FTSE-100 hits August highs with Ladbrokes owner GVC on the rise

OIL investors under any illusion over the crisis facing the industry were stopped in their tracks this week, as newly listed behemoth Saudi Aramco posted a plunge in profits.

With roads relatively empty, the black stuff hasn’t been in demand for months, and the carnage was underscored by British oiler Petrofac today.

The oil services company said it would not pay its dividend due to the oil price fall, and it had swung into the red, making a $78 million first-half loss down from a $139 million profit in the same period last year, hurt by a $99 million charge due to the price crash.

Hargreaves Lansdown analyst Nicholas Hyett warned Petrofac’s shrinking order book and the delay of new orders into next year “isn’t encouraging”.

There were some bright spots: the company committed to reduce its direct emissions to net zero by 2030 and boost the number of women in senior roles to 30% by 2030. Its shares rose 2% to 169p as the wider FTSE 250 was buoyed by comments from Bank of England deputy governor Dave Ramsden that the central bank would step up quantitative easing if the economy slowed again.

Domino’s shares were off the menu — down 7.8p at 317.2p. The pizza chain has seen sales surge in lockdown, up 5.5% to £628.9 million in the UK as takeaways took up some of the slack from restaurant closures. But £3.4 million in costs for PPE hit first half profits.

A stand-off with its largest franchisees which began under former boss David Wild continues. CEO Dominic Paul, the former boss of Costa Coffee, said he had visited franchisees and stores since joining Domino’s in May. “I have been incredibly impressed by how our franchisees have operated throughout the Covid crisis,” he said.

Emma-Lou Montgomery of Fidelity said: “The decision to pay the deferred 2019 dividend will go some way to appease shareholders, but the lack of an interim payout amid the clear warning that the road ahead is very uncertain will, no doubt, leave investors with a nasty taste in their mouths.”

Ladbrokes owner GVC was the biggest gainer on the FTSE 100, aided by a Buy note from Peel Hunt which was bullish on its US growth prospects, while noting the controversy over ex-CEO Kenny Alexander’s sudden departure and an HMRC probe. Shares increased 8% to 771p.

Peel Hunt analyst Ivor Jones said: "GVC should use the interims to make noise about its operational excellence and reset the investment agenda. It cannot prove that there will be no further fall-out from the departure of the former CEO and the HMRC investigation. What it can do is show the strength of the business: market-by-market, product-by-product."