Companies roundup: BP’s profits & house prices

BP's (BP.) first quarter upstream production rose by 2.1 per cent from a year earlier to 2.38mn barrels of oil equivalent per day. However, financial performance came up short of consensus expectations due to weaker fuel margins, lower energy prices, and the impact of the Whiting, Indiana refinery outage. 

Underlying replacement cost profit — the group’s preferred metric — came in at $2.72bn (£2.18mn) against $4.96bn in Q123. Profits more than halved at the gas & low carbon energy division as hub prices clicked into reverse, although overall performance was aided by a strong oil trading result and higher realised refining margins. The dividend held steady at 7.27 cents per share and another $1.75bn is due from the ongoing share buyback through the second quarter. MR

Read more: Are Shell and BP’s buybacks good for shareholders?

House prices hold steady

House prices largely flattened in April, up just 0.1 per cent in March and 1.1 per cent on the same period a year ago. The average property now costs £288,949, according to Halifax’s house price index.

Halifax’s head of mortgages Amanda Bryden said that although borrowing costs remain elevated, a “period of relative stability” has led to improvement in demand and activity, with mortgage approvals hitting their highest level in 18 months.

However, she warned that mortgage rates have been edging up in recent weeks as markets factor in a slower pace of interest rate cuts from the Bank of England. MF

Read more: Why everyone was wrong about house prices last year

Revenue flat at IWG

International Workspace Group (IWG), the flexible office space provider, reported flat revenue of $912mn (£727mn) in the first quarter. Net debt was also steady at around £791mn, and the company left adjusted cash profit and debt expectations for this year unchanged. 

RBC Capital Markets analyst Andrew Brooke expects IWG to continue to make inroads into cutting its debt, benefiting from lower capital spending and the demise of US competitor WeWork. MF

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Builders are more active

The UK’s construction sector improved for a second month, bolstered by the commercial and civil engineering sectors.

S&P Global’s UK Construction Purchasing Managers’ Index lifted to 53.0 in April, comfortably above the neutral 50.0 level that separates sector expansion from contraction. It also represented a decent uplift from the 50.2 level recorded in March.

Commercial building was the fastest growth area, in part driven by refurb projects. Civil engineering grew at its fastest pace for nine months, but the private housing market remained a drag on activity. MF