BP navigates choppy waters: Refining margins weigh on Q3

Earlier this month, BP (BP.) released a trading statement that stayed in line with expectations, giving us a glimpse into the company’s performance for the third quarter of 2024.

But the oil production and operations segment is facing a bit more turbulence. BP highlighted lower oil price realisations, particularly from the Gulf of Mexico and the UAE, combined with increased exploration write-offs. All told, this could hit the bottom line by as much as $0.6 billion.

The refining business also took a hit. Weaker margins, expected to knock between $0.4 – 0.6 billion off earnings, are compounded by a soft oil trading result. The refining environment continues to be a headwind, further weighing on the quarter’s performance.

To add to that, net debt is set to rise. Softer refining margins, combined with the delayed arrival of $1 billion in divestment proceeds, mean debt levels will be ticking higher.

BP’s full financial results are due on October 29, and all eyes will be on how they navigate these challenges in the final stretch of the year.

IntegraFin inflows keep rolling: Record quarter for Transact platform

IntegraFin (IHP) has released its Q4 2024 trading update, highlighting another quarter of steady growth for its Transact platform. The platform achieved a record high for funds under direction (FUD), reaching £64.1bn, a 3% increase in the quarter and a 17% jump year-on-year.

Revenue for FY24 is expected to come in around £145m, up from £134.9m in FY23, buoyed by higher average daily FUD. These numbers show that IntegraFin continues to hold its own in the highly competitive adviser platform market.

CEO Alex Scott struck a balanced tone in his remarks, noting that while the company is well-positioned heading into FY25, cautiousness is warranted with the upcoming Autumn Budget and US elections, both of which could sway investor sentiment. Nonetheless, the group’s focus on innovation, award-winning service, and steady inflows should provide a solid foundation for future growth.

With FY24 ending on a high, IntegraFin is well-poised for the year ahead, though we will be closely watching the year-end results set to be released on December 18^th.

Mony Group delivers mixed by in Q3

Mony Group’s (MONY) Q3 trading update revealed a mixed bag of results as solid growth in insurance was tempered by declines in other segments like travel and home services.

Home Services faced challenges, with an 8% drop in revenue as broadband demand softened and fewer new mobile handsets hit the market. The travel sector was the hardest hit, suffering a 15% decline due to lower car hire conversions.

On the upside, Cashback grew 2%, supported by rising member numbers and robust insurance product performance within the platform. This growth highlights the success of Mony’s diversification efforts, particularly through the ever-growing SuperSaveClub.

With over 750,000 members now enrolled, SuperSaveClub continues to drive customer engagement, offering a wider range of products like single-trip travel insurance. CEO Peter Duffy remains confident in the company’s strategic direction, expressing optimism about meeting full-year expectations despite persistent market challenges.

Norcros sees resilient first half despite market challenges

Norcros (NXR) has provided a trading update ahead of its interim results, and the group’s resilience shines through, even in tough conditions.

In the UK, LFL revenue was up by 1%, with market share gains driven by fresh product launches and solid cross-selling strategies. However, with the Johnson Tiles sale in the rearview, reported revenue fell by 9%. Operationally, Norcros ticked off a key milestone, consolidating its warehousing and distribution for Grant Westfield and Vado—though there’s a £2 million one-off cost attached that’ll be listed as an exceptional item.

Over in South Africa, the numbers were a bit softer. Revenue was down 1% on a reported basis and 2% in constant currency. Despite no electricity supply interruptions in the last four months—a win for stability—consumer confidence is still shaky, and it’s been reflected in the trading results.

Financially, Norcros is still standing strong. Net debt is expected to sit around £45 million by the end of September, right in line with seasonal patterns, and the leverage ratio remains a healthy 1.0x underlying EBITDA. This puts Norcros in a good position to continue executing its strategy.

Looking ahead, Norcros isn’t shying away from the market’s ongoing challenges. The board remains confident in its market-leading position and expects full-year underlying operating profit to hold steady, in line with market expectations. They’re also looking to push further toward their medium-term targets, showing that while the environment is tough, Norcros is far from standing still.

Trading update provides some light relief for under fire Rentokil

Rentokil Initial’s (RTO) latest trading update for the third quarter of the 2024 financial year brought a bit of relief for investors as the shares registered a modest price gap higher on the day of the results. This uptick, while welcomed, stands in stark contrast to the significant negative gap we saw in September.

In North America, however, the company faced operational hurdles, resulting in a lackluster organic growth rate of just 1.4%. CEO Andy Ransom acknowledged these challenges but also noted that the integration of Terminix remains on track, with additional branches transitioning to the new systems platform.

Customer retention in North America improved slightly to 79.9%, yet inbound digital lead flow was disappointing during July and August, with a notable rebound in September. To address these issues, Rentokil is rolling out the Right Way 2 plan, focusing on sales and marketing enhancements as well as customer retention strategies. The introduction of new satellite branches in key metro areas aims to bolster brand visibility and lead generation, alongside a renewed commitment to customer experience through strategic leadership additions.

Despite the ongoing challenges, Rentokil maintains its full-year revenue and margin guidance, projecting North America Adjusted Operating Profit margins around 17.2% and overall Group margins at 15.5%. The net debt to earnings (EBITDA) leverage is expected to remain stable at 2.8x by year-end, underscoring the Board’s confidence in the Group’s long-term strategy and growth potential.

Saga’s half year revenue jumps 10% year-on-year

Saga (SAGA) followed up the positive Ageas news we reported earlier this month with a solid trading statement that has further boosted investor confidence. In its recent update, Saga revealed that revenue for the six months ending August 31, 2024, increased by 10% year-on-year, reaching £300 million. This growth is underpinned by a robust performance in its travel and insurance divisions.

In the insurance sector, while challenges persist, Saga reported a 5% rise in policy sales. The strategic focus on enhancing customer value through tailored products and improved service has begun to pay off, despite the backdrop of rising claims and competitive pressures.

Saga’s operating profit for the period reached £45 million, reflecting a significant recovery from last year’s losses. The company also reported a net cash position of £75 million, bolstering its financial stability and providing flexibility for future investments.

With the Ageas partnership discussions gaining traction, Saga aims to leverage this collaboration to enhance its insurance offerings, particularly in pension and savings products. This strategic move aligns with the growing demand for such services among the aging population in Europe and Asia.

Overall, Saga’s latest trading update demonstrates a strong operational turnaround, signaling its potential to navigate current challenges and capitalize on emerging opportunities in the market.

Whitbread sees progress in UK and Germany with strong interim results

Whitbread (WTB) recently delivered a robust trading update, highlighting steady performance in UK accommodation sales and significant strides in its German operations. For the first half of FY25, total statutory revenue reached £1.57 billion, slightly down from £1.57 billion in H1 FY24. However, adjusted profit before tax fell 13% to £340 million, reflecting transitional impacts from their Accelerating Growth Plan (AGP) and a softer demand environment in the UK. Despite these challenges, the company’s continued focus on growth and efficiency has put them in a strong position moving forward.

In the UK, Premier Inn remains the leading hotel brand, with total accommodation sales broadly in line with last year’s performance. While UK food and beverage sales dipped 7% due to changes in their restaurant offerings, the brand has maintained a strong occupancy rate of 84.2%. In Germany, total accommodation sales surged by 22%, driven by successful commercial initiatives and a growing portfolio. The company is on track to achieve breakeven on a run-rate basis by the end of this year, with plans to reach 20,000 open rooms by FY30.

Looking ahead, Whitbread anticipates an improving trend in bookings and remains optimistic about driving like-for-like sales growth in the second half of the fiscal year. The company is set to realize between £175 million and £225 million from property-related transactions, further strengthening its financial position. CEO Dominic Paul emphasized the company’s commitment to operational excellence and brand strength, which will sustain their performance in both the UK and German markets.