary spending” was far worse than had seemed the case when it warned of tough market conditions in January. Difficulties previously confined to Xansa’s consultancy business were now appearing across the board.Profits for the year to 30 April, before exceptional items, would be “at the low end of expectations”, prompting Xansa to expand an existing redundancy programme from 250 to 350 job losses.

Delays in implementing the plans would cost the company an additional £2m in the current financial year.Hilary Cropper, the chief executive, blamed the problems on the global economic slowdown. “We thought we had read the situation pretty well in January but it has got worse than we thought,” she said “I wouldn’t say I was upbeat. The economic situation here and in the US isn’t going to bounce back dramatically. We hope we have been sufficiently pessimistic, although I know that’s what I said last time.”Ms Cropper said she did not expect more job losses, but she could rule nothing out.Xansa shares fell as low as 187.5p but recovered somewhat to close down 37p at 225.5p, valuing the group at £740m.Xansa also reported indications of a handful of big contracts a long way down the pipeline. New orders, particularly for large programmes and outsourcing contracts, had strengthened further since January, prompting the company to invest in its operations in the United States and Northern Europe.”Some investors will feel there’s a management credibility issue because the company should perhaps have cut more people in January,” one technology analyst said.

“Maybe the long-term prospects aren’t looking so bad, but there’s a lot of pain in the business right now.”Management are to conduct a tour of institutional investors this week.. City Index, the company at the centre of the “Plumber and Spaniard” spread-betting fiasco, admitted yesterday that a controversial wager it took on a recent flotation had “smelt bad” and had proceeded despite being queried internally. Mr Davidson is also the major shareholder in Cyprotex.City Index hedged the deal through a contract with the investment bank Dresdner Kleinwort Wasserstein, which subscribed for 80 per cent of the shares in the float to cover City Index’s exposure.The arrangement raised eyebrows in the City when it emerged this week. By generating such a large committed buyer in the float, the bet in effect guaranteed a strong debut for Cyprotex shares. The wager has also attracted interest because it was placed on Mr Davidson’s behalf by his friend Nigel Howe, an employee at Cyprotex’s broker Gilbert Elliot.Michael Spencer, City Index’s non-executive chairman, broke the company’s silence over the affair yesterday to criticise its actions while revealing that some employees had raised doubts about the transaction. He himself learnt of the deal from this week’s newspaper reports.”I would not have taken the bet myself – it doesn’t pass the smell test,” he said.

“But someone [here] spoke to DKW and found out it was okay with DKW’s compliance department, and thought: ‘If DKW thinks it’s ok then that’s alright.’”He added: “There was a debate in City Index but [we] accepted too readily the fact that Davidson had taken legal advice and therefore everything was ok.”Mr Spencer will be reviewing controls within City Index to curb the size of spread bets in relation to the amount of shares being placed in a float.Gilbert Elliot also revealed that its staff had questioned why 80 per cent of the shares in the placing were going to one institution. Julian Knight, its managing director, said senior staff had been “satisfied with the answers”.The broker has suspended Mr Howe on full pay pending an investigation into the affair. A separate probe is underway by the Financial Services Authority. No one involved in the transactions appears to have acted illegally.DKW declined to say why its compliance department had approved the transaction with City Index.