Segro shares were higher on Friday after pre-tax rose 8% to £386m in 2022 as the logistics property firm said net rental income rose 18.9% to £522m.

The company suffered a 15% reduction in adjusted NAV per share due to a negative revaluation of their property portfolio. Macroeconomic influences were to blame for lower property prices but strong rental demand supported earnings.

Segro noted record new headline rent commitments of £98m as customers snapped up their warehouses.

Segro shares were 4% higher at the time of writing on Friday.

“Logistics property specialist SEGRO has reported underlying profits up 9% to £386m, with strong demand from occupiers contributing to a 19% increase in rental income,” said Steve Clayton, Head of Equity Funds at Hargreaves Lansdown.

“But rising interest rates are impacting on what the group’s properties are worth in the open market. The Net Asset Value dropped 15% as a result. SEGRO are far from alone in seeing their asset values drop. So far, the group is paying more attention to its operational performance, which gave SEGRO the confidence to hike the dividend by 8.2% to 26.3p per share. The market was expecting something along these lines and the shares are little changed in early trading.”

After breaching 8,000 yesterday, the index smashed through the milestone level on Thursday trade as high as 8,047, before easing back.

The FTSE 100 was trading at 7,985 at the time of writing with the historic 8,000 failing to hold as support.

“For an index that’s been unloved for years, it’s refreshing to see the FTSE find its rhythm as this could help it win back some of the investors who turned their backs in 2016 when the Brexit vote was cast,” said Russ Mould, investment director at AJ Bell.

The index was supported by favourable earnings updates from Centrica, Standard Chartered and RELX, as well as continued interest in Vodafone.

“Helping to drive the index on Thursday was Relx, up 3.2% after its full-year results were well received. Despite being one of the UK market’s biggest companies, Relx tends to stay out of the spotlight and is often underappreciated by investors. In a nutshell it provides information to people working in industries such as legal and insurance to help them do their job in a better way,” Mould said.

Vodafone shares were 3.4% to the good after Liberty Global acquired a 5% stake in the FTSE 100 telecoms company earlier this week.

Heavyweight selling

Despite a raft of positive corporate news on Thursday, investors sold market cap heavyweights including AstraZeneca, Unilever and Shell which ultimately resulted in the FTSE 100 slipping below 8,000.

Imperial Brands and Berkeley Group were the top fallers.

Standard Chartered

Standard Chartered investors will be pleased their board issued a more upbeat outlook than Barclays did yesterday as shares in the emerging markets bank gained 2.5% on Thursday.

Standard Chartered upgraded their expectations for the year ahead after profit before tax rose 15% in 2022. The group earns most of their profit before tax in Asia and is well placed for a recovery in the Chinese economy.

Centrica

Centrica was the FTSE 100’s top gainer after the British Gas owner’s adjusted EBITDA more than tripled to £3.5bn on the back of higher gas prices. Free cash flow increased to £2.5bn as the company announced a £250m share buyback.

Centrica shares were 5% higher to 103p at the time of writing on Thursday.

Standard Chartered’s bullish perspective on the year ahead helped their shares higher on Thursday as the group increased their earnings expectations for the year ahead.

“We continue to make significant progress against the five strategic actions outlined last year, and we remain confident in the delivery of our financial targets,” said Bill Winters, Standard Chartered Chief Executive.

“We are upgrading our expectations, and are now targeting a return on tangible equity approaching 10% in 2023, to exceed 11% in 2024, and to continue to grow thereafter.”

The positive outlook was at odds with Barclays‘ clouded perception of growth in 2023 outlined in their results yesterday. Barclays’ outlook was dominated by concerns around the health of the UK economy and UK rate trajectories. This is problem Standard Chartered does not have.

Although both banks enjoyed the higher interest rate environment last year, Standard Chartered are focused on emerging markets and are benefiting from growth in their key markets.

“In many ways Standard Chartered’s 2022 results are similar to those of Barclays, but the shares are getting a much warmer reception because the outlook statement reads much more positively,” says AJ Bell investment director Russ Mould.

“Both banks recorded multi-year highs in profits and dividends last year, even if both were held back by loan losses and other one-off costs, and they have each extended share buyback programmes for this year.”

Standard Chartered are to return $2.8bn in buybacks and dividends back to shareholders.

Seize China opportunity

One of Standard Chartered’s key strategic actions is to ‘Seize China opportunity’. This is an attractive proposition for investors as the world’s second largest economy recovers from a prolonged coronavirus restrictions.

Despite the restrictions, Standard Chartered produced a 10% year-on-year increase in income from on-shore China in 2022. This could well accelerate in the year to come.

Standard Chartered generated $3.7bn of their $4.8bn total group profit before tax in Asia last year.

After years of low profitability, dividend cuts and balance sheet concerns, the invasion of Ukraine by Russia elevated energy prices and provided the conditions for Centrica to unleash their earnings potential.

Centrica’s EPS for 2022 rose to 34.9p from 4.1p in 2021 as higher gas prices bolstered revenue by 61% to £23.7bn.

With customer numbers for their retail business only growing 2%, the lion’s share of Centrica’s revenue growth was achieved by price inflation in their British Gas retail and business supply, and increased marketing and trading activity.

Net cash rose to £1.2bn at the end of 2022 compare to £0.7bn at the end of 2021.

The higher energy price environment permitted Centrica to reinstate their progressive dividend policy and will pay 3p for the 2022 full year.

“There will no doubt be howls of anguish and pain at the news that British Gas owner, Centrica, has today reported a 700% jump in profits from almost £400m to just over £2,800m, with earnings per share rising even faster from 2.8p to 34.2p. Despite that huge increase, British Gas saw profits fall 39% to £72m, in no small part due to the company spending £75m on customer assistance measures,” said Steve Clayton, Head of Equity Funds at Hargreaves Lansdown.

“The huge dichotomy between a group that makes billions and British Gas making millions is because the money is being made in the North Sea and beyond, where the energy is brought out of the ground at high prices. British Gas’s realm is onshore, where gas must be piped around through expensive networks and sold at thin margins in a market with many competitors.”

The half-time results to end December from MJ Gleeson (LON:GLE), the UK’s leading low-cost housebuilding group, showed a 1.4% fall in revenues to £171m and a 34.8% fall in pre-tax profits.

A lower forward order book in the first six months was further impacted by weaker sales after the mini-Budget.

However, average selling prices were up 15.6% at £186,400, perhaps reflecting higher cost prices.

Gleeson Homes’ customers are typically young, first-time buyers with a median income of £26,000.

The group’s current trading outlook notes that net reservations in the last four weeks have doubled from the low levels seen before Christmas but remain below the levels typically seen this time of the year.

The group, which sold 894 homes in the first half, is now targeting its full year completions at between 1,650 and 1,850 homes for the full year to end June 2023.

New CEO Graham Prothero stated that:

“We have an exciting opportunity to take Gleeson to the next level by delivering sustainable growth over the medium-term, across both our Homes and Land divisions.

 At the same time as managing through the lower levels of current market demand, I want to ensure that the Group is in the best possible shape to take advantage of the recovery which we are beginning to see early signs of.

In terms of guidance: confidence, underpinned by improved mortgage rates, is slowly returning to the market, evidenced by improving net reservations.”

Broker’s analysts are estimating a 40% fall in adjusted pre-tax profits for the end-June year’s figures, to £31.7m (£55.5m) on the back of some £347m (£373m) sales, taking earnings down from 70p to 42p per share. The question is whether the 15p dividend will be retained.

Both Singer Capital Markets and Liberum Capital are rating the group’s shares as a Buy, with Singers looking for 606p and Liberum 560p as their Target Prices.

Gleeson’s shares held steady at 454p after the results.