Lloyds apologises for Cardnet glitch
Thousands of customers have been charged twice for transactions on Cardnet card terminals on Wednesday the 29th of August, despite appearing to have only been charged once on receipts.
Around 5% of all card payments made on that day were affected by the glitch, but Lloyds have said that all parties concerned have since been refunded. The Cardnet payment system is run by Lloyds and First Data and carries out 1.1 billion transactions a year, mostly via Visa Debit Card.
“Cardnet sincerely apologises for the issue and the inconvenience caused, we continue to work closely with all parties to resolve this issue swiftly,” said a company spokesperson.
In light of the small blip and quick resolution, Lloyds stock has not been negatively impacted. With a small dip, their share price currently stands at 60.62p, up 0.27p or 0.45% since trading began today.
FTSE 100 sinks and sterling jumps on Brexit deal reports
The FTSE 100 shed over 50 points in a 30 minute period and GBP/USD jumped over 100 points in less than 5 minutes on Wednesday afternoon following a report from Bloomberg that Germany and the UK were prepared to pull back from key demands.
The comments could not be immediately corroborated as Bloomberg reported the source spoke on a condition of anonymity as they were close to the matter.
If the report holds any weight it would mean the much feared ‘no deal’ scenario could be averted and the UK could have more significant Brexit.
The Bloomberg report said both sides would be happy to explore a less detailed agreement in order to get a deal done.
This is likely to raise questions from both supporters and opposers of Brexit as it could leave many elements to be agreed in the years after the official leave date. The EU is renowned for kicking the can down the road and leaving deals to absolute deadlines as was the case with the Greece bailout.
Nonetheless, the currency market showed signs of relief with a sharp rally in sterling. GBP/USD has been the market of choice for investors wanting to air their view on Brexit as equity markets have remained relatively stable over the past few months.
FTSE 100
In a possible sign of things to come, the FTSE 100 dropped beneath 7400 for the first time since late April as sterling rallied. Sterling and the FTSE 100 have had a strong inverse relationship since Brexit which may lead to further declines in London’s leading index if sterling was to rally further.
Help to Buy boosts new housing completion
Earlier today, Barratt Developments (LON:BDEV) released their final results for the year ended in June 2018. Sky reported that Barratt consider market conditions favourable and that the Help to Buy scheme continues to assist the vigorous consumer demand.
Listed on the FTSE 100, Barratt Developments made £835.5 million in profit (before tax). This is a 9.2% increase from 2017. Additionally, Barratt sold 17,579 homes in the year with an average selling price of £289,000. The report disregards fears of a slowdown in the property market.
Today, there are various schemes to assist property buyers in purchasing their first home. One of the most well known to first time buyers is the Help to Buy scheme.
In a video interview with Sky, the Chief Executive of housebuilder Redrow, John Tutte, said: “First time buyers have always wanted some assistance to get on the housing ladder. If you look at help to buy, 82% of Help to Buy users are first time buyers.
“When you look at its use it’s generally for people who have got incomes of around £50,000.”
A report by the HPF shows that 170,000 new homes have been purchased through the scheme between April 2013 and March 2018.
Interestingly, 2013-2017 saw the fastest increase in housing supply on record. The Help to Buy scheme is exclusive to new build homes. With this in mind, the demand for new properties has increased since 2013. Fundamentally, the scheme provides equity loans to buyers so they can purchase newly built homes with only a 5% deposit. However, the Evening Standard’s Home and Property has reported that the scheme has been criticised for artificially inflating house prices. It is said that the scheme is being used by wealthy buyers as it is not capped at an income level. As a result, Homelessness charity Shelter believes that the scheme has increased average home prices by £8,250. Help to Buy has certainly been beneficial for housebuilders such as Barratt Developments, who have seen an increase in their profits. But, just how sustainable is the scheme? With wealthier households using the scheme to upgrade their property, Help to Buy is artificially inflating house prices. The future of the Help to Buy scheme remains uncertain as it parallels the looming uncertainty over Brexit. Whilst housebuilder Redrow has been calling for the clarity over the scheme’s future, the government has not committed to the scheme later than March 2021.21st Century Fox to invest $100m in Caffeine startup
Twenty First Century Fox announced plans on Wednesday to lead a $100 million round of funding for startup Caffeine.
Fox alone is investing $100 million into the newly formed venture, which hopes to produce exclusive esports, video game, sports, and live entertainment.
“The combination of the Caffeine platform with a content studio that benefits from Fox Sports’ expertise in live events and programming will help position Caffeine to deliver compelling experiences in esports, video gaming and entertainment,” said Lachlan Murdoch, 21st Century Fox chairman, in a statement.
“We are excited to partner with Caffeine and build something special for fans in the growing live social streaming esports and gaming space,” he added.
Fox’s stakes in Caffeine will be part of the “new Fox,” the company following the completion of the $71.3 billion sales of Fox to Disney (NYSE: DIS).
Ben Keighran, the CEO of the streaming startup said: “We want to bring the world together around friends and live broadcasts.”
“It’s an ambitious goal, but one we believe is attainable with the support of our amazing new partners, our awesome and ever-growing community, and the content that together, we can bring onto the platform.”
The social live streaming startup was founded in 2016 by Ben Keighran and Sam Roberts.
Caffeine already raised $46 million of funding over two different rounds that were led by Andreessen Horowitz and Greylock Partners.
The startup has also revealed a content agreement with Live Nation in order to bring live music concerts to the streaming platform in the fourth quarter.
Shares in 21st Century Fox (NASDAQ: FOXA) are trading at 45,33 (1442GMT).
William Hill PLC announces exclusive partnership with Eldorado Resorts
William Hill PLC (LON:WMH) has announced a partnership between William Hill US and Eldorado Resorts, Inc.
William Hill is already a leading sports betting company in the US. However, the partnership with Eldorado will provide an extensive access to the market. Eldorado is currently a major casino group with 21 properties across 11 states. Moreover, its customer base reaches 23 million people.
The agreement details several key features. Firstly, William Hill will become Eldorado’s exclusive partner for digital and retail sports betting. Next, William Hill US will retain 80% of the enhanced business. Additionally, Eldorado will receive $50 million of stock in William Hill PLC and a 20% stake in William Hill US. The initial term of the agreement is 25 years.
Within weeks, William Hill sportsbooks will be opened in five properties across three states. Subject to the legalisation in each state, additional sportbooks and digital betting and gaming services will launch in the months ahead.
The supreme court decided to legalise sports betting earlier this year.
Contrary to the UK, the 1992 Amateur Sports Protection Act prohibited sports gambling in the US with few exceptions. However, earlier this year the Supreme Court gave the go-ahead for state legalisation of sports betting. Nevada was one of the law’s only exceptions. Hence, since 2012 William Hill PLC and Eldorado have been partnered there. Philip Bowcock, William Hill PLC Chief Executive Officer, commented: “Partnering with Eldorado gives William Hill access to one of the largest and most attractive casino footprints with 23 million customers across multiple states. “This partnership provides extensive cross sell and profit growth opportunities to both parties. “Together, we are positioned to capture the evolving US opportunity – starting with land-based sports betting and extending to digital sports betting and, in some states, online gaming.” At 11:34 BST shares in William Hill PLC (LON: WMH) were up by 5.88% at 263.1.Google suffers as they look set to snub the Senate
Google’s parent company Alphabet Inc (NASDAQ:GOOGL) have seen their share price dip as it has been announced the firm plan to ignore the Senate Select Committee on Intelligence’s request to appear at a hearing for Russian meddling in the 2016 election, alongside Facebook and Twitter.
Though the company were asked to send either their CEO or the Chief Executive of their parent company Alphabet, Larry Page, they have opted instead to offer the services of their chief lawyer Kent Walker. While Twitter and Facebook have faced public scrutiny over the course of the last year, they still look set to appear at the hearing – whereas, symbolically, the likelihood is that Google’s seat in the hearing will be left empty.
While the Committee’s vice chair, Senator Mark Warner, has already tabled a subpoena as follow-up action should Google opt for a no-show, there is quite little that can be done to make the company abide by any rules other than their own. Indeed, only recently did the EU deliver the largest fine in its history to Google, to the tune of $5 billion, but this was shrugged off soon after as the company announced quarterly revenues of $33 billion.
Similarly, it has been said that non-compliance could be costly at least in regard to PR, with President Trump calling Google on on allegedly censoring content with conservative leanings, and now Senator Warner saying, “I think there will be a lot more questions raised that could have been actually dealt with if they sent a senior decision-maker [to the hearing] and not simply their counsel.”
However, many would be right in thinking that to this point, Google’s ability to dodge or quell controversy is bulletproof, and taking some short-term flack or financial repercussions would be far more favourable than having to weather the same kind of drawn-out public ridicule that Facebook CEO Mark Zuckerberg had to endure earlier this year.
Following the news, Alphabet’s share price is currently trading down $20.49 or 1.66% at $1211.21 a share.
Barratt Development has impressive year after shirking London market
Barratt Developments releases impressive results for the year through August, after reporting that it built its largest number of homes for a decade.
The company announced bumper pre-tax profits of £835.5 million, up 9.2% on-year. At the same time, sales grew 4.8% to £4.87 billion. Additionally, forward sales were up by 11.1% to £3 billion, completions rose 1.1% to 17,579 and average selling price grew 5% to 288,900.
Despite a plethora of market uncertainties, the company have exceeded expectations by capitalising on the demand for more affordable housing, as well as focusing the majority of developments outside of London because of adjustments to stamp duty. Having not bought a central London site since 2014, Barratt have avoided the uncomfortable situation faced by their rivals Berkeley, who are now having to contend with Brexit uncertainties and increased production costs alongside a lull in the London property bubble.
According to Berkeley, the property market currently lacks urgency and remains constrained by “high transaction costs, restrictive income multiple limits on mortgage borrowing and prevailing economic uncertainty, accentuated by Brexit.”
Despite the concerns faced by the market as a whole, Barratt look confident and they start their balance sheet for the new year, having just announced a 4.7% increase in final ordinary dividend per share to 17.9p together with a 17.3p special dividend per share, resulting in a total dividend for the financial year of 43.8p.
David Thomas went on to echo his confidence in the firm’s strong results,
“The Group has had another outstanding year delivering a strong operational and financial performance, and our highest volumes in a decade. As the UK’s largest housebuilder we are helping to address the country’s housing shortage – creating jobs and supporting economic growth whilst continuing to lead the industry in quality and customer service.
Our continued focus on operating efficiencies and margin initiatives is starting to deliver and we have today announced new medium term operational targets reflecting our confidence in the business going forward.
The Group starts the new financial year in a good position with a strong balance sheet, healthy forward sales and robust consumer demand supported by a positive mortgage environment.”
Going forwards, the company’s top brass appear bullish, though they appreciate the very real possibility that a bad Brexit scenario or Labour government could unsettle current liquidity.
Novo Nordisk UK announces no-deal Brexit contingency plan
Novo Nordisk UK (CPH:NOVO-B) has announced it is building up a four-month stock-pile in the event of a no-deal Brexit. The Danish company is taking this action in order to ensure patients’ insulin supply remains unaffected in the event of a no-deal Brexit.
The global pharmaceutical company founded in 1923 has its headquarters in Denmark. As a leading company in diabetes care, Novo Nordisk is Britain’s largest supplier of insulin. Moreover, the company employs roughly 43,100 people across 79 countries. Its products are marketed in more than 170 countries.
In addition to the increased stock supply, the company has already put in place a “robust” contingency plan. The decision to increase insulin stock builds upon Novo Nordisk’s no-deal Brexit program.
Corporate Vice President of Novo Nordisk UK, Pinder Sahota, has commented: “Our first commitment is to ensure that patients treated with our medicines remain unaffected in the event of a ‘no-deal’ Brexit.
“We are working closely with trade associations in the UK and the EU to ensure that the interests of our patients are at the forefront of negotiations.
Our decision to increase stock is in line with the technical notices and guidance published by the Government to industry.”
Fundamentally, Novo Nordisk is working with the Department of Health to guarantee continuity of supply, regardless of Brexit.
Mercedes unveils fully-electric SUV
Mercedes has revealed its first fully-electric car as the group aims to as it aims to take on Tesla (NASDAQ: TSLA).
The group is planning to invest over €10 billion (£9 billion) in its electric range, and over €1 billion in battery production.
The EQC will go on sale next year and be priced in the mid-£60,000s.
Recharging time for the vehicle using a high-current DC charger (110kW) will take around 40 minutes to charge up to 80 percent. Charging with the car’s 7.4kW on-board charger at home can take up to 10.8 hours.
The group has acknowledged that the lack of widespread recharging facilities and how this might prove to be problematic.
“I don’t see any specific problems with electric vehicles, but resources for mobility are limited and at some point we will have to decide on one powertrain or the other (although we are not there yet) and there is the issue of the charging infrastructure,” said Dr Dieter Zetsche, the CEO of Daimler AG (ETR: DAI) and Head of Mercedes-Benz Cars.
Zetsche added whilst investment was increasing on electric cars, environmental problems would still remain.
“I think we all agree that it is mandatory to find a way to decarbonise transportation,” he says. “At this point the most realistic path seems to be electric mobility, but that is not to say that all the issues have been solved.”
“As well as the ethical and environmental issues of the batteries and motors, there is also how the power to charge them is produced, recharging, where the materials come from and their recycling. And from a physical point of view of perhaps 100 million vehicles a year with 650kg batteries on board being driven round the globe, well I think probably not.”
Both BMW (ETR: BMW) and Audi (ETR: NSU) hope to address this problem with wireless charging, however, this feature is absent for the EQC.
“We had early prototypes of this [charging system] going a couple of years ago, but frankly speaking it’s not good enough [yet], we’ve got to jump further and didn’t think it worth introducing in the first cars. We’re in development of the second generation system as we speak,” said Ola Kallenius, the board member in charge of research and development at Mercedes.
Many car makers are investing in electric cars, adding pressure on Tesla who until recently had very little competition.
John Lewis to axe 270 jobs
John Lewis is undergoing several changes as the group plans to axe 270 jobs and change its name to “John Lewis & Partners”.
The group will cut back on jobs from 50 stores in IT, finance and store security. Employees were informed earlier this week.
Both John Lewis and Waitrose will rebrand, with Waitrose becoming “Waitrose & Partners”, to highlight the company is employee-owned.
The rebrand will kick off with an advert in which a group of schoolchildren sing Queen’s Bohemian Rhapsody and will end the line “for us, it’s personal”.
It will be the first advert featuring both Waitrose and John Lewis together.
Department stores are struggling amid a difficult trading environment, where groups are pressured to push sales online. Customers are also spending less due to a squeeze on spare cash.
Last month, House of Fraser collapsed into administration and was shortly purchased sportswear giant Sports Direct (LON: SPD) in a £90 million deal.
Debenhams (LON: DEB) has issued three profit warnings this year and is also cutting jobs.
Shares in Debenhams and Sports Direct dipped slightly after the announcement but remained positive on the day.