Rolls-Royce announces first dividend since Covid-19 pandemic; Gatwick runway decision expected – business live

Grocery delivery firm Ocado’s shares are also sliding, down 13% this morning, after it reported another annual loss.

Ocado made a statutory loss of £373m in the 12 months to 1 December 2024, lower than the £387m it lost in 2023. Total revenues rose 14%.

City investors may be disappointed that Ocado hasn’t announced any fresh deals for its robotic warehouses this morning.

It launched three of these customer fulfillment centres (CFCs) last year, in Sydney, Melbourne and Madrid, and is planning at least seven more over the next three years, starting with Warsaw this year.

But the opening dates of two of those CFCs, in Charlotte, North Carolina, and Phoenix, Arizona, has slipped to early 2026, following a “new Auto Freezer order”.

Adam Vettese, market analyst at eToro, says:

“A familiar story from Ocado’s results: on the surface there is plenty to be optimistic about – the loss has narrowed, on track to be cash-flow-positive, fastest growing UK grocer. Unfortunately, optimism isn’t going to pay the bills.

“The trouble is that while all of these things are great, the sticking point is that operationally there are still some issues. The rollout of robotic grocery warehouses to partners isn’t where the firm would want it to be, and of those confirmed in the pipeline, we are seeing them kicked back towards 2026.

“The firm insists more warehouse deals are coming. But just how much longer will they have to burn cash for is the question investors eagerly await to be answered. Shares are trading at less than half of what they were at the beginning of last year, some investors might be looking at this as a cheap play with things seemingly only able to improve. If the orders don’t come and there are more delays on what Ocado does have then this may not be the case.”

Ocado’s shares are down 15%, the worst performer on the FTSE 250 index, at 281p

While Rolls-Royce’s shares soar to the top of the FTSE 100 leaderboard, advertising group WPP have slumped 18% to the bottom of the pack.

WPP missed sales forecasts this morning, reporting a 0.7% drop in reported revenues in 2024.

The slowdown worsened in the last quarter of the year, when revenues fell in North America, the UK, and China, although they rose in Western Continental Europe.

Mark Read, chief executive officer of WPP, says Q4 was hit by “weaker client discretionary spend”.

We did see growth from our top 25 clients of 2.0% and an improving new business performance in the second half of the year with wins from Amazon, J&J, Kimberly-Clark and Unilever reflecting the strength of our integrated offer.

“The actions we are taking across WPP will strengthen our existing client relationships and drive our new business results. We expect some improvement in the performance of our integrated creative agencies in the year ahead. At the same time, we have comprehensive efforts underway to improve our competitive positioning through new leadership at GroupM, with further investment in AI, data and proprietary media.

“Though we remain cautious given the overall macro environment, we are confident in our medium-term targets and believe our focus on innovation, a simpler client-facing offer and operational excellence will support our growth and deliver greater value for our shareholders.”

On the UK specifically, WPP reports:

The United Kingdom declined in 2024 reflecting a strong comparison (2023: +5.6%) and the impact of slower client spending in Q4 with further weakness in project-based work across creative and specialist agencies exacerbated by an uncertain macro outlook, only partially offset by growth in GroupM and Ogilvy.

BOOM! Shares in Rolls-Royce are soaring at the start of trading, as investors hail its financial recovery.

Rolls-Royce’s stock has jumped by over 15% to 735p per share, a new all-time high.

The City will be impressed with Rolls’s upgraded forecasts for profit growth (see 7.48am), as well as relieved that the dividend has been restored (as had been expected).

UK engineering firm Rolls-Royce is resuming payouts to shareholders for the first time since the Covid-19 pandemic hit its operations.

Following “strong results” in 2024, Rolls-Royce has announced it will pay a dividend of 6.0p per share to investors. It also plans to spend £1bn on a share buyback scheme – another way of returning cash to shareholders.

The news comes as Rolls-Royce annouces that earnings rose by over 50% last year – with underlying operating profit up to £2.5bn, from £1.6bn in 2023.

Chief executive Tufan Erginbilgiç says Rolls-Royce is being transformed into a “high-performing, competitive, resilient, and growing business”.

All core divisions delivered significantly improved performance, despite a supply chain environment that remains challenging.

We are moving with pace and intensity. Based on our 2025 guidance, we now expect to deliver underlying operating profit and free cash flow within the target ranges set at our Capital Markets Day, two years earlier than planned.

Significantly improved performance and a stronger balance sheet gives us confidence to reinstate shareholder dividends and announce a £1bn share buyback in 2025.

It’s quite a turnaround since Covid-19 buffeted Rolls-Royce, which makes and services jet engines, runs a defence arm, and produces a range of power and propulsion products, including nuclear propulsion plants for the Royal Navy’s nuclear submarines. It is also developing small modular nuclear reactors.

Rolls suspended dividend payments in April 2030, as its airline customers kept flights grounded due to the pandemic.

The crisis, drove its share price down below 40p in October 2020. Last night they closed at 631p, having hit a record high earlier this month.

The company has been cutting costs under Erginbilgiç, and also reported record-breaking orders amid mounting military tension around the world.

We’re expecting to learn later today whether Gatwick airport will be allowed to open a second runway.

The Transport Secretary, Heidi Alexander, is due to announce today whether she has granted a development consent order which could allow more than 100,000 extra flights a year at the West Sussex airport.

Gatwick wants to modify an emergency runway and taxiway to allow it to be used alongside its existing main runway.

The BBC reports that on Tuesday Alexander told the annual dinner of trade body Airlines UK in London that she had “no intention of clipping anyone’s wings,” and said aviation was good for growth, adding:

“I am not some sort of flight-shaming eco warrior. I love flying – I always have.”

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

The spectre of tariffs is stalking Europe today after Donald Trump announced last night he will soon hit goods made in the European Union with tariffs of 25%.

Trump told his first cabinet meeting, on Wednesday, that he will soon release details of the latest tariff threat, declaring:

“We have made a decision and we’ll be announcing it very soon. It’ll be 25%.”

Trump did not give further details but mentioned carmakers and said the levies would be applied “generally”, adding:

“And that’ll be on cars and all other things.”

European stock markets are expected to open in the red, as investors anticipate a new front opening up in Trump’s tradae wars.

Traders were already bracing for the looming March 4 deadline for US tariffs against Canada and Mexico, and for the steel and aluminum duties set to drop on March 12.

Each of these points could rattle markets, warns Stephen Innes, managing partner at SPI Asset Management, adding:

For now, markets are still fixated on tariff risk, not the impact. Absolute volatility begins when investors fully price these tariffs’ inflationary and/or growth ripple effects. The dollar, bonds, and equities are about to enter the trade war vortex again, and positioning will be everything.

The agenda

• 12.30pm ECB minutes from Jan meeting

• 1.30pm US GDP (1st revision) for Q4

• 1.30pm US initial jobless claims data