BAE Systems shares slip on fall in profits
BAE Systems (LON:BA) saw shares slip on Wednesday morning, after reporting a fall in profits in the first half of the year.
Operating profit fell 10.5 percent to £792 million in the first half of the year, led by a 3 percent dip in sales to £8.8 billion. Revenue also sunk 5 percent to £874 million, sending first-half underlying earnings (EBITA) down 6 percent on a constant currency basis.
The group, one of Britain’s largest defence and security companies, reported a £1 billion drop in order intake, with stronger performances in its Electronic Systems and Air sectors negated by weakness in Maritime and Platforms & Services.
“We have made good progress in the first half strengthening the outlook through significant wins on the Australian SEA 5000 and US Amphibious Combat Vehicle programmes. These, combined with the launch of the UK Combat Air Strategy, provide good momentum into the second half and beyond,” Charles Woodburn, Chief Executive, commented.
“In this transition earnings year, our Group earnings guidance is maintained and, with a large order book and a positive outlook for defence budgets in a number of key markets, we have a strong foundation to deliver growth and sustainable cash flow.”
Shares in BAE Systems are currently trading down 1.07 percent at 646.20 (0945GMT).
Lloyds Banking shares edge up on H1 profit increase
Lloyds Banking Group (LON:LLOY) reported an increase in profit for the first half of the year, after a fall in its PPI charge.
Underlying profit rose by 7 percent to £4.2 billion in the six months to June, with statutory profit before tax up 23 percent to $3.1 billion. Total income came in 2 percent higher at £9 billion.
The positive results were largely down to a decrease in its PPI charge to £550 million, which included an additional £460 million in the second quarter and would cover claims volumes of approximately 13,000 per week until the deadline in August 2019.
Net interest income came in at £6.3 billion, up by 7 percent, as improved net interest margin and increased average interest-earning banking assets rose 1 percent to £436 billion.
“Given the strong performance, the Group now expects net interest margin for 2018 to be in line with the first half of 2018 and for the margin to remain resilient over the plan period,” the group said.
“We now expect net interest margin to be in line with the first half of the year, the asset quality ratio to be less than 25 basis points and for capital build to be c.200 basis points, at the top end of our guided range. All other longer term guidance remains unchanged”.
Shares in Lloyds Banking Group are currently up 2.08 percent at 63.68 (0928GMT).
Next shares sink despite positive quarterly sales figures
Clothing retailer Next (LON:NXT) defied recent high street gloom with its latest quarterly results, with online sales driving a strong performance.
‘Full price’ sales grew by 4.5 percent in the first half, with a 12.5 percent boost to online sales offsetting continued weakness on the high street.
Next entered sale a week earlier than the same period last year, but markdown sales combined with full-price sales growth of 4.5 percent led to a total sales growth of 3.9 percent on-year.
“Full-price sales in the second quarter were up 2.8 percent on last year and ahead of our guidance. We believe that this over‐achievement in sales was due to the prolonged period of exceptionally warm weather, which greatly assisted the sales of summer weight product.
“It is almost certain that some of these sales have been pulled forward from August, so we are maintaining our sales and profit guidance for the year to January 2019.”
Next shares are currently trading down despite the relatively positive set of results, down 5.63 percent at 5,602.00 (0919GMT).
Taylor Wimpey confident after strong first half
Housebuilder Taylor Wimpey (LON:TW) said it remained confident about full year trading figures, after reporting an increase in first half profit.
First half pretax profit rose to £301 million, up from £205 million in the same period last year, with the housing market remaining strong and sending the UK private average selling price up to £295,000, from £287,000 in 2017.
The group declared an interim dividend of 2.44p per share, up 6.1 percent on-year, adding that it would also pay a special dividend of around 10.7p per share in 2019.
“As employment prospects remain positive and mortgage availability is good, customer demand for our homes has been strong in spite of some wider macroeconomic uncertainty,” chief executive Pete Redfern said.
“With a strong order book in place, we are confident in our prospects for the remainder of the year and looking further ahead.”
Shares in Taylor Wimpey are currently up 0.005 percent at 172.14 (0922GMT).
Greggs profits up in H1, despite “challenging” conditions
Shares in bakery chain Greggs (LON:GRG) rocketed nearly 10 percent in early trading on Tuesday, after reporting a solid rise in both pretax profit and sales in the first half of the year.
For the 26 weeks to 30 June, reported pretax profit rose to £24.1 million from £19.4 million a year earlier. Like-for-like revenue also increased by 1.5 percent and total sales were up 5.2 percent to £476 million.
However, underlying operating profit fell £25.7 million to £27.6 million, which the group attributed to an exceptional pre-tax charge of £1.9 million in 2018.
Chief executive Roger Whiteside said it was a “resilient performance”, but warned on “challenging market conditions”.
“While we remain cautious in respect of the outlook for sales in the balance of the year given the consumer backdrop, we are confident in the medium and long-term growth potential for the business, supported by customers’ response to our initiatives, our strong cash generation and the ongoing strategic investments that we are making.
“Over the year as a whole we continue to believe that underlying profits (before exceptional costs) are likely to be at a similar level to 2017.”
Shares in Greggs (LON:GRG) are currently up 9.32 percent at 1,051.00 (0910GMT).
BP report soaring profits as oil market picks up
Oil giant BP (LON:BP) reported a jump second quarter in profits on Tuesday, boosted by higher production and a recovery in the oil market.
Profit on a an underlying replacement cost basis hit $2.79 billion, up from $684 million a year earlier. Statutory pre-tax profits were up almost 150pc to $10 billion.
First-half underlying replacement cost profit nearly doubled to $4.18 billion from $2.2 billion, after oil and gas production for the quarter rose 1.4 percent to 3.6 million barrels of oil equivalent per day.
Bob Dudley, chief executive, said: “We continue to make steady progress against our strategy and plans, delivering another quarter of strong operational and financial performance.
“Given this momentum and the strength of our financial frame, we are increasing our dividend for the first time in almost four years.
“This reflects not just our commitment to growing distributions to shareholder but our confidence in the future.”
BP shares are currently trading up 1.36 percent at 573.20 (0901GMT).
Travis Perkins shares plummet as Wickes takes a hit
Travis Perkins (LON:TPK) shares sunk over 8 percent in early trading on Tuesday, after slashing profit outlook on the back of weak demand.
The home improvement retailer wrote down the value of its Wickes business, after it was hit by weaker consumer spending trends and tough competition. The challenging environment led the group to take a £246 million hit against goodwill in its Wickes arm.
Across the whole business Travis Perkins said it expected full year Ebitda to be at the lower half of the range of analysts’ expectations, after pre-tax losses for the six months through June amounted to £123.4 million.
Adjusted operating profit fell 5.8 percent to £179 million, with Chief Executive John Carter adding that the “changing market conditions” are “expected to continue for the foreseeable future”.
Cost reduction plans were in progress across the group with benefits expected to be weighted towards the second half, and its interim dividend was held steady at 15.5p per share.
Shares in Travis Perkins (LON:TPK) are currently trading down 8.32 percent at 1,229.00 (0843GMT).
BMW raises prices in wake of tariffs
BMW (ETR:BMW) have announced they will raise prices for their SUV models for consumers in China.
The price spikes come after China’s retaliatory tariffs, which add a 25% levy on all US-made vehicles and thus affects the BMW’s sold in China, which are produced at BMW’s factory in South Carolina. The tariffs have led to BMW increasing the prices of their X5 and X6 SUV models by 4% and 6% respectively.
While price increases will soften the impact of the tariffs on BMW’s profit margins, most of the cost is still being borne by the firm. China is the fastest-growing automotive market in the world, with US-made BMW sales to CHina finishing at over 100,000 models in the last year alone. Thus, absorbing some part of the cost caused by tariffs has been deemed necessary so that BMW can maintain competitive prices. Following the news, a BMW spokesperson confirmed that the prices of other models, including the BMW X4 SUV, will remain “largely unchanged”.
This comes after other firms such as Mercedes and Ford announced similar plans to attempt to absorb most of the extra costs incurred by tariffs. Trade delegates from different nations are now set to meet in Geneva to discuss the long term impacts of the tariffs on the auto industry, as well as discussing the ‘Section 232’ Investigation ordered by President Trump.
“The meeting is meant to bring together major auto producing nations so we can discuss our concerns over the US Department of Commerce’s Section 232 investigation of automobiles and parts,” a Canadian government official told Reuters.
BMW and other auto retailers have already suffered, with tariffs affecting the European auto market. Going forwards, they will be keen to minimise the effects of tariffs on their foothold in emerging markets, as well as ameliorating the uncertainty posed by ongoing Brexit negotiations.
In more positive news, BMW followed news on price increases with the announcement of successful integration of Amazon Alexa technology into their 2018 models. After negotiations with Amazon and trials of the software in the computer system of their X5 SUV model, BMW will now produce Alexa-enabled models in the US, UK, France and Germany, with the aim of expanding and eventually incorporating other software such as Cortana and Google Assistant.
BMW shares are currently trading at 82.70 EUR, down 0.25% or 0.21 EUR since trading began this morning.
Mosman Oil and Gas shares soar after boost in production at Welch Project
Shares in Mosman Oil and Gas (LON:MSMN) soared on Monday after the company issued an update on its Welch Project.
The oil and gas exploration company noted that production at the project had significantly, almost doubling after recent repairs.
The firm previously reported oil production for the six months ending June 2018 of 4,309 barrels, marking a net Attributable to Mosman of 3,303 barrels at the project.
However, Since June, Mosman said that three additional wells have been restored to production, increasingly the amount of barrels considerably.
Subsequently, Mosman reported that between the period of 1 July to 27 July production at Welch was 1,180 barrels, producing 896 barrels.
According to the company, this represents an average aggregate production of circa 44 barrels per day, before taking into consideration royalties.
The previous six month average of circa 24 barrels per day had been below well capacity, as water injection pump repairs had stunted production levels.
“We proceeded with the repairs as a result of obtaining funding from the recent placement and the repairs have resulted in an immediate effect on production. This is an encouraging evidence that Mosman continues to achieve its strategic objectives to build a strong production base,” John Barr, the firm’s chairman commented.
Shares in the London-listed company are currently +21.57 percent as of 10.52AM (GMT).
Heineken shares dip after rapid expansion in Brazil
Shares in Heineken witnessed their biggest drop in over three years on Monday, after quicker than expected expansion in one of its least profitable areas.
Its presence in Brazil grew quicker than expected during the first half of the year, after it became the biggest brewer in the country in the wake of its acquisition of Kirin Holdings Co last year. However, the group reported lower earnings per share than expected, at €1.89 over the first six months of the year.
Despite currency headwinds putting pressure on the business, revenue rose by 5.6 per cent. Overall beer volumes grew 4.5 per cent and volumes of the flagship Heineken brand rose 7.5 per cent.
Chairman and CEO Jean-Francois van Boxmeer said: “In the second half, we expect a continuation of our revenue growth and an acceleration of our operating profit growth on an organic basis. We continue to invest steadily behind our brands, innovations, e-commerce platforms and commercial strategy.”
Shares in Heineken (EPA:HEIA)are currently down 4.61 percent at 88.10 (0945GMT).