Shell (SHEL), Melrose Industries (MRO), Smurfit Kappa (SKG), Standard Chartered (STAN), Alpha FMC (AFM), Bridgepoint (BPT), Reach (RCH), Grafton (GFTU), SIG (SHI), Revolution Bars Group (RBG), Nightcap (NGHT), Kitwave (KITW) and Hostelworld (HSW)
Shell (SHEL) revealed higher margins from its trading activities through the first quarter, partly offset by reduced LNG trading and unfavourable tax movements. Financial performance was helped by a 9 per cent increase in refinery processing intake, although the group booked an unfavourable movement relating to the fair value accounting of commodity derivatives, offset by favourable currency movements which netted off to a loss of $600mn in “identified items”.
Adjusted cash profits increased by 15 per cent on the prior quarter to $18.7bn, but were down 13 per cent year-on-year. Operating cashflow was up 6 per cent on the prior quarter, but down 6 per cent year-on-year, at $13.3bn.
Strengthening cash generation is enabling Shell to pay down debt, but it also announced another $3.5bn share buyback tranche. Gearing fell to 17.7 per cent at the end of the first quarter, compared with 18.8 per cent in the final quarter of 2023. MR
Read more: Are Shell and BP’s buybacks good for shareholders?
Engine repairs power Melrose
Melrose Industries (MRO) had a “strong” start to the year, with revenue up by 8 per cent, driven by an engines arm that grew by 21 per cent on the back of lots of repair work. The structures business remained flat, however, which reflected “the planned exit of non-core work and destocking by a major customer”, the company said.
Full-year guidance was left unchanged, with Melrose expecting to make an adjusted profit before central costs of around £560mn – a 33 per cent year-on-year increase. The reported revenue growth was slightly below RBC Capital Markets’ forecast of around 10 per cent, though, and the shares slipped by 5 per cent in early trading. MF
Read more: A new deal means Melrose can put past failures behind it
Standard Chartered boosted by non-interest income
Standard Chartered (STAN) revealed a strong first quarter update alongside a confident outlook for the rest of the year. Operating income for the Asia-focussed bank jumped 17 per cent to $5.2bn with net interest income and margins on the rise. Non-interest income, which accounts for over half of all revenue, was also heading in the right direction, important given that central bank interest rates have probably peaked. Profit at the investment banking unit rose by 13 per cent in the quarter. Fee-based revenues were boosted as the bank pulled in more wealthy clients, while trading volumes increased across all its product offering. MR
Reach reports positive start to 2024
Shares in Reach (RCH) jumped by 10 per cent in early trading, after the news publisher revealed that it was on track to hit its full-year forecasts.
Revenue fell by 6.7 per cent between January and March, driven by a decline in advertising, but management still expects to deliver adjusted operating profit of £97.6mn, up from £96.5mn in 2023. Plans to cut costs by 5-6 per cent are progressing well and events such as the European Football Championships, Olympics and elections are expected to boost reader engagement later this year. JS
Revolution tempted by Nightcap
Revolution Bars Group (RBG), the struggling operator which this week raised £12.5mn from investors through a discounted equity issue, confirmed it has held talks with fellow Aim-listed leisure company Nightcap (NGHT) about a “range of possible transactions”, including a potential sale of the company.
Revolution runs a chain of 88 pubs and bars. It has been running a formal sales process alongside its fundraising as it attempts to restructure its business to bring down borrowings – the company had net bank debt of £20mn at the end of last year, plus almost £120mn of lease liabilities.
In a statement issued in response to press speculation about a potential tie-up, Revolution said Nightcap – a smaller chain running 46 bars – had not been part of that formal process. It added there was “no certainty” that an offer from Nightcap would emerge, or on what terms. Its shares rose by 7 per cent. MF
Hostelworld sticks with guidance
Hostel online travel agent Hostelworld (HSW) reiterated that it expects to post booking and revenue growth in the high single-digits this year, as the company flagged market share gains and marketing costs at the bottom of its guidance range in an AGM statement. It added that its trading performance would allow it to repay its AIB debt facility two years ahead of schedule, and added that it would start a share buyback programme later this year. CA
