BUSINESS LIVE: Lloyds profits slump; Heathrow slams ‘anti-growth’ policies; PZ Cussons to sell St. Tropez

Zoe Gillespie, investment manager at RBC Brewin Dolphin:

‘Lloyds’ numbers have begun to slow, which was to be expected as interest rates appear to have peaked and competition in the mortgage market heats up.

‘While the bank’s profits and net interest margin may have been squeezed, they are still at strong levels.

‘More generally, Lloyds appears to be in relatively rude health and in a good position to manage the potential fall of interest rates later in the year.

‘With such steady performance, Lloyds’ focus may soon turn to more strategic questions around its future direction, adding to the £6 billion sale of Scottish Widows’ in-force bulk annuity portfolio announced earlier this year.’

The chairman of Natwest has declared it is ready to bring an end to the ‘sorry tale’ of government involvement as a public sale of shares in the lender draws closer.

Rick Haythornthwaite, who took over in January, told the bank’s annual general meeting in Edinburgh: ‘A return to private ownership is now in sight.’

And he said he was confident that Paul Thwaite – the bank’s fourth chief executive since it was rescued from collapse in 2008 – would be the last to answer to Treasury shareholders.

Soap maker PZ Cussons will divest several of its assets across the globe, including its popular self-tanning brand St. Tropez, to reduce its debt levels.

The Imperial Leather and Original Source maker has been hammered over the last year by wild currency swings, with the firm’s heavy exposure to Nigeria’s Naira proving to be particularly challenging.

PZ Cussons said: ‘St. Tropez has grown significantly since acquisition, establishing a leading position in its key premium self-tanning market of the US.

‘Given the strength of the brand’s equity, there remains significant long-term growth potential in the US and in both new geographies and category adjacencies.

‘This growth will however be harder to realise under PZ Cussons’ ownership, given the need to allocate resources across our diverse geographic and category footprint.

‘We therefore plan to realise shareholder value by initiating a process to sell the brand to an owner better placed to capture the brand’s significant long-term potential.’

Heathrow execs have lashed out against ‘anti-growth policies’ like the so-called tourist tax, which they say are holding back the airport and travel industry.

The criticism came despite a record 8.5million passengers travelling through Heathrow in the first three months of the year.

The airport said: ‘Ministers should rethink anti-growth policies like the “tourist tax” that discourage international visitors from spending in the UK; and unnecessary travel visas for transiting passengers that risk the UK’s global connectivity and Heathrow’s hub status.

‘A supportive policy environment for aviation would deliver a much-needed economic boost by encouraging people to visit, spend and do business here in the UK.’

Ithaca Energy is to join forces with the UK arm of an Italian oil major in a deal worth more than £750million.

The FTSE 250 North Sea producer has agreed to buy most of the upstream oil and gas assets owned by Eni UK for around £754million.

Lloyds Banking Group profits sank 28 per cent in the first quarter after peaking interest rates and rising competition in the mortgage market squeezed margins.

The British bank has posted a first quarter pre-tax profit of £1.6billion, down from £2.3billion a year ago and in line with estimates.

Group chief executive Charlie Nunn said: ‘The Group is continuing to deliver in line with expectations in the first quarter of 2024, with solid net income, cost discipline and strong asset quality. Our performance provides us with further confidence around our strategic ambitions and 2024 and 2026 guidance.

‘Guided by our purpose, we are continuing to support customers and successfully execute against our strategic outcomes, as highlighted in the third of our strategic seminars last month. This underpins our ambition of higher, more sustainable returns that will deliver for all of our stakeholders as we continue to Help Britain Prosper.