Having briefly touched a two-year high, London’s FTSE 100 ended Tuesday’s trading session marginally lower, off a mere 0.09% at 7,567.07 points, despite a decent start on Wall Street and as an early boost from oil major BP (BP.) faded by the close.
Investors remained cautious in the face of worries over inflation, interest rates and geopolitical tensions and a decline in oil prices acted as a wider drag on the energy sector, although miners including Polymetal (POLY), Anglo American (AAL) and Rio Tinto (RIO) provided support amid rising metal prices.
OCADO SLIPS AS LOSSES WIDEN
Shares in online grocery and delivery business Ocado (OCDO) slumped 13.8% to £12.13 following the announcement of full year results that missed both earnings and revenue forecasts.
Ocado reported full year 2021 earnings before tax depreciation and amortisation of £61 million, impacted by ongoing technology investment. Revenue increased 7.2%. Capital expenditure is set to increase to £800 million which will negatively impact cash burn.
For 2022 the group anticipates mid-teens revenue growth.
Shares in BP ended 2.4% lower at 399p despite the oil major reporting its biggest annual profit in eight years. BP posted pre-tax profit of $12.8 billion (£9.5 billion approximately) for 2021, and it made more than $4 billion in the final quarter of the year as oil and gas prices surged.
Annual production fell 4.5% to 3.3 million barrels of oil per day year-year, with upstream output down about 6.6%.
Based on BP’s current forecasts, at around $60 per barrel, the company expects to be able to deliver share buybacks of around $4 billion per annum and have capacity for an annual increase in the dividend per ordinary share of around 4% through 2025.
The dividend was held at $0.0546 per share.
Looking ahead, the company forecast first quarter 2022 upstream production to be lower than fourth quarter 2021, and full year 2022 upstream production to be broadly flat compared with 2021.
DIVIDEND GUIDANCE RAISED
Power utility SSE (SSE) has upgraded its annual earnings guidance. This is due to a robust showing from its thermal and hydro plants.
Adjusted earnings per share for the year to 31 March 2022 is now expected to be at least 90p per share. This is an increase from previous guidance of at least 83p.
SSE said it intended to recommend a full year dividend of 81p per share plus the retail price index. The shares cheapened 0.1% to £15.50 on the news.
AROUND THE MARKET
Elsewhere, sports betting and gaming group Entain (ENT) cheapened 0.6% to £15.96 on news it has acquired Canada’s leading online sports betting brand Sports Interaction in a deal valued at C$300 million or roughly £174 million.
Ladbrokes owner Entain acquired the brand via the purchase of Avid Gaming, which exclusively licenses the Sports Interaction trademark and provides proprietary online and gaming products to the Mohawk Council of Kahnawake.
Shares in support services group DCC (DCC) drifted 2.8% lower to £62.82 despite announcing that profit rose in the third quarter, from a year earlier, in line with expectations as acquisitions bolstered performance.
DCC LPG traded ‘robustly’ and in line with expectations during the third quarter despite ‘significantly’ increased cost of product which remained a headwind during the quarter, particularly in the natural gas and power segments of the division, the company said.
Looking ahead, DCC said it continued to expect that the year ending 31 March 2022 would be another year of ‘strong’ operating profit growth, in line with current market consensus expectations.
Investors responded positively to housebuilder Bellway’s (BWY) latest trading update, chasing the shares up 1.7% to £28.86 after a month-long decline brought about by government demands for developers to stump up billions to rectify cladding issues.
The firm said market conditions and customer confidence were strong in the six months to January and stuck to its forecast of a 10% increase in output this year.
IT infrastructure business Micro Focus (MCRO) sank 11.1% to 406.4p despite posting a narrower annual loss of $517.8 million due to lower impairment charges, as investors focused on a drop in sales and underlying earnings.
Stockbroker Numis (NUM:AIM) slumped 5.4% to 281p on news it has experienced a slower start to its second quarter amid concerns about rising inflation and interest rates.
Numis said revenue for the first quarter to December 2021 had been in line with the strong second half performance in the 2021 financial year, before inflation concerns hit.
