Business Live: HSBC Reports More Than Double Profits; BP Increases Dividend
By Live Commentary
Updated: 08:31 BST, 1 August 2023
The FTSE 100 is up 0.2% in early trading. Today, several companies, including HSBC, BP, Greggs, Dominos, Robert Walters, Travis Perkins, Aston Martin, Watches of Switzerland, Weir Group, and Diageo, have released reports and trading updates. Read the Tuesday 1 July Business Live blog below.
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Breaking: Cineworld Successfully Emerges from Chapter 11 Bankruptcy
Cineworld Group has emerged from Chapter 11 bankruptcy after nearly 11 months. The cinema chain operator, which is the second largest globally, has significantly reduced its debt and introduced new management and board members. Ann Sarnoff, former chair and CEO of Warner Bros, has joined the board along with four others. Eric Foss is the new Chairman, and Eduardo Acuna is the new CEO.
Richard Moriarty Named as New Head of Britain’s Accounting Watchdog
The Financial Reporting Council has appointed Richard Moriarty as its new head. Moriarty will take over from Sir Jon Thompson after serving as the CEO of the Civil Aviation Authority for five years. However, Moriarty assumes the role during a time of major transformation for the FRC, aimed at preventing future scandals like the ones involving Carillion and BHS.
Diageo Exceeds Sales Forecasts
Diageo has surpassed full-year sales forecasts as consumers continue to purchase expensive scotch, whisky, and tequila despite high prices. The world’s largest spirits maker achieved organic net sales growth of 6.5% in the year ending on June 30. This slightly outperformed analyst expectations of a 6.4% increase.
BP’s Diversification Softens Outlook
John Moore, senior investment manager at RBC Brewin Dolphin, has commented on BP’s results, highlighting strategic differences compared to Shell. While declining oil prices and reduced profits grab headlines, BP maintains a strong position due to its focus on diversification. The company has recently completed the acquisition of TravelCenters of America and entered the German offshore wind market. BP also possesses strong credentials in carbon capture technology, which has untapped potential. Additionally, the announcement of a $1.5 billion share buyback, along with a 10% dividend hike, shows management’s confidence despite reduced profits.
Frasers Group Increases Stake in Boohoo
Frasers Group, owned by Mike Ashley, has once again increased its stake in fast fashion brand Boohoo. The retail empire, which includes Flannels and Sports Direct, now holds just over 7.8% of Boohoo’s shares, up from 6.78%. This follows Frasers’ prior increase from 5% to 6.78% last week.
Greggs’ Profits Soar as Costs Ease
Greggs has experienced a 14% jump in profits during the first half of 2023. The bakery chain attributes this success to easing inflationary pressures and plans to open new stores. Roisin Currie, chief executive, emphasizes the company’s commitment to offering exceptional value and expanding its market share. Greggs continues to open new shops, extend trading hours, and see increased participation in its app.
BP Increases Dividend despite Profit Slump
BP’s second-quarter profits have fallen 70% YoY to $2.6 billion, missing market forecasts. This decline reflects lower fuel prices and weaker oil trading. However, the energy giant has increased its dividend by 10% to 7.27 cents per share, marking the fourth hike since reducing it during the pandemic. BP will also repurchase $1.5 billion of its shares over the next three months.
Aston Martin Announces £210m Cash Call to Reduce Debt
Aston Martin plans to raise an additional £210 million in funding to expedite its debt reduction efforts. The luxury car manufacturer has secured backing from its largest investors, including the Saudi Arabian sovereign wealth fund and Chinese competitor Geely.
HSBC Reports More Than Double Profits
HSBC has raised its key performance target after achieving a more than two-fold increase in pre-tax profits during the first half of the year to $21.7 billion. This growth is attributed to rising interest rates globally and gains from the planned sale of its French unit. The bank’s profits beat analyst expectations of $20.9 billion. HSBC has also announced share buybacks of up to $2 billion and a dividend of 10 cents per share. Moreover, the bank has raised its near-term return on tangible equity goal to at least mid-teens for 2023 and 2024, signifying increased confidence in its performance. In 2022, HSBC reported a return on tangible equity of 9.9%.
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