Earnings Round-Up Tuesday 16th: Santander, BHP Billiton, Antofagasta

Miranda Wadham
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Earnings Round-Up Tuesday 16th: Santander, BHP Billiton, Antofagasta

Santander disclose strong figures

Santander UK warned that the British banking industry is “facing some serious headwinds”, as it released its half yearly results this morning.

Profit before tax rose to £1,079 million in the six months to June 30th, up from £929 million the year before. Non interest income also saw a 34 percent rise to £671 million. The bank’s retail banking sector was helped by a 20 percent decrease in charges after a lower FSCS charge.

In a statement, the bank said they were “well prepared to serve the needs of our retail and business customers as they steer their way through the opportunities and challenges ahead”

Looking ahead to the rest of the year, “some downside risks are likely to be mitigated by monetary policy actions by the Bank of England and the capital and liquidity strength of the banking sector”.

Santander made headlines this weekend by becoming the first bank to slash its interest rates, cutting the interest paid on its current account from 3 percent to 1.5 percent.

BHP Billiton shares steady despite 81 percent drop in profit

Mining giant BHP Billiton released their results for the year ended June 30th on Tuesday, showing an 81 percent slump in underlying profit to $12.3 million, citing the imapct of weaker commodity prices.

Their profit is the weakest since the merger of BHP and Billiton in 2001 but slightly ahead of analysts’ expectations. The figures were helped by a reduction in operating costs, with capital expenditure declining by 42 percent.

Net debt remained unchanged at $26.1 billion.

CEO Andrew Mackenzie conceded the last 12 months had been “challenging” for the company, but said the “results demonstrate the resilience of our portfolio and the diverse ways in which we can create value for shareholders despite low commodity prices.”

BHP Billiton’s (ASX:BHP) share price has remained steady, currently up 0.45 percent at 20.25 (0857GMT).

Antofagasta profits slip on weak commodity prices

FTSE 100 miner Antofagasta also saw profits slip in the six months to June 30th, largely due to the slide in commodity prices.

Revenue fell 18.5 percent to $1.44 billion, with pre-tax profit down 8.4 percent to $276.1 million. Earnings per share also took a 3.3 percent hit, with group net debt of $1,039.7 million unchanged from December.

However, shares have risen 3.5 percent on the news, currently trading at 532.00 (0902GMT).

16/08/2016

Hacked bitcoin platform Bitfinex face lawsuit

Miranda Wadham
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Hacked bitcoin platform Bitfinex face lawsuit
Crypto-currency exchange Bitfinex, who recently saw $72 million worth of Bitcoin stolen by hackers, risk being sued for its plan to spread the loss across its whole customer base. The Hong-Kong based exchange told customers they would have to forfeit 36 percent of their holdings after the theft, in exchange for “BFX tokens” that could be redeemed at the exchange or converted into shares in its parent company. The announcement came after hackers stole $72 million of bitcoin from a minority of customers’ accounts on the 2nd August. However, lawyers have since said that their plan could be open to legal challenge. Bitfinex may well be breaching a special banking relationship, going against the company’s terms of service; many customers are angry at the arrangement, saying the possibility of their funds being used to keep Bitfinex afloat was not disclosed to them before placing money with the platform. 
15/08/2016

Morning Round-Up: William Hill rejects 888 bid, Japanese growth slows, oil up

Miranda Wadham
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Morning Round-Up: William Hill rejects 888 bid, Japanese growth slows, oil up
William Hill rejects second takeover offer William Hill has rejected a second takeover offer from 888 Holdings and Rank Group, saying that is still “substantially” undervalues the company. The consortium or casino heavyweight Rank Group and online gambling site 888 are aiming to create Britain’s largest multi-channel gambling group, saving £100 million per year. However, William Hill called their offer of 352p per share – up from their previous offer of 339p per share – “highly opportunistic”.

William Hill’s chairman, Gareth Davis, commented, “this revised proposal continues to substantially undervalue the company and the cash element of the proposal has not changed. Therefore, the board sees no merit in engaging.”

William Hill (LON:WMH) shares are down 2.46 percent this morning at 325.50 (0944GMT).

Japanese growth slows further in the second quarter

Japanese growth slowed again in the second quarter, coming in under analysts’ expectations and further undermining Premier Shinzo Abe’s economic policies

The Japanese economy expanded by just 0.2 percent in the second quarter, less than the 0.7 percent increase expected and steep drop 2 percent increase in the first quarter of the year, according to the latest Cabinet Office data.

Japan has grappled with twenty years of deflation despite the stimuli introduced by Abe’s “Abenomic” measures. The economy’s failure to respond positively suggests a further policy review is needed.

Oil up amidst further oversupply agreement speculation

Oil prices rose further gain on Monday, as hopes rise yet again for an agreement on oversupply.

Brent crude is up 11 percent on the start of the month, with West Texas Intermediate up 7 percent. WTI is currently trading at $44.49 per barrel, with Brent at $46.97.

Prices have risen steadily over the course of this year since the record lows seen at the height of the oil rout. Speculation is now increasing over potential producer action the curb the chronic overproduction forcing down prices, amidst a battle between Middle Eastern producers for Asian market share.

15/08/2016

US crowdfunding sector takes off after Jobs Act amendment

Miranda Wadham
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US crowdfunding sector takes off after Jobs Act amendment

US businesses have raised more than $5 million through equity crowdfunding, just three months after a change in the law opened up the investment process to allow anyone to participate.

Title III of the US Jobs Act came into effect on May 16th, allowing anyone – not just accredited investors – to invest in start-up businesses through equity crowdfunding. Previously, ordinary Americans were limited to Kickstarter campaigns unless they had the $1 million net worth allowing them to become ‘accredited investors’. Since then, the amount raised through equity crowdfunding has hit $5 million, making it easier and simpler for start-up businesses to gain capital and allowing the entire population access to the same investment opportunities as those with significant wealth.

Aubrey Chernick, founder of NextGen Crowdfunding, said: “this new era of crowdfunding is creating powerful opportunities for both investors and startups.”

Companies hitting their minimum goals include Beerfit, an endurance event company ($27,912), Hawaiian Ola Brewing Crop, a drink company helping sustainable farmers ($100,000) and Legian M Entertainment, a fan-owned entertainment company.

12/08/2016

Morning Round-Up: UK construction falls, Italian economy stagnates, China figures slow

Miranda Wadham
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Morning Round-Up: UK construction falls, Italian economy stagnates, China figures slow

UK construction output falls in June, referendum has little ‘impact’

Construction output fell in by 0.7 percent in June compared with the first three months of the year, according to the latest survey by the Office for National Statistics.

The figure comes in lower than the preliminary number of 0.4 percent released in July, with output falling considerably further in June than May. The period mainly covered the run-up to the referendum, but suggests that there is “very little anecdotal evidence” to suggest the referendum has had an impact.

The ONS construction figure is a short-term indicator of construction output by the private sector and public corporations within Great Britain and is produced from a monthly survey of 8,000 businesses.

Italian economy stagnates in second quarter

The Italian economy flatlined in the second quarter, after seeing promising growth of 0.3 percent in the first.

Before this reading the Italian economy had grown for five straight quarters, but fell over the last three month due to a lack of domestic demand.

With an Italian banking crisis in full swing, these economic figures are the latest in a series of worrying problems for Prime Minister Matteo Renzi, whose leadership rests of maintaining the support of the population ahead of a constitutional reform in October.

Latest data suggests China slowdown

Further economic data from China, released today, suggests an ongoing slowdown in the world’s second biggest economy.

Industrial output expanded 6 percent in July, hit by severe flooding and hot weather, with retail sales rising just 10.2 percent – below the 10.6 percent forecast. This matches trade data released earlier this week, suggesting further economic slowdown.

12/08/2016

This is what happened last time all three US indices hit record highs

Miranda Wadham
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This is what happened last time all three US indices hit record highs
Oil and retail stocks pushed all three major US indexes up to record highs yesterday, for the first time since 1999. Strong retail earnings sparked the rise, with US department store Macy’s seeing shares rise 17.1 percent after posting impressive quarterly profits. Nordstrom’s and Dillard’s both rose over 7.5 percent, with Kohls up 16 percent. The Dow Jones soared 117.8 points, with the Nasdaq up 23.8 points. The S&P 500 rose 0.5 percent to hit its ninth record close of the year. However, investors shouldn’t get too excited – last time this happened the immediate aftermath was a sell-off of 10 percent over the following month, and over 45 percent over the following three years.
chart
S&P 500 1999 – 2003
12/08/2016

Startupbootcamp still believes in UK FinTech start-ups

Katy Fleiner
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Startupbootcamp still believes in UK FinTech start-ups
June’s Brexit vote raised worries that the UK capital may lose its position as leader in the FinTech industry and innovation. However, the Startupbootcamp believes in the growth potential for UK based FinTech start-ups. Six of the nine FinTech innovators chosen to participate in its 2016 London accelerator scheme are UK-based companies. Startupbootcamp started in 2010 in Copenhagen as a supporter of rising entrepreneurs and their start-ups. After only two years the Startupbootcamp network had grown to the European level and offered five support programs for start-ups to participate in. It has over the past six years grown a global network of entrepreneurs. Currently it is Europe’s biggest, as well as the world’s third largest start-up accelerator. It now offers 15 different programs in various start-up industries such as FinTech, FoodTech and Digital Health. Its FinTech Accelerator London 2016 will start on the 5th of September. Nearly 400 companies from 61 countries applied to participate. Six out of only nine chosen start-ups are based in the United Kingdom.

The six UK FinTech start-ups chosen for the programme are:

EuropeOne: A mobile bank aimed at Europeans working in Europe, outside their home country. Kyolab: A business which monitors and archives instant messaging apps such as WhatsApp or WeChat for regulated institutions, which can help them to avoid fines. moBILLity: The business is working on an app which helps its users manage their bills by integrating all of them on one platform, tracking them and comparing them with offers from other service providers. Monuva: A global payment platform which aims to make international transfers easier and cheaper by offering low and transparent currency rates to individuals and businesses. Zenith One: A robotic financial advisor which interviews its’ customers to propose strategies. Zeroflows: An information platform which allows which allows customers to scan emerging and ‘frontier’ markets for liquidity.

The other chosen FinTech start-ups to participate are:

Enterprise Bot, India: A company which creates automated response systems for businesses which are programmed to behave like humans when responding to customer queries. Penta Bank, Germany: A new digital bank hoping to launch in Germany in spring 2017. Trakti, Italy: A online platform which assists businesses in closing deals with clients, partners and suppliers. The chosen FinTech start-ups will receive funding of €15,000 each, as well as mentoring, free London office space and access to a global network of investors and venture capital firms. While the overwhelming majority presence of UK FinTech start-ups managing to secure a spot on the program does not prove that the UK will preserve its reign over the FinTech industry in a post-Brexit environment, it does show that the global community still has confidence in the ability of UK businesses to lead innovation and performance growth in the sector. 
Katharina Fleiner 11/08/2016

CrowdCube raises over £6.8 million in campaign on own platform

Katy Fleiner
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CrowdCube raises over £6.8 million in campaign on own platform
One of the most popular UK crowdfunding platforms, CrowdCube, has managed to exceed its target amount of £5 million in its latest crowdfunding campaign launched on its own platform. With five days to go, the campaign has raised £6,845,400 from 3411 investors. The new funds will go towards expanding the company’s market position in the UK, focusing on expanding on equity crowdfunding.
CrowdCube commented:
“We want to dominate the UK equity investment market for private companies, estimated to be worth £5.3 billion, and become the partner of choice for investors and ambitious high growth companies.” CrowdCube launched its online platform in 2011. It has since raised more than £160 million in more than 400 successful campaigns. Currently it has over 285,000 registered members. 115,000 new members joined in the last year alone. CrowdCube said it is expecting the number of registered members to increase to 500,000 by 2017. New software products “to enable businesses to manage their investors more efficiently and give investors greater transparency on how their investments are performing” are also in planning. CrowdCube has been the platform for well-known success stories for crowdfunding. The Scottish brewery BrewDog’s four ‘Equity for Punks’ campaigns, launched on CrowdCube, broke two world record in crowdfunding. BrewDog became the first company to raise as much as £26 million in total equity crowdfunding. Its’ latest round also become the first scheme to raise more than £5 million in less than three weeks. CrowdCube itself has received a large following in backers. More than 570 private investors gave over £3 million in various crowdfunding rounds. It is also largely supported by Balderton Capital – one of the largest European venture funds, Numis – a leading UK stockbroker and corporate advisor and Draper Esprit – “one of Europe’s most experienced venture capital investors”. 
Katharina Fleiner 11/08/2016

10 UK Tech start-ups to watch in 2016

Katy Fleiner
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10 UK Tech start-ups to watch in 2016
We had a look at 10 UK Tech start-ups which could make some waves this year.

1. Darktrace

Darktrace is a UK cyber security firm founded in Cambridge in 2013 which developed the world’s first operational Enterprise Immune System detecting emerging cyber-threats, giving companies the opportunity to defend against in-progress cyber-attacks. The business reports that, since its’ foundation, revenues have grown by 600 percent year-on-year. In 2016 Darktrace won a product award at the Info Security Global Excellence Awards. But above all else, Darktrace made our list of 10 UK Tech start-ups to watch after doing exceptionally well since the UK’s decision to leave the European Union in June. The Financial Times reported that Darktrace has attracted more funding than any other UK start-up in the month after the Brexit-vote, raising $65 Million. Darktrace is currently valued at $400 Million and has global offices in Cambridge (HQ), San Francisco (HQ), New York, Auckland, London, Milan, Mumbai, Paris, Seoul, Singapore, Sydney, Tokyo, Toronto and Washington D.

2. Seedrs

Seedrs is an equity crowdfunding platform, headquartered in London, which launched in March 2009. What sets the platform apart from other popular crowdfunding sites such as Kickstarter is that it offers backers monetary returns on the company shares they invest in. It also allows users to invest as little as £10 to buy a stake in a company they want to support. The company is currently valued at £11.3 million, up 288.26 percent from the previous year, according to CompanyCheck and recently announced that over £100 million had been invested through their platform. On its advisor board sit well-known business personalities such as Logan Gree, CEO of Lyft, Mike Butcher, Editor-at-Large at TechChrunch and – since June last year – tennis pro Andy Murray.

3. Rentify

The four-year-old proptech start-up offers landlord tools for effective and simple property management, as well as providing other rental-focused services. Last year the company raised £5.5 million and added close to £1.4 million earlier this year in a crowdfunding campaign on Crowdcube. Its biggest backer is currently the London venture capital firm Balderton Capital – currently, the business is valued at £413.9k In February last year the team at Rentify was joined by former head of strategy and initiatives at Google, Roxanna Zea, who acts as chief operating officer.

4. Mondo

The London fintech start-up was founded only last year. Its CEO and co-founder, Tom Blomfield, co-founded the online direct debit provider GoCardless, another one of the many recent successful UK Tech start-ups, but left the business in 2013 to build Mondo. Mondo is creating a branchless bank using a debit card system connected to a mobile app. The cards are controlled by the app which allows users to easily access all information and purchases. Although the company has not yet fully launched, the proposition sounds promising and a version of the new card has been launched to Alpha testers already. So far, the business has already raised £7.2 million to fund its idea.

5. Divido

Divido aims to help customers pay for their goods by allowing people to pay for anything they buy in instalments over a one to five-year period, using an phone-based app. The service aims to fill a market niche – most people are unaware that smaller businesses offer payment plans. Using the app, businesses are paid in full right away but Divido charges customers an initial and monthly fee to allow them to split the cost over a longer period of time. Over 100 on and offline retailers have so far signed up to the service. Most operate in the furniture, bike and music retail sector but other areas include funeral services, fashion, healthcare and education. The service supports by well-known e-commerce platforms such as Shopify and Magneto.In 2015 it received the title ‘European Innovator of the Year’ by InnoPitch (European Commission & European Parliament). For 2016 the team at Divido has an ambitious expansion plan on the go. It aims to quadruple its turnover and double its team size – currently just 11 members.

6. Enigma Recovery

Enigma Recovery is a fast growing data recovery start up. Its team creates software such as data recovery and deletion programs for smart devices. Their service is currently available for IOS as well as Android systems and other storage devices such as SD cards. In March this year it moved its’ offices to 30 St Paul’s Square, a prime London location, motivated by a growth in staff numbers. The UK tech start-up is backed by global companies such as Kaspersky Lab and Mangrove Capital and has plans to expand on an international scale in the soon future.

7. LendInvest

LendInvest is a three-year-old peer-to-peer property lending platform. The business currently takes the number one spot on the Startups 100 2016 index for most promising UK start-ups. The business idea is to connect investors, who are seeking new opportunities, with property entrepreneurs looking for short-term mortgage finance. LendInvest vows that it can process an application for funding in as little as two weeks, while current waiting times at high street lenders are around three months. A year ago the company scored one of the biggest UK investments of the year. Beijing Kunlun, a Chinese technology firm invested £22 million in one of the most promising UK Tech start-ups. Its current net worth stands at £993k, according to CompanyCheck, up 894.4 percent from the previous year. The business has announced that it is intending to increase its staff headcount from 90 to 150 by the end of this year.

8. Hubble

Hubble is a UK start-up aiming to help other UK start-ups. It aims to connect companies, which currently have an excess in workspace in their offices, with small businesses in search of affordable and flexible office space in the UK capital, with the help of an online platform. It charges a 5 percent fee of monthly rents on any successful deal, while big companies profit from monetising currently unused space and helping other start-ups find a place to begin their work. WeWork, The Office Group and Regus, as well as companies such as Funding Circle, GoCardless and Songkick are some of the well-known users of the service so far. Hubble recently secured the second place in the ‘Rising Star of the Year’ category at the Startups Rewards. This year, Hubble is hoping to increase its funding, having already successfully raised £500,000 from ‘angels’ such as James Caan and Brett Akker. Its’ goals are to double its’ 11-member-strong team size and expand its’ office space inventory.

9. PensionBee

The Fintech start-up launched by former Goldman Sachs and Morgan Stanley financial professional, Romi Sacoca, is an online pension manager which helps young to old work professionals who have changed jobs once or more manage their pensions online through one of three of PensionBee’s pensions plans. Since the new Workplace Pensions Reform came into effect this year, pensions are a more widely discussed topic and how to easily manage pensions is a question on many peoples’ minds. PensionBee came into the industry at just the right moment and is working with the well-known global investment managers State Street and BlackRock. At the start of the year the company aimed to expand its eight-member-strong team to 17, a goal which has already been achieved. The company is hoping to accumulate 3,000 new customers this year and offer new and ‘exciting’ product improvements.

10. Elliptic

Elliptic is a promising three-year-old Fintech start up aiming to eliminate the dangers of digital currency transactions. With bitcoins currently undergoing a fast-paced increase in importance around the world, while its security and issues are still highly debated, blockchain technology has become an increasingly valuable investment opportunity. Blockchain is the permanent public ledger which records bitcoin transactions. Elliptic uses Blockchain to identify and any illegal activity for leading Bitcoin companies, financial institutions as well as law enforcement. This year the business received an additional $5 million in Series A equity funding by the end of March to expand its services, bringing the total funding amount over to $ 7 million in three campaign rounds of equity funding (excluding funding from round one as amount was not disclosed). Elliptic gained the title “Top Disruptive Start Up” by The Times in January 2016 and reached the Top 10 Global Emerging Star on the KPMG Fintech 100. In 2015 it won the Security Project of the Year Award (The Banker), as well as the Swift Innotribe Growth Stage Startup Competition. The company is valued at £978,000 according to CompanyCheck, and has been able to expand its services into the US. 
Katharina Fleiner 11/08/2016

Earnings season 2016: winners and losers

Miranda Wadham
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Earnings season 2016: winners and losers
Winners: Lloyds Banking Group (LON:LLOY) A surprise winner of the summer earnings season, Lloyds Bank saw a 101 percent increase in post-tax profit to £1.8 billion – an impressive contrast to the dismal figures provided by other British banks. However, the stock is still down 25 percent on the year, hitting a one year low in the weeks after Brexit. Just Eat (LON:JE) A relative newcomer to the scene, revenues at fast food delivery service Just Eat soared 59 percent to £171.6 million over the last quarter. Underlying EBITDA rose 107 percent to £53.4 million, helped by a 55 percent increase in order numbers. Just Eat’s CEO David Buttress called the figures a “strong start” to the year. Domino’s Pizza (LON:DOM) Growth shows no signs of slowing at pizza takeaway chain Domino’s – revenues climbed 12 percent over the fiscal second quarter versus the the year before. The group has benefited from higher supply chain revenues, increased volumes and store growth. However, the international company took a big hit after Brexit, with their share price dropping from 1,029 pence per share to 323.40 – recovery since has been slow. Losers: Barclays (LON:BARC) Barclays had a disappointing quarter, reporting a 23 percent fall in post-tax profit. Underlying profit before tax fell 4 percent, with the net operating income falling a further 11 percent. Royal Bank of Scotland (LON:RBS) Seven years of restructuring efforts have yet to see any real positive effect – this season RBS reported a £2 billion loss, making it one of the worst performing British high street banks. RBS shares are down 37 percent since the start of the year, after being hit further by the outcome of the EU referendum in June. Vodafone (LON:VOD) Whilst the loser list could be made up entirely of British banks, for the sake of variation we have included telecoms provider Vodafone. Group revenue fell 4.5 percent, with the internet arm being hit particularly badly – broadband subscriber additions slowed to 1,000 due following tariff changes. However, despite Vodafone shares having a rocky six months, they have climbed steadily since their low point in February. 
11/08/2016
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