On the 2nd of April 2007 I commenced purchasing ordinary shares from the UK’s five different companies. The industries/markets that these five companies belong to are: financial, retail and travel ; leisure. Below I have pasted a summary of investment portfolio. the reason why I have chosen these five companies are because I have kept track of their past success and feel that they will return a decent sum after sufficient investment is made upon them. I also value of their business ethics, such as Tesco and Marks ; Spencer who stock fair-trade items4.
I really feel that these companies will generate profit because these companies have been doing well recently and if the company does well, the value of your stock should go up over time. If the company does not do well, the value of your investment will decrease5. In this section I will state briefly my chosen company’s background including a few statistics, extract from their annual reports and graphs of their success in my project. The reasons for their selection will also be stated along with elements which have caused a great change during my project period (2nd April – 11th May).
British Airways is the largest airline of the United Kingdom and the third largest in Europe, with more flights from Europe across the Atlantic than any other operator. Investments in IT have played a key role in boosting British Airways’ profits by 20% to 620m in the face of rising fuel prices and growing competition from no-frills airlines. The revenue environment in 2006 remains challenging. Whilst turnover is up in the nine months to 31 December 2005 by 8. 8%, market conditions remain broadly unchanged as significant promotional activity is required to maintain seat factors6.
British Airways and aerospace engines maker Rolls-Royce were the best performing stocks in terms of total shareholder returns (TSR) last month, with increases of 15% and 14% respectively (see Table 5a). BA reported higher annual profits and its lowest net debt since 1993, while Rolls-Royce provided the engines for the new Airbus A380, which made a successful test flight in April8. During the 1990s BA became the world’s most profitable airline and trumpeted the slogan “The World’s Favourite Airline”.
Since then is has done reasonably well and as you can see chart below BA has been increasing its dividends per year and kept an average of 12. 8% since 19999. The first couple of days went well as I was making a profit until the 11th (shown with the circled black dot) where share price dropped to 503. 50 pence from 512. 50 pence because Iberia (Madrid: IBLA. MC – news) is hoping British Airways (LSE: BAY. L – news) will increase its stake to fend off a private equity offer10. On the 2nd May share price increased to 519.
00 pence from 505. 00 pence (shown with the 2nd circled black dot after 1st May) as the group said that fuel surcharge on longhaul flights of less than nine hours will rise from 30 per sector to 33 and on longer flights from 35 per sector to 38 from May 2nd. It is because of this announcement the share prices had a crash after as you can see the line declines till the 10th where it slowly increases slightly11. Experian is a global information solutions company, with operations in over 30 countries around the world.
The largest operation, Experian North America, is a consumer credit reporting agency, considered one of the “big three” along with Equifax and TransUnion in that business in the United States. Experian employs approximately 12,500 people in 34 countries and as of 2005 had clients in more than 60 countries. According to its corporate site, Experian’s annual sales exceed $3. 1 billion USD ( 1. 4 billion) and it has assets of $7. 644 billion12. Lloyds TSB Group plc is a banking and insurance group in the United Kingdom.
It was formed in 1995 by the merger of Lloyds Bank and the Trustee Savings Bank. They are currently the fifth largest banking group in the UK, its other subsidiaries include the mortgage bank Cheltenham and Gloucester; life assurance company Scottish Widows; and finance house Blackhorse. In 2000, the group acquired Scottish Widows, a mutual life assurance company based in Edinburgh in a deal worth 7 billion. This made the group the second largest provider of life assurance and pensions in the UK after the Prudential14.