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Beans means…buck$

The worlds favourite coffee shop (Starbucks) has announced plans to reorganise its global operations, at the moment only 20% of its revenue is generated from outside of the US. The plan is to create three new regions, each with its own president to oversee operations. It is interesting to see how a giant coffee company carves up the world into China and Asia Pacific, Americas, EMEA (Europe, UK, Middle East, Russia, Africa). Michelle Gass has been names president of Starbucks EMEA.

It may interest you (it may not) that in Q2 of 2011 there were 10m Starbucks cards activated worth £128.8m. If you are a card user you will appreciate the mechanics of reloading a card. There were 14.3m reloads in Q2 worth $341.1m at an average of $24 per reload. Big numbers from the big coffee house that began life in 1971 as a single outlet in Pike Place Market, Seattle.

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Beans means…buck$Dominic2023-12-01T12:49:29+00:00

There be Gold in d’em hills…and silver…and…

Fresnillo, the silver mining company recently published their Q2 figures to end end of June. Their overall Q2 production of silver increased by 8.8% and by the way, they also increased gold production by 20.6% over the same period in 2010. These are record levels for Fresnillo largely due to the successful start-up of production as the Saucito mine. The company is on track to achieve the full 2011 production targets – anticipating production of 44 million ounces of silver and 400,000 ounces of gold. Fresnillo plans to double production from the new Mexican mine by 2015.

However the news is better-sweet, during the same period Fresnillo “suffered two fatalities of unionised personnel” and contractors at various operations suffered five fatalities. Mining is hazardous. You will recall the 33 miners that became trapped in a mine in Chilli who were working at the San Jose gold and copper mine. Fresnillo are a UK FTSE listed company and about the 42nd largest company listed on the UK stockmarket and representing about 0.6% of the FTSE100. Fresnillo has 4 main mines at Fresnillo, Cienega, Herradura and Saucito.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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There be Gold in d’em hills…and silver…and…Dominic2023-12-01T12:49:31+00:00

Monthly Market Report

June was a fairly tough month for most markets, all the vital statistics are available to read via our website. The new market report is now available.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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Monthly Market ReportDominic2023-12-01T12:49:34+00:00

Business News Updates 27 June 2011

Solomons-financial-advisor-wimbledon-blogger

Over the weekend we learned about the demise of another high street retailer – Habitat. Habitat was originally created by Sir Terrance Conran, who has achieved considerable success in the world of style and design. He has a unique eye for design and it would appear that he also has the knack of fantastic vision and timing, something that many retailers seem to lack consistently. Hilco bought Habitat a little over 2 years ago and specialise in “restructuring” (this does not mean saving) retail businesses that are in distress. Presumably this was the outcome that they were looking for. The Home Retail Group that own Argos and Homebase have agreed to buy part of Habitat – 3 of its stores and the online business. This is perhaps a strange buyer, given that HRG have their own struggles with Argos (sales down 9%) as the retail world has evolved to something rather more than the ability to sell a lot of BBQ sets.

I’m not sure if the economic backdrop or the warm weather has resulted in improved sales of beverages, but the Whitbread Group reported increases in sales of 9.2%. It owns Costa Coffee who saw a 22.5% increase in sales. On the other side of the earth, Fosters Group recommended shareholders to reject a bid from SABMiller (owners of the Grolsch and Peroni) that values the Group at £6.2bn. The world of brewing beer is not one that I understand terribly well. It seems that firms brew and market all sorts of beers in various different global regions, to the extent that SABMiller actually brew (importing some of the specific ingredients from Australia) and market Fosters to parts of India. This is effectively brewing under license, but suggests that few beers are actually from the assumed place of origin. Beer seems to have a rather confused market and I’m not sure if this is due to historic agreements or the consequence of sampling the products. However, here is a video from a man who is definitely not confused, creating fantastic design pieces and discusses his perspective on brands and his work with Peroni. Here is Antonio Berardi.

https://www.youtube.com/watch?v=xnfUtm7iQhU

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Business News Updates 27 June 2011Dominic2023-12-01T12:49:41+00:00

Business Updates 15 June 2011

There are few things more exasperating to Londoners than the inability for trains to run on time, it is part of the daily ritual for many and whilst the weather has been very warm throughout Spring, hot trains packed full of commuters is no laughing matter. I was rather feeling fed up with late running trains (that recently seem to have increased) due to points failures, when it was pointed out that one of the main reasons for the plight of commuters is the huge rise in the price of copper. Hey? well it seems that there are copious amounts of copper serving the tracks and it is being stolen faster than it can be replaced. Hence the points failures and delays. It seems that the rail companies are not terribly good at protecting their tracks from thieves, who are stealing on an industrial scale costing millions. So we could probably do with a few more British Transport Police…

So it is little wonder that the China Development Bank has recently loaned Kazakhstan’s largest copper miner Kazakhmys $1.5bn (in addition to the $2.7bn) to help boost its production by as much as 60%. China, like the rest of us needs copper… for all that electric wiring that is being lined in new buildings and infrastructure. All of which applies further pressure on the price of copper, which in turn eventually filters down to the cost of a train ticket. The rise in the price of commodities would also help explain the 47% rise in net income of Glencore to $1.3bn.

If the trains eventually grind to a halt (can you imagine the problems for the Olympics!) then there is of course always the prospect of working or cycling to work. Perhaps for many a good use of their Timberland boots, who have just been acquired for a blistering £1.23bn by VF Corp who own brands like The North Face, Vans and Wrangler Clothing.

Here is a short video about copper mining in Chile, I couldn’t find anything about copper mining in Kazakhstan.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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Business Updates 15 June 2011Dominic2023-12-01T12:49:45+00:00

Business Updates 8th June 2011

Last week I outlined a little about the problems that Southern Cross have been having, in the last few days they have announced that they are going to sell off around 200 of their Care Homes (is there a worse time to be selling property than now?). They also seek something like £100m in additional funds to help meet the £230m annual rent bill (ouch!). I’m sure that there are some very good reasons that led to the thinking to take on these commitments, but it does appear that the company has rather over-stretched.

Rather than see HMV go the way of the Dodo, a £220m refinancing deal has been structured with the help of RBS and Lloyds (both now effectively owned by UK plc). HMV recently put Waterstones up for sale and has a growing debt and if the figures are to be believed, fewer and fewer people are buying music and film in the more “traditional” formats (an actual hard copy). As much as we may not wish to see brands disappear that have been with us and perhaps part of our culture for years, there does come a point in business where it is a case of adapt or die. Sales in the UK alone are down 18%. Shares in HMV have fallen nearly 70% in value over the last year to around £10.50. In September their peak price was £67.75 with an all-time high of £282.00 and an all-time low of £7.75. Stockbrokers are possibly wondering if this is a case of “dead cat bounce” and if the little dog has now had his day, much like the gramophone. All of which prompts the question (again).. do Lloyds and RBS know what they are doing?

By way of an example, consider luxury fashion brand Prada who have announced plans to list on the Hong Kong stock exchange for a fashionably cool £1.6bn. This is all part of the huge demand from China for luxury brands as a rapid way onto the world stage. However, a note of caution – whilst it may be highly tempting to develop large markets, the main purpose of high end luxury brands is to convey a sense of exclusivity. Once luxury brands become widely available, the main purpose of the brand is lost, or certainly much reduced. I, of course know little about fashion, which is probably just as well as the latest advert from Prada makes me feel somewhat nauseous. It is probably the camera work.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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Business Updates 8th June 2011Dominic2023-12-01T12:51:09+00:00

Business News Updates 1st June 2011

Care homes and hospitals have been in the news. The BBC’s Panorama team produced a shocking undercover report on the care (or lack of) at a a private hospital Winterbourne View owned by Castlebeck who seem to have responded appropriately to the film which shows an appalling lack of care and depicts what can only be described as shameless abuse. A completely different company Southern Cross Healthcare (the UK’s largest care home company) are having a few financial problems of their own. They recently decided to withhold a third of its rent payments. The company has seen revenues decline 3.4% over the last financial year to £464.3m, they are running at a loss of £310.9m which was 13 times greater than the 2010 loss of £22.9m. Debt pretty much doubled from £7.3m to £14.4m. Big owners of Southern Cross shares include Credit Suisse, JO Hambro, Wintrust, Deutsche Bank, UBS, Lloyds Banking Group, Legal and General, Allianz, ING and Standard Life who collectively own nearly 65% of the company.

A few uncomfortable days ahead for some of those groups and certainly a sense of being caught out – which reminds me of those rather bizarre “you’ve been Tango’d” adverts that appeared some years ago. Britvic investors (who produce Robinsons, Tango and J2O) will be pleased that there is some sparkle in their performance as sales rose 4.7%. However due to the increasing prices of commodities – in particular sugar, profits remained the same at £27.7m. Now that Wimbledon is just a few weeks away, perhaps a good run for Andy Murray at Wimbledon will help boost Robinson’s sales and profits. Here’s a classic advert to remind you of hot summers. The picture quality is poor… it was a long time ago!

As the cricket season really begins to get started, I am also reminded of my childhood team Somerset and their glory days with Ian Botham, Viv Richards, Joel Garner and Brian Rose. At the end of the summer, part of the preparation for a new term was one childhood experience I loathed (not really sure why) which was getting a new pair of school shoes. Clarks shoes were invariably the choice of mothers (well certainly mine) which seemed robust enough to last a thorough workout in the playground. So news that this West Country shoe manufacturer has finally exceeded profit of £100m for the first time is welcome (I guess… unless you are a parent having to fork out again for school shoes!). Clarks saw pre-tax profits rise by 28% with sales up 9% with a now global brand.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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Business News Updates 1st June 2011Dominic2023-12-01T12:51:11+00:00

Business Updates – 27 May 2011

As we head into a Bank holiday weekend, the first official weekend of the British summer, we seem to be in for a mixed bag of weather – much like the mixed results from the UK retailers.

But of course, this isn’t any annual report, this is a Marks and Spencer annual report… covered in plenty of jam as MandS revealed an increase in profit of nearly 13% – so it is not all doom and gloom on the high street. Sales were increased by 4.2% to £9.7bn much of which is accredited to improvements in the in-store presentation and additional food ranges. If only the State and Banking system was run!

It may not be that great a Bank Holiday for UK Bankers as Moody’s (one of the credit ratings agencies) feels similarly about UK Banks, but frankly they are in no position to carp as all of the credit rating agencies were factors in the lack of appreciation of risk and “whats under the bonnet” that made the credit crunch as bad as it was (or is). Anyhow, on Tuesday they warned that they are likely to be reducing their rating (a gold star system that now seems even less worthwhile than those handed out at primary school) for 14 of our UK Banks and Building Societies. These are Lloyds Banking Group, RBS, Santander UK, Bank of Ireland UK, Co-operative Bank, Coventry Building Society, Nationwide Building Society, Newcastle Building Society, Norwich and Peterborough Building Society, Nottingham Building Society, Principality Building Society, Skipton Building Society, West Bromwich Building Society and Yorkshire Building Society. The main reason cited for the possible downgrade is that the UK Government would be less likely now, than in the past to bail them out…. which frankly tells us all nothing that we didn’t already think. In my humble opinion it tells us very little about each of the Banks concerned. Although you will note that two of the big 4 banks are missing from this list (Barclays and HSBC). The impact of this is a guessing game, but possible outcomes are that the share prices in the identified Banks reduce and just for good measure their own borrowing costs are likely to increase…so nobody wins.

Sadly, the Japanese earthquake and its impact on the nuclear power plant at Fukushima has left its owners Tepco reporting a £9.4bn loss, which is the tenfold reverse figure of their profit in 2010. So the last few months has cost them the equivalent of the last 10 years, never mind the future costs that they are likely to suffer as they attempt to restore the region to some form of safe environment. Even giant firm Sony has reported a loss for the year at £2bn which has had disrupted supply chain impacts compounded by the cyber attack on its game platform PlayStation.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Business Updates – 27 May 2011Dominic2023-12-01T12:51:13+00:00

Business Updates 19 May 2011

I think that it is probably fair to say that we all know that there is plenty of money to be made from drugs – well Alliance Boots have posted some very good results for 2011 Q1. Alliance Boots was formed as a result of the merger between Boots and Alliance UniChem it is no longer a publicly owned company. Revenue was up by 15% to £23.3m from £20.2m and trading profits up to £1,051m. This is a significant player in the pharmaceutical world and one that many of us turn to in sickness and in health…

You may have also read that Mothercare (also Early Learning Centre) are now planning to close around 25% of their high street stores over the next two years in response to the changing shopping habits of consumers. In truth, this has been the general direction of the group anyway with an increasing number of out of town stores and reducing number of high street stores. This is despite worldwide sales rising by 7.1% to £1.2bn, although UK sales are down, they declined by only 0.5% which given the economic environment I would not really think to be a poor result.

Mothercare believe that shopping habits are changin for good and have been working on mobile phone shopping applications as well as their online offering. At the moment just over half of revenue for the company comes from the UK alone. Share values in the company have been declining since December when shares trading at £6.25 and are currently trading around £4.50 which is clearly significantly below market returns.

The Chinese are coming – as if to prove that the world balance of power is shifting to the East, China’s largest online company Tencent (not to be confused with 50Cent) has taken a 16% holding in Elong the Chinese online travel company for £52m, this is a business that is 56% owned by Expedia. I am at a loss to explain the Pingu-like penguin character that forms the logo for Tencent, but presumably this makes sense to the Chinese. If you know the reason, do let me know.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Business Updates 19 May 2011Dominic2023-12-01T12:51:15+00:00

Business News Updates 11th May 2011

The retail sector has sector has had a decent month, in part due to many of us rushing out to buy garden furniture and “summer stocks” due to the warm weather. Sainsbury’s seem to have encouraged us all to spend more with themas we tried something new. They saw an increase of 12.8% in pre-tax profits for Q1. Sales were up by 7.1% to £23bn.

The Bankers continue to have mixed fortunes with yours and mine. Royal Bank of Scotland announced a Q1 net loss of £528m, which was blamed on the Irish, whose luck certainly seems to have run out. You may have also picked up that the Banks are now dropping their challenge to the High Court ruling to resolve the payment protection insurance mis-selling scandal. As a result they are all starting to set aside funds for hefty payouts. Lloyds for example, set aside £3.2bn for compensation, which merely goes to show the depth and scale of the scandal.

Perhaps as a result of renewed interest in the Eurovision Song Contest and Dima Bilan winning in 2008 for the first time, the Russians have taken him at this word (“Believe”) and decided to take a more active involvement in the music scene. Well, probably not, the music industry is just that – an industry and Access Industries recently paid $3.3bn in an all cash payment for the world’s third largest music firm – Warner Music. Warner have a number of artists on their label including the Red Hot Chilli Peppers, Eric Clapton, Seal, Genesis, Neil Young, The Bee Gees and James Blunt.

Some of you may have had the Skype meeting experience with me – well Microsoft have stumped up a huge $8.5bn in cash to buy Skype, making this Microsoft’s largest purchase. The irony will not be lost on PC users – their investor relations webpage takes ages to load up – or was this simply my own Internet connection? Probably me, or rather my Internet connection.

Returning to Europe, but remaining with a global brand leader, BMW has announced Q1 profits before tax of €1,812m up from €508m for Q1 in 2010. This is a significant increase. In Q1 BMW sold 382,758 BMWs (so not surprising that you see so many around!) you may remember that they now also own MINI and sold 60,860 of those and 723 Rolls Royce cars. These are global sales figures. Mind you orders are one thing, the world of motoring has a few supply issues at the moment with inevitably some tiny but vital component coming from Japan. Orders are now expecting fairly lengthy waiting periods, so if you are wanting a new car, you may have to wait.. much like most of the time spent in it if you ever drive in London or on the M25.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Business News Updates 11th May 2011Dominic2023-12-01T12:51:20+00:00