Why 3 FTSE Blue Chip Stocks Reported Weaker Results in FY20

3 min read | March 12, 2021 02:19 AM AEDT | By Suhita Poddar

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Why 3 FTSE Blue Chip Stocks Reported Weaker Results in FY20

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Summary

3 FTSE 100 stocks --- Rolls Royce, Morrison, WPP PLC announced lower FY 2020 results on 11 March due to the pandemic.

Rolls Royce and WPP reported losses while Morrison’s reported lower profits from a year ago

3 FTSE blue chip stocks -- Rolls Royce (LON: RR), Morrison (LON:MRW), and WPP PLC (LON: WPP) --- announced weaker 2020 results on 11 March due to the pandemic-related uncertainties.

The UK-based luxury car manufacturer Rolls Royce (LON: RR) announced its results for the year ending 31 January, while supermarket major Morrison (LON:MRW), and advertising multinational firm WPP PLC (LON: WPP) reported their preliminary FY 2020 results.

Morrison’s (LON:MRW) shares were trading at GBX 176.55, down by 0.25 per cent on 11 March at 10:22 am GMT+1. Meanwhile, Rolls Royce (LON: RR) stock prices stood at GBX 115.59, up by 2.29 per cent, and WPP PLC (LON: WPP) shares were up by 1.07 per cent at GBX 921.80. The FTSE 100 broader index, which the above three are a part of, stood at 6,716.65, down by 0.13 per cent for the same period.

Morrison (LON:MRW)

The supermarket giant’s total revenues rose by 0.4 per cent to £17.6 billion from £17.5 billion a year ago. The company’s profit before tax dived by 62.1 per cent to £165 million in FY 2020/2021, after accounting for net exceptional costs worth up to £36 million.

Despite lower profits, the company paid its deferred special dividend of 4.00p per share in January. Its full-year ordinary dividends rose by 5.6 per cent to 7.15 pence per share, while its full-year total dividend increased by 27.1 per cent to 11.15 pence per share from 8.77 pence per share a year ago.

Rolls Royce (LON: RR)

The British carmaker reported £4 billion loss in FY 2020 compared to £306 million in FY 2019 due to the pandemic, worse than what analysts had expected -- £3.1 billion loss. However, the company’s reported over £1 billion in saved cash and increased liquidity to £9 billion.

The company did not disburse any dividends to shareholders in 2020 due to covid related uncertainties.

In another piece of update, Rolls-Royce and Tecnam joined forces with Widerøe to deliver an all-electric passenger aircraft ready for service in 2026, according to Reuters inputs.

WPP PLC (LON: WPP)

The advertising company’s FY 2020 revenue dropped by 9.3 per cent to £12 billion from £13.2 billion a year ago. WPP reported an operating loss of £2.3 billion in FY 2020, compared to a profit of £1.3 billion a year ago.

The company reported a final dividend of 14.0 pence per share in 2020 in accordance with its new dividend policy and plans to purchase up to £300 million of shares buyback by June 2021.

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