Three things you need to know as the UK financial markets open, from Tony Cross.
#1. Volume slump covered by improving margins at Diageo
Full year numbers are out from Diageo LON:DGE this morning showing an increase in operating margin and an 8.2% uptick in reported operating profits, but organic net sales declined 0.6%. This has been sufficient to encourage management to push through a 5% increase in full year dividends, but the falling sales volumes may warrant further scrutiny. The note highlights that this is primarily being driven by the Latin America and Caribbean territory, with the company holding or growing share in 75% of its operating markets.
#2. Inflation pressures easing as Greggs sales continue to grow
Interim results from Greggs LON:GRG show the fast serve food outlet group continuing to make strong progress. Total sales were up by more than 17% and the interim dividend has been hiked by 3p to 19p per share. Use of the Greggs loyalty app is also rapidly growing, with it being used in 18.3% of transactions, against just over 10% a year ago. Improved recovery of cost inflation is also helping and management note that the company remains on track to meet full year expectations.
#3. $1.5bn share buyback announced at Standard Chartered
Q2 numbers are out from Standard Chartered LON:STAN this morning with news of a $1.5bn share buyback headlining. Growth in the bank’s wealth management division was seen as being a key driver here and management have upgraded full year profit forecasts to the top of previously stated expectations. It hasn’t been all positive however with net interest income down by 20% as the impact of the early stage of the high rate cycle retreated.