Morning business news - July 26

Friday 26 July 2013 09.38
Morning business news - July 26
Morning business news - July 26

The Archbishop of Canterbury Justin Welby has been a vocal opponent of payday loan firms in Britain.

He's made it known that he wanted to "compete" Wonga out of business by expanding the reach of the Church's credit unions.

But now it's emerged that the Church of England's pension fund has put money into Accel Partners - that's the US venture capital firm that was a big investor in the launch of Wonga in 2009.

The fund claims to have a strong ethical investment policy that bans firms involved in payday lending. A Church spokesman said an investigation would be launched.

“(Justin Welby) is absolutely furious over this,” Justin Urquhart Stewart, of Seven Investment Management said. “It’s always good to check - if you’re going to try to attack an area - that another part of the organisation isn’t supporting it.

“It’s an indirect investment but nonetheless it’s extremely embarrassing for him.”

Mr Urquhart Stewart, who described payday lenders as “loan sharks with ties on”, said the incident highlighted the importance of doing due diligence before making investments.

He also said investors should have a mandate that makes clear what kind of investments they are willing to support.

***

In jobs news, Alexion Pharmaceuticals is to create 50 jobs at a new office and laboratory in Dublin. The company has also decided to set up a global supply chain facility in Ireland.

***

A report on the construction sector from Forfas, says output from the sector should represent 12% of GNP, compared to the current level of 6.4%.

Forfas reckons though that until 2015 the sector will not return to a sustainable level of output and it has 36 recommendations for various Government departments and agencies, on removing obstacles and restoring confidence in the domestic market.

***

Samsung says smartphone sales growth will continue to slow in the third three months of the year, as it reported that earnings were pulled down by high marketing costs in the three months through June.

The world's biggest technology company by sales reported second-quarter revenue of $51.7 billion, a year-on-year increase of 20.1%.

During the quarter, Samsung launched the Galaxy S4, the latest in the line of high-end mobiles that have helped its rise to become the world's leading smartphone maker by market share.

Sales of the device beat company records - selling 10 million units in less than a month after its launch - the associated marketing costs drove a fall in operating profit at Samsung's IT and mobile communications arm and the quarterly rise in earnings was driven by the memory chip business, which was Samsung's main profit driver until its growth in smartphones.

***

LVMH, the French luxury group, said that solid demand for its fashion and leather goods and wines and spirits division helped produce a 6% increase in reported sales during the first half of the year.

The maker of Louis Vuitton bags, Dior perfume and Dom Pérignon champagne saw its rate of growth stay well down on the double-digit expansion enjoyed until about a year ago before demand in key Asian markets began to ease.