Leeds-born businessman set to revolutionize Yorkshire air travel
According to Leeds-born businessman James Thorpe, HS2 and the Northern Powerhouse are not the answer for economic improvement the North.
Instead, he believes the weakness in Northern infrastructure lies in the lack of business air travel. To that end, he is seeking to raise £2 million of funding to set up his own airline, Extrajet, which will run twice daily direct flights from Leeds-Bradford International Airport, to Copenhagen & Antwerp, with other UK and European cities to follow.
“Business people wanting to travel internationally, to drive their export sales, are very badly served by Yorkshire’s airports. It is impossible to fly to many of the key European business destinations, and those looking to fly to other continents from Yorkshire are forced to fly to London first. The same applies to business or pleasure travellers from Europe wishing to travel to the region. This is simply unacceptable for a county the size of
Yorkshire ”
The ticket price will be slightly higher than low cost operators, with no discount available – but for them, service is key. Unlike the infamous service provided by operators such as Ryanair and Easyjet, Extrajet will offer all the trimmings, including car parking, in-flight entertainment, an aiport lounge, speedy boarding and in-flight light meals and drinks.
Yorkshire is the largest of England’s regions and, with a population of almost 6 million, its economic output of £88 billion is significant – almost 7% of the UK’s total economic output. The need to improve business links to the area is unavoidable.
Though he started raising investment through a a corporate finance firm based in the city, he has decided that individual investors with a real interest in seeing Yorkshire thrive are the best way forward for his business.
His plan is to attract investors through press releases and business groups which – to his own surprise – has worked exceedingly well. In the last few days alone he has received emails from a few hundred interested parties; it seems that he is not alone in thinking that an improvement in business air travel is the right thing for Yorkshire.
Thorpe said: “We would like to find a small group of ‘qualified’ investors who are passionate about Yorkshire and perhaps also aviation. We are looking to raise £2M in total in exchange for 45% equity. I would imagine we need around four or five serious investors.”
Furthermore, Thorpe believes that the business will be eligible for the Enterprise Investment Scheme, offering tax relief for investors – an encouraging incentive.
Thorpe is an experienced, well qualified and highly motivated business entrepreneur with almost 30 years experience at an international level, and has a strong team supporting the company with solid backgrounds in business, finance and aviation. Starting his own airline is a bold move; but it might just be exactly what Yorkshire is looking for.
HTC post record profit loss
HTC shares fell 10%, the daily limit, in the wake of a record quarterly profit loss.
Their second quarter report, released today, showed weaker than expected demand at the high end and weak sales in China, leading to year on year fall in profits.
For the three months to June, losses dropped to 8bn Taiwanese dollars (£163m) from Tw$2.26bn a year earlier. Shares fell to their lowest price since February 2005
“HTC has begun to implement company-wide efficiency measures to reduce operating costs across the organisation and ensure resources are appropriately allocated to future growth,” the company said in a statement.
HTC have faced strong competition in recent months from Apple and Samsung, as well as being undercut by cheaper Chinese smartphone companies.
Miranda Wadham on 07/08/2015
MPC’s dovish approach hits pound, helps housing stocks
The Bank of England’s unexpectedly dovish approach to interest rates this morning had a knock-on effect on the stock markets and the strength of the pound.
The FTSE 100 index was up 0.1 percent at 6,757.74 points by 1200 GMT, having been in negative territory all morning. now down 0.04% 1445 GMT.
The lack of change has been beneficial to rate-dependent industries such as housing development, with the prospect of higher interest rates being pushed back and supporting mortgage applications .
Housebuilder Taylor Wimpey (LON:TW) rose 3.1 percent, making it one of the best-performers on the FTSE 100 and taking it to a new eight-year high. Barratt Developments (LON:BDEV) rose 2.3 percent, also hitting its highest level since 2007. Persimmon (LON:PSN) rose 2 percent to a record high.
However, the pound has fared less well on the back of the announcement. Sterling strengthened this morning against the euro this morning for the fourth day in a row, up to its strongest level since 2007, however quickly fell at the MPC’s news. The pound has fallen 0.65 per cent against the dollar and 0.66 per cent against the euro.
Mark Carney made it clear that the strength of the sterling will continue to have an effect on inflation and will be “taken into account” when discussing the time for a rate increase, saying that there was “no question of the strength of sterling having an influence on policy”.
When asked about the impact of recent events in both China and Greece, Mark Carney stated that they were not taken into account and that he “wouldn’t characterize what has happened in the market as turmoil and did not weigh on the MPC’s decision”
However, he does see oil prices and movements in China as risks to global growth.
Carney remained ambiguous on the subject of rate rise, saying that the “rate hike is moving closer, but cannot be predicted in advance”. Carney’s reluctance to give away hints is nothing new, with one MP likening him to an “unreliable boyfriend”.
BNP Paribas economist Dominic Bryant said expectations that the BoE could move as soon as this year now looked a stretch, though a move in February was still a possibility.
Miranda Wadham on 06/08/2015
Interest rates to stay at record 0.5% low
The Monetary Policy Committee have voted to keep interest rates at their record low of 0.5%, by a majority of 8-1 with Ian McCafferty dissenting.
The decision marks the 78th consecutive month of record-low interest rates
Carney maintains plans for “gently rising rates” and said that the time for a rate hike was “drawing closer, but cannot be predicted in advance”.
CPI inflation fell back to zero in June, with the report stating that three quarters of deviation from target was due to low contributions from energy and food sectors.
The report continued that private domestic demand expected to remain robustt, with household spending up and an increase in wage growth. Carney stated that consumer confidence at the highest level in a decade.
The Bank of England remains supportive of bank lending, and business investment remains a key area of aggregate demand. There is “little evidence of deflationary mindset”, according to Mark Carney.
The MPC ended the report by saying that they expect to reach their target level of inflation within the next two years.
Miranda Wadham on 06/08/2015
RBS finish pricing CoCo bonds
Royal Bank of Scotland (LON:RBS) has announced that it has completed the pricing of two issues of contingent convertible bonds, or CoCos.
The bonds were announced after their positive quarterly results last Thursday, becoming the last of the major UK banks to fofer a bond of this type. The bond will convert into equity if the bank’s CET1 ratio drops below 7%.
The move will raise £1.98 billion to bolster the bank’s capital. The offer is due to close on Aug. 10.
“This is another important step in the road towards becoming a much stronger, safer bank for our customers and shareholders. Improving our capital resilience has been an integral part of our plan and we are well on track to achieve this,” Chief Executive Ross McEwan said in a statement.
The bank also said that they will buy back shares or pay a dividend to shareholders, but not until 2017.
The government began selling off its share in RBS earlier this week, attracting criticism for the decision to sell the shares at a loss.
Miranda Wadham on 06/08/2015
Old Mutual’s African operations bearing fruit
By UK Investor Magazine – 6/8/15
Old Mutual (LON:OML) have reported a 19% increase in adjusted operating profit to £904 million in the six months on 30th June.
The strong performance enjoyed by Old Mutual has been driven by African activities as it builds an ‘African financial services champion.’
African earnings were up 400%, helped by Nedbanks partnership with Ecobank Transnational Incorporated providing broad African exposure.
Having been founded in South Africa in 1845, Old Mutual now services the financial needs of 17 million customer globally.
Although growth has been strong there are some concerns over the impact of rate hikes in the US.
“While we expect the next six months to be challenging for emerging markets, and exchange rate movements will likely temper sterling reported growth, I am confident that by remaining focused on meeting our customers’ needs and improving the operating efficiencies of the business we will continue to make good progress,” said Chief Executive Julian Roberts who is due to be replaced in the coming months.
Old Mutual shares were up 3.3% on Thursday morning at 225p, 16p off its 2015 high.
info@ukinvestormagazine.co.uk
Fitbit beat expectations with first quarterly earnings report
Fitbit (NYSE:FIT) are up 4% this morning, after releasing their first quarterly earnings report and beating expectations.
The company, who make wristbands and devices that track heart rate, calories, steps and sleep pattern, went public in June and stocks have risen nearly 160% since then.
Revenue tripled to $400 million, with net income rising to $17.7 million, up from $14.8 million.
Margins fell as more money was ploughed back into more expensive products, with adjusted margins falling to 47%, down from 52% the previous year.
Fitbit sold 4.5 million of their products in the last quarter and adjusted expectations, saying that it expects revenue for the coming quarter to be slightly lower, in the range of $335m to $365m.
Miranda Wadham on 06/08/2015
FTSE weak before Bank of England announcement
The FTSE 100 is weak this morning as the city prepares for a slew of announcements by Mark Carney at midday today.
Today is being named ‘Super Thursday’ as the Bank of England will announce their interest rate decision and the minutes from the meeting together for the first time, prompting caution in the markets. US non farm payrolls are also due to be released tomorrow.
Mike McCudden, Head of Derivatives at Interactive Investor, said to ThisIsMoney: “As we enter ‘Super Thursday’ investors are treading very cautiously with the prospect of rate hikes sinking in.
“Furthermore, with a mixed bag of corporate earnings and a strong dollar impacting commodities, expect equity indices to be under pressure throughout the session.
“The focus will soon switch back to US employment data so those without the stomach for volatility will be well advised to stay away in the short term.”
Rio Tinto (LON:RIO) rose 0.5% this morning despite reporting a sharp drop in second-quarter profits. Aviva (LON:AV) rose 1.2% after it reported half-year operating profits of £1.17bn, up from £1.07bn last year. RSA (LON:RSA) insurance group beat analysts expectations by disclosing pre-tax profits of £288 million. RSA are currently in the midst of takeover talks with rival Zurich Insurance.Why brands should harness crowdfunding to engage customers
Over the past few years we have seen the rise of crowdfunding. It first started with the crowd donating to entrepreneurs to get projects off the ground and more recently equity crowdfunding to enable investment from angels into startups.
Crowdfunding, or democratised alternative finance, has seen phenomenal growth of about 150% year on year for the past few years – depending on how you measure it. Regardless of the number it is a clear trend within our society that not only reflects the rebuilding of the financial service sector but embraces a more decentralised transparent way of living.
Crowdfunding is not just about the money for startups and crazy projects; now much more sophisticated financial products are available that suit larger well established companies. Established brands are turning to crowdfunding more and more, not because of a financial need but because it allows them to engage their customers in a way like never before. Brands are able to truly make their customers part of their company through allowing them to lend or purchase part of the company.
This is an excellent mechanic for established businesses as it builds a team of brand evangelists, and we all know that getting your customers to sell for you is the key to marketing success. Crowdfunding also allows brands to reach out to new audiences while executing a crowdfunding campaign whether its members of the platform or people caught in the crossfire of an exploding crowdfunding campaign.
Now, a little about why the finances work for brands better than traditional sources of finance – because investors and lenders are buying into brands they love the interest rate is often less important to a lender (in comparison to mechanics where the interest rate is the only element in a deal) and therefore very attractive rates for businesses can be achieved. Also – by offering rewards for investments it allows the brands to leverage their products to achieve more attractive interest rates from their customers. And the customers are still generally getting better returns than traditional investments.
Crowd2Fund is a platform specifically designed for established brands to allow them to harness the power of their crowd in a way like never before, so it’s a win win situation for all.
Ruroc, possibly the world leading snow sports safety gear brand, are currently raising a loan on Crowd2Fund. They are ‘mobilising the Ruroc army’ to raise a loan on the terms that suit their business and truly build an army of global brand ambassadors who are genuinely financially wedded to their business.
For more information on investing in Ruroc, visit their crowdfunding page here. Their campaign is now overfunded, and ends today.
This guest post was written by Chris Hancock, CEO of Crowd2Fund, the only crowdfunding site in the UK to offer a revenue-based model. He has developed the platform over two years with the help of a team that includes entrepreneur Sarah Jane Thomson, founder of AIM-listed consultancy Ebiquity, and former HSBC Private Bank chief investment officer Nigel Webber.
SEIS: what you need to know
The Seed Enterprise Investment Scheme (SEIS) was introduced in 2012 to encourage investment in small businesses and start-ups. The scheme provides tax incentives to investors, and upon introduction was hailed as a key driver of entrepreneurship and small business growth; however, figures say that 40% of business owners are still unaware it exists. If you’re interested in investing in seed businesses, or indeed you are one – it’s well worth knowing about the scheme’s benefits.
Overview
The Seed Enterprise Investment Scheme (SEIS) was designed to complement the existing Enterprise Investment Scheme, but is geared towards helping small and early-stage companies rather than high risk enterprises. It aims to help seed businesses raise equity finance and offers Income Tax Relief for those who subscribe for qualifying shares in companies that meet the SEIS requirements.
For investors
Under the SEIS scheme, investors have the opportunity to invest up to £100,000 each year into small businesses.
Tax relief is available at 50% of the cost of the shares, reducing investors’ tax liability in return for putting money into the start-up sector.
Exemption from Capital Gains Tax on the earnings from your shares so long as you have held them for a minimum of three years
You can also receive Capital Gains Relief of up to 50% of the profits if you sell within three years and reinvest the profit into SEIS companies.
To take advantage of the scheme, you don’t need to be a UK resident – but you do need to paying tax in the UK.
The scheme also includes loss relief in the event that the company fails. The amount you receive in loss relief is equal to your investment minus the 50% you received back multiplied by your tax rate
Investors may NOT control more than a 30% stake in any company invested in through SEIS.
For businesses
The SEIS scheme covers the first £150,000 of external investment in to a seed business.
To qualify, your company must be based in the UK, have traded for no more than two years, have fewer than 25 employees and net assets of less than £200,000.
Make sure you consider how much capital you need – especially if its more than the £150,000 cap. The EIS scheme may be better for you.
If any of the conditions needed for your business to qualify for the scheme fall short during that period, investors will be liable to have their relief withdrawn. It is well worth covenanting to protect its SEIS status to encourage potential investors.
For further information and how to list your company with SEIS, visit the SEIS website.
Miranda Wadham on 05/08/2015