Views on the Eurozone crisis & George Osborne's plans for the Construction Industry
Neil Mackay of Advantage Business Angels publishes a weekly email, and today's provided a particularly pithy view of the Eurozone crisis, which can be accessed by clicking here. This week George Osborne gave an interesting insight into the government's mindset with his intentions to boost the construction industry (click here). I cannot understand why this should be made a key focus since most individuals or businesses able to afford a property already have what they want. I would argue that the first step is to create an environment which results in more people and businesses demanding new infrastructure.
This requires an economy with a larger pool of wealth creating businesses. A couple of examples which illustrate the point are blinkx and Majestic Wine (LON:MJW). blinkx is a spin-out from Autonomy (which was founded in 1996 and acquired by Hewlett Packard last month for £7 billion). Essentially it is using a combination of the burgeoning video market and Autonomy's search technology to enable advertisers to reach consumers globally in a rifle shot manner as opposed to a shotgun approach. It is a company that improves the productivity of its customers. Blinkx (LON:BLNX) listed on AIM in May 2007 at 45p vs today's price of 102.5p, an IRR in excess of 20% pa. By comparison, the AIM index has fallen 40% over the same period. The company looks to have attractive growth potential.
By contrast, Majestic Wine looks to be a well run business but operating in a sector which for me is unappealing because it relies on discretionary expenditure, whilst income available for discretionary expenditure is likely to be shrinking for most people for a number of years. By contrast with blinkx, the Majestic Wine share price in mid-2007 is almost the same as it is today.
If the government wants the construction industry to be busier, it needs to create conditions where more wealth creating companies such as blinkx are being developed. Then there will be more people able to afford to place orders with the construction industry.
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This note was prepared by LCF Research Limited using information provided by the subject company’s management or publically available news sources. No representations are made nor warranties given (express or implied) in relation to accuracy and completeness. This document is not an invitation to invest in the subject company and does not purport to contain all the necessary information that a prospective investor might require. LCF Research Limited recommends prospective investors to conduct their own thorough independent analysis of the subject company and the information contained in this note or referred to above.
Majestic Wine Warehouses, which is a United Kingdom-based wine retailer; Lay & Wheeler, which is a specialist in the wine market, and Majestic in France operates retail units in northern France servicing the United Kingdom cross-channel market. Lay & Wheeler is the Company’s fine wine merchant specializing in en primeur sales, cellarage and broking of customer reserves. Majestic in France operates from three stores in northern France, two in Calais and one in Cherbourg, selling to United Kingdom consumers. During the fiscal year ended April 2, 2012 (fiscal 2012), the Company opened 16 stores and had 181 stores trading as of April 2, 2012. more »
Blinkx Plc is a holding company. The principal activity of the Company, along with its subsidiaries, consists of the provision of video search and advertising services on the Internet. The Company operates a global Internet business. Its products include blinkx 3D, blinkx.com, blinkx AdHoc, blinkx AdHoc BT, blinkx Advanced Media Platform, blinkx Beat, blinkx Brasil, blinkx Embeddable Player, blinkx Internet Explorer 8 Add-ons, blinkx it, blinkx Mobile Video Search, blinkx Red Label, blinkx Remote, blinkx Remote for Kids, blinkx Video Wall, Cheep and Video SEO. The Company's subsidiaries include blinkx UK Limited, blinkx, Inc, Burst Media Corporation, Prime Visability Media Group, Inc and blinkx (Canada), Inc. On May 9, 2011 the Group acquired 100% interest in Burst Media Corporation. On November 9, 2011 the group acquired 100% interest in Prime Visibility Media Group Inc. more »
