From Airbus to VW: First-half results to watch today

·7-min read
Diageo saw a move to more premium drinks brands following the easing of lockdown restrictions. Photo: PA
Diageo saw a move to more premium drinks brands following the easing of lockdown restrictions. Photo: PA

Mid-year results season kicked off earlier this week, with a number of big banks reporting in Europe yesterday and oil majors and pharmaceutical companies slated for today, alongside key players in the FTSE 100 and FTSE 250.

Here's what you need to know as it plays out on Thursday:

  • Diageo (DGE.L) reported a better-than-expected rise in full-year organic net sales, as North American bars and restaurants reopened. By region, North America saw the strongest growth, boosted by consumers trading up to more premium spirits such as tequila, liqueurs and higher-end bottles of Johnnie Walker scotch.

  • "There’s certainly excitement about re-opening, we’ve all seen the early queues, but there’s also a have-fun-at-home sentiment that’s been bred by lockdowns. It’s possible this could see a permanent reduction in the number of feet on dancefloors as things get back to normal, which could see the likes of Diageo face a headwind,” said Sophie Lund-Yates, senior equity analyst at Hargreaves Lansdown. 

  • Shares were almost flat by mid-morning, having fallen earlier in the session. 

  • Rentokil Initial (RTO.L) shares climbed 5.9% higher in early trade in London, buoyed by a 50% bump in operating profit from the same period a year ago and a return to growth.

  • It was the top riser in the FTSE 100 this morning. 

  • “The UK market saw investors flock to stocks that would benefit from economic expansion, principally commodities producers and banks," said Danni Hewson, financial analyst at AJ Bell. 

Read more: Meagre savings rates push Brits to hunt harder for returns

  • Credit Suisse (CS) results were coloured by its involvement in the Archegos scandal as it saw a near-80% fall in second-quarter profit.

  • Net profit of 253m Swiss francs missed average forecasts for 334m Swiss francs as it absorbed an additional $653m loss from the fund's collapse amid a general slump in trading.

  • A report on the scandal said there had been a "lackadaisical" approach to risk. 

  • Excluding Archegos, Credit Suisse said pre-tax income would have dropped 11%.

  • Airbus (AIR.PA) said there were 297 commercial aircraft delivered in its first half, a total that brought revenues to €24.6bn. It raised its aircraft delivery target for the year to 600, having managed 566 the previous year. 

  • The CEO said that despite navigating an "unpredictable environment" the company had "pulled all levers" to preserve the business. 

  • Stock rose around 4% following the report. 

  • Volkswagen (VWAGY) lifted its profit margins on Thursday, off the back of record first-half earnings which are now surpassing pre-pandemic levels. 

  • The company said it expected an operating return on sales of 6-7.5% this year, up from 5.5-7% previously, and nudged up its forecast for net cash flow at its automotive division, which is now expected to be much stronger than in 2020.

  • Share price has already grown by a third this year, off the back of a strong showing in the electric car market as it tries to consolidate its place in a net-zero future. 

  • Smith & Nephew (SN.L) reported revenues of $1.3bn in its second quarter, up 48.2% and compared with $901m for the same period last year. It was also on track to meet full-year guidance, it said. 

  • Investors were unconvinced by the report, as stock dipped more than 8% in early trade on Thursday. 

  • BAE Systems (BA.L) raised its dividend and launched a new stock buyback programme worth £500m off the back of strong results. First-half underlying earnings per share were up 25%. 

  • The firm said its confidence had been boosted by progress in ongoing projects, as it delivered electronic warfare systems for the F-35 fighter jet programme, made automation improvements to help ramp up production of combat vehicles and approached full output of F-35 rear fuselages.

  • Stock has risen 15% in the last three months alone, and ticked up 2.6% in early trade on Thursday. 

  • "With worries about a recession and cuts to defence spending budgets firmly off the table for now, we’re expecting BAE to continue gaining momentum and delivering shareholder returns in both the medium and long-term," said Laura Hoy, equity analyst at Hargreaves Lansdown. 

Read more: European markets unfazed by Fed comments on tapering stimulus

  • Lloyds Bank (LLOY.L) on Thursday reported a pre-tax profit of £3.9bn on net income of £7.6bn in the first half of 2021. Analysts were expecting profits of £3.1bn on revenues of £7.4bn.

  • Lloyds, Britain's biggest mortgage lender, has benefitted from a booming property market in the UK. Last month was the busiest ever recorded for home sales in Britain as the end of a temporary stamp duty holiday drove a surge in activity.

Full report: Lloyds Bank bounces back to £3.9bn profit as pandemic impact fades

Coronavirus vaccine bottles lined up on a stainless steel tray ready to be used in a vaccination campaign in Apucarana, Paraná
AstraZeneca results hailed a deal with Alexion, a specialist drugs manufacturer. Photo: Getty
  • AstraZeneca (AZN.L) hailed a transformational deal with Alexion in its half-year earnings update.

  • The drugs company delivered revenue growth of 23% in the half to $15.5bn. In the second quarter, revenue increased by 31% to $8.2bn.

  • The company said that, excluding the contribution from the COVID-19 vaccine, revenue increased by 14% in the half.

Full report: AstraZeneca's sales rise as CEO hails transformational Alexion deal

  • BT's (BT-A.L) first quarter underlying revenue fell 3% to £5.1bn, reflecting declines in the Corporate and Public Sector segments in the Enterprise and Global divisions. Underlying cash profits (EBITDA) rose 3% to £1.9bn. 

  • Shares were down 7.9% following the news, despite the fact that trade was in line with expectations. 

  • "Free cash flow was still negative as the group shelled out over £1.5bn in capital spending. A decent chunk of this went on more electromagnetic spectrum, but it highlights the massive capital requirements of telecoms groups," said William Ryder, equity analyst at Hargreaves Lansdown. "Ultimately, this is the problem for sector – largely homogenous products and eye-watering investment. Overall, this quarter showed how hard it can be to get ahead in telecoms.”

  • National Express (NEX.L) said cost reductions helped it inch out of the red, after a tough year of COVID-19 lockdowns. 

  • Revenue declined slightly in the first half of the year, but underlying operating profit came in at £22.9m for the period, up from a £30.6m loss in the same half in 2020.

  • The FTSE 250 company's shares fell 4.6% in early trade in London. 

  • Schroders (SDR.L) said it generated net new business of £17.9bn in the first half, as assets under management increased 6% to a new high of £700.4bn. 

  • Shares ticked up 0.7% following the report. 

  • "The business performed strongly during the first half of the year, delivering a 33% increase in profits," said Peter Harrison, group CEO. "These results reflect the benefit of our organic growth initiatives, strong investment performance and our leadership position in sustainability."

  • Foxtons (FOXT.L) announced it was reinstating its dividend and launching a £3m share buyback programme in half-year results this morning. 

  • There was growth across all areas of the business, with group revenue of £66.9m, 66% up against 2020 and 29% up against 2019. 

  • The estate agents said it had not used government support in the first half, with £1.5m of branch business rates voluntarily paid in July relating to the first six months of 2021.

A pair of Dr Martens boots
Investors were disappointed with Dr Martens sales growth, despite a positive report. Photo: Vadim Pacajev/Sipa USA
  • Dr Martens (DOCS.L) said it had seen triple-digit revenue growth across its Americas function, and was "very pleased" with performance in the first half. 

  • Despite positive noises, shares took a 5% knock in early trade in London. 

  • "With so many competitors' stores closed, its online operation stomped ahead during the pandemic, and although a slower pace of sales was expected as more normal retail operations resume, there are worries the company will be hit by further shipping delays which could disrupt operations," said Susannah Streeter, senior investments analyst at Hargreaves Lansdown. 

  • Nestle (NSRGY) said it had seen organic growth of 8.1% in its first half, and growth 8.6% in its second quarter of 2021, warning that inflation in costs would squeeze its margins.

  • Strong demand for coffee buoyed sales in the first half and it boosted its full-year guidance to 5-6% organic growth. 

  • Shares pulled back 0.6% on the report. 

Watch: What are sPACs?

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting