Updates from Barclays, United Utilities and Facebook
Stockmarkets around the world soared yesterday on comments by ECB boss Mario Draghi to support the euro. The FTSE 100 pushed +1.36% higher. However the French Cac 40 got the biggest boost, up +4.07%. The Dow Jones lifted +1.67% yesterday.
Overnight, Asian markets continued to carry the optimism with the Hang Seng climbing +1.8% and the Nikkei increasing by +1.3%.
We commence with Barclays with pretax profits for the six months up to 30 June rising 13% to £4.22bn, a lift from what some analysts had predicted. Adjusted return on average shareholders' equity increased 9.9% (2011: 9.3%); operating expenses slipped -3% to £9,491m.
Barclays has also made additional £300m provision for settling mis-sold payment protection insurance (PPI) claims. Its also had to conserve £450m for possible costs of providing compensation to small businesses.
The results also saw an apology from ex Barclays chairman Marcus Agius. "We are sorry for the issues that have emerged over recent weeks... I speak for all of Barclays people when I say how determined we are to regain the full confidence of all our stakeholders; customers and clients, investors, regulators and staff alike."
Next, United Utilities. Current trading remains in line with expectations the company said in a interim statement this morning and revenues are up. Regulatory capital investment is expected to be around £700 million (including infrastructure renewals expenditure) for 2012/13.
The increase in revenue is though largely offset by higher depreciation and higher levels of infrastructure renewals expenditure and other operating costs, both impacted by the transfer of private sewers.
The company has proposed a final dividend of 21.34p per share. Taken together with the interim dividend of 10.67 pence the total dividend for the 2011/12 year is 32.01p per share, an increase of 6.7% over the previous year.
Finally, Facebook shares have been under pressure following investor growth concerns. The value of Facebook shares have sunk to under $24 - that compares with its launch $38 IPO price, a drop of one third. Second quarter company losses came in at $157m.
However overall revenues were in line with analyst estimates at $1.18bn. What is most concerning investors is the lack of detailed future financial forecasting, though Facebook executives claim investment is the priority rather than future margins.