Shares in Rolls-Royce slipped 4.4 per cent yesterday after a report in the Financial Times claimed that the company had warned investors not to treat its “ambitions” to generate £1 billion in free cashflow by 2020 as a “firm target”.
Expensive semantics? Maybe. Not that shareholders have much to complain about: shares in Rolls-Royce have risen 34 per cent since the start of the year, as investors have backed its new(ish) chief executive, Warren East, to turn the previously troubled business around and bet on future revenues from the group’s Trent XWB engine.
Markets snap
There appears (at a quick glance) to be no mention of the cashflow target (or rather, ambition) in this morning’s half-year results, the first overseen by the newly appointed finance director Stephen Daintith. Rolls-Royce has announced a 148 per cent increase in underlying profit before tax to a better-than-expected £287 million.
“Rolls-Royce delivered encouraging year-on-year operational progress in the first six months of the year,” Mr East says. We’ll have a story on the Rolls-Royce results from Marcus Leroux on the website shortly.
Rolls-Royce is just one of seven (yes, seven) FTSE 100 companies to update this morning as chief executives and advisers rush to post results before heading to the beach. The highlights:
Advertisement
• Alongside interim results the British Gas owner Centrica has announced plans to raise electricity prices by 12.5 per cent this morning. That will mean that the average annual dual fuel bill rises by £76 to £1,120. Helpfully for Centrica’s embattled PR spinners, operating profits at the group have fallen 4 per cent to £816 million in the first half, down from £853 million in the same period last year. We’ll have more from Emily Gosden, our energy editor, on www.thetimes.com/business.
• Underlying replacement cost profit at BP has fallen to $684 million in the second quarter, the oil giant has announced this morning as write-offs for its abandoned project in Angola more than offset the benefit of higher oil prices.
• Housebuilder Taylor Wimpey has announced plans to return a further £340 million to investors via a special dividend this morning as it announces a 9 per cent rise in completions in the first half to 6,580. Alongside the results Pete Redfern, chief executive, claims to have seen “improved customer confidence” in central London following a period of uncertainty.
• Profits at Direct Line Insurance, the owner of Churchill and Green Flag, have come in ahead of forecasts, with operating profits up 9.5 per cent at £354.2 million in the first half and pre-tax profits rising to £341.4 million. The insurer has rebased its dividend payments upwards.
• The silver miner Fresnillo has posted an 87.2 per cent increase in first-half profits to $310.1 million, boosted by higher production of the precious metal.
Advertisement
• Finally, we have had interim results from product testing company Intertek Group. Operating profits are up 10 per cent at £223.9 million, although analysts are likely to focus on “solid” organic growth of 1.7 per cent.
Outside of the FTSE 100 we have also got results this morning from, among others, British aerospace group Meggitt, money manager Man Group and BBA Aviation.
On the economics front we get manufacturing PMI data for July at 9.30am. According to a Reuters poll, City economists expect a reading of 54.4, up a fraction from the 54.3 reading in June, although as David Smith warned in his Sunday Times column this week translating survey data into hard numbers is a challenge.
Ahead of that we have had the Nationwide house price index. Month-on month house prices rose by a better-than-expected 0.3 per cent in July. Annual house price growth slowed to 2.9 per cent, down from 3.1 per cent in June.
“Constrained supply is likely to continue to provide support for house prices and, as a result, we continue to expect prices to rise by around 2 per cent over 2017 as a whole,” says Robert Gardner, chief economist at Nationwide. Tom Knowles, our economic correspondent, is poring over the Nationwide data. He’ll have a report on the website shortly.
Advertisement
Finally, have Apple fans been holding off buying new iPhones in anticipation of the launch of the company’s tenth anniversary handset? We’ll find out later today when the world’s largest public company reports its third-quarter results after the closing bell.
Please do keep sending me your thoughts and observations — richard.fletcher@thetimes.co.uk — and don’t forget to follow me on Twitter — @fletcherr — for regular updates.
Have a great day. I’m off to talk markets and review the papers on BBC Business Live. Tune in on the BBC News channel at 8.30am.
Richard
Get our daily Times Business Briefings — including the business front pages, market updates and day ahead in the United States — direct to your inbox at 8am and lunchtime by going to https://home.thetimes.com/myNews and ticking the business box