Investors cheer BP as it starts buying back shares
Oil giant BP kick-started its share buyback programme yesterday, the first time a major European oil firm has resumed r epurchases si nce prices slumped in 2014.
As part of scheme that allows i nvestors to choose dividend payouts in shares rather than cash, BP said it will purchase a maximum of 1.96bn ordinary shares until the company’s 2018 AGM, or August 17 next year, whichever is earliest.
The plans were revealed last month as BP announced that profit for the third quarter had been doubled.
BP’s chief financial officer Brian Gilvary said the scheme would be introduced to ‘offset the ongoing dilution’ of its dividend.
‘Given the momentum we see across our businesses and our confidence in the outlook for the group’s finances, we will be recommencing a share buyback programme this quarter,’ he said.
BP has been trying to shake off the legacy of the Deepwater Hori- zon spill in 2010, that saw it fork out more than £48bn in clean-up costs and penalties.
But a downgraded outlook for oil demand from the international Energy Agency meant the price of crude oil fell, and BP ended the day down by 1.6pc, or 8p, to 495p.
Shares in mining companies Glencore, Anglo American and Rio Tinto also fell as the price of copper slid.
‘With the miners falling ... it’s a very heavily-weighted sector on the FTSE,’ said Henry Croft, a research analyst at Accendo Markets. ‘We’ve been really in a consistent downtrend since the beginning of November.’
Bucking the trend were safe haven precious metals miners –
Fresnillo led FTSE 100 gains to soar 3.3pc, or 42p, to 1325p, while
Randgold Resources also made inroads to end the day 0.8pc higher, or 55p, at 7045p.
Fresnillo was also boosted by an upgrade f r om HSBC which changed its ‘hold’ rating to ‘buy’, and cut its target price to 1570p from 1760p. it was the biggest mover on the FTSE 100 as markets closed, but the index fell 41.81 points to 7372.61.
Wizz Air’s mammoth £13.1bn order from Airbus weighed on
Thomas Cook as it traded lower by 2.8pc, or 3.3p, to land at 113p. Hungarian airline Wizz has bought 146 of Airbus’s planes, in a deal it called ‘a game-changer’.
industrial conveyor belts supplier Fenner enjoyed soaring profits and a subsequent leap in its share price as the company confirmed its outlook for 2018 would be above previous expectations.
Profits and revenue for the year ending August 31 came in well above market predictions to rise by £68.1m from a loss in 2016 to £53.4m, while revenue rose 14pc to £655.4m. Analysts were expecting full-year revenue of £639.8m, and an operating profit of £47.1m.
Fenner closed 8.4pc higher, or 28.25p, at 365.25p. Shares in outsourcing group
Carillion spiked in early trading as it announced a £254m contract win from Oman. The debt-laden firm issued two profit warnings this year and i n September announced a £1.2bn loss for the first half. The deal did little to assuage the fears of investors, leaving Carillion down at 41.75p, 3.5pc lower, or 1.5p.
Strong results at Avon Rubber boosted shares by 4pc, or 43p, taking its final price to 1108p. The manufacturer’s order book increased by 11.8pc to £173.9m in the year to September-end, while profits were up 11pc to £19.8m.
EasyHotel’s takeover of a 104room hotel in Newcastle boosted its share price, which rose 1.7pc, or 2p, to 119.5p. Boss Guy Parsons said the deal was an excellent opportunity to establish itself in the ‘vibrant and popular’ city.