10th Jul 2025 07:53
(Alliance News) - Water utility Severn Trent and housebuilder Vistry backed guidance, while advertising firm WPP named a new chief executive.
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 8,911.92
GBP: higher at USD1.3611 (USD1.3583 at previous London equities close)
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BROKER RATINGS
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Jefferies cuts Land Securities to 'underperform' (hold) - price target 492 (556) pence
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COMPANIES - FTSE 100
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Severn Trent expects to perform in line with guidance, with the water utility expecting "improvements in leakage". The water utility, which operates in areas including the Midlands and Wales, said it has "increased proactive work to find and fix leaks". Severn Trent updated on trading up to July 9. Its prior financial year ended on March 31. It expects to deliver at least GBP25 million in outcome delivery incentives this financial year. "In the first quarter, we have invested around GBP360 million in our capital programme, up 19% year on year, and we are on track to deliver between GBP1.7 billion and GBP1.9 billion of capital expenditure in FY26," it added. "Financial performance for the year remains on track, and we expect to perform in line with guidance."
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Advertising agency WPP named Non-Executive Director Cindy Rose as its new chief executive, replacing outgoing Mark Read. Rose takes on the role from the start of September, with Read stepping down on the same date. Read will work with Rose until the end of the year to support the transition. Rose has been a non-executive at WPP since 2019 and has spent the last nine years in "senior leadership roles" at Microsoft. Currently, she is chief operating officer of Microsoft's Global Enterprise offering. "As he hands over to Cindy, I would like to reiterate my sincere thanks to Mark for his tireless commitment during more than 30 years with WPP and in particular the progress he has made to modernise, simplify and transform the company over the last seven years as CEO. On behalf of the board and the company as a whole I wish him all the very best for the future," Chair Philip Jansen said. WPP cut guidance on Wednesday following a tricky first half. WPP now expects a 2025 like-for-like revenue decline, excluding pass through costs, between 3% and 5%. It predicts a decline in headline operating profit margin of 50 to 175 basis points, excluding foreign exchange.
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COMPANIES - FTSE 250
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Vistry backed its outlook and said it achieved first half profit in line with expectations. The housebuilder said it expects to report adjusted operating profit of GBP125 million for the first half of 2025, a decline of 23% from GBP161.8 million. Adjusted pretax profit is expected 34% lower at GBP80 million from GBP120.7 million. It achieved around 6,800 completions during the half year, down from 7,792 a year prior. "As expected, partner funded demand from our affordable housing partners remained at lower levels in the first half due to uncertainty ahead of the June spending review and transitional funding constraints," Vistry said. "Demand from private rented sector providers remained resilient, supported by new market entrants and increased investment activity. Whilst we have seen some periods of improvement in open market demand, affordability challenges, particularly for first-time buyers, have persisted with expected interest rate cuts being pushed further out." Vistry said its forward order book stands at GBP4.3 billion, down from GBP5.1 billion 12 months earlier. It is 79% forward sold for the financial year. "Of this, 83% of the partner funded sales are secured, with more than 100% of the balance of partner funded units for the full year covered in our deal pipeline. We are hopeful that further rate cuts will provide additional stimulus to open market sales in the second half," it added. "A first half performance in line with expectations, together with the recent landmark government support for affordable housing, reinforces the board's conviction in Vistry's partnerships model and long-term prospects. In the near term, the group remains focused on executing the strategic and cash generation initiatives laid out in March and is on track to deliver a year-on-year increase in profits in FY25."
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Recruiter PageGroup said its profit decline worsened in the second quarter of the year amid "ongoing market and tariff related uncertainty". It reported a "slight deterioration in activity levels" in Continental Europe, though "some improvement" in Asia and the US. Gross profit in the second quarter of 2025 was 13% lower on-year at GBP194.8 million. At constant currency, it declined 11%, worsening from a 9.2% fall in the first three months of 2025. For the whole of the first half, gross profit fell 12% to GBP389.3 million and was 9.7% lower at constant currency. "We delivered a resilient performance despite ongoing market and tariff related uncertainty, with mixed results across the group. We saw a slight deterioration in activity levels and trading in Continental Europe, particularly in our two largest markets, France and Germany. However, we saw some improvement in activity, trading and customer confidence in Asia and the US," CEO Nicholas Kirk said. Kirk added: "The conversion of accepted offers to placements remained the most significant area of challenge, as ongoing macro-economic uncertainty continued to impact confidence, which extended time-to-hire. Permanent recruitment continued to be impacted more than temporary, as clients sought flexible options and permanent candidates remained reluctant to move jobs." PageGroup expects 2025 operating profit to be "broadly in line" with current market consensus of around GBP22 million.
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Bootmaker Dr Martens said its financial year has started in line with expectations and it left guidance unchanged. Dr Martens, which concluded its prior year on March 30, said it has "positive trading in our Americas direct to consumer channel". In the Europe, Middle East & Africa region, the DTC business is "more variable". The UK offering is suffering with a "challenging trading backdrop" but the APAC arm is seeing "good growth". "Looking forward, the autumn/winter order books globally are healthy. The EMEA order book is up year-on-year, whilst the Americas order book is broadly in line year-on-year and importantly is based on a much wider product range than previously. As ever, our performance will be H2-weighted, particularly from a profit perspective," the firm added.
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OTHER COMPANIES
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Mecca bingo and Grosvenor casino operator Rank Group expects to report full year profit ahead of expectations. Rank said that in the 12 months to June 30, like-for-like net gaming revenue was up 11% to around GBP795 million. It now predicts full year underlying like-for-like operating profit of at least GBP63 million. "We have enjoyed a very strong year of earnings growth despite the significant cost and regulatory headwinds that we have faced from the start of Q4. The momentum experienced in the first three quarters has continued, with strong trading in Q4 resulting in our full year underlying operating profit being ahead of expectation," CEO John O'Reilly said.
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RTW Biotech Opportunities noted portfolio company Verona Pharma is to be acquired by pharmaceutical firm Merck & Co in a deal worth roughly USD10 billion. Merck will fork out USD107 per American depository share in Verona, the pharmaceutical firm said Wednesday. Each ADS represents eight Verona ordinary shares. Life sciences focused investor RTW noted the sum is a 23% premium to Verona's closing price on Tuesday. "Merck's acquisition of Verona, following its 2023 purchase of Prometheus, is a powerful validation of our long-held thesis: that small and midcap biotech companies represent fertile ground for transformative innovation, and that large pharma must increasingly look to these emerging players to replenish and diversify their pipelines," said Rod Wong, chief investment officer of RTW Investments.
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By Eric Cunha, Alliance News news editor
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Related Shares:
Rtw BiotechRank Group PlcDr. MartensPageGroupVistry GrpWPPSevern TrentLand Securities