Britain's biggest public companies reported their largest profits since 2012 in the second quarter of the year, analysis published today has revealed.
Companies in the FTSE 350 which reported annual results between April and June saw pre-tax profits soar to £22.7bn, a 41.3 per cent increase compared to the same quarter last year, according to the Share Centre.
Half of the increase in profits was driven by a return to the black for mid-cap mining company Vedanta, owned by Indian tycoon Anil Agarwal. It swung from a £3.3bn loss last year to a £1bn profit reported in May.
Overall revenues rose by 5.7 per cent year-on-year, to reach £346.1bn. That represented the fastest increase in revenues since 2014, while operating profits rose for third successive quarter, climbing by 9.9 per cent year-on-year to reach £26.8bn.
Read more: UK’s biggest firms report record results
Helal Miah, investment research analyst at the Share Centre said: “By any yardstick, this was a positive performance by UK PLC.
“Consumer-orientated companies have been riding a wave of strong spending last year, while the relative strength of the UK economy last year, an improving global outlook, combined with the weaker pound have buoyed results,” he said.
The resilience of British economic growth in the second half of 2016 surprised some economists, with continued strong consumer spending proving a boon to retailers and other companies exposed to the domestic market. The Share Centre’s latest quarterly analysis includes a large swathe of retailers, accounting for two-fifths of revenues.
The period covered by the results generally covers the year to March, so likely does not reflect the full hit to consumption caused by the recent fall in real incomes.
The total value of sales for food retailers grew by two per cent year-on-year, with food sales jumping over £100bn for the first time since 2011 as prices rose.
The performance across the retail sector more broadly was mixed, with Marks and Spencer and Next both failing to impress. B&Q owner Kingfisher, JD Sports, Morrison and Tesco all added positive contributions to overall reported profits.