23rd Jan 2026 08:00
(Alliance News) - UK retail sales rise unexpectedly in December, Babcock promotes Nuclear division chief executive Harry Holt to be its next CEO, while STV expects revenue at the top end of previous guidance.
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 0.1% at 10,143.15
GBP: lower at USD1.3494 (USD1.3498 at previous London equities close)
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ECONOMICS
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UK retail sales unexpectedly rose in December, but fell in the final quarter of the year, numbers showed. The Office for National Statistics said retail sales volumes rose 0.4% in December, following a fall of 0.1% in November, beating an FXStreet-cited forecast for a 0.1% decline. Non-store retailers' volumes rose in December, following falls in October and November, as the ONS noted that online jewellers reported that demand for precious metals picked up. The 0.1% fall in November was unrevised, while the ONS revised up October's reading to a 0.8% fall from a 0.9% decline previously. Retail sales volumes in December were 2.5% higher than a year ago, beating expectations of a 1.0% increase. In the quarter to December, retail sales volumes were down 0.3% compared to the previous quarter. The ONS said both supermarkets and non-store retailers' sales both fell following a "strong" third quarter. Annual sales volumes rose 1.3% over the year to 2025, with increases in both food and non-food stores, as well as non-store retailers.
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BROKER RATINGS
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Barclays raises Haleon to 'overweight' (equal weight) - price target 420 (380) pence
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Jefferies raises Severn Trent to 'buy' (hold) - price target 3,220 (2,610) pence
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COMPANIES - FTSE 100
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Babcock International says Chief Executive David Lockwood will retire by the end of the calendar year, to be replaced by current CEO of Babcock's Nuclear sector Harry Holt. Lockwood joined the London-based aerospace and defence engineering firm as CEO in September 2020. "The appointment of a strong internal candidate ensures Babcock's ability to continue implementing the strategy which has been fundamental to the business growth and success," the firm says. In a trading update, Babcock says its performance in the third quarter "has seen a continuation of the strong performance reported at the half year". The firm says it is confident of deliver the board's expectations for financial 2026 trading, including meeting the margin target of 8%. It notes strong third quarter growth in Nuclear and Aviation, with the French Mentor 2 contract helping Aviation growth. Babcock says this more than offset the expected lower revenue in Land due to continuing lower activity in Rail. It adds that the vast majority of forecast revenue for the year is now contracted. Babcock says the average of analysts' forecasts is revenue of GBP5.08 billion, up 5.1% from GBP4.83 billion in financial 2025, and underlying operating profit of GBP409 million for the year, up 13% on-year from GBP362.9 million. It intends to complete its share buyback programme around the March year end, when its financial year ends.
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COMPANIES - FTSE 250
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AVI Global Trust's investment manager, Asset Value Investor, publishes an open letter to the board, manager and shareholders of HarbourVest Global Private Equity which says it must prioritise shareholder returns and run a formal sales process. Asset Value Investors says it manages a 3.3% stake in HarbourVest Global Private Equity. "We are firmly of the view that further significant initiatives are necessary and should be explored well ahead of a potentially failed continuation vote," Asset Value Investors says. It says net asset value performance has been "disappointing" over any period seven years or shorter, which it says is why HVPE trades at a "deep and persistent discount to NAV". "To ensure shareholders are armed with sufficient information ahead of casting their votes for or against continuation, we believe the board should set out and evidence its expected returns for shareholders from the status quo; from a managed run-off; and from a sale of the company or its portfolio," Asset Value Investors says. AVI Global Trust is a shareholder in HVPE, and says it "fully supports" the points set out by Asset Value Investors in the letter. Migo Opportunities Trust, which is also managed by Asset Value Investors, expresses its support for the letter.
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SSP Group says its expectations for financial 2026 are unchanged as it reports "positive trading momentum" through the remainder of the first quarter. It reports 6% sales growth for the quarter, or 5% on a like-for-like basis. On a constant currency basis, sales in North America grew 4% in the first quarter to the end of December, while continental Europe sales rose 1%. In the UK and Ireland, the London-based operator of food and beverage outlets in travel locations says sales rise 8% on-year with "sustained strong like-for-like sales". "The new financial year has started well, with positive revenue momentum," SSP says. The firm says it is making "good progress" in driving improved performance. "We have made a good start to the financial year, with LFL sales growth of 5% in the first quarter. We are on track against our 'Focus 26' operational plan with a range of programmes underway to deliver sustained improvements in profitability, cash and returns on capital. Given this momentum, we remain confident in our prospects for the balance of FY26 and beyond," says Chief Executive Officer Patrick Coveney.
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OTHER COMPANIES
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STV Group expects to report 2025 revenue towards the top end of the guidance range of between GBP165 million and GBP180 million, with adjusted operating profit in line with the current consensus of GBP11.4 million. Revenue in 2024 was GBP188.0 million, with adjusted operating profit of GBP20.6 million. The Glasgow-based media company says total advertising revenue is expected to be down 10% both in the fourth quarter and full year, due to the "continued impact of the challenging macroeconomic climate on the advertising market". It expects these market conditions to continue into early 2026. It says actions announced in September to protect profitability will deliver a GBP2.5 million cost reduction in 2026 as planned. "The macro-uncertainty of H2 2025 has continued into early 2026 with subdued advertising and commissioning markets persisting, although the upcoming 2026 FIFA World Cup provides an important event for advertisers and viewers alike. We are on track to realise previously identified cost savings to protect profitability and provide balance sheet resilience," says Chief Executive Rufus Radcliffe.
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By Michael Hennessey, Alliance News reporter
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