Barclays pre-tax profits fall, Centrica adjusted earnings surge

London pre-open

The FTSE 100 was being called to open 48.5 points firmer ahead of the bell on Thursday after closing 0.57% higher in the previous session at 7,348.23.

Stocks to watch

Barclays reported a fall in pre-tax profits on Thursday as higher costs and a £300.0m impairment provision for bad debts amid the cost of living crisis weighed on the bank's bottom line.

Barclays said pre-tax profits had fallen 24% to £3.7bn, while group income was £13.2bn, up 17% year-on-year, including £800.0m from hedging arrangements related to the over-issuance of securities. Credit impairment charges were £300.0m, compared to a £700.0m release of cash last year that had been set aside for debts expected during the Covid pandemic.

Electric services company Centrica said on Thursday that it had delivered a "strong" operational performance in the six months ended 30 June, with adjusted earnings surging against a backdrop of "high and volatile" commodity prices.

Adjusted underlying earnings skyrocketed 143% to £1.66bn, adjusted operating profits surged 412% to £1.34bn and adjusted earnings per share shot up to 11.0p from 1.7p at the same time a year earlier. However, on a statutory basis, Centrica swung from an operating profit of £1.0bn in 2021 to a loss of £1.09bn a year later, due to a £1.9bn loss on net re-measurements after taxation.

Newspaper round-up

Britain's exporters have seen their overseas trade stagnate over the past year despite strong growth in domestic demand for their products and booming export markets, according to a survey. The British Chambers of Commerce said that a survey of 2,600 exporters found a quarter had suffered a fall in exports and another 46% reported no change. – Guardian

The UK car industry has said it will not be able to produce a million vehicles a year until 2025, two years later than expected, after the global sector was hit by a string of crises. Russia’s invasion of Ukraine, Covid-19 lockdowns in China, and continued shortages of computer chips have all combined to stall the recovery in car-making, leaving manufacturers unable to supply enough cars to willing buyers. – Guardian

A Saudi Arabian prince has taken a £190.0m stake in Britain's biggest pension provider as the Gulf state expands its foothold in the City of London. Saudi royal Alwaleed bin Talal Al Saud revealed he had taken a stake of just over 3% in Phoenix Group through his Kingdom Holding Company. The investment makes the Saudi royal the sixth biggest investor in Phoenix. – Telegraph

British courts will have the power to award damages in Bitcoin under new proposals to bring the legal system into the crypto era. The Law Commission has told the Government English law needs a new category of property to cover crypto assets, including digital currencies such as Bitcoin and non-fungible tokens. – Telegraph

The owner of Facebook and Instagram has suffered its first drop in revenue as it struggles with a global advertising slowdown, stronger dollar and mounting competition. Meta Platforms fell short of Wall Street's expectations in the latest quarter and forecast another drop in sales in the next. Shares in the world's largest social media group retreated by 4.1%, or $6.88, to $162.70 during after-hours trading in New York last night. – The Times

US close

Wall Street stocks closed firmly higher on Wednesday as investors digested another fat stack of corporate earnings and mulled the outcome of the Federal Reserve's latest policy meeting.

At the close, the Dow Jones Industrial Average was up 1.37% at 32,197.59, while the S&P 500 was 2.62% firmer at 4,023.61 and the Nasdaq Composite saw out the session 4.06% stronger at 12,032.42.

Reporting by Iain Gilbert at Sharecast.com