BP profits treble to more than $10bn. Profits at BP (BP.) more than trebled to $10 billion last year on the back of higher oil and gas prices. The oil major cheered investors with a significantly better than expected fourth quarter performance, sending shares surging more than 3% in early trading. Bob Dudley, chief executive, said that its strategy was “clearly working” after a year in which it agreed a $10.5 billion deal for BHP Billiton’s US shale fields and boosted production by starting up six major new oil and gas production projects.
Car showrooms offer discounts to lure buyers as sales fall. New car registrations have fallen for a fifth month running and the slump in sales of diesel vehicles has continued, now making up less than a 30% of the market, an historic low. Sales of electric and hybrid vehicles offset some of the diesel fall out, increasing by 26% year on year. In January, one of the slacker sales months of the year, 161,013 new cars were registered, a fall of 1.6%. That continues the depression in the sector after car sales dropped 6.8% to 2.37 million in 2018. The talk in the showrooms is of widespread discounting to lure in motorists and lock them into three- or four-year finance deals before Brexit when, it is argued, interest rates could increase and the price of imported cars could also rise because of tariffs.
Ryanair nosedives into €20m loss as airlines fear storm. After two profit warnings in four months, Ryanair Holdings (RYA) reported a dive into the red yesterday in the traditionally lucrative Christmas trading quarter, losing nearly €20 million as it slashed fares to keep its ever-growing fleet of aircraft flying at capacity. It also posed a brutal question — If the undisputed robber baron of the European aviation scene is struggling, then what must be happening to the rest of the sector? — that merely served up an all-too-obvious answer. The airline industry is in turmoil. In 2017, too many airlines flying too many aircraft chasing too few passengers prompted the demises of Monarch Airways, a long-time favourite of the British sunseeker, and Air Berlin, the single biggest operator in Germany after Lufthansa.
Flybe hits more turbulence after investor tries to block sale. The future of Flybe Group (FLYB) remains up in the air after the airline admitted that its biggest shareholder was attempting to prevent its sale. Flybe, which is making heavy losses, is under offer from a consortium styling itself as Connect Airways. This is made up of Cyrus Capital Partners, Virgin Atlantic, and Stobart Group Ltd. (STOB). The problems at Flybe are so serious that it has accepted the offer, which values it at 1p a share, or £2.8 million. Hosking Partners, a London fund manager, holds a 19% stake but is nursing losses of more than £16 million having bought stock at what it regarded to be a bombed-out price of about 40p a share. After a false start on the paperwork, it has requisitioned an extraordinary general meeting of the company to try to get its placeman, Eric Kohn, a sometime investment banker and airline executive, on to the Flybe board and stop the sale to Connect. Hosking’s executives are furious that Flybe is being sold for 1p a share when last spring the airline rejected a separate merger plan with Stobart that valued Flybe at more than 40p a share. Flybe has said that it is prepared to meet Mr Kohn, but has made no promises about calling the EGM before February 22, the scheduled date for the closure of the sale to Connect. The airline also confirmed that it had received “a very preliminary, short and highly conditional outline contingency proposal” from Andrew Tinkler, a former chief executive of Stobart who has been at war with his old company.
Charity ‘discrepancies’ deal a blow to Ferrexpo. Auditors have uncovered “unexplained discrepancies” at a charity funded by Ferrexpo (FXPO). The company said that its board was carrying out an independent review into issues at Blooming Land, which was set up to carry out its corporate social responsibility programmes. It said that Deloitte may qualify or modify its opinion on the miner’s 2018 results, which are due to be published on March 20, if the review was not completed by then. The announcement comes after its senior independent director resigned abruptly on January 29. It also follows the company’s disclosure in August of transactions involving the charity and another company controlled by its chief executive.
New York firm takes gamble on Metro rising to challenge. A New York-based investment firm with ties to Warren Buffett has taken a £63 million stake in Metro Bank (MTRO), it emerged yesterday. Ruane, Cunniff & Goldfarb, which manages the Sequoia Fund, has amassed a 5.2% stake in the troubled challenger bank, a regulatory filing showed yesterday. Its position has emerged within days of Metro’s admission last month that it incorrectly assessed the value of its loan book, a mistake that wiped more than £800 million from its value. The bank, which is valued at £1.2 billion and has 1.5 million customers, opened in 2010 with the motto “no stupid bank rules”.
Indivior (INDV) sharpens focus by selling drug rights in China. An embattled anti-addiction drug maker has moved to offload its opioid treatment in China in a potential £94 million deal. Indivior, which is embroiled in legal action in the United States, said that it had agreed to sell the rights to a tablet called Sai Bo Song in China to a private company for up to $122.5 million. The company’s biggest market is the US, where it is trying to prevent rivals from launching generic versions of its blockbuster Suboxone Film, an oral opioid addiction treatment that provides the bulk of its revenue.
After Royal Mail (RMG) shares fell recently to their lowest level since the postal company was privatised in 2013, HSBC has decided that now is the time to buy them again. Royal Mail blamed fewer letters being sent — and the business world’s anxiety about using junk mail that could breach European privacy laws — when it admitted last month that its profits would not be as high as hoped. Coming after a terrible 2018, when the company was relegated from the FTSE 100, its shares promptly fell to an all-time low of 256p. HSBC said that at present levels investors were pricing in a 50% cut to the dividend. The bank argued that while profits at Royal Mail were unlikely to recover to previous levels, it should generate enough cash to cover a maintained dividend next year. It believes that a forthcoming announcement of a strategic plan could have a positive effect on shares. They upgraded the stock to “buy” from “hold” and cut their price target to 300p from 347p.
Morrison (Wm) Supermarkets (MRW) rose 4½p to 239¼p after Citigroup upgraded its rating to “neutral”, citing benefits to the supermarket chain from the prospective merger between Sainsbury’s and Asda.
RPS Group (RPS), the professional services group, rose 21½p to 161p after announcing the acquisition of Corview, an Australia-based transport advisory company, in the first purchase since John Douglas became chief executive. It also confirmed that trading for 2018 had been in line with market expectations.
Progress towards a merger between two British online marketing groups sent shares in both companies higher. Taptica International (DI) (TAP) said that it had made a recommended offer to buy Rhythmone (RTHM). Taptica International jumped 24p to 222p, while shares in Rhythm One climbed 24½p to 195p.
DotDigital Group (DOTD), the software services provider to digital marketing professionals, climbed 4p to 87½p, after it announced that it had extended its partnership with Magneto, an Adobe company, for a further three years.
A further setback for Hurricane Energy (HUR) in the mooring of a floating production vessel to the west of Shetland sent its shares lower yesterday. Despite the latest of a number of recent setbacks, Hurricane hopes to start taking oil out of its Lancaster site by June. The company is initially developing only a portion of the Lancaster field and hopes to prove its theories on geological formations known as fractured basements, which lie below where oil reservoirs have typically been found. Even independent forecasts have suggested that the company’s acreage in the west of Shetland could hold 2.6 billion barrels of oil. The profile of Hurricane, founded in 2005 and listed on Aim in 2014, has risen in recent years because of its finds in one of the UK continental shelf’s least explored areas. It had achieved several engineering milestones on Lancaster before the worst of the winter weather halted work. However, it said that a rope had failed while hooking up a buoy to the Aoka Mizu, the production vessel being used. Last month a rope became snagged in the hook-up phase, causing a delay.
Tempus – London Stock Exchange Group (LSE): Hold. Diverse and resilient in a hugely competitive market with a potentially game-changing new boss
Tempus – Bankers Inv Trust (BNKR): Hold long-term. Diversely exposed reliable dividend payer that should perform
