Baron Oil (LON:BOIL) was one of AIM’s top risers on Wednesday after the oil explorer revealed a work-sharing agreement alongside the release of their final results. Baron Oil announced a work-sharing agreement “with a large European Exploration and Production Company” for in the Inner Moray Firth area. The news is a milestone in the prospect which could lead to significant value creation for Baron Oil’s shareholders. Baron Oil has a 15% interest in the prospect and the work sharing agreement could lead to a more formal farm-in agreement. The explorer, who has prospects in South East Asia, Latin America and the UK, also posted a significant reduction in pre-tax losses to £1.7m in their final results. Commenting on the results, Malcolm Butler, Executive Chairman, said: “The final award of the Chuditch PSC was a great result for your Company and marks a step-change in Baron’s asset base. However, our industry is currently faced with the dual global impact of significantly lower oil prices and the rapid spread of the COVID-19 virus. While Baron is not insulated from the oil price shock, it should be noted that the Company’s assets are all in the pre-cashflow exploration phase and, following the award of the Chuditch PSC, are now heavily weighted towards gas where regional markets play a much greater role in pricing.” “In Timor-Leste, there is no obligation to drill before 2022 and any commercial production is unlikely to be achieved before 2025. There are no plans to fund drilling in the UK for the foreseeable future. In both cases, work on these projects over the next 12 months is desk and computer-based and should not be affected by current movement restrictions, although gaining access to the necessary data is being delayed.” “As regards the El Barco-3X well in Peru, it is unclear how much local oil companies’ appetite for drilling will be affected by oil price movements and although it is unlikely that local gas prices in this part of Peru will be affected by the drop in oil prices, it is impossible to predict the effects on short term gas demand of a COVID-19 related recession. “Critically for shareholders, following our £2.5m (gross) fund raise in Q1 2020, our proposed work programme for 2020 and into 2021 is funded.” Analysts were also positive on the results and pointed towards potential uplift for Baron Oil. “Exclusivity may be extended until 31 December 2020 in the event that the interested party wishes to negotiate a formal farm-in agreement. In the event that the third parties’ technical work suggests significant potential resources to be present on the licence and a farm-in is agreed, we believe that the value of Baron’s interest could increase significantly,” Barry Gibb, Research Analyst at Turner Pope, wrote in a note.

Shares in AIM-listed Braveheart Investments (LON:BRH) rocketed on Wednesday after the investment company announced the results of a placing to help grow their portfolio. The Braveheart Investments share price was up 71% to 38p on Wednesday. The jump followed a successful £275,000 placing at 17p. Th proceeds will be used to expand the company’s portfolio with investments already earmarked for the cash. The cash will be invested in Braveheart’s strategic investments including Paraytec, Pharm2Farm, Kirkstall Limited, Gyrometric Systems , Phasefocus Holdings and Sentinel Medical. Braveheart Investment’s portfolio is focused on technology companies with high levels of intellectual property. Trevor Brown, Braveheart CEO, commented: “We are delighted to have been able to raise this extra funding and to have also increased our shareholder base. The balance sheet of Braveheart remains strong and so we will be able to provide financial support to our Strategic Investments if it is required to keep up their momentum in development.”

Shares in Next plc (LON:NXT) fell on Wednesday as the company scrapped their dividend amid disastrous sales performance due to the coronavirus pandemic. The British retailer released full price sales figures that revealed an obliteration of sales during the lockdown with total sales for the year to April 25th down 38%. Next faced pressure to close their warehouses after failing to implement social distancing measures meaning their website was forced to close. With stores already closed, Next’s revenue generation was severely limited to the extent the company made no sales in the week commencing 29th March. Online sales have since resumed but a well below the comparative period last year. The company has scrapped the dividend to be paid in August and said it is unlikely the January dividend will be paid either. This is estimated to save £220m in an effort to conserve cash. Next summuarised the results of stress tests and potential scenarios that showed even in the case of a 40% reduction in full year sales, the company would still be EBITDA positive. “It is hard to think of a time when the outlook for sales and profit has been more difficult to predict. A pandemic of this scale has simply not been experienced by a modern global economy. No amount of information about the past can accurately guide us in our deliberations on the future. Our job is not to guess exactly how things will pan out but to prepare the Company for all outcomes that seem reasonably possible,” Next said in a statement. “So, the scenarios we set out are just that, scenarios, not guidance, not a forecast. Their purpose is to demonstrate how the business is likely to perform under different levels of stress, without seeking to predict which outcome is most likely.” “But these stress tests are more than an academic exercise. They serve to inform the decisions we take about the costs we should save, the cash we need to generate and investments we can afford to make.” “The stress test also serves to demonstrate the financial stability of the Group. NEXT’s historic maintenance of healthy margins and high returns on capital have built a strong base from which to weather the storm: even in our worst case scenario of sales down -40% the Group still is likely to deliver positive EBITDA and reduce year end financial net debt.”

Barclays shares (LON:BARC) rallied on Wednesday after the UK bank posted a reduction in profit for the first quarter as it set aside $2.1bn for bad debt dues to COVID-19. Shares in Barclays rose significantly above 100p for the first time since late March as Barclays share price rallied over 5% to 103p in early trade on Wednesday. The UK bank reported statutory profit before tax of £0.9bn, down from £1.5bn in the same period a year ago. Profit before tax would have been £3bn should the bank not have had to set aside £2.1bn in provisions for bad loans. Before the impact of the £2.1bn provision, Barclays £3bn profit represents a strong increase on last year and will stoke investor optimism Barclays were in good shape going into the crisis. “An event like the COVID-19 pandemic makes everyone focus on what’s really important right now. For us, that means running the bank safely and soundly, helping our customers and clients through the difficulties they face, supporting the UK economy and the communities where we live and work, and taking care of our colleagues around the world,” said Jess Staley in a statement included in the update. Jess Staley continued to outline the impact government schemes such as CBILs had on Barclay’s ability to make loans to UK businesses. “We welcome the government and Bank of England’s business support programmes and have introduced additional measures to back UK companies ourselves. They are now having a real impact. As at 24 April 2020 we have facilitated significant commercial paper issuance though the Covid Corporate Financing Facility, lent £737m in Coronavirus Business Interruption Loans, approved over 238,000 mortgage and loan payment holidays, and over 6 million customers and clients are currently paying no personal overdraft or business banking charges. We have launched a community aid package; through which we are donating £100m to support those who are being hardest hit by COVID-19. We expect that all of these measures will help to limit the economic and social impact of the pandemic.” The Barclays CEO highlighted the impact of COVID-19 on the bank’s earning which would have been £3bn if they were not to set aside £2.1bn in provisions for bad loans due to the COVID-19 crisis. “The impact of COVID-19 came late in what was until that point a good quarter. Statutory profit before tax was £0.9bn and profit before tax excluding credit impairment charges was £3.0bn. We have taken a £2.1bn credit impairment charge which reflects our initial estimates of the impact of the COVID-19 pandemic.” “The strength of Barclays lies in our diversification by business, geography and currency, which allows us to remain resilient through the developing economic downturn.” Touching on the letter from the Bank of England which instructed banks to cut their dividends, Staley provided a rough timeline on when the Barclay’s board would start to consider paying dividends. “In response to a request from the Prudential Regulation Authority (PRA), we cancelled the full year 2019 dividend payment of 6 pence per ordinary share, and the Board will decide on future dividends and its capital returns policy at year-end 2020.” “Despite all the challenges we face as a consequence of COVID-19, I am confident Barclays will emerge from this pandemic, well placed to continue to serve our customers and clients, the communities and economies in which we operate, and our shareholders.” The Barclays share price was up 5.68% at 103.3p in the first hour of trading on Wednesday.

Building material company, Travis Perkins (LON:TPK), has shed light on the impact of COVID-19 in a trading update that highlighted strong sales until lockdown measures were in place. However, the pandemic shut large parts of Travis Perkins’ business, leading to a 4.8% reduction in sales across the group in the first quarter. The company, which also owns Wickes and Toolstation, said it saw a £50m cash outflow during the first month of the coronavirus lockdown and has started to reduce cash commitments. Furloughing staff and deferring VAT payments will assist in TPK’s cash conservation. Travis Perkins have furloughed roughly half of their 30,000 staff for three weeks on full pay. Providing some optimism on the reopening of the UK economy, Travis Perkins said it expected sales resumption to stem the flow in the coming weeks as its outlets begun to reopen. The company also said it expected to benefit to the tune of £90m from business rates holidays. House builders such as Taylor Wimpey have recently announced they will reopen sites again in early May, signalling a trend across the industry that will lead to increased demand for Travis Perkins goods. Nick Roberts, Chief Executive, commented on the update: “In light of the COVID-19 emergency, we have established a new operating model that has kept colleagues and customers safe, operating within Government guidelines, and enabling branches across all of the Group’s businesses to remain open. Moreover, we have provided essential services and support to keep the nation’s critical infrastructure maintained and operational and the UK’s homes warm, dry and safe during this time of need. “We continue to adapt our operations, applying stringent social distancing and using technology to enable contactless operations, and we are therefore able to respond to the Government’s call to ensure that the construction industry can continue to deliver on crucial programmes and projects and be an engine for future economic recovery. “As we move forward we will continue to adjust our operations, with our foremost priority to keep colleagues and customers safe and the industry supplied with the materials it needs.” Shares in Travis Perkins were 3.2% higher on the day at 1,052p and are down 34% year-to-date.

FTSE 100 oil major BP (LON:BP) has reported a drop in profits in the first quarter as the lower oil price and a sharp reduction in demand due to coronavirus takes it’s toll. BP’s Q1 underlying replacement cost profit fell to $0.8bn, down from $2.4bn in the same period a year ago. The confirmation of such a large drop in profit barely moved the share price as the market has seemingly priced in the recent negative impact of the COVID-19 crisis to BP shares. BP shares were softer by 1.59% to 309p in mid morning trade on Tuesday and are down 34% year-to-date. Looking forward to the second quarter, investors should be prepared for a significant impact due to the lower price of oil. In the first quarter, BP recorded an averaage oil price of $47.47 per barrel, down from $55.90 in the fourth quarter of 2019. With oil trading around $20 for much of the second quarter, which started 1st April, BP are likely to record a much lower oil price in the next trading update. Despite the sharp reduction in profitability, BP have maintained their dividend of 10.5 cent which is due to be paid 19th June. The maintenance of the dividend was helped in large part by BP’s strong cash position. BP had $32bn in liquid assets at the end if the quarter. BP CEO, Bernard Looney commented on the results: “This extraordinary time for the world demands extraordinary responses. And thankfully we are seeing that just about everywhere we look around the world. Our industry has been hit by supply and demand shocks on a scale never seen before, but that is no excuse to turn inward. BP, like many other companies, is stepping up and extending a helping hand to those in need. We do it not because it is expected of us – but because we want to. That is consistent with our purpose.” “We are focusing our efforts on protecting our people, supporting our communities and strengthening our finances. I am incredibly proud of the work that our people are doing in all three areas, particularly our colleagues in operations – from rigs to retail and everywhere in between – who are continuing to deliver energy and provide goods in the most difficult of circumstances.” “At the same time, we are taking decisive actions to strengthen our finances reinforcing liquidity, rapidly reducing spending and costs, driving our cash balance point lower.” “We are determined to perform with purpose and remain committed to delivering our net zero ambition.”