(Alliance News) - Stock prices in London are seen opening higher on Tuesday supported by strong earnings from BP, while shares in Airtel Africa were down sharply after a substantial stake sale.
The FTSE 100 index was up 27.00 points, or 0.4%, at 7,600.47 early Tuesday. The mid-cap FTSE 250 index was up 106.55 points, or 0.5%, at 21,818.59. The AIM All-Share index was marginally higher, up 1.04 points, 0.1%, at 1,086.68.
The Cboe UK 100 index was up 0.2% at 755.23. The Cboe 250 was down 0.1% at 19,477.76, and the Cboe Small Companies was 0.1% higher at 15,354.92.
On the continent, the CAC 40 stock index in Paris was up 0.3% and the DAX 40 in Frankfurt was 0.5% higher.
In the FTSE 100, St James's Place was the best performer, up 2.5%, after Morgan Stanley raised the wealth manager to 'overweight' from 'equal weight'.
M&G was up 2.0% after Morgan Stanley also raised the asset manager to 'overweight' from 'equal weight'.
SSE was up 1.8% after the energy utility upgraded its adjusted earnings per share expectations for the financial year ending March 31 to at least 90 pence from at least 83 pence.
BP was up 1.5% after the oil major swung to an annual profit as it presses ahead with its clean energy transition.
For 2021, BP posted attributable profit of USD7.57 billion, swinging from a USD20.31 billion loss in 2020. For the three months to December 31, attributable profit was USD2.33 billion, swung from USD2.54 billion loss in the fourth quarter of 2020.
For 2021, replacement cost profit - BP's preferred metric - was USD4.74 billion, swung from USD18.10 billion loss the year before. For the fourth quarter, RC profit was USD1.97 billion, swung from USD2.93 billion loss during the same period in 2020.
BP's underlying replacement cost profit for the fourth quarter of 2021 was USD4.07 billion, surging from just USD115 million a year before. For all of 2021, it was USD12.82 billion, swung from a USD5.69 billion loss.
Allegra Dawes, a senior analyst at Third Bridge, said the fourth quarter underlying RC profit beat market consensus of USD3.9 billion.
BP declared a 2021 dividend of 21.63 cents per share, down from 26.25 cents in 2020. For the fourth-quarter, the company declared a 5.46 cents dividend, unchanged from the third quarter, but up from 5.25 cents in the fourth quarter of 2020.
BP completed share buybacks worth USD1.73 billion in the fourth quarter, and plans to carry out a further USD1.5 billion from surplus cash flow before announcing its first quarter results for 2022.
For the year ahead, BP plans to use 60% of surplus cash flow for share buybacks and the remaining 40% to strengthen the balance sheet.
At the other end of the large-caps, Airtel Africa was the worst performer, down 11% at 138.51 pence. Citigroup Global Markets said it placed 58 million shares of Airtel Africa, a 1.5% stake, on behalf of shareholders Warburg Pincus and Morningstar Investment. The shares were sold at 140p each, raising GBP81.2 million.
Citigroup didn't say how many Airtel Africa shares the two sellers have remaining, but noted they have agreed to a 90-day lock-up period for any they own. Airtel Africa won't receive any proceeds of the sale, as it was of existing shares.
Ocado Group was down 8.2% after the online grocer pointed to labour shortages for containing growth, as it struggled to find workers to keep up with increased demand. It also hailed its new technologies as the retailer ramps up investment into its end-to-end e-commerce, fulfilment and logistics Ocado Smart Platform.
For the financial year that ended November 28, Ocado generated revenue of GBP2.5 billion, up 7.2% from GBP2.33 billion in financial 2020. The figure was in line with market forecasts.
The Hatfield-based firm posted a pretax loss of GBP176.9 million, widened from a loss of GBP52.3 million. Ocado said the loss reflected increased investment in its Solutions business, particularly the increasing roll out of the Ocado Smart Platform.
Looking ahead, Ocado said capital expenditure is set to rise to around GBP800 million in 2022, driven by the worldwide roll-out of its platform. This was higher than the GBP590 million expected by analysts at Jefferies.
DCC was down 1.1%. The Irish support services firm said operating profit for the third quarter ended December 31 was in line with expectations and ahead of the prior year.
The Dublin-based firm said it delivered a good trading performance and benefited from acquisitions completed in the prior year. Looking ahead, DCC continues to expect that the financial year ending March 31 will be another year of strong operating profit growth, in line with current market consensus expectations.
In Asia on Tuesday, the Japanese Nikkei 225 index closed up 0.1%. In China, the Shanghai Composite ended up 0.7%, while the Hang Seng index in Hong Kong lost 1.0%. The S&P/ASX 200 in Sydney closed up 1.1%.
The pound was quoted at USD1.3535 early Tuesday, little changed from USD1.3534 at the London equities close Monday.
The euro was priced at USD1.1400, down from USD1.1438. Against the Japanese yen, the dollar was trading at JPY115.32, higher than JPY115.05 late Monday in London.
Brent oil was quoted at USD91.98 a barrel on Tuesday morning, down sharply from USD92.98 at late Monday. Gold stood at USD1,819.43 an ounce, up from USD1,816.81.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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