All eyes are on UK’s big league firms
Jul 26 2010 by Karen McLauchlan, Evening Gazette
SOME of the UK’s biggest firms will be in the spotlight this week.
The biggest crisis in BP’s long history threatens to tip the oil giant into the red for the first time since 1992 tomorrow as it gives more details on the havoc wreaked by the Gulf of Mexico spill.
Although the final bill is not yet known, the provisions for the impact of the Deepwater Horizon disaster could submerge £3.3bn in underlying profits expected for the second quarter, a 60% rise on a year earlier.
BP reported its first quarter figures just a week after the explosion when the magnitude of the disaster.
But since then the company has axed its dividend for the first time since the Second World War - and the company and its chief executive Tony Hayward found themselves at the centre of a storm not seen since disgraced Royal Bank of Scotland boss Sir Fred Goodwin refused to give back his pension.
The cost of the clean-up is estimated at around £2.6bn so far, with assets in the US, Canada and Egypt sold to rival Apache raising £4.6bn for the cause.
Transport group National Express expects to show “good progress” in boosting half-year profits on Thursday thanks to a major cost-cutting drive under former Tube Lines boss Dean Finch.
Mr Finch is getting to grips with the tough task of reviving the business following a disastrous year for its rail arm, which returned its loss-making East Coast franchise back to the Government in November.
At this stage last year, the East Coast deal sent the firm plunging into the red with a £48.1m pre-tax loss. But a cost crackdown by the new chief executive is helping shore up results, while the firm says revenue trends are “resilient”.
British Gas parent Centrica will see profits from its residential business almost double in results for the first half of the year as shivering households cranked up the heating in a bitterly cold winter.
Citigroup analyst Peter Atherton is expecting operating profits of £583m from British Gas for the first six months of 2010 - up from £299m previously - with its business division also forecast to double profits to £132m.
Friday’s update from British Airways will reveal the impact of a nightmare first quarter for the airline, which has already said that it “could hardly have had a worse start” to the year.
The opening three months of BA’s financial year saw it hit by Iceland’s volcanic eruption, which closed most of European airspace for almost a week in April, and crippling strike action.
BA has already lost around £120m from the volcanic disruption, while it said the first wave of industrial strikes cost it £43m - with the group widely thought to be facing a total bill from the disputes of £150m.
