The winners and losers among the current flurry of business results | Business News

Oh dear. It’s that day of the year that financial journalists – and many analysts too – dread: the day, usually at the end of July or beginning of August, during which dozens of FTSE-100 companies report their financial results on exactly the same day. Same time.

There are a number of reasons why does this happen every yearincluding regulators’ requirement for companies to report their results in a timely manner, the fact that so many companies have a financial year ending in December (so late July and early August is when finance departments had the opportunity to add half annual numbers and auditors sign them) and the time directors need to rehearse presentations to analysts and the media.

However, this practice does a disservice to investors because financial analysts and journalists – whose ranks are more dispersed than they once were – have less time to pore over the numbers and properly assess the prospects for a given company. The risk of stock price anomalies emerging as companies are under-investigated increases.

So what about the current crop of FTSE-100 results?

Shell-ebrate time?

The biggest company reporting today is oil major Shell, which reported adjusted profits of $6.3 billion in the three months to the end of June, down from $7.7 billion in the first three months of the year and reflecting weaker refining margins.

The numbers, however, increased by 25% compared to the same period last year – which partly reflected cost reductions implemented by Wael Sawan, Shell’s chief executive, who succeeded the former Ben van Beurden at the beginning of last year.

Sawan also announced a $3.5 billion share buyback and, with the numbers exceeding expectations, Shell shares rose 1.5% this morning.

Today, however, he argued – as he has for some time – that he believes the company is still undervalued.

Schwimmer pivot

The next largest company to update the market today was the London Stock Exchange Group (LSEG), the 12th largest company in the world. FTSE-100which again exceeded expectations.

Adjusted operating profits of £1.6bn in the six months to the end of June were up 9% on the same period last year.

Although much attention is invariably focused on the exchange itself, this is a relatively small part of LSEG, which under David Schwimmerits chief executive for the past six years, has been reshaped to become a data and analytics business.

Schwimmer, who took the helm on this day in 2018, highlighted that all parts of the business saw growth during the period, led by its capital markets division, which grew 17%, and FTSE Russell, its index business, which grew by 11.5% – as did the group’s risk intelligence business.

He also updated LSEG’s partnership with Microsoft, launched in late 2022, to an initial decade, revealing that the first products developed under the partnership will be available to customers by the end of the year. Shares rose almost 4% on the news, valuing LSEG at just over £50 billion.

Speeding up

Also reporting today are the two titans of British engineering – defense contractor BAE Systems and aircraft engine maker Rolls-Royce.

While both posted pleasing results, Rolls was possibly the standout performer in all of today’s business reports, with the company’s share price rising more than 10% to an all-time high after reinstating its dividend today for the first time since the pandemic. Rolls reported an underlying operating profit of £1.1 billion for the first six months of the year, up from £673 million in the same period in 2023, thanks in part to the resurgence in global air travel.

But Tufan Erginbilgic, the former BP chief executive who succeeded Warren East as Rolls CEO early last year, could also point to efficiency improvements across the business and a raft of new orders.

This included 108 orders during the first six months of the year alone for the Trent XWB-97, part of a family of products that Rolls describes as “the world’s most efficient large aircraft engine” and the engine that powers the Airbus A350-1000, the aircraft used by – among others – Turkish Airlines, Air France, Qatar Airways, Singapore Airlines, Emirates, Lufthansa and Delta Airlines.

Fleet first

Rolls wasn’t the only engineering giant to update its forecasts for the year. The same happened with BAE Systems, Europe’s biggest defense contractor, which said it now expects sales to grow 12-14% this year instead of the 10-12% previously guided.

BAE, whose chief executive, Charles Woodburn, last week spoke to Sky News from the Farnborough Air Show, increased its dividend by 8% and also highlighted a strong early performance from Ball Aerospace, a key NASA supplier whose acquisition was completed earlier this year and was followed by the business being rebranded as Space & Mission Systems.

Highlights during the semester included the selection of BAE to build Australia’s new fleet of nuclear-powered submarines under the AUKUS defense pact, a new £4.6 billion contract for the delivery of three Hunter Class frigates to the Royal Australian Navy and the delivery of two further Typhoon fighters to the Qatari Emiri Air Force. Shares rose 1%.

BAE and Rolls have slightly shaded a third FTSE-100 engineer reporting today, aerospace components supplier Melrose, whose shares fell 6% after cutting 2025 sales forecasts.

Also reporting today among the FTSE heavyweights was Barclays, the last of the UK’s big five lenders to publish results following updates last week following Lloyds Banking Group, NatWestStandard Chartered and HSBC.

Financial falls

Barclays reported pre-tax profit of £3.3 billion for the first six months of the year, a 9% drop on the same period in 2023, although it was slightly above expectations.

Barclays also updated its guidance to investors on expected returns and announced a further £750m share buyback, but shares fell 1% as investors focused on falling returns in the lender’s UK corporate banking division United.

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Elsewhere in the financial services sector, Schroders, the largest listed fund manager in the UK, has been the biggest faller today, with shares falling 8% despite news that assets under management during the first half of the year rose 6.5% to £773.7 billion.

With the results coming a day after Schroders announced a joint venture with life insurance and pensions giant Phoenix Group to invest up to £20 billion in unlisted assets over the next decade, investors focused in the company’s comments that margins have been under pressure. .

Another major player that provided an update today was Haleon, the consumer health giant behind brands such as Advil, Sensodyne, Panadol and Centrum, whose shares rose 2% after reporting an 11% rise in half-year adjusted operating profits to £1.29bn, while highlighting that sales growth increased during the most recent three months.

Next chapter of the story

Other companies reporting today whose shares rose on the back of their results included Next, which rose 8% after raising its profit outlook for next year. reporting better-than-expected sales during the 13 weeks to last Saturday, while medical equipment supplier Smith & Nephew – a company that has had its fair share of ups and downs in recent years – rose 5% after reporting a 19.5% rise in half-yearly operating profits to US$328 million.

Mondi, the paper and packaging group, saw its shares rise 2.5% as investors looked beyond the fall in half-year operating profits to focus on an upbeat trading statement – in which management highlighted a number of price increases in all its types of paper which expects the situation to remain in a good position during the second half of the year.

These updates provide valuable information about how a number of important companies are trading – but, across so many sectors and operating in so many different countries, in many cases it is difficult to generalize about what they say about the global economy or the UK economy. . .

A binding factor in many of the statements, however, is how companies have adjusted to higher inflation in their businesses, seeking to cut costs or increase efficiency.

How they respond to lower inflation and, with it, lower interest rates in the UK, US and eurozone will perhaps be the story of the next six months.