- Thomas Lohnes/Getty Images
LONDON – Today is one of the biggest, busiest days in the UK’s earnings calendar, with a multitude of firms reporting earnings for the first half and second quarter of the year.
In total, 32 companies from the FTSE 100 and FTSE 250 reported in some capacity on Thursday, and while some were lesser known firms for the man on the street, some of the biggest, most recognisable brands in the country also gave an update on how they’re doing.
Here are some of the highlights:
Lloyds Banking Group — Profits up, but big charges for misconduct
Lloyds reported an increase in underlying profits of 8% to £4.49 billion, while statutory profits picked up 4% to £2.54 billion. That included the hit taken from one-off charges, including more than £1 billion in charges related to the misselling of PPI in the past.
“It’s a sign of Lloyds’ strength that it can shrug off £1.6 billion of misconduct charges to post a strong rise in profits,” Laith Khalaf, senior analyst at Hargreaves Lansdown said in an emailed statement.
“Growing revenues at the bank were driven by a good showing from its commercial banking division, and with costs heading downwards, that spells good news for profits, dividends and shareholders.”
Lloyds also announced that it has agreed to pay out £238 million in compensation to customers who experienced unfair late payment fees and unsustainable repayment plans.
Following discussions with the Financial Conduct Authority, Lloyds said it agreed to set up a redress scheme for mortgage customers who racked up fees after falling behind on repayments.
Lloyds’ shares have taken a small hit on the day, dropping around 1.5%, as the chart shows.
AstraZeneca — A major setback
Pharmaceutical giant AstraZeneca reported revenues of $10.46 billion in the first half of the year, with a core operating profit of $3.22 billion over the same period. However, the company’s results were less important on the day than the news that a trial of a new drug for treating lung cancer had not produced the expected results.
In an update to the stock market, the company – which makes many widely used clinical drugs, including anaesthetics and diabetes treatments – said that initial results of the study, known as “Mystic,” showed that the medicines did not “meet the primary endpoint” intended from the trial.
The trial featured an immunotherapy drug, which AstraZeneca hopes will be able to be used as an alternative to chemotherapy in the treatment of non-small cell lung cancer in future, but results were disappointing.
The setback has also proved a major negative for investors in the Anglo-Swedish firm, and the company’s stock has plummeted as a result.
British American Tobacco — New laws in Pakistan hampering sales
- Thomson Reuters
The tobacco giant, which produces cigarettes from brands including Lucky Strike, Pall Mall, Dunhill, and Benson & Hedges, had a mixed quarter, with sales falling, but both revenues and profits jumping.
Sales dropped 5.6% in the first half of 2017, with BAT blaming a tax hike in Pakistan, which caused a move away from regulated sales and into illicit buying.
However, revenues increased by 15.7%, largely down to the subdued price of the pound – BAT does a lot of its business in dollars. Profits were also helped by the weak pound, rising 16% to around £2.6 billion.
“Sterling weakness has provided a significant boost to BATS’ first half results, with around 90% of the group’s sales generated outside of UK shores,” Charlie Huggins, a fund manager at Hargreaves Lansdown noted.
“These are exciting times for the Group. In the first six months of 2017, the combustible business continued to perform well, against the backdrop of a strong volume comparator,” Chairman Richard Burrows said in a statement to the markets.
“We remain confident of delivering another year of good earnings growth at constant rates of exchange.”
Diageo — Shares jump on £1.5 billion buyback
The drinks maker, which produces Johnnie Walker whisky and Smirnoff vodka, reported a rise in both full-year sales and profits for 2016/17, and on Thursday morning announced a major share buyback as a result.
“We have delivered consistent strong performance improvement across all regions and I am pleased with progress in our focus areas of US Spirits, scotch and India,” Ivan Menezes, the firm’s chief executive said in a statement.
Diageo will buy back around £1.5 billion of stock from shareholders by 2018, something which has sent stock soaring on Thursday morning, as the chart below shows:
Countrywide — 98% fall in profits
Countrywide, the UK’s largest estate agents,posteda 98% collapse in pre-tax profits. Pre-tax profits for the half-year to June were £447,000, and operating profit – which excludes costs – dropped 77% to £6.5 million.
The group said the UK market for transactions was down 7% in the half-year, partly because people rushed to buy and sell homes before a stamp duty hike in April 2016.
The group did not pay out a dividend, which totalled 5p last year, having already cut its dividend in March and issued new shares to strengthen its balance sheet.
Shares in Countrywide dropped more than 10% in early trade as a result
Foxtons — The London slowdown takes hold
- REUTERS/Luke MacGregor
Foxtonsposteda 64% drop in first-half profits as it issued a stark warning about the capital’s housing market. Its group revenues were also down by 15% from £68.8 million in the first half of 2016 to £58.5 million.
The group said its position mirrored London’s stagnant housing market, which saw a 29% drop in transactions in the period.
Foxtons chief executive Nic Buddensaid: “Our performance has been resilient in the context of a London property market that has been further impacted by unprecedented economic and political uncertainty.”
Shares have fallen close to 5% on the news.
Deutsche Bank — Things are too calm
Outside the UK, Deutsche Bank blamed a lack of volatility in the markets for a fall in revenue in the second quarter of the year. The corporate and investment banking division of Germany’s largest lender posted a 10% slide in revenues in the second quarter to €6.6 billion.
There was “lower client activity resulting from low volatility in the market,” Deutsche Bank said in its interim report.