11th Jul 2025 07:52
(Alliance News) - BP on Friday warned of impairments of up to USD1.5 billion in its upcoming second quarter numbers, Warehouse REIT threw its support behind a new Blackstone takeover offer, while gambling firm Flutter did some deal-making of its own.
The pound, meanwhile, struggled after poor UK gross domestic product data.
Here is what you need to know before the London market open:
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MARKETS
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FTSE 100: called down slightly at 8,972.86
GBP: lower at USD1.3543 (USD1.3561 at previous London equities close)
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ECONOMICS
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The UK economy suffered another decline in May, falling well-short of expectations of growth, numbers showed. According to the Office for National Statistics, UK gross domestic product fell 0.1% on-month in May. It followed a 0.3% fall in April from March. The economy had been expected to grow 0.1% in May, however, according to consensus cited by FXStreet. In March, the economy had risen 0.4% from February. Services output returned to growth in May, edging up 0.1%, after a 0.3% fall in April. Production output, however, fell at a faster pace of 0.9% in May, after a 0.6% decline in April from March. Construction output was 0.6% lower monthly in May, after a 0.8% rise in April. "Real GDP is estimated to have grown by 0.5% in the three months to May 2025, compared with the three months to February 2025. This reflected growth earlier in the year that resulted, in part, from some activity being brought forward to February 2025 and March 2025. There was growth in all three main sectors in the three months to May 2025," the ONS said.
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The UK trade deficit narrowed in May, as exports rose and imports were largely steady. Exports in May rose 1.2% on-month to GBP74.31 billion, while imports edged up 0.1% to GBP80.01 billion. The trade deficit amounted to GBP5.70 billion in May, narrowing from GBP6.50 billion in April. The ONS said exports of goods to the US rose by GBP300 million in May, after a "substantial decrease" in April.
"This increase in exports was because of a rise in chemical exports, driven by increased exports of inorganic chemicals. The value of goods exports to the United States in May 2025 remained relatively low," the ONS said. Imports of goods from the US fell by USD900 million in May.
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There will be "financial consequences" to UK Prime Minister Keir Starmer's last-minute climbdown on welfare reform, a Cabinet minister has said, as he declined to rule out tax rises. Pat McFadden said ministers "will keep to the tax promises" in their election manifesto. Rachel Reeves has seen the GBP4.8 billion predicted savings from welfare reforms whittled away through the government's changes to plans designed to keep backbenchers onside. In a late concession on Tuesday evening, ministers shelved plans to restrict eligibility for the personal independence payment, Pip, with any changes now only coming after a review of the benefit. The prime minister had a revolt of almost 50 MPs regardless of the changes.
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BROKER RATINGS
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UBS cuts SSP Group to 'sell' (neutral) - price target 170 (165) pence
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COMPANIES - FTSE 100
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BP said it expects to report a pick-up in upstream output in the second quarter, but expects to be hit by weaker commodity prices and impairments. The oil major said upstream output in the second quarter "is now expected to be higher compared to the prior quarter". In the gas & low carbon energy offering, realisations are expected to contribute a USD100 million to USD300 million hit, when compared to the first quarter, however. In oil production & operations, a chunkier hit in the range of USD600 million to USD800 million was earmarked. It noted "production mix effects and the price lags on BP's production in the Gulf of America and the UAE". BP said the Brent price averaged USD67.88 a barrel during the second quarter, down from USD75.73 in the first. BP also warned of asset impairments in the range of USD500 million to USD1.5 billion "attributable across the segments".
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OTHER COMPANIES
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Warehouse REIT threw its weight behind a sweetened Blackstone takeover offer, withdrawing its recommendation for a Tritax Big Box REIT bid. On Thursday, the warehouse property investor said it was reviewing the new Blackstone bid. Blackstone on Thursday announced a higher offer for 113.4 pence per share in cash, matching a proposal it made back in March. Combined with a dividend, the offer has a total value of 115.00p per share, valuing the company at GBP489 million. In early June, Warehouse REIT had agreed to a takeover from asset manager Blackstone, which valued it business at GBP470 million. However, it then withdrew that recommendation in favour of a cash and shares bid from Tritax Big Box. "The Warehouse independent directors have carefully evaluated both offers, while remaining firmly focused on their fiduciary duties to Warehouse REIT shareholders. The increased Blackstone offer provides Warehouse REIT shareholders with a certain all-cash offer, at a premium to the BBOX offer, which comprises a mixed consideration of new BBOX shares and cash, and the Warehouse independent directors now switch their recommendation in favour of the Increased Blackstone offer accordingly," Warehouse REIT Chair Neil Kirton said on Friday. Shortly before the market close on Thursday, Tritax Big Box said it was "considering its options" but believed its offer for Warehouse REIT was "more compelling".
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Flutter Entertainment announced it now has sole ownership of the FanDuel offering, paying USD1.76 billion to acquire a further 5% stake. The Paddy Power owner will pay that sum to casino and hotels operator Boyd Gaming. The figure values FanDuel at USD31 billion. "The agreement also provides for the extension of the strategic partnership between FanDuel and Boyd at significantly reduced market access costs in the states where FanDuel's market access is provided by Boyd. This is expected to contribute to annual savings for Flutter of approximately USD65 million beginning July 1, 2025," Flutter added. Flutter said the deal will be funded by debt financing. It will increase leverage, but then expects this to reduce, "given the highly visible profitable growth opportunities that exist across the group". CEO Peter Jackson said: "Our acquisition of FanDuel in 2018 is one of the most transformational events in our group's history, with its natural competitive advantages combined with access to Flutter Edge capabilities driving impressive growth to become the well-established and clear leader in US online sports betting and iGaming. I am really pleased to drive future value for our shareholders by increasing our ownership of FanDuel to 100%. Boyd have been fantastic partners for FanDuel, and we are delighted to be extending our important strategic partnership through to 2038."
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Heathrow Airport has unveiled a GBP10 billion investment plan to expand capacity over the next five years, aiming to handle an extra 10 million passengers by 2031. The plan forms the core of the airport's 2027–2031 business proposal, which was submitted to the Civil Aviation Authority on Friday.
Writing in The Standard, Heathrow Chief Executive Thomas Woldbye said the changes would include new lounges, restaurants and shops, as well as faster security and baggage handling. Heathrow said Friday it "served more passengers than ever before in the six months to June", with 39.9 million flying through the UK airport. In June alone, however, passenger numbers fell 1.0% to just under 7.4 million. "Overall, demand continues to grow and passengers have enjoyed swift service in security and reliable flights ahead of another record-breaking summer," Heathrow said.
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By Eric Cunha, Alliance News news editor
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