Market report

FTSE 100 lifted by positive BP statement | Greggs ahead


5pm: Stocks hold on to gains

Shares in London were lifted by a series of dividend announcements, not least from BP whose 4% uplift (see below) helped push the FTSE 100 higher.

The oil giant was trading 5% higher at 304p as investors warmed to the positive half-year statement. Royal Dutch Shell traded also higher.

The FTSE 100 closed off its session high but 24 points ahead at 7,105.72.

7am: BP to raise dividend

BP Clair Ridge

Energy giant BP plans to raise its dividend by 4% and increase share buybacks after beating expectations for second-quarter profits on the back of higher oil and gas prices.

The company will increase its second-quarter dividend to 5.46p a share from 5.25p a year earlier and said it would buy back $1.4bn of shares.

Full story here

7am: AG Barr benefits in first half

Irn-Bru commonwealth

Irn-Bru maker AG Barr said factors driving a strong first six months are unlikely to be repeated in the second half of the year.

In a trading update the company said group revenue for the 27-week first half is expected to be 18% ahead of last year, or 13% on a like-for-like 26-week basis.

Full story here

7am: Greggs back in profit


High street fast food chain Greggs is expected to open 100 stores after returning to a first half profit on the back of a strong recovery in sales. It said it expected annual profit to be slightly ahead of its previous expectations.

The company posted an underlying pretax profit of 55.5 million in the six months to 3 July against a pretax loss of £64.5m in the same period last year.

John Moore, senior investment manager at Brewin Dolphin, said: “Greggs’ results reflect its underlying strength as a business. The company is feeling the full effect of a ‘return to normal’ along with the benefits of its investment in digital and the adaptations made to its estate to accommodate new customer habits during lockdown.

“The company’s balance sheet is robust and the reinstatement of the dividend is another positive move for shareholders, who have also seen the share price reach record new highs in recent months.

“There are no doubt challenges ahead – not least in the form of rising inflation – but Greggs is in a very good position, while many of its competitors have not been so fortunate.”

Ross Hindle, analyst at Third Bridge, said: “Greggs chose to pass on the Chancellor’s VAT discount to their customers. They now face the tricky challenge of putting their prices back up when VAT increases to 12.5% at the end of September, and 20% in 2022. This may mean short-term margin pressure for the Group.”

7am: Direct Line dividend raised

Direct Line

Direct Line declared an interim dividend of 7.6 pence per share, up by 2.7% over 2020 has launched the second £50 million tranche of the £100 million share buyback programme the insurer announced with it year end results.

Motoring claims remain below normal levels, along with fewer new car sales and a reduction in new drivers entering the market.

“These factors were strongest in Q1 and have started to reverse in Q2 at the same time as motor market premium stabilised,” it said.

A deal with Motability Operations is expected to come into effect in 2023 and to increase the motor customer base by around 15%.

“This is an exciting and pivotal point for the business, we’ve completed the majority of our tech transformation, and we’re starting to reap the benefits of what the new systems offer us. This is driving real momentum and means we are entering the second half of the year with ambition and confidence,” said the company.

7am: Standard Chartered

Standard Chartered posted a rise in first-half profits and said it was resuming dividends against an improving economic backdrop.

Pre-tax profit came in at $1.15bn in the second quarter, up 55% year on year and beating consensus analyst estimates of $1.1bn. For the first half of the year, StanChart reported pre-tax profits of $2.56bn, a 57% jump from the same period in 2020.

It also announced a $250m share buyback and said it would pay an interim dividend of 3 cents per share.

Global markets

Wall Street saw a subdued session following unexciting PMI figures with the Dow Jones and S&P 500 falling 0.3% and 0.2% respectively while the Nasdaq was only just ahead.

Stocks in Asia overnight were mostly in the red as shares of Chinese online gaming players were hit hard after the activity was described as a type of “opium” by Chinese state media.

The Nikkei 225 was down 0.6% and China’s Shanghai Composite was 0.56% lower and Hong Kong’s Hang Seng was down by 0.48%.

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