Apple becomes first trillion dollar company
Apple (NASDAQ: AAPL) became the first company worth one trillion dollars (£767 billion) on Thursday.
The tech giant reached the landmark after it released strong financial results and shares hit a high of $207.05.
Apple beat rivals Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT) to become the first public company to reach the $1 trillion valuation.
Amazon is currently worth $875 billion, Alphabet is valued at $850 billion and Microsoft $823 billion.
“Growth was strong all around the world,” said Apple’s finance chief, Luca Maestri.
Founded in 1976, it took the group 42 years reach the one trillion mark.
The company experienced higher than expected profits for the most recent quarter due to strong sales. Profits reached $11.5 billion in three months on the back of $53.3 billion worth of sales.
Sine the first iPhone sale in 2007, shares in Apple have increased by 1,100 percent and have soared by almost a third in the past year.
The good news for the trillion dollar company was met by bad news for Facebook, who last week suffered the worst day for a single company in US stock market history. The group lost over $120 billion from its value as shares fell over 20 percent.
PetroChina, the world’s fourth biggest oil company by revenue, passed the one trillion dollar mark in 2007. However, the record worth was short-lived due to the collapse in oil prices. Today the group is worth about $220 billion (£167 billion).
RBS pays first dividend in decade, shares rise
The Royal Bank of Scotland is to pay its first dividend since the financial crisis ten years ago.
The bank will pay two pence a share as an interim dividend once its provisional $4.9 billion settlement with the US Department of Justice is completed.
“The turnaround of the bank is almost complete,” said Ross McEwan, the group’s chief executive.
“We still have a lot more to do to achieve our ambition of being the best bank for customers in the UK and Republic of Ireland. “However, with our major legacy issues largely behind us, we are able to fully focus on closing this gap,” he added.
The treasury will receive £149 million from the £240 million dividends as the bank is still 62 percent owned by the UK government.
RBS reported its first annual profit in ten years in February.
“RBS has made tremendous progress in addressing legacy issues over the past 12 months such that it is now in a position to resume dividend payments and plan additional capital distributions to shareholders,” said Gary Greenwood, an analyst at Shore Capital.
“Despite this positive progress, the shares have been weak of late and are beginning to look more interesting to us,” he added.
The bank has made no comment over its controversial Global Restructuring Group (GRG), which was criticised over its treatment of small and medium-sized business customers.
The Financial Conduct Authority has said that no action would be taken against RBS over the controversy.
The bank has offered a total of £125 million to the victims of GRG.
“It is important to recognise that the business of GRG was largely unregulated and the FCA’s powers to take action in such circumstances, even where the mistreatment of customers has been identified and accepted, are very limited,” said Andrew Bailey, the FCA chief executive.
Shares in the group (LON: RBS) rose three percent to 257.6p in early trading.
Next shares dip despite impressive first half
Home wares and clothing retailer Next (LON:NXT) saw their share price dip following reports of over-achievement in the first half of the year.
This came as the firm announced it would leave its full-year profit projections from May unchanged, despite an impressive spell of summer sales. It is believed that full-year profits will still be down 1.3% on last year, as impressive first half performance has been put down to impressive on-year figures for Q1, in comparison to a disappointing first quarter in 2017. Also, Q2 sales have soared as it has been noted that the hot weather has pulled the summer spending spree forward into July.
Next CEO Simon Wolfson said, “Full price sales in the second quarter were up 2.8% on last year and ahead of our guidance. We believe that this over-achievement in sales was due to the prolonged period of exceptionally warm weather, which greatly assisted the sales of summer weight product. It is almost certain that some of these sales have been pulled forward from August, so we are maintaining our sales and profit guidance for the year to January 2019.”
AJ Bell Investment Director, Russ Mould, reiterated Wolfson’s comments, “Despite enjoying better than expected trading in the second quarter thanks to the warm weather, the company’s full year guidance remains unchanged. Wolfson and his management team prudently judging that spending may have been pulled forward from a traditional splurge in August.”
“Investors seem to be taking this warning to heart, although it is worth noting the company upgraded guidance after the better-than-expected first quarter performance announced in May.”
Thus, the Next CEO’s cautious approach in the quarterly sales update was not well received by investors, but one should note that such an approach is typically in character for Lord Wolfson.
Despite high street retail sales dipping by 5.3% in the first half, Next’s online sales cancelled out this drop with a 15.5% increase. Following yesterday’s sharp dip, Next’s share price has increased 0.73% or 40p since markets opened this morning, to 5552p. Analysts from Liberum have reiterated their ‘Hold’ stance on Next stock.
Crowdcube reports record-breaking second quarter
Crowdcube have seen their most successful quarter, with a hike in on-year revenue and the most funds raised in a single quarter.
The firm are the world’s first and largest equity crowdfunding platform, giving entrepreneurs the opportunity to cut out banks and pitch their ideas to the general public, in return they have direct access to the capital they raise.
The firm was founded in 2011 and has since gone on to collect a total of £490 million in funds from the general public, with 560,000 registered investors and involvement with 700 different companies.
Crowdcube’s recent success saw the firm raise a total of £47.4 million for 58 businesses in the second quarter. Additionally, Q2 revenues were up 43% on-year to £1.6 million. Adding this to the impressive figures form the first quarter, Crowdcube achieved a record-breaking first half, with total revenues reaching £2.67 million, up 32% on the year before.
The successful start to 2018 has largely been attributed to Crowdcube’s intelligent business model, based on efficient spending and structural investment on personnel and technological expansion. Such investment began towards the end of 2017 and has extended to 2018, with the firm’s Q1 introduction of the ‘entrepreneur dashboard’ and Q2 introduction of an insight process which allows businesses to see performance statistics for their crowdfunding and marketing campaigns, as well as the source of any investment being made.
Luke Lang, co-founder of Crowdcube, said “Our two consecutive record quarters are a reflection of real progress over a long period by the team. By investing in the business, we’ve been able to develop our technology and our processes to enhance the fundraising experience, allowing us to attract and support more companies and accelerate our revenue growth, while improving efficiency and productivity to manage costs. We’re getting fitter as a business while providing more companies with access to finance and bringing more investment opportunities to investors.”
The recent triumphs for Crowdcube come on the back of opening up innovative investment opportunities to the general public, when traditionally, such opportunities would have been reserved for corporate bodies.
The platform has had an integral role in raising funds for businesses such as Brewdog, Monzo, Zing Zing, The Eden Project, eMoov, Parcel2Go, Freetrade, Pod Point, JustPark, Mindful Chef, Innis and Gun, Grind and Revolut.
The last opportunity listed above represents an instance of success for all parties involved. Revolut is a fintech firm that provides a digital banking alternative, and has grown exponentially since its Crowdcube campaign in 2016, where it raised £1.01 million. Since being worth £42 million in 2016, Revolut has gone on to become the second member of Crowdcube’s Unicorn Club – after Brewdog – which is reserved for businesses worth over a billion dollars. In 2016, Revolut’s crowdfunding venture offered investors the chance to invest up to £5000 in the firm, and as of today, they were given the choice to either keep their stake in the company or sell it back to Revolut. Those that chose to sell, have seen a 1900% return on their original investment.
Bank of England raise interest rates
The Bank of England has raise UK interest rates to 0.7 percent, marking the highest level since March 2009.
The Bank decided to raise the rate by a quarter of one percent, from 0.5 percent, marking the second raise in a decade.
The monetary policy committee reached the decision unanimously , after concluding that the economy had shown signs of recovery after extreme winter weather conditions.
Looking ahead, the Bank anticipate “modest” economic growth to continue at around 1.4 percent for the year, increasing to 1.8 percent next year.
Unemployment is expected to fall further from 4.2 percent and wage growth is expected to pick up.
Inflation is forecast to fall back down to 2 percent, by 2020, in line with the Bank of England’s target.
Nevertheless, this has prompted concerns from economists in the event of a no-deal for Brexit.
However, the BoE Governor, Mark Carney could opt for an emergency rate cut should no deal be reached.
The hike had been widely expected after the committee delayed raising rates back in May, nevertheless a unanimous decision was not expected.
Rolls-Royce profits on track despite costs of engine problems
Rolls-Royce (LON:RR) shares rose around 3 percent on Thursday morning, after the British engine-maker said it expected full year profit to come in at the higher end of expectations.
Underlying operating profit rose to £205m in the first half of the year, up from £141 million in the same period of 2017. This came despite the group taking a £554 million charge to cover costs relating to problems with its Trent 1000 engine.
The engine, which is used in Boeing’s Dreamliner range of aircraft, has experienced problems with its turbine blades, and airlines have been forced to take aircraft out of use whilst Rolls-Royce fixes the problem.
“We continued to make good progress in the first half. Financial results were ahead of our expectations, with strong growth from civil aerospace and power systems, and we achieved a number of operational and technological milestones,” chief executive Warren East said.
The expected cost of fixing the problem will be around £450 million this year, £450 million in 2019 and £350 million in 2020. The work is set to be totally complete by 2022.
Shares in Rolls-Royce (LON:RR) are currently trading up 3.31 percent at 1,020.50 (1301GMT).
Aviva profits fall but dividend rises 10pc
Aviva (LON:AV) shares fell in morning trading on Thursday, after reporting a slight fall in profit in the first half of the year.
Operating profit fell 2 percent to £1.44 billion, down from £1.47 billion a year earlier, with operating earnings per share increased 4 percent to 26.8 pence.
The insurance giant attributed the weak results to a slowdown in the Canadian motor insurance sector, alongside adverse weather and various business divestments. However, looking towards the second half the company is more positive.
“Aviva remains financially strong with a capital surplus of £11 billion. In the first half of 2018, we started a £600 million share buy-back and paid off €500 million of expensive debt,” said Mark Wilson, Group Chief Executive Officer.
The group boosted its interim dividend per share by 10 percent to 9.25 pence from 8.40 pence the year previously.
Centamin profits up despite decline in production
Gold miner Centamin (LON:CEY) saw shares edge down in morning trading on Thursday, despite profit rising by over a third over the period.
Profit before tax rose 34 percent in the six months to June 30th, with total revenues rising by 2 percent to hit $296.4 million. Earnings (EBITDA) rose by 16 percent to $129.7 million.
This all came despite the group selling and producing less gold over the period, with gold production figures for the half year falling by 7 percent to 217,099 ounces. Gold sales fell 3 percent to 228,672 ounces.
Looking ahead, however, the company said gold production was likely to pick back up.
“Significantly stronger production is expected for the second half (“H2″), driven by continued improvements in grade from the open pit as mining progresses into the sulphide ore and an increase in high grade stoping tonnes from the underground,” the company said.
Shares in Centamin are currently trading down 0.79 percent at 112.60 (1153GMT).
London Stock Exchange profits strong as it begins Brexit preparations
London Stock Exchange Group (LON:LSE) saw shares rise nearly 3 percent on Thursday morning, after strong performance from its information services division led to a profit increase.
For the six months to 30 June, profit before tax rose 30 percent to £360 million, with adjusted operating profit up 21 percent to £480 million. Revenue also saw an increase by 12 percent, after its information services division saw revenue jump by 16 percent.
‘We remain well positioned in an evolving regulatory and macroeconomic environment and remain focused on achieving the 2019 financial targets,’ the company said.
The group also said that it had started implementing contingency plans in preparation for a possible hard Brexit. These include developing new entities in “the EU27 and applications for authorisation within the EU27 for certain group businesses”.
“However, the complexity and the lack of clarity of the application of a hard Brexit may decrease the effectiveness, or applicability of some of these contingency plans.”
Shares in the London Stock Exchange (LON:LSE) are currently trading up 2.85 percent at 4,481.00 (1123GMT).
Countrywide shares dive as it announces fundraiser
Estate agency group Countrywide Plc (LON:CWD) have seen their shares dip 61% following the announcement of a discounted shares placement.
The shares are being sold at a reduced price, in an attempt to raise £140 million, which will be put towards paying off their backlog of debt.
This news comes after a report announced that the firm’s adjusted earnings EBITDA had dropped by 61.5% on-year for the first half, to £10.7 million. There have also been worries surrounding sales and lettings, which were down 8.7%.
Within the last eight months, the company have issued four profit warnings. High street sales have declined sharply over the last year, with increasing liquidity on the online housing market. While this has been the case for Countrywide, they have been losing out in recent months to online rivals such as Zoopla and Rightmove.
The company’s closing share price of 49p a share was down 50% within the first hour of trading, with placement shares trading at 10p a share. Analysts from Citigroup have retained their ‘Neutral’ stance on Countrywide stock.