Uk service sector defies projections

Nicole Jeary
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Uk service sector defies projections

The UK service sector has seen its fastest growth since January, despite continued anxiety over Brexit uncertainties.

Despite an initial slowdown, British hotels and banks look to cap off the year with solid performances suggesting a resilient UK economy.

According to the Markit/CIPS, UK services PMI rose to 55.2 in November up from 54.5 the previous month. This proved a better-than-expected performance, with Reuters forecasts anticipating the sector to experience slowdown to 54.0. The index has now been above the 50-mark which indicates growth, as opposed to contraction for four consecutive months.

Chris Williamson, the chief economist for business at IHS Markit, stated:

“The further upturn in the vast services sector shows that the pace of UK economic growth remains resiliently robust in the fourth quarter, despite ongoing uncertainty caused by Brexit.

“The three PMI surveys collectively indicate that the economy will grow by 0.5% in the fourth quarter.”

The sector has benefited from a weaker pound, pushing up overseas demand and led to growth in employment levels. Nevertheless, sterling weakness also meant higher import costs and greater pressure as a result of higher food and fuel costs for British businesses within the services sector.

In addition, it was noted that the pressure from inflation and as political uncertainty starts to weigh upon business outlook, this may impact performance into the new year. Similar concerned were raised last week in respect to the UK’s manufacturing and construction industry.

“Rising prices – often linked to the weaker pound – are a big concern, however, and suggest that inflation is set to lift higher,” Williamson continued.

“The past two months have seen the steepest rise in businesses’ costs for over five-and-a-half years. These higher costs will inevitably feed through to consumers in the form of higher prices.”

The services sector remains a dominant contributor to the UK economy, making up over 75 percent.

Markets take Italy No vote to referendum in their stride, Renzi resigns

UK Investor Magazine
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Markets take Italy No vote to referendum in their stride, Renzi resigns
In what many had tipped as being a volatile outcome for the struggling Euro nation financial markets after an initial bout of volatility have taken in their stride Italy’s resounding “No” to constitutional reforms. With Italian Prime Minister Matteo Renzi putting his head on the line on the outcome it will mean Italy is due to elect their 6th Prime Minister in 10 years. The reforms were broadly looking to assist in preventing the stalemate which can often occur in Italian politics with the two levels of Government having the same powers. The No vote was championed by populist party Five Star Movement (5SM) Francesco Oggiano, author of “Beppo Grillo Parlant” was quoted as saying “According to the 5SM, people won’t be able to choose their own representatives in the parliament and this is the most important point,” Oggiano explained. “The result (of a ‘yes’ victory) would be a parliament full of bureaucrats chosen from their parties that, once elected, will just get to satisfy their leader instead of people’s needs,” he added. Whilst the Euro initially saw heavy selling the negativity was short lived, shortly after the vote EURUSD was down over 1.5% however by midday had recovered those losses, with equity markets following a similar pattern.

Shares in Banco Monte dei Paschi di Siena, regarded as Europe’s most troubled large bank, recovered to only mild losses by midday. Jeroen Dijsselbloem, Eurogroup President said “If this is the market reaction, it doesn’t seem to require any emergency steps,” in response to a question about whether the European Central Bank should intervene ahead of a eurogroup meeting in Brussels.

“The process of dealing with some of the banks that have problems need to continue and will continue,” he added. “[Italy] is a strong economy, is one of the largest economies in the eurozone, it’s a country with strong institutions.”

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UK Investor Magazine
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UK manufacturing growth unexpectedly slow in November

Miranda Wadham
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UK manufacturing growth unexpectedly slow in November
Growth in the UK’s manufacturing sector slowed unexpectedly in November, as factories suffer with the weak pound in the wake of the EU referendum. The manufacturing purchasing managers’ index (PMI) fell to 53.4, down 0.8 points since last month but still above the 50 point mark indicating expansion. The PMI figure dipped below 50 in July as confidence was spooked in the immediate aftermath of the Brexit vote. IHS Markit said the rate of growth remained “solid”, despite it being the second month of declining confidence in the sector.

Rob Dobson, senior economist at IHS Markit, said:

“Scratching beneath the surface of the data shows that rising consumer demand and business-to-business spending is helping manufacturing to grow at a robust clip.”

“The concern is that higher costs may in time offset any positive effect of the weaker exchange rate, especially given that export order book growth has already waned markedly from September’s five-and-a-half year high,” he added.

Oil prices jump as OPEC begin meeting in Vienna

Miranda Wadham
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Oil prices jump as OPEC begin meeting in Vienna

Oil prices jumped over 5 percent on Wednesday morning on hopes that OPEC may agree an output cut at its meeting in Vienna.

The 14-country group, which accounts for a third of global oil production, is set to meet this morning at 0900GMT to finalise the first production cut in eight years, which was voted for in September.

Tensions between Iraq, Iran and Saudi Arabia have blighted hopes this week that an agreement will be voted for, with oil prices falling 4 percent yesterday. Some analysts believe the meeting may not produce a deal, but oil surprise jump this morning suggests that investors remain hopeful.

Yesterday Indonesian Energy Minister Ignasius Jonan told reporters that he was unsire as to whether Opec would be able to forge an agreement: “I don’t know. Let’s see. The feeling today is mixed.” 
30/11/2016

JD Sports sub-division kicks in and announces Go Outdoors takeover

UK Investor Magazine
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JD Sports sub-division kicks in and announces Go Outdoors takeover
Shares in JD Sports Fashion PLC (LON:JD) closed Friday at 1594p, this morning they opened at 330p as the share dilution that was announced on the 1st of November came into effect splitting the ordinary shares of 1.25p each into shares of 0.25p. In old money, JD Sports shares are trading up almost 4% as the group announced the acquisition of Go Outdoors for £112 million, adding to it’s already significant exposure in the outdoor market through the Blacks, Millets, Tiso and Ultimate Outdoors businesses. The purchase sees Go Outdoors founders Paul Caplan and John Graham leave the business Through the purchase JD Sports adds 58 Go Outdoors stores to the group. With the majority of the stores being at out of town retail parks the Chief Exec Peter Cowgill confirmed “The minimal overlap in store locations and their out of town, one stop retailer approach complements the work we have done on the high street with Blacks and Millets and further strengthens our offering in the outdoor sector. I am excited by the future prospects this holds for the JD Group.” The addition to the group can also be seen as backing the potential boost for the staycation market as the pound weakens making international holidays that bit more expensive. With Go Outdoors reporting sales of £202m last year, this equates to approximately 10% of JD Sports’ expected sales for this year providing what could be a notable boost with little geographical competition through differing store locations.

“Perfectly credible” case for second referendum, argues Sir John Major

Nicole Jeary
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“Perfectly credible” case for second referendum, argues Sir John Major
Former Prime Minister Sir John Major has argued that there is a legitimate basis for a secondary referendum, to ensure that those who voted to remain are fairly represented. During a private dinner, the former Conservative leader argued that the government should not impose its negotiations on the people without further consultation. “I hear the argument that the 48 percent of people who voted to stay should have no say in what happens,” he said. “I find that very difficult to accept. The tyranny of the majority has never applied in a democracy and it should not apply in this particular democracy.” The decision to leave the European Union was narrowly provoked by the June referendum result, with a slim majority of 51.9 percent of people voting Leave, against 48.1 percent casting their vote to Remain. During his time as Prime Minister, Sir Major faced dissent from the eurosceptic wing within his party, who condemned his moves to compound the UK further to Europe. The former leader previously claimed that his success in negotiating the Social Chapter, exclusion from the single currency and the Maastricht Treaty were “game, set and match for Britain”. Nevertheless, he was later defeated in Parliament on the matter, which significantly affected his authority and leadership. Theresa May has already announced her intended timeline for withdrawing from the EU, with the date for triggering the two year process of Article 50 said to occur in March 2017. However, the specifics regarding negotiations over single market access and passporting rights are yet to be clarified. According to the Chancellor, the government anticipates borrowing to increase to £122 billion as a result of Brexit. This comes amidst claims that the government is finding itself overwhelmed by the process. Reportedly, the civil service would have to see an increase of around 30,000 to accommodate the growing administration required to tackle ongoing negotiations regarding Europe. This follows former Labour Prime Minister Tony Blair’s announcement of his return to British Politics, as he calls for the people to mobilise against Brexit. Tony Blair remains Labour’s most electorally successful leader, having won three successive elections.

Trump must ‘show backbone’ and repeal Obama’s imperialistic global tax law

Miranda Wadham
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Trump must ‘show backbone’ and repeal Obama’s imperialistic global tax law
Trump must “show some backbone” and repeal Obama’s highly controversial global tax law that negatively impacts foreign financial institutions (FFIs)and Americans living abroad, says boss of deVere Group. Nigel Green has asked the President Elect to address the problems brought on by the Foreign Account Tax Compliance Act (FATCA), which has adversely affected FFIs and millions of Americans around the world. Green said: “Donald Trump has publicly stated that he will revoke some of Obama’s executive orders. I would urge him to make repealing FATCA one of those he revokes. “This must be a major priority as FATCA negatively impacts millions of U.S. citizens. It has been responsible for the record number of Americans, most of whom are proud patriots, feeling that there is no other option than to relinquish their U.S. citizenship. “Since FATCA was introduced, official figures show that more and more Americans give up their U.S. passports every year. This correlates with a deVere Group survey carried out last year that reveals 73 percent of Americans living overseas are tempted to give up their U.S. passports.” He continues: “This toxic legislation turns law-abiding Americans living overseas, of whom there are approximately eight million, into financial pariahs. “For instance, many U.S. citizens cannot even now hold a bank account in their country of residence as foreign banks routinely feel Americans are too much trouble thanks to FATCA’s onerous and costly rules by which they would need to abide to take them on as clients. This makes normal life extremely challenging, to say the least. “By using its super power status, the U.S. has over the last few years been coercing foreign financial institutions around the world into accepting FATCA, or facing stiff financial penalties and extraterritorial sanctions. These FFIs are now working as de facto agents of America’s tax authority.” Green concluded that this issue is a “golden opportunity for Trump to show his mettle and reverse a fatally flawed, misguided, imperialistic law”. The FATCA came into effect in July 2014 and requires all non-U.S. financial institutions (including banks, insurance companies, investment funds and pension funds) to report the financial information of American clients who have accounts holding more than $50,000 directly to the IRS. The official aim of the legislation is to try and combat tax evasion. However, its opponents, including Nigel Green, a long-term vocal critic of the legislation, says: “Tackling tax evasion is a noble and worthwhile objective, yet FATCA’s dragnet approach will be highly ineffective at achieving this as well as being prohibitively costly.” 
22/11/2016
 

Eco-friendly plant hire Anglia Crane seeks investment on Crowd2Fund

Miranda Wadham
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Eco-friendly plant hire Anglia Crane seeks investment on Crowd2Fund

Jah Plant Hire, a specialist plant hire company based in Northamptonshire is seeking a £50,000 on Crowd2Fund.com to help manage their fast growth.

Operating since 1982, the company – which trades as Anglia Crane – was taken over by current owner Jay Hawkes. Since then, Anglia Crane has seen significant growth, expanding from a fleet of just four machines to over 450 to become one of the fastest growing hire companies in the UK.

Hawkes has a strong history in construction, running his own business prior to Anglia Crane. During this time, he identified a gap in the market to provide eco-friendly, fuel efficient plant hire; inspiring him to purchase the company and turn it into the high growth business that is today.

Alongside the eco-friendly element of the business, another key factor is service delivery.

gold digger
Anglia Managing Director Jay Hawkins,, centre, with Kubota UK MD Dave Roberts, left, and Julian Payne from local dealer, Shell Plant, who placed the highest bid for the machine.

“First class service that customers can rely upon is one of the key selling points of the business”, Hawkes said.

Corporate social responsibility is at the heart of the business, working with a number of local charities to reduce the environmental impact of the construction industry.

Anglia Crane are now seeking to raise an IFISA qualifying £50,000 loan, with an estimated average APR of 9 percent, to help manage their working capital as the company continues to grow.

“The funds will be used to bolster the working capital in the business. As with any business, as it grows the strain on working capital can appear. Having a strong working capital position will allow the business to capitalise on future opportunities,” said Hawkes.

Hawkes’ long term vision for the business is to consolidate future growth to become the go-to nationwide plant hire business.

Anglia Crane chose to raise with crowdfunding platform Crowd2Fund.com due to its innovation in the industry. Hawkes says, “Anglia Crane is in an established industry that uses modern, innovative technology to fulfil our customers’ needs. I see Crowd2Fund in exactly the same way. Linking investors with my business without having to pay extortionate fees along with the flexibility it offers investors really excites me.”

Miranda Wadham on 21/11/2016

Mitie Group shares fall as Brexit hits profits

Miranda Wadham
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0
Mitie Group shares fall as Brexit hits profits
Outsourcing group Mitie Group saw profits shrink in the first half of the year, hurt by customer uncertainty in the wake of the European Referendum. The group’s pretax loss fell to £100.4 million for the six months ended September 30th, down from last year’s pretax profit of £45.1 million. Revenue fell 2.6 per cent in the first half, from £1.123 billion to £1.093 billion, with operating profit before other items falling 40 per cent to £35.4 million from £58.1 million. In September, the company cut its operating profit forecast due to “changing market conditions as clients adjust to rising labour costs and economic uncertainty”.

Chief executive Ruby McGregor-Smith said:

“The steps we have taken to counter these impacts include the restructuring of both frontline and support functions across facilities management and the decision to withdraw from the domiciliary care market.

“Second half performance is expected to improve with our new operating model as we adapt to market conditions.”

Mitie Group (LON:MTO) shares fell significantly in early trading, currently down 14.43 percent at 181.30 (0809GMT). 
21/11/2016
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