13th Oct 2025 08:00
(Alliance News) - Lender Lloyds Banking Group has set aside another GBP800 million related to motor finance matters, Oxford Instruments reports a tariff hit first half and Serica Energy has agreed a deal with BP to acquire North Sea assets.
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 7.4 points, 0.1%, at 9,434.87
GBP: higher at USD1.3362 (USD1.3338 at previous London equities close)
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ECONOMICS
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UK Chancellor Rachel Reeves could raise tens of billions from tax reforms without breaking Labour's manifesto pledges but must avoid "half-baked fixes" to Britain's economic woes at the budget, leading economists have said. The government is under pressure to balance the books ahead of November's autumn statement amid warnings of a black hole estimated to be as much as GBP50 billion in the public finances. But in a wide-ranging report, the Institute for Fiscal Studies urged the chancellor to resist "simply hiking rates" without making other changes to an "unfair" and "inefficient" tax system. It also warned that restricting income tax relief on pension contributions "should be avoided" and repeated its cautions against an annual wealth tax, which it says would penalise savers, or increasing stamp duty.
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BROKER RATINGS
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RBC reinitiates Aviva with 'outperform' - price target 800 pence
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Berenberg raises M&G to 'buy' (hold) - price target 342 (225) pence
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COMPANIES - FTSE 100
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Lloyds Banking Group says it plans to book an additional GBP800 million provision related to motor finance matters. The lender says this "reflects the increased likelihood of a higher number of historical cases" being eligible for redress. This includes cases dating back to 2007, it adds. It also sees a "higher level of redress than anticipated in the previous scenario based provision". Its existing provision was GBP1.15 billion. "The current FCA proposals remain a consultation and the ultimate outcome may evolve in response to representations made by various parties as well as further legal proceedings and complaints or any other broader implications of the Supreme Court judgement. However, the total GBP1.95 billion provision, including both redress and operational costs, represents the group's best estimate of the potential impact of the motor finance issue," Lloyds adds. On Thursday, Lloyds had warned of a "material" new provision related to motor finance. Last week, the Financial Conduct Authority said car finance mis-selling will cost providers around GBP8.2 billion, with an additional GBP2.8 billion of administrative costs, taking the total to GBP11 billion.
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AstraZeneca confirms it has reached a "historic" drug pricing agreement with the Donald Trump administration in the US. The agreement, which follows a similar accord announced last month with Pfizer, requires AstraZeneca to charge "Most Favored Nation" pricing – matching the lowest price offered in other wealthy nations – to Medicaid, the US health insurance programme for low-income Americans. In exchange, Trump administration officials agreed to a three-year delay on new tariffs on AstraZeneca, which had previously announced plans to invest USD50 billion in the US in response to looming tariff threats. AstraZeneca adds: "AstraZeneca has also reached an agreement with the US Department of Commerce to delay section 232 tariffs for three years, enabling the company to fully onshore medicines manufacturing so that all of its medicines sold in America are made in America. This will be achieved through the company's recently announced USD50 billion investment in US medicines manufacturing and R&D over the next five years to help deliver USD80 billion in total revenue by 2030, 50% of which is expected to be generated in the US." Separately on Monday, AstraZeneca reports it will announce data at an industry conference which will cement the "potential of Enhertu" in a form of early breast cancer. It also notes data will show the promise of Datroway in another form of breast cancer, with another report showing the benefit of Imfinzi in "early bladder and gastric cancers". AstraZeneca is collaborating with Daiichi Sankyo to develop and commercialise Enhertu and Datroway.
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Legal & General says it has named Scott Wheway as its next chair. Wheway will join the board on January 2 but take over as chair on May 21, following the firm's annual general meeting. Wheway is currently chair of insurer Scottish Widows Group and is a non-executive at Lloyds Banking. "Before his non-executive career, Scott was an executive in the retail sector for over 25 years, both in the UK and internationally, where he held positions including CEO of Best Buy Europe, Managing Director of Boots the Chemist PLC, and a number of senior executive positions at Tesco PLC, including CEO, Japan," L&G adds. Wheway replaces John Kingman, who was appointed chair in October 2-016.
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COMPANIES - FTSE 250
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Oxford Instruments says order intake suffered in the first half of its financial year amid tariff disruption. The provider of high technology products and services to industry and scientific research communities saw "contrasting order dynamics" in its two divisions during the six months to September 30. Tough market conditions meant a greater hit in the Imaging & Analysis arm, it says. "In our Advanced Technologies division, market tailwinds in the compound semiconductor market, and our expansion into volume manufacturing customers, have continued to drive very strong order growth," Oxford Instruments explains. Total order intake in the first half was up just over 1% on an organic constant currency basis. It had fallen 3% on-year in the first quarter before rising 6% in the second. Revenue for the half-year is expected to have fallen 10% on-year from GBP204.2 million. "On a reported basis we expect H2 revenue to be marginally up versus H2 of the prior year," it adds. As a result, it now expects full year revenue, adjusted operating profit and its margin to be "similar to the prior year" on an organic constant currency basis.
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OTHER COMPANIES
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Serica Energy says it has struck an agreement to acquire the entirety of BP's stake in the P111 and P2544 licences in the UK Central North Sea. North Sea-focused oil and gas producer Serica will pay USD232 million upfront to BP. The deal includes the oil major's 32% interests in P111, which contains the Culzean gas condensate field, and the adjacent P2544. TotalEnergies owns just under 50% of Culzean, "the largest single producing gas field in the UK North Sea", Serica adds. Neo Next owns just over 18%. "As per the terms of the joint operating agreement between the Culzean field partners, the proposed acquisition announced today is subject to a pre-emption period which runs for 30 days, with each of the Culzean field partners having the option to acquire BP's stake in the licences on the same terms as those agreed by Serica," Serica says. Serica Chief Executive Officer Chris Cox says the buy will be a "step-change" for the company, should it be completed. "Culzean is a world-class asset, delivering gas from a modern platform with exceptionally high uptime and low emissions," Cox adds.
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Construction and engineering company Costain has been selected for a GBP1 billion "long-term programme". Sellafield awards the deal, which will see Costain "refurbish and replace a variety of on-site and off-site utility distribution systems and services to enable Sellafield's decommissioning programme". "The contract is expected to be worth up to GBP1 billion to Costain and consists of an initial term of nine years with an option to extend by a further six years, either in a single extension or multiple smaller extensions," Costain adds. Costain CEO Alex Vaughan adds: "This long-term award follows previous contract wins in the civil nuclear energy market this year with Sizewell C and Urenco and further demonstrates our integral position in this market."
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Shawbrook Group confirms it plans to list in London, looking to raise GBP50 million from an issue of new shares. The initial public offering on the Main Market is expected to occur next month, and the digital banking platform expects to be FTSE index eligible. Shawbrook adds that its "existing sole shareholder" Marlin Bidco will also sell shares, alongside the issue of new shares. The final IPO price is expected to be announced in late-October. Shawbrook has engaged Ardea Partners International LLP as financial adviser, Goldman Sachs International as sponsor, joint global coordinator and joint bookrunner, Barclays Bank as joint global coordinator and joint bookrunner, and Stifel Nicolaus Europe, Deutsche Bank AG, and UBS AG as joint bookrunners. Shawbrook reports its loan book has grown to GBP18.3 billion as of the end of last month, from GBP17.0 billion at the end of June. "This loan book growth has been driven by a strong level of organic originations, which were approximately GBP1.5 billion for the three-month period ended 30 September 2025, complemented by the contribution from the group's strategic acquisition of the ThinCats group," it says.
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Chinese firm Ming Yang Smart Energy Group shared plans to build the UK's largest wind turbine manufacturing facility in Scotland. The firm said the project will involve investment of up to GBP1.5 billion, creating as many as 1,500 jobs. A number of sites in Scotland have been shortlisted for the factory, with Ardersier in the Highlands identified as the preferred option, being one of the "green freeport" initiatives which offer tax and customs incentives to encourage investment. Under the first of three phases, Ming Yang said it will invest up to GBP750 million in an advanced manufacturing facility, with production beginning by late 2028. Latter phases will see the facility expand and create an "offshore wind industry ecosystem" around the hub. The announcement follows discussions with the Scottish and UK governments over the past two years.
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Heathrow airport's passenger numbers have grown by just 0.3% so far this year because of capacity constraints. Figures from the UK's busiest airport show 63.3 million passengers travelled through its four terminals between January and September. That is only 200,000 more than during the same month last year, as its two runways are being used at almost full capacity. Heathrow unveiled plans to build a full-length third runway last week. It stated this would enable an additional 276,000 flights per year, from 480,000 today to 756,000. Heathrow believes it is possible to meet the government's ambition of securing planning consent by 2029 and the new runway being operational within a decade. It proposed that the expansion would be privately financed at a cost of GBP21 billion, but there are concerns over the impact on passenger charges. The airport said it recorded its busiest September, with 7.3 million passengers.
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By Eric Cunha, Alliance News news editor
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AvivaM&GCostainSerica EnergyBPOxford InstrumentsLegal & GeneralAstrazenecaLloyds