AB Foods FTSE 100 top riser after revenues rise 2%
AB Foods were 3.3% to the good at 9:30am in London trading following the release of a trading statement that showed revenues for the 40 weeks to 20th June were 2% higher than the previous period.
Although revenues rose on a constant currency basis AB Foods were still experiencing FX headwinds that meant at actual exchange rates revenue was flat.
Primark continued to carry the group, the budget clothing store enjoyed a 13% increase in sales from a year earlier helped by new store openings in the Netherlands and Germany.
Investors would have been pleased to see that their flagging sugar business was showing some signs of recovery. A long time thorn in the side of ABF’s operations the sugar unit has been helped by a pickup in sugar prices.
The outlook for their sugar operations are improving and may provide further upside in the coming year. “As quota sugar stocks reduce, EU sugar prices, as reported by the European Commission, have shown some signs of recovery, albeit moderated by continued low world sugar prices,” the company said in a statement
Shanghai Composite posts best day since 2009
The Shanghai Composite has posted the biggest one day gain since 2009 as the Chinese government unleashed another set of measures to boost confidence in the market.
The Chinese government have put selling limits in place to prevent major shareholders liquidating their holdings. Authorities have warned they will enforce the ban on those large shareholders that sell their shares within six months.
The move is one of many interventions by the Chinese government to halt a sell off that has already wiped 30% from the value of mainland equities in the last three weeks.
“A huge amount of wealth has been wiped out … People are underestimating the damage to the real economy,” said Michiro Naito, executive director of JPMorgan in Tokyo.
Indeed, it is very difficult for anyone to sell their shares at the moment as around 50% of mainland shares, worth around $2.6 trillion, have been suspended.
The latest steps by the Chinese government have many doubting that there will be any true reforms of Chinese stock markets in the near future as equities are repeatedly manipulated by liquidity injections, restrictions and speculation that the government will actually begin to buy shares to prop up the market.
The optimism may only be temporary but it was enough to support commodities and in turn FTSE 100 mining companies that were among the top risers in early trading.
Shell shares drop after problems disrupt Arctic venture
Shares in Royal Dutch Shell (LON:RDSB) hit their lowest point since 2011 yesterday, over fears that their Arctic Ocean project may be under threat.
Royal Dutch Shell is on the verge of drilling in the Arctic Ocean, a risky venture setting them apart from most other competitors; very few oil and gas groups are considering Arctic exploration after the large drop in oil prices since last summer, combined with the cost of exploration in such a remote area. Recently the oil giant has been hit with a series of problems that may impact on the smooth running of the project.
An agency said last week that Shell would not be able to drill two wells simultaneously within a 15-mile radius, to minimize the impact on walruses. Although Shell had planned to drill two wells this year, this may mean that they are restricted to just one.
This came just before Shell announced that an icebreaker carrying a piece of safety equipment to a drilling site in arctic Alaskan waters returned to shore after suffering a minor hull breach.
Shell are planning to transport two rigs more than 2,000 miles up the Alaska coast to the Chukchi Sea, accompanied by 30 support vessels and seven aircraft. The company has already incurred significant costs with its stop-start Alaskan Arctic campaign, and its total spending is set to rise to $8.4bn by the end of next year.
Ann Pickard, an executive vice president who runs Shell’s Arctic division, commented: “Everybody’s watching to see if we’re going to fail or succeed out there. If we fail for whatever reason, I think the U.S. is another 25 years” away from developing Arctic resources.”
The project has sparked several environmental protests; environmentalists warn that disturbing its unique and sensitive ecological balance could spell disaster for the world at large.
“We simply cannot afford to burn the oil that might lie underneath the Arctic if we are serious about staving off the worst impacts of climate change,” said Ben Ayliffe, Greenpeace project head for Arctic Campaign.
House builders demolished by Summer Budget
UK house builders bore the brunt of the Chancellors budget after he removed tax relief for buy-to-let investors – potential reducing the amount of homes that are purchased for investment purposes.
The UK’s leading homebuilders typically sell many new homes off plan, often to those that are making an investment.
Osborne said his desire to create a fairer housing market was the motive for introducing the changes.
Barratt Developments, Persimmon and Taylor Wimpey were the FTSE 100’s top fallers and The FTSE 350 House builder’s index was the biggest sector faller.
Home builders have enjoyed significant support from the government in the last few years and this is the first major negative intervention to the house builders the Tories have made.
The Tories have said they would like more people to own a home but there may be the unintended consequence of higher rents for lower income households.
Home builders have enjoyed significant support from the government in the last few years and this is the first major negative intervention to the house builders the Tories have made.
The Tories have said they would like more people to own a home but there may be the unintended consequence of higher rents for lower income households. Osborne reforms dividends
In today’s Budget George Obsorne further supported savers by reforming dividends meaning 85% of investors will pay less tax.
George Osborne said of his reforms: “I am today undertaking a major and long overdue reform to simplify the taxation of dividends. The dividend tax credit will be replaced with a new tax-free allowance of £5,000 of dividend income for all taxpayers”
The announcement came among many changes to the tax system that were aimed at reducing tax bills for working people. Corporation tax was also slashed, Osborne said by 2020 corporation tax would be reduced to 18%.
The FTSE 100 rallied on the news and was trading up around 1% in the wake of the announcement, however much of this can be attributed to a rebound from yesterday’s selloff.
Ruroc eyes up expansion through crowdfunding campaign
Ruroc, creators of the world’s first fully integrated ski helmet, goggle and mask are seeking to crowdfund through online platform Crowd2Fund. They are seeking a £150,000 revenue loan, with 10% APR.
The company, first established in 2010, has already proven itself in the marketplace; Ruroc’s helmets are used by over 20,000 people worldwide and are frequently seen in the Formula One Pit lanes on Sky Sports. The company are hoping to use the loan to introducing a new range of products, including an updated version of the RG-1.
The business currently turns over more than £1 million and has been experiencing double digit revenue growth year on year. The company’s flagship product, the RG-1, is fully patented and permanently prevents goggles fogging without the use of electronics.
One of Ruroc’s strengths is having a strong following online. They have a number of celebrity fans, such as Simon Pegg, close to 2,500 followers on Twitter and over half a million likes on Facebook. This has resulted in a brand following, who have helped fuel sales internationally; currently 88% of sales are from international customers. The company feel that crowdfunding is the best source of finance, giving their existing customers the chance to invest and grow the company.
Daniel Rees, the MD of Ruroc, says: “The new helmet will help to alleviate the problem that we have with seasonality as it will be certified across a number of sports including road and mountain biking, as well as a selection of other action sports.”
Rees believes that the revenue loan suits businesses such as Ruroc which are seasonal.
Rees says, “Crowd2Fund’s revenue loan was a massive attraction for us as we are a seasonal business and this offers a much easier solution than making fixed monthly repayments.”
Crowd2Fund are the only UK-based crowdfunding platform to offer the revenue loan model.
For more information on this investment opportunity, visit Ruroc’s page on the Crowd2Fund website.
Chinese stock market crash snowballs
It was only a couple of months ago analysts were touting the economic recovery in China as reason to pile into Chinese equities to benefit from corporate earnings and central bank easing.
That trade would have been very successful for a nimble trader who exited near the top, however those inexperienced Chinese individuals, who account for roughly 85% of the market, are now running for the hills as the crash in Chinese stocks snowballs.
“I’ve never seen this kind of slump before. I don’t think anyone has. Liquidity is totally depleted,” said Du Changchun, an analyst at Northeast Securities to Reuters.
Panic is contagious and China has an epidemic. Around half of the stock market has been halted and those who piled in on margin are in a huge amount of trouble.
The selloff continues despite intervention from authorities who are doing there best to contain the market volatility.
“It’s just a matter of whether it will fall more slowly, or continue to slump in freefall,” said Qi Yifeng, analyst at CEBM. If this is the sentiment shared by the masses, the Chinese stock market could have a lot further to fall.
Hiring pace slows further in June
Permanent staff placements by recruiters have continued to slow in June, according to a survey published on Wednesday.
This continues the trend set in May, where the number of job vacancies made available also fell to their slowest in 2015.
The report cited a lack of skilled candidates as the reason for the slow growth.
“Recruiters are struggling to fill vacancies for everything from software engineers to sales,” Bernard Brown, a partner at KPMG, said.
Job data will be watched closely by the Bank of England, who are predicted to raise interest rates from its record low of 0.5% in the near future. The market predicts the first rise in the UK Bank Rate around May or June 2016, with the conensus of economist views pointing to March.
Anthony Jenkins sacked as Barclays CEO
Barclay’s CEO Anthony Jenkins has been sacked over the lack of cost cuts and changes to the investment bank.
Chairman John McFarlane will step in as caretaker CEO until a suitable replacement is found.
“Whilst it is unfortunate that I have had little time to work with Antony, I respect and endorse the position of the board in deciding that a change in leadership is required at this time,” said Mr. McFarlane
Jenkins’ exit follows a number of changes at the top of major investment banks whose boards and investors felt the man at the top wasn’t the most appropriate person to navigate changes in regulations and deliver cost synergies.
“The board recognizes the contribution made by Antony Jenkins as chief executive over the past three years in incredibly difficult circumstances for the group, and is extremely grateful to him in bringing the company to a much stronger position,” Barclays said in statement.
Shares in Barclays traded up 3.3% in early London trade.
Apprentice star Lauren Riley crowdfunding for ‘The Link’ app
Apprentice star Lauren Riley is crowdfunding for The Link, her new app designed to revolutionise methods of communicating between professional firms and their clients.
Initially, the app has been created for those working across private client legal sectors. Riley, who is a family law solicitor, saw the need for a way to save time and money and increase productivity by replacing multiple daily calls, emails and letters into one easy to use channel. In an increasingly competitive market, an app that claims to potentially increase firms’ profit by £84,000 per year, per solicitor is an invaluable addition to the workplace.
The Link App are crowdfunding on Crowd2Fund, with a funding target of £150,000 for 15% equity. The funding will enable them to release their product on the general market.
Riley says: “Crowd2Fund offers a simple and quick platform for investors to gain insight into the business with much of the usual due diligence work done for them. My investors also become my clients, product testers and invest in future rounds so crowdfunding was clearly the best way to raise funds.”
“I have always loved being in business. As an entrepreneur I was convinced there must be a better way for lawyers to communicate with their clients. After all, this is the twenty first century. After listening to the continued grumblings of my colleagues who work in law, I had my eureka moment and The Link App was born. We’ve seen phenomenal interest in the app so far, using the crowd is a modern way to raise funds for a modern company.”
The basic version of the app has launched and 80 law firms have already expressed their interest in using the product. Although initially focused on law firms and their clients in the UK, many professional sectors have the same needs and in the future the app could be developed to target these sectors and globally.
For further information on investing in The Link, visit www.crowd2fund.com/thelinkapp. As an added incentive, investors will also receive £1,000 of usage credit on the app if they contribute £5,000 or more of the £150,000 target.