9th Jul 2025 07:46
(Alliance News) - Advertising agency WPP cut its guidance after a tricky first half, Jet2 decided against providing profit outlook for its new financial year but hailed a "record" annual performance.
Here is what you need to know before the London market open:
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MARKETS
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FTSE 100: called 0.2% at 8,870.98
GBP: higher at USD1.3590 (USDUSD1.3574 at previous London equities close)
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BROKER RATINGS
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RBC raises Berkeley Group to 'outperform' - price target 4,900 pence
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Jefferies starts Imperial Brands with 'buy' - price target 3,600 pence
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COMPANIES - FTSE 100
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Seven housebuilders, including Barratt Redrow, Berkeley Group, Persimmon and Taylor Wimpey, have agreed to pay a total of GBP100 million to affordable housing programmes, following a watchdog probe, the UK Competition & Markets Authority said. Vistry Group and Bellway are also among the seven, as well as Bloor Homes. "This is the largest payment secured by the CMA as part of a commitments package, which could fund hundreds of new homes - helping low-income households, first-time buyers and vulnerable people. The housebuilders have also agreed to legally binding commitments which will prevent anticompetitive behaviour and promote industry-wide compliance," the CMA said. "The housebuilders have offered a package of commitments to address the CMA's concerns which it will now consult on until 24 July 2025." The CMA noted that if it accepts the commitments made by the housebuilders, it will not be necessary for it to decide whether they "broke competition law". This would allow for the "investigation to conclude swiftly". In separate comments, Barratt Redrow, Persimmon, Vistry and Bellway said the commitment did not constitute admissions of wrongdoing.
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Advertising agency WPP said the market backdrop has been "challenging" and it has reduced its full-year guidance amid a weaker than expected half-year. WPP now expects a 2025 like-for-like revenue decline, excluding pass through costs, between 3% and 5%. It predicts a decline in headline operating profit margin of 50 to 175 basis points, excluding foreign exchange. Back in its first quarter numbers issued in April, it had guided for a like-for-like revenue outcome ranging from flat on-year to a 2% fall. It expected an "around flat" margin outcome. WPP said Wednesday: "Against a challenging economic backdrop, we have seen a deterioration in performance as Q2 has progressed. We now anticipate H1 like-for-like revenue less pass-through costs to decline by 4.2% to 4.5%, with a decline of 5.5% to 6.0% in Q2 which, although impacted by one-off factors, is below our expectations." WPP expects headline operating profit of GBP400 million to GBP425 million for the first half, a decline from GBP646 million in the first half of 2024. WPP predicts "continued macro uncertainty weighing on client spend". Chief Executive Officer Mark Read said: "Since the start of the year, we have faced a challenging trading environment with macro pressures intensifying and lower net new business. While we expected the second quarter to be similar to the first quarter, performance in June was worse than anticipated and we expect this pattern of trading in the first half to continue into the second half." Read added: "Our focus remains on ensuring the right balance between investing in the business for the long-term and continuing to reduce structural costs, while taking appropriate actions to respond to the current trading environment."
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Prudential said a regulatory document has been filed in connection to the initial public offering of ICICI Prudential Asset Management in India. Back in February, the insurer said it was evaluating a partial divestment and potential listing of the investee, in which it holds a 49% stake. Indian financial services company ICICI Bank holds the rest of the joint venture. A prospectus has been filed with the Securities & Exchange Board of India for an IPO, which Prudential said will comprise of the sale of up to 10% of its stake in ICICI Prudential. In addition, it reported it has struck an agreement with partner ICICI Bank to divest 2% of ICICI Prudential to the joint-venture partner ahead of the IPO.
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COMPANIES - FTSE 250
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Vehicle rental and fleet management solutions firm Zigup said annual results beat expectations, and it is a "positive outlook" for the new year. For the year ended April 30, pretax profit fell 37% to GBP101.5 million from GBP162.1 million, while revenue declined 1.1% to GBP1.81 billion from GBP1.83 billion. On an underlying basis, revenue climbed 2.3% to GBP1.56 billion, while the pretax profit decline was a less sharp 7.6% to GBP166.9 million. The underlying calculation excludes vehicle sales revenue and one-off items. "The financial performance reflects the benefits of our differentiated business model, delivering group underlying performance ahead of market expectations," Zigup said. "At the same time, we believe the headwinds which have impacted the group's performance over the past couple of years are receding, with vehicle residual values and replacement hire lengths having substantially normalised and have been stable since the first half." Zigup raised its final dividend by 17.6p per share from 17.5p. It brought its total dividend to 26.4p per share, up 2.3% from 25.8p.
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OTHER COMPANIES
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The low cost airline reported stronger annual results, aided by "record" passenger numbers. Jet2 said pretax profit in the year to March 31 increased 12% to GBP593.2 million from GBP529.5 million. Revenue improved 15% to GBP7.17 billion from GBP6.26 billion. "These results reaffirm the enduring appeal, resilience and differentiation of our product offering founded on end-to-end customer care, all of which help to create cherished holiday memories for our customers," Chief Executive Steve Heapy said. Total flown passengers rose 12% to 19.8 million, from 17.7 million. Jet2 raised its final dividend by 13% to 12.1 pence per share from 10.7p. It brought its total dividend to 16.5p per share, a 12% hike from 14.7p. Jet2 said it is currently trading in lien with market expectations. Summer 2025 on sale capacity is at 18.5 million seats, 8.0% higher than in 2024. Jet2 said bookings for summer holidays are being made closer to departure, though "eagerness to get away from it all and enjoy a relaxing overseas holiday in the sun remains strong". "We are satisfied with our progress for FY26 to date, although we remain mindful of the late booking profile which limits forward visibility and the evolving geo-political and economic landscapes. With the peak summer months of July, August and September not yet complete, plus the majority of winter 2025/2026 seat capacity of 5.8 million still to sell, it remains premature, as is always the case at this time of year, to provide definitive guidance as to group profitability," it added.
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Impax Asset Management Group reported an increase in assets under management, helped by a "significant reduction in net outflows". Assets under management at June 30, the end of its third quarter, amounted to GBP26.13 billion, a 3.1% rise from GBP25.33 billion at the end of March. Aiding its AUM were acquired assets, as well as a GBP1.03 billion boost from performance, market movements and currency exchange. CEO Ian Simm said: "'m pleased to report an increase in assets under management for the third quarter of Impax's financial year. Our fixed income platform has been boosted with the addition of GBP1.1 billion of AUM following the completion of the acquisition of the European assets of Sky Harbor Capital Management." Impax sealed the buy of Sky Harbor Capital Management's European assets in April. Simm added: "The majority of our AUM follows investment strategies that have outperformed their generic benchmarks this calendar year, and in our larger listed equities business, there was a significant reduction in net outflows compared to the previous two quarters, with positive flows in June, reflecting strong institutional client commitments and fresh momentum in our wholesale channels in Europe."
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Galliford Try expects to report a full-year performance ahead of expectations. The construction company expects revenue and adjusted pretax profit ahead of the current market forecasts for the year ended June 30. It puts the revenue market forecast range between GBP1.86 billion and GBP1.89 billion, and the profit range between GBP40.1 million and GBP41.6 million. "I am delighted that all our operations continued to perform strongly throughout the second half of the year and we expect to report another year of increased revenue and profit in September," CEO Bill Hocking said.
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By Eric Cunha, Alliance News news editor
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Related Shares:
Berkeley GroupImperial BrandsPrudentialBarratt RedrowTaylor WimpeyPersimmonVistry GrpBellwayWPPZigupImpax Asset ManagementGalliford Try