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(Alliance News) - Stock prices in London are called lower on Tuesday, with markets hit by tensions between the governments of US and China.
IG futures indicate the FTSE 100 index is to open 34.5 points, 0.5%, lower at 7,378.92. The measure of large-company stock performance closed down 10.01 points, or 0.1%, at 7,413.42 on Monday.
In early UK corporate news, oil major BP joined peer Shell in announcing another share buyback, as well as vastly improved second quarter results. JD Sports has named a new chief executive, shortly after separating the CEO and chair roles, while baker Greggs has appointed a new chair of its own, alongside improved first-half results.
BP's second quarter profit jumped on stronger refining margins, the company said, though a Russia hit from earlier in the year more than ensured a weaker first-half bottom line.
By its preferred metric, BP's replacement cost more than trebled to USD7.65 billion in the second quarter of 2022, from USD2.38 billion a year earlier. On an underlying basis, RC profit was USD8.45 billion, up from USD2.80 billion. Pretax profit surged to USD14.06 billion from USD5.14 billion.
Total second-quarter revenue improved 85% to USD69.51 billion from USD37.60 billion.
BP swung to a first half loss, however. It posted a replacement cost loss of USD15.40 billion, swinging from a profit of USD5.71 billion a year earlier.
Profit was wiped out by a first quarter USD24.4 billion post-tax charge related to BP's exit from its near 20% stake in Russian business Rosneft, following the invasion of Ukraine.
BP lifted its quarterly dividend by 10% to 6.006 cents per share from 5.460 cents a year prior. The first-half payout is up 7.1% to 11.466 cents.
It executed USD2.3 billion worth of buybacks in the second quarter before completing the remainder of a USD2.5 billion programme in late July.
What's more, BP plans to complete a USD3.5 billion buyback before announcing third-quarter results, which are scheduled for November 1.
"On average, based on BP's current forecasts, at around USD60 per barrel Brent and subject to the board's discretion each quarter, BP continues to expect to be able to deliver share buybacks of around USD4.0 billion per annum and have capacity for an annual increase in the dividend per ordinary share of around 4% through 2025," it said.
Brent traded at USD99.91 a barrel early Tuesday, down from USD100.70 late Monday.
JD Sports named Regis Schultz as its new CEO, after an "extensive executive global search process".
Schultz will join JD in September. There will be a brief handover process alongside interim CEO Kath Smith. Smith will then resume her former role of senior independent director.
"Regis brings with him a wealth of retail experience as CEO, including of a UK-listed retail business, and across retail categories including home, fashion, electrical sporting goods and food. In particular, he has a strong track record of effecting transformational change through digitisation, driving multi-channel growth strategies and working across international markets," JD said.
He joins from Dubai-based Al-Futtaim Group, which partners with blue-chips in the fields of retail, financial services, real estate and health. Schultz has Al-Futtaim's president of retail since 2019.
"The retail division has helped to launch and build world class brands, including Zara, IKEA, Hugo Boss, M&S and Lacoste and operates in Middle East, Asia and North Africa," JD explained.
In May, former JD executive chair Peter Cowgill left the role with immediate effect. Back in July of last year, the company bowed to shareholder pressure over its corporate governance, agreeing to eventually split its chair and CEO roles.
Last month, it named Andy Higginson as its new chair.
Meanwhile, Greggs has appointed former Halfords and Pets at Home CEO Matthew Davies as its new chair. He also led Tesco's UK & Ireland arm.
He will take on the post on November 1.
Incumbent Ian Durant became the Greggs chair in 2013 meaning he has more than exceeded the time-limits under the UK corporate governance guidelines. Back in March of last year, Durant had noted he had been asked to remain as chair going forward, despite this.
"I would have been expected to step down in 2020 but the board has asked me to remain in place to provide continuity of leadership during a period when we are likely to address chief executive succession as Roger Whiteside approaches retirement age," Durant explained at the time.
In addition, Greggs left its outlook unchanged as it reported a first-half revenue climb. Profit was largely flat, however, amid cost inflation.
In the half-year ended July 2, revenue increased 27% to GBP694.5 million from GBP546.2 million. Pretax profit inched up just 0.5% to GBP55.8 million from GBP55.5 million.
Distribution and selling costs ratcheted up 32% to GBP339.3 million from GBP257.8 million, as cost inflation dragged the Greggs bottom line.
"Greggs delivered an encouraging performance in the first half of the year with sales ahead of 2019 levels. These results demonstrate the continued strength of the Greggs brand and demand for our great tasting, quality and value for money offering," Chief Executive Roisin Currie commented.
"During the period we continued to make good progress with our strategic priorities, including expanding our shop estate and making Greggs more accessible to customers through extended trading hours and digital channels."
The firm noted that in the four weeks to July 30, like-for-like sales in company-managed shops were 13% higher annually.
"Clearly there are considerable uncertainties in the economy as a whole, but we continue to trade in line with our plan and are making good progress against our strategic objective to become a larger, multi-channel business. As such, the board's expectations for the full-year outcome remain unchanged," Greggs said.
In its 2021 annual results back in March, Greggs said it didn't expect "material profit progression" in 2022.
Elsewhere in London, geotechnical contractor Keller reported improved interim earnings and lifted its dividend.
Revenue in the half-year ended June 26 climbed 36% year-on-year to GBP1.34 billion from GBP984.1 million. Pretax profit rose 12% to GBP32.7 million from GBP29.2 million.
It lifted its dividend by 4.8% to 13.2 pence from 12.6p.
Keller hailed a "record first half performance despite the current macroeconomic challenges".
"The board's expectations for the group's full-year performance remain unchanged, with our usual increase in trading momentum and moderate second half weighting," Keller added.
In Tokyo, the Nikkei 225 ended 1.4% lower. In China, the Shanghai Composite was 1.8% lower, while in Hong Kong, the Hang Seng Index was down 2.2%.
The mood in Asia was soured by tensions between the US and China, the world's most premier economies.
China need not turn any visit by Pelosi into a "crisis", White House National Security Council spokesman John Kirby told reporters, even as he warned that Beijing may be "positioning" itself for a show of military strength around the island.
Media reports have said that Pelosi, currently on an official Asia tour, will stop off in Taiwan and meet President Tsai Ing-wen on Wednesday – if so, the highest-level US visit to Taipei in decades.
Beijing, which views Taiwan as its territory, has reacted furiously to the idea, warning President Joe Biden that his administration was playing "with fire" and announcing a series of live-fire military drills in the Taiwan Straits.
The dollar was mixed early Tuesday.
The pound faded to USD1.2230 early Tuesday from USD1.2270 at the London equities close on Monday. The euro fell to USD1.0242 from USD1.0270.
Versus the yen, the greenback fell to JPY130.85 from JPY131.85. The buck had slumped to JPY130.43 earlier on Tuesday, roughly a two-month low.
Though the Federal Reserve last week Wednesday voted for its second straight 75-basis-point hike, investors interpreted subsequent comments from Chair Jerome Powell as dovish.
Powell said the Fed would not hesitate to implement a stronger rise if needed, but he also hinted that the pace of rate hikes could slow.
St Louis Fed President James Bullard, among the most hawkish US monetary policymakers, speaks at later on Tuesday.
Elsewhere on the central banking front, the Reserve Bank of Australia on Tuesday lifted interest rates by another 50 basis points as it tackles high inflation, and said further tightening is likely.
The RBA raised the cash rate by half a percentage point to 1.85%, as expected by markets, and also increased the interest rate on exchange settlement balances by 50 basis points to 1.75%.
August's move followed similar 50 basis point hikes in both July and June.
The S&P/ASX 200 in Sydney closed 0.1% higher.
Gold rose to USD1,773.31 an ounce early Tuesday from USD1,766.01 late Monday.
By Eric Cunha; ericcunha@alliancenews.com
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