Sterling rises as UK unemployment data puts pressure on Bank of England

UK Investor Magazine
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Sterling rises as UK unemployment data puts pressure on Bank of England

The pound rose on Tuesday after the UK released another set of strong employment data showing 160,000 jobs had been created in October.

Job openings also soared to a record high.

GBP/USD spiked higher by some 50 points to 1.3473 in the initial reaction to the news, before easing back to around 1.3450.

Having decided against hiking rates in their last meeting, the Bank of England will now be feeling the heat of soaring inflation and an economy that is facilitating a very healthy job market.

“This data will put further pressure on the BoE and members of the MPC to make a decision around rising interest rates as Governor Andrew Bailey recently mentioned that the only missing economic data was how the UK labour market would react after the end of the furlough program,’ said Jesús Cabra Guisasola, Associate at Validus Risk Management.

The next instalment of jobs data will come just days before the Bank of England meet in December and will be one of the most anticipated readings of UK jobs activity in the last decade.

Despite Sterling’s jump this morning, the pound has been under pressure against the dollar since late October falling from highs around 1.3830. The pound had also fallen against the Euro in early November but has now recouped most of the losses.

“Sterling climbed against the dollar on the back of the positive data and is currently testing 1.345. Nevertheless, we continue being cautious around the UK economy as inflation continues rising, with Covid and the negotiations between the UK and EU also weighing on the pound to the downside,” Jesús Cabra Guisasola cautioned.

Whilst the news was positive for GBP and the UK economy, the FTSE 100 underperformed peers as the FTSE 100’s inverse relationship with the pound once more came into play.

“Holding the index back a bit was strength in the pound, hitting the relative value of its dominant overseas earnings, as stronger than expected unemployment figures suggested Bank of England Governor and ‘unreliable boyfriend’ Andrew Bailey might deliver the promised rate rise in December,” said AJ Bell investment director Russ Mould.

Diageo in ‘party’ mode as it unveils growth plans

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Diageo in ‘party’ mode as it unveils growth plans

Diageo has revealed an enthusiastic set of growth targets as part of their capital markets day which includes sales growth of between 5% and 7% for fiscal years 2023 and 2025.

It also set out bold plans to capture 50% of the alcoholic drinks market by 2030.

“Diageo has declared it is party time as far as its growth ambitions go,” said AJ Bell investment director Russ Mould.

“Often considered to be a pedestrian company with slow but steady revenue gains each year, Diageo has now announced bold ambitions for a 50% increase in its share of the alcoholic drinks market by 2030.”

Diageo brands include Captain Morgan, Smirnoff, Jonnie Walker, Baileys and Gordon’s.

Ivan Menezes, Chief Executive, Diageo explained the groups strategy to active their goals which included spending on staff and marketing.

“Since our last Capital Markets Day, we have continued to invest in our brands, sharpened our focus on accelerating growth and quickly responded to shifts in consumer behaviour. We have also launched ‘Society 2030: Spirit of Progress’, our ten-year sustainability action plan, building on our strong track record of doing business the right way, from grain to glass.

“Our culture of everyday efficiency is embedded in our business and we continue to challenge ourselves to achieve more. In fiscal 21, despite the challenges created by Covid-19, we delivered strong organic net sales growth, drove an improvement in organic operating margin and delivered strong cash flows, while continuing to invest in long-term sustainable growth.

“We believe our sales growth trajectory has accelerated, underpinned by the strength of our advantaged position across geographies, categories and price tiers. TBA is a large, growing and attractive sector of which Diageo currently has a 4% value share. With continued investment in marketing, digital capabilities and our people, we have significant headroom for growth. This gives us the confidence that we can grow Diageo’s value share of TBA from 4% in 2020,1 to 6% by 2030.”

Imperial Brands profits rise as new generation products reduce losses

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Imperial Brands profits rise as new generation products reduce losses

Imperial Brands has released full year results in which reported revenues rose 0.7% to £32.8 billion.

The group’s rise in revenue was attributed to excise duty, however, the group did manage to grind out a 4.8% increase in operating profit as losses were reduced on their new generation products.

“In what has been an eventful year for all businesses, Imperial Brands today announced a set of sturdy FY results for the year ending 30th September 2021. Organic adjusted revenue was up 1.4%, with tobacco growth of 1.5%. Tobacco price mix was up 4.4%, more than offsetting volume declines of 2.9%,” Sara Welford, Director Consumer, Edison Group.

Imperial Brands shares fell over 1% in early trade on Tuesday following the release of their results.

Imperial Brands have embarked on a change of strategy in the past year which CEO Stefan Bomhard commented on along side the release of the full year results.

“This has been a year of important progress and significant change, as we begin to deliver on the new, focused strategy we announced in January 2021,” commented CEO Stefan Bomhard

“We have substantially refreshed our leadership team, making new hires to strengthen our consumer-facing capabilities, while building on our existing deep tobacco experience. We have changed the way we work, placing the consumer at the centre of our decision making. We have simplified the organisation, creating efficiencies for reinvestment. And we have introduced more rigorous performance management, enabling better prioritisation of resources.”

“This approach is already delivering improved operational and financial outcomes. In tobacco, our sharper focus and increased investment in the top-five priority markets have begun to stabilise the aggregate market share performance. This is encouraging early progress in addressing the long-term historical declines. We will build on this foundation in the coming year, with further investment in brand building and sales execution.

November house prices down £2,000

Safiya Bashir
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November house prices down £2,000

New data from Rightmove has found that the average house price on the market is £2,000 lower this month.

The cost of an average home is 0.6% lower than in October and now stands at £342,401. This is the largest monthly decline since January, which was 0.9%.

“New sellers have given buyers an early Christmas present by dropping their average asking prices by 0.6%” said Tim Bannister, director of property data at Rightmove.

“We expect this downward price trend to be relatively short-lived, though sellers who are in a hurry will continue to need to attract buyers for most of December as well.

“As soon as Christmas Day is out of the way, there’s a boom in people searching for property on Boxing Day, perhaps with time available during the holiday season and a resolve to enjoy their next Christmas in new surroundings.

“That is likely to push prices higher again, and increase the competition from other buyers.”

December is traditionally the quietest month in the housing market.

“With the holiday season coming up fast, sellers planning to enter the market might be tempted to put off beginning the process of putting their home on the market until the New Year,” explains managing director at Thomas Morris Sales & Lettings, Simon Bradbury.

“However, Boxing Day is historically the start of a busy period of both new sellers coming to market, and a resurgence of prospective buyers browsing properties. So, if they wait until January to begin the selling process, they may have missed out on a valuable period of time to attract buyers,” he added.

Shell to simplify share structure and remain London-listed

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Shell to simplify share structure and remain London-listed

Shell announced the streamlining of their share structure on Monday which would see the removal of A/B share classes.

The energy giant said the move was necessary to facilitate simpler distributions back to shareholders and help the business transition to Net-Zero.

Shell will also now align its tax residence with the UK and now locate their CEO and CFO here.

Shell’s Chair, Sir Andrew Mackenzie, said: “At a time of unprecedented change for the industry, it’s even more important that we have an increased ability to accelerate the transition to a lower-carbon global energy system. A simpler structure will enable Shell to speed up the delivery of its Powering Progress strategy, while creating value for our shareholders, customers and wider society.”

Shell will remain listed in London as part of the proposals as well as keeping listings in Amsterdam and ADR access in New York.

“Shell’s proposed a change to the way it’s organised, eliminating its share classes and unifying its tax home to the UK. Ultimately, the new structure would be a net positive for shareholders as it will streamline the company and make it easier to manoeuvre moving forward,” said Laura Hoy Equity Analyst at Hargreaves Lansdown.

“Aside from the fact that the shares they hold will no longer come with a ‘Royal’ designation, this new alignment won’t change much for investors. The long-term growth story for Shell still rests heavily on the oil price. For now, buoyant oil prices are keeping the group’s cash coffers topped up, which has had a positive impact on debt and given the group the means to boost shareholder returns. However, with the inevitable shift to more sustainable energy picking up steam we suspect the need to invest in greener operations will keep a lid on what the group can pass on to shareholders.”

Amazon reveals plans to open 260 UK supermarkets

Safiya Bashir
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Amazon reveals plans to open 260 UK supermarkets

Amazon has announced plans to open 260 grocery markets in the UK.

All of the supermarkets will be cashierless, with the first 60 to open in 2022 and then further 200 to open before 2024.

“In 2022, we assume a broader rollout of 2 store launches per week by the end of [the] year, targeting 60 total openings,” wrote Amazon in their internal documents.

“In 2023 and 2024, we are planning 100 store launches per year, in line with more aggressive opening programmes achieved by convenience stores in the UK in the last five years, Tesco’s, Sainsbury’s and Co-op have all exceeded 100 openings per year.”

The group hopes to take on UK supermarkets Tesco and Sainsburys. It will also open supermarkets in Germany and Spain next year.

There are currently six open stores in the UK.

Our top 30 startups from Web Summit 2021

UK Investor Magazine
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Our top 30 startups from Web Summit 2021

Sustainable startups

CauliBox

This London-based start-up hopes to disrupt the urban food industry by helping customers and restaurants shift to reusable packaging. The reusable lunchbox scheme has the potential to save 15m single-use takeaway containers every year.

Starting with a 10-person trial, the scheme now has over 250 members, where city professionals and food vendors can enjoy street food at lunch without the environmental downfall.

www.caulibox.com

Carbon Limits

Carbon Limits is turning CO2 pollution into profits. By working with public authorities, private companies, financial institutions to reduce emissions, the Norwegian startup also supports clients to finance projects that mitigate climate change and generate economic value.

www.carbonlimits.no

WhyWaste

According to the UN, 30% of all food production is wasted before human consumption – despite 821m people living in starvation. WhyWaste is an app based in Brazil that uses data to control expiration dates and help food companies to reduce their losses.

The startup is used in 12 countries across the globe and the loss prevention technology is used by thousands of stores of retail chains, enabling a reduction in food waste, greater productivity and operational efficiency.

www.whywaste.com.br

Bioworld

Bioworld creates circular and sustainable business models for innovative product solutions, creating, capturing and delivering value throughout the product lifecycle.

Through consultancy, training and innovation, the startup ensures innovation and sustainability for clients.

www.bioworld.pt/en/homepage/

Changing Room

Changing Room empowers consumers to reduce their environmental impact by giving them transparency on their purchases and suggesting lower-impact alternatives. The startup provides a gamified experience that allows people to celebrate progress towards a sustainable lifestyle and find out just how much their clothing is impacting the environment.

www.changingroom.eco/

Full&Fast

Full&Fast believe in a future in which the right clean energy management will allow new generations to enjoy a more sustainable planet. With innovation at the core of their work, they provide clients with renewable technologies that will add value.

www.fullandfast.com/

EcoTree

This startup allows users to instantly buy trees around the world, follow its progress, and when it’s time for the tree to be cut down and sold for sustainable timber, users will receive a profit.

www.ecotree.green/en/

Health

GlycanAge

GlycanAge provides users with longevity biological tests that focuses on the inflammation of Glycans to help detect early signs of disease. The aim of the tests are to help people age well and improve their lifestyle.

https://glycanage.com

Nexus Digital Technology

This is the non-prescriptive digital behaviour modification that empowers users to take control of their health and wellbeing.

www.nexus-dt.com/

Maindcare

This Italian startup combines AI with a proprietary wearable to prevent chronic stress for users and offers daily personalised activities based on gamification. The unique method can set the baseline stress level and use AI-driven Algorithm to extract stress peaks.

www.maindcare.com/

RAW

This app is the one-stop platform for runners. It combines a training platform with a social network and also allows users to search and sign up for races.

www.letsraw.com/

Fintech

Numur

Numur is a national investment company that provides innovative services such as credit lines, leasing lines, automachine and student loans with fast, easy, flexible terms and conditions.

www.numur.mn/en/

EthicHub

This Madrid-based startup connects small farmers with international lenders and buyers, based on its Ethix token and to build collateral and incentives.

www.ethichub.com

PitchedIt

PitchedIt is building an alternative to crowdfunding platforms, which have set the barrier to entry too high for most early-stage founders to even get their ideas heard. It is a community-powered fundraising platform for early-stage founders and investors, which takes ideas to launch and beyond.

www.pitchedit.co/

Finmap

Finnmap is a cashflow management tool that provides simple visual tools to help business owners manages their finances. Finmap integrates seamlessly with hundreds of other apps including Paypal and Wise.

https://finmap.online/en

Steakwallet

Steakwallet is a multi-chain wallet that makes staking your crypto as easy as possible. Send, receive, stake, delegate and more all from your personal Steakwallet.

www.steakwallet.fi/

Finoa

The startup offers a wallet for your crypto assets alongside a user-friendly platform providing portfolio coverage for both institutional and corporate customers. The API allows users to integrate the digital wallet with their own applications.

www.finoa.io/

Education

Zzish

Zzish is a global education platform for teachers that uses machine learning to help learning in the classroom and at home. Zzish uses gamification and spaced repetition to help aid memory.

www.zzish.com/

Growappy

Growappy is the app that aims to revolutionize the communication experience between schools and families, strengthening their sense of community.

www.growappy.com/home

Key2Enable

Key2Enable develops technology to assist people with disabilities to develop their skills and individualities. Based on assistive projects first developed in Brazil back in 2015, the platform uses exponential technologies to give autonomy to people with motor and intellectual disabilities around the world.

www.key2enable.com/

Twin Science

This is the programme that equip kids with the tools and knowledge they need to overcome tomorrow’s biggest challenges. So far, they have taught over 400,000 children and supported 1,200 schools using playful and individual learning techniques.

www.twinscience.com/en/

Wuolah

Over a million students already use Wuolah, the platform that allows people to upload and share study materials. Help your classmates and also receive money for downloads.

www.wuolah.com/

Gaming

Infinity Games

Infinity Games creates immersive experiences, providing games that are simple, relaxing and minimalistic. Download one of the many games already on the app store.

www.infinitygames.io/

Haptology

This gaming experience consists of a double modality for Immersive Presence Controller; gesture and tactile control. The wireless, ergonomic ring enables to emulate the sense of touch and gesture recognition in cross-platform, 2D/3D applications, which allows users to interact with digital content in a natural and intuitive way.

www.haptology.com/

Black Snow

Combines physical and digital realities using just your smartphone. Turn on your camera to enjoy immersive AR at your location and play with friends.

www.blacksnow.tv/

MaxSens Innovations

MaxSens Innovations is the platform that allows you to train virtually for real life events. With innovative virtual reality tools, employees can master new skills faster and more effectively than ever.

www.maxsens-innovations.com/en/

VRpartments

VRpartments allow users to browse and furnish apartments without leaving the house. Users can see apartments from anywhere using virtual reality technology, saving time and money.

www.vrpartments.com/

Media

Frame Media

Frame Media is an award-winning news publication dedicated to exploring the unseen sides of the biggest issues of our time. They tell stories in unconventional and immersive formats, aiming to foster a deeper understanding of the news.

www.frame.media/

Producer

Producer is the all in one workspace for media production. The Swiss startup assists ambitious filmmakers, creatives, storytellers, and teams to get full control in managing the complexity of developing and executing a successful production.

www.the-producer.io/

UShowMe

This is the platform that amplifies live shows beyond venues. It provides new interactive experiences and revenues for creators.

www.ushowme.tv/

Cineworld demand grows, revenues rise

Safiya Bashir
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Cineworld demand grows, revenues rise

In its most recent trading update, Cineworld has reported 90% of pre-pandemic revenues.

On 2019 levels, revenues were 129% up and the cinema said that demand had steadily increased across UK and Ireland. Films including the latest James Bond and Black Widow had boosted the group’s recovery.

“James Bond has come to the rescue of Cineworld, helping its UK and Irish cinemas in October to beat box office and concession revenue levels seen in the same month two years earlier, before the pandemic struck,” said AJ Bell investment director Russ Mould.

“No Time To Die has encouraged people to try the cinema again, although the master spy was unable to crack the code for similar success in the US and other Cineworld territories where October’s takings didn’t surpass the comparative period two years earlier.”

With COVID-19 restrictions in the rear view mirror in the UK and the US moving in the same direction, cinema goers have take the opportunity to return to watch on the big screens.

“We are thrilled to see audiences returning in significant numbers. Our partnerships with the studios are as strong as ever and with the incredible movie slate to come, there are real grounds for optimism in our industry,” said chief executive, Mooky Greidinger.

“Whilst there are challenges ahead, I believe these efforts have positioned us for great success in the future and we are all looking forward to continuing to welcome our customers to the best place to watch a movie.”

Films that are coming out ahead of Christmas that are expected to boost Cineworld demand include Spider-Man, Top Gun and The Matrix.

New AIM admission: Firering’s lithium potential

Andrew Hore
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New AIM admission: Firering’s lithium potential

Firering Strategic Minerals is emphasising the lithium potential of the Atex project, but the potential columbite-tantalite (coltan) resource should also be lucrative.
It is no surprise to investors that lithium demand is increasing as more electric vehicles are produced and they require batteries. The coltan is also used in electric vehicles as well as other consumer electronics.
The Atex project is still at an early stage and the cash raised in the placing will finance mapping and initial drilling. Recent sampling has shown high grade samples. There also plans for pilot production of coltan....

New standard listing: PYX obtains dual listing

Andrew Hore
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New standard listing: PYX obtains dual listing

PYX Resources Ltd (LON: PYX) is already quoted on the NSX in Australia and it wants to tap into an investor base in the UK that is experienced in the mining sector.
PYX is in a strong position as the second largest resources of zircon in the world with zircon prices increasing and demand remaining strong. An undersupply of zircon is anticipated so there will be plenty of demand.
There is plenty of cash for immediate needs even though none was raised in the introduction to the standard list. Management intends to increase zircon production at Mandiri and start production at Tisma. There are als...

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