1st Jul 2025 07:54
(Alliance News) - London's FTSE 100 is set to open broadly flat on Tuesday, ahead of a vote in Parliament on Labour's proposed welfare cuts and following a delay in the decision on post-Brexit EU food labelling.
In early corporate news, Drax taps a former Shell vice president as its new chief financial officer, and energy firms SSE and National Grid respond to a planned investment programme by UK energy regulator Ofgem.
Here is what you need to know before the London market open:
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MARKETS
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FTSE 100: called slightly higher at 8762.26
GBP: up at USD1.3741 (USD1.3701 at previous London equities)
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ECONOMICS
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UK Prime Minister Keir Starmer continues to face the prospect of a major rebellion over his welfare cuts despite making concessions to disgruntled Labour MPs. Ministers hope a partial U-turn will be enough to win over Labour rebels when MPs vote on welfare changes on Tuesday. The concessions included protecting people claiming personal independence payment, Pip, from changes due to come into effect in November 2026, and rowing back plans to cut the health-related element of universal credit. But backbench anger has continued to simmer, with a statement from Work & Pensions Secretary Liz Kendall laying out the concessions on Monday receiving a negative response. Asked whether he was "confident" that the concessions had done enough to secure passage of the Universal Credit and Personal Independent Payment Bill, disabilities minister Stephen Timms would only tell Sky News: "I certainly hope it passes."
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A move to give ministers an emergency power to counter the commercial fallout of EU law post-Brexit suffered a delay after a late-night ambush at Westminster. Draft regulations enabling the contingency measure on food labelling failed to gain approval after a vote was forced in the Lords, but fewer than 30 members took part. Under parliamentary rules, the division, which the government won by 17 to nine, majority eight, was judged invalid. The unexpected vote, called by Northern Ireland peers at around 2230 BST on Monday, caught the government off guard and means the regulations, which might usually be expected to go through on the nod, now need to be brought back for approval on Tuesday.
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BROKER RATINGS
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Jefferies raises Antofagasta price target to 1,850 (1,700) pence - 'hold'
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Barclays raises PayPoint price target to 600 (520) pence - 'underweight'
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RBC raises Halfords price target to 155 (150) pence - 'sector perform'
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COMPANIES - FTSE 100
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National Grid and SSE respond to Ofgem's approval of an initial GBP24 billion investment programme for the operation and maintenance of gas networks in Britain. The investment in UK energy will rise to around four times the current spending levels, will allow for 80 transmission projects and all associated works across the country to be completed within five years, says Ofgem, as well as significantly increasing the grid's capacity. More than GBP15 billion will be allocated to ensuring the safe operating of the UK's gas transmission and distribution networks, whilst GBP8.9 billion is being committed to the UK's high-voltage electricity network, plus a further GBP1.3 billion ready to go. SSEN Transmission notes the announcement, but says "based on an initial assessment, Ofgem's draft determination does not go far enough to deliver the investible, financeable and ambitious framework required to unlock the unprecedented levels of investment needed to deliver lower and more stable bills". The subsidiary of SSE adds that "the proposed incentive regime is at an early stage and therefore requires further development to give sufficient confidence this will be a balanced and investable package that incentivises strong performance and delivers for consumers". National Grid says it is "pleased to see Ofgem continuing to recognise the need for significant levels of investment in networks", and continues to expect to invest around GBP60 billion over the five years to March 2029. National Grid will now review the draft determination to assess "whether it delivers an investable overall financial package".
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Shell Canada Energy, a Shell subsidiary, says the first cargo of liquefied natural gas has left the LNG Canada facility in Kitimat, British Columbia, in which Shell has a 40% working interest. The joint venture facility will export LNG from two processing units with a total capacity of 14 million tonnes a year. Petronas owns a 25% stake in the facility, PetroChina Co holds 15%, Mitsubishi owns 15% and Korea Gas holds the remaining 5%. Shell forecasts global demand for LNG will rise by around 60% by 2040, largely as a result of expected economic growth in China. "LNG Canada grows our leading integrated gas portfolio, providing a reliable supply of LNG to markets, most notably in Asia," says Cederic Cremers, Shell's president, Integrated Gas. "We expect that supplying LNG will be the biggest contribution Shell will make to the energy transition over the next decade, and projects like LNG Canada position our portfolio to achieve this."
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J Sainsbury reports a 4.9% growth in total retail sales excluding fuel for the 16 weeks that ended June 21, as sales rise to GBP8.92 billion in the first quarter from GBP8.51 billion the year before. Including fuel, sales rose 2.4% on-year to GBP10.04 billion from GBP9.80 billion. The supermarket chain continues to expect full-year underlying operating profit of around GBP1 billion for its Retail unit in the year ending March 1, 2026, against GBP1.04 billion in financial 2025, as well as Retail free cash flow of more than GBP500 million. "We have great momentum, growing faster than the market for three consecutive years and we are well set to deliver another strong performance over the summer," says Chief Executive Officer Simon Roberts. "Boosted by a sunny spring, we're already off to a great start with Taste the Difference fresh food sales up 20 per cent as customers enjoy our delicious new Deli and Picnic ranges, which are perfect for sharing with friends and family."
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COMPANIES - FTSE 250
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The UK Competition & Markets Authority has given the green light for Direct Line Insurance's takeover by Aviva. The motor and home insurer accepted a GBP3.7 billion cash-and-shares takeover offer from its larger peer back in December. Direct Line shareholders will receive 0.2867 of an Aviva share, 129.7p in cash, and up to 5p in dividends payments for each Direct Line share held. Because of the share element, Direct Line shareholders will hold 12.5% of the enlarged group.The UK competition watchdog had opened an inquiry into the acquisition in May, and on Tuesday announces it will not refer the deal to a phase 2 investigation.
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Drax names Frank Lemmink as its new chief financial officer, succeeding Andy Skelton with effect from September 1. Lemmink has been executive vice president, Finance, at Shell's Integrated Gas & Upstream business since 2023, and has held various senior finance and risk management leadership roles at the company over a 20-year career at the company. Skelton will step down as a director on September 1, but will continue to support the company during the handover period until December 4. "[Lemmink] brings a wealth of experience and skills in financial control, project development, governance and capital allocation gained through over 20 years with Shell and will be a strong addition to the Drax team, as we develop opportunities for short, medium and long-term growth and value creation," says Drax Chief Executive Officer Will Gardiner.
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OTHER COMPANIES
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Supreme reports pretax profit of GBP30.9 million for the year that ended March 31, up 2.7% from GBP30.1 million the year before. Revenue rises 4.5% to GBP231.1 million from GBP221.2 million, while administration expenses increase 40% to GBP44.2 million from GBP31.5 million. The consumer products manufacturer and distributor declared a total dividend of 5.2 pence per share, 10% higher on-year. "I am pleased to report another strong performance from Supreme, which has seen the business extend its sector reach through a number of highly complementary acquisitions," says Chief Executive Officer Sandy Chadha. "With our more recent acquisitions of Clearly Drinks and Typhoo Tea now fully integrated into the business, our team is now fully focused on leveraging both cross and up-sell opportunities alongside developing an exciting range of new products to deliver to market." Supreme expects to deliver financial 2026 results in line with current market expectations, citing a company-compiled consensus for GBP236 million in revenue and adjusted earnings before interest, tax, depreciation and amortisation of GBP36.5 million. The company reports adjusted Ebitda of GBP40.5 million in financial 2025, up 6.3% from GBP38.1 million a year prior.
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Adriatic Metals achieves commercial production at its Vares silver operation in Bosnia & Herzegovina, following the resolution of previous constraints related to tailings management. The firm has maintained plant throughput levels of 75% over 14 days, including 80% over 7 days, and reaching 2,000 tonnes per day, 90%, in late June. Construction of the Veovaca tailings storage facility had been completed in March, with initial tailings deposition beginning on April 2. Meanwhile, mining activities at the company's Rupice project are "progressing well", Adriatic Metals says, with around 900 metres of underground development completed in the second quarter. "We are proud to announce the achievement of commercial production at the Vares silver operation, marking a significant milestone that demonstrates our ability to operate at production levels that support strong cash generation," says Adriatic Metals Chief Executive Officer & Managing Director Laura Tyler.
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By Emily Parsons, Alliance News reporter
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AntofagastaPaypointHalfordsShellSainsbury'sAdriatic Metal.Supreme PlcSSENational GridDirect LineAvivaDrax