Royal Mail shares tank after Ofcom announcement

Miranda Wadham
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Royal Mail shares tank after Ofcom announcement
Royal Mail share prices tanked this morning after Ofcom revealed the scope of its review of regulation for the business, including whether any price controls should be imposed on the company given the lessening of competition in the postal services market.
Ofcom said there had been a number of changes since the regulatory framework was set in 2012, not least the “significant improvement in the financial position of the universal service” and “an intensification in the level of competition and innovation in parcels service”.
“The review will incorporate our existing work to assess Royal Mail’s efficiency, consider its position within the parcels sector, and assess the company’s potential ability to set wholesale prices in a way that might harm competition,” it said.
“In addition, the review will address the implications of Whistl’s withdrawal, which represents a significant change in the potential level of competition for end-to-end letter delivery.
The FTSE 100 was down 0.2% at 6,783.20 this morning, led by big fallers including M&S and GlaxoSmithKline.

M&S down after clothing boss quits

Miranda Wadham
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M&S down after clothing boss quits
Marks and Spencer was one of the biggest fallers on the FTSE 100, down 16.16 points after it was announced that the head of its clothing business was quitting. John Dixon is leaving after 26 years at the retailer, having started on the shop floor and worked his way up. Mr Dixon led the general merchandise division, which has struggled in recent years to update its image. Most recent figures showed like-for-like sales down 0.4% in the quarter. Retail analyst Nick Bubb said: “It is a shame that John is leaving, but it looks as if he was moving down the internal pecking order at M&S, having been given the thankless task of running M&S clothing.” Mr Dixon he had “thoroughly enjoyed” his time at M&S. “I now have the opportunity to become a chief executive and have therefore resigned from this great company,” he said.  

Pound rises against the euro

Miranda Wadham
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Pound rises against the euro
The pound rose to its highest rate against the euro since November 2007 this morning, climbing to €1.4350 at its highest point. In a statement today Mario Draghi confirmed that the European Central Bank is expected to maintain its loose monetary policy in the near-distant future. However, both the UK and the US are set to raise rates before the end of this year. Governor of the Bank of England Mark Carney said on Tuesday that the point at which UK interest rates may begin to rise was “moving closer”. On Wednesday, Chair of the US Rederal Reserve Janet Yellen said much the same thing for the US. The euro fell 0.5% against the dollar on Thursday to $1.0891.  

Crowdfunding: explained

Miranda Wadham
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Crowdfunding: explained
Crowdfunding seems to be everywhere at the moment, but when you start looking into it, it’s easy to be confused by the option. It’s hard to tell who’s offering what, how much you’ll get as a return, sort the good from the bad and find out which one is best for your investment. To make things simpler, we’ve split the generic topic of ‘crowdfunding’ into five separate categories. Essentially, the first three are ideal for an investment – there is the possibility of making a little – or a lot – of money. However, the last two categories offer no financial returns, so it’s worth looking out for the difference when considering where to put your cash. 1. Equity Equity-based crowdfunding offers people the chance to invest in an unlisted company, in return for shares. If the company does well, their share will be worth more and they stand to profit. The opposite is also true; if the company fails investors can lose some, or all, of their investment. Examples: The Link app, Cake app, Seedrs, SyndicateRoom, Crowdcube 2. Debt Debt based crowdfunding, or ‘lending based’, is where the people give money to the business in the form of a loan. They will then eventually get their money back, plus interest accrued. Mini bonds are a form of debt based crowdfunding, where investors wil receive their money back at a set time when the bond matures. Examples: Hotcha bond, Square Pie bond, Perception Bi, Crowdcube, FundingTree 3. Revenue Revenue based crowdfunding is less common in the UK, and is really a branch of debt based. With a revenue loan, investors lend the company money which is then repaid as a percentage of company revenue. This is a more flexible option; there are no set repayment dates. If the company performs better than expected, the loan is paid back faster – if they underperform, there’s no pressure to pay back the debt by a certain date. So far, Crowd2Fund are the only platform offering revenue based loans in the UK. Examples: Ruroc, Crowd2Fund 4. Rewards Rewards-based crowdfunding offers people rewards in return for the money they give. This is often for projects or enterprises, rather than businesses in needs of finance. There are usually several tiers, whereby the more money they give the better the reward they receive. Examples: The Crystal Maze experience, on Indiegogo, Shenmue 3 game on Kickstarter 5. Donation Donation based crowdfunding is more like a form of charity, rather than an investment. There are many online platforms offering this, where people can ask for money for anything from college tuition to a project helping children in Africa. Examples: Gofundme.com, Justgiving    

Citi reports strong growth

Miranda Wadham
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Citi reports strong growth
Citigroup delivered quarterly earnings this morning that topped analysts’ expectations, announcing its highest quarterly profit in eight years. Legal expenses plunged and restructuring efforts and cost cuts appear to have paid off, with Citi’s net income rising 18 percent to $4.65 billion from $3.93 billion a year earlier. The bank’s shares rose by 2% in pre-market trading. “Our results for the quarter show very balanced performance across our business lines,” said Michael Corbat, CEO of Citigroup. “We grew loans and deposits in constant dollars in Global Consumer Banking, while also gaining wallet share among target clients in our Institutional Clients Group.” Several banks have already reported this week, including Bank of America whose earnings were stronger than expected as well as both Wells Fargo and JPMorgan who beat analysts expectations. Foreign banks will also report over the next few weeks, when it will emerge how they have compared to their UK counterparts.  

Netflix soars after boost in subscribers

Miranda Wadham
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Netflix soars after boost in subscribers
Investment in original content such as Orange is the New Black appears to be working for Netflix, as the company gained nearly a third more subscribers than expected in the second quarter. Shares soared 9.4 percent at the news to 107 pence per share. Net subscriber additions rose about 94 percent year over year to about 3.3 million in the second quarter, beating the company’s forecast of 2.5 million. Several of its original shows, including House of Cards and Grace and Frankie, have garnered serious attention over the past year. “Subscriber growth was huge domestically and internationally,” said FBR Capital Markets analyst Barton Crockett. “The technology, the breadth of content and the quality of content is really working in their favour.”  

Risk Reward offers investment opportunity on FundingTree

Miranda Wadham
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Risk Reward offers investment opportunity on FundingTree
Risk Reward, the global banking and financial services training, consultancy and recruitment specialist, is turning to crowdfunding to raise money to grow the business. Using FundingTree, they are looking for £250,000 in return for 5% equity. Risk Reward is based in London, and has recently opened an office in Miami to service its business in the Americas. The company specialises in risk and compliance training and recruitment, the fastest growing part of the sector. Clients include international training firms and specific banks including the British Bankers Association, GPS, MIS, Al Rajhi Bank, FBN, First Gulf Bank, HSBC, Lloyds Bank, Wells Fargo and many more prominent names. The company’s goals over the next year include additional development of expertise-led recruitment offering and growing the recently acquired Alan Buckley recruitment business. The business has been operating for 12 years, with Dennis Cox as CEO. He has 30 years experience and is assisted by a General Manager who is a chartered accountant with 30 years experience, a head of recruitment with 15 years experience and a Managing Director with 25 years experience. Recent valuations have put the company’s worth between £7-12 million. The expected return in a three-year period is 100%. For more information on this opportunity, visit FundingTree

Central Rand Gold falls

Miranda Wadham
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Central Rand Gold falls
Central Rand Gold fell 23.17% due to a delay in the completion of an agreement for its sale. The company had targeted a completion date for the execution of a binding agreement by 12 June 2015, which wassubsequently extended to 15 July 2015 at the request of both Huili Resources Limited and Hiria Group Company Limited. In a statement, The Board cautioned that “at this time there can be no certainty that the discussions with both Huili or Hiria will lead to a binding agreement being entered into by either party, nor that the potential sale of Central Rand Gold N.V., or any other transaction will be completed.”

Dixons Carphone sees strong results

Miranda Wadham
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Dixons Carphone sees strong results
Dixons Carphone has reported a 21% jump in profits in its first annual results. Carphone Warehouse and Dixons Retail merged last year, and have since reported underlying pre-tax profits of £381m in the year to 2 May, with revenues up 6% to £9.9bn. “This has been a terrific first year for Dixons Carphone,” the firm’s chief executive Sebastian James told the BBC. “We have seen excellent increases in both sales and profitability and we have made very encouraging progress with the tricky job of integrating these two great companies,” he continued. Whilst Greece may be in turmoil, Dixons Carphone’s Greek branch Kotsovolos appears to be unaffected, recording an increase in like-for-like revenues, driven by a strong demand for large screen TVs. “We have a fantastic team in Greece,” Mr James told the BBC. “They’ve been very entrepreneurial in thinking about every possible outcome, and how we would react to it.” However, southern Europe is proving a tougher marketplace, with like-for-like sales down 5%. Earlier this month, Dixons Carphone announced a deal with US telecoms firm Sprint, which could lead to the opening of 500 stores in the US.

Volkwagen affected by China’s slowing auto market

Miranda Wadham
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0
Volkwagen affected by China’s slowing auto market
Volkswagen’s Audi is abandoning plans to sell 600,000 cars in China after tepid demand in the market, it was announced today. This comes after China recorded a 3.4% monthly year-on-year drop in new-car sales in June, its first decline in more than two years. China’s Automakers Association also cut its 2015 forecast for vehicle sales growth to a meager 3 percent last week, as a volatile stock market affected sales to consumers concerned about the slowing economy. This slow in growth will come as a blow to Volkswagen, who generate about 37% of its group unit sales in China. Associate earnings from its China joint venture alone accounted for more than 35% of the group’s pretax profit, Morgan Stanley estimates. Volkswagen opened 1.8% higher this morning after EU car registration data showed its biggest gain in 5 years; however, it then fell over 2.6% into negative figures in 4 mins. It has since steadily gained 2.7%. This slowdown in China is likely to have knock on effects for the European auto market. Shares in BMW were also hit this week after its Chinese joint venture, Brilliance China Automotive, warned that profit would fall by 40% in the first half from a year earlier. The auto market could well have an effect on China’s oil prices; their implied oil demand grew 3.5 percent in June, as rising air travel and vehicle usage boosted fuel consumption. However, a drop in passenger car sales and a recent stock market slump could limit demand growth over the next few months.  
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