Barclays (BARC), Unilever (ULVR), Meta (US:META), AstraZeneca (AZN), J Sainsbury’s (SBRY), Norcros (NXR), WH Smith (SMWH), WPP (WPP), Wizz Air (WIZZ), Indivior (INDV) and Travis Perkins (TPK)
The first quarter banking results season was generally expected to be a mixed bag, with difficult comparisons baked into the numbers. And so it proved for Barclays (BARC) as the very mixed retail and investment saw a 4 per cent dip in its quarterly group revenue to £7bn. The knock-on effect for pre-tax profits was a 12 per cent fall to £2.28bn.
It comes as some relief to investors that a regulatory fine, or an administrative mistake, was not the source of the profit attrition. The naturally higher structural income it receives from better Bank of England interest rates has been superseded. Depositors and borrowers are either shopping around for better savings rates, or simply running the clock down on their mortgages in expectation that cuts later this year will mean cheaper deals. This was the main reason why Barclays UK, which represents the High Street retail bank and Woolwich brand, saw revenue fall by 7 per cent to £1.82bn.
The difficulties with deposit churn mean the net interest margin came in at 3.09 per cent (2023: 3.18 per cent). Still, the bank looks on course to deliver a return on tangible equity of over 10 per cent this year and made a further commitment to strengthening areas of growth by putting its Italian mortgage book up for sale and investing in the UK consumer business. JH
Read more: FTSE 350 Review: Are bank shares still worth owning?
Unilever beats forecasts and keeps guidance steady
Unilever (ULVR) shares rose by 5 per cent in early trading after the Marmite and Dove maker reported a better-than-expected first quarter. Revenue was up 1.4 per cent to €15bn (£12.9bn), on underlying sales growth of 4.4 per cent and volume growth of 2.2 per cent. All units were in growth, with the beauty and wellbeing arm leading the way. At the ice cream business, which the company plans to divest, sales were up 2.3 per cent on higher prices.
Management kept its full year outlook unchanged. It forecasts underlying sales growth of 3-5 per cent and a “modest improvement” for the operating margin. CA
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Astra’s cancer drugs drive major revenue beat
AstraZeneca (AZN) found itself near the top of the FTSE risers leaderboard this morning after releasing stronger-than-expected Q1 figures. Sales of $12.7bn (£10.1bn) were 7 per cent ahead of the market’s consensus estimates and represent a 19 per cent uptick on the same period last year.
The group’s oncology division was the engine of its outperformance, with revenue up 26 per cent to $5.1bn. Its blockbuster diabetes medicine Farxiga also surpassed expectations with $1.3bn in sales. Management maintained previously issued FY 2024 guidance of “low double digit” growth in total revenue and core EPS. The shares were up 5 per cent by mid-morning. JJ
Read more: AstraZeneca's dividend hike divides opinion
Norcros offloads UK tilemaking arm
Bathroom products distributor Norcros (NXR) is to sell its UK tilemaking business Johnson Tiles to its management for £1mn. Johnson Tiles UK eked out a £500,000 operating profit last year on revenue of £35.3mn, or 8 per cent of the group’s total, but has been a drain on cash for each of the last three years.
Norcros will incur one-off costs of £1mn on the sale, though, and will record a balance sheet impairment of £15mn on the carrying value of the asset in its results for the financial year that ended in March.
Norcros chief executive Thomas Wilcocks said the sale would allow the company “to focus on and accelerate” its growth strategy. Shore Capital analyst Tom Fraine said the sale demonstrated “a focus on efficient capital allocation”. The shares rose by 2 per cent. MF
Read why we’re bullish on Norcros
Revenue languishes at WPP
WPP (WPP) has reported its ninth consecutive quarter of top-line underperformance versus its peer group, according to analysts at Bernstein. Organic revenue minus pass-through costs dipped by 1.6 per cent between January and March, with growth in the UK and Europe offset by declines in North America and Asia Pacific.
Management has reiterated its guidance for 2024, however. Organic revenue growth minus pass-through costs is expected to be 0-1 per cent, while adjusted operating margins are due to widen by 20-40 basis points. JS
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Indivior hobbled by ‘transitory items’
Shares in Indivior (INDV) – the maker of opioid addiction treatments – fell 5 per cent in this morning’s trading after its Q1 results missed expectations. Revenue increased 12 per cent year-on-year to $284mn, but the market had been anticipating a figure closer to $300mn.
According to the company, sales of its key product, the opioid withdrawal aid Sublocade, were adversely impacted by a series of “transitory items” in the three months to 31 March. These include accelerating Medicaid dis-enrolment, a cyberattack on a US medical claims processor and abnormal levels of trade destocking.
Management also confirmed it plans to move the company’s primary listing to the US, where it makes nearly all of its sales while maintaining a secondary presence in London. JJ
