BP rises as boss vows to protect its 6pc dividend
BP shares were given a boost as the firm’s chief executive promised to defend the dividend.
Bob Dudley revealed that he thought the global oil market was ‘pretty much in balance’. His comments came after a week of oil price rises.
The black stuff finished yesterday 3pc higher at $53.50 a barrel. Dudley thinks it will stay around $53 over the year to come.
The oil price crashed last year as a burgeoning US shale gas industry and a weak global economy curtailed demand. The producing nations did little to help the situation, refusing to stem the flow, which led to a glut of supply and drove the price down further.
Oil had fallen below $30 a barrel in January this year. There has long been talk about whether the industry giants will be able to maintain their attractive payouts to shareholders as a depressed oil price eats away at profits. BP shares are currently yielding more than 6pc.
But speaking at the World Energy Conference in Istanbul, Dudley said BP would defend its dividend even though oil supply is likely to outpace demand through at least the first half of 2017. BP shares gained 1.7pc, or 8.5p to close at 494.45p.
It wasn’t the only commodity firm to climb yesterday. The industry largely dominated the FTSE 100. The stock market continued its climb, narrowly missing out on besting its all-time high of 7104. It finished 0.75pc, or 53.1 points higher at 7097.5. The top riser for the day was BHP
Billiton. The firm yesterday proposed an investment of £24.2m to buy a 10pc stake in AIM-listed gold exploration firm SolGold.
BHP wants the right to appoint a director to the board of the business, as well as the opportunity to earn from some of SolGold’s projects. But SolGold’s board has said the deal is not in the best interest of the company or its shareholders. Executive director Nick Mather said it was pleased BHP had joined a growing list of international mining companies that are interested in investing in SolGold.
But he said a financing deal with Maxit and Newcrest was the current preferred option as it would leave SolGold in control of its Cascabel project in Ecuador.
Shareholders will decide at the AGM on Thursday. SolGold shares surged 20.3pc, or 3.4p to 20p. BHP shares were up 2.8pc, or 34.5p to 1267p.
Shares in InnovaDerma, a hair loss and anti-ageing treatment business, shot up on a tantalising teaser for the firm’s full- year results. InnovaDerma said it expects to report that revenues have grown more than 800pc to £4.2m in the 12 months to June 30.
Hopes are high for the firm’s Skinny Tan range, a self-tanning product which is designed to reduce the appearance of cellulite.
The product was originally backed by businesswoman Kelly Hoppen when the founders appeared on television programme Dragons’ Den in 2013.
InnovaDerma acquired the brand in May 2015 and the products are now available in seven countries and 2,500 retail locations including Superdrug stores, compared to just 250 a year ago.
The results are set to bring the business, which listed on the stock market in September, to its first net profit. Final results will be announced by the end of the month. Shares rocketed an eyewatering 216.7pc, or 162.5p to 237.5p – more than three times higher than Friday’s closing price of 75p a share. Ultra Electronics climbed after announcing it had won a £28m contract with the US Department of the Navy to provide cyber-secure systems. Initial tasks are set to be completed by September 2017 with a possible extension to the contract, which could take it through to 2020 and bring the value of the deal to £66.3m. Ultra Electronics will work with the Navy to develop a range of intrusion detection, control and security systems for the department. Shares advanced 1.2pc, or 23p to 1869p.