2nd Oct 2025 07:59
(Alliance News) - Tesco raises its dividend as pretax profit falls, Morgan Sindall expects to beat expectations while Ryanair's monthly passenger figures rise.
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 0.4% at 9,482.73
GBP: down at USD1.3476 (USD1.3477 at previous London equities close)
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ECONOMICS
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The UK Treasury plans to give a stamp duty holiday to investors in new stock market listings in London in an attempt to encourage more initial public offerings, the Financial Times reported on Wednesday. Investors in newly listed companies on the London Stock Exchange would be exempt from the 0.5% tax on buying those shares, the newspaper said, citing "two people with knowledge of discussions for the UK's November budget". There already is an exemption for shares bought at the point of issue in an IPO, the FT noted, but the new exemption would apply for a two to three years after the company's flotation.
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BROKER RATINGS
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Bernstein starts Rightmove with 'outperform' - price target 870 pence
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Exane BNP cuts BT Group to 'underperform' (neutral) - price target 150 (160) pence
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UBS raises 3i Group to 'buy' (neutral) - price target 4,700 (4,450) pence
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RBC starts PensionBee with 'sector perform' - price target 170 pence
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Berenberg starts Jadestone Energy with 'buy' - price target 68 pence
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COMPANIES - FTSE 100
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Tesco reports increased revenue but lower profit for the first half of the year. Pretax profit falls 6.3% to GBP1.31 billion in the 26 weeks to August 23 from GBP1.39 billion a year ago. Revenue climbs 3.6% to GBP36.04 billion from GBP34.77 billion. Adjusted operating profit rises 1.5% to GBP1.67 billion from GBP1.65 billion while adjusted diluted earnings per share jump 6.8% to 15.43 pence from 14.45p. The food retailer declares an interim dividend of 4.80p per share, up 13% from 4.25p per share a year ago. It says volume-driven market share gains and good weather offset investment in its customer offer, and operating cost inflation, including the increase in national insurance contributions and a new packaging levy. "We are committed to doing everything we can to keep prices down and deliver great quality, service and availability for our customers, and are making good progress towards our GBP500 million Save to Invest target, helping to mitigate the impact of increased cost inflation," the firm says. The company now expects full year adjusted operating profit between GBP2.9 billion and GBP3.1 billion, up from the previous range between GBP2.7 billion and GBP3.0 billion as it says the customer response to its actions has been "better-than-expected". "I am pleased with our first half performance, which builds on already strong momentum. Our market share gains in the UK are a particular highlight and reflect the decisive action we took at the start of the year to further invest in value, quality and service," says Chief Executive Ken Murphy. "Competitive intensity remains high, and with continued pressure on household budgets, we remain committed to ensuring customers get the best possible value by shopping at Tesco. As we continue to invest, we are creating sustainable value for all our stakeholders."
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National Grid says its performance in the six months to the end of September was in line with its own expectations. It expects underlying earnings per share to be weighted to the second half of the year "as usual". The electricity and gas utility also expects the profile of half year operating profit to be "broadly consistent" with historical periods. In the UK Electricity Transmission and UK Electricity Distribution arms, it expects operating profit to be "broadly evenly split" across the year. In its US regulated businesses, the firm expects operating profit to be weighted to the second half. "Relative to the same period last year there have been fewer storms in our New York business, as well as new electricity distribution rates in our New England business. As such, we expect a slightly higher contribution to operating profit from both businesses in the first half relative to the profile last year," National Grid says. It expects a roughly even weighting of profitability across the year in National Grid Ventures.
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ICG increases medium term guidance for performance fees and fund management company operating margin. It says performance fees are now expected to represent between 10% and 20% of total fee income, up from between 10% and 15% previously. It expects the FMS operating margin to be in excess of 54%, from 52% previously. The private equity investment firm expects performance fees in the first half of the year to be between GBP90 million and GBP95 million. It also says it is changing the way it recognises performance fee revenue in financial statements. This will result in a one-off gain of between GBP65 million and GBP75 million in results for the first half of the year.
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COMPANIES - FTSE 250
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Morgan Sindall expects its full year results to be "significantly ahead" of previous expectations as the performance of its Fit Out division continues to strengthen. Profits for the Partnership Housing arm remain in line with previous guidance. The average capital employed for the full year in the division is estimated to be between GBP420 million and GBP430 million. The construction firm expects trading performance in Mixed Use Partnerships "to continue to reflect increased investment costs both on schemes yet to start on site and relating to future opportunities". Operating losses for the division in the second half are now expected to be "almost double" the GBP1.5 million loss in the first half. Morgan Sindall says the secured order book for its Fit Out division at the end of August was GBP1.6 billion, of which GBP900 million relates to 2026 and beyond, an 8% increase on the position six and twelve months previously. The overall order book for the group was GBP12.2 billion at the end of August, up 2% from the half year and 7% from the end of the 2024 financial year.
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OTHER COMPANIES
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Shawbrook Bank is preparing to launch its initial public offering in London, with an announcement likely as soon as Thursday, the Financial Times reported on Wednesday, citing "three people familiar with the matter". One of those people told the FT that Shawbrook could be valued at up to GBP2 billion in the IPO. Shawbrook is a commercial and retail bank, providing credit facilities to businesses and mortgages to professional landlords and property investors. Back in May, Shawbrook said its loan book stood at GBP15.8 billion, up 15% from a year before. It had paused its plans for an IPO earlier this year amid market turmoil. Shawbrook Bank Ltd is the operating subsidiary of Shawbrook Group PLC, which has bonds listed on the London Stock Exchange but not shares. It had previously been listed, but was acquired by private equity firms BC Partners LLP and Pollen Street Capital Ltd in 2017.
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Ryanair Holdings says passenger numbers climbed 1.6% to 19.4 million in September from 19.1 million, while the load factor remained at 94%. On a rolling 12-month basis, passenger numbers were up 5.3% to 203.9 million from 193.6 million. The load factor was unchanged at 94%. The airline says it operated over 107,000 flights in September.
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Fermi starts trading on the Main Market of the London Stock Exchange as a secondary listing on Thursday. The real estate investment trust for data centre infrastructure started trading on Nasdaq as a primary listing on Wednesday. The firm focuses on developing electric grids for artificial intelligence. "The market understands that AI and chips are only as good as the power that supports them," says Chief Executive Officer Toby Neugebauer. "This IPO injects significant capital onto our balance sheet, enabling us to continue locking up long lead-time items and executing at the velocity of the last ten months which will be required to deliver power at scale."
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By Michael Hennessey, Alliance News reporter
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