Robo-advisor Moneyfarm offers simple, cost-efficient alternative to investing
Until recently, receiving real investment advice has seemed impossible for younger or lower net worth individuals – many Financial Advisors have minimum asset requirements of £500,000 or above, and charge 1-2 percent for their services.
According to the FCA, the new wave of online robo-advisors offer “online automated advice models that have the ability to deliver advice in a more cost-efficient way”, widening access to financial advice to those that may previously have felt excluded.
Robo-advisors offer online advice and guidance for investments and, depending on the platform, execute it as well. They typically charge less than half the fees of traditional brokerages and their low-cost, simple approach to investing has earned them a real name for themselves.
One such robo-advisor is Moneyfarm, which launched in the UK in February after gaining traction in its home market of Italy. It was founded by Paolo Galvani and Giovanni Daprà in 2011 with a simple mission: to make low-cost, low-stress wealth management a reality for everyone.
Moneyfarm allows customers to build an investment portfolio online after answering a simple questionnaire to find out goals and risk tolerance. The site has six portfolios made up of ETFs, which offer full transparency of the assets that make up a fund and have low management fees and low minimum investment levels.
All products are fee and commission free for the first £10,000 invested and for savings over £1 million, making it a simpler and more cost efficient answer to investing than traditional investment managers.
Dixons Carphone profits rise 19%
Dixons Carphone (LON:DC) reported a 19 percent rise in profits across their phone and electrical homeware appliances.
In the six months to 29 October, pre-tax profits rose to £144 million with sales increasing by 4 percent to £4.9 billion.
With respect to the Brexit vote, the company said that they had yet to feel any impact upon consumer demand for their products, but stated that it was bracing itself for “more uncertain times” as negotiations continue.
Despite the promising figures, Dixons Carphone shares have lost a third of their value across the year, due to concerns of higher costs as Brexit negotiations begin.
After a series of closures of retail branches across the country, the company has looked to reduce cost output by continuing to streamline its business.
“In particular, we have been focusing on reducing our fixed cost base,” said group chief executive Seb James.
In addition, sales were buoyant across in core markets in both the UK and Ireland, where the company operates under the Currys, PC World and Carphone Warehouse brands.
That was partly driven by higher sales of mobiles and consumer electronics, as well as a plan to reduce store numbers.
Mr James welcomed the “strong start” to 2016, but did note that the company was bracing itself for “all eventualities” as the new year approaches.
“In particular, we have been focusing on… identifying areas of potential market share growth if the world becomes a tougher place for our competitors,” he said.
“We are also planning our offer so that potential currency impacts are minimized for the customer.”
The electronics retailer has announced its intention to close 134 outlets, as it develops larger stores to accommodate its recent merger.
Dixons Carphone originated from a merger worth £5 billion between Dixons and Carphone Warehouse in 2014. They currently employ 42,000 personnel in the UK and overseas.
Despite the reported growth in revenue, shares in the company fell 4.99 percent as of 10.24 AM (GMT).
Micro Focus shares lead FTSE100 higher up 4 percent
Micro Focus International (LON:MCRO) leads the FTSE100 higher this morning trading up over 4% north of £22 a share as it announced a 22 percent rise in first-half underlying earnings.
Micro Focus is in the process of paying US$8.8bn for Hewlett Packard Enterprise’s software business and has said that while it had made a good start to the deal, it was maintaining full-year guidance for revenue growth of between minus 2 percent and zero.
Numis is advising on the deal and has commented this morning “Micro Focus has outperformed on nearly all levels in the first half, giving a net 9% EPS beat and 3% full year upgrade. 1.0% underlying revenue growth is well ahead of our -2% forecast, although management reiterate full year guidance of -2% to 0%, and we note that timing of deal closures can impact individual periods, thus 1% growth should not be automatically extrapolated into the second half. However, it clearly provides strong support for the achievability of management’s “modest growth” goal.”
Whilst Julian Yates of Investec was slightly more cautious “Full-year guidance was not raised, implying a softer second half, but we feel this is partly due to conservatism and also to reduce the reliance on [Linux specialist] SUSE having to sustain this growth level. We expect the stock to move up today, but continue to struggle to justify prices above 2400p given the extent of the HPE task and time horizon to deliver required synergies.”
Chief Executive Kevin Loosemoore commented “The board is delighted with our progress.
“Our focus on delivering to our customers by making detailed product by product decisions and investments has resulted in the business achieving modest like-for-like revenue growth.
“Our investments have resulted in strong growth in SUSE and a reduced rate of decline in the Micro Focus portfolio.
“Mergers and acquisitions continue to be a key component of our strategy.
“The key strategic announcement in the period was the HPE Software transaction which is on target to complete in the third quarter of calendar year 2017.
“The acquisition of Serena completed at the beginning of the period together with a number of small acquisitions across the business comprising GWAVA, openATTIC on 1 November and the OpenStack IaaS and Cloud Foundry Paas talent and technology assets from HPE which was announced on 30 November and is currently expected to close in the first quarter of calendar year 2017.
“We are delighted to announce that our interim dividend is increasing to 29.73 cents from 16.94 cents in line with our twice covered dividend policy.”
Carpetright shares slump 7% amid competition from founders son
Carpetright shares slumped to a fresh 52 week low of 180 before recovering slightly to 186 by mid afternoon, down 7% on the day. The company saw a 2.9% fall in UK same-store sales in the six months to October 29th, total sales down almost 4% to £222mln. First half profits dived 42% to £4.1mln amid a “challenging” first half.
Carpetright’s house broker, Peel Hunt, put much of the struggle down to new entrant to the market Tapi, which was setup by the founder of Carpetright’s son last year.
To try and protect market share Carpetright has been offering free fittings and large discounts in an attempt to fend off competition.
Chief executive Wilf Walsh said: “We have had a challenging first half – the full impact of the UK decision to leave the EU remains unclear; consumer demand remains uneven; the market is extremely competitive and the impact of currency movements have combined to give us substantial trading headwinds.
“To address these challenges and revitalise the business, we have a programme of activities underway, but these will take time to deliver their full effect. The positive impact at the initial 49 refurbished stores has given us the confidence to accelerate this part of the programme.
“We are now scheduling investment to 150 stores by the year end – 50% more than the original target and representing over one third of our UK estate. ”
“We have made an encouraging start to the second half with a return to like-for-like sales growth in both businesses. As we enter the important January trading period, we remain comfortable with the range of market expectations.”
“Looking longer term, we are confident that our plan to build on Carpetright’s strong foundations, to modernise the business and to ensure we capitalise as market leader to the full is still on track.”
Whilst management tries to pain a rosy picture being positive of the outlook less can be said by investors who have seen shares fall from highs of 505 a year ago to new 52 week lows of 180 in early trade.
Camera hire company Focus24 targets profit growth through crowdfunding
Specialist camera hire company Focus24 are seeking a £100,000 investment on Crowd2Fund, with an estimated APR of 8 percent, to invest in RID technology and assist their working capital as they grow the business.
Started in 2009 by industry specialist Ben Mitchell, Focus24 is a London-based camera hire facility offering services for all budgets in feature film, drama, commercial, music, fashion and documentary. Whilst working in post-production on both films and commercials, he noticed how important it was to keep up with technology and stay ahead of the game; thus, Focus24 was born. His aim from day one was for the company to be technology focussed, and creating a vision of how he thought camera services should service the marketplace. The company have an innovative approach, focussing on enlightening and empowering the end customer through technology. Focus24 is supported by a number of ancillary services other than camera and equipment hire such as technical support, training and repair work.Focus24 has already attracted several high profile clients, including Vice Magazine and Dazed Digital. They work with a number of mainstream brands and content producers such as BBC and ITV and have grown their revenues and brand by 20 percent year on year since their inception. Mitchell said:
“[We plan to] consolidate some of our existing HP and lease base which will give Focus24 a leaner overhead.”Additionally, they are seeking to use some of the funds from the revenue loan to invest in Radio Frequency Identification (RFID) technology to implement leaner operational efficiencies around their hire business.
“We will invest in RFID technology to bring the tracking and checking of our assets into a new age. It involves setting up quadrants with scanners within our facility and vehicles. From here it allows us to “swab” a flight case to determine exactly what’s inside it on a line by line basis. We will do this when assembling goods and upon return.”
Focus24 is seeking investment to transform itself into a 360 degree production offering, whereby customers can service their entire production under the Focus24 brand.The company’s decision to seek a revenue loan on Crowd2Fund was partly influenced by a bad experience with a more traditional lender for a loan prior to trying crowdfunding. Unlike The process was more protracted and resulted in his focus being taken away from the core business and customers. On Crowd2Fund Mitchell commented:
“There is a keen effort on their part to promote the opportunities it undertakes through research, social media and even making a film for some campaigns.”
21st Century Fox in £18.5bln bid for Sky
On a calm Friday afternoon in the City media stocks were rallying as confirmation came through of us media giant 21st Century Fox making a takeover approach for UK listed satellite broadcaster Sky.
The proposed offer is worth £10.75 per share prior to the announcement shares were trading at £8.37, already up 6% from yesterdays close. On the announcement the shares spiked to intra-day highs of £10.40 a share.
Rupert Murdoch controls 21st Century Fox, which already owns a 39.1% stake in Sky. The announcement confirmed the independent directors of both companies had “reached agreement on an offer price” of £10.75 a share, but added that “certain material offer terms remain under discussion”.
The collapse in the value of the pound makes UK listed companies significantly cheaper than earlier on this year for international buyers.
Shares closed at Friday £10.39.
Low interest rates and the impact on your savings
The Bank of England hasn’t increased interest rates since July 2007 when rates were increased to 5.75% from 5.5%. Since then rates have plummeted to record lows and there is no sign of a rate hike anytime soon given the backdrop of Brexit uncertainty.
During the period of record low rates, borrowers have able to secure capital at low a cost and pump it back into the wider economy. This has been central in helping the UK recover from one of the worst recessions in history.
Record low rates have undoubtedly been great for the economy as UK GDP growth has outperformed many developed economies. The lower rates have supported borrowing in the housing market and retail sales have remained resilient, even in the face of Brexit.
However, market theory dictates that where there are winners, there will always be losers. The winners of low interest rates have clearly been borrowers. The losers have been savers.
At the time of writing the Cash ISA interest for major UK banks are as follows; HSBC Advance Standard Rate 0.5%, Lloyds 0.35% and Barclays 18 month flexible 0.8%. Pitiful to say the least.
This is why many investors are turning to companies such as Moneyfarm who operate low-cost and fully-managed Stocks & Shares ISAs.
Moneyfarm allows investors to invest up to £10,000 free of a management charge and choose between a general investment account or an ISA. Clients of Moneyfarm benefit from easy set-up, low fees and full transparency from their funds.
Moneyfarm portfolios are managed around the clock by their investment committee who are striving to provide returns in excess of the pathetic offerings of Cash ISAs currently.
If you invest with Moneyfarm, like with any investing, your capital is at risk and you may get back more or less than your original investment.
Mcdonald’s to move non-tax base to London
McDonald’s has announced its intention to move its non-tax base to London from Luxembourg.
The fast-food giant will create a new holding company in the UK, and will pay UK taxes on any profits earned outside of the U.S. It said it came to the decision after taking into consideration the vast amount of employees it has within the UK.
In a statement, the company said that the new holding would have the “responsibility for the majority of the royalties received from licensing the company’s global intellectual property rights outside the US”.
“This unified structure will be administratively simpler and will reduce expenses and enhance flexibility,” the firm said.
On Brexit
“The reasons for changing the location of the corporate structure to the U.K. were sound before Brexit and remain so beyond it,” the company remarked.
“These strengths are unlikely to change as the U.K. negotiates leaving the European Union.”
The company emphasised that their “significant number of staff based in London working on our international business, language, and connections to other markets.”
The move has attracted speculation that the company were most likely motivated by UK’s corporate tax rate. The UK rate currently rests at 20 percent, with government plans to reduce it further to 17 percent by 2020, which would make it the lowest within the G20.
Under Investigation
Mcdonald’s remains entangled in an EU investigation on the company’s tax activities, centred on whether it utilized Luxembourg to facilitate the taking of large corporation tax breaks.
Amid the criticism, the brand stated that it continues to pay “a significant amount of corporate taxes.” In addition, they noted that from 2011 to 2015, “we paid more than $2.5 billion in corporate taxes in the EU, with an average tax rate approaching 27 percent,”.
The company receives about two-thirds of its income from its operations outside the U.S, with France making up its second largest market.
Russia sells $11 billion stake in Rosneft
The Russian government has agreed to sell its largest oil stake in Rosneft, in a bid to rescue its ailing economy.
London-listed company Glencore and the Qatar Investment Authority (QIA) have agreed to acquire a 19.5 percent stake in the company for €10.5bn (£8.9bn). According to the deal, Glencore will supply €300 million in funding, with the rest made up by the QIA and through bank financing.
Rosneft been struggling in recent years, as the over-saturation in the oil market has continued to impact oil prices and thus its access to revenue. However, following OPEC’s agreement of their first output cut in 8 years last week, oil prices have since rebounded to $50 a barrel which has since revitalized the sector.
“The transaction was made on an upward trend in oil prices and reflects on the value of the company,” Russia’s president Vladimir Putin commented during a televised meeting with Rosneft boss Igor Sechin. “In that sense this is a good time.” He added.
The deal will mean that investor Glencore will acquire around 20 percent stake in the company in return for receiving 220,000 barrels of oil daily from the producer. It is already the biggest trader in Russian oil, and thus the agreement will prove a boost to its commodity shipping business. Glencore and QIA will join British-held BP to become a shareholder in the oil company. As of 2011, BP has retained an 18.5 percent stake in the Russian oil firm.
This comes amid Glencore made the move towards reinstating dividends just last week, following a challenging few years. In an announcement, Glencore stated that it had completed sales of assets in order to bring in debt targets in line with $17 billion for the end of the year. Glencore had previously racked up a debt that at its peak had reached $30bn (£23.7bn), as it continued to struggle in a depleting commodities market.
Italian Banks show recovery, amid bailout hopes
Italian banks have showed signs of recovery on Wednesday, after a heavy referendum defeat led to the resignation of Prime Minister Matteo Renzi.
Following the Italian people’s overwhelming “No” response to proposed constitutional reforms, Italian banking shares plummeted amidst concern over the country’s political instability.
However, shares in the world’s oldest bank – Monte dei Paschi – rose by almost 9 percent as the prospect of a government bailout looked increasingly likely. The bank performed the worst in Europe in stress tests over the summer, as its sizeable amount of debt continues to take its toll.
Both Italian and international newspapers have speculated that a government bailout may be on the horizon, prompting the rise in share value for the troubled banks. A deal with a private investor looks increasingly unlikely, now the country has been left without a leader.
Italian daily La Stampa reported that the Italian government may look to the European Stability Mechanism (ESM) for funds of around €15 billionn (£12.7 billion) to help with the financial rescue.
Additionally, Reuters stated that various unnamed sources anticipate the government taking as much as a €2 billion stake in Monte dei Paschi, following the collapse of a potential private rescue bid from external investors.
Italy however, has already been warned by the EU commission that it may violate rules regarding excessive debts of member countries. The EU Economics Affairs Commissioner, Pierre Moscovici, noted that the strain on Italian finances arose from the recent devastating earthquakes that struck central Italy, and that he expected that the commission would take this factor into consideration.
The ESM, which deals with European bailout funding, has stated that the Italian government has yet to initiate discussions. A spokesperson stated:
“There is no request and there are no discussions with the Italian authorities on an ESM loan.”
Amid the speculation other banks’ shares are rallying, seeing a 3 percent rise for the Italian banking sector.