FTSE 100 Live Tuesday
- Domino's Pizza profit warning
- Diageo ups cost savings
- BP posts strong quarter
Market update: Smith & Nephew surges in FTSE 100, Domino's Pizza tumbles
10:22 , Graeme EvansResults-day cheer for under-pressure BP and Diageo today helped the FTSE 100 index in a session when the value of Smith & Nephew surged by 15%.
A strong Wall Street handover as traders priced in US interest rate cuts meant London’s top flight rose for a second day in a row, up 26.81 points to 9155.11.
Corporate earnings added to the upbeat mood, particularly BP after the oil giant’s second quarter underlying profit of $2.4 billion easily beat City forecasts.
Chief executive Murray Auchincloss also announced a business review in order to ensure that BP is “maximising shareholder value moving forward”.
The move came in the week that the Financial Times said activist investor Elliott Management had called for BP to step up its cost savings programme.
Auchincloss said: “We are two quarters into a twelve-quarter plan and are laser-focused on delivery of our four key targets - and while we should be encouraged by our early progress, we know there's much more to do.”
The shares, which were 331p in April, rallied 8p to 414p as BP lifted its dividend by 4% to 8.32 US cents alongside a further $750 million quarterly share buyback.
Diageo shares got a much-needed boost after its revenues and bottom-line guidance for the new financial year came in ahead of expectations. It also lifted its annual cost savings target by $125 million to $625 million for the period to 2028.
The outlook offset a challenging set of annual results after operating profit fell 27.8% to $4.3 billion (£3.2 billion).
Strong demand for Guinness, Don Julio tequila and Crown Royal Blackberry whisky underpinned organic net sales growth of 1.7% for the year to 30 June.
Diageo shares rose 7% or 122p to 1937p as it forecast a similar sales performance this year, albeit second half weighted. The stock had been 2650p last autumn.
Smith & Nephew shares posted the best performance in the FTSE 100 index, jumping by 171p to a two-year high of 1325p after half-year results came in ahead of City expectations.
The orthopaedics, wound management and sports medicine business reported an improved margin of 17.7%, which led to a 11% rise in trading profit to $523 million.
Underlying revenue growth for this year is expected to be around 5%, with the trading profit margin set to expand to between 19% and 20%.
Chief executive Deepak Nath said operational improvements under the company’s 12-point plan were increasingly translating into better financial performance.
The FTSE 250 index rose 101.32 points to 21,960.82, with Travis Perkins among those higher after it reiterated guidance in half-year results.
The builders’ merchant put back 28.5p to 563.5p, having fallen more than 25% this year on the back of tough market conditions. Operating profit fell 23% to £62 million after revenues dropped 2% to £2.3 billion in today’s results.
Other stronger mid-cap stocks included Keller, with the ground engineer up 6% or 76p to 1394p after reporting interim figures ahead of market expectations.
Domino’s Pizza shares moved the other way, sliding 14% or 33.2p to a decade low of 212.8p as it cut profit guidance on the back of weaker half-year results.
Chief executive Andrew Rennie said: “There's no getting away from the fact that the market has become tougher both for us and our franchisees, and that's meant that the positive performance across the first four months didn't continue into May and June.
“Given weaker consumer confidence, increased employment costs and uncertainty ahead of the Autumn Statement, franchisees are taking a more cautious approach to store openings for the time being.”
Smith & Nephew shares jump 15% after strong results
09:10 , Graeme EvansSmith & Nephew shares have posted the best performance in the FTSE 100 index after half-year results came in ahead of City expectations.
The orthopaedics, wound management and sports medicine business reported an improved margin of 17.7%, leading to a better-than-forecast 11% increase in trading profit to $523 million.
Underlying revenue growth for this year is expected to be around 5%, with the trading profit margin expected to expand to between 19% and 20%.
Chief executive Deepak Nath said operational improvements under the company’s 12-point plan are increasingly translating into better financial performance.
He added: “We are on track for our full year revenue growth target, a significant step-up in profitability and strong free-cash generation, and are announcing a $500 million share buyback.
“There is more to be done, but the transformation of Smith+Nephew is starting to deliver substantial value."
The shares jumped 15% or 168p to their highest level in two years at 1322p, boosted by the buyback and full-year guidance as well as 5% beat on trading profit in today’s results.
Smith & Nephew leads stronger FTSE 100, Domino's Pizza down 14%
08:31 , Graeme EvansForecast-beating second quarter results today lifted BP shares by 2% or 7.5p to their highest level since April at 417.5p.
Diageo shares rose 6% or 116p to 1931p after its annual results included an increase in its cost savings target.
Among other blue-chip companies reporting today, Smith & Nephew surged 11% or 132p to 1286p after it announced a $500 million buyback of shares alongside interim figures.
The FTSE 100 index rose 29.21 points to 9157.51, while the FTSE 250 index lifted 81.98 points to 21,941.48.
Domino’s Pizza shares slid 14% or 33.4p to 212.6p after the takeaway business downgraded profit guidance for the year.
Domino's Pizza cuts profit guidance
07:58 , Graeme EvansDomino’s Pizza today scaled back profit guidance after feeling the impact of weaker consumer confidence, rising employment costs and tax rise uncertainty.
Poor trading in May and June contributed to a 15% decline in underlying profit to £43.7 million.for the six months to 29 June.
Despite an improvement in like-for-like sales towards the end of July, the company now expects annual underlying earnings in the range of £130 million-140 million.
This compares with current market expectations of £140.8 million-£149.2 million.
Chief executive Andrew Rennie said: “There's no getting away from the fact that the market has become tougher both for us and our franchisees, and that's meant that the positive performance across the first four months didn't continue into May and June.
“Given weaker consumer confidence, increased employment costs and uncertainty ahead of the Autumn Statement, franchisees are taking a more cautious approach to store openings for the time being.”
Diageo posts 28% profit fall, increases cost savings target
07:34 , Graeme EvansDiageo today said it is braced for market conditions to remain challenging after reporting a 27.8% fall in annual operating profit to $4.3 billion (£3.2 billion)
The decline reflected the impact of one-off write-downs and restructuring costs, as well as currency movements and sharp fall in operating margin to 21.4%.
Organic net sales growth of 1.7% for the year to 30 June included a volume improvement of 0.9%, with the performance boosted by strong demand for Don Julio, Guinness and Crown Royal Blackberry.
For the 2025/26 financial year, Diageo has forecast similar sales growth to 2024/25 as it continues to expect challenging market conditions. It added that growth should be more weighted toward the second half.
Organic operating profit growth for the year is expected to be mid single digit, when including its current estimate for a $200 million impact from tariffs.
The company’s cost savings programme target has increased to $625 million, up from $500 million previously.
Interim boss Nik Jhangiani said: “While macroeconomic uncertainty and the resulting pressure on consumers continues to weigh on the spirits sector, we believe in the attractive long-term fundamentals of our industry and in our ability to continue to outperform.”
BP profit beats hopes, announces business review
07:13 , Graeme EvansOil giant BP today reported a better-than-expected second quarter underlying profit of $2.4 billion (£1.8 billion).
The figure is up from $1.4 billion in the previous three months but down from $2.8 billion a year earlier amid the impact of lower oil and gas prices. Analysts had forecast a figure of about $1.8 billion.
A dividend of 8.32 US cents a share represents an increase of 4% on a year ago, while the company announced a further $750 million share buyback for the quarter.
Chief executive Murray Auchincloss said: “We are two quarters into a twelve-quarter plan and are laser-focused on delivery of our four key targets - and while we should be encouraged by our early progress, we know there's much more to do.”
He announced “a thorough review of our portfolio of businesses to ensure we are maximising shareholder value moving forward”.
Auchincloss added: “We are also initiating a further cost review and, whilst we will not compromise on safety, we are doing this with a view to being best in class in our industry.
“We reaffirm our commitment to ensure that there is an embedded process of continuous business improvement across our operations. This is all in service of accelerating the delivery of our strategy. BP can and will do better for its investors.”
FTSE 100 seen higher, Wall Street markets rally
06:59 , Graeme EvansThe FTSE 100 index is seen rising by 0.4% after Wall Street stocks rebounded on Monday.
The Dow Jones Industrial Average closed 1.3% higher, the S&P 500 index rose by 1.5% and the Nasdaq Composite jumped 2%.
The recovery came in the wake of a sharp fall on Friday, when sentiment was impacted by a weak labour market report.
Lloyds Banking Group led Monday’s session in London after a favourable motor finance ruling helped shares to jump by 8%. The FTSE 100 index closed up 0.7% or 59.72 to 9128.30.
Asia markets are higher this morning, with the Hang Seng index up 0.5% and the Nikkei 225 about 0.7% stronger.
