6th Jan 2026 07:48
(Alliance News) - Next raises its profit forecast after sales in the festive period beat expectations, while Prudential launches a USD1.2 billion share buyback programme.
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 10,033.47
GBP: higher at USD1.3555 (USD1.3516 at previous London equities close)
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ECONOMICS
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UK shop price inflation will "remain sticky" in 2026, having increased in December, the British Retail Consortium reports. Inflation picked up 0.7% in December, accelerating from 0.6% in November and in line with the 0.7% three-month average, the BRC says. "Shop price inflation edged up in December as food prices rose at a faster rate," comments BRC Chief Executive Helen Dickinson. "Nonetheless, shoppers still found plenty of value across many Christmas essentials including vegetables, cheeses, and alcohol, helping households to enjoy the festive season." Mike Watkins, head of retailer & business insight at NielsenIQ, adds: "This Christmas, shoppers remained cautious, prioritising affordability...Retailers worked hard to encourage spending by keeping supply chain price increases to a minimum, and many food retailers reduced prices in December to support demand."
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BROKER RATINGS
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BofA cuts JD Sports Fashion to 'neutral' (buy) - price target 96 (112) pence
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Jefferies cuts Auto Trader to 'hold' (buy) - price target 650 (895) pence
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Jefferies raises Paragon Banking to 'buy' (hold) - price target 1,060 (1,015) pence
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COMPANIES - FTSE 100
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Next ups its guidance as it says full price sales in the nine weeks to December 27 rise 11% compared to last year, ahead of its guidance for the quarter of 7.0%. The retailer says UK sales gain 5.9% in the festive period, while international sales jump 38%. Next raises its full year pretax profit guidance by GBP15 million to GBP1.15 billion, up 14% against last year, as it says the "over-achievement" adds GBP51 million to full price sales for the year. Next previously expected pretax profit of GBP1.14 billion, a rise of 12%. Next now expects FY26 full price sales of GBP5.60 billion, a rise of 11%, compared to previous guidance of GBP5.55 billion, a 9.7% increase on the prior year. It expects post-tax earnings per share to rise 16% in the full year to 738.8 pence, compared to previous guidance of a 15% rise to 729.4p. Next notes that the FY26 guidance is based on a 52-week year, while week 53 will add around GBP22 million of pretax profit. Next provides initial guidance for the year to January 2027, as it says it expects full price sales growth of 4.5%. The firm expects group pretax profit of GBP1.20 billion, up 4.5%. Assuming it makes no further acquisitions, Next expects cash available for distribution to shareholders, including ordinary dividends, to be GBP768 million. It says anticipated shareholder distributions, with forecast EPS growth of 4.3%, would deliver a total shareholder return of 9.1%.
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Prudential launches a USD1.2 billion share buyback programme, which it expects to complete by December 18. The London-based insurer says JPMorgan will conduct the programme on its behalf. "I am pleased with the progress we are making in executing our strategy. The significant growth opportunities ahead of us have not changed and we remain firmly focused on creating long-term shareholder value through high quality, sustainable growth, and consistent delivery of shareholder returns," says Chief Executive Officer Anil Wadhwani.
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COMPANIES - FTSE 250
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Rank Group says Chief Executive Officer John O'Reilly will step down on January 29, and will "continue to support the business" until the end of the current financial year. O'Reilly was appointed as CEO in April 2018. The Maidenhead, England-based casino operator appoints current Chief Financial Officer Richard Harris as interim CEO. Harris has been an executive director since joining Rank as CFO in May 2022. Prior to Rank, Harris was CFO at estate agency Foxtons. Rank says it will now start a formal search process to identify a permanent CEO. "As interim CEO, the board are confident Richard Harris will provide both important continuity and the strategic leadership required to drive the performance of the business and maximise shareholder returns," says Chair John Ott.
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OTHER COMPANIES
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essensys reports a wider loss amid lower revenue in the twelve months to the end of July, and says it expects to miss expectations in its new financial year. The London-based software and cloud service provider says revenue falls 21% to GBP19.2 million from GBP24.1 million a year ago. Pretax loss widens to GBP5.7 million from GBP5.5 million, while loss per share widens to 8.6 pence from 5.1p. Net cash falls 42% to GBP1.8 million from GBP3.1 million. The firm returns to positive adjusted earnings before interest, tax, depreciation and amortisation of GBP1.3 million, swung from a GBP900,000 loss a year ago. essensys says it remains debt free, but notes that discussions are ongoing to secure a debt facility to "optimise capital structure and support strategic growth". Looking ahead, essensys says revenue in the first quarter of the new financial year is in line with management expectations. It expects performance in financial 2026 to be "materially below management expectations" due to the "volatile" macroeconomic environment leading to longer sales cycles and slower than anticipated adoption rates of its product elumo. "While revenue reduced year on year, due to the downsizing of a customer, it also reflects a deliberate evolution of our customer portfolio and revenue mix, with a greater emphasis on scalable, higher-quality software revenues. This shift drove an improvement in gross margins and strengthens the long-term sustainability of the business. We continue to see strong structural tailwinds in flexible workspace, supported by a clear flight to quality," says Chief Executive Officer James Lowery. "While we expect volatile macro-economic trading conditions to continue in the short term, we remain confident in our strategy, product suite and long-term growth opportunities, and that we are well positioned to benefit as market conditions improve."
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By Michael Hennessey, Alliance News reporter
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