German economic conditions lower in August, say businesses

Katy Fleiner
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German economic conditions lower in August, say businesses
IFO indicators capturing business assessments of current German economic conditions fell in August. The new data, which came in below analysts’ expectations, is the latest in a string of data to suggest a slowdown in German economic growth. Markit’s PMI figure, published on Tuesday, showed a decrease in August, alongside Wednesday’s lower GDP growth rate.
IFO indicators for German economic conditions miss estimates
The IFO Current Assessment indicator, published by CESifoGroup Thursday morning, came in at 112.8. The figure is 2 points lower than July’s measure and missed estimates by 2.1 points. Similarly, the IFO assessment of business climate in August fell by 2.1 points, to 106.2, 2.3 points than the consensus prediction. The indicator of future expectations fell to 100.1, also down 2 points from the previous month and missing estimates by 2.4 points. While the data deviates greatly from analysts’ predictions, with all indicators falling instead of rising to estimated higher levels, they are not yet critical. Similar figures were last seen at the start of the year and they are well above figures during the height of the global financial crisis in 2009, where IFO Current Assessment was as low as 89 in November.
German data releases this week show reduced growth
The Markit PMI Composite for August, published by Markit Economics on Tuesday, stood at 54.4, down 0.9 points from July’s figure. This measure was 0.6 points lower than analysts had estimated. German GDP growth for the second quarter of the year was reported by DEstatis on Thursday. The figure matched estimates at 0.4%, representing a 0.3% decrease from the first quarter. The German Gfk Consumer Confidence Survey will be published on Friday and give further indication as to the perception of German economic conditions over the next month. While Germany saw some unexpected reductions in growth indicators, Euro-Zone figures have been mixed this week. The Euro-Zone Markit PMI came in at 53.3, up 0.1 points from July. However, an indicator of consumer confidence, published by the European Commission, came in at -8.5. The figure was 0.6 points lower than July’s figure and 0.9 points lower than analysts’ estimates. 
Katharina Fleiner 25/08/2016

NHS will collapse without EU workers, says IPPR

Miranda Wadham
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NHS will collapse without EU workers, says IPPR
The NHS would collapse if its 57,000 EU workers were to leave in the wake of Brexit, according to a new report by The Institute of Public Policy Research (IPPR). The research concluded that EU staff must be offered British citizenship in order to prevent them taking their skills elsewhere. Chris Murray, who headed the report, commented: “It is critical to public health that these workers do not seek jobs elsewhere. All EU nationals who work for the NHS, or as locums in the NHS system, should be eligible to apply for British citizenship”. The IPPR highlighted the need to reform the current system of British citizenship, which is seen as both expensive and complicated, in order to prevent a post-Brexit brain-drain. According to jobsite Indeed.co.uk, the brain drain has already started; thousands of British workers have begun to look beyond the EU for work since the referendum. Others have looked towards Ireland, who will retain access to the Common Market and have English as a main language. 
25/08/2016

Morning Round-Up: UK car production up, Spanish economy strong, Jimmy Choo up

Miranda Wadham
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Morning Round-Up: UK car production up, Spanish economy strong, Jimmy Choo up
UK car production “booming” in 2016 UK car production rose again in July, up for the 12th consecutive month according to the Society of Motor Manufacturers and Traders. Production rose 7.6 percent on a year ago, bringing year to date production up to 12.3 percent. Performance so far this year has been the best since 2000, with the total cars produced in the UK rising to over 1,000,000 in the seven months since January. Looking ahead, SMMT chief executive Mike Hawes highlighted the importance of Britain demonstrating “it remains competitive and open for business.” Spanish economy strong despite uncertainty The Spanish economy remains strong despite months of political uncertainty, with GDP growing 0.8 percent in the second quarter. Figures from the National Statistics Institute showed consumer spending grew by 3.6 percent year-on-year, despite uncertainty created by two elections in the past six months. The country is still without a functioning government, but the economy has grown at one of the fastest rates in the Euro Zone. Demand for menswear boosts Jimmy Choo Jimmy Choo shares rose on Thursday after strong demand for its men’s designs pushed revenues up nearly 10 percent. Men’s shoes represented 8 percent of global revenue for the first half of the year, with revenues across the company up 9.2 percent to £173 million. Operating profit was up 42.6 percent to £25 million. Asia remained the company’s strongest market, with both China and Hong Kong leading growth. Geopolitical events damaged demand in Europe, but the weakness of the pound served to boost the company’s half-year figures. Jimmy Choo (LON:CHOO) is currently trading up 1.91 percent at 120.00 (1034GMT). 
25/08/2016

OneSavings Bank stocks rally on report of 36% growth in underlying profits

Katy Fleiner
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OneSavings Bank stocks rally on report of 36% growth in underlying profits
OneSavings Bank reported its first half-year earnings for 2016, causing stocks to jump on strong profit growth. The bank reported an increase in underlying profits before taxation to £64.6 million in the first half of 2016. The figure is up 36 percent on the same period last year. Gross new organic lending increased 25 percent to £973 million. This figure, alongside new acquisitions worth £131 million, drove loan book growth up 10 percent in the first half of 2016. The net interest margin was up 2 bps from the first half of 2015 to 307bps at the 30. June 2016. While cost to income ratio rose one percent, it still remains low at 27 percent. An interim dividend of 2.9 pence per share was proposed for the first half of 2016, payable on the 4. November. The amount is based on a third of the total dividend of 8.7 pence per share paid in 2015. The interim dividend is 0.9 pence larger than last year’s first-half figure.
Group CEO Andy Golding, commented on the results:
“I am delighted that OneSavings Bank has delivered another strong set of results for the first half of 2016.” “We have achieved all of our financial objectives since IPO and the strength of our balance sheet, together with the high quality of our secured asset portfolio, positions us well in the current uncertain economic climate.” “It is too soon to predict the medium to long-term impact of Brexit on the UK economy, but we will continue to concentrate on what we have proven we do best; using our broker relationships, manual underwriting expertise and secured lending strategy to lend responsibly to customers in underserved markets. We remain well placed to take advantage of opportunities that arise using these well proven capabilities.” One Savings Bank plc (LON: OSB) started trading on the 1. February 2011, floating on the London Stock Exchange in June 2014. The group’s stocks struggled after their IPO, seeing little upward movement throughout the first half of 2016 and falling to 179.8, its lowest since November 2014, after the European Referendum. However, today’s earning release send share prices up to a new two month-high at 268.9 pence, up 13.9% from market open at 3.30pm. 
Katharina Fleiner 24/08/2016

Paddy Power Betfair reports 18% growth in revenues over H1

Katy Fleiner
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Paddy Power Betfair reports 18% growth in revenues over H1
Paddy Power Betfair Plc this morning reported their first half earnings results for 2016. Figures in revenue growth look encouraging and progression of the merger integration between Paddy Power and Betfair is ahead of schedule. The company also revealed that Stewart Kenny will be stepping down from his role as Non-Executive Director on the company’s board.
Revenues up 18% in H1
The bookmaker reported that revenue in the first half of 2016 stood at £759 million, up 18% compared to the same period the previous year. Revenue from online operations increased to £440 million, up 20%, with sportsbook stakes matching this growth rate. Sportsbook stakes in Australia where up a full 30%, with revenue from operations in the country increasing 17%, to £129 million. Retail revenue over the period grew by 12%, compared to H1 in 2015, to stand at £147 million. Paddy Power Betfair Plc also stated that second quarter revenues grew by as much as 20% to £420 million, helped by a strong performance throughout the Euro Cup. With an interim dividend of 40 pence per share, total dividends for the first half now stand at 52 pence per share.
Merger integration will be completed ahead of schedule
Further, the company was happy to report that the merger integration of Paddy Power and Betfair has been progressing ahead of its schedule. The bookmaker assumes £65 million in operating costs savings from the merger, achieving full benefit by 2017. This is a full year earlier than previously expected. The £7 billion merger between Paddy Power, an Irish bookmaker and Betfair, the world’s largest online betting exchange, was concluded in February this year. The company first seemed to suffer under the cost of the merger and share prices dropped considerably in late February and the first half of March.
Breon Corcoran, Chief Executive, commented on the success in the integration of the two companies:
“Paddy Power Betfair has sustained good momentum through a period of considerable change […] We are creating a world-class operation by exploiting the unique assets and capabilities of each legacy business, particularly in the key functions of technology, marketing and trading.”
Steward Kenny announces he will be stepping down
The earnings report was joined by another announcement by the company, notifying that Stewart Kenny will be stepping down from his position as Non-Executive Director on the Board. Steward was one of the co-founders of Paddy Power and the company’s CEO unitl 2002. After a period as chairman, he remained on the board as non-executive director for 13 years. Gary McGann, Chairman of Paddy Power Betfair commented on Kenny’s decision to leave the board: “After 40 years in bookmaking and 28 years’ involvement with this business, Stewart has an enviable record in the industry and leaves a great legacy. He was instrumental in creating a highly successful international business from a small domestically-focussed retail operation at inception. Stewart, more than anyone, positively influenced the culture of the business. He played a hugely supportive role in the merger of Paddy Power with Betfair. He is retiring after many years of enormous service to the Company and the industry. We wish him every success in the future and thank him for his incredible contribution to this business.”
Paddy Power Betfair Plc shares struggle
Paddy Power Betfair Plc (LON: PPB) shares gained greatly, to a new six-month high of 9,995 pence, in Tuesday afternoon trading. However, today’s news has not helped this rally to continue. After a short period of upwards movement just after market open, the share price began to drop, losing all of its gains from the previous day. At 11:58 shares were trading at 9,775 pence (-1.76%). 
Katharina Fleiner 24/08/2016

The Night Tube has launched – but can it save London’s night-time economy?

Miranda Wadham
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The Night Tube has launched – but can it save London’s night-time economy?
In case you hadn’t heard, Friday night ushered in a new era for London: the Night Tube. Bringing the British capital in line with other European cities who already have 24 hour metro systems, two main lines will now run continuously between Friday morning and Sunday night. Championed by both Boris Johnson and Sadiq Kahn as vital to “help maintain London’s status as a vibrant and exciting place to live, work and visit,” Friday’s launch was the result of hard work by both mayors, as well as hours of discussion with unhappy trade unions. Expensive as the project may be, both Kahn and his predecessor Johnson were agreed on the long term economic benefits. Research suggests that the net additional output produced as a result of the service will equate to an additional £360 million over 30 years, and for each £1 spent on delivering the Night Tube, the benefits will be worth £2.70. Looking at the bigger picture, Sadiq Kahn hopes the Night Tube service will give London’s failing nightlife a much-needed boost. Recent months have seen London nightclubs close at an unprecedented rate, leading Kahn to seek the appointment of a ‘Night Minister’ to nurture and protect the city’s nightlife. A 24-hour service gives clubs and bars the potential for longer operating hours, and obtain more staff – TfL predicts the Night Tube will lead to the creation of 1,965 permanent jobs, across a range of industries.
The Mayor of London, Sadiq Kahn, at Oxford Circus station
The Mayor of London, Sadiq Kahn, at Oxford Circus station
The demand for a 24 hour service, especially at weekends, is certainly there: around 560,000 people use the tube after 10pm on Fridays and Saturdays already, equivalent to 8 percent of all trips, according to a report by economic consultant Volterra. For shift workers, it spells the end of long, tiresome night bus journeys home. Almost half of night bus passengers are commuting to and from work, and demand has risen 170 percent in the past 15 years – far in excess of TfL’s daytime services. Indirectly, the service has other benefits; it provides a reduced demand for illegal minicabs and less time spent on the streets waiting for Night Buses, thus improving safety at night. Whether the investment will be as good as it sounds is something only time will tell. For London, however, it represents a new era; for nightlife, for the economy and for everyone who considers themselves a Londoner. 
Miranda Wadham on 24/08/2016

Morning Round-Up: Pfizer-AstraZeneca deal, Glencore profits down 66 percent, German economy slows

Miranda Wadham
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Morning Round-Up: Pfizer-AstraZeneca deal, Glencore profits down 66 percent, German economy slows
Pfizer and AstraZeneca agree antibiotic deal Pfizer has agreed to buy a small antibiotics arm of AstraZeneca’s pharmaceutical business, just days after confirming a $14 billion takeover of Medivation. The deal, worth $1.5 billion, will widen its antibiotic medicine offering and give access to several others still in the development stage. AstraZeneca said the deal is unlikely to have an effect on this years figures, but pushed shares down 0.30 percent to 5,046 (LON:AZN). Glencore profits drop 66 percent Glencore (LON:GLEN) disclosed a 66 percent drop in first half profits on Wednesday, sending shares down nearly 5 percent. The company said volatile commodity prices had impacted on its performance, which saw first half adjusted EBITDA fall 13 percent. Glencore also announced a new debt reduction target, raising it to between $16.5 million and $17.5 million. CEO Ivan Glasenberg commented, “Going forward, we continue to focus on successfully completing the balance sheet repositioning, first announced in September of 2015 and delivering industry-leading shareholder returns into the future.” Growth slows in Germany The Germany economy has slowed in the second quarter, with GDP increasing by just 0.4 percent between April and June. The figure represents a 0.3 percent slowdown from the 0.7 percent growth achieved in the first quarter. The annual growth rate stood at 3.1 percent. Growth was driven by household and public sector spending, but held back by a fall in investment. 
24/08/2016

Challenging day on the stock market for Sirius Minerals

Katy Fleiner
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Challenging day on the stock market for Sirius Minerals
Sirius Minerals Plc drops 21.7% on the London Alternative Investment Market on Tuesday. UK fertiliser development company has seen a share price increase of 188 percent this year. Com The company, which focus on extracting polyhalite, a type of potash, is valued just under £1 billion. However, Tuesday proved a challenging day on the stock market for the company as stock prices tumbled from 51.66pence at 8.15am to a low of 40.75pence at 4pm, down a staggering 21.7%. The decline, which can likely be attributed to stop-losses, has since been reverted to some extent.
At 4.21pm Sirius Minerals Plc (LON: SXX) was trading at 42.8pence (-5.93%).
Katharina Fleiner 23/08/2016

CrowdTuesday happening in London next week

Katy Fleiner
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CrowdTuesday happening in London next week
The next CrowdTuesday session in London is only a week away.
CrowdTuesday will be held on the rooftop at the BWB London offices next Tuesday, from 6 to 8pm. Through the networking event the organisers – the European Crowdfunding Network, portfolio manager Lendery and professional services consultancy Bates Wells Braithwaite – aim to connect people in the crowdfunding industry within an informal setting.
The European Crowdfunding Network comments on CrowdTuesday:
“CrowdTuesday is a perfect occasion for anybody interested in crowdfunding to do some networking or to listen to an interesting presentation, while having an after work drink. Participation is free of charge.” Next week’s event in London will focus on the potential blockchain technologies have to advance alternative financial services. It will feature speeches from Alex Batlin, Senior Innovation Manager at UBS; Steven Garner, Co-Founder of Xsoar.com and Jamie Burke, Co-founder of OutlierVentures. 
Katharina Fleiner 23/08/2016

Volkswagen settles dispute with suppliers after 20 hours of talks

Katy Fleiner
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Volkswagen settles dispute with suppliers after 20 hours of talks
Volkswagen finally settled a contract dispute, after negotiations with two suppliers began on Monday morning.
After 20 hours of talks with two suppliers, manufacturing seats and cast iron parts needed to make gearboxes, Volkswagen has now confirmed that a resolution has been reached. CarTrim as well as ES Automobilguss will resume supply to the German car manufacturer shortly.
Stoppages will not affected already placed orders
The stop of production affected 27,700 staff members, as well as the production output at four German VW plants, according to Volkswagen. The German car manufacturer has however stated that the dispute and temporary supply cut will not affect delivery of already executed orders. According to the BBC, production of Golfs in Wolfsburg, as well as production of both Golfs and Passats in Zwickau will resume later this week. Production of chassis parts and plastic parts in Braunschweig will start again Monday next week. Volkswagen gave no details of the nature of the settlement. Due to what the company stated to be an unrelated issue, production of Passats was also temporarily halted in Emden last week, but is set to resume again this Wednesday. News of a number of production stoppages send Volkswagen (VOW3:GER) shares down 2.3%, to a low of €119.05, on Monday afternoon. After the resolution to the dispute became public, they recovered to €122.6, up 2.12% from market open on Tuesday.
Car maker’s share prices still not recovered since last years emission scandal
The car maker suffered greatly after the emission scandal in the second half of 2015. The company has since only managed a marginal recovery of stock prices and prices once again fell sharply after the UK’s EU referendum. Although earnings were still depressed by further pay outs and law suits, related to the illegal software installation deactivating pollution controls, Q2 earnings in 2016 exceeded estimates, giving investors some new confidence in the performance of the car manufacturer. 
Katharina Fleiner 23/08/2016
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