Diageo under investigation for manipulating results
Diageo (LON:DGE) is being investigated by the US Securities and Exchange Commission, after it was alleged the company shipped out excess stock to US retailers in order to boost their financial results.
The business has showed signs of being under pressure int eh recent months, with performance down in North America and sales relatively flat.
Diageo told the Wall Street Journal it had received an enquiry and was co-operating with the investigation. A spokeswoman said: “”Diageo is working to respond fully to the SEC’s requests for information in this matter.”
Diageo is one of the UK’s leading drinks manufacturers and the biggest alcoholic drinks company in the US, owning the Smirnoff, Johnny Walker, Guiness and Baileys brands. The company were trading down 3.33% this morning after the news broke.
Aggreko falls 13% after trading update
Aggreko plc (LON:AGK) fell 13% this morning after releasing a less than favourable trading update.
The company said in a statement:
“We now expect the 2015 interim and full year results to fall sort of current market expectations.
Our 325MW of gas contract extensions in Bangladesh are entering the final stages of approval, with our expectation being that 180MW will be secured into the first half of 2016 and the remaining 145MW for three years. The trading terms secured for these extensions, which would retrospectively apply from the second quarter 2015, are likely to be less favourable than our earlier expectations”, leading to an adverse effect on profit.
Furthermore, security challenges in Yemen mean the company are operating below full capacity.
The oil arm of the business has also taken a hit:
“We have seen a further slowdown in North America with volumes in the shale basins continuing to decline. More recently, we have begun to see an impact on our offshore oil and gas business in the Gulf of Mexico.”
Aggreko plc is a United Kingdom-based company, which provides power and temperature control solutions.
Pearson’s half yearly report shows consistent growth
Pearson (LON:PSON) published their half yearly report this morning, showing consistent growth.
Sales were up 1% to £2.2bn,with strong growth in North America, Brazil and China. Operating profit down 4% from £73bn to £72bn and its divedend was raised by 6% to 18p.
The company are trading up 3.24% this morning, following on from yesterday’s news of a sale of its Financial Times newspaper to Nikkei Group for £844m.
John Fallon, chief executive said:
“Overall, we’re competing well, enabling us to reaffirm our full year guidance and increase the interim dividend. The new education products and services we’re developing which will enable far more people of all ages to discover the joy of learning and progress in their careers. We believe the returns on the signific”.
Looking forward the company have a positive outlook, expecting the UK market to stabilize as well as strong growth in China and North America.
Amazon shares surge after reporting first sizeable profit
Shares in Amazon (NASDAQ:AMZN) shot up more than 18% in after hours trading yesterday, as the company reported an unexpected $92m profit.
Traditionally Amazon has grown its revenue consistently, whilst its profit remained low or non-existant – in the same period last year, Amazon made a loss of $126m. Its announcement yesterday was the first time the company have reported a sizeable profit.
Sales in North America rose 25.5% to $13.8bn in the second quarter, driven by technology and electrical goods. Amazon’s top line grew 20 percent in the quarter, and company profile was boosted by the heavily advertised “Prime Day” on July 15th, where the company gained more new members trying it’s speedy Prime delivery service than ever before.
Founder Jeff Bezos said the results were down to pure hard work: “The teams at Amazon have been working hard for customers,” he said.
Ladbrokes announces merger £2.3bn plans
Betting chain Ladbrokes (LON:LAD) announced this morning plans to merge with Gala Coral, in a deal that will make the combined chain the biggest bookmaker on the high street.
Adding Coral’s 1,845 shops to Ladbrokes’ 2,100 will mean the chain will overtake the current market leader, William Hill.
The business is expected to be valued at £2.3bn, and the deal will be funded by offering 93 million new shares to investors.
Peter Erskine, chairman of Ladbrokes, said the merger was a “major strategic step for Ladbrokes”.
He added: “Together, we will create a leading betting and gaming business. The transaction will provide an attractive opportunity to generate considerable value for both sets of shareholders.”
Ladbrokes is currently trading down 2.57% at the news.
E-Car Club buyout spells good news for crowdfunding sector
Equity crowdfunding has become a big name in alternative finance, but there are still those who are sceptical; the risks are high and the sector is still relatively young. How can the public be encouraged to invest when nobody knows what the future holds?
However, recent events may go some way to allay concerns. Two weeks ago E-car Club was sold to car rental giant Europcar, becoming the first UK crowdfunded start up to successfully exit and pay back their investors.
Back in 2013, E-Car Club became one of the first companies to try crowdfunding. They raised £100,000 from 63 investors on platform Crowdcube, with a valuation of £500,000. Its investors took a real risk – however for them, it paid off. They put in an average of £1,500, with the largest investment £15,000, and will now receive a healthy 3-4x return on their investment.
“Being able to write a cheque to your investors this early on is one of the unexpected pleasures of doing what we do,” E-Car Club founder Andrew Wordsworth told CityAM. Luke Lang, CEO of crowdfunding site Crowdcube agrees. He also spoke to CityAM: “An exit for an equity investment was what the industry was looking for. The aim of all of this is identifying great businesses that people want to invest in and that then deliver great returns.”
The facts speak for themselves; the chances of a return on investment in a start-up business aren’t high. According to a 2009 Nesta report, 56 per cent of investments fail to return capital. The other 44 per cent bring positive returns, but a mere 7 per cent will return 10x return on investment. Not good chances, if you’re hoping to become a millionaire.
However, for the crowdfunding sector, E-Car Club’s success can only be a good thing. Whilst it’s clear that a lot of start-up businesses fail, this buyout is the first definitive proof that there really is the opportunity to make money from investments on crowdfunding platforms – if you’re prepared to take a chance.
Meet JetSmarter, the ‘Uber of the sky’
After the success of Uber, the on-demand Taxi app, entrepreneur Sergey Petrossov has taken the next logical step – and launched JetSmarter, a similar service for private jets.
For those that are lucky enough consider flying by jet an option, the process is difficult to organise and very costly. Sergey Petrossov wanted to simplify that process, so he built the JetSmarter app to make it easy for anyone to book a flight on a private jet in a matter of seconds.
“I started the company out of a frustration with the process,” Petrossov told Business Insider in an interview. “I kept thinking to myself, ‘Why hasn’t this service been brought into the digital world?'”
“Essentially it works like an airline, except you go through private carriers,” he continues. “There’s no going through security, you just pull up to a private plane five minutes before you take off and go.”
There are currently three tiers to his new business, ensuring that he meets the needs of every potential customer: JetDeals, which involves booking a one-way private flight on demand; JetShuttle, which allows you to book a seat on a previously scheduled private flight; and JetCharter, which offers completely customized private jet packages.
Unsurprisingly, the costs involved for members wishing to use the service are not cheap. JetSmarter members pay $9,000 a year — roughly $800 a month — to get unlimited access to private flights.
The new app has been funded by some high-profile names, both of which are no strangers to the private jet industry. Petrossov obtained $20 million in Series B funding from The Saudi Royal Family and rapper Jay-Z. He has also sought financing from executives at Goldman Sachs and Twitter.
However, JetSmarter is not the first of its kind. Another similar app, Blackjet, went bust in 2013 due to lack of capital; whilst Petrossov’s company seems to be on track for success, the private jet market is not an easy one to crack.
Looking for a last minute holiday? Visit crowdfunding site Travelstarter
For avid travellers with a bit of extra cash, TravelStarter is well worth a look. It’s a crowdfunding site with a twist; a unique project that offers people free stays, tours or meals in the places around the world that they choose to invest in.
The idea was born in early 2014, and the platform launched several months later. TravelStarter aims to support individuals and local businesses by helping them raise funds for their tourism and travel related projects.
Like traditional donation-based crowdfunding platforms, each project offers rewards; however, unlike the usual free t-shirt or free ticket, TravelStarter offers options to stay, eat, tour, or learn with the projects that they support. Essentially, instead of booking a traditional hotel or restaurant for a holiday, people have the option to lend the money to the business and then claim their reward once the business is up and running. Not only are you getting a holiday, but you’re boosting small businesses and tourism projects by doing so. Supporting one of these projects not only supports that business, but the tourism industry as a whole.
Once the project is successfully funded, you are free to claim the reward for your trip. It could be a nice dinner in Paris, an overnight stay at a guesthouse in Prague, a daily bike rental in Amsterdam, an authentic tour of Rome, or maybe a flamenco lesson in Madrid.
Guide Like You is one of the projects currently listed, which aims to promote travelling like a real tourist by getting locals to take visitors on tours and show them the best local places to eat, drink and explore. The rewards are great; for giving $50, you receive a hald fay tour of Paris or Toulouse with one of the company’s founders, and for $200 or more you receive 3 days stay in Toulouse with car hire.
Another project, Hostaria 239, wants $3,000 to refurbish a small, eco-friendly bed and breakfast in Koh Lanta, Thailand. For a donation fo just $30, you will receive one night in a double room, half board. For $50, you get 5 nights and for $300, one weeks stay, half board and two tours as well as a “big hug and a lot of good tips!”
According to Dan from Cardiff, who successfully crowdfunded $13,000 to refurbish a hostel, the site is perfect for tourism related projects as “all of the rewards appeal to people interested in travel or tourism.”
Although the site is American, based in Boston, it aims to fundraise for projects all round the world. The team behind it are five passionate travellers, who hope that TravelStarter will become “the number one platform for all travel related projects, and help bring tourism back to the people.” Together, the team have expertise in all areas to make the site successful; from social media ad digital marketing to database and sustainable tourism knowledge.
The site itself is branded brilliantly, with a modern feel and easy navigation. The idea of a platform that swaps travellers’ cash for holiday based rewards, to the mutual benefit to both parties, is clever, unique and has plenty of potential. A tree house hotel in Slovenia, complete with hot tub, is one of my favourite projects listed on there; as a keen traveller myself, I can absolutely see the attraction of the site. If you’re looking to donate to a worthwhile project and receive some great rewards yourself, TravelStarter is the place to visit.
Pearson “in talks” to sell Financial Times
Education and publishing group Pearson has confirmed that it is in “advanced talks” about the sale of its Financial Times newspaper.
The Financial Times has been a leader in financial journalism for 130 years, 60 of which have been under Pearson’s ownership.
In a statement, the group said that “it had noted recent press speculation and confirms that it is in advanced discussions regarding the potential disposal of FT Group”.
“There is no certainty that the discussions will lead to a transaction. A further announcement will be made if and when appropriate,” it added.
Reuters reported earlier that Pearson had decided to sell the FT to a “global, digital news company”; this decision would reflect their recent aim to focus purely on education.
Pearson shares are currently trading up 2.5%at the news.
Greek parliament passes second batch of reforms
The Greek parliament have passed a second package of reforms, meaning negotiations can begin for an €86bn European Union bailout.
Greek Prime Minister Alexis Tsipras managed to contain a rebellion by members of his left-wing Syriza party, passing the reforms with the backing of 230 votes in the 300-seat chamber.
Tsipras appealed to parliament before the vote:
“We made tough choices, and I personally made difficult, responsible choices. Today we must all redefine the possibilities ahead of us given the new circumstances.
We chose a difficult compromise to avert the most extreme plans by the most extreme circles in Europe.”
Further violence erupted on the streets of Athens as Parliament debated the bill, which was passed at approximately 4:00 local time.
The government has said it hopes negotiations on the bailout deal can start this week and hope to have them wrapped up by Aug. 20.