BUSINESS LIVE: BP profits fall 72%; Wayve raises over $1 billion; Retail sales decline in April

Nikhil Rathi, head of the Financial Conduct Authority (FCA), will face criticism from MPs this week as pressure mounts over the regulator’s plans to ‘name and shame’ the companies they investigate.

Rathi will be questioned at a Commons Treasury committee tomorrow about the proposals – which have provoked a fierce response from the city.

The number of new regular models that are manuals has more than halved in just six years, research shows.

Car manufacturers that no longer offer new showroom models with manual transmissions include Volvo, Mercedes-Benz, Jaguar and Lexus.

The FTSE 100 opened at another record, boosted by gains at Shell after Reuters reported its plans to sell its Malaysian petrol station business and BP posted profits as it maintained share buyback plans but missed earnings expectations expected.

Shell rose 1.6 percent after Reuters reported that the energy giant is in talks to sell its gas station business in Malaysia to Saudi Aramco.

BP rose 0.4 percent after the oil major maintained the pace of its share buyback program at $1.75 billion for the next three months but missed forecasts due to lower oil and gas prices and a US refinery outage .

The number of housebuilders rose 1.4 per cent based on data from Halifax, which shows UK house prices rose in April.

Medical equipment and services is the only sector in the red, with a decline of 0.2 percent.

Adam Vettese, analyst at eToro:

‘Quarter-to-quarter consistency appears difficult to achieve for BP at the moment, with a missed forecast in the first quarter due to a very strong update last time to round out 2023.

‘Lower energy prices and a weaker fuel margin are responsible for the slump. Investors will be happy to see that this miss has no impact on the buyback program and that the dividend remains stable.

“Looking ahead, the company aims to achieve $2 billion in cost savings over the next two years. This seems like a tough target, but if achieved, it will help eliminate volatility in the other variables that impact the revenue figure.

“Despite the dip, shares are still up this year and now represent an 8% discount to last month’s all-year high.”

Stuart Lamont, investment manager at RBC Brewin Dolphin:

‘As with Shell last week, investors sought reassurance from BP on production volumes and capital discipline.

However, BP missed earnings expectations due to lower gas prices, weaker margins and operational disruptions.

‘The extension of the share buyback program and the maintained dividend will nevertheless provide some comfort to shareholders, both of which indicate that BP’s management team views this as a temporary setback and remains relatively optimistic about the near-term prospects.’

House prices will rise by 2.5 percent this year due to an improved economic outlook and lower mortgage costs, property company Savills has predicted.

Prices were previously expected to fall by 3 percent.

Savills’ forecast is the latest to paint a more optimistic picture. Lloyds, Britain’s largest mortgage lender, also recently said prices have risen this year. Lucian Cook, head of residential research at Savills, said the outlook has improved since the last forecast in November.

British self-driving tech startup Wayve has raised $1.05 billion in a funding round led by Japanese investment bank SoftBank Group.

The funding will be used to accelerate the development and launch of Embody AI technology in production models, which can learn from and adapt to human behavior.

Nvidia also contributed to the Series C financing round as a new investor, as did existing investor Microsoft.

The latest funding brings Wayve’s total money raised to just over $1.3 billion and marks the largest investment to date in a British startup focused on artificial intelligence technology.

Founded in 2017, Wayve’s autonomous driving technology uses AI that the startup says will allow vehicles to “navigate situations that do not follow strict patterns or rules, such as unexpected actions by drivers, pedestrians or environmental elements.”

“This will enable automakers and fleets to accelerate their transition from assisted to autonomous driving,” Wayve CEO Alex Kendall told Reuters.

Retail sales fell 4 percent in April from the previous year, dampened by a spell of wet weather and an early Easter holiday.

The year-on-year decline is down from 5.1 percent growth in April 2023, but was artificially exacerbated by the earlier timing of Easter, which meant March sales were previously unusually high, the British Retail Consortium (BRC)-KPMG said. Retail monitor.

Nevertheless, the average growth for March and April combined was only 0.2 percent, even after adjusting for seasonal distortion, lower than the three-month average of 0.5 percent and the 12-month average of 2.2 percent.

Helen Dickinson, chief executive of the British Retail Consortium, said: ‘Gloomy weather and disappointing sales made for a depressing start to spring for retailers, even taking into account the change in Easter timing.’

Disruption in the Red Sea is getting worse and will reduce trade capacity from the Far East to Europe by as much as a fifth this quarter, shipping giant Maersk has warned.

Container ships have been diverted around the southern tip of Africa since late last year to avoid attacks by Iran-backed Houthi militants in the Red Sea.

BP posted a 72 percent year-on-year decline in net profit in the first quarter, as the energy giant faced much lower gas prices.

Profit after tax fell to $2.3 billion from $8.2 billion in the first three months of 2023, while total revenue fell 13 percent to $48.9 billion.

Rival Shell said last week that first-quarter net profit fell 15 percent to $7.4 billion.

Gas prices have fallen sharply since the surge following the invasion of Ukraine by major energy producer Russia in early 2022.

CEO Murray Auchincloss said: “We have had another financially resilient quarter and have continued to make progress on our strategy. Oil production had increased and our ACE platform in the Caspian Sea is now producing.

“We are simplifying and reducing complexity for bp and plan to deliver at least $2 billion in cash cost savings by the end of 2026 through portfolio upgrading, digital transformation, supply chain efficiency and global capacity hubs.”