Shell profits ‘in line’ | BT and Sainsbury’s rise
The decision by the Bank of England and the US Federal Reserve to hold interest rates supported rate-sensitive property stocks and housebuilders.
Student halls provider Unite Group rose 50.5p, or 5.7%, to 942p, Land Securities ended 31.75p, or 5.5%, higher at 605.25p and Barratt Developments was 15p, or 3.6%, higher at 432.5p.
The FTSE 100 enjoyed one of its best single sessions for several weeks, closing 104.10 points, or 1.4%, up at 7,446.53.
Oil giant Shell said its earnings for the third quarter came in largely in line with expectations, down 34% compared with a year earlier, landing at a little over $6.2 billion (£5.1bn).
This was just $24 million behind expectations, unlike BP which missed its forecast underlying replacement cost profit by around $700m, causing shares to plummet on Tuesday.
Shell said it would return a further $3.5bn (£2.9bn) to shareholders.
Chief executive Wael Sawan said: “Shell delivered another quarter of strong operational and financial performance, capturing opportunities in volatile commodity markets.”
Shell’s shares rose 111p, or 4.2%, to close at 2768p.
BT reported a 30% rise in half-year pre-tax profit to £1.1 billion on flat half-year revenue of £10.41bn (from £10.37bn). Adjusted EBITDA climbed 6% to £4.09bn from £3.87bn.
Revenue reflected increased fibre-enabled product sales, inflation-linked pricing and improved lower margin trading in Business, partially offset by legacy product declines, while earnings benefited from strong cost control.
Reported capital expenditure of £2.3 billion was down 11% with lower fixed network spend driven by lower FTTP (fibre to the premises) build unit costs.
Philip Jansen, chief executive said: “These results show that BT Group is delivering and on target: we’re rapidly building and connecting customers to our next generation networks, we’re simplifying our products and services, and we’re now seeing predictable and consistent revenue and EBITDA growth.”
BT said its transformation programme has now delivered £2.5 billion in annualised savings, well on track to meet its £3 billion savings target by 2025. It reported strong customer demand in Openreach for FTTP with net adds of 364,000 in the second quarter, bringing take-up rate to 33%.
The firm declared a 2.31p dividend. Shares in BT rose by 6.25p, or 5.7%, to close at 117.5p.
Sainsbury’s has reported a rise in sales and revenue that it credits to “consistent investment in our customer proposition”.
The supermarket group’s like-for-like sales excluding fuel rose 8.4% while like-for-like sales including fuel increased 3.2%.
For the 28 weeks to 16 September, underlying pretax profit was £340m, the same as in the same period last year and ahead of analysts’ average forecast of £335m.
The group, which has a 15% share of Britain’s grocery market, trailing only Tesco, said it now expected a 2023/24 underlying pretax profit of between £670-700m. That compares with previous guidance of £640-700m and the £690m made in 2022/23.
Howdens Joinery shares fell 18.25p, or 2.8%, to 625.5p as the maker and supplier of kitchens warned that it expects its full-year performance to be towards the lower end of forecasts in a “more uncertain macroeconomic outlook”.