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The Big Story
Four of the FTSE big beasts reveal their results
Striking gains for Barclays
Barclays' half-year results show impressive growth, and not just in the ways you might expect.
Its UK lending businesses performed strongly, buoyed in part by relatively high interest rates and continued loan growth. Income from the UK retail bank rose 8% in the first half of the year, supported by growth in mortgages and deposits, while the Corporate Bank increased profits by 30%.
The investment banking division delivered a strong performance, although this reflects global rather than UK activity. Higher levels of deal and capital raising activity drove sharp increases in advisory fees (+67%) and equity capital markets (+65%). Equities trading also performed well. The figures suggest businesses and investors have become more active despite wider macroeconomic uncertainty and geopolitical tensions.
The bank paid out dividends of around £0.8bn and completed a £1bn share buyback, following a similar £500m buyback announced earlier this year. Buybacks like this mean there are fewer shares outstanding, with earnings therefore being spread across a smaller pool, and more value accruing to existing investors as a result.
The bank also upgraded its expected income for 2026 to around £31.5bn, up from around £31bn previously.
There were some credit impairments, although this was largely driven by a single investment banking client and the bank making higher provisions for potential payouts in connection with UK motor finance redress.
GSK update tells two stories
You'd be forgiven for baulking slightly at the 75% operating loss that GSK reported on Tuesday. In truth, the results were far more nuanced.
The company's decision to make an accounting adjustment for Camplixant, a drug used to treat chronic coughs, was a significant factor. The drug, which had been in Phase 3 development, was abandoned following disappointing trial results, resulting in a £1.3bn accounting impairment. The underlying picture in terms of actual money coming in and out of the business paints a healthier picture.
The company's core operating profit actually grew by 7%. Specialty medicines were the key vehicle for growth, with a total rise of 14%. This broke down into 19% growth for respiratory, 17% for oncology and a 10% increase in HIV medicines.
The success across specialty medicines offset a more negative picture in general medicines which by contrast was down by 9%.
Perhaps more interestingly, the company announced the development of a new flagship R&D site in Cambridge. Consistent with other pharmaceutical firms, the intention will be to ensure that the development pipeline is strong as patents continue to expire.
Overall, GSK's results tell two stories: a negative headline picture for accounting purposes, but a materially better story overall in the underlying numbers.
The stats are in, and people are spending
Unilever's results maybe told the clearest story of the FTSE 100 companies that reported on Tuesday. Consumers are clearly still spending on its products globally, although growth was driven primarily by emerging markets while Europe remained comparatively weak.
The company reported that underlying sales grew by 4.8%, with volume growth of 4.2%. Importantly, pricing was only up by 0.8%, further highlighting the volume-based nature of the growth.
Unilever said it was the strongest volume quarter for over a decade.
The company has focused heavily on its so-called Power Brands, such as Dove and Hellmann's, as opposed to allocating advertising spend to smaller businesses.
Whilst the headline figures for accounting purposes were slightly down, with a net loss of about 3.5%, the underlying business looks strong. The key question we were looking to answer was whether consumers are still spending on everyday household goods. Unilever's results suggest they are, although the strongest demand came from outside Europe.
Solid growth for BetMGM
BetMGM, which is fifty per cent owned by UK-listed Entain, showed solid figures for the half year.
Second quarter revenue was up by 3%. H1 revenue was also up 4% to $1.4bn. This was largely driven by its online casino business, which was up by 8%.
While BetMGM operates in the US, its performance is important for UK-listed Entain, which owns half of the business.
The business remains profitable and maintained its earnings guidance for the year, although management indicated the final year results may be towards the lower end of the range.
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