3rd Jul 2025 07:54
(Alliance News) - Stocks were called up on Thursday, as UK Prime Minister Keir Starmer defends Chancellor Rachel Reeves, and US President Donald Trump continues to seek final approval for his "One Big Beautiful Bill".
In early corporate news, Currys resumes dividend payouts as profit multiples more than fourfold, and Ryanair cancels 170 flights ahead of a strike by French air traffic controllers.
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 0.3% at 8,802.89
GBP: up at USD1.3645 (USD1.3612 at previous London equities close)
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ECONOMICS
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Rachel Reeves will be chancellor for a "very long time to come", Keir Starmer has said after she was seen crying during Prime Minister's Questions. The UK prime minister said it was "absolutely wrong" to suggest the chancellor's visibly tearful appearance in the Commons related to the welfare U-turn, which put an almost GBP5 billion black hole in her plans. "It's got nothing to do with politics, nothing to do with what's happened this week. It was a personal matter for her," he said while speaking to the BBC's podcast Political Thinking with Nick Robinson. Asked if Reeves would remain in her post, the prime minister said: "She will be chancellor by the time this is broadcast, she will be chancellor for a very long time to come, because this project that we've been working on to change the Labour party, to win the election, change the country, that is a project which the chancellor and I've been working on together." Markets took fright after scenes of Reeves's tears spread, with the value of the pound and long-term government bonds slumping sharply.
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A new 10-year-plan for the National Health Service marks the beginning of a "major programme of renewal and rebuilding that will transform the entire country", Starmer has said. He will unveil his vision for the NHS in a major speech on Thursday, as he seeks to shift focus away from several chaotic days in Westminster. The plan will "fundamentally rewire" the health service and will focus on "three big shifts" in the way the health service operates, Starmer is expected to say. Writing for broadcaster LBC ahead of the speech, Starmer attempted to move on from a fractious week in Parliament which saw him U-turn on welfare reforms following the threat of a major rebellion by his MPs, as well as scenes of Chancellor Rachel Reeves crying in the Commons. The government is moving on to its "next phase" he wrote in an LBC op-ed, adding: "A major programme of renewal and rebuilding that will transform the entire country. Once again making Britain a nation where you work hard and reap the rewards. A Britain you feel proud to live in once again." The government will get the NHS "back on its feet and fit for the future" Starmer pledged. The new plan, which will be published on Thursday, sets out how the NHS will move from analogue to digital, treatment to prevention, and from hospital to more community care.
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Donald Trump's signature tax and spending bill was in limbo early Thursday as Republican leaders in the US Congress scrambled to win over a group of rebels threatening to torpedo the centerpiece of the president's domestic agenda. Trump is seeking final approval in the House of Representatives for his Senate-passed "One Big Beautiful Bill" – but faces opposition on all sides of his fractious party over provisions set to balloon the national debt while launching a historic assault on the social safety net. As midnight, 0500 BST, struck, House Speaker Mike Johnson was still holding open a key procedural vote – the bill's last hurdle before it can advance to be considered for final approval – more than two hours after it was first called. Originally approved by the House in May, Trump's sprawling legislation squeezed through the Senate on Tuesday by a solitary vote but had to return to the lower chamber Wednesday for a rubber stamp of the Senate's revisions. The package honors many of Trump's campaign promises, boosting military spending, funding a mass migrant deportation drive and committing USD4.5 trillion to extend his first-term tax relief. But it is expected to pile an extra USD3.4 trillion over a decade onto the country's fast-growing deficits, while forcing through the largest cuts to the Medicaid health insurance program since its 1960s launch.
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BROKER RATINGS
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Berenberg cuts Rio Tinto to 'hold' (buy) - price target 4,700 (6,200) pence
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UBS cuts Fresnillo to 'neutral' (buy) - price target 1,500 pence
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Berenberg cuts Bytes Technology to 'hold' ('buy') - price target 390 (660) pence
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COMPANIES - FTSE 250
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Currys reports pretax profit of GBP124 million for the year that ended May 3, multiplied from GBP28 million the year before, as revenue grows 2.7% to GBP8.71 billion from GBP8.48 billion the year before. UK & Ireland revenue rises 6%, while revenue in the Nordics declines 2%. The electronics retailer resumes dividend payments, declaring a 1.5 pence final dividend. Going forwards, it expects to set its interim dividend at one-third of the prior year dividend. Currys continues to target at least a 3% adjusted earnings before interest and tax margin in both the UK & Ireland and the Nordics, and anticipates keeping annual capital expenditure below GBP100 million. The firm is "comfortable" with a company-compiled market consensus for GBP167 million in adjusted pretax profit for financial 2026, which would be up 3.1% from GBP162 million in financial 2025. "Customers are increasingly adopting our credit, setup, installation, repair and connectivity services, building valuable recurring revenues for Currys," says Chief Executive Officer Alex Baldock. "We're now seen as the home of AI-enabled tech and our investments in new product categories and serving business-to-business customers are showing early signs of success...I'm pleased that thanks to all this hard work we can resume the dividend. We aim to return more of our growing free cash flow to shareholders."
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Watches of Switzerland says pretax profit falls 18% to GBP76 million in the year that ended April 27, from GBP92 million the year before, as the firm records a GBP46.5 million exceptional impairment of assets against GBP26.2 million a year prior. Revenue rises 7.1% to GBP1.65 billion from GBP1.54 billion, and administrative expenses increase 16% to GBP43.6 million from GBP37.5 million. The sales growth is primarily driven by US revenue, which edges up 14% to GBP786 million, while UK & Europe revenue rises 2.4% to GBP866 million. "As we look ahead, whilst we are of course remaining mindful of the broader macroeconomic and consumer environment, including potential US tariff changes, we remain confident in the strength of our diversified business model, our strong pipeline of showroom openings and growth projects, and the resilience of the luxury watch and luxury branded jewellery categories," says Chief Executive Officer Brian Duffy. Watches of Switzerland targets constant currency revenue growth between 6% and 10% for financial 2026, plus capital expenditure of GBP65 million to GBP75 million.
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OTHER COMPANIES
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Chesnara agrees to acquire specialist life protection and investment bond provider HSBC Life UK for a total of GBP260 million from HSBC Bank. The consideration will be funded by GBP55 million in existing cash resources, a GBP65 million drawdown from the company's GBP150 million revolving credit facility, as well as a rights issue at 176 pence per share to raise up to around GBP140 million. The takeover is expected to complete in early 2026, subject to regulatory approvals. Chesnara expects the deal will enable an increase in its dividend trajectory, with the final financial 2025 dividend and interim financial 2026 dividend expected to be increased by 6%. This stands against Chesnara's prior 3% annual increases. Around GBP140 million in cash generation is anticipated during the first five years of the acquisition, with further "significant" cash generation anticipated "in future years". The acquisition is also expected to result in Chesnara's inclusion in the FTSE 250 index, the company adds.
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Mkango Resources announces subsidiary Lancaster Exploration will merge with other wholly-owned Mkango subsidiaries in a business combination deal with Crown PropTech Acquisitions, to become a publicly-traded company under the name Mkango Rare Earths. Lancaster owns Mkango's Songwe Hill rare earths project in Malawi and the Pulawy rare earth separation project in Poland, which are both designated as strategic projects under the EU Critical Raw Materials Act. The new entity's shares are expected to trade on Nasdaq, and the pro forma value of Mkango's stake in the combined MKAR Group is USD400 million, prior to transaction expenses. "This transaction is expected to significantly accelerate the growth trajectory of the Mkango group and position us as a key player in the global rare earth supply chain, with a strong emphasis on sustainability and critical industry demand," says Mkango President Alexander Lemon. "Partnering with CPTK, an organisation that shares our strategic vision and values, enhances our platform for scalable growth and innovation. As we move towards a Nasdaq listing, we believe this combination will catalyse new opportunities, broaden our investor base, and drive long-term value creation."
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Ryanair cancels 170 flights as a result of "yet another" French air traffic controller strike on Thursday and Friday. The budget carrier says the cancellations, which will disrupt more than 30,000 passengers, "coincide once more with the start of the European summer holidays - one of the busiest travel periods of the year". Ryanair notes the strike will also affect all French overflights, and calls on EU Commission President Ursula von der Leyen to take "urgent action" to reform EU ATC services. "Even though it's French ATC that are striking, most disrupted passengers are not even flying to/from France but just overflying French airspace en route to their destination [e.g., UK - Greece, Spain - Ireland, etc]," says Ryanair. "EU skies cannot be repeatedly closed just because French air traffic controllers are going on recreational strikes."
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By Emily Parsons, Alliance News reporter
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