The Chart Show: BP, JD Wetherspoon, Flutter

TL;DR

BP reports strong profits but faces challenges from exiting operations in Russia; JD Weatherspoon aims to break even amidst slow sales recovery; Flutter experiences revenue growth in the US but faces challenges internationally.

Transcript

hello and welcome to the chart show i'm victoria scholar and this week's three charts are bp jd weatherspoon and flutter shares mbp rallied on tuesday after it reported underlying replacement cost profit in the first quarter of 6.2 billion dollars that's ahead of forecasts for four and a half billion dollars and the highest level in over 10 years i... Read More

Key Insights

• 🫥 BP's strong profits reflect the benefits it gained from the sharp rally in crude prices during Q1 2023, but the cost of exiting operations in Russia has impacted its bottom line.
• 🐢 JD Weatherspoon's aim to break even is hindered by slow sales recovery and increasing input costs, making profitability a major challenge.
• 😀 Flutter's revenue growth in the US is offset by declining revenue outside of the US, as it faces regulatory headwinds and post-pandemic demand lull in other markets.
• 😀 The challenges faced by BP, JD Weatherspoon, and Flutter highlight the macro uncertainties and the ongoing cost of living crisis, impacting their respective industries.
• 🤙 Investors are still assessing BP's profits against the cost of exiting Russia, while renewed calls for a windfall tax on energy giants like BP are being made.
• 🫒 JD Weatherspoon's struggles reflect the tight household budgets and limited discretionary spending due to the cost of living crisis.
• 🌍 Flutter's stock performance is influenced by the contrasting growth in the US market and challenges in other international markets.

Questions & Answers

Q: How did BP perform in Q1 2023, and what were the factors impacting its profits and cash flow?

BP reported strong underlying replacement cost profit of $6.2 billion, exceeding expectations. The surge in crude oil prices contributed to the high profits and surplus cash flow. However, the company faced a $24 billion charge due to exiting operations in Russia, impacting its cash flow and leading to hefty write-downs.

Q: How has JD Weatherspoon been affected by the ongoing challenges in the hospitality industry?

JD Weatherspoon's sales have been slow to recover, resulting in the pub chain's aim to break even by the end of the current fiscal year. Rising input costs like food, drink, and energy, along with a recent VAT increase, have added to the profitability challenges faced by the company.

Q: What contributed to Flutter's revenue growth in Q1 2023, and what challenges does it face outside of the US?

Flutter experienced a 6% revenue growth in Q1 2023, driven by a 15% increase in monthly players and a 45% increase in US sales. However, outside of the US, the company faced a 3% revenue decline due to safer gambling regulations and other regulatory headwinds, reflecting the challenges it faces internationally.

Q: How has the post-pandemic environment affected Flutter's stock performance?

After initially enjoying an uptrend with higher highs and higher lows, Flutter's stock peaked in Q1 2021 and has since struggled to maintain a positive trajectory. A significant downward trend line has emerged, with lower lows and lower highs, indicating the challenges the company has faced in the post-pandemic environment.

Summary & Key Takeaways

• BP reported higher-than-expected underlying replacement cost profit for Q1 2023, reaching $6.2 billion, the highest level in over 10 years. However, the company faced a $24 billion charge from exiting operations in Russia, impacting its bottom line.

• JD Weatherspoon expects to break even in the current fiscal year, but sales have been slow to recover. Rising input costs, including food, drink, energy prices, and a recent VAT increase, pose challenges for the pub chain.

• Flutter experienced revenue growth driven by increased players and sales in the US, but outside the US, revenue declined due to safer gambling regulations. Macro uncertainties and the post-pandemic lull in demand continue to challenge the business.