BUSINESS LIVE: BP profits slump 72%; Wayve raises more than $1bn; Retail sales sink in April

Just before close, the FTSE 100 was 1.28% down at 8,318.57.

Meanwhile, the FTSE 250 was 1.1% higher at 20,386.00.

IWG upheld its annual outlook on Tuesday following a robust performance by its managed and franchised business.

The office space provider reported group revenues flatlined at $912million in the first three months of 2024, while system-wide turnover grew by 2 per cent to $1.04billion (£820million).

Octopus Energy is now worth more than £7billion after two of the group’s biggest shareholders upped their stakes in the business.

The energy and tech group said Generation Investment Management and Canada Pension Plan Investment Board have lifted their positions to 13 and 12 per cent, respectively, thereby lifting its valuation by 15 per cent to $9billion (£7.2billion).

First Direct has relaunched its £175 switching bonus after pulling it just two weeks ago.

From today, new customers will receive £175 if they switch their current account to a First Direct current account though the Current Account Switch Service (CASS).

(PA) – Octopus Energy’s valuation has jumped $9billion (£7.2billion) after two of its biggest investors increased their stakes in the business.

Generation Investment Management and Canada Pension Plan Investment Board, already major investors, took even bigger shares in the energy and technology group, pushing its value up 15 per cent on a previous estimate.

Generation, which focuses on sustainable investments, upped its stake to 13 per cent after getting new backing from pension funds in the US and Australia, including Australian superannuation fund Aware Super.

CPP Investments, which manages about C$590.8billion worth of assets, increased its stake to 12 per cent.

Greg Jackson, founder of Octopus Energy Group, said: “Bringing globally respected long-term investors on board helps raise our profile in key markets, and open up new opportunities to continue our international expansion.”

Octopus has been expanding abroad for some years and now has a presence in 18 countries. It is pushing its energy software platform, Kraken, in North America, having signed its first licensing deal in Texas last year.

They have been described as sitting ducks: UK-listed companies that really ought to be more highly valued and are therefore ripe for being picked off by cash-rich foreign predators.

It’s bad news for the London market but for private investors, picking the right takeover target can mean a quick profit, as bidders normally have to pay well above the current share price to win control.

(PA) – The boss of P&O Ferries has admitted to paying the firm’s workers as little as £4.87 per hour, nearly two years on from a scandal which saw it branded “pirates” for laying off hundreds of staff without notice.

Peter Hebblethwaite repeatedly told MPs on the Business and Trade Committee that P&O’s workers were not being exploited, while resisting calls for an independent investigation into the company’s employment practices.

The chief executive, who admitted he could not live on £4.87 per hour, also revealed he earned £508,000 including a bonus of £183,000 last year.

Mr Hebblethwaite said: “We are paying considerably ahead of the international minimum standard. We believe that it is right that as an international business operating in international waters, we should be governed by international law.”

He added: “All we want is a level playing field with our competitors.”

Mr Hebblethwaite’s appearance before MPs came two years after P&O Ferries fired 786 of its staff and replaced them with low-paid workers who are employed by an external crewing agency.

The company fired employees without notice or union consultation, attracting widespread criticism from ministers, unions and the public.

House prices held steady in April, according to the latest figures from Halifax, after a 0.9 per cent fall in March.

The average property rose by just 0.1 per cent between March and April, which in cash terms is less than £200.

New car registrations in the UK grew for the 21st consecutive month in April, rising by 1 per cent, the latest figures from the Society of Motor Manufacturers and Traders (SMMT) show.

While electric vehicles (EV) were the main driver of this growth, this is almost entirely due to business purchases rather than private buyers.

Sodden weather conditions and the early Easter weekend caused UK retail sales to slump last month.

The latest British Retail Consortium (BRC)-KPMG Retail Sales Monitor shows sales dropped by 4 per cent year-on-year in the four weeks ending 27 April, against 5.1 per cent growth in 2023.

Easter fell much sooner than usual this year, artificially upping demand for food, cookware and tableware across Britain in March.

British self-driving tech start-up Wayve has raised $1.05billion (£840million) in a funding round led by Japanese investment giant SoftBank Group.

The fundraise will help accelerate the development and launch of in-production model vehicles using Wayve’s Embodied AI technology, which trains self-driving vehicles to learn from and adapt to human behaviour.

It marks the biggest-ever investment in a British start-up focused on artificial intelligence technology, which Prime Minister Rishi Sunak said in a statement is ‘a testament to our leadership in this industry’.

Spending on digital subscriptions such as Netflix has soared thanks to popular shows, higher subscription fees and password sharing rules, a study found today.

New series such as Baby Reindeer and Ripley contributed to a 10.6 per cent annual rise in spending on digital content and subscriptions, according to Barclays

Elon Musk‘s Tesla has laid off staff from the software, service and engineering departments in a fourth week of job cuts as the EV car maker keeps shedding staff.

Britain’s construction sector expanded at its fastest expansion in more than a year during April, despite a further drop in house-building, according to a survey on Tuesday that added to signs of an economic recovery from recession.

The S&P Global UK Construction Purchasing Managers’ Index rose to 53 from 50.2 in March – moving further above the 50-point growth threshold and marking the fastest growth since February 2023.

The survey’s gauges of commercial work and civil engineering shot higher, although the housing sector’s downturn worsened in April. Recent house price surveys have pointed to a moderation in the housing market’s recovery.

Tuesday’s PMI chimed with other business surveys that suggest Britain’s economy returned to modest growth in early 2024 after its shallow downturn in the final two quarters of last year.

‘Demand was boosted by greater confidence regarding the broader UK economic outlook,’ Tim Moore, economics director at S&P Global said.

Financial Conduct Authority (FCA) chief Nikhil Rathi will this week face a grilling by MPs as pressure mounts over the regulator’s plans to ‘name and shame’ firms it is investigating.

Rathi will be questioned over the proposals – which have provoked a fierce City backlash – at the Commons Treasury select committee tomorrow.

The number of new mainstream models that are manuals has more than halved in just six years, research reveals.

Car makers that no longer offer any new showroom models with manual gearboxes include Volvo, Mercedes-Benz, Jaguar and Lexus.

The FTSE 100 has opened at yet another record high, boosted by gains in Shell after Reuters reported its plans to sell the Malaysian gas station business and BP gained on maintaining share buyback plans but missed earnings forecast.

Shell has jumped 1.6 per cent after Reuters reported the energy giant is in talks to sell its gas station business in Malaysia to Saudi Aramco.

BP has edged 0.4 per cent higher after the oil major maintained the rate of its share buyback programme at $1.75billion over the next three months but missed forecasts due to lower oil and gas prices and a US refinery outage.

Homebuilders are up 1.4 per cent on Halifax data showing British house prices edged higher in April.

Medical equipment and services is the only sector trading in the red, down 0.2 per cent.

Adam Vettese, analyst at eToro:

‘Consistency quarter to quarter seems to be tough to achieve for BP at the moment with a missed forecast in Q1 following on from a very strong update last time out to round off 2023.

‘Lower energy prices and weaker fuels margin are to blame for the slump. Investors will be pleased to see this miss will not affect the buyback programme and the dividend is being held steady.

‘Looking ahead the company aims to deliver $2 billion worth of cost savings over the next 2 years, this seems like a punchy target but if achieved will help ride out volatility in the other variables affecting the top line number.

‘Despite the dip, shares are still up for the year and now represent an 8% discount to this year’s high seen last month.’

Stuart Lamont, investment manager at RBC Brewin Dolphin:

‘As with Shell last week, investors were looking for reassurance from BP on production volumes and capital discipline.

‘However, BP has missed profit expectations on the back of lower gas prices, weaker margins, and operational outages.

‘The extension to the share buyback programme and maintained dividend will, nevertheless, provide shareholders with some solace, both of which suggest BP’s management team sees this as a temporary setback and remains relatively optimistic about the near-term outlook.’

House prices will rise by 2.5 per cent this year amid an improved economic outlook and lower mortgage costs, property firm Savills has predicted.

It previously expected that prices would fall by 3 per cent.

Savills’ forecast is the latest to take a more upbeat view. Lloyds, Britain’s biggest mortgage lender, also recently said it saw prices rising this year. Lucian Cook, head of residential research at Savills, said the outlook had improved since its last forecast in November.

British self-driving tech startup Wayve has raised $1.05billion in a funding round led by Japanese investment bank SoftBank Group.

The funding will be used to accelerate the development and launch in production-model vehicles of its Embodied AI technology that can learn from and adapt to human behavior.

Nvidia also contributed in the Series C funding round as a new investor, as did existing investor Microsoft .

The latest funding brings Wayve’s total funds raised to just over $1.3billion and marks the largest investment yet in a British startup focused on artificial-intelligence technology.

Founded in 2017, Wayve’s autonomous driving technology uses AI that the startup says will enable vehicles to ‘navigate situations that do not follow strict patterns or rules, such as unexpected actions by drivers, pedestrians, or environmental elements’.

‘This will enable automakers and fleets to accelerate their transition from assisted to autonomous driving,’ Wayve boss Alex Kendall told the Reuters news agency.

Retail sales dropped 4 per cent in April versus the previous year, dampened by a spell of wet weather and an early Easter bank holiday.

The year-on-year drop is set against a growth of 5.1 per cent in April 2023, but was artificially worsened by the earlier timing of Easter, which previously pushed March sales unusually high, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor.

Nonetheless, even when correcting for the seasonal distortion, the average growth for March and April together was only 0.2 per cent, down on the three-month average of 0.5 per cent and the 12-month average of 2.2 per cent.

Helen Dickinson, chief executive of the British Retail Consortium, said: ‘Dismal weather and disappointing sales led to a depressing start to spring for retailers, even accounting for the change in timing of Easter.’

Disruption in the Red Sea is getting worse and will reduce the capacity of trade from the Far East to Europe by up to a fifth this quarter, shipping giant Maersk warns.

Container vessels have been rerouted around the southern tip of Africa since the end of last year to avoid attacks by Iranian-backed Houthi militants in the Red Sea.

BP posted a 72 per cent year-on-year decline in net profits for the first quarter as the energy giant suffered much lower gas prices.

Profit after tax tumbled to $2.3billion from $8.2billion in the first three months of 2023, as total revenue dropped 13 percent to $48.9billion.

Rival Shell last week said its net profit dropped 15 percent to $7.4billion in the first quarter.

Gas prices have dropped heavily since soaring after the invasion of Ukraine by major energy producer Russia in early 2022.

Chief executive Murray Auchincloss said: ‘We’ve delivered another resilient quarter financially and continued to make progress on our strategy. Oil production was up and our ACE platform in the Caspian is now producing.

‘We are simplifying and reducing complexity across bp and plan to deliver at least $2 billion of cash cost savings by the end of 2026 through high grading our portfolio, digital transformation, supply chain efficiencies and global capability hubs.’