Google (NY) has announced that it plans set up a new headquarters in London by 2020. Experts anticipate that this latest announcement could provide an investment of up to £1BN in the UK economy.
The company currently employs around 4,000 people in the UK. The latest plans are expected to see this number reach nearer 2020. The office space owned by the company in Kings Cross is expected to double.
This news will prove a big boost to the UK. Markets have feared that multinational companies may shun UK investment in the wake of the Brexit vote. A number of worries have surrounded further foreign investment in UK business following it’s vote to leave the European Union.
In an interview with the BBC following the announcement chief executive Sundar Pickah said that the decision to further invest in the UK went far beyond the Brexit vote. He went on to say “The innovation we see here, the talent we have available here and how on the cutting edge of technology we are able to be here makes it an incredible place for us to invest.”
Parent group Alphabet recently reported Q3 earnings at the top of analysts’ expectations. The company reported earnings per share on of $9.06 on revenue of £22.25 billion (adjusted). This comfortably beat consensus forecasts prior to the announcement of $8.63 on revenue of $22.05.
Year on year revenues showed an increase of 20% for the same period on an operating margin on 26%. In addition the company announced its intention to initiate a buyback of stock. Over $7BN worth of Class C shares are to be repurchased over the quarter.
Advertising continued to be a key driver of revenue for the group. It is expected that well over half of global revenues this year will come from mobile internet ads. The company’s intention is to further drive revenues by increasing engagement from users across its expanding Google ecosystem.
Google Stock traded at $764.48 up 0.79% on Wednesdays close.
Google shares have enjoyed a strong run over the past few years, recently reaching an all time high of $839.
Far from being just a technology innovator parent company Alphabet is now seen as a core growth stock by many investors. The decision to split operations was welcomed by investors at the time and continues to enable transparency of its various operations.
The most recent Q3 figures and willingness to invest back up the positive growth story. So far the $740 level has shown good support to the most recent pullbacks. If the company can continue on its growth trajectory it looks set to continue to make new highs.