Pound hits lowest level since 1985 as Brexit worries bite

Miranda Wadham
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Pound hits lowest level since 1985 as Brexit worries bite
The British pound fell to new lows on Wednesday, as fears of a ‘hard’ Brexit continue to bite. The pound fell below $1.27 for the first time since June 1985, after several consecutive days of decline in the wake of Prime Minister Theresa May’s March 2017 deadline for leaving the European Union. During her speech May made clear her intentions to prioritise curbing immigration over free trade as the UK begins its negotiations with the EU bloc, prompting investor panic and pushing sterling down against the Euro.
Carlo Alberto De Casa, chief analyst at online broker ActivTrades, told the BBC: “As far as the pound goes, this week is a write off. It is difficult to see a quick recovery in prices after this morning’s lows against the dollar and euro – and it could go lower. “Investors are still analysing what could happen after March when the Article 50 will be triggered and this fear is dominating the currency market.” The Pound is currently down 0.07 percent against the Euro and 0.02 percent against the Dollar. The FTSE 100 is down 23.28 points, after hitting record highs on Tuesday as a weaker pound sent international companies’ shares higher (1344GMT). 
05/10/2016

Tosh Products seek investment in rapidly-growing coffee cup brand

Miranda Wadham
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Tosh Products seek investment in rapidly-growing coffee cup brand
Tosh Products, the creators of a reusable, fully biodegradable takeaway coffee cup, are looking for a £100,000 investment through their crowdfunding campaign on Crowd2Fund. Most takeaway coffee cups contain contain plastic or wax and can’t be recycled, meaning over 100 billion go to landfill each year globally. Tosh Products founders David and Alison McLagan set out to change this, creating reusable, biodegradable takeaway cup made from naturally organic bamboo fibre. The cup has a lifecycle of between three and four years, after which it can be composted. It is dishwasher safe and comes in three sizes, with over 50 designs in total. The McLagans are now looking to take the company to the next level, and are seeking a£100,000 investment via Crowd2Fund: giving the public a chance to support their mission and, with the single-use takeaway cup sector worth US$27billion globally, potentially earn impressive returns. The founders have ambitious growth plans for the business over the next five years, with plans to introduce a range of complimentary products targeting other areas of single-use waste. David says: “Our objective is to become the leading brand to facilitate re-use instead of single-use.” The company is raising a loan in order to accelerate growth – and is building a team of investors who believe in the brand and will support them for the longer term. The funds will be used exclusively to meet rapidly growing global demand. Alison says: “A 40ft container of product costs around US$80,000 and we are currently ordering around 12 per year. This will rise to over 40 by 2018 – hence the demand for funds.” Up until this point, the business has been entirely self-funded by founders Alison and David. However, David sees the crowdfunding campaign as a way to connect with customers and raise funds simultaneously: “We think it’s a much more human approach and provides us with a great way to speak directly, and be shaped by, the people who truly believe in our brand and what we are doing.” The campaign features a number of different rewards for investing, including the potential to create a customized Ecoffee Cup. For more information, visit their campaign page on Crowd2Fund.com. 
04/10/2016

Cath Kidston set for Asia after Baring takeover

Miranda Wadham
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Cath Kidston set for Asia after Baring takeover
British lifestyle brand Cath Kidston has been sold to Hong Kong-based investment firm Baring Asia, in a deal said to be worth more than £250 million. Baring Asia bought total control from US private equity firm TA Associates, appointing ex-Gucci boss William Flanz as chairman. Its new owners are likely to be eyeing up expansion in Asia, where it already has 133 shops. The group now have about 160 stores outside the UK, 70 percent of its total stores, and is set to open in India later this year. Kenny Wilson, Cath Kidston’s CEO, said: “We are entering a really exciting new stage under a single owner. Baring Asia’s decision to increase its shareholding is a fantastic endorsement of the potential of the Cath Kidston brand and I would like to welcome Bill Flanz. “This year has been our most successful start to the year, proving the strength of our product and the continued and growing appeal of the brand to existing and new customers. As well as expanding internationally, we continue to innovate as demonstrated by our new collaboration with Disney, which lands in stores this month. We are very excited about the future.”

Cath Kidston is well-known for its floral-patterned homeware products, and started from just one store in Holland Park in 1993. Kidston still owns around 11 percent of the business, despite leaving her job as creative director in 2014, with the rest of the management team owning the remaining 9 percent.

04/10/2016

Sterling falls to lowest level since 1985 on Brexit date

Miranda Wadham
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Sterling falls to lowest level since 1985 on Brexit date
Sterling dropped to its lowest level in three decades on Tuesday, after Prime Minister Theresa May set a date by which Britain will have left the EU. The currency fell heavily on Monday and pushed down another 0.5 percent on Tuesday, hitting its weakest level since June 1985. Connor Campbell, financial analyst at SpreadEx, told the BBC “The pound’s perilous position has continued this Tuesday, with sterling still suffering from the aftershock of Theresa May’s (hard) Brexit promises. “Just like yesterday the UK index’s rise will be tested by a PMI reading, with this morning the turn of the construction sector. While the manufacturing and services PMIs have recently been a source of comfort, the construction survey has lagged behind, missing out on last month’s surprise boost to remain in contraction territory. “September’s reading is meant to be even worse.” However, sterling’s fall is good news for the FTSE 100 index, which broke the 7,000 point barrier at the beginning of Tuesday’s session. Many companies in the FTSE 100 operate internationally and will benefit from a weaker pound. 
04/10/2016

Tax returns create fresh controversy for Trump

Nicole Jeary
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Tax returns create fresh controversy for Trump

The reported release of Donald Trump’s tax return documents suggest that the Republican presidential candidate may not have paid income tax in the US for over a decade.

The documents allegedly show that Trump claimed a loss of $916 million by two failed businesses in order to escape paying federal tax. Whilst not an illegal act in itself, the documents shed some light on the businessman’s continued refusal to reveal his tax returns – despite the precedent set by every presidential candidate over the past 40 years.

In a statement, his campaign said: “The only news here is that the more than 20-year-old alleged tax document was illegally obtained, a further demonstration that the New York Times, like establishment media in general, is an extension of the Clinton campaign, the Democratic party and their global special interests.”

Following criticism from Senator Bernie Sanders about his tax activities, his campaign team said Trump was “a highly-skilled businessman who has a fiduciary responsibility to his business, his family and his employees to pay no more tax than legally required”.

“That being said, Mr Trump has paid hundreds of millions of dollars in property taxes, sales and excise taxes, real estate taxes, city taxes, state taxes, employee taxes and federal taxes, along with very substantial charitable contributions.”

This release follows last week’s presidential debate in which Clinton attempted to interrogate Trump over his continued secrecy of his tax returns. When questioned over his tax activity, Trump said that such a move made him “smart”. According to poll figures, voters concluded that Clinton decidedly won the first televised debate over Trump.

Trump has thus far not denied the latest allegations, but has announced his intention to sue the New York Times for illegally obtaining the documents.

Brexit process to begin at the end of 2017

Nicole Jeary
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Brexit process to begin at the end of 2017

Article 50 will formally be triggered before the end of the 2017, Prime Minister Theresa May announced in a speech on Sunday.

May stated that the two-year Brexit process will be initiated by March 2017, taking Britain out of The European Union by March 2019. The Prime Minister has committed her government to repealing The European Communities Act 1972, previously signed into law by the former Conservative Prime Minister Edward Heath.

Theresa May highlighted her intention to retain aspects of European law, with the ‘Great Repeal Bill’ enshrining all existing EU law into British law and permitting the government to maintain, amend or remove any legislation once the Brexit process has been finalised. May said that the move would ensure that UK remains an ‘independent, sovereign nation.’ The retention of components of certain EU laws has been enacted to ensure the preservation of employment regulation and workers’ rights, and to reassure British businesses.

However, Theresa May has long been a critic of the European Convention of Human Rights (ECHR). The Treaty is a key piece of European legislation which enshrines the protection of Human Rights into European Law. These rights include the right to life (Article II), Freedom of expression (Article X) and Freedom of Association (Article XI), with British MP Sir David Maxwell Fyfe being one of the Convention’s key writers. May has previously said that the Convention can “bind the hands of parliament”, and “adds nothing to our prosperity, makes us less secure by preventing the deportation of dangerous foreign nationals – and does nothing to change the attitudes of governments like Russia’s when it comes to human rights”.

Initially Theresa May advocated remaining within the union and instead, pursuing leaving the ECHR in order to protect parliamentary sovereignty in respect to Human Rights legislation. Her previous opposition to the ECHR makes her decision to maintain other aspects of European law a surprising development.

Despite being a Remain advocate, May has clearly indicated that under her leadership ‘Brexit means Brexit’. Nevertheless, Sunday’s speech is the first real clarification of how Brexit might actually look since the result was declared in June. Since the announcement, the pound dropped one percent against the dollar at $1.2854 and nearly one percent against the euro at €1.1440. This marks a 30 year low for the British currency, as the prospect of Brexit continues to cause market uncertainty.

FTSE 100 rises steadily on Article 50 deadline

Miranda Wadham
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FTSE 100 rises steadily on Article 50 deadline
The FTSE 100 index rose over 1 percent this morning after Theresa May announced a date by which Article 50 will be triggered. The announcement added an element of certainty to the markets, calming investor sentiment and sending the index higher. The FTSE 100 fell sharply in the wake of the European Referendum on June 24, but has climbed nearly 10 percent since. Theresa May announced her intention to trigger the clause by March 2017, meaning the Uk is likely to have left the EU by mid 2019.
Peel Hunt economist Ian Williams told Reuters: “Confirmation from the Prime Minister yesterday that Article 50 will be triggered by the end of March 2017 superficially provides some more clarity for investors on the timing of the Brexit process, but in practice not much has changed.””The much discussed two-year negotiation period is a minimum, and there are many unpredictable political events scheduled across the rest of the EU during that period,” he added. Today’s rise marks a 16-month high for the index, which is currently up 1.15 percent at 6,978.35 (1326GMT). However the news spelt bad news for the British Pound, which has fallen around 1 percent against the Euro. It also fell to its lowest point against the dollar since July 6th, as investors worry about the business impact of leaving the single market. 
03/10/2016

Golfbreaks.com offers slice of golf travel market with new mini-bond

Miranda Wadham
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Golfbreaks.com offers slice of golf travel market with new mini-bond

Golfbreaks.com, one of the UK’s leading golf travel companies, launched its second mini-bond on Monday as part of an effort to raise £2 million needed for expansion across the USA, Scandinavia and the UK.

The Golfbreaks Bond 2 offers investors 7.5 percent gross return per annum, over a four-year initial fixed term. Investments can range between a minimum of £2000 up to a maximum of £100,000, with bondholders having the option to extend the term of their Golfbreaks Bond 2 by successive one-year periods at the end of the initial four years.

Golfbreaks.com now has an annual turnover of £55 million, growing significantly since raising its first £2.9 million through a bond offer in 2014. Golfbreaks.com has recently acquired the premium golf travel business Xclusive Golf, owned by sky sports presenter Sarah Stirk.

Commenting on the Golfbreaks Bond 2, Andrew Stanley, Chief Executive, said:

“From the outset of planning our first Golfbreaks Bond, we saw the potential benefits of offering our customers an attractive return on their money by bringing them closer to the business. As a result of the funds raised the business has made great strides and delivered on specific targets.

“To take us to the next stage we are now reapproaching our loyal customers, as well as the wider investor community, to help accelerate our plans to take a share of the US domestic golf travel market, as well further develop our UK and Scandinavian businesses.”

Golfbreaks are raising the funds to enable them to accelerate the Company’s strategy to capture a share of the US domestic market, opening their business up to North America’s 30 million golfers. Funds will also be used to increase its Scandinavian marketing activity via the Golfbreaks.com’s Copenhagen office and continue growing its UK business by enhancing and promoting its new Xclusive Golf collection and the recruitment of more people to build the systems, partnerships and destinations that it provides to British golfers.

Miranda Wadham on 03/10/2016

Focus on UK start-ups: Why FinTech businesses are staying in London

Katy Fleiner
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Focus on UK start-ups: Why FinTech businesses are staying in London
The UK’s vote to leave the European Union has led to speculation surrounding the future of London’s currently booming FinTech scene. Considered to be the “FinTech capital of Europe”, London has seen real benefits from the rise on FinTech, which has brought businesses, jobs, talent and investment into the country. However, Brexit has sparked worries that economic uncertainty may lead FinTech start-ups to leave the UK behind and set up elsewhere in Europe. Loss of access to the European market has been the major fear spearheading the “what-if” scenario, leading some to believe that British exit from the EU means a FinTech exit from the UK. In a series of interviews conducted this month, we spoke to London FinTech start-ups about their experience in London, how they view the challenge presented by the UK’s decision to leave the European Union and their take on the future of the London FinTech scene.
Brexit will make life harder
Founder and CEO of MoBILLity, Lukas Zoerner, admitted that Brexit is likely to have an impact, and has led some start-ups to rethink strategy. MoBILLity is a mobile platform which helps users save money on their reoccurring bills by putting them back in charge of their data and helping them understand their costs. Zoerner and his team started the company in May this year, choosing the UK’s capital as “the best place to be” for FinTech. However, Brexit has made this a less obvious assumption. Zoerner noted, that uncertainty is a main issue installed by the UK’s decision, as even the right of EU citizens to remain in the UK is under question. He said, “You don’t know what going to happen. You don’t even know if I as an Austrian will even need a Visa – and no one is able to tell me that.” Brexit has installed a number of worries about the economical, as well as political future collaboration between the UK and the rest of Europe. Not knowing how relations will progress certainly makes business planning and development difficult, while also having an adverse effect on investment.
The next issue: regulation of market access is of great concern
Tom Blomfield, Founder and CEO of Monzo Bank, a smartphone powered current account bank, spoke to us about the value of Europe-wide passporting and e-banking licences. FinTech start-ups such as TransferWise, GoCardless and Monzo Bank itself started in London because they knew they could operate across Europe. Blomfield said, “Someone starting the next TransferWise today would not start it in London. You’d go start it in Berlin where you could be certain of passporting.” The scale of the adverse effects Brexit will have on London FinTech start-ups hinges greatly on the decisions made by regulatory authorities over the ability to access the full European market. Lukas Zoerner from MoBILLity added, “I hope that the regulators across the EU will work together and find a way to minimize the impact on the financial system.”
Even businesses focusing solely on the UK market face challenges
Online mortgage advisor Trussle is trying to take advantage of the plentiful supply of and demand for property in London. “London is home to more properties than any other city in the UK”, says founder and CEO, Ishaan Malhi. Should Brexit have the long term adverse effect on the UK economy and London property market many analysts predicted, doing business could become more difficult in this sector. However, Trussle is staying positive: “Brexit was a shock to most Londoners, but until we know the details of what our new relationship with Europe will look like it’s too early to speculate with any degree of certainty. So far the property market has remained resilient.”
But although challenges may arise, FinTech start-ups are deciding to stay in London.
Although most businesses we talked to agreed that Brexit has made things more difficult for them, none of them would currently consider relocating. Even post-Brexit, London has still too much to offer to abandon the city and head to other European locations. For Zoerner and his team at MoBILLity, London remains as the location with the best access to global banks, as well as other businesses and regulators. The UK’s capital offers the unique advantage to have all involved agencies, businesses as well as the government in close proximity to each other and “the spirit of London”, as Lukas put it, is built on very friendly and open interaction between all to support and help each other along the way. Zoerner added, “Whenever you have a question for someone, they are just a tube ride away.” Tom Bloomfield from Monzo Bank draws a similar picture: “[London] offers great access. In the US, the government is in Washington, the banks are in New York and Tech is in Silicon Valley.” In Germany, which is often considered the next best alternative for European start-ups, the challenges are similar; the government is in Berlin, while the financial capital is considered to be on the other side of the country, in Frankfurt. The FinTech community, which has made itself at home in London, is unlikely to be able to build the same supportive and interactive ecosystem anywhere else in Europe at this point in time.
Its regulatory environment also speaks for the UK
The UK is in the FinTech world often considered as the “Singapore of Europe”, thanks to its adaptive financial system open to change and supportive of innovation. Founder and CEO of RiskSave, Dan Tammas-Hastings, named this one of the most important reasons FinTech will likely stay loyal to London. RiskSave is a new investment platform expected to open in January next year, which will tackle the current issue of investment platforms being prohibitively expensive for the average person. It aims to cut investment costs to its customers by 70 percent, and according to Tammas-Hastings, “Anything that saves investors’ money and is generally more efficient is supported [by the UK regulators].” It has been noted in many instances that the Financial Conduct Authority is a far more adaptive and flexible institution than many other European regulators, giving it the clear advantage to attract new and innovative FinTech start-ups. Proximity also plays a role here, as offices of the FCA are located close to, and in some cases even in the same building as London Tech hubs, giving start-ups the opportunity to reach out easily. While it has been noted that current regulations which have improved new start-ups ability to enter the market have come under the EU framework, many businesses are faithful that the FCA’s flexibility and support for new innovation will allow post Brexit regulations to be very accommodative of FinTech start-ups. Monzo Bank’s Blomfield said, “The FCA is more adaptive than the EU and could turn what looked like a disaster into an opportunity.”
Some businesses have even seen a bright side to the Brexit
Tom Blomfield noted that the fall in the pound has helped the company cut its cost base. Global Money Exchange App, Revolut, has seen sign up rates for its service shooting up to 2000 per day. With exchange rates offered by traditional institutions worsening after the Brexit, the service, which offers users interbank exchange rates is in even higher demand.
The verdict: FinTech is here to stay
At the end of the day, the spirit of FinTech start-ups is innovation and overcoming challenges. Considering the supportive environment London has to offer these businesses, we believe that the UK capital’s FinTech companies will rise to the challenge of Brexit, instead of fleeing abroad. 
Katharina Fleiner 30/09/2016

UK start-ups post-Brexit: The fight to attract small businesses

Katy Fleiner
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UK start-ups post-Brexit: The fight to attract small businesses
Over the past year, the number of UK start-ups has been growing fast. In 1980 there were 700,00 small businesses – this had grown to 5.4 million by the beginning of 2016. According to the UK government, small businesses have created more than 15 million jobs and contributed £1.8 trillion to the UK economy. The government has done much to encourage entrepreneurial spirit within the UK, providing start-up loans and incentivising venture capital firms by lowering business regulations.
However, there have been a number of complications
2016 has not provided the best environment for new start-ups to enter the UK market, due to falling investment and a slow economic start to the year. By July, worries that the UK’s exit from the EU would prevent access to European markets reduced confidence further, bringing the UK’s start-up environment into question.
Berlin attempts to lure UK start-ups to the German capital
Berlin has been a strong challenger to the UK’s dominance in the start-up sector, overtaking the UK in terms of venture capital investment in 2014. In August the Berlin senate wrote to hundreds of UK start-ups with headquarters in London to incentivise them consider relocating to new start-up community in the German capital, which is expected to open its doors in September. Cornelia Yzer, Berlin’s senator for the economy, technology and development said: “We want to make sure that British start-ups and international talent feel welcome here. Brits already love Berlin – we see that from the number of people who travel here every weekend. We will continue to receive them with open arms.”
However, it appears London still has advantages.
Regulatory issues still hamper Germany’s ability to draw start-up businesses to its capital, especially since the process needed to open a business in Germany is still more difficult and lengthy than in the UK. The British government has vowed to improve conditions for small businesses in any way possible and provide the best possible start-up environment in the UK. Gerard Grech, chief executive of Tech City UK, the government body tasked with fostering East London’s tech scene, commented: “[I am] listening to the community and will be informing government on the policies that need to be put into action.” “We are confident that further initiatives and policies will continue to evolve to ensure London stays a global tech powerhouse.” Several British businesses have also weighed in on the debate, with an overwhelming majority set on staying in the UK. FinTech companies have vowed to stay true to the UK’s capital. 
Katharina Fleiner 30/09/2016
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