16th Oct 2025 07:54
(Alliance News) - Whitbread notes a return to growth in the UK, but a trickier market backdrop in Germany, while chemicals firm Croda reports a rise in third quarter sales despite a "challenging market environment".
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 6.0 points, 0.1%, at 9,418.75
GBP: higher at USD1.3413 (USD1.3395 at previous London equities close)
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ECONOMICS
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The UK economy achieved slight growth in August, but a reading for July is downwardly revised. The Office for National Statistics says UK gross domestic product edged up 0.1% in August from July, in line with the FXStreet cited consensus. "Production grew by 0.4% in August 2025, whereas services showed no growth and construction fell by 0.3% in August," the ONS says. The reading for July was downwardly revised, however. GDP is now reported to have shrunk 0.1% in July from June. The ONS had previously reported it had tread water. The ONS says: "Real gross domestic product is estimated to have grown by 0.3% in the three months to August 2025, compared with the three months to May 2025. This follows a growth of 0.2% in the three months to July 2025 and a growth of 0.3% in the three months to June 2025. "There was growth in two of the three main sectors in the three months to August 2025. A rise of 0.4% in the services sector made the largest contribution to the increase in GDP during this period. Construction output also grew, by 0.3%, while production output fell by 0.3% over this period."
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UK Chancellor Rachel Reeves needs to be "bold" when she delivers her budget or face "groundhog day" with more cuts or tax rises next year, a think tank has warned. The Institute for Fiscal Studies said it expected the chancellor would need to find at least GBP22 billion next month, thanks to rising borrowing costs, weaker growth forecasts and spending commitments made since the spring. That figure would restore the GBP10 billion of headroom Reeves previously left herself against her self-imposed debt rules, although it does not include the cost of widely expected announcements on abolishing the two-child benefit cap and maintaining the freeze on fuel duty. But the IFS said there was a "strong case" for the chancellor to go further, arguing that a GBP10 billion buffer was not enough to ensure stability and would leave her "limping from one forecast to the next".
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BROKER RATINGS
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Barclays raises Centrica to 'overweight' (equal-weight) - price target 210 (180) pence
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Berenberg starts Filtronic with 'buy' - price target 196 pence
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COMPANIES - FTSE 100
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Whitbread reports a decline in half-year revenue and profit but says its Premier Inn arm outperformed amid UK growth, and the FTSE 100 listing's five-year plan is "on track". The hotel company says pretax profit falls 7.1% to GBP287 million in the half-year to August 28, from GBP309 million 12 months earlier. Revenue declines 1.8% to GBP1.54 billion from GBP1.57 billion. "While forward visibility remains limited and despite some uncertainty around the forthcoming UK budget, positive trading momentum and encouraging levels of bookings into future periods in both the UK and Germany mean we remain confident in the full year outlook," Whitbread says. Whitbread adds that the UK market returned to growth in the second quarter, but it notes "softer market demand" in Germany. In Germany, it has cut its annual adjusted pretax profit outlook to "up to GBP5 million", from the GBP5 million to GBP10 million range previously. Whitbread maintains its interim dividend at 36.4 pence per share. Whitbread said its five-year plan remains on track to deliver incremental adjusted pretax profit of at least GBP300 million by financial 2030. Chief Executive Dominic Paul says: "We're making great progress against our strategic priorities and our Five-Year Plan is firmly on track to deliver a step change in profits, margins, and returns. We remain confident in returning GBP2 billion to shareholders through share buy-backs and dividends and we are on track to complete the previously announced GBP250 million share buy-back by the time of our FY26 results."
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Chemicals firm Croda International leaves its annual guidance unchanged, as it reports third quarter sales growth amid a "challenging market environment". Croda says sales in the three months to September 30 improve 4.4% on-year to GBP424.7 million from GBP406.6 million. At constant currency, they improve 6.5%. "As anticipated, customer demand in Q3 was similar to Q2, with sequential sales ahead in a more challenging market environment," Croda says. In the first half, sales rose 4.9% on a reported basis and 7.3% at constant currency. Croda says US tariffs "contributed to volatility" in the third quarter. "We expect the more challenging trading environment and low order book visibility to continue for the remainder of the year. In line with previous years, absolute sales in Q4 are likely to be seasonally lower than in the first three quarters as customers typically manage their working capital into the year end. Despite this, the combination of good year-to-date sales growth and delivery of anticipated cost savings means that our full year 2025 outlook is unchanged," it adds. Croda still expects GBP265 million to GBP295 million in adjusted pretax profit at constant currency in 2025. Adjusted pretax profit on a constant currency basis was GBP273.1 million in 2024.
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COMPANIES - FTSE 250
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Travis Perkins reports a rise in third quarter revenue, aided by a rise in volumes. The builders' merchant says revenue in the third quarter of the year edged up 0.3% on a year prior. Like-for-like volumes rose 2.2%, though it saw a 0.4% price and mix decline. Like-for-like revenue rose 1.8%. "In the third quarter we have consciously focused on building top-line momentum and regaining market share in the Merchanting businesses. I am pleased with how our teams have responded to this challenge with Merchanting returning to revenue growth and our operating performance stabilising," Chair Geoff Drabble says. "In what remains a highly competitive market, we have invested in pricing and targeted promotions and will continue to do so in the near-term. We continue to demonstrate good discipline on capital allocation and overheads which will allow us to reinvest in our proposition and position." Year-to-date, total revenue is down 1.3%.
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OTHER COMPANIES
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Canal+ reports a slight decline in year-to-date revenue but says it has "made significant progress on delivering our strategic and financial priorities". Revenue in the nine months to September 30 fell 2.4% on-year to EUR4.61 billion from EUR4.72 billion a year prior. On an organic basis, however, it rose 2.1%. When including entertainment company MultiChoice, which it recently took control of, revenue amounted to EUR4.68 billion, Canal+ notes. Canal+ notes it assumed "effective control" of MultiChoice late last month and at the end of a mandatory offer, it expects to own just over 94% of the company. It will apply for MultiChoice to delist from the Johannesburg Stock Exchange, where Canal+ looks to "undertake a secondary inward listing". "A secondary inward listing will preserve South African investor access and market liquidity, allowing investors to hold shares in a leading global media and entertainment company on the JSE. It will also broaden the investor base of Canal+, reinforce the company's long-term commitment to South Africa and Africa's creative economy, and support continued institutional exposure to the media sector," it explains. In addition, Canal+ has signed a deal to acquire a 34% stake in French cinema company UGC. "From 2028, Canal+ has the option to acquire the remaining stakes held by the UGC shareholders in the company," it adds.
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By Eric Cunha, Alliance News news editor
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Related Shares:
CentricaFiltronicCanal+Travis PerkinsCroda InternationalWhitbread