16th Jul 2026 07:56
(Alliance News) - The UK economy returns to growth in May, matching expectations, while takeover activity gathers pace as DCC extends talks with a KKR-led consortium and ABB strikes a GBP4.1 billion deal for Rotork.
Ocado, meanwhile, swings to a first-half pretax profit and maintains its full-year outlook.
Here is what you need to know before the London market open:
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MARKETS
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FTSE 100: called down 0.5% at 10,459.12
GBP: higher at USD1.3535 (USD1.3486 at previous London equities close)
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ECONOMICS
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The UK economy returns to growth in May, with gross domestic product rising 0.1% from April, matching the FXStreet-cited consensus, after a 0.1% contraction in April. The expansion is driven by a 0.3% increase in services output, led by professional, scientific and technical activities, which offsets a 0.5% fall in production and a 0.8% decline in construction. Production is weighed down by a 4.6% drop in mining and quarrying, including a 4.8% fall in crude oil and natural gas. Over the three months to May, GDP grows 0.7%, beating the FXStreet-cited consensus of 0.6%, while the Office for National Statistics revises growth in the three months to April up to 0.8% from 0.7%.
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The UK's goods trade deficit narrows to GBP19.5 billion in May from GBP20.6 billion in April, comfortably beating the FXStreet-cited consensus for a GBP23.6 billion shortfall, as export growth outpaces imports. Goods exports rise 4.5% to GBP35.0 billion, driven by stronger shipments to both non-EU countries and the EU, while imports increase 0.8% to GBP54.5 billion. Over the three months to May, however, the overall goods and services trade deficit widens to GBP9.1 billion from GBP4.7 billion as the goods deficit increases and the services surplus narrows.
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BROKER RATINGS
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UBS raises Jet2 price target to 1,695 (1,660) pence - 'buy'
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Citigroup starts Hikma Pharmaceuticals with 'buy' - price target 1,700 pence
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COMPANIES - FTSE 100
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DCC says first-quarter continuing operating profit is ahead of the prior year and in line with expectations, with trading in both its Energy and Technology divisions also ahead year-on-year. The Dublin-based provider of sales, marketing and distribution services to the energy sector reiterates its expectation for strategic progress, growth and continued development activity in 2026, while saying the sale of its Nexora technology business remains on track for agreement by the end of the calendar year. Separately, DCC extends the deadline for a consortium led by Energy Capital Partners and KKR to announce a firm takeover offer to July 27 after receiving an improved proposal. The revised approach retains the 6,525 pence a share cash offer and proposed 147.22 pence final dividend, while adding a contingent payment of up to 125 pence a share linked to proceeds from the sale of Nexora.
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Experian reports a "strong start" to its financial year, with first-quarter revenue for the three months ended June 30 rising 10% on-year, or 8% at constant exchange rates, while organic revenue grows 7%, in line with expectations. Growth is driven by strong demand across its business-to-business operations, particularly in North America, although North American consumer services organic revenue falls 2% following the wind-down of two large data breach contracts. The credit data and technology firm leaves its full-year guidance unchanged.
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SSE reiterates its financial guidance ahead of its annual general meeting, keeping adjusted earnings per share guidance at 168p to 193p for financial 2027 and 225p to 250p for financial 2030. In the first quarter, investment by its regulated networks businesses rises 83% on-year to GBP888 million from GBP484 million, while renewables output increases 31% to 3,264 gigawatt hours, reflecting favourable weather and added capacity. The company says it remains on track to invest a record GBP5 billion this year as it progresses its GBP33 billion five-year investment plan. CEO Barry O'Regan says: "Since announcing our GBP33 billion investment programme to unlock the enormous growth opportunity of UK electricity networks, we are continuing to see real progress as we work to deliver the plan, and in doing so we are underpinning compounding, long-term earnings growth and creating significant value for investors."
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Diploma reports 15% organic revenue growth in the nine months to June 30, driven by a strong third quarter and continued momentum across its Controls and Seals businesses despite challenging Life Sciences markets. The company upgrades full-year guidance, now expecting 14% organic revenue growth at constant currency, an operating margin of around 26.5%, and operating profit growth of about 42%, around 7% above analyst consensus of GBP454 million. Diploma also says acquisitions completed to date will add 6% to reported revenue growth and notes it has a strong acquisition pipeline and significant balance sheet capacity.
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COMPANIES - FTSE 250
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ABB agrees to acquire Rotork for 506 pence per share in cash, valuing the Bath, England-based flow control solutions provider at GBP4.14 billion on a fully diluted basis, a 73% premium to Wednesday's closing price. The Swiss engineering group says Rotork's flow control and instrumentation business is highly complementary to its Automation division and will strengthen its industrial automation offering. Rotork's board unanimously recommends the offer, saying ABB's commitment to operate the business as a separate division will benefit the company, its employees and other stakeholders.
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Ocado Group swings to a pretax profit of GBP17.1 million in the 26 weeks ended May 31 from a GBP173.1 million loss a year before, while revenue rises 54% to GBP1.04 billion, boosted by Kroger and Sobeys closure fees. Excluding those impacts, revenue grows 1% to GBP684 million and adjusted Ebitda falls to GBP81 million from GBP92 million, while underlying net cash outflow widens to GBP147 million from GBP108 million. Ocado keeps full-year guidance unchanged, expecting Technology Solutions revenue of around GBP500 million excluding closure impacts, Ocado Logistics revenue growth in the mid-single digits and positive cash flow in the second half before turning cash flow positive for the full year in financial 2027. Ocado Retail, its joint venture with Marks & Spencer, continues to outperform the wider UK grocery market, with revenue up 15% to GBP1.76 billion and online grocery market share rising to 13.7%
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OTHER COMPANIES
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Ramsdens agrees to a sweetened takeover by US pawnbroker FirstCash at 675 pence per share in cash, plus up to 9 pence per share in dividends, valuing the company at GBP229 million, or GBP232 million including dividends. The revised offer is a 13% premium to the previously agreed 600p-per-share bid and follows shareholder engagement, with investors holding just over 17% of Ramsdens' shares backing the higher proposal. Separately, Ramsdens raises its full-year pretax profit guidance to GBP32 million to GBP35 million from GBP30 million to GBP33 million, citing robust pawnbroking demand, resilient jewellery retail trading and stronger June foreign exchange.
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By Eva Castanedo, Alliance News senior economics reporter
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Related Shares:
DCCExperianSSEDiplomaRotorkMarks & SpencerOcadoRamsdens HldgsJet2Hikma Pharmaceuticals