Shell has posted a fall in profits in the third quarter.

The oil giant’s profits fell 25% quarter-on-quarter to $4.1bn, which was below analyst expectations.

“Normally one shouldn’t get too hung up over a mere three months’ trading, but this was meant to be Shell’s big quarter, given the surge in oil and gas prices in the past few months. Sadly, it has missed earnings forecasts and left investors feeling frustrated,” says Russ Mould, investment director at AJ Bell.

Whilst some analysts focused on the headline earnings miss, others focused in on Shell’s cash flow that plays a significant part in the group’s distributions to shareholders.

“These are a muddy set of results from Shell. The rapid swings we’ve seen in oil & gas prices over the last 18 months mean the group has had to take a large writedown in the value of the derivatives it took to out hedge itself against a further price fall. These have officially pushed the group into a loss for the quarter. However, the underlying numbers, and particularly the all-important cash flow numbers, are looking far more upbeat,” said Nicholas Hyett, Equity Analyst at Hargreaves Lansdown.

Climate Targets

Shell has also set new climate targets for itself. Whilst the group has already pledged to become net-zero by the year 2050, the group has also said that it will cut 2016 levels of emissions from operations and electricity it uses by 50% by the year 2030.

Earlier this year, the Dutch Court ruled Shell to reduce its worldwide carbon emissions by 45% by the end of 2030. The ruling aimed at bringing the company in line with the Paris Agreement, is the first of its kind in history.

“The court orders Royal Dutch Shell … to reduce its CO₂ output and those of its suppliers and buyers by the end of 2030 by a net of 45% based on 2019 levels. Royal Dutch Shell has to implement this decision at once.”

Travis Perkins has posted strong Q3 results despite issues in the global supply chain.

The building materials business posted a 13% rise in like-for-like sales as people continue with DIY projects in the house since lockdown.

Full-year profits are now expected to hit £340m.

“The group has delivered a strong performance in the third quarter and is navigating well-documented supply chain and cost inflation challenges very capably,” commented Nick Roberts, the chief executive.

End market demand remains robust and we are confident that we are in a strong position to deliver future growth.”

Chancellor Rishi Sunak unveiled his Autumn Budget which he says is designed to prepare the UK for an ‘age of optimism’. The government plans included changes to taxes, and spending on innovation, skills and welfare to help to the prosperity ‘of the whole United Kingdom’.

Capital Gains and Income Tax

A Capital Gains Tax reform was rumoured before the March Budget and was highly anticipated before this Autumn Budget.

However, there was no announcement on Capital Gains Tax or Income Tax, although this didn’t mean a reduction in taxes.

“No news isn’t always good news: higher taxes didn’t get a mention in the Budget speech, but unfortunately, you’re still likely to pay more tax next year,” said Sarah Coles, senior personal finance analyst, Hargreaves Lansdown.

“Part of this sleight of hand is about timing. The major tax hike had already been announced, with National Insurance and dividend tax both rising 1.25 percentage points in April 2022. The more you earn, the bigger an impact this will have, but NI will add £180 a year to the tax bill for a typical basic rate taxpayer earning £24,100.”

National Minimum Wage

The National Minimum Wage has increased to £9.50 from £8.91.

Innovation and Skills

The government unveiled a multifaceted effort to help innovation in the UK which included attracted overseas innovators and spending on UK business.

Our Global Talent Network will identify and attract the best talent from around the world in Science and Technology. #Budget2021 #SpendingReview pic.twitter.com/G5AS6dyH2D

— HM Treasury (@hmtreasury) October 27, 2021

Research & Development

Rishi set out plans to help boost UK spending on R&D with £22 billion spending on tax credit reforms and increases to funds designed to help innovation such as the Future Fund.

Universal Credit

Universal Credit has long been a thorn in the side of the government. Today the government made changes to support working families by reducing the taper tax rate from 63% to 55%.

A single mother of two will be better off by £1,200 a year.

This was a more generous move than expected by the government.

Housing and Construction

The ongoing unsafe cladding issue was addressed with a 4% levy on property developers with profits over £25 million.

£11.5 billion is to be spent on 180,000 new affordable homes.

Energy Bills

Prior to the Budget, a MoneySuperMarket study found many consumers worried about their energy bills. Unfortunately, a speculated VAT cut to household bills was not delivered.

“We have found that nearly half (49%) of bill payers are concerned about being able to afford their energy bills this winter and that three quarters (74%) of this group attribute their worries directly to seeing their bills increase,” said Stephen Murray, energy expert at MoneySuperMarket.

Business Rates

The chancellor announced £7bn in Business rates reliefs focused on the struggling retail sector.

We’re making key reforms to business rates to ease the burden on our local firms and create stronger high streets.

More details here. #Budget2021 #SpendingReview2021 pic.twitter.com/1fBcEkKmwH

— HM Treasury (@hmtreasury) October 27, 2021

Education

The government has earmarked an additional £1.8 billion to help the poorest students’ recovery from the impact of the pandemic. Schools will receive £4.7 billion by the end of the parliament.

£1.8bn to help schools and colleges tackle lost learning from the pandemic, and bring total education recovery support to almost £5bn.#Budget2021 #SpendingReview pic.twitter.com/DDXP7L0A81

— HM Treasury (@hmtreasury) October 27, 2021

NHS

The chancellor has announced an additional £5.9 billion in funding for the NHS to help tackle the backlog of patient appointments.

International Aid

UK international aid is expected return to 0.7% by 2024/25, the end of the current parliament. This is an expectation that is a long way out so take it with a pinch of salt.

Welfare

£200m will be provided to families through Supporting Families schemes.

Up to 300,000 more families will benefit from an extra £200m investment in the Supporting Families programme.#Budget2021 #SpendingReview pic.twitter.com/Gg7IloZ0BL

— HM Treasury (@hmtreasury) October 27, 2021

Devolved Administrations

Scotland, Wales Northern Ireland will receive additional funding £8.7bn per year.

The largest annual funding settlements for the Scottish Government, Welsh Government and Northern Ireland Executive since devolution in 1998.#Budget2021 #SpendingReview pic.twitter.com/Oi1noVfXTK

— HM Treasury (@hmtreasury) October 27, 2021

Alcohol Duties

Changes to duties on UK manufactured alcohol were introduced to to help boost the industry with reductions on cider and sparkling wines.

A boost for pubs was provided with draft relief to help encourage people to drink in pubs instead of at home, as pubs are seen as a safer drinking environment.

A tax cut of £3bn was provided to the UK industry by the cancellation of proposed duty whiskey, beer and cider.

Alphabet, the Google parent company, has posted an increase in profits and revenues for the third quarter.

Revenue jumped 41% to $65.12bn. This is the largest revenue increase in 14 years. Advertising revenue jumped from $37.1bn $53.13bn.

Sundar Pichai, chief executive of the group, said: “this quarter’s results show how our investments there are enabling us to build more helpful products for people and our partners.”

Cloud division revenues jumped 45% to $4.99bn.

Chief business officer Philipp Schindler commented on the uncertainty of future results, saying: “it’s clear that uncertainty is the new normal.”

“When it comes to anticipating change, predicting demand and investing in innovation businesses need as much support now as they did a year and a half ago.”

Ikea has bought the Topshop flagship store on Oxford Street.

In a move that cost £378m, the new Ikea store will open in autumn 2023. The transaction is expected to be finished in January 2022.

“We are delighted to have exchanged contracts on this iconic property, which sits at the cornerstone of London’s principal retail district,” Ed Boyle, who is the managing director at Interpath Advisory and joint administrator of Redcastle.

“We are delighted to have exchanged contracts on this iconic property, which sits at the cornerstone of London’s principal retail district. As shoppers, workers and tourists return to central London following the pandemic, IKEA’s presence in Oxford Circus will help further boost footfall and provide a real fillip for the city’s retail sector,” he added.

Bloomsbury Publishing has posted a 225% profit growth to £12.9m, as well as a year-on-year revenue growth of 29% to £100.7m.

Bestsellers at the group included The Priory of the Orange Tree by Samantha Shannon and Outdoor Cooking by Tom Kerridge.

“For a time publishing firm Bloomsbury was like a magician with only a single trick. To be fair it was a good one, with the Harry Potter series perhaps the biggest single phenomenon in book publishing history,” said AJ Bell investment director Russ Mould.

“However, once the series ended in the late noughties Bloomsbury’s share price and sales went into steady decline.

“After a few years of decent progress, building up a diversified business, the pandemic hit fast forward on Bloomsbury’s return to prominence as people picked up the book reading bug in large numbers.”

The book publisher has said that it expects to meet market expectations at February 2022 despite the supply chain issues. The group expects to make profits of pre-tax profits of £19.3m and revenues of £193.4m.

“These results demonstrate the strength and resilience of our strategy of publishing for both the consumer and academic markets, and our growth of digital revenues,” said chief executive, Nigel Newton.

“Our strong financial position and cash generation give us significant opportunities for further acquisitions and investment in organic growth. In recognition of our strong performance and in line with our dividend policy, we are announcing a 5% increase in our interim dividend to 1.34 pence per share.”