Results round-up
Standard Chartered reported on a woeful year on Tuesday, with the company completely destroying 2014's $5.2bn profit before tax, with a $1.5bn loss.
The FTSE 100 bank saw underlying profit before tax dive 84% during the year to $0.8bn (£0.57bn), with the board blaming 'challenging market conditions'.
Underlying operating income was down 15% to $15.4bn. Standard Chartered's board broke that decline down into four segments.
It blamed one-quarter on the lower exchange rates against the US dollar; another quarter on business exits, disposals and de-risking; a third quarter on lower commodity prices and mark-to-market valuations; and a final quarter on lower levels of business activity.
The London-based bank saw underlying operating costs drop 7% to $9bn, though its underlying loan impairment of $4bn represented an increase of 87%. Around 40% of that increase was related to a number of exposures beyond the board's tightened risk tolerance, it said, and the balance was mainly driven by falling commodity prices and a deterioration of financial markets in India.
"While 2015 performance was poor, the actions we took on capital throughout last year and in particular in December have positioned us strongly for the current macro environment. We have a balance sheet that is resilient and we are in the right markets. We have identified our risk issues, and we are dealing with them assertively," said Standard Chartered group chief executive Bill Winters.
"We are making good progress on executing our strategy, creating a bank that will generate improved financial performance over time following from our improved cost efficiency, tightened risk controls, and focus on our many core advantages," he added.
On a reported basis, the bank made a loss of $1.5bn, after accounting for restructuring charges of $1.8bn, which was within the $3bn indicated in November to cover redundancy costs, impairments and a goodwill write down.
That also took into account a broadly capital neutral credit and funding valuation adjustment of $863m in the fourth quarter, a positive own credit adjustment of $495m, a gain on sale of businesses of $218m, and goodwill impairment of $362m related to Taiwan.
Normalised basic losses per share were 6.6c, down from earnings per share of 138.9c in 2014. Standard Chartered's normalised return on ordinary shareholders' equity was -0.4%, down from 7.8% in 2014. The bank's board confirmed its earlier decision not to declare a final dividend for the year.
Persimmon has increased its full year underlying profit before tax by 34% to £637.8m.
The FTSE 100 housebuilder said on Tuesday revenue for the year to 31 December 2015 had also risen 13% to £2.9bn.
That was driven by an 8% increase in legal completions rising to 14,572, and a 4.5% increase in the average selling price to £199,127.
The company also acquired another 20,501 plots of land in the 12 months, with 6,739 plots converted from the group's strategic land portfolio.
The company also commented that four years into its nine and a half year long term plan, its performance is significantly ahead of original expectations.
Since the launch of the plan in 2012, new home legal completions are ahead by over 55% and £733m of excess capital has been returned.
Chairman Nicholas Wrigley said the company has delivered an “outstanding” performance supported by improving customer sentiment and a mortgage market which is responding to customer demand.
“This strong growth results from working hard to open new outlets as quickly as possible following receipt of an implementable planning consent and from actively managing build programmes to secure improved rates of new home construction on every development site to meet demand,” he said.
The company also highlighted that the outlook is also looking bright, with forward sales including legal completions 12% ahead of 2015 so far.
“Customer activity in the first seven weeks of the 2016 spring season has been encouraging,” Wrigley said.
“Visitors to our sites are 12% ahead year on year, cancellations remain low and our weekly private sales rate is 13% ahead of the prior year.”
He believed the company is in a strong position to deliver further growth in 2016 supported by a refreshed outlet network of 380 active sites and its site opening programme for the year.
After absorbing a half-year loss of $5.67bn, BHP Billiton sliced its dividend deeper than most analysts predicted and adopted a new more cautious payout policy as it hunkered down for what it believes will be a prolonged period of low and volatile commodity markets.
The Anglo-Australian colossus also cut its capital and exploration spending by 40% to $3.6bn, which combined to help keep its half-time net debt at $25.9bn in line with consensus forecasts for the six months to 31 December.
In line with a new dividend policy designed to protect the balance sheet, and net cash flow shrinking 45% to $5.3bn, BHP chopped its interim payout by almost three quarters to 16 cents from 62 cents a year before. The consensus of analyst forecasts pointed to a 35 cents payout.
The new dividend policy is to provide a minimum 50% payout of underlying attributable profit at every reporting period, which represented 4 cents, with an extra 12 cents to soften the blow this time.
"We have not made these changes lightly," said chairman Jac Nasser. "They are a determined response to changing markets that will also help us take advantage of the significant opportunities ahead. We remain strongly committed to returning cash to our shareholders and in every reporting period, the board will assess the possibility of returning additional cash over that implied by the 50% payout ratio, as we have done this period."
As crumbling commodity prices led to revenue shrinking 37% to $15.71bn, continuing operations during the period generated underlying earnings before interest, tax, depreciation and amortisation of $5.99bn, a decline of 54%, with underlying attributable profits plunging 92% to just $412m and underlying earnings per share down by the same degree to 7.7 cents.
Steady sailing was the theme of the year at GKN, with the company reporting growth in sales and earnings across most of its operations on Tuesday.
Sales at the FTSE 100 firm increased 4% through the year to 31 Decembet to £7.23bn on a reported basis, from £6.98bn.
On a management basis it increased 3% to £7.69bn, with the board citing good growth in Automotive and Aerospace, though Land Systems was down in what it called a tough market.
The company's trading margin remained unchanged at 9.2%, excluding the recently-acquired Fokker Technologies, with a 10.9% increase in reported profit before tax to £245m, from £221m.
Profit before tax increased marginally on a management basis to £603m, from £601m.
"GKN continued to make progress in 2015 and delivered on our expectations," said GKN chief executive Nigel Stein.
"We performed well against our key markets, overcoming some demand weakness and demonstrating once again the strength of our businesses, strong market positions and leading technology," he added.
Stein said highlights of the year were GKN Aerospace's acquisition of Fokker Technologies, strong market-beating growth by GKN Driveline and good margin advances by GKN Powder Metallurgy.
"Looking forward, we expect 2016 to be a year of good growth, helped by the contribution from Fokker," he concluded.
Reported earnings per share increased 15% to 11.8p, though on a management basis it dipped 4% to 27.8p as a result of the costs of the Fokker acquisition, which was completed on 28 October.
At the end of the period, GKN had net debt of £769m, which was £145m higher than the prior year, also due to the the Fokker acquisition.
The company's board confirmed the total dividend was rising 4% to 8.7p per share, from 8.4p a year earlier.