THE reporting season gathers pace next week when some of the UK’s biggest companies unveil their annual figures, including oil giant BP, banking group Barclays and the country’s largest pharmaceutical firm GlaxoSmithKline.
Hopes have been raised that BP’s fourth quarter results tomorrow will include its first dividend increase since the Gulf of Mexico oil spill.
Shares are just 2% lower than a year ago and have recovered 31% since the 2011-low in September as oil prices remained close to the 100 US dollars a barrel mark and optimism surrounding its recovery following the fatal Deepwater Horizon explosion improved.
City analysts currently forecast a fourth-quarter dividend of 8 US cents a share, up from 7 cents paid in the previous quarter, which will be watched closely as it accounts for one pound in every six invested by pension schemes. And the oil spill recovery efforts were dealt a blow last week when a US federal judge said BP must uphold a clause in its contract with well partner Transocean that would protect the driller from compensation claims related to the disaster.
The FTSE 100 listed company is forecast to report clean replacement cost profit of £4.9bn in the fourth quarter, compared with £4.7bn the previous year.
The row over bankers’ pay will reignite once again on Friday when Barclays kicks off the industry’s annual results season amid reports boss Bob Diamond could pocket up to £10m.
However, the bank is reportedly set to announce plans to cut pay by up to 30% for 24,000 employees at BarCap as it responds to outrage over bankers’ bonuses. Earnings for middle ranking and junior staff will be slashed. Barclays is expected to report pre-tax profits of £4.96bn for 2011, compared with £6.1bn the previous year, as its powerhouse investment arm Barclays Capital was hit by volatile market conditions.
Engine giant Rolls-Royce is in line to report profits in excess of £1bn for the first time when it announces its annual results on Thursday compared to £955m the previous year. Shares are 22% higher than a year ago, and have recovered 44% since a low in August, as the FTSE 100 company saw its order book grow as it received significant orders from Singapore Airlines, Norwegian Airlines and Emirates Airlines.
Struggling holidays firm Thomas Cook is expected to reveal more sales pain on Wednesday amid signs that rival TUI Travel has picked up some of its business.
Thomas Cook reportedly suffered a 33% decline in summer holiday sales in the first two weeks of 2012 as customers delayed their holiday plans amid uncertainty over the firm’s future prior to a £100 million lifeline from its banks.
Drugs giant GlaxoSmithKline is set to book a healthy £8bn profit tomorrow despite a sluggish performance in its final quarter. Analysts expect a 1.3% rise in sales in final quarter, down on the 4% growth in the previous three months when strong sales of vaccines, such as a cervical cancer drug, helped it beat expectations.
Full-year sales are expected to be down 3% to £27.6bn. But profits are forecast to rise 86% to £8.4 billion.