27th Feb 2026 07:54
(Alliance News) - British Airways parent IAG reports better-than-expected annual profit, Melrose also beats consensus, while Senior says it has received M&A interest.
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 10,876.40
GBP: lower at USD1.3479 (USD1.3513 at previous London equities close)
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ECONOMICS
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The Green Party has won its first ever parliamentary by-election in Gorton & Denton, dealing a bitter blow to UK Prime Minister Keir Starmer. Labour's defeat, trailing in third behind Zack Polanski's Greens and Nigel Farage's Reform UK in the previously rock-solid Greater Manchester constituency, will pile pressure on the prime minister. Hannah Spencer, a councillor and plumber, emerged victorious for the Greens, with 14,980 votes and a majority of 4,402 votes. Reform UK's candidate Matt Goodwin got 10,578 votes, with Labour's Angeliki Stogia trailing on 9,364, down from 18,555 in the 2024 general election, when the turnout was similarly high. Conservative candidate Charlotte Cadden received just 706 votes, with the Liberal Democrats getting 653. Labour Party Chair Anna Turley lamented the "clearly disappointing" result, saying: "By-elections are normally difficult for the party of government, and this election was no different." She added that "the politics of anger and easy answers offered by the Greens and Reform" would not tackle the cost-of-living crisis, create opportunities for young people or invest in public services.
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BROKER RATINGS
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Goldman Sachs cuts Segro to 'neutral' - price target 890 pence
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COMPANIES - FTSE 100
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British Airways parent International Consolidated Airlines Group says it achieved "another year of exceptional performance", with annual profit beating expectation. IAG's operating profit before exceptional items grew by 13% in 2025 to EUR5.02 billion, from EUR4.44 billion in 2024, beating company-compiled consensus of EUR5.01 billion. Pretax profit for the year shot up 26% to EUR4.51 billion from EUR3.56 billion, with revenue improving 3.5% to EUR33.21 billion from EUR32.10 billion. For the final quarter alone, pretax profit was up 46% to EUR890 million with revenue edging down 0.8% to EUR7.98 billion. Operating profit before exceptional items was 2.5% lower in the final quarter at EUR1.09 billion. Chief Executive Officer Luis Gallego says: "We reported another year of exceptional performance in 2025, delivering for our customers with continued improvements in on- time performance and customer satisfaction." IAG, which also owns Iberia, Aer Lingus and Vueling, on Thursday said it will return EUR1.5 billion to shareholders over the next 12 months, including a EUR500 million buyback to be completed by end-May. IAG announced a EUR0.05 per share final dividend, down from EUR0.06 a year prior, taking its full year payout to EUR0.098, up from EUR0.09. Looking ahead, it says: "The outlook for travel trends continues to be supportive, particularly in our core markets. We will continue to execute on our strategy, supported by our transformation programme. This will enable the continuing delivery of earnings growth at world-class margins, as well as significant free cash flow, which will help to strengthen the balance sheet as we build towards a step up in capital expenditure. We will continue to reward shareholders with a sustainable dividend and we plan significant excess cash returns to shareholders, starting with the EUR1.5 billion to be executed in the next 12 months." IAG back in its third quarter results in November said "the North Atlantic market saw some softness", with passenger revenue per available seat kilometre down by 7.1%, up 0.5% over the nine months. North Atlantic passenger revenue per available seat kilometre fell 0.5% over the course of the year. Across the whole of the IAG network, it edged up 0.1%. It noted "resilient demand" in its core markets, despite some weaker areas, "notably in the US point-of-sale economy segment, together with intra-European travel, particularly in the third quarter, with both showing improvement in the fourth quarter".
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Education products publisher Pearson says it is "confident" in its outlook, raising its annual dividend. In 2025, adjusted operating profit improved 2.3% to GBP614 million from GBP600 million, largely in line with consensus of GBP612 million. Pretax profit, however, fell 10% to GBP457 million from GBP510 million. Sales edged up 0.7% to GBP3.58 billion from GBP3.55 billion. Operating expenses were 6.8% higher at GBP1.35 billion, hitting its bottom line. "We delivered on our goals in 2025, making significant progress in scaling AI across our products and services and building tangible momentum in our enterprise offering. The partnerships we secured with leading technology companies are a recognition of Pearson's unique role at the intersection of education, skills and workforce development, underpinned by our unrivalled strength in assessments which positions us to deliver meaningful shareholder value over the medium term," CEO Omar Abbosh says. Pearson expects 2026 adjusted operating profit between GBP640 million and GBP685 million. Consensus stands at GBP658 million. Pearson says it has raised its final dividend by 4.8% to 17.4 pence per share, with the annual payout up 5.0% to 25.2p. In addition, the firm says it has named Simon Robson as its finance chief, replacing Sally Johnson who will become chief financial officer of a "large privately owned business". Robson is currently CFO at Sky and will join Pearson on March 30, assuming the finance chief position on May 8.
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Aerospace firm Melrose says it will buy back GBP175 million worth of shares in the next year, after "another strong performance", which saw it beat profit consensus. Adjusted diluted earnings per share shot up 25% to 32.1p in 2025 from 26.4p in 2024, topping consensus of 31.6p. It says it swung to a pretax profit of GBP468 million from a loss of GBP106 million. Revenue improved 3.5% to GBP3.59 billion from GBP3.47 billion, topping consensus of GBP3.50 billion. "Melrose delivered another strong performance in 2025. Significant profit growth was driven by increased Engines and Defence demand, together with the positive impact of our multi-year transformation programme reading through. We generated GBP125 million of free cash flow, representing an inflection point for the group, with substantial further increases in cash generation to come," CEO Peter Dilnot says. "We have positive momentum and are well-positioned to benefit from expected production ramp-ups and ongoing aftermarket expansion. We are therefore confident of further growth in 2026 and achieving our 2029 targets." Melrose has upped its final dividend by 20% to 4.8p per share, with the total dividend also up 20% to 7.2p. In addition, it is announcing a new share buyback programme of GBP175 million to be completed by the end of March 2027.
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COMPANIES - FTSE 250
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Senior reports it is in talks with a suitor and says it has postponed a GBP40 million buyback, The maker of components and systems for aerospace and defence, land vehicle, and power and energy customers says last month, it received a preliminary, non-binding all-cash proposal from a possible bidder. This offer was rejected, with Senior deeming it undervalued the firm. Two higher proposals were made by the same bidder, the "the second of which was unequivocally rejected". It adds: "Following the approaches described above, the board appointed Lazard and Jefferies to initiate discussions with a limited number of third parties regarding a possible offer for the entire issued and to be issued share capital of Senior, to determine the value that could potentially be achieved. Following a period of discussions with these other parties, the company confirms it has received two further, superior all-cash proposals from other potential offerors. Discussions with potential offerors remain ongoing." Senior at the end of last year set a GBP40 million buyback, but "mindful of the company's regulatory obligations", it has postponed the programme's start. It had been due to kick off following its annual results, due to be announced on Monday.
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OTHER COMPANIES
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Aquis-listed Equipmake, a maker of electric motors, inverters and zero-emission electric drivetrains and power electronic systems, says it has received further backing from heavy machinery maker Caterpillar. Equipmake has entered into a GBP3 million senior secured convertible loan note with New York listing's Caterpillar Venture Capital arm. It follows a GBP5 million strategic investment and development agreement with Caterpillar announced back in March. "Since Caterpillar's GBP5 million strategic investment in Equipmake in March 2025 we have developed a close relationship with them. I am therefore delighted that they have recognised the value of this partnership through investing a further GBP3 million in the company. Having the backing of Caterpillar has helped position Equipmake as a credible partner to both customers and suppliers, as well as providing a natural route to market for our solutions," Equipmake CEO Ian Foley says. Separately, Equipmake says its pretax loss in the six months to November 30 narrowed to GBP2.8 million from GBP4.3 million a year prior. Revenue, however, edged down to GBP1.4 million from GBP1.9 million.
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By Eric Cunha, Alliance News news editor
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Related Shares:
SegroSeniorMelrosePearsonInternational Airlines