Updates from BT, Shell and Centrica
The FTSE 100 consolidated its recovery on Wednesday, ending more than 75 points higher at 6,631. HikmaPharma and BritishAmericanTobacco were the biggest risers, up 3.7% and 3.6% (to 2407p and 3,680.50p). However there was a steep 5.3% fall from caterer CompassGroup to 1028p following a new restructuring warning, possibly affecting full year margins.
Over in the US the Dow Jones climbed 121.1 points to 17,751.3 helped by strong rises from Microsoft, up 2.1%, and Merck & Co, up 1.7% and also no move on interest rates - the Fed voted to keep rates on hold.
Plenty of big name news this morning. We start with new half-year numbers from British Gas owner Centrica. Profits for British Gas have doubled to £528m however Centrica says 6,000 jobs are to go - about half to expire by the end of 2017.
Centrica says profits for the second half of the year are likely to be significantly lower. Its full year outlook is broadly unchanged, but uncertainties on low wholesale commodity prices continues it says.
"With Centrica delivering solid financial and operational performance in the first half of the year," boss Iain Conn said, "...the Group is well placed to compete materially against the emerging long-term trends in global energy markets."
The bad jobs news continues with a similar announcement from Shell. It says 6,500 jobs are to go. The Brit-Dutch oil giant says it also intends to slash capital spending by 20% in the next year due to the slide in oil prices (which could last several years, it warned). Latest Shell profits come in a $3.4bn, down 35% on last quarter.
"We're taking a prudent approach," says Shell, "pulling on powerful financial levers to manage through this downturn, always making sure we have the capacity to pay attractive dividends for shareholders."
The Shell dividend will remain at $1.88 per share this year, with a rise indicated for 2016. Shell advised that its BG takeover remains on course.
Lastly, BT. For the last quarter BT Group claims a 16% hike in pre-tax profits to £623m though revenues are down. BT says its mobile plans have seen 100,000 sign up in the first three months.
"We are engaging," says BT, "with Ofcom as part of its Strategic Review of Digital Communications which offers scope for deregulation and the potential to create a more level playing field in pay-TV."
The Ofcom concern is a worry for BT. The regulator has previously indicated it is open to breaking up BT's Openreach services - which are highly profitable - into a separate operation.
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