Market report

Oil slips | Ocado loss | SSE | Bellway | Beeks

5pm: Oil price fall drags down BP and Shell

In a busy day for equity markets the FTSE 100 suffered from hefty share price declines for Ocado, down 9.7%, and Airtel Africa ( 9.2% lower) and closed 6.4 points down at 7,567.07.

Brent oil was quoted at $90.28 a barrel, down sharply from $92.98 late Monday. BP, whose shares initially climbed after strong annual results and the promise of chunkier shareholder returns, closed 2.4% lower. Shell lost 3.2%.

“With results coming in thick and fast there has almost been too much for investors to get their heads round today,” said Danni Hewson at AJ Bell.

“BP’s bumper profits came with a sweetener which might well stave off some calls for a windfall tax. Its commitment to super charge spending on green technologies demonstrated that it’s hyper aware of the difficulties facing ordinary people because of the very environment that has helped it bounce back from last year’s losses.

“But an early bump to its share price couldn’t be sustained, in part because the price of a barrel of Brent Crude slipped back a touch.”

9.30am: Asia spooked by new Covid flare-up

Talk of Hong Kong preparing to reintroduce strict social distancing rules amid a new Covid flare-up has spooked investors in Asia, with the Hang Seng index falling 1%. It was the outlier among an otherwise positive day for markets across Europe and Asia, including a 0.5% rise in the FTSE 100 to 7,611. The index hit 7,631, its best level since January 2020, before slipping back.

“The UK market was driven by miners, oil producers, financials and utilities, helped by well-received figures from BP,” said Russ Mould, investment director at AJ Bell.

Ocado group was down 11.41% following its full year figures (see below).

7am: Ocado increases loss


Online grocer Ocado reported an increased loss of £176.9 million for the year to the end of November against a £52.3m loss last time. This was largely a result of higher investment in the roll-out of automated warehouses in the UK and overseas, along with investment in technology development and platforms.

Core earnings earnings before interest, tax, depreciation and amortisation (EBITDA) were £61m, in line with analysts’ average forecast, but down 12.1% from £73.1m previously.

Tim Steiner, chief executive, said: “The past year has further reinforced that demand for online grocery is here to stay.

“In the majority of mature markets, the fastest growing channel is online and to truly win here food retailers need to deliver the best offer with the best economics across all customer missions.”

7am: SSE raises expectations

Energy firm SSE intends to recommend a full-year dividend of 81p per share plus RPI for 2021/22 and continues to target an RPI linked dividend in 2022/23, followed by a rebase to 60p in 2023/24 and at least 5% increases in 2024/25 and 2025/26.

The company said it remains on track to report full year 2021/22 capex in excess of £2bn.

Net debt is expected to be around £9bn at 31 March 2022, assuming the proceeds from the disposal of SSE’s 33.3% stake in SGN are received prior to the year-end.

7am: BP profits soar

Soaring commodity prices saw BP post a full-year underlying replacement cost profit of $12.8 billion compared with a net loss of $5.7bn in the previous year, marginally ahead of forecasts.

It said fourth-quarter net profit came in at $4.1bn, beating analyst expectations of $3.9bn.

Full story here

7am: Bellway on track

House builder Bellway said it remains on target to deliver volume growth of around 10% to more than 11,100 homes this financial year (31 July 2021 – 10,138 homes) and annual output of around 12,200 homes in financial year 2023.

Jason Honeyman, chief executive, commented: “Bellway has delivered a strong first half performance, achieving record volume output and housing revenue, notwithstanding the wider economic challenges presented by labour, material and fuel shortages and COVID-19 related absenteeism. 

“We have continued our disciplined investment in land and enter the second half of the financial year with a strong order book and a backdrop of ongoing, positive trading conditions. 

“Going forward, Bellway is on track to deliver its target volume growth of around 10% this financial year and further growth to around 12,200 homes in financial year 2023.  Thereafter, our strong balance sheet and capacity to invest positions the Group well to continue its long-term and disciplined growth strategy.”

7am: Mattioli Woods benefits from acquisitions

Mattioli Woods said the eight acquisitions completed since 1 June 2020, including its two largest acquisitions to date – Maven Capital Partners and Ludlow – contributed £19.4m (1H21: £2.0m) of revenue in the six months to the end of November.

Full story here

7am: Beeks contract extension

Beeks Financial Cloud has signed a £2.5 million contract extension over three years with an existing customer. The contract is for the provision of private cloud services into an additional geography.

This follows the announcement last week of a $2.2m contract for the Group’s Proximity Cloud, bringing the total contract value of deals signed in the current quarter to over $6m – a record for the Hillington-based group and evidence of the momentum behind Beek’s specialist cloud offerings for financial markets.

Gordon McArthur, CEO of Beeks Financial Cloud commented: “We continue to secure notable contracts with some of the world’s largest players in the financial services industry, demonstrating our growing reputation and the quality of our offerings.

“This latest contract contributes towards underpinning our FY23 expectations. With growing levels of committed future revenues and a record pipeline, we are confident in continued growth.”

Global markets

There was a mixed session on Wall Street overnight, with the Dow Jones Industrial Average remained unchanged, while the S&P 500 index dropped 0.37% and the tech-stocked Nasdaq fell 0.58%. The small caps of the Russell 2000 rose 0.51%.

The market still unclear about how the Federal Reserve will react to inflation data on Thursday.

One analyst said: “The American central bank has already hinted that it is likely going to start interest rate lift-off next month, but the number of interest rate hikes to be held in 2022 and by how much they are going to be raised is still a mystery.”

Japan’s Nikkei 225 and South Korea’s Kospi rose above the flatline, gaining 0.13% and 0.05%, respectively.

The Shanghai composite in China lifted 0.52% while Hong Kong’s Hang Seng index dipped 0.98%.

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