“But both of those problems are in the long grass, so for the time being the housebuilding sector still looks to be sitting pretty.”
Oil giant BP also impressed with its set of half-year results, announcing a triumphant return to profit of £144m, compared to last year’s loss of £1.4bn.
Group chief executive Bob Dudley attributed the group’s success to its “continued tight focus on costs” and “efficiency and discipline in capital spending”.
“We delivered strong operational performance in the first half of 2017 and have considerable strategic momentum coming into the rest of the year and 2018, with rising production from our new Upstream projects and marketing growth in the Downstream,” he added.
Its second quarter upstream production exceeded last year’s output by 10%, while the downstream unit saw 20% higher fuels marketing earnings over the first half of 2017.
BP reiterated that the dividend would remain unchanged at 10 cents per share.
This was welcome news to the firm’s shares which were trading 3% higher at 459p by late-morning, helping the FTSE 100 to surge 0.83% higher.
The overhang from $2bn payments related to the Gulf of Mexico disaster continued to push debt higher, and remained a glaring negative for the firm, according to Graham Spooner, investment research analyst at The Share Centre.
“Payments in relation to the spill were $2bn in the second quarter and $4.3bn in the first half of 2017,” he said.
“Nevertheless, BP was keen to highlight today that it expects these payments to be ‘considerably lower’ in the second half and the additional charge is not expected to have any significant effect on forecast cashflows.”
Also, the company’s ability to cover dividends and capital expenditure was still in question, he added, which is one of the reasons why he continues to recommend BP as a “buy” for contrarian investors.
