Finance Friday – a brief look at this week’s finance and investor news from around the UK
HSBC have reported profits of $10.2 billion, up 5% on the first half of last year.
Adjusted profits (excluding currency effects and significant one-off items) rose 12% to $11,967 million. Adjusted revenue rose 3% to $26.1 billion. Adjusted Loan Impairment Charges fell from $0.9 billion to $0.7 billion, partly reflecting better performance from companies in the oil and gas sector.
BT’s Q1 results are marginally ahead of prior expectations, and previous guidance has been reiterated. The group continues to expect full year ex-transit revenues to be broadly flat, with adjusted earnings before interest, tax, depreciation and amortisation of £7.5-7.6bn and normalised free cash flow of £2.7-2.9bn.
With costs relating to sports rights and the group’s pension scheme both rising, adjusted EBITDA (excluding £318m of specific items) fell 2% to £1.8bn. The shares dipped 2.1% on the news.
Taylor Wimpey has reported a 23.7% fall in first half profits to £205 million. The fall was due to a £130 million charge, taken by the company to provide redress to customers who were sold leasehold properties where the ground rent doubles every 10 years. Taking out exceptional costs, profits rose 25.7% to £335 million.
Underlying earnings per share rose 31% in the first half to 23.3p, thanks to continued improvements in underwriting performance. RSA increased its interim dividend by 32% to 6.6p.
Despite the strong performance, results were slightly behind analyst expectations, which saw share fell 1.1% following the announcement.
Unfavourable football results meant gross win margins were disappointing in both Online and Retail, leading adjusted operating profits down 1% to £130m. However, the group saw wagering growth across all divisions. These gains, combined with good progress against its plans to deliver £40m of savings, mean the group is confident about delivering a ‘good outturn in 2017 and beyond’. The shares rose 6% on the news. The interim dividend is increased 4% to 4.26p per share.
Underlying profit for the first half rose 75% to $2.2bn, thanks largely to a recovery in the Upstream business, although second quarter profits of $0.7bn were lower than last year as tax costs increased. The shares rose 1.9% following the announcement. The quarterly dividend remains unchanged at 10 cents per share.
Operating profits at British Airways and Iberia owner International Consolidated Airlines Group rose 45% in the second quarter to €805m. The improved performance was driven by a 4% increase in passenger unit revenues and 13.2% fall in fuel costs, partially offset by a 3.5% increase in non-fuel costs. The shares rose 1% following the announcement.
Direct Line Group
First half operating profits of £359.7m represent 13.5% growth on last year, with both in-force policies and gross written premiums increasing. The shares rose 4.9% following the announcement, as an upward rebasing of the dividend saw the interim payment rise 38.8% to 6.8p per share.
In today’s half year results, Rolls delivered restructuring savings ahead of plan, which, together with a higher than expected benefit from long-term contract accounting adjustments, helped to deliver a financial performance ahead of prior expectations.
The group also reported free cash flow of -£339m, which although still negative, was an improvement of the £414m outflow seen last year, and significantly ahead of Rolls’ previous guidance. The shares rose 7% on the news The interim dividend payment is unchanged at 4.60p per share.
Rio Tinto’s first half results paint a mixed picture. Performance improved dramatically, although fell slightly short of expectations. Results were accompanied by a $3bn return of cash to shareholders, with the interim dividend rising to 110 cents and a $1bn share buyback. The shares fell 1.9% following the announcement.