FTSE 100 Live: BP profits surge to £23 billion, house prices stable

FTSE 100 Live: BP profits surge to £23 billion, house prices stable

BP today racked up an annual profit of $27.6 billion (£23 billion), more than double the previous year’s haul after a surge in oil and gas prices.

The performance, which included a fourth quarter profit of $4.8 billion (£4 billion), comes after rival Shell reported an annual surplus of almost $40 billion (£33.2 billion).

Meanwhile, figures from mortgage lender Halifax today showed stability in the UK house market after the average price remained largely unchanged in January at £281,684.

FTSE 100 Live Tuesday

  • BP profits more than double

  • House prices steady in January

  • Cyber attack cost hits Morgan shares

City Comment: Mortgage market bounces back from Truss madness

Tuesday 7 February 2023 11:42 , Simon English

Liz Truss complains that a cabal of stuck-in-the-mud economists did for her plans to reform the UK’s finances before they ever had a chance to get going.

The more obvious view is that markets looked at what she had to offer and took fright because they were dangerous. They certainly calmed down once she was gone.

What has happened since? Well, in the mortgage market the picture could hardly be moving more rapidly in our favour.

The Bank of England is still putting interest rates up. But mortgage deals are already getting cheaper on the expectation that the longer term tend is downwards.

One expert says there is a “mortgage price war” that is giving brokers nervous breakdowns. Steven Morris at Advantage Financial Solutions says: “Every time we apply for a fixed rate for a customer, within no time it’s cheaper elsewhere. I am currently on application number six for the same client in a bid to get them the best deal, which must be a personal record since I started advising back in 2008.”

There was a very scary looking period when it seemed that anyone coming to the end of a fixed rate mortgage deal was facing seriously expensive new monthly payments just to stay in their house.

This already looks like it will be manageable, that competitive banks operating in a fluid market for finance will once again fight for our custom.

Brokers say they expect mortgage rates to keep falling, so our biggest problem will be locking in to a deal too soon and missing out on a cheaper one later.

This doesn’t sound like a staid economic establishment bent on undermining ideas it doesn’t like. It sounds like a competitive market that works just fine as long as the people at the top at sensible.

GSK and Haleon lift FTSE 100, Centrica loses ground

Tuesday 7 February 2023 10:29 , Graeme Evans

Shares in Centrum-to-Panadol owner Haleon continued their progress today by adding another 1% or 3.55p higher at 334.2p.

The consumer healthcare giant, whose other brands include Sensodyne and Voltaren, made its debut at 330p-a-share in July but fell to 246p in September. However, the improved outlook for the global economy and the company’s improved revenues guidance have perked up the shares.

Analysts at UBS today reiterated their 400p price target and said the current 25% discount to peers looked to be unwarranted.

The Swiss bank added that the Weybridge-based company, whose chairman is former Tesco boss Sir Dave Lewis, had the "best of both worlds" thanks to the resilience of the consumer healthcare category and the strength of its portfolio of brands.

Haleon was joined on the FTSE 100 risers board by its former parent company as GSK shares revisited levels seen last August, when sentiment towards the drugs giant was shaken by uncertainty around US litigation on heartburn drug Zantac.

GSK shares were below 1300p in September but have since recovered to stand at 1486p after today’s rise of 2% or 25p.

With other heavyweight stocks including BP, Shell, Prudential and HSBC making robust progress, the FTSE 100 index recouped some of yesterday’s near 1% decline to improve 34.05 points to 7870.76.

Among the blue-chip stocks under pressure, British Gas owner Centrica fell 0.9p to 96.1p and accounting software group Sage lost 7.2p at 787.4p.

The UK-focused FTSE 250 index weakened another 81.21 points to 20,328.17 as stocks including recruitment firm Page and consumer electricals chain Currys fell 2%.

One of the brightest performances came from Auction Technology Group (ATG) as the owner of The Saleroom and LiveAuctioneers strengthened its position in North America with the $40 million (£33.3 million) acquisition of Missouri-based estatesales.net.

ATG, whose shares rose 24p to 707p, described the US estate clearance market as growing and fragmented with an estimated value of $5 billion (£4.2 billion) in 2022.

Music talent agency All Things Considered expects double-digit revenue growth in 2022

Tuesday 7 February 2023 09:59 , Daniel O'Boyle

Music talent agency All Things Considered Group said it expects double-digit revenue growth and significantly reduced losses in 2022, thanks in part to diversification into streaming and ticket booking.

Alongside “strong progress” its core talent management arm - which represents artists including Nick Cave, Faithless and Johnny Marr - the group said its ticket and live-event streaming arms continued to expand.

The company said it still expects to make a loss of £300,000 for the year, but this is down from a £2.7m loss in 2021.

“I am pleased with the progress we have made in the year, including a number of key operational and strategic achievements combined with the continued growth of our artist representation business,” CEO Adam Driscoll said.

However, he added that the group will “remain mindful of the wider economic backdrop”.

Costly cyber-attack sends Morgan shares down 7.5%

Tuesday 7 February 2023 08:56 , Simon Hunt

Shares in Morgan Advanced Materials tanked 7.5% to 292p this morning after the industrial manufacturer said a recent cyber-attack would cost millions of pounds to resolve and take a chunk out of future profits.

The 166-year-old firm warned the attack meant some of its IT systems were irrecoverable, adding it had been forced to revert to manual transaction processes at a number of sites. The total cost of dealing with the incident could be as much as £12 million, the company said, as it slashed its full-year operating profit forecasts by 10-15%.

It added: “During January, a number of sites experienced a delay in restarting production and shipping due to the cyber security incident.

“Whilst demand has remained strong during January, we are experiencing production inefficiency during the recovery period.”

The incident has also caused Morgan to delay the report of its results amid disruption to work by auditors.

BP powers FTSE 100, cyber incident hits Morgan shares

Tuesday 7 February 2023 08:45 , Graeme Evans

BP shares have jumped 4% after the oil giant upped its dividend payout to shareholders by 10% alongside a share buyback of $2.75 billion (£2.3 billion).

A 2% rise in the Brent crude price to $82.45 a barrel also helped as BP topped the FTSE 100 risers board with a gain of 19.05p to 497.4p.

Richard Hunter, head of markets at Interactive Investor, said the shares have added 18% in the past year compared to a gain of 3.5% for the wider FTSE 100.

Hunter said: “The oil majors remain an important constituent of many standard portfolios given their cash generation and high levels of shareholder returns when circumstances allow. Shell may be the marginally preferred of the UK majors, but the market consensus on BP will also likely remain positive, coming in at a buy.”

BP’s strong performance and a 2% gain for heavyweight stock GSK helped the FTSE 100 index to improve by 38.86 points to 7875.57. Lenders including Lloyds and NatWest were also higher amid relief over a steadier month for UK house prices.

In contrast, the UK-focused FTSE 250 index fell 29.61 points to 20,379.77. Big fallers included Morgan Advanced Materials, which dropped 22p to 294p after estimating the cost of a recent cyber security incident at between £8 million and £12 million.

Spotlight on diversity in tech as report finds most LGBTQ+ founders and investors hide their gender or sexuality

Tuesday 7 February 2023 08:07 , Simon Hunt

Fresh questions over a lack of diversity in the tech sector emerged today after a report found 75% of founders and nearly 80% of LGBTQ+ investors withhold their identity from their peers in the ecosystem, potentially resulting in worse health conditions and lower cognitive performance.

Just â…“ of investors who said they were taking action to support ‘diverse’ founders were doing anything to support LGBTQ+ founders, a report by Proud Ventures found, while some founders shared shocking examples of direct queerphobia and discrimination they faced as part of their fundraising process.

Edward Kandel, investor at Founders Factory and a founding member of Proud Ventures said: “Recent research has shown us that concealment is a real tax on LGBTQ+ people.

“Academic studies have found increased concealment comes at a cost to an individual’s wellbeing with a greater risk of depression, anxiety, and poorer cognitive and physical health. We need to change the script and create an open and welcoming ecosystem where people should not have to hide who they are.”

read more here

FTSE 100 steadies ahead of Federal Reserve speech

Tuesday 7 February 2023 07:56 , Graeme Evans

Stock markets fell yesterday as investors reassessed the outlook for US interest rates in the wake of Friday’s better-than-expected jobs market figures.

The FTSE 100 finished 0.8% lower and the FTSE 250 was down 1%, but CMC Markets expects London’s top flight to open nine points higher at 7845 this morning.

The S&P 500 closed more than 0.5% lower last night, with futures markets pointing to a flat start later as investors await a speech by Federal Reserve chair Jerome Powell shortly after London’s closing bell.

In Australia, the country’s central bank today raised its interest rate by another quarter point to the highest level in a decade at 3.35%.

House prices stable in January, annual growth at 1.9%

Tuesday 7 February 2023 07:28 , Graeme Evans

Mortgage lender Halifax said the start of 2023 had brought some stability to the UK property market after the average price falls of 1.3% in December and 2.4% in November.

January’s performance was largely unchanged at £281,684, although the pace of annual growth slowed to 1.9% and is the lowest level recorded over the last three years.

The average house price is now around £12,500 or 4.2% below its peak in August last year, though it still remains some £5,000 higher than in January 2022.

In London, which for some time has lagged many other areas of the UK in terms of house price growth, saw the cost of buying an average home fall from £541,472 to £530,396 in January. Annual house price inflation was flat compared to 2.9% higher in December.

Halifax Mortgages director Kim Kinnaird said: “We expected that the squeeze on household incomes from the rising cost of living and higher interest rates would lead to a slower housing market, particularly compared to the rapid growth of recent years.

“As we move through 2023, that trend is likely to continue as higher borrowing costs lead to reduced demand.

“For those looking to get on or up the housing ladder, confidence may improve beyond the near-term. Lower house prices and the potential for interest rates to peak below the level being anticipated last year should lead to an improvement in home buying affordability over time.”

BP’s profits more than double for 2022 to £23 billion

Tuesday 7 February 2023 07:23 , Michael Hunter

BP made a record profit of $27.6 billion (£23 billion) for 2022, more than doubling due to high energy prices in the year after Russia’s invasion of Ukraine.

The striking number came days after Shell also reported some of the biggest profits in its history and is likely to add to calls for more windfall taxes on the sector. BP also upped its dividend payout to shareholders by 10% alongside a share buyback of $2.75 billion

Profit in the fourth quarter alone was $10. 8 billion.

Looking ahead, it said it expected demand to depend on a recovery in Chinese markets and “ongoing uncertainty around the level of Russian exports and low inventory levels”.

Neil Shah, executive director at investment consultancy Edison Group, said the results were “no surprise,” adding: “he extraordinary scale of these earnings will undoubtedly once more raise the question of how governments around the world look to tax Big Oil.”

The company also outlined plans to increase its spending on moves toward green energy by $8 billion (£6.6 billion), with the same increase for oil and gas exploration. It plans capital expenditure in a range between $14 billion and $18 billion per year out to 2030, up to an extra $2 billion in the period.

Bank of England takes first steps towards digital pound with consultation

Tuesday 7 February 2023 07:23 , Simon Hunt

The Bank of England has taken its first steps towards creating a new form of currency after beginning a consultation on the introduction of its own digital pound.

The consultation, which has been launched in conjunction with the Treasury, sets out proposals on how the digital currency would operate and invites businesses and members of the public to review its design and implementation.

A digital pound would be issued by the Bank of England and could be used by households and businesses for everyday payments in-store and online, according to the Bank. If introduced, the currency would be interchangeable with cash and bank deposits, complementing existing cash payments. It wouldn’t be intended for savings and would not pay interest.

Read more: The Bank of England’s proposed digital pound: what does it mean?