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Wednesday, April 8th, 2015

Welcome to Direct Market Touch’s Blog Site.

On the DMT blog pages, you will find up-to-date news articles and market insight from leading professionals in the industry.

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A Blue-Chip Starter Portfolio

Wednesday, April 8th, 2015

Article written by G A Chester, for The Motley Fool (http://bit.ly/1CenwKg)

Every quarter I take a look at the largest FTSE 100 companies in each of the index’s 10 industries to see how they shape up as a potential “starter” portfolio.

The table below shows the 10 industry heavyweights and their current valuations based on forecast 12-month price-to-earnings (P/E) ratios and dividend yields.

Company Industry Recent share price (p) P/E Yield (%)
ARM Holdings (LSE: ARM) Technology 1,105 34.1 0.8
BHP Billiton Basic Materials 1,474 14.7 5.9
British American Tobacco Consumer Goods 3,489 16.3 4.5
GlaxoSmithKline Health Care 1,546 16.7 5.2
HSBC Holdings (LSE: HSBA) Financials 574 10.2 6.1
National Grid (LSE: NG) Utilities 865 14.7 5.2
Rolls-Royce Industrials 953 15.6 2.6
Royal Dutch Shell Oil & Gas 2,099 14.8 5.9
Vodafone Telecommunications 220 35.6 5.4
WPP Consumer Services 1,531 15.9 2.9

Excluding tech share ARM Holdings, the companies have an average P/E of 17.2 and an average dividend yield of 4.9%.

My rule of thumb for the group of nine (excluding ARM) is that an average P/E below 10 is bargain territory, 10-14 is decent value, while above 14 starts to move towards expensive.

The current group P/E rating of 17.2 is at its highest since I’ve been tracking the shares, and has moved well above the FTSE 100 long-term average P/E of 14.

The growing disconnect between P/E and yield also seems a cause for concern. The last time the yield was as high as the current 4.9% was in January 2013 — when the P/E was just 11.4. It may be that we’ll see a period of little or no dividend growth among the heavyweights (or even a rebasing of some dividends) to bring the yield down to a level that better reflects the high P/E and a low interest-rate environment in which other assets are yielding very little.

HSBC is the current highest yielder of the group at 6.1%, which is higher than it’s been in any of my previous quarterly reviews. At least the P/E is in sync at a lowly 10.2 — the standout “value” P/E in the table of companies above. Still, it has to be said that HSBC has been looking good value for quite a long time, and at higher share prices: for example, this time two years ago, the P/E was 10.7 … but the shares were 703p. HSBC, then, has been something of a value trap, but could be a great buy now if earnings finally start to rise (supporting the dividend in the process) and the shares re-rate. Certainly, though, there is above-average risk for the potential high reward.

ARM Holdings is a company that’s had no problem growing earnings, and is a mirror opposite to HSBC. If we go back to October 2012, the P/E was 34.1 at a share price of 575p. Today, the shares are 1,105p — but the P/E is still 34.1. “Price is what you pay, value is what you get”, as legendary investor Warren Buffett once said. So, while ARM’s “price” is higher today than in October 2012, the “value” (as measured by the P/E) is the same. ARM’s P/E has been above 40 in some of my quarterly reviews, and the current rating looks reasonable value for a tech growth share.

For a steadier prospect, I’d highlight National Grid at this time. The P/E of 14.7 is as low as it’s been since my January 2014 review, and has been above 15 at each of the last four quarterly review dates. The shares are some 10% below their 52-week high — despite modest earnings upgrades — and the dividend yield of 5.2% also looks attractive.

Company website: www.directmarkettouch.com

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The ‘Grexit’ – How the UK should prepare

Tuesday, February 10th, 2015

Five things the UK should do to prepare for a Grexit

By Matthew Lynn (The Telegraph)

As the Prime Minister meets Treasury and Bank of England officials on the possibility of a Greek exit from the euro, Matthew Lynn suggests five key ways the UK should prepare should the unthinkable happen

In game theory, it is known as “chicken”. Two cars drive towards each other across a narrow bridge. Both have an interest in swerving out of the way, since if they don’t then both drivers will get killed. So they both assume the other will get out of the way first, because they have such a strong interest in doing so. The result? According to the theory, quite often they both die as the cars crash into each other.

The stand-off between Athens and Berlin over whether Greece remains in the eurozone increasingly looks like that. Both sides might be better off reaching a compromise. In the real world, they might easily misjudge how the other side will behave. And in that case, Greece could quickly find itself out of the eurozone. Maybe there are firewalls in places, as officials in Berlin and Brussels keep assuring everyone. Perhaps the ECB has made sure that a Greek exit would be a relatively contained event. But that would still be a huge, and potentially catastrophic, event for the European continent; and while the turmoil would hit our neighbours in the eurozone much harder, the shockwaves would wash across this country as well.

The Prime Minister David Cameron and his Chancellor George Osborne have already asked staff at the Treasury to come up with some plans for how to cope with the fallout. “We’re stepping up the contingency plans here at home,” Osborne told the BBC at the weekend. And so it should. The Government prepares for all kinds of potential catastrophes: a terrorist strike on London; a closure of the ports because of an Ebola epidemic; a winter snowstorm, floods or a financial crash taking down the City. A Grexit is a lot more likely than any of those right now, and would have a huge impact on the UK economy.

But what kind of emergency plan should the UK put in place? Assume you wake up one morning to hear that Greece has exited the euro overnight, its banks have shut down, and once they re-open they will start issuing new drachma. Here are five measures the UK should have in place to deal with that.

 

One

Try and stop sterling from soaring. It doesn’t matter how much the market say they expected it. The euro will be in freefall on the news of a Grexit and the pound, along with the dollar and gold, will be the obvious safe haven for money getting out of the continent as fast as it can. The trouble is, while the US has only modest trade with Europe, about 18pc of our economy consists of selling stuff to the rest of Europe. We can’t afford to see all those exporters suddenly priced out of the market, anymore than the Swiss can. Short of capital controls, and no one is likely to be in favour of those, it is pretty hard to stop your currency going up in value, especially in a crisis. But a blast of quantitative easing, or else negative interest rates, which the Swiss and Danes have already been forced into, would help. Get the Bank of England to prepare do something to stop sterling climbing too high.

 

Two

Line up emergency aid for the banks. According to the latest round of stress tests by the European Central Bank, the financial system can withstand just about any kind of shock. There’s just one snag. The tests didn’t include a Grexit. In fact, the financial system is so complex, no one knows how the impact of a Greek departure from the single currency might ripple out. Nor do they know on what terms Greece will leave – whether it defaults on day one, or promises to repay its debts in drachma some time in the future remains to be seen. So the British banks might well take a big hit. Or one of the German or French banks might go down, and that could easily lead to a collapse of financial institutions in London. If that happens, plans will need to be in place to recapitalise them, and to do so before confidence collapses. If it comes to that, let’s try and do a better job than we did in 2008 – it might be better to wind down some institutions in an orderly way rather than bail them out.

 

Three

Offer emergency aid to Athens. No one has any interest in Greece turning into a failed state, or falling into an alliance with the Russians or the Chinese. The EU might well want to punish a Syriza government for damaging the single currency, as a way of discouraging the Portuguese, Spanish or Irish from doing the same thing. Normally you would expect the International Monetary Fund to step in, as it did when currency regimes collapsed in South America during the 1980s and 1990s. But its managing director Christine Lagarde seems more interested in propping up the euro than rescuing the global financial system. So it may well be up to the US and UK to step in with emergency financial and technical aid. At the very least, the Greeks will need hard currency to pay for oil and medicines – and the UK should be ready to offer it to them.

 

Four

Get ready to trade the new currency. The City has a greater depth of financial know-how that any other centre in Europe. The new drachma won’t be worth a whole lot on the first few days after it is introduced – the Zimbabwean shilling will look solid by comparison. But the sooner it establishes itself, finds some kind of value, and becomes accepted on the global markets, the faster the Greek economy can start to stabilise. The UK, and the Bank of England in particular, should make sure that City firms start pricing and trading the new drachma as fast as possible – after all, if the City is willing to accept it, most other financial markets will follow that lead very quickly. The faster Greece gets back on its feet, the better for everyone – and the fact the City will have carved out a new market for itself won’t hurt either.

 

Five

Wring some concessions from the EU. It is never polite to kick a man when he is down. No one wants to do it. But let’s be honest here. It can also be smart tactics. In the weeks immediately after a Grexit, the rest of the EU will be in crisis mode. Officials, commissioners, finance ministers and presidents will desperately be trying to contain the situation, and stop the rot from spreading. That will be a good moment to negotiate, in the Tony Soprano sense of the word, a few concessions. Such as? The taxes threatened on the financial sector could be the first to go. If it gets really bad, we might even be able to reform the Common Agricultural Policy.

True, no one has any idea whether Greece or Germany will back down in this stand-off. Even the Greek Prime Minister Alex Tsipras and the German Chancellor Angela Merkel don’t really know what will happen next. They would probably still rather avoid a Grexit. But if they don’t, it is best to have a plan in place for dealing with the fall-out for the UK – because once it starts, events will move very quickly and it will be too late to plan anything.

Company website: www.directmarkettouch.com

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Dixons Carphone

Thursday, January 8th, 2015

Dixons Carphone

The all-share merger last August of Dixons (owner of Currys and PC World) and Carphone Warehouse was well received by the market. The shares have risen steadily from 320p to around 450p today.

City analysts remain keen on the stock after the company released forecast-beating maiden interim numbers before Christmas. The Board also said that integration is progressing well, and that £80m+ of synergies are now expected by 2016-17, one year ahead of plan.

Analysts at Barclays and Investec were among a number of City company-watchers to reiterate positive ratings. Barclays has Dixons Carphone trading broadly in line with the UK General Retail sector on a 2015 calendar-year price-to-earnings (P/E) ratio of 15, but said “we see significant upside risk to our earnings forecasts”. Meanwhile, Investec noted the company’s current modest dividend yield of around 2%, but highlighted “free cash flow increases in FY16, potentially offering scope for further shareholder returns”

Company website: www.directmarkettouch.com

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BT shares offer a ‘rare opportunity’ for UK income investors, says star fund manager

Friday, December 12th, 2014

Article by David Thorpe, writing for whatinvestment.co.uk

Thomas Moore, manager of the high-performing £700 million Standard Life Investments UK Equity Income Unconstrained fund, has revealed that he is ‘wary’ of investing more in FTSE 100 income stocks right now, but he feels that BT (LON:BT.A) represents a ‘rare’ opportunity for income investors. 

Moore’s fund has a current yield of 4 per cent, and is the third best performing out of 75 funds in the IMA UK Equity income sector over the last five years under his management.

On a total return basis, the fund has delivered 105 per cent over that period, compared to 68 per cent for the average fund in the sector.

Moore remarked, ‘The FTSE 100 is good for the dividends, but the FTSE 250 is where the dividend growth comes from, and the growth is the important consideration for the future. If you look over the past decade, the average dividend growth in the FTSE 100 is 4 per cent, but outside the FTSE 100, in the smaller companies, it is 6 per cent.’

He added, ‘The valuations of a lot of the stocks at the top of the FTSE look stretched, but they don’t look stretched at all in the mid-cap area.’

Two FTSE 100 stocks on which he is keen are telecoms company BT and mobile phone business Vodafone, the latter being a recent investment.

On BT, Moore commented, ‘This company has been a strong performer for the fund. There are company-specific as well as sector-specific reasons for liking BT. The consolidation that now seems to be coming to the sector is a positive. And if you look at the numbers, the earnings per share (EPS) and price-to-earnings (p/e) ratio, those are getting better, while the fundamental performance of the company is also improving – it is rare to get that combination.’

He recently added a position in Vodafone, remarking that this was due to his ‘increased confidence that recent pricing trends for data bundles should be supportive both for the profitability of their European operations and the overall rationale for investing in 4G networks’.

One large-cap stock he has long avoided is pharmaceutical giant GlaxoSmithKline. ‘The dividend cover of this stock has fallen to 1.2 times. We feel that we would be taking a risk if we owned it due to the fall in the dividend cover, and the declining pipeline of new drugs, which is likely to put future earnings under pressure. In terms of valuation, the earnings per share and the price to earnings ratio have actually been moving in the wrong direction, even though the share has got more expensive.’

Moore has had a long-term aversion to investing in commodity and oil stocks. He remarked, ‘The problem with commodities is that the investment case is totally reliant on the price of the commodity, and the price is hard to predict, being dependent on demand from other countries like China, or supply factors which it is hard to have an expertise in.’

Moore also has no exposure to banks, commenting that ‘they are under regulatory pressure, and will be for years’.

Turning his thoughts to the mid-caps in which he is invested for dividend growth at the present time, he nominated engineering firm WS Atkins.

Moore remarked, ‘WS Atkins is in the early stage of its earnings recovery. There have been positive announcements from the company, and it is a stock which should benefit from the continuation of the economic recovery in the UK and the US, as well as the rest of the world.’

WS Atkins has a market cap of £1.3 billion, and currently yields 2.6 per cent. For the year to March 2014, the company recorded profits of £114 million on a turnover of £1.75 billion.

The second mid-cap stock cited by Moore is financial services company Close Brothers. Moore explained that, ‘Unlike the banks, Close Brothers is not faced with the [same] regulatory issues, and is growing earnings. This company has a market cap of £2.2 billion and a market cap of 3.9 per cent.’

He has also recently added a position in HellermannTyton, a company which makes cable ties. The business has a market cap of £650.5 million, and profits of £69 million are forecast for the 2014 calendar year on a turnover of £495 million.

Moore concluded his comments with the remark, ‘The rush into many large-cap stocks for their bond-like characteristics has stretched valuations for what are deteriorating fundamentals in many cases. This contrasts with the sell-off in many domestic mid-cap stocks despite their improving prospects.

‘This has provided an opportunity to add to favoured positions at lower valuations. We remain focused on those stocks offering the best dividend growth potential, which leads us again towards the better growth and balance sheets of small-cap and mid-cap stocks.’

Company website: www.directmarkettouch.com

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Starbucks won’t pay tax in UK

Thursday, December 4th, 2014

Starbucks won’t pay tax in UK, By Elizabeth McLoughlin, for myretailmedia.com

Starbucks boss Mark Fox has sparked outrage by suggesting that the brand will not be paying ordinary levels of UK tax for three years, saying it needed to get “its mojo back” before it will make a profit in Britain. His words have been described as insulting, and customers are continuing to boycott the coffee chain which has been under scrutiny since revelations that it has only paid £8.6 million corporation tax since 1998 when it made the move to Britain, by reporting financial losses through the alleged cost of high street outlets. The firm has also been called immoral for moving revenue out of the UK into Switzerland and the Netherlands, though Fox said this “didn’t bother me at all” and regarding the tax scandal stated:

“Fundamentally, the piece that was aerating was around royalties – the fact a brand is paying a royalty to an entity outside the UK, and to me that’s very, very ordinary.” He continued “It happens across the sector and therefore it didn’t bother me at all. There was nothing abnormal about the way Starbucks is run in the UK. What is abnormal is that we haven’t been making a profit.”

Starbucks has embarked on a five-year plan to it profitable in the UK, of which it is two years into. Labour MP Margaret Hodge is critical of the brand and encourages consumers to boycott it “I think it’s an insult to ordinary hard-working taxpayers across the country. Hopefully it’s a big enough insult to his customers that they will take their business elsewhere. They will not win back the trust of the public unless they unwind these immoral schemes.”

The coffee chain use a variety of practises to keep the profitability of the UK sector low, and has therefore not reported a profit since the launch here in 1998. It has registered brand and logo rights to a Dutch holding company, and therefore pays 6 per cent in royalties for every cup sold to its Netherlands arm. It also buys coffee beans from a firm in Switzerland, where tax is extremely low, meaning all coffee sold in the UK is at a large premium. These two methods make it harder to turn a profit and help keep UK revenues low.

Starbucks offered to pay £20 million in taxes following the scandal two years ago, and have recently finished the series of payments. However, critics are still dissatisfied, chief executive of the TaxPayers’ Alliance Jonathan Isaby said “It’s quite understandable that taxpayers don’t feel everyone pays their fair share. But the power to fix that lies in the hands of politicians, who add complex loopholes and reliefs to the tax system year after year.”

Company website: www.directmarkettouch.com

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Can British American Tobacco plc Beat The FTSE 100 In 2015?

Tuesday, November 11th, 2014

By Peter Stephens, writing for: www.fool.co.uk

While the FTSE 100 has thoroughly disappointed in 2014, being down 2% year-to-date, shares in British American Tobacco have surged. Indeed, the tobacco and e-cigarette company has seen its share price rise by 11% since the turn of the year and, with a dividend yield of over 4%, this means that a total return of over 15% has been delivered since the turn of the year.

However, there could be much more to come, and British American Tobacco could beat the FTSE 100 in 2015, too. Here’s why.

Growth Potential

While the FTSE 100’s forecast growth rate of mid-single digits in 2015 is fairly impressive, British American Tobacco is set to beat it. That’s because it is expected to deliver earnings growth of 8% next year, but also has superb longer term growth prospects, too.

That’s because of its early move into e-cigarettes via its subsidiary, Nicoventures. Indeed, British American Tobacco entered the e-cigarette market in early 2013 in the UK and is attempting to grab market share in the lucrative sector, which could give it a head start versus other major tobacco companies.

While at present it remains relatively unprofitable, the e-cigarette market could stimulate British American Tobacco’s bottom line over the medium to long term. That’s because it seems to be a win-win situation for consumers and for the government. For example, the government still has the opportunity to collect a reliable and consistent tax stream, while consumers are able to use a product that contains around 5% of the toxins of traditional cigarettes. Furthermore, rules on advertising e-cigarettes are far more relaxed than for traditional cigarettes, which should allow greater product differentiation and brand building, resulting in higher profitability for British American Tobacco.

Relative Stability

In addition to strong growth potential, British American Tobacco also offers excellent stability. While the earnings of most companies depend upon the economic picture, British American Tobacco is able to provide investors with a highly visible revenue and profitability profile that has seen earnings grow by an average of 11% per annum during the last five years, with growth being recorded in each of those years. As such, even during highly uncertain periods for the wider market, British American Tobacco’s shares remain in high demand.

Looking Ahead

While shares in British American Tobacco trade on a relatively high price to earnings (P/E) ratio of 17.2, their growth potential and relative stability appear to be worthy of a substantial premium to the wider index. Indeed, while the FTSE 100 is cheaper on a P/E ratio of 14, it has lower growth potential and less stability than British American Tobacco. As such, and with the future remaining highly uncertain for the global economy, British American Tobacco could outperform the FTSE 100 in 2015, just as it is doing in 2014.

Company website: www.directmarkettouch.com

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Lifting The Lid on IPOs

Tuesday, October 28th, 2014

Please  CLICK HERE to request more information on IPOs from the team at Direct Market 

Private equity firms are racing to sell their holdings by floating companies on the stock market. At DMT we tell you how to spot the best and avoid the worst new market entrants.

The London Stock Market is increasingly becoming the exit choice for private equity with a deluge of IPOs (initial public offerings) littering equity capital markets this year and there’s more to come.

DMT help you peer into the months ahead and select some of the more interesting private equity – to- IPOs likely later this year and into 2015, as well as helping you assess future IPOs using our golden rules (that private investors should bear in mind when choosing which IPOs to get involved in).

The UK main market is already closing in on record levels of funds raised through IPOs, as of August this year it stands at £7.4BN and on the junior AIM market. Whilst there have only been 55 IPOs to date, it’s the amount that has been raised that should raise an eyebrow… on average £32m each, which is more than at any point since records began.

Please  CLICK HERE to request more information on IPOs from the team at Direct Market 

Company website: www.directmarkettouch.com

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Britain risks fines if it refuses to pay EU bill: Commission

Tuesday, October 28th, 2014

Article written by Eubusiness.com
Article Link: http://bit.ly/1FSl7t2

 

(BRUSSELS) – Britain must contribute an extra 2.1 billion euros ($2.66 billion) to the EU budget or face fines, the European Commission said on Monday, after a furious David Cameron insisted that London would not pay.

“There will be a moment when the Commission will start imposing … fines on the amounts that are due,” interim EU Budget Commissioner Jacek Dominik said when asked what would happen if the British premier stuck to his guns and did not pay by a December 1 deadline.

Cameron had called the demand completely “unacceptable” at a European Union leaders summit on Friday, claiming he had been bushwacked out of the blue.

“I am not paying that bill on the first of December. If people think that is going to happen they’ve got another thing coming,” he said.

“We are not suddenly going to take out our chequebook and write a cheque for two billion euros, it is not happening.”

Dominik reiterated that Britain should not have been surprised since the process of adjusting the budget was well established and, as normal, included British-sourced figures and involved British officials who had not raised any problems on the issue after official notification on October 17.

“I was surprised by (Cameron’s) reaction,” he said, “because there was no signal that they had a problem with this figure.”

Asked if there could be a political solution with the British premier, Dominik said he did not think so.

Calculating the budget was based on a formula agreed by all EU member states which would require new legislation to change.

Going down that track would be to “open up a Pandora’s box,” he said.

At the same time, he said, Britain could not pick and choose which bits of EU laws it wanted to live by.

On top of its regular annual budget rebate, London was due to get an additional 500 million euros next year, Dominik said.

Britain “cannot question one day the system that imposes (an extra payment) and next day say it likes the other element” which gives it a rebate, he said.

Cameron, facing a rising tide of eurosceptic voters deserting his Conservative Party has promised an in-out EU referendum in 2017 if he wins elections next year, making the latest exchanges with Brussels even more bitter.

– Bigger countries pay most –

The EU budget, currently running at around 135 billion euros per year, is based on the principle that the bigger the member state is, the more it contributes.

Accordingly, Germany pays most, followed by France and Italy along with Britain, which also gets a special rebate won by late prime minister Margaret Thatcher in 1984.

To ensure that the fraught budget process is fair and transparent, each year the EU reviews the economic performance of all 28 member states, adjusting their contributions up or down as a result.

In addition, in recent years, authorities broadened the review to include new forms of economic activity, some of them illegal such as prostitution and drug dealing.

The result for 2013, the year in question, was a much larger than usual range of adjustments — as well as Britain, the Netherlands has to pay an extra 650 million euros.

Especially galling for London is that France, with an economy which has stalled, will get a rebate of some one billion euros while powerhouse Germany gets 780 million euros.

Company website: www.directmarkettouch.com

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McDonald’s to restructure after “significant decline” in sales

Tuesday, October 21st, 2014

Article by Catherine Neilan, writing for CITYAM.COM

For full article, please go to:http://bit.ly/1s30gZd

McDonald’s is planning a major review of its working practices and structure on the back of a “significant decline” in revenues and profit.
Revenues fell five per cent to $6.98bn (£3.8bn) for the three months to September 30, with the fast food giant blaming increased competition.  Consolidated operating income plummeted 14 per cent to $2.07bn. Net income dropped 30 per cent to $1.07bn.
Global like-for-likes fell 3.3 per cent “reflecting negative guest traffic in all major segments”, as well as the well-documented supplier issues when it emerged it was using out-of-date chicken. 
Earnings per share fell 28 per cent year-on-year, to $1.09. The closure of stores in Russia and Ukraine knocked $0.01 off, while “certain foreign tax matters” reduced earnings by $0.26 a share. Supplier issues accounted for a $0.15 per share drop.
In pre-trading, McDonald’s share price was down more than two per cent.
McDonald’s president and chief executive Don Thompson said there had been “a significant decline versus a year ago” adding that the company was “responding with the sense of urgency required to improve our performance.”
“While our ability to withstand these factors is a testament to the company’s enduring brand and strong financial foundation, by all measures our performance fell short of our expectations.”
As a result Thompson said McDonald’s was “taking decisive action to fundamentally change the way we approach our business”.
There are three main pillars of this new strategy:
Overhauling its concept to “elevate” the menu and customer experience, to bring it “in-tune with today’s consumer needs”.
* A new digital strategy that will simplify ordering and paying, such as introducing options including Apple Pay.
* Reviewing its structure and resources around the new initiatives to support “key long-term growth initiatives”.
It hopes to increase its relevance with customers and drive footfall into its stores.
McDonald’s US president Mike Andres will also restructure the team to create “a flatter, more nimble organisation that ensures key business decisions are made closer to the customer”.
Marketing will also be revamped to emphasise “food quality, brand transparency and people initiatives”.
A simplified menu will also be available.
The UK was one of McDonald’s few bright spots, with like for likes and profits up, although declines in Germany and the issues in Russia and the Ukraine meant overall Europe’s like-for-likes dropped 1.4 per cent.
Asia Pacific, Middle East and Africa (APMEA) saw sales drop 9.9 per cent, while operating income fell 55 per cent, because of problems with a supplier as well as profitability in Japan and China.
“APMEA is diligently working to restore consumer trust and confidence in McDonald’s brand and strengthen the segment’s financial results to continue driving the long-term potential of this segment,” the company said.
Thompson added: “We began 2014 mindful of the challenges we faced in driving sales and profitability.
“The internal factors and external headwinds have proven more formidable than expected and will continue into the fourth quarter, with global comparable sales for October expected to be negative. These significant challenges call for equally significant changes in the way we do business.
“In the US we are driving decision making from headquarters back into the field, where our restaurants serve the daily needs of our customers in their local communities.  In our international markets, we are taking action to restore customer trust and regain business momentum.
“We understand the depth of the challenges and we are responding with the sense of urgency required to improve our performance.”

Company website: www.directmarkettouch.com

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