MARKET REPORT: Anglo American dodges market chaos with a divi bonanza

Anglo American managed to avoid the chaos that engulfed markets yesterday by unveiling a record set of results.

The mining giant reported earnings for 2021 of £15.5billion, more than double the £7.3billion generated in the previous year, while revenues surged 63 per cent to £31.1billion. 

Its performance was boosted by high prices for commodities such as iron ore, a key ingredient in steelmaking and one of the company’s core products, as suppliers struggled to keep pace with surging demand as the global economy recovered from its pandemic downturn.

Dishing dividends: Anglo American reported earnings for 2021 of £15.5bn, more than double the £7.3bn generated in the previous year, while revenues surged 63% to £31.1bn

As a result of the record-breaking performance, Anglo unveiled a £1.6billion final dividend for investors, taking its total payout for the year to £4.6billion.

The shares inched up 1.8 per cent, or 62.5p, to 3595p as investors digested the figures.

‘Anglo’s results are yet another reminder of how hot the mining industry’s been over the last year, and demonstrates the cash generation and shareholder returns that a miner can deliver when commodity prices are plump,’ said Hargreaves Lansdown analyst Matt Britzman. 

‘Miners are in a good spot right now and Anglo looks well set up to capitalise on evolving demand.’

Anglo’s bumper dividend followed a whopping £12.6billion payout from rival Rio Tinto (down 1.8 per cent, or 101p, at 5467p) earlier this week, the second-biggest in UK corporate history.

Fellow blue-chip miners Glencore (down 1.2 per cent, or 5.1p, at 422.25p) and BHP (down 7 per cent, or 178p, at 2354.5p) have also handed out large sums to shareholders this year.

Anglo wasn’t the only FTSE 100 firm reporting bumper results yesterday, with British Gas-owner Centrica raking in a profit of £948million last year, up from £447million in 2020, as it cashed in on soaring energy costs.

Stock Watch – Tremor International

Tremor International climbed after delivering a record set of results.

The advertising specialist reported a profit for 2021 of £55.5million, swinging from a £4.5million loss the previous year, while revenues surged 61 per cent to £255million. 

It also announced plans for a £56million share buyback. 

Looking ahead, the group flagged an ‘ongoing resurgence’ in advertising demand as the economy recovered from the pandemic.

Shares climbed 10.3 per cent, or 50p, to 534p.

The group also benefited from customers using more gas in the first half of the year due to colder weather, while milder temperatures towards the end of the year had allowed it to sell some of its surplus gas and power as prices surged. 

The company repaid a £27million loan taken from the Government to furlough staff during the pandemic while boss Chris O’Shea agreed to waive his £1.1million bonus as UK households braced for a sharp rise in energy bills.

Despite the profit jump, Centrica shares dropped 4.8 per cent, or 3.6p, to 72.16p.

Russia’s invasion of Ukraine sent markets into meltdown, with the FTSE 100 plunging 3.9 per cent, or 291.17 points, to 7207.01, wiping out all of this year’s gains, while the mid-cap FTSE 250 tumbled 2.8 per cent, or 587.08 points, to 20,254.44.

There were very few bright spots in the market. However, Howden Joinery gained 4.2 per cent, or 30.8p, to 761.6p after posting record full-year results. 

For 2021, pre-tax profit at the firm soared by 111 per cent to £390.3million while revenues jumped 35 per cent to £2.1billion as the pandemic sparked strong demand for new kitchens and bathrooms from consumers looking to improve their homes during lockdown.

Advertising giant WPP swung back into profit as the advertising market bounced back from the pandemic. 

The group posted a pre-tax profit for last year of £951million compared to a £2.8billion loss in 2020 while revenues rose 6.7 per cent to £12.8billion. The shares fell 12.1 per cent, or 142.5p, to 1034p.

Blue-chip gold miners without large exposure to Russia cashed in as prices of the yellow metal surged amid a rush to safer assets.

Mexico-based Fresnillo jumped 4 per cent, or 27.6p, to 715.8p while Hochschild Mining, based in Peru, surged 13.8 per cent, or 14p, to 115.7p.

Victorian Plumbing sank 8.4 per cent, or 6.9p, to an all-time low of 75.1p after warning rising costs will hit its profit margins.