UK stocks held onto gains at midday Tuesday, buoyed by corporate earnings while index heavyweight BP (BP.) topped the FTSE 100 leader board after hinting at a substantial return of capital to shareholders.

At 12pm, the FTSE 100 index of leading shares was up 0.4% to 7,108 points while the FTSE 250 mid-cap index gained 0.5% at 23,315 points.

BP BUYBACK PLEASES

Oil giant BP reported an increase in second-quarter earnings to $2.8 billion against $2.63 billion in the first quarter on the back of higher energy prices, prompting it to raise its dividend by 4% to 5.46c per share and to announce a $1.4 billion share buyback.

If oil prices stay at $60 per barrel, the firm expects to be able to buy back around $1 billion per quarter – equal to 5% of capital on an annual basis – and to increase its dividend by 4% per year through 2025. The shares gushed 5.6% higher to 305.9p.

Asia-focused lender Standard Chartered (STAN) posted  better than expected first half earnings and announced a $250 million (£180 million) share buyback.

Pre-tax profits were $2.55 billion against estimates of $2.23 billion, helped in part by the release of $67 million of bad loan provisions. The shares gained 3.1% to 450.3p.

Home and motor insurer Direct Line (DLG) posted a 1.5% fall in gross written premiums for the first half of 2021 to £1.55 billion, although it saw a rebound in the second quarter in commercial, home and rescue policies.

Operating profits beat estimates with a rise of almost 40% to £370 million thanks to a large write-back of prior-year provisions, good weather – meaning fewer household claims – the absence of Covid-related travel claims and a reversal of prior-year investment losses. The shares accelerated 5% to 314.6p.

Lloyds insurer Hiscox (HSX) reported a ‘return to profitable growth’ in the first half of 2021 with gross written premiums rising 8.5% to $2.43 billion and earnings per share of $0.35 against a loss of $0.50 last year.

The firm is deploying more of its own capital into what it called a ‘hard market’ with the result that London Market pre-tax profit jumped from $16.3 million to $87.3 million. The shares added 6.5% to 921.8p.

POSITIVE FOOD & DRINK UPDATES

Food-to-go retailer Greggs (GRG) posted a strong recovery in first half trading with sales matching their pre-pandemic level of £546 million and underlying profits rising more than 30% on their level of two years ago to £55.5 million.

As well as being able to reopen its existing stores the firm has pushed ahead with new store openings, adding a net 37 shops in the first half with double that number set to open in the second half. After a strong run the shares dropped 3.6% to £27.02.

Takeaway food retailer Domino’s Pizza (DOM) also delivered a strong first half with system sales up 19.6% to £752 million driven by like-for-like growth of 19.3% helped in part by the Euro football championship.

Total orders returned to a positive trend up 3.5% with collection orders back to 75% of pre-pandemic levels. The shares made a new high rising 3.3% to 435p.

Soft drinks maker AG Barr (BAG) registered an 18% increase in revenues for the first half as on-the-go consumption recovered, with the energy sub-category outperforming the total soft drinks market.

Meanwhile, the reopening of the hospitality sector led to a recovery in cocktail sales due to re-stocking by bars, while at-home consumption of cocktails also increased. The shares dipped 0.6% to 562.6p.

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Issue Date: 03 Aug 2021