1st Aug 2025 07:47
(Alliance News) - IAG hailed its ongoing transformation as profit jumped, Pearson raised its dividend and Playtech said it has delivered a strong performance since May.
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 0.5% at 9,086.81
GBP: down at USD1.3207 (USD1.3230 at previous London equities close)
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ECONOMICS
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UK house price growth edged higher in July, according to an index. Property values increased by 0.6% month-on-month in July, following a 0.9% fall in June, taking the average UK house price to GBP272,664, Nationwide Building Society said. The typical UK house price increased 2.4% annually in July, compared with 2.1% in June. Robert Gardner, Nationwide's chief economist, said: "Looking through the volatility generated by the end of the stamp duty holiday, activity appears to be holding up well. Indeed, 64,200 mortgages for house purchase were approved in June, broadly in line with the pre pandemic average, despite the changed interest rate environment...Despite wider economic uncertainties in the global economy, underlying conditions for potential home buyers in the UK remain supportive." He added: "Unemployment remains low, earnings are still rising at a healthy pace (even after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little further if bank rate is lowered further in the coming quarters as we, and most other analysts, expect. Providing the broader economic recovery is maintained, housing market activity is likely to continue to strengthen gradually in the quarters ahead."
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Heathrow Airport has said it can build a third runway for GBP21 billion within a decade. The airport has submitted plans to the UK government for a new full-length runway, but insisted it is open to considering a shorter one. The west London hub is seeking permission to open a new 3,500-metre runway to the north-west of its existing location. This would enable an additional 276,000 flights per year, from 480,000 today to 756,000. The M25 motorway would need to be moved into a tunnel under the new runway. Heathrow also wants to create new terminal capacity for 150 million annual passengers, up from 84 million currently. This would involve a new terminal complex named T5XW and T5XN, extending Terminal 2, and demolishing Terminal 3 and the old Terminal 1. Heathrow said its runway and airfield plan would be privately funded at a cost of GBP21 billion. It attributed the increase from its estimate of GBP14 billion in 2018 to "construction inflation". The total plan, including terminals and supporting infrastructure, would be expected to cost GBP49 billion.
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An offshore wind farm which developers say could be the world's biggest has been approved by the Scottish government. Berwick Bank – proposed to be built off the coast of East Lothian – aims to deliver 4.1 gigawatts of capacity, which is believed to be enough to power every home in Scotland twice over and around 17% of the homes in the UK. The development will feature up to 307 turbines and have two connection points to the grid – one in Dunbar, East Lothian, and another in Blyth, Northumberland. Developers SSE Renewables will have to provide a plan to counter any impact the wind farm may have on seabirds to be approved by ministers. Stephen Wheeler, the managing director of SSE Renewables, part of SSE, said news of the approval is "hugely welcome". He added: "At over 4 [gigawatts] of potential capacity, Berwick Bank can play a pivotal role in meeting the mission of clean power 2030 for the UK and achieving Scotland's decarbonisation and climate action goals."
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BROKER RATINGS
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Peel Hunt cuts Taylor Wimpey to 'hold' (add) - price target 110 (130) pence
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Barclays cuts Pets At Home to 'underweight' (equal-weight) - price target 190 (285) pence
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Exane BNP cuts Just Group to 'neutral' (outperform) - price target 220 (160) pence
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COMPANIES - FTSE 100
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International Consolidated Airlines Group reported increased earnings for the first half of the year, which it said reflects "the success of our ongoing transformation". Revenue increased 8.0% to EUR15.91 billion from EUR14.72 billion, while pretax profit jumped 67% to EUR1.75 billion from EUR1.05 billion. The owner of British Airways and Iberia Airlines said revenue in the second quarter was up 6.8% to EUR8.86 billion while pretax profit climbed 33% to EUR1.51 billion. It said it is confident of delivering good earnings growth, margin progressions and strong returns to shareholders in 2025, though the firm noted "ongoing uncertainty that may result from the geopolitical and macroeconomic backdrop". IAG said demand in the core markets of the North Atlantic, Latin America and Europe is "robust", with strength in its premium cabin partially mitigating softness in US point-of-sale economy leisure. It said it is 57% booked for the second half, in line with last year. "We continue to benefit from the trend of a structural shift in consumer spending towards travel. We remain focused on our market-leading brands and core geographies, where we continue to see robust performance, allowing us to invest in fleet as well as technology to improve operational efficiency and customer experience," said Chief Executive Officer Luis Gallego.
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Pearson said it is on track to deliver its priorities for the year and is confident of stronger growth in the second half after sales fell slightly. The publisher of digital and virtual learning materials said sales were down to GBP1.72 billion in the first half of 2025 from GBP1.75 billion a year ago. Pretax profit increased to GBP218 million from GBP212 million, while basic earnings per share were up to 24.8 pence from 23.1p. The firm said the GBP350 million share buyback programme is "well underway" and declared an increased dividend of 7.8p per share, up from 7.4p a year ago. Pearson said it is on track to deliver its 2025 guidance. "We are making rapid progress with bringing AI-powered products to market and are scaling and enhancing our enterprise business with a range of new partnerships and deals," said Chief Executive Omar Abbosh. It expects sales growth and adjusted operating profit in line with market expectations in 2025, with stronger sales growth in the second half, especially in the fourth quarter. The market consensus is for underlying sales growth of 4.4% and adjusted operating profit of GBP656 million.
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COMPANIES - FTSE 250
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Playtech said it has delivered a "strong performance" since its last market update in May, supported by "good momentum" in its business-to-business arm and a better than expected contribution from income from associates. The gambling software company said performance at Caliente Interactive benefitted from favourable sporting results in the second quarter. Playtech said it now expects adjusted earnings before interest, tax, depreciation and amortisation for the first half to be at least EUR90 million. It expects increased investment for growth in the US and Brazil in the second half of the year, and said it remains mindful of headwinds in Brazil and Colombia. "Given the exciting growth opportunities ahead, the Board remains very confident in Playtech's ability to execute on its strategy as a predominantly pure-play B2B business," the company said. It will release its half year results on September 11.
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OTHER COMPANIES
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Johnson Service Group said it has completed a move to London's Main Market, away from the AIM market. Shares in the textile rental and services provider will be admitted to trading on the Main Market on Friday, while shares will be cancelled from trading on AIM. Johnson Service said it does not intend to raise any funds or offer any new shares in connection with the admission.
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By Michael Hennessey, Alliance News reporter
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Related Shares:
International AirlinesPearsonPlaytechJohnson ServiceJust GroupPets at homeTaylor WimpeySSE