New rules lead to more Britons swapping banks
There has been a 4 percent increase in customers moving accounts in the last year, due to new rules introduced in 2013 that ensure customers can switch accounts within seven working days.
The rules are designed to break the dominance of the Big Five banks: Lloyds, RBS, Barclays, HSBC and Santander. The sector’s competition watchdog is currently undertaking research into whether there is enough competition for current accounts in the UK, due to be published in September. It could well recommend that the banks be broken up, in order to allow for a more competitive market.
It seems the new rules are finally having the desired effect, with Bacs data showing that there were 1.1 million switches compared with 1.06 million over the same period one year before. 69 percent of Britons are now aware of the service, compared with 58 percent in the month of its launch.
Glaxo Smith Kline gets go-ahead for malaria vaccine
Glaxo Smith Kline (LON:GSK) have become the first drug company to be given approval from European Medicines Agency for a malaria vaccine.
Mosquirix, which is designed primarily for use on children, has been in development for 30 years. Currently the only drugs available are oral tablets. The drug has completed its safety review and could soon be used for immunisation across sub-Saharan Africa and is set to make a significant difference.
Andrew Witty, chief executive of GSK, said:
Today’s scientific opinion represents a further important step towards making available for young children the world’s first malaria vaccine.
GSK have said that they will not be making a profit on the drug, despite it costing them £236m so far to develop.
GSK’s share price is staying relatively steady, currently up 0.18%. It is one of the UK’s leading healthcare companies, who research and develop pharmaceuticals, vaccines and consumer healthcare products.
“Hobbit village” crowdfunding on Kickstarter
If you’re a Tolkien fan with a secret desire to experience life in Middle Earth, now’s your chance: one company are crowdfunding to build “Podditon”, a realistic hobbit style holiday village in Suffolk.
Based in West Stow, the company already runs West Stow Pods, a glamping business near Thetford Forest. However its owner, Jan Lengyal, is hoping to raise £50,000 to build the UK’s first habitable village based on “The Shire”. The authentic “hobbit holes”, as they are known in the timeless Lord of the Rings trilogy, will be eco-efficient and sleep up to five people.
The sustainably built development will utilize natural building techniques and materials and, upon completion, will be carbon neutral or carbon positive. Lengyal isn’t the avid Tolkien fan you might expect; what really drew him to the project was the eco-friendly manner in which it was built. In an interview with teh Telegraph, he said: “I’m very conscious of people’s – and my own – carbon footprint, so if I can stop one family from flying to Benidorm, and instead holidaying in Britain, that’s my ultimate goal.”
However, for the project to get the go-ahead, it needs to be 100% funded through it Kickstarter campaign. Donations start at as litte £2, going up to £1,000 – where donors will be some of the first to spend five nights in the Poddit Hole, as well as getting a guided tour of the area’s nearby Anglo-Saxon village. The project has until 21st August at 3.14pm to achieve it’s £50,000 goal.
Diageo under investigation for manipulating results
Diageo (LON:DGE) is being investigated by the US Securities and Exchange Commission, after it was alleged the company shipped out excess stock to US retailers in order to boost their financial results.
The business has showed signs of being under pressure int eh recent months, with performance down in North America and sales relatively flat.
Diageo told the Wall Street Journal it had received an enquiry and was co-operating with the investigation. A spokeswoman said: “”Diageo is working to respond fully to the SEC’s requests for information in this matter.”
Diageo is one of the UK’s leading drinks manufacturers and the biggest alcoholic drinks company in the US, owning the Smirnoff, Johnny Walker, Guiness and Baileys brands. The company were trading down 3.33% this morning after the news broke.
Aggreko falls 13% after trading update
Aggreko plc (LON:AGK) fell 13% this morning after releasing a less than favourable trading update.
The company said in a statement:
“We now expect the 2015 interim and full year results to fall sort of current market expectations.
Our 325MW of gas contract extensions in Bangladesh are entering the final stages of approval, with our expectation being that 180MW will be secured into the first half of 2016 and the remaining 145MW for three years. The trading terms secured for these extensions, which would retrospectively apply from the second quarter 2015, are likely to be less favourable than our earlier expectations”, leading to an adverse effect on profit.
Furthermore, security challenges in Yemen mean the company are operating below full capacity.
The oil arm of the business has also taken a hit:
“We have seen a further slowdown in North America with volumes in the shale basins continuing to decline. More recently, we have begun to see an impact on our offshore oil and gas business in the Gulf of Mexico.”
Aggreko plc is a United Kingdom-based company, which provides power and temperature control solutions.
Pearson’s half yearly report shows consistent growth
Pearson (LON:PSON) published their half yearly report this morning, showing consistent growth.
Sales were up 1% to £2.2bn,with strong growth in North America, Brazil and China. Operating profit down 4% from £73bn to £72bn and its divedend was raised by 6% to 18p.
The company are trading up 3.24% this morning, following on from yesterday’s news of a sale of its Financial Times newspaper to Nikkei Group for £844m.
John Fallon, chief executive said:
“Overall, we’re competing well, enabling us to reaffirm our full year guidance and increase the interim dividend. The new education products and services we’re developing which will enable far more people of all ages to discover the joy of learning and progress in their careers. We believe the returns on the signific”.
Looking forward the company have a positive outlook, expecting the UK market to stabilize as well as strong growth in China and North America.
Amazon shares surge after reporting first sizeable profit
Shares in Amazon (NASDAQ:AMZN) shot up more than 18% in after hours trading yesterday, as the company reported an unexpected $92m profit.
Traditionally Amazon has grown its revenue consistently, whilst its profit remained low or non-existant – in the same period last year, Amazon made a loss of $126m. Its announcement yesterday was the first time the company have reported a sizeable profit.
Sales in North America rose 25.5% to $13.8bn in the second quarter, driven by technology and electrical goods. Amazon’s top line grew 20 percent in the quarter, and company profile was boosted by the heavily advertised “Prime Day” on July 15th, where the company gained more new members trying it’s speedy Prime delivery service than ever before.
Founder Jeff Bezos said the results were down to pure hard work: “The teams at Amazon have been working hard for customers,” he said.
Ladbrokes announces merger £2.3bn plans
Betting chain Ladbrokes (LON:LAD) announced this morning plans to merge with Gala Coral, in a deal that will make the combined chain the biggest bookmaker on the high street.
Adding Coral’s 1,845 shops to Ladbrokes’ 2,100 will mean the chain will overtake the current market leader, William Hill.
The business is expected to be valued at £2.3bn, and the deal will be funded by offering 93 million new shares to investors.
Peter Erskine, chairman of Ladbrokes, said the merger was a “major strategic step for Ladbrokes”.
He added: “Together, we will create a leading betting and gaming business. The transaction will provide an attractive opportunity to generate considerable value for both sets of shareholders.”
Ladbrokes is currently trading down 2.57% at the news.
E-Car Club buyout spells good news for crowdfunding sector
Equity crowdfunding has become a big name in alternative finance, but there are still those who are sceptical; the risks are high and the sector is still relatively young. How can the public be encouraged to invest when nobody knows what the future holds?
However, recent events may go some way to allay concerns. Two weeks ago E-car Club was sold to car rental giant Europcar, becoming the first UK crowdfunded start up to successfully exit and pay back their investors.
Back in 2013, E-Car Club became one of the first companies to try crowdfunding. They raised £100,000 from 63 investors on platform Crowdcube, with a valuation of £500,000. Its investors took a real risk – however for them, it paid off. They put in an average of £1,500, with the largest investment £15,000, and will now receive a healthy 3-4x return on their investment.
“Being able to write a cheque to your investors this early on is one of the unexpected pleasures of doing what we do,” E-Car Club founder Andrew Wordsworth told CityAM. Luke Lang, CEO of crowdfunding site Crowdcube agrees. He also spoke to CityAM: “An exit for an equity investment was what the industry was looking for. The aim of all of this is identifying great businesses that people want to invest in and that then deliver great returns.”
The facts speak for themselves; the chances of a return on investment in a start-up business aren’t high. According to a 2009 Nesta report, 56 per cent of investments fail to return capital. The other 44 per cent bring positive returns, but a mere 7 per cent will return 10x return on investment. Not good chances, if you’re hoping to become a millionaire.
However, for the crowdfunding sector, E-Car Club’s success can only be a good thing. Whilst it’s clear that a lot of start-up businesses fail, this buyout is the first definitive proof that there really is the opportunity to make money from investments on crowdfunding platforms – if you’re prepared to take a chance.
Meet JetSmarter, the ‘Uber of the sky’
After the success of Uber, the on-demand Taxi app, entrepreneur Sergey Petrossov has taken the next logical step – and launched JetSmarter, a similar service for private jets.
For those that are lucky enough consider flying by jet an option, the process is difficult to organise and very costly. Sergey Petrossov wanted to simplify that process, so he built the JetSmarter app to make it easy for anyone to book a flight on a private jet in a matter of seconds.
“I started the company out of a frustration with the process,” Petrossov told Business Insider in an interview. “I kept thinking to myself, ‘Why hasn’t this service been brought into the digital world?'”
“Essentially it works like an airline, except you go through private carriers,” he continues. “There’s no going through security, you just pull up to a private plane five minutes before you take off and go.”
There are currently three tiers to his new business, ensuring that he meets the needs of every potential customer: JetDeals, which involves booking a one-way private flight on demand; JetShuttle, which allows you to book a seat on a previously scheduled private flight; and JetCharter, which offers completely customized private jet packages.
Unsurprisingly, the costs involved for members wishing to use the service are not cheap. JetSmarter members pay $9,000 a year — roughly $800 a month — to get unlimited access to private flights.
The new app has been funded by some high-profile names, both of which are no strangers to the private jet industry. Petrossov obtained $20 million in Series B funding from The Saudi Royal Family and rapper Jay-Z. He has also sought financing from executives at Goldman Sachs and Twitter.
However, JetSmarter is not the first of its kind. Another similar app, Blackjet, went bust in 2013 due to lack of capital; whilst Petrossov’s company seems to be on track for success, the private jet market is not an easy one to crack.