UK Earnings Today: BP Begins Buyback, Diageo Hikes Dividend – Morningstar

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BP today announced a $1.5 billion (£1.1 billion) share buyback programme and raised its dividend as it posted an interim swing to a profit.
BP shares were 2.1% higher at 493.20p each in London on Tuesday morning.
Second quarter attributable profit came in at $1.79 billion, the company said, down considerably from $9.26 billion a year earlier and from $8.22 billion in the first quarter of 2023. However, in the first half of 2023, it swung to a profit of $10.01 billion from a loss of $11.13 billion a year prior.
Underlying replacement cost profit in the quarter fell to $2.59 billion, down from $8.45 billion year-on-year and $4.96 billion in quarter one, it said.
The average realised price for oil was $70.40 per barrel of oil in the first half of 2023, down 23% from $92.00 a year ago and 12% lower than what BP said was the average oil market price of $79.66 per barrel.
Looking ahead, BP said it expected reported and underlying upstream production in 2023 to be higher than in 2022, amid USD4.0 billion per year in buybacks. The company was also optimistic about seasonal demand and output restrictions by OPEC+ countries in the third quarter.
Further, in the third quarter the company anticipates industry refining margins to stay above historical average levels, boosted by seasonal demand in the US and due to low product inventories.
Elsewhere in the markets, drinks giant Diageo increased its annual dividend as sales and profit grew on higher alcohol prices. That came despite a decline in volumes sold.
Diageo is a London-based brewer and distiller with brands including Baileys, Tanqueray, Johnnie Walker, Smirnoff and Captain Morgan.
In the year ended June 30, sales rose 4.8% year-on-year to £23.52 billion from £22.45 billion, the company said. Net sales rose 11% to £17.11 billion from £15.45 billion, or 6% on an organic basis.
Diageo said net sales grew in by double-digit percentages for scotch, tequila and Guinness stout on an organic basis, with its premium-plus brands contribution 57% of total organic net sales growth.
Volumes, however, fell 7.5% to 243.4 million equivalent units from 263.0 million, or by 1% on an organic basis.
“We delivered strong growth in four of our five regions, with Europe and Asia Pacific growing double-digit,” chief executive Debra Crew said.
“North America delivered stable performance as the US spirits industry continued to normalise post-pandemic, and we lapped strong comparators, particularly in the second half of [financial 2023].”
Diageo now recommends an interim dividend of 49.17 pence, bringing the full-year total to 80.00p, up 5.0% from the total payout of 76.18p.
High street food outlet Greggs also declared a dividend, but its shares fell on results posted today.
Today the company reported a half-year earnings climb and said it had made a promising start to the second half of 2023, amid signs inflation is easing.
Greggs shares fell 7.2% to 2,562.00 pence each, however, among the worst FTSE 250 performers.
The baker said total sales in the six months to July 1 rose 22% to £844.0 million from £694.5 million a year earlier. Pretax profit was 43% higher at £80.0 million from £55.8 million. Its bottom line got a £16.3 million boost from the settlement of a Covid-19 business interruption insurance claim.
“Greggs’ strong performance continued in the first half of 2023 as we deliver on our strategic growth plan,” chief executive Roisin Currie said.
“With consumers remaining under pressure, we continue to offer exceptional value, which is reflected in our performance and growing market share.
“In the period we continued to open further new shops, extended trading hours into the evening and saw increased participation in the Greggs App.
“Our ambitious plans for growth are on track and our amazing teams are committed to realising the opportunity to become a significantly larger, multi-channel business.”
Greggs declared a 16.0p per share interim dividend, up 6.7% from 15.0p.
Meanwhile, Domino’s Pizza reported a boost in revenue in its half year, while profit remained flat from the year before.
In its half year ended June 25, the Milton Keynes-based pizza delivery group said its revenue was up 20% to £332.9 million, from £278.3 million. Domino’s said that this was driven by a rise in system sales volume, acceleration of store openings, and the pass-through of food costs.
Pre-tax profit remained flat at £50.9 million, however, unchanged from the year before. This was partially driven by higher interest costs following the refinancing in the second half of financial 2022.
The company declared an interim dividend of 3.3 pence per share, up 3.1% from 3.2p per share the year before.
With additional reporting by Ollie Smith, UK Editor, Morningstar
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