BUSINESS LIVE: Retail sales growth disappoints; BP profits beat forecasts; Virgin Money UK suffers mortgage dip

British retailers endured weaker than expected sales growth in January as shoppers remain cautious on discretionary spending, industry data shows.

The British Retail Consortium (BRC) said sales were up by 1.2 per cent year-on-year last month, representing a fall in purchases when inflation is taken into account and down from a 1.7 per cent rise in December.

(PA) – The sale of shares in NatWest to everyday investors could happen as soon as June, a Government-owned company has said.

The retail offer was first announced by Chancellor Jeremy Hunt during his autumn statement last year, as the Government leaps forward in its efforts to fully offload its stake in the bank.

UK Government Investments (UKGI), which is owned by the Treasury, said it is currently in the process of working with advisers to carve up a plan for the share sale.

Holger Vieten, who is leading the work for the organisation, told a group of MPs: “At this point, we have been asked by the Chancellor to explore a retail offer…and we are in the development and design stage. We are looking at various options as to how that could be implemented.”

He said advisers had been brought on board to help, including Freshfields to give legal advice, Barclays as retail co-ordinators and Goldman Sachs as the overall privatisation strategy advisers.

Mr Vieten stressed that there is no exact date for when the sale will occur but revealed that it could be in the summer at the “very earliest”.

Pushed to give a closer timeline, he agreed that that could mean June.

Mr Hunt indicated in November that the potential sale would happen in the coming year.

The UK Government bailed out NatWest Group, previously known as Royal Bank of Scotland, with nearly £46billion during the 2008 financial crisis, landing it – and therefore taxpayers – with a stake in the bank.

It has gradually been whittling down this shareholding from a peak of 84% in 2009, and now owns less than 35%, which is worth about £7billion.

But it wants to fully offload its shareholding and return the bank to private ownership by 2025 to 2026, provided the conditions are right and that selling shares offers value for money.

Triodos Bank UK has launched a thematic fund investing in companies that it says will improve the wellbeing and development of children worldwide.

The Triodos Future Generations Fund invests in 34 small and medium-sized listed companies that fit into one of the fund’s five themes.

Renishaw shares jumped by a fifth on Tuesday morning despite the FTSE 250 firm reporting a sharp drop in earnings.

The Gloucestershire-based engineering company revealed pre-tax profits slumped by 27 per cent to £56.5million in the six months ending December.

Oil prices were treading water on Tuesday as US-led strikes on Houti rebel targets helped to stabilise prices, following a sharp decline on hopes of a Israel-Hamas ceasefire.

Brent Crude futures recovered to $77.97/barrel by mid-morning, having fallen from as high as $83.55/bl in January, while West Texas Intermediary was at $72.68 compared to its 2024 high of $78.01.

Virgin Money UK saw a downturn in mortgage market activity its first quarter as a likely peak in UK interest rates drives a housing market slowdown.

The London-listed lender saw a 2.2 per cent decline year-on-year in mortgage lending to £57.1billion in the three months to December.

AIM-listed healthcare group Futura Medical expects to post its ‘first meaningful revenues’ after the successful UK launch of its over-the-counter erectile dysfunction drug.

Eroxon, which the group claims is the first ‘clinically proven topical treatment’ for erectile dysfunction that does not require a doctor’s prescription, has already taken a 20 per cent market share among similar products in the UK and Belgium since its March 2023 launch.

Economic growth could be held back for up to four decades because of the impact of lockdowns on children’s education, according to major report.

The Organisation for Economic Cooperation and Development (OECD) said test scores showed an ‘unprecedented’ drop in reading and maths standards between 2018 and 2022.

Seraphim Space Investment Trust climbed to new heights in January, marking itself as the best performing investment trust of the month as its returns skyrocketed 49.4 per cent.

The trust, which invests in early-stage space technology firms, reversed losses in the latter part of 2023, which saw its share price fall by nearly half.

BP has followed rival Shell in revealing a sharp fall in profits in 2023, reflecting a significant drop in oil and gas prices compared with the previous year.

The oil supermajor reported a $13.8billion (£11billion) underlying replacement cost profit for last year, compared to a record $27.7billion (£22.1billion) the previous year.

The Confederation of British Industry (CBI) has agreed to settle a wrongful dismissal case brought by former boss Tony Danker.

The business organisation sacked Danker as director-general last April following complaints about his behaviour.

The Government needs to seriously accelerate its transition to electric vehicles (EVs) if Britain is going to meet net zero targets in time, a House of Lords inquiry has found.

The Environment and Climate Change Committee’s EV Strategy: rapid recharge report published today warns that a ‘combination of higher purchase costs, insufficient charging infrastructure and mixed messaging’ risks slowing the adoption of electric cars in Britain.

The British arm of electric car firm Arrival has collapsed into administration, putting nearly 200 jobs at risk.

Administrators from auditing group EY said they are looking to sell the business and assets of the two UK units.

Richard Hunter, head of markets at Interactive Investor:

‘The more immediate outlook over the next quarter and indeed for the year as a whole guides that upstream production looks likely to improve, but lower industry refining margins could persist, albeit at a lower rate.

‘The group is keeping its foot to the floor on capital expenditure to fund its transition, with spending of $16 billion per year to continue at the very least in the years of 2024 and 2025.

‘In the meantime, the industry as a whole is under increasing pressure to move away from traditional fossil fuels to cleaner replacement energies, and this has tended to weigh on the sector, not least of which in terms of historical valuations.

‘With the move to renewables yet to prove consistently profitable or practical across many technologies, there are many challenges to be overcome.’

Virgin Money UK’s mortgage business staggered in the first quarter due to stiff competition and subdued demand, but the British challenger bank still met financial target during the period.

The company also stuck by its full-year net interest margin forecast of 1.9 to 1.95 per cent.

‘We are encouraged by both our customers’ resilience and improving sentiment in the mortgage market as interest rates have peaked,’ CEO David Duffy said in a statement.

BP profits beat expectations in the first quarter at $3billion, thanks to strong gas trading, as the energy company increases the pace of its share repurchases.

The quarterly results lifted the energy giant’s 2023 profit to $13.8 billion, a 50 per cent drop from a year earlier as oil and gas prices cooled and refining profit margins weakened.

The strong quarterly profit will come as a relief to CEO Murray Auchincloss after the company had substantially missed forecasts in the previous two quarters.

BP maintained its dividend at 7.27 cents per share and increased the rate of its share buyback programme to $1.75 billion over the next three months from $1.5 billion in the previous three months.

The company said it was committed to repurchasing $3.5 billion of shares in the first half of 2024.

Rivals Exxon Mobil, Chevron and Shell last week beat profit expectations on the back of a mix of strong trading results and higher oil and gas production while refining margins weighed on the sector amid sluggish global economic activity.

The Confederation of British Industry (CBI) has agreed to settle a wrongful dismissal case brought by former boss Tony Danker.

The business organisation sacked Danker as director-general last April following complaints about his behaviour.

Terms of the pay-out were not disclosed but come as the latest embarrassment for the crisis-plagued organisation.

British retailers reported sales growth of 1.2 per cent in January, representing a fall in purchases due to inflation and down from 1.7 per cent in December, as Britons continue to remain cautious on spending, British Retail Consortium data shows.

‘It may be a new year, but the hangover of low consumer confidence remains,’ Linda Ellett, UK head of consumer markets, leisure & retail at KPMG said.

Ellett said bad weather conditions last month, including two storms, discouraged shoppers from venturing out to stores.

British consumers have had to contend with high inflation and borrowing costs, potentially pushing the economy into a shallow recession in the second half of 2023.

But the Bank of England last week hinted that rate cuts could be on the horizon as price growth slows