Tullow Oil (TLW), house prices, 4imprint (FOUR) and Quilter (QLT)
West African oil and gas producer Tullow Oil (TLW) remains a debt story. The company reported stronger interim pretax profits of $196mn, compared to $70mn last year, but its net debt climbed between the end of 2023 and 30 June. This was up to $1.7bn, compared to $1.6bn as of 31 December, because of a $75mn working capital outflow.
Free cash was negative, although the company said this was down to the “timing of tax payments and capital expenditure weighted toward the first half of the year”. Guidance for full-year free cash flow remains $200mn-$300mn, while the company said it would get net debt down to $1.4bn at the end of year.
“Tullow has no uncovered debt maturities until May 2026 and continues to consider options to manage its debt maturities and optimise its capital structure,” the company said. Its shares climbed late in the first half to almost 40p, but it has since fallen back to 28p. AH
House prices boosted by rate cut expectations
The positive news for UK house prices continued this morning after lender Halifax updated its closely followed index. Prices increased 0.8 per cent in July following a quiet few months, as falling mortgage rates, better economic sentiment and expectations of an interest rate cut boosted activity. Halifax said house price growth would remain positive for the rest of the year given the potential for more cuts from the Bank of England.
The lender’s numbers are based on the mortgages it approves, and it’s a huge lender so that will be comprehensive. However, it does strip out cash buyers and those buying with 100 per cent equity, which is still a large part of the market. Rival lender Nationwide released its updated index last week, which said prices in July rose 0.3 per cent. TL
Read more: What comes next for UK house prices?
Quilter prospers while the FCA ponders
Quilter (QLT) has been rebuilding itself after a bruising period of boardroom instability and a brush with the Financial Conduct Authority (FCA) over fees and the quality of advice offered by its personal advisor network. A skilled person was appointed in June to review the situation and at this early stage, no remediation funds have been set aside to cover any potential claims.
Despite this distraction, the operational results were strong, with the company delivering record underlying profits for the half. Assets under management (AUM) to the end of June were 7 per cent higher at £113bn, compared with £106bn at the December year-end, which were based on improved net inflows of £1.7bn. An operating margin of 29 per cent, up 5 percentage points, translated into a 28 per cent leap in adjusted profits before tax of £97mn. JH
Read more: Hunting for bargain shares? They’re right in front of you