Become a Member
  • Track your favourite stocks
  • Create & monitor portfolios
  • Daily portfolio value
Sign Up
Quickpicks
Add shares to your
quickpicks to
display them here!

LONDON BRIEFING: BAE Systems backs guide; JD Wetherspoon sales pick up

7th May 2025 07:45

(Alliance News) - The FTSE 100's 16-day win streak is under threat, with the index called to open lower ahead of a Federal Reserve decision later.

According to the CME FedWatch Tool, there is just under a 96% chance that the Fed maintains rates at the 4.25% to 4.50% range in the May meeting. It had maintained the federal funds rate at that level in the last two meetings.

Elsewhere, focus remains on tariffs. The Financial Times reported the US and UK could strike a deal.

Treasury Secretary Scott Bessent told Fox News that he and US Trade Representative Jamieson Greer will meet Chinese Vice Premier He Lifeng to lay the groundwork for future negotiations.

"We will agree what we're going to talk about. My sense is that this will be about de-escalation, not about the big trade deal," Bessent told "The Ingraham Angle" show.

"We've got to de-escalate before we can move forward."

In early UK corporate news, BAE Systems maintained its outlook, while Rentokil and Vodafone announced executive departures.

Here is what you need to know at the London market open:

----------

MARKETS

----------

FTSE 100: called down 0.2% at 8,584.52

----------

Hang Seng: up 0.4% at 22,754.36

Nikkei 225: flat at 36,830.28

S&P/ASX 200: up 0.3% at 8,178.30

----------

DJIA: closed down 389.83 points, 1.0%, at 40,829.00

S&P 500: closed down 0.8% at 5,606.91

Nasdaq Composite: closed down 0.9% at 17,689.66

----------

EUR: higher at USD1.1364 (USD1.1348)

GBP: lower at USD1.3355 (USD1.3368)

USD: higher at JPY142.95 (JPY142.86)

GOLD: lower at USD3,389.63 per ounce (USD3,396.32)

(Brent): higher at USD62.88 a barrel (USD62.58)

(changes since previous London equities close)

----------

ECONOMICS

----------

Wednesday's key economic events still to come:

08:30 BST eurozone construction PMI

10:00 BST eurozone retail sales

08:30 BST Germany construction PMI

09:30 BST UK construction PMI

19:00 BST US interest rate decision

19:30 BST US Fed press conference

----------

The UK and the US are close to agreeing a trade pact that would cushion the impact of Donald Trump's "liberation day" tariffs by granting lower-tariff quotas for UK steel and car exports, the Financial Times on Tuesday said. Citing officials in London and Washington, the FT said the deal, set to be signed this week, is due to include quotas that spare some UK exports from the full brunt of the additional 25% tariffs that Trump levied on steel and car imports in February and March. UK trade negotiators returned to Washington this week for the final stages of negotiations, which one senior UK official told the FT were continuing "at speed", cautioning that disagreements remain over pharmaceuticals. As well as offering quotas for UK exports, the UK is also hoping to secure reductions in the sector specific 25% tariffs that Trump has levied on steel and cars. The UK's "offers" include concessions to Washington on the digital services tax levied on international tech companies, cuts on tariffs imposed on US auto exports, and a reduction of tariffs on US agricultural products, the FT said.

----------

EU foreign ministers are to meet on Wednesday in Warsaw for two days of informal talks focused on the bloc's changing relation with the US and the ongoing war in Ukraine. The return of Donald Trump to the White House at the beginning of the year has significantly changed the political winds in the EU. After steadily increasing trans-Atlantic trade, the EU has become a target of Trump's unpredictable trade policies. The bloc still hopes to resolve a conflict over currently suspended additional tariffs on EU imports to the US worth billions through negotiations. The fallout from the US administration's U-turn on support for war-torn Ukraine is also on the agenda. EU ministers are expected to discuss how to strengthen Ukraine's position ahead of possible peace talks and how to increase pressure on Moscow. Ukrainian Foreign Minister Andrii Sybiha is expected to debrief EU ministers on the latest on Russia's war. British Foreign Secretary David Lammy is to join his EU counterparts on Wednesday as the rapid geopolitical shifts help reconcile relations roughly five years after the UK left the bloc.

----------

The EU and Britain look set to seal a defence pact at a landmark summit this month as worries about US President Donald Trump and the war in Ukraine spur them beyond the wrangles of Brexit. Multiple EU diplomats and officials told AFP the signs are positive that a security agreement will be inked when British Prime Minister Keir Starmer meets EU chiefs in London on May 19. The "security and defence partnership" is billed as an important first step in Starmer's much-vaunted push to reset ties after the years of bad blood caused by the UK leaving the bloc. The move is aimed at opening the door to closer cooperation as both the EU and Britain race to rearm in the face of the menace from Russia and fears Trump will no longer help protect Europe. That should mean more regular security talks, Britain considering joining EU military missions and the potential for London to fully tap into a EUR150 billion defence fund being set up by the bloc. But the deal is expected to leave much of the detail to be filled in later – for instance requiring a further agreement on giving the UK and its defence industry unfettered access to the EU programmes.

----------

German new manufacturing orders increased at a faster pace than expected in March, according to numbers from Destatis. New orders rose 3.6% in March from February, having been flat in February from January. The latest outcome topped the FXStreet cited consensus which had pencilled in a 1.3% hike. On-year, orders advanced 3.8% in March, having shrunk 0.2% in February. "When large-scale orders are excluded, new orders were 3.2% higher than in the previous month. The less volatile three-month on three-month comparison showed that new orders were 2.3% lower in the 1st quarter of 2025 than in the 4th quarter of 2024; when large-scale orders are excluded, new orders were up 0.5%," Destatis added.

----------

BROKER RATING CHANGES

----------

JPMorgan places Diageo on 'positive catalyst watch'

----------

Berenberg starts Foresight Group with 'buy' - price target 580 pence

----------

COMPANIES - FTSE 100

----------

BAE Systems said it has traded in line with expectations so far in 2025, and the defence firm backed annual guidance. The firm said its "order backlog and pipeline of work" provide it with strong levels of visibility. It is set to benefit from "additional defence spending", the firm added. " "We've had a strong start to 2025 and are maintaining our guidance for the full year. During this time where the defence and security landscape is rapidly evolving, we are focused on delivering our long-term programme commitments to our customers, while investing in our business to boost capacity, drive efficiencies and shape our portfolio to support future growth," Chief Executive Charles Woodburn said. BAE still expects sales for 2025 to rise between 7% and 9% from GBP28.34 billion. Underlying earnings before interest and tax are forecast to climb between 8% and 10% from GBP3.02 billion. BAE added: "The regions in which we operate are poised for higher defence spending. We expect this to provide a robust set of further opportunities across all our sectors. In response to the increased global security challenges, a number of European Nato members have announced significant increases in their defence budgets. We have a strong, established position in Europe and our range of products and services aligns well to the capability requirements of these nations. These include combat aircraft, combat vehicles, air defence, missile systems, artillery, munitions, drones, electronic warfare and sensor technology." BAE announces half-year results on July 30.

----------

Pest control and hygiene firm Rentokil Initial announced Andy Ransom will step down as chief executive next year. He has been with the company for 17 years, 12 of them as CEO. "Andy has created a global leader in Pest Control and the Board thanks him for his outstanding contribution. Rentokil Initial is well placed within an industry that has attractive and sustainable growth drivers. The Company has exceptional long term growth prospects but short term our priority is on turning around the underperforming North American business. Andy is very focused on this task and will ensure a smooth handover when a new Chief Executive is appointed," Chair Richard Solomons said. Ramson will leave by the time of the 2026 annual general meeting. Its 2025 AGM is on Wednesday.

----------

Vodafone Group said Chief Financial Officer Luka Mucic will leave the role early next year to join property firm Vonovia as CEO. The telecommunications firm said a "rigorous search" for a new CFO is underway. "I would like to thank Luka for his commitment to Vodafone during this first stage of our transformation. During his time with us he has played a key part in resetting our capital allocation priorities and enhancing our focus on operational excellence. I wish him the very best for the next phase of his career as a CEO back in his homeland," Vodafone CEO Margherita Della Valle said.

----------

COMPANIES - FTSE 250

----------

Trainline reported an annual earnings hike but predicts growth to slow in its new financial year, as the rail ticketing platform grapples with "some headwinds". Trainline said pretax profit in the year to February 28 surged 68% to GBP80.9 million from GBP48.1 million. Revenue was 11% higher at GBP442.1 million from GBP396.7 million. Net ticket sales shot up 12% to GBP5.91 billion, Trainline said. It recorded adjusted earnings before interest, tax, depreciation and amortisation of GBP159 million, a rise of 30%. "Our sustained investment in tech innovation over the last three decades is delivering for customers, driving industry growth and is reflected in our performance with net ticket sales up 12% year-on-year to GBP6 billion. Spain offers a powerful blueprint for Europe, where net ticket sales have nearly tripled in two years. Looking ahead, liberalised routes across Europe will be worth EUR12 billion by 2030, almost three times their size today. In the UK we remain the number one travel app and continue to innovate, including leveraging AI, to shift more people towards greener, digital-first rail travel, which now represents over 50% of industry ticket sales," CEO Jody Ford said. Trainline said it has "significant long term growth opportunities". The firm added: "While the group remains focused on its long-term growth priorities, in FY2026 we expect some headwinds as previously announced. These include Transport for London's phased expansion of their contactless travel zone and the ongoing impact from Google's changes to its search engine results page. In addition, recent global macroeconomic uncertainty may impact foreign travel." As a result, Trainline expects net ticket sales growth in the range of 6% to 9% for financial 2026, a slowdown from the year just ended. What's more, it predicts revenue growth to be slower than net ticket sales. Trainline predicts a revenue outcome for the new year that ranges from flat, to a 3% rise. "Despite that, we expect adjusted Ebitda to grow broadly in line with net ticket sales, at a rate of 6% to 9%, as we benefit from operating leverage and our cost optimisation exercise," it added.

----------

Pub firm JD Wetherspoon said it expects a "reasonable outcome for the financial year". In the 13 weeks to April 27, like-for-like sales were 5.6% higher on-year. Growth has picked up from the 4.8% rise it reported for the half-year to January 26. Year-to-date, like-for-like sales are up 5.1%. Total sales are 5.0% higher on-year for the 13-weeks, quickening from a 3.9% hike in the half-year period. Year-to-date, they are 4.2% higher. "The company's main ambition, as always, is to improve its appeal to staff and customers. In this connection, for example, the company has invested in new staff facilities in 520 pubs (49 in the current year), including staff rooms and changing rooms, with approximately 270 planned for the future. The investment per pub is approximately GBP100,000," Chair Tim Martin said. "Bearing in mind that recent trading has been helped by favourable weather, the company anticipates a reasonable outcome for the financial year, notwithstanding previously reported wage and tax increases of approximately GBP1.2 million per week."

----------

OTHER COMPANIES

----------

Card Factory hailed its "strength and resilience" as it reported a rise in annual revenue, but a slight profit decline. Pretax profit in the year to January 31 fell 2.3% to GBP64.1 million from GBP65.6 million. On an adjusted basis, however, it rose 6.3% to GBP66.0 million rom GBP62.1 million. The greeting card seller's revenue increased 6.2% to GBP542.5 million from GBP510.9 million. "Our performance in FY25 demonstrates the strength and resilience of cardfactory and our strategy as we continue to evolve the business into a leading global celebrations group. We delivered strong revenue growth, outperforming the wider celebration occasions market. Further expansion of our store estate combined with continued development of our gift and celebration essentials categories, were key drivers of our performance," CEO Darcy Willson-Rymer said. "As we move into FY26, good momentum has continued during our Spring seasons. Despite an uncertain and inflationary backdrop, we remain confident in our ability to deliver mid-to-high single-digit percentage profit growth, underpinned by our strategic focus, our ongoing productivity and efficiency programme and our strong financial discipline. I want to thank our dedicated colleagues whose passion and focus on helping our customers celebrate life's moments, continues to drive our success." For the new year, it expects a "mid-to-high single-digit percentage" hike in adjusted pretax profit.

----------

By Eric Cunha, Alliance News news editor

Comments and questions to [email protected]

Copyright 2025 Alliance News Ltd. All Rights Reserved.


Related Shares:

DiageoForesight Group HoldingsCard FactoryWetherspoon (J.D)TrainlineVodafoneRentokil InitialBAE Systems
FTSE 100 Latest
Value8,559.33
Change-38.09