30th Sep 2026 07:49
(Alliance News) - Greggs has lifted its annual profit view and proposed cuts to around 700 jobs in a manufacturing review, while Saga says it will meet its medium-term aims earlier than expected.
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 0.5% at 10,691.01
GBP: higher at USD1.3253 (USD1.3210 at previous London equities close)
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ECONOMICS
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The UK economy grew at a stronger pace than expected in the second quarter of the year, according to data from the Office for National Statistics on Wednesday. Gross domestic product expanded 0.5% quarter-on-quarter in the three months to June 30, upwardly revised from a previously reported 0.4% increase. It still represents a slight slowdown from a 0.6% climb in the first quarter. Year-on-year, the UK economy rose 1.4% in the second quarter, upwardly revised from a 1.2% increase. The ONS said that for the whole of 2025, GDP is now estimated to have grown 1.2%, downwardly revised from a 1.3% increase.
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Andy Burnham has acknowledged he could go "all the way" and propose rejoining the EU as he considers the UK's future relationship with Brussels. The UK prime minister, who has blamed Brexit for a decade of drift and division, said he would look at the "pros and cons" of all options. In his first Labour Party conference speech as leader, the prime minister said Brexit had done "more harm than good" and promised to set out the options to the country around the time of a UK-EU summit later this year. He told the BBC he did not want to leave the issue "hanging" and he wanted to be clear on "where we want Britain to go in the next decade".
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G20 trade ministers are set to open talks Wednesday in the US, in meetings strained by President Donald Trump's tariffs as Washington targets partners regarding forced labor and overcapacity. The gathering of officials from the Group of 20 major economies – which includes the UK, China, India, Russia, Japan, Germany and France – takes place in the Midwestern city of Milwaukee. But analysts expect the two days of talks to be deadlocked as Trump's tariffs weigh on relationships while China rejects concerns about its exports, which critics see as driven by excess industrial capacity. US Trade Representative Jamieson Greer defended Washington's approach at a Tuesday roundtable in Milwaukee, saying the administration "is not anti-trade." He added that countries are facing similar challenges with global overcapacity and "non-market policies." This week, key US trading partners like Canada and the EU are also expected to push for deeper trade ties outside the US.
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BROKER RATINGS
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JPMorgan reinitiates Quilter with 'overweight' - price target 227 pence
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COMPANIES - FTSE 100
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Babcock International says a bridging pact extension has been struck with the UK Ministry of Defence for a maritime support deal, while talks for a longer contract progress. The London-based aerospace, defence and nuclear engineering services company says the two-month extension to the future maritime support programme begins on Thursday. "This provides continuity of critical naval base and nuclear submarine fleet support services while Babcock and the MOD finalise the successor contract, the gateway agreement," Babcock says. "The gateway agreement will provide the long-term framework for Babcock's critical contribution to UK defence capability as the sole provider of in-service submarine support to the Royal Navy. It will enable Babcock to support the Royal Navy's continuous at sea deterrent and its move to warfighting readiness, while providing the foundation for delivering the UK government's long-term investment in the submarine enterprise."
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COMPANIES - FTSE 250
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Baker Greggs says it has seen "improved" trading in recent weeks, helped by more favourable weather, and it has proposed a plan to consolidate its manufacturing operations which may lead to over 700 roles being lost. In the 13 weeks to September 26, total sales rose 7.7%, Greggs says, climbing 7.4% on a like-for-like basis. Company-managed shop like-for-like sales were up 3.4% during the period. "Trading improved across the quarter, supported by the successful launch of new products and more settled weather in August and September," Greggs adds. Year-to-date, total sales are up 7.4%, with like-for-like sales up 2.6%. Greggs still expects around 100 to 110 net new shop openings in 2026, plus 12 'Greggs Express' convenience retailing installations. Looking ahead, it says: "As previously communicated, new distribution centres in Derby and Kettering will increase costs in 2027 before contributing to profitable growth thereafter. Improved trading performance in recent months and continued strong cost control leads us to expect a modestly improved outcome for 2026." It had previously expected an outcome "broadly in line with 2025". Greggs has proposed changes to its manufacturing operations after a "comprehensive review". "This review has resulted in a set of proposals that would relocate elements of our manufacturing processes. Today we have launched a consultation exercise that will consider proposals that could lead to the closure of four sites. This may result in a total of circa 740 roles becoming redundant over a period of two and a half years. We believe such changes, whilst difficult, are necessary to ensure Greggs continues to meet capacity requirements for growth in the years ahead in the most cost-efficient manner," Greggs adds. The proposals would result in cash costs of some GBP60 million, around GBP40 million stemming from capital expenditure and GBP20 million from "disruption costs and redundancy payments".
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Saga says its half-year earnings have improved, and it now expects to meet medium-term aims sooner than expected. The provider of products and services for people over 50 says pretax profit in the six months to July 31 jumped to GBP28.0 million from GBP3.7 million. Revenue improved 12% to GBP367.5 million from GBP328.2 million. Underlying pretax profit soared 98% to GBP46.6 million from GBP23.5 million. It was a first half that was "ahead of expectations and driven by growth across all core businesses", Saga adds. It now expects annual underlying pretax profit "to be materially higher than in the prior year" and in a range of GBP65 million to GBP70 million. It now expects to meet its medium-term underlying pretax profit aim of GBP100.0 million and leverage ratio target of 2.0 "before the original target date of January 2030". "In April 2025, we laid out our medium-term targets, with plans to achieve underlying profits of GBP100.0 million by January 2030 and leverage of less than 2.0x. Eighteen months on, we are significantly ahead of that trajectory. While conscious of potential economic headwinds and volatile global conditions, our performance this year further demonstrates the resilience of our business model and target customer group, increasing our confidence in achieving our medium-term targets ahead of plan," Chief Executive Officer Mike Hazell says.
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OTHER COMPANIES
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Future says it has paused a share buyback as it looks to focus on cutting debt. The online magazine publisher and owner of price comparison website Go Compare says the decision has come after a "continuous review of the capital allocation priorities". "The board has decided to pause the current share buyback to focus on deleveraging in financial year 2027 starting Thursday. The board confirms that it will continue with its current dividend policy," Future says. It notes that GBP24 million of its GBP30 million buyback has been executed. For the financial year that ends on Wednesday, "trends in the second half have been largely as expected", it adds. It expects to deliver "in line with market expectations for FY 2026 as it executes against its strategy". It puts market expectations at GBP707 million for revenue and GBP180 million for adjusted earnings before interest, tax, depreciation and amortisation. Revenue in financial 2025 amounted to GBP739.2 million, while the adjusted Ebitda was GBP223.4 million.
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By Eric Cunha, Alliance News news editor
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