Yahoo Finance FTSE 100 Live: Shares slip, Nationwide house prices down, BP profits fall but dividend up
Shareholders of BP, HSBC and Diageo can expect more big dividends after the trio of FTSE 100 heavyweights posted results today.
HSBC beat City forecasts as quarterly profits more than doubled, but BP reported a slide in its surplus to $2.3 billion (£1.8 billion).
Greggs, Domino’s Pizza and Travis Perkins have also updated investors on their performances in the first half of the year.
FTSE 100 Live Tuesday
Profits double at banking giant HSBC
BP’s quarterly profit down by over two-thirds
UK manufacturing decline gathers pace in July
Scrap the tourist tax and entice global shoppers
15:37 , Daniel O'Boyle
“The Mayor is right — the capital is having a successful summer, despite the majority of schools having only just broken up,” Dee Corsi writes.
“Here in the West End, summer began early with the coronation attracting international and domestic visitors to once-in-a-lifetime experiences that only this iconic British district could deliver.
“Throughout the months to follow, the indicators of footfall and spend have continued to tell a positive story. Footfall is growing year on year and spend is growing, both compared to last year and to 2019.
“Domestic spend is certainly proving more conservative due to the cost of living crisis, and therefore our recovery is largely being driven by international visitors. It is clear to me that they are key to future growth and remaining on track to deliver our historic £10billion district turnover by the end of 2025.
“And so we should be doing everything we can to entice them to our shores, to come more often and stay longer.”
US market snapshot
14:54 , Daniel O'Boyle
Take a look at our US market snapshot with shares close to flat.
Food price inflation slows to lowest level this year
14:46 , Daniel O'Boyle
Food price inflation has slowed to its lowest level this year amid falling prices for staples such as oils, fish, and breakfast cereals, figures show.
Food inflation decelerated to 13.4% in July, down from 14.6% in June – the third consecutive slowing and its lowest level since December last year, according to the British Retail Consortium (BRC)-Nielsen Shop Price Index.
Overall, shop prices were 7.6% higher in July than a year ago, slowing from 8.4% in June, and also the lowest level this year.
MPs criticise UK banks after HSBC profits surge on higher interest rates
14:28 , Daniel O'Boyle
MPs and activists have criticised the UK banking sector after HSBC became the latest bank to report surging profits as it benefited from higher interest rates squeezing borrowers.
The global banking giant saw its pre-tax profit more than double to 21.7 billion US dollars (£16.9 billion) in the first half of 2023.
Like the other “big four” UK lenders: Barclays, Lloyds Banking Group, and NatWest Group; its financial performance has been buoyed by rising borrowing costs, with mortgage rates racing to highs not seen for 15 years.
Market snapshot with FTSE down
13:55 , Daniel O'Boyle
Take a look at today’s market snapshot with the FTSE 100 still down 0.3% for the day.
‘There is a problem’ — City investment bank Peel Hunt warns London listings decline could hit growth
13:28 , Daniel O'Boyle
City investment bank Peel Hunt has warned that the ‘shrinking pool’ of London-listed companies risks creating a downward spiral of slowing economic growth.
Peel Hunt said that continued mergers and acquisitions while companies shun London IPOs has led to a significant reduction in businesses listed on London markets. There had only been one significant London IPO this year: CAB Payments.
The number of companies making up the FTSE Small Cap Index has fallen by 21% during the past five years, while the number in the FTSE Fledgling Index is down by 28%. Peel Hunt said the numbers would be even worse if listed funds were excluded.
Metro Bank swings to half-year profit as it ‘fixes issues of the past’
12:29 , Daniel O'Boyle
Metro Bank has hailed its strongest financial performance in “several years” after swinging to a half-year profit, as it was bolstered by higher interest rates and the completion of its turnaround plan.
The banking group reported a pre-tax profit of £15.4 million in the half year to the end of June, up from a loss of £10.5 million last year.
The high-street chain, which has 76 branches known as “stores”, said it marked its first half-year of statutory profitability since its transformation plan completed, after overcoming legacy issues including historic global sanctions.
City comment: House price falls aren’t a patch on the bad old days
12:01 , Jonathan Prynn
Property prices falling at their “fastest rate in 14 years” sounds alarming and there is no denying the factual accuracy of the Nationwide’s headline.
But just step back a moment. The story could easily be rewritten “house prices stay close to all-time highs”.
Yes they have nudged down 3.8% in the past year according the building society’s tally. But that is very modest compared with previous recent downturns. During the global financial crisis a decade and a half ago they were falling at an annual rate of 15% or more.
Fresnillo leads FTSE 100 lower, upgrades boost Weir and AG Barr shares
10:30 , Graeme Evans
The retirement plans of one of the stock market’s longest serving bosses today failed to take the fizz out of shares in Irn-Bru and Rubicon drinks maker AG Barr.
Roger White’s move to call time on two decades running the Cumbernauld-based company was offset by an update forecasting annual profits slightly ahead of City hopes.
AB Barr’s FTSE 250-listed shares rose 2% or 8.8p to 480.3p as it revealed first-half revenues of about £210 million, some 10% higher on a like-for-like basis as the company offsets inflationary cost pressures.
White will leave the company within the next year. Chair Mark Allen praised him for leading the transformation from a regional soft drinks business to “highly successful” multi drink and brand company that has delivered significant value to shareholders.
As well as Irn-Bru, which has been made to a secret recipe since 1901, the portfolio now includes the oat milk business Moma Foods, Boost Drinks and Funkin Cocktails.
The update by AG Barr came during a busy session for mid-cap results, with Man Group the biggest faller in the FTSE 250 index despite record assets under management of $151.7 billion and net inflows of $2.6 billion. Shares slumped 7% or 16.5p to 222.3p as investors focused on higher-than-expected costs.
In the FTSE 100 index, Weir Group set the pace after the mining technology company’s interim results included upgrades to full-year revenue and profits guidance.
Shares jumped 5% or 87p to 1922p as Weir continues to benefit from decarbonisation trends and demand for sustainable extraction and processing techniques. Half-year revenues rose 19% to £1.3 billion and profits by 32% to £188 million.
Despite heavyweight stocks BP, Diageo and HSBC also making results-day gains, the FTSE 100 index drifted 12.12 points to 7687.29.
Mexico-based miner Fresnillo led a poor session for mining stocks in the top flight, declining 46.4p to 571.8p despite higher silver and gold production and stronger precious metals prices helping to lift first-half revenues by 6.7%.
However, higher costs across the business as well as the material impact of the revaluation of the peso against the US dollar left profits sharply lower. Iron ore giant Rio Tinto also fell 86p to 5064p, a drop of 2%.
UK manufacturing decline gathers pace in July
10:07 , Daniel O'Boyle
The decline in UK manufacturing gathered pace in July, with output falling to the joint-lowest level since the height of the Covid-19 pandemic.
The closely watched S&P Global / CIPS UK Manufacturing PMI came to 45.3 for July, with any figure below 50 meaning the sector is in decline. The latest reading marked the twelfth consecutive month of contraction for UK manufacturing.
Dr. John Glen, chief economist at the Chartered Institute of Procurement & Supply, said: “The outlook for the manufacturing sector darkened again in July with a sudden fall in output and one of the worst since the pandemic. Manufacturers have registered a reduction in activity in all-bar one month during the past year as new work and employment levels shrank back.
“The lowest orders since last November from overseas customers was particularly surprising, just when signs of improvements in global marketplace activity had started to appear, new work from the Eurozone was subdued just as domestic work dried up.”
But there was more good news for inflation, as average input prices fell for the third consecutive month, after falling at their fastest pace in seven years in June.
Rob Dobson,director at S&P Global Market Intelligence, said: “The only upside is that prices are falling in this environment of sharply deteriorating demand, with cost pressures also helped lower by further repair to supply chains. Supplier performance improved for the sixth successive month, while raw material prices fell for the third month in a row.
“However, while good news for inflation, lower prices are largely a symptom of malaise and hence bode ill for manufacturers’ profits, which may in turn hit investment.”
Job confidence “muted” warns top recruiter
10:01 , Simon English
THERE was little sign of an end to the turbulence at Robert Walters today as it warned that the confidence of clients and job candidates remains “muted”.
The head-hunter issued a profit warning in June that saw its shares plunge 20%. City analysts bet profits would halve to £25 million for the year.
Today Robert Walters, named for the founder, said half-year profit was £8.1 million, down from £26 million.
The UK arm, 16% of the business, saw fees fall 15% and profits of just £100,000.
CEO Toby Fowlston said: "The reduced client and candidate confidence levels that the Group first signalled during the second half of last year have yet to show sustained signs of improvement across many of the Group’s markets and specialist disciplines.”
Job cuts are plainly possible.
He added: “In the face of current trading pressures, we intend to protect the Group’s strategic core, focus on consultant productivity and sensibly manage our cost base whilst continuing to prudently invest in attracting and developing our people and our global infrastructure for the long-term.”
The shares fell 12p to 400p, which leaves the business valued at £295 million.
HSBC profits double
09:50 , Simon English
HSBC poured fuel on the row about bank profits today with stonking profits of nearly £17 billion in just the last six months.
That’s largely thanks to rising interest rates around the world and a $1.5 billion gain from buying the UK arm of the collapsed Silicon Valley Bank.
These profits for the first half of the year are double for the same period a year ago and will increase calls for a windfall tax on profits that critics say are entirely down to interest rate rises and little to do with executive prowess.
CEO Noel Quinn gets towards £6 million a year in pay, a package that could hit £10 million depending on results.
Regulators and politicians are demanding that banks are quicker to pass on rate rises to savers as quickly as they do for borrowers. The Financial Conduct Authority is pledging robust action against banks that don’t treat customers fairly.
Tobias Gruber CEO of My Community Finance, said: “I find it concerning that despite HSBC’s massive profit surge there seems to be a lack of commitment to passing on the benefits to their customers. The substantial increase in profits, fueled by rising interest rates globally, should prompt banks like HSBC to prioritise their customers by offering fairer savings rates and mortgage terms.”
HSBC is so awash with cash it is launching a $2 billion share buyback programme to boost earnings per share. That is on top of a similar buyback earlier in the year.
There is also a dividend of 10 cents a share. Today the stock jumped 14p to 660p.
Unlike its UK high street rivals such as Lloyds, HSBC makes most of its money in Asia, leading to regular talk that it will quit Britain altogether.
CEO Neol Quinn said: "There was good broad-based profit generation around the world, higher revenue in our global businesses driven by strong net interest income, and continued tight cost control.”
It is ditching offices in Canary Wharf for smaller HQ in the City.
Today it insists it is “absolutely committed to UK” and “very happy in London” despite shift away from Canary Wharf.
The results ought to help fend off calls from major shareholder Ping An to split the business in two – an easter and a western arm. Most shareholders have already rejected the Ping An proposal.
Quinn warned that tougher times are coming as inflation and higher rates bite.
He said: “With more mortgage customers due to roll off fixed-term deals in the next six months, and further rate rises expected, tougher times are ahead.”
Rob Murphy at Edison Group said: “Despite these impressive results, HSBC remains cautious about the economic outlook, particularly for its UK customers. The combination of high inflation and rising interest rates could put pressure on households, leading to uncertainties in the future.”
Citigroup analyst Andrew Coombs said: “Overall good results, encouraging buyback update, and positive outlook. This should be taken well.”
Mortgage rates up again after brief respite
09:36 , Daniel O'Boyle
Mortgage rates rose again today and got close to 15-year highs again,, after some recent declines.
The average 2-year fixed residential mortgage rate today is 6.85%. , up from 6.81% yesterday and just below the high of 6.86% reached last month.
The average 5-year fixed residential mortgage rate is 6.37%, up from 6.34% yesterday.
Homeowners will hope the increase is just a brief blip rather than a sign that the trend of price increases is continuing. The latest increase comes just days before the Bank of England announces its latest interest rates decision. Lenders are already pricing in a hike in the Bank rate in their mortgage offers.
Domino’s says its app has become popular with millions
09:21 , Simon Hunt
Domino’s today revealed its mobile app had become one of the most popular in Britain after it posted a jump in sales.
The pizza-maker said the number of active users of its delivery app had swelled to 7.9 million — almost 1 in 8 of the UK population — a rise of 46% compared to last year.
Interim CEO Elias Diaz Sese told the Standard: “We are very proud of the significant growth we have seen with our app customers.
“Last year 59% of orders came through the app — we are ending the second quarter at 75% and last week we were already at 81%.”
Revenue for the first half of the year rose 19.6% to £332.9 million. Sese said average order sizes had fallen slightly as consumers on squeezed incomes pared back spending. The launch of its new Chicken Mexicana menu option had proved a hit with over 660,000 sales.
Shares rose 6.7% to 371p.
Travis Perkins hit by housebuilding slowdown
08:57 , Daniel O'Boyle
Builders’ merchant Travis Perkins was the latest firm to be hit by a fall in new housing builds, as its profits fell by a third.
Housebuilding has been falling at a rate only previously seen during the pandemic and after the global financial crisis, according to S&P. This decline meant Travis Perkins’ profits fell to £107 million.
Yesterday, landscaper Marshalls cut 250 jobs because of the impact of the housebuilding slowdown on its own business.
Travis Perkins CEO Nick Roberts said: “Market conditions have been challenging, which is reflected in both our first half performance and our outlook for the balance of the year.”
But he was also optimistic about the opportunities presented by the green transition.
Shares were up 3.3% as the firm maintained its full-year guidance.
HSBC and BP higher in FTSE 100, Greggs shares fall 3%
08:34 , Graeme Evans
Weir Group is the best performing FTSE 100 stock after the mining technology company’s interim results included upgrades to full-year revenues and profits guidance.
Shares jumped 5% or 88p to 1923p, stronger than the results-day gains of 2% or 14.8p to 661.1p achieved by banking giant HSBC and 2% or 10p to 493p for BP.
The heavyweight gains meant the FTSE 100 index posted a better-than-expected performance by lifting 10.77 points to 7710.18.
Silver miner Fresnillo led the fallers board, declining 6% or 35p to 583.2p after the publication of half-year figures.
The FTSE 250 index fell 34.98 points to 19,108.78, driven by post-results falls of 6% for Man Group, 3% for Greggs and 4% for industrial threads group Coats.
Half-year fIgures from Domino’s Pizza UK and Travis Perkins helped their shares up by 4%.
Diageo UK boss slams ‘Brexit Pubs Guarantee’ as volumes slip amid higher prices
08:17 , Daniel O'Boyle
Diageo’s UK boss today slammed a set of new alcohol duty changes as a tax hike being presented as relief as higher prices hit the Guinness and Johnnie Walker maker’s sales volumes.
From today, alcohol will be taxed based on its strength and alcohol duty, with the exception of draught pints, will be unfrozen. Though the so-called “Brexit Pubs Guarantee” has been cheered by some in the pubs sector, Diageo UK MD Nuno Teles was not impressed.
“I definitely would not celebrate it,” he said. “The idea that it means beer being cheaper is not absolutely true. What we see is a rise in alcohol duty in a way that discriminates against spirits.
“What we see is alcohol duty going up at a time that consumers are looking for relief on prices”
Meanwhile, the British Beer & Pub Association pointed out brewers will pay 10.1% more tax on bottles and cans of beer, so tax will make up 30% of the cost of a 500ml bottle. It says the increase will add an extra £225 million of annual costs across the industry.
Greggs swaps small stores for larger ones as sales jump 22%
07:57 , Simon Hunt
Greggs is swapping smaller stores for larger venues as it eyes further expansion.
The firm opened 94 stores and shut 44 stores in the first six months of the year.
Boss Roisin Currie said of the closures: “A lot of them are where we look for bigger locations.
“Because our shops are on a lease basis when the lease runs out we can try and look for a better location on the high street which offers delivery and click and collect.”
The bakery business is also expanding its drive-through, train station and airport locations, including a recent new opening at Canary Wharf tube station.
Sales for the half-year surged 21.5% to £844 million, while profits rose to £80 million. Margins slipped back slightly, which Currie said was due to holding back cost inflation as well as offering loyalty discounts to customers using its app.
HSBC profits soar, announces $2bn shares buyback
07:48 , Graeme Evans
HSBC profits and revenues have soared after the London-listed banking giant benefited from the global surge in interest rates.
Profits for the second quarter jumped by $4.1 billion to $8.8 billion (£6.9 billion) after revenues rose by $4.5 billion to $16.7 billion (£13 billion).
The net interest margin in the three month period stood at 1.72%, an increase of three basis points on the previous quarter.
Chief executive Noel Quinn said: “There was good broad-based profit generation around the world, higher revenue in our global businesses driven by strong net interest income, and continued tight cost control.”
He announced a second interim dividend of $0.10 a share and a second share buy-back in 2023 of up to $2 billion (£1.6 billion), “with substantial further distribution capacity still expected ahead”.
BP’s quarterly profit down by over two-thirds to $2.3 billion
07:32 , Michael Hunter
Profit at BP almost were down by over two-thirds in the second quarter, as the drop in energy prices continued to cool earnings down at oil and gas giants.
The FTSE 100 multinational reported $2.3 billion in replacement cost profit, the most closely watched industry measure, down from almost $9 billion in the first quarter and from $7.6 billion in the same period a year ago and first quarter and $8.7 billion in the first quarter.
The drop came in line with the fall in commodities prices and will feed into hopes that inflation may have peaked in the UK, as the Bank of England prepares for its next decision on interest rates due this week.
For the first half of 2023, replacement cost profit fell to $11 billion from $15.4 billion a year ago.
BP lifted its dividend by 10% to 7.27 cents per share and announced plans to return $1.5 billion to investors on top of the regular payout via share buybacks.
Nationwide house prices fall at fastest rate since 2009, but slower than expected
07:22 , Daniel O'Boyle
House prices slipped by 0.2% in July, and by 3.8% over the last year, according to the country’s biggest building society Nationwide.
The fall is the steepest since 2009, but is still less than expected as the housing market proves surprisingly resilient to 14 consecutive interest rate hikes. Markets had expected a fall of around 0.5% month-on-month.
It comes despite mortgage rates continuing to climb in July, hitting a 15-year high during the month.
John Ennis, CEO of Chestertons, said: “In London, the property market remained stable throughout July with buyer registrations reaching the same level as in previous months.
“Whilst there were fewer first-time-buyers with support from the Bank of Mum and Dad, we witnessed an increase in cash buyers and higher-valued property sales in excess of £1 million. This was further driven by continuously strong demand for larger family homes in London’s leafier suburbs such as Richmond as well as luxury townhouses in areas such as Islington and Kensington.”
S&P 500 extends run on monthly gains, FTSE 100 seen flat
07:20 , Graeme Evans
Wall Street benchmarks wrapped up another robust month for global financial markets by finishing yesterday’s session in positive territory.
The Dow Jones Industrial Average, the S&P 500 index and Nasdaq Composite closed about 0.2% higher as sentiment continued to benefit from quarterly earnings and the prospect of an end to policy tightening by the Federal Reserve.
The S&P 500 rose 3% last month, meaning it is on its best run since August 2021 after five successive months of improvement.
London’s FTSE 100 index, meanwhile, closed at its highest level in two months last night. CMC Markets expects the top flight to consolidate its recent gains by opening three points higher at 7702 in this morning’s session.
Recap: Yesterday’s top stories
06:42 , Simon Hunt
Good morning. Here’s a summary of our top headlines from yesterday.
The FCA plans to ask banks why they are not passing on interest rate rises to consumers under new Consumer Duty rules.
Education giant Pearson said there were plenty of opportunities ahead for the use of AI but some of its own tools were imports of ChatGPT.
The Guardian newspaper group swung to a near-£50 million loss.
Landscaping business Marshalls said it would cut 250 jobs in light of a slowdown in new builds.
Todaywe’re expecting results and trading updates from:
HSBCBPDiageoGreggsDominosRobert WaltersTravis PerkinsFresnilloVirgin Money
