A four-year low for BP quarterly profits today heightened the focus on the oil giant’s plans for a major strategy reset.
Chief executive Murray Auchincloss has promised a new direction in a presentation due later this month.
The FTSE 100 set another record but Entain shares fell sharply after the gambling group’s chief executive left within six months of starting the role.
FTSE 100 Live Tuesday
- BP profits post sharp fall
- Entain CEO in swift exit
- Dunelm boss to step down
Market update: BP and FTSE 100 consolidate gains, airlines face fresh selling
10:29 , Graeme EvansBP’s promised new direction offset a four-year low for profits today as the oil giant’s shares clung to the gains seen on an activist’s stake building.
The stock stayed near 465p following annual results, having surged 7% during Monday’s record-breaking session for the FTSE 100 index.
London’s top flight initially touched a fresh intraday high of 8789 before settling 3.99 points lower at 8763.81.
BP’s rival Shell rose 26p to 2665.5p, while there were stronger performances by widely-held Tesco, NatWest and BAE Systems after gains of 1%.
The results by BP showed a 36% drop in underlying replacement cost profit – the company’s preferred earnings measure – to $8.92 billion in 2024.
Fourth quarter earnings fell by more than expected, down 61% year-on-year to $1.17 billion as stagnant oil prices and weaker refining margins led to the poorest result since 2020.
Chief executive Murray Auchincloss said the company had laid foundations during 2024 for a fundamental reset of strategy, which will be announced later this month. He said it would be a “new direction for BP”.
He now faces pressure from activist investor Elliott, which is believed to have joined the shareholder register last week in a move that triggered yesterday’s sharp rise.
Speculation has focused on whether the hedge fund will push for divestment of clean energy business segments as part of a renewed switch back towards traditional oil and gas.
Auchincloss has already spun off BP’s offshore wind business in a joint venture.
The update on 26 February will also determine the 2025 outlook for shareholder returns after the company said it would buy back another $1.5 billion of its shares in the current quarter.
On the fallers board, the shares of Ladbrokes and Coral business Entain slid 10% or 71.6p to 670.6p after it announced the exit of chief executive Gavin Isaacs. His departure after less than six months in the role was by mutual agreement.
Airline stocks traded sharply lower for a second successive session as British Airways owner IAG followed yesterday’s reverse of 3.5% by losing another 2% or 8.7p to 344.7p.
The fall, which follows a strong run for shares over the past year, came even though Heathrow reported another record month for passenger numbers. Low-cost carrier easyJet also weakened 4% or 20.8p to 502.4p.
Housebuilders Persimmon and Taylor Wimpey fell by 2% amid a negative reaction to a trading update by FTSE 250-listed Bellway. Its shares retreated 132p to 2432p despite reiterating full-year expectations
Elsewhere in the FTSE 250, Dunelm was 4p cheaper at 967p as chief executive Nick Wilkinson announced he is leaving the retailer after seven years in the role. Resilient half-year results included another special dividend.
Bellway on track amid “challenging” market conditions
08:59 , Graeme EvansBellway said today it remains on track to deliver full year volume output of at least 8500 homes in the year 31 July, up from 7654 the previous year.
It continues to expect the full year average selling price to be around £310,000 and for the underlying operating margin to approach 11% from 2024’s 10%.
The FTSE 250-listed builder has ben encouraged by a seasonal pick-up in customer enquiries and reservation rates in the early weeks of the current spring selling season.
However, it is also mindful of the sensitivity of customer demand to mortgage affordability and the evolving economic backdrop.
Chief executive Jason Honeyman said the company delivered a strong first half performance in challenging market conditions.
He added: “While mortgage interest rates have increased modestly since the autumn, customer demand has remained robust, and the group has a healthy order book to support our targeted growth in volume output for the full year.”
Shares fell 5.5% or 142p to 2422p following the update.
Heathrow reports another record month
08:46 , Graeme EvansHeathrow has reported another record month after 6.3 million passengers passed through the airport in January.
The total was up 5% on last year, suggesting that the post-pandemic boom in air travel has not yet topped out.
It was the eleventh month in a row that Heathrow has averaged over 200,000 passengers a day, with trans-Atlantic travel driving the growth.
BP steady as FTSE 100 sets new record, housebuilders struggle
08:36BP shares have opened flat after the oil giant’s annual results included the weakest quarterly profits performance in four years.
The stock edged 0.7p higher at 465.85p, having surged 7% yesterday on the back of speculation over the stake built by activist investor Elliott.
The FTSE 100 index continues to set intraday records after reaching 8789 in early dealings before settling 9.84 points higher at 8777.64.
Entain shares slumped 10% or 76p to 666.2p after announcing the exit of chief executive Gavin Isaacs after less than six months in the role.
Housebuilders Persimmon and Taylor Wimpey fell 2% amid a negative reaction to a trading update by FTSE 250-listed Bellway. Its shares retreated 132p to 2432p.
Entain CEO leaves after less than six months
08:08 , Graeme EvansThe boss of Ladbrokes and Coral gambling group Entain has left the business after less than six months in the role.
Entain said the departure of Gavin Isaacs, who has over 25 years of experience across the global sports betting, gaming and lottery industries, had been by mutual agreement.
Stella David, currently Entain's non-executive chair, will return as interim chief executive having previously held the role from December 2023 until Isaac’s start date in September.
Entain recently announced that underlying earnings will be at the top end of the £1.04 billion-£1.09 billion guidance range. It is comfortable with market expectations for 2025.
Shares fell 8% following the announcement.
Dunelm boss to step down, half-year profits steady
07:52Dunelm chief executive Nick Wilkinson is to retire from the home furnishings business after seven years in the role.
Board chair Alison Brittain said Wilkinson had been a “tremendous leader” for Dunelm, having guided the business through a global pandemic, driven a step-change in the digital offer and maintained its “unique, entrepreneurial culture”.
She added: "Nick will continue to lead the business over the coming months as we transition to a new CEO, maintaining a focus on delivering long-term, sustainable growth for all stakeholders."
The announcement came as Dunelm reported unchanged pre-tax profits of £123 million for the six months to 28 December.
Total revenues lifted 2.4% to £893.7 million during a period in which the retailer boosted its market share by 30 basis points to 7.8%.
The interim dividend has increased 3.1% to 16.5p a share, while the company has repeated last year’s special dividend of 35p.
Guidance for the full year is unchanged as the company comes to terms with April’s increase in National Insurance contributions.
It added: “We have a good track record of delivering efficiencies to offset cost increases, and will continue to do so through both operational improvements and targeted longer-term productivity opportunities.”
BP boss promises “new direction” for oil giant, profits fall
07:18 , Graeme EvansBP chief executive Murray Auchincloss today promised a new direction for the oil giant ahead of a strategy update due later this month.
Presenting the company’s annual results, Auchincloss said: “We have been reshaping our portfolio - sanctioning new major projects, and focusing our low-carbon investment - and we have made strong progress in reducing costs.
“Building on the actions taken in the last 12 months, we now plan to fundamentally reset our strategy and drive further improvements in performance, all in service of growing cash flow and returns.
“It will be a new direction for BP and we look forward to sharing it at our capital markets update on 26 February.”
As part of the update, BP said it intends to review elements of its financial guidance including expectations for 2025 share buybacks and capital expenditure.
It is planning another $1.75 billion share buyback in the first quarter, while it announced a dividend of eight cents for the fourth quarter.
The impact of lower oil prices and weaker refining margins meant BP posted an underlying replacement cost profit of $1.17 billion for the final quarter of 2024.
This compared with the previous year’s $3 billion and left the total for the year sharply lower at $8.9 billion.
FTSE 100 seen lower despite US markets rally
07:03 , Graeme EvansThe FTSE 100 index is set to fall back after posting another record close last night.
IG Index futures show a decline of about ten points, in line with this morning’s downbeat performances by the Hang Seng index and Shanghai Composite.
US markets finished in positive territory, despite fears over the inflationary impact of Donald Trump’s 25% tariffs on steel and aluminium imports.
The Dow Jones Industrial Average rose 0.4%, the S&P 500 lifted by 0.7% and the Nasdaq Composite advanced 1%.
The gold price remains near to a record high at $2916 an ounce, while the pound is at $1.236. The FTSE 100 starts the session at 8767 after rising 0.8% yesterday, with BP shares up 7% on the back of stake building by an activist investor.
