14th Jan 2026 07:58
(Alliance News) - BP issues a quarterly trading update pointing to flat upstream production and billions in expected impairments, Diploma reports a strong start to its financial year with double-digit organic growth, and publisher Pearson posts sales growth across all divisions in 2025.
Here is what you need to know before the London market open:
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MARKETS
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FTSE 100: called up 0.2% at 10,154.95
GBP: higher at USD1.3447 (USD1.3428 at previous London equities close)
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BROKER RATINGS
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RBC cuts Reckitt Benckiser to 'sector perform' (outperform) - price target 6,200 (6,400) pence
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Jefferies raises InterContinental Hotels Group target to 16,000 (11,400) pence - 'buy'
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Jefferies raises Softcat to 'hold' (underperform) - price target 1,500 (1,450) pence
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COMPANIES - FTSE 100
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BP issues a fourth-quarter trading update, saying upstream production is expected to be broadly flat quarter-on-quarter, with oil output steady and gas & low-carbon production lower. Realisations in both gas & low carbon energy and oil production & operations are set to weigh on results by up to USD300 million and USD400 million respectively. In customers & products, The oil major expects seasonally lower volumes and flat fuels margins, while refining benefits from slightly stronger margins are offset by heavier turnaround activity and reduced capacity following a fire at the Whiting refinery. The oil trading result is expected to be weak. BP warns that fourth-quarter results will include USD4 billion to USD5 billion in post-tax impairments, largely within transition businesses in its gas & low carbon segment, though these will not affect underlying replacement cost profit. Net debt is forecast to fall to USD22 billion–USD23 billion from USD26.1 billion, helped by about USD3.5 billion of divestment proceeds in the quarter. BP now expects its full-year underlying effective tax rate to be about 42%, up from prior guidance of around 40%.
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Diploma reports a "very strong" start to the financial year, with first-quarter organic revenue rising 14% year-on-year. The value-add solutions group also highlights "great acquisition momentum", completing four deals in the period for around GBP75 million. The London-based supplier of specialised technical products and services says the acquisitions expand Diploma's presence across aerospace, industrial, and defence end markets. Across the last two quarters, the company has secured eight acquisitions totalling about GBP130 million, expected to deliver roughly GBP20 million in annualised operating profit. The pipeline is described as "healthy" by Diploma. Full-year guidance remains unchanged, with the company still targeting 6% organic revenue growth and an operating margin of around 23%. The company notes that organic growth will be "significantly weighted" to the first half. Net acquisition growth is now seen at 3%, up from 2%.
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Pearson reports 2025 performance in line with guidance, with underlying group sales growth of 4% for the year and momentum strengthening into the fourth quarter, where sales rose 8%. Adjusted operating profit is expected to come in at GBP610 million to GBP615 million, up around 6% on an underlying basis. Free cash flow conversion exceeds 95%, supported by strong cash generation and a GBP100 million state aid repayment. The London-based educational materials publisher says Assessment & Qualifications arm delivers 4% growth, with fourth-quarter accelerating due to new contracts and a recovery in US Student Assessment. Virtual Learning sales rise 8% for the year and 20% in fourth-quarter. Higher Education edges up 2% annually, while English Language Learning grows 1%. Enterprise Learning & Skills advances 6%. Pearson highlights strategic progress, including the launch of Microsoft 365-integrated tool Communication Coach. Net debt stands at around GBP1.1 billion, and the company reiterates its medium-term outlook for mid-single-digit sales growth, sustained margin improvement and free cash flow conversion of 90% to 100%.
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COMPANIES - FTSE 250
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Polar Capital Global Healthcare Trust reports a weaker performance for year to September 30, with its net asset value per share falling 6.5% to 369.51 pence from 395.05p a year earlier. The trust posts a NAV total return of minus 5.9%, though this outperforms its benchmark index, the MSCI ACWI Healthcare index, which declined by 7.8%. The board at the London-based technology investor declares a second interim dividend of 1.00p per share, bringing the full-year payout to 2.20p, down from 2.40p the prior year.
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Hays reports a tougher second quarter, with group net fees down 10% year-on-year on a like-for-like basis as permanent recruitment remains weak and average hours worked in Germany fall further. Temp & Contracting net fees decline 8%, while Perm drops 14%. The staffing provider expects first-half pre-exceptional operating profit to come in at around GBP20 million, in line with consensus, supported by a 6% rise in consultant net fee productivity and cost discipline. Hays has secured about GBP15 million of annualised savings in the first half as part of a broader programme targeting GBP80 million in structural savings by the end of financial 2029. It will book an exceptional restructuring charge of around GBP10 million in the first half. "Given ongoing macroeconomic uncertainty and reduced average hours worked in Germany, our New Year 'return to work' will be particularly important in financial 2026, and we are closely monitoring activity levels," said Hays.
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OTHER COMPANIES
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Mulberry reports a "strong" festive trading period, delivering growth across all regions. For the 13 weeks to December 27, total sales rise 5.3% year-on-year, while retail and digital like-for-like sales climb 11%. The Somerset, England-based luxury handbag maker says disciplined full-price trading helped lift retail full-price sales by 19%, despite a "highly promotional wider market". Growth is broad-based: UK sales increase 3.5%, the US rises around 13%, Europe gains 15%, and Asia Pacific edges up 0.8% despite store estate "right-sizing", with LFL sales up 12% following strong demand during the Double 11 shopping festival. Mulberry says the performance reflects early success from its "Back to the Mulberry Spirit" strategy, centred on simplifying the business and refreshing the brand. Chief Executive Officer Andrea Baldo says: "We have delivered a strong performance during the festive period. While there remains plenty more to be done, it is encouraging to see the early signs of our 'Back to the Mulberry Spirit' strategy delivering. We have maintained disciplined cost control, while at the same time growing full-price sales by having products that resonate at the right price. The growth in sales across our markets show that our products are resonating with customers around the world, as we continue our focus on re-invigorating Mulberry and injecting creativity back into an iconic brand."
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Nichols posts 2025 revenue and adjusted pretax profit in line with market expectations, with full-year revenue rising 1.3% to GBP175.0 million from GBP172.8 million a year prior. The Merseyside-based soft drinks manufacturer, whose brands include Vimto and Slush Puppie, says the performance reflects continued strategic progress, including its shift toward a higher-margin concentrate model in Africa. UK Packaged revenue grows 2.6%. International Packaged revenue is flat year-on-year but up 2% on a like-for-like basis, with Africa delivering like-for-like growth of 10%. Out-of-Home revenue "was consistent" after the exit of the "low-margin" Starslush business. Nichols ends the year with cash of GBP55.8 million, up from GBP53.7 million, and reiterates its commitment to a progressive dividend policy. Nichols says: "Given the strength of its financial position and clear growth opportunities in the UK and internationally, the group is confident in the outlook for 2026."
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By Eva Castanedo, Alliance News reporter
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