BP deal hands Serica Energy a five-fold surge in profits. Serica Energy (SQZ) has unveiled a five-fold profit boom in its first set of financial results since a deal with BP (BP.) catapulted the North Sea lightweight into the top three listed European oil producers. The £300m acquisition of majority stakes in three of BP’s North Sea fields – Bruce, Keith and Rhumm – helped drive Serica’s oil and gas reserves to almost 69 million barrels at the end of last year, from 3.1 million the year before. The company’s shares surged 13% higher to £1.31 a share after it reported an average production rate of 25,000 barrels a day for 2018, from fewer than 2,000 barrels in 2017.
Council contracts bolster sales for Countryside Properties (CSP). “Brexit fatigue”, tie-ups with local councils and a £135m takeover of rival Westleigh helped housebuilder Countryside Properties post a big rise in half-year sales. The FTSE 250 firm sold 2,362 homes in the six months to March, up 43% on the same period last year. Even excluding the Westleigh takeover, which completed last April, the total rose by 8%. Ian Sutcliffe, chief executive, said its private housebuilding arm had bounced back following a “subdued December” as buyers shrugged off uncertainty over the UK’s departure from the European Union.
Mediclinic on the mend after Swiss problems hit profits. Mediclinic International (MDC) has offered investors some welcome good news after months of patchy trading and a steady slide in its share price. The hospital group said annual profits would be slightly ahead of expectations as a turnaround implemented by its new chief executive, Dr Ronnie van der Merwe, starts to pay off. Performance at the South African company has been uneven since its listed on the London Stock Exchange two and a half years ago. Problems with its hospital businesses in the Middle East and, more recently, in Switzerland, have triggered a series of profit warnings and led to a £479m pre-tax loss in Mediclinic’s last financial year.
Car dealer Pendragon (PDG) warns on profits and launches review of its business. Car dealer Pendragon’s new management has launched a review of the business after profits crashed in the first three months of the year. Posting a quarterly update, the owner of the Evans Halshaw and Stratstone brands and one of the biggest players in the sector said “challenging trading conditions” had put a squeeze on margins. This meant that like-for-like profit fell by 5.4% on new cars, 1.6% on used cars and 5% on aftersales, such as parts and servicing. Combined with investment in Pendragon’s underperforming “Car Store” vehicle supermarket concept – which has gone from 26 stores a year ago to 34 today – this meant that the company made a £2.8m underlying loss in the first quarter.
Apple set to catch up in 5G race after settling billion-dollar lawsuit with chip supplier Qualcomm. Apple has settled a lawsuit with Qualcomm, allowing the company to scramble to catch up with its competitors in the race to release 5G phones. The agreement ends a multi-billion dollar legal battle over smartphone technology and will allow Apple to use Qualcomm’s advanced chipsets. As part of the settlement Apple will also make a payment to Qualcomm and the two have made a six-year license agreement. The size of the payout has not been disclosed.
Lufthansa rocked as fuel bill unexpectedly soars. Lufthansa, Europe’s biggest airline, has been rocked as soaring fuel prices diverted profits off course. In an announcement that may not bode well for its rivals, the German giant unveiled a worse-than-expected first quarter of trading. Lufthansa racked up €336m (£291m) of losses in the three months to March, a sharp swing from the same period last year when it was €52m in the black. The airline blamed a €202m rise in fuel costs for missing analysts’ expectations, as well as a fare war and tough comparisons from 2018. Analysts had pencilled in Lufthansa posting a €186m loss.
Intel abandons its quest to break into 5G smartphones after Apple and Qualcomm reconcile. Intel has announced that it is winding down a multi-billion-dollar, multi-decade effort to win a foothold in the mobile phone industry. The mammoth chipmaker, whose products dominate many other kinds of computing but which has struggled to compete in mobile hardware, said it would meet current orders but cancel its planned new products. Its mobile business had previously received a boost from Apple, which was locked out of using more popular mobile phone chips made by Qualcomm by a byzantine legal dispute over patents.
Switzerland to back China’s controversial Belt and Road project. Switzerland is set to endorse China’s controversial Belt and Road Initiative when its president visits the world’s second-largest economy later this month. Ueli Maurer’s signature will come shortly after Italy became the first G7 nation to lend its backing to the trillion dollar infrastructure and investment plan. Italy’s decision angered allies in Brussels and irked the United States in particular given that tensions between Washington and Beijing over trade remain unresolved. Brussels, along with the global lender of last resort, the International Monetary Fund (IMF), has criticised the debt burdens imposed by China on countries involved with the Belt and Road project.
Intercontinental hits six-month high. InterContinental Hotels Group (IHG) hit a six-month high after analysts at Mainfirst began its coverage of the hotel operator with an “outperform” rating. Hailing the group’s portfolio of strong brands, such as Hotel Indigo and Holiday Inn, and its technological platform, the analysts rated the blue-chip company as a “safe haven” with “opportunities for growth acceleration”. Like other hotel operators, IHG has come under pressure from the likes of Airbnb to beef up its luxury brands. But the company has responded strongly after it bolstered its portfolio with the $300m (£230m) acquisition of high-end resort chain Six Senses in February.
