Weekly review
By Josh White
Date: Friday 23 May 2025
(Sharecast News) - The FTSE 100 ended the week up 33.41 points, or 0.38%, closing at 8,717.97 on Friday.
Equity view
Pharma group GSK has announced that US regulators have approved the use of its Nucala treatment for adults with chronic obstructive pulmonary disease (COPD) following positive results from phase III trials. The US Food and Drug Administration has given the green light to Nucala, otherwise known as mepolizumab, as an add-on maintenance treatment for adult patients with inadequately controlled COPD and an eosinophilic phenotype, GSK said.
Warhammer maker Games Workshop said its current-year licensing revenue would not match 2024/25's record of £50m adding that pre-tax profit for the 52 weeks to June 1 would be at least £255m, smashing estimates of £225m. Core revenue and operating profit were expected to be at least £560m and £210m respectively from £498m and £174.8m in 2023/24, with licensing operating profit of around £45m, up from £27m last year.
Shares in Begbies Traynor were rising on Friday after the business recovery and financial advisory firm reported a strong end to its financial year, with revenues, profits and cash ahead of market forecasts. Revenues over the year to 30 April were £153m, up 12% on the previous year and ahead of the company-compiled consensus forecast of £152.1m.
AJ Bell shares were popping on Friday morning, after it reported a strong set of interim results for the six months ended 31 March and raised its revenue margin guidance. Revenue rose 17% year-on-year to £153.2m and profit before tax increased 12% to £68.8m. The company saw a record platform AUA of £90.4bn, driven by £3.3bn in net inflows and favourable market movements, while customer numbers grew by 51,000 to 593,000.
BT Group has posted an unexpected fall in annual revenues due to lower international sales and handsets, and pointed to further declines over the coming year. The telecoms giant, which in January guided to 1-2% revenue growth from the previous year's print of £20.8bn, said revenues totalled £20.4bn in the 12 months to 31 March.
Mining giant Rio Tinto has announced that boss Jakob Stausholm will leave the company after four years in the role, calling it a "natural moment" for a change in leadership. Stausholm, who joined Rio in 2018 as chief financial officer before becoming chief executive officer in January 2021, is to step down later this year at the conclusion of a succession process, the company said.
Gas explorer Energean on Thursday trimmed full-year production guidance citing actual performance in the year to date and the uncertainty around the unsuccessful sale of its $930m sale of portfolio in Egypt, Italy, and Croatia to Carlyle. The Israel-focused company said it now expected production of 155,000 - 165,000 barrels of oil equivalent per day (kboed) compared with indicative guidance of 160-175 kboed.
The Works lifted its profit outlook for 2025 and 2026 on Thursday following a strong fourth quarter. For FY25, the retailer now expects adjusted earnings before interest, tax, depreciation and amortisation of about £9.5m, up from £6m a year earlier and ahead of market expectations of £8.5m. For FY26, meanwhile, the group said it was targeting profit growth in excess of current market expectations of £10m.
Electrical retailer Currys raised its annual profit outlook again with "significant" free cash flow underpinning the board's plan to resume dividend payments after a 4% rise in like-for-like sales since January. Currys said it expected full year adjusted pre-tax profit to be around £162m, a rise of 37% and up from estimates of £160m. It finished the period with net cash of more than £180m after rising sales and improving profit margins more than offset cost increases in the UK and Ireland.
Marks & Spencer has said it expects current-year profits to take a £300m hit from a "highly sophisticated" cyber incident that has hampered operations over the past month. The attack has hit food sales through reduced availability, while waste and logistics costs have risen due to the need to operate manual processes. Meanwhile, ecommerce sales for fashion, home and beauty still remain paused, with M&S expecting online disruption to continue throughout June and into July.
4imprint Group said on Wednesday that it delivered a "resilient" operational and financial performance in the early part of 2025, against a backdrop of volatile macroeconomic conditions. In an update ahead of its annual meeting, the direct marketer of promotional products said group revenue in the first four months of the year was in line with the same period a year earlier.
Energy company SSE has cut its network investment programme by £3bn amid a "complex operating environment", as it reported a sharp drop in full-year profits. The Perth-based outfit said it was lowering its investment expectations for the five years to 31 March 2027 to around £17.5bn as a result of "financial discipline in a changing macro environment across the energy businesses and consent phasing in networks".
Hilton Food Group said on Tuesday that current trading was in line with the board's expectations. In an update for the period from 1 January to date ahead of its annual meeting, the company said volumes and sales were ahead of the same period last year across all three operating regions. In the UK & Ireland, the business continues to outperform the market, benefiting from strong BBQ and Easter trading and despite raw material inflation.
Smiths Group said on Tuesday that it now expects full-year revenue growth to be towards the top end of its guidance amid strong demand. The company said third-quarter organic revenue growth accelerated to 10.6%, leading to organic revenue growth of 9.6% for the nine-month period. As a result, "reflecting this strong performance and momentum in the order book", it now expects organic revenue growth for the year to be towards the top end of its 6-8% guidance range and continues to expect margin expansion of 40-60 basis points for FY2025.
North Sea operator Ithaca Energy on Tuesday said it had bought an additional 46.25% stake in the Cygnus gas field from Centrica's Spirit Energy in a £116m deal. The move will lift Ithaca's operating interest in Cygnus, located in the Southern North Sea, about 150km east of the Lincolnshire coast, to 85%. Cygnus was currently producing from 11 wells, with three further infill wells approved, Ithaca said in a statement. It is the largest UK Continental Shelf gas field.
Diploma surged on Tuesday after lifting its full-year organic revenue growth and operating margin guidance following a strong first half. In results for the six months to the end of March, the company posted a 25% jump in adjusted operating profit to £156.9m, with revenue up 14% to £728.5m. Organic revenue growth was 9%, up from 5% in the same period a year earlier.
Drinks giant Diageo reiterated guidance for full-year organic sales and operating profits after a solid pickup in underlying growth in the third quarter, but announced that trade tariffs would hit the business by $150m. Organic net sales increased by 5.9% in the three months to 31 March, compared with a 1.0% increase in the first half, though this was mainly a result of "significant phasing benefits" which contributed around 4% to third-quarter growth. However, these benefits are expected to reverse in the fourth quarter.
Pipe maker Genuit held annual guidance after an 8.5% rise in revenue from the first four months of the year and added that it was not directly exposed to US tariffs. Chief executive Joe Vorih said all of Genuit's business units delivered organic sales growth for the first four months and the company "secured some positive share gains in a competitive market" with "encouraging" signs of growth in the UK market.
IT services group Kainos met expectations with its full-year results on Monday, with profits falling by a quarter amid tough trading conditions, as the company delivered a cautious outlook. "While the long-term drivers in our market remain strong, and our near-term performance is supported by a healthy pipeline, a significant contracted backlog, and a strong balance sheet, we believe it is prudent to maintain our cautious stance given continued volatility in the global macroeconomic environment," Kainos said.
An acquisition vehicle by KKR and Stonepeak reiterated its offer for Assura on Monday, dismissing the proposed alternative share-and-cash offer from Primary Health Properties (PHP), arguing it posed material financial and strategic risks. In a statement responding to PHP's 16 May proposal, Bidco reiterated that its own recommended all-cash offer, announced on 9 April, was the only proposal that would allow Assura shareholders to fully realise their investment while ensuring long-term growth through fresh capital deployment into UK healthcare infrastructure.
Economic news
UK household energy bills will fall by 7% from July, industry regulator Ofgem said on Friday, although they will still be higher year on year amid a squeeze on consumers from local tax rises and massive water charge increases. A typical energy bill will drop by £129 to £1,720 per year when the regulator's new price cap per unit of electricity or gas comes into force.
UK retail sales rose more than expected in April, according to figures released on Friday by the Office for National Statistics. Retail sales increased 1.2% on the month following a 0.1% jump in March, which was revised down from 0.4% growth. Analysts were expecting a 0.3% increase. The ONS said food stores sales volumes grew strongly, up 3.9%, mostly recovering from falls in February and March.
Consumer confidence ticked higher in May, a long-running survey showed on Friday, on improved expectations for the UK economy. The latest GfK consumer confidence barometer rose three points month-on-month to -20, although that remains below the -17 recorded in May 2024. Driving the improvement was a five-point jump in personal finance expectations over the next 12 months, which took the sub-index into positive territory with a reading of 2.
The UK manufacturing sector suffered a sharp contraction in May, an industry survey showed on Thursday, as rising costs and US tariff concerns weighed on sentiment. According to the latest industrial trends survey from the Confederation of British Industry, output volumes in the three months to May fell at the joint-steepest pace since August 2020, with the weighted balance tumbling to -25 from -2 in April.
The UK private sector remained in negative territory in May, a closely-watched survey showed on Thursday, although the pace of decline slowed. The latest flash S&P Global UK PMI composite output index was 49.4, below the neutral 50.0 though it was an improvement on April's 48.5. A reading above 50.0 indicates growth, while one below it suggests contraction.
The UK government borrowed more than expected in April, according to figures released on Thursday by the Office for National Statistics. Government borrowing rose to £20.2bn in April, up £1bn on the same month a year ago and coming in above the £18bn expected. It was the fourth-highest figure for April borrowing since records began in 1993.
British consumer sentiment strengthened in May, a survey found on Thursday, after the UK secured a key trade deal with the US. According to the latest consumer sentiment monitor from the British Retail Consortium, expectations for the state of the economy over the next three months improved to -36 from -48 in April. The personal financial situation also nudged higher, to -12 from -16, although personal spending on retail fell three points to 0 and personal spending overall was unchanged at 10.
UK house prices jumped in March, official data showed on Wednesday, while growth in private rents continued to slow. According to provisional estimates from the Office for National Statistics, average UK house prices increased by 6.4% in the 12 months to March. That compares to the 5.5% rise seen in the year to February. As a result, the average house price now stands at £271,000.
Thames Water and Anglian Water are the focus of a sweeping crackdown on illegal sewage discharges, it emerged on Wednesday, with the two utilities accounting for more than 50 of a record 81 criminal investigations launched into water companies since July 2024. The probes, led by the Environment Agency, came amid mounting political and public pressure to hold firms accountable for repeated breaches of environmental permits, such as discharging excessive pollution into rivers or failing to monitor water quality.
UK inflation rose more than expected in April as household bills increased, according to figures released on Wednesday by the Office for National Statistics. Consumer price inflation rose to 3.5% from 2.6% in March, hitting its highest level since January 2024. Economists were expecting a jump to 3.3%. ONS director general Grant Fitzner said: "Significant increases in household bills caused inflation to climb steeply.
International events
Stockmarkets slumped on Friday after US President Donald Trump said he wanted a 50% tariff on the European Union from June 1and complained that the 27-nation bloc had been "very difficult" to deal with. The pan-regional Stoxx 600 index was down more than 2% to 538, erasing morning gains. Britain's FTSE and Germany's DAX fell 1.2% and 2.5% respectively, while France's CAC-40 was down almost 3%.
US president Donald Trump said on Friday that Apple must pay a tariff of at least 25% on any iPhones not manufactured in the United States, renewing pressure on the tech giant to shift production domestically. The comments, posted Friday on Trump's social media platform Truth Social, followed weeks of public criticism aimed at Apple and its chief executive officer Tim Cook over the company's overseas manufacturing.
Germany's economy performed better than expected in the first quarter, with growth unexpectedly picking up, according to revised estimates from the Federal Statistics Office on Friday. Gross domestic product expanded by 0.4% over the first three months of 2025, compared with the initial estimate of 0.2% growth released last month.
The eurozone economy slipped into contraction in May, a closely-watched survey showed on Thursday, weighed down by a surprise slowdown in the service sector. According to provisional estimates, the HCOB eurozone composite PMI output index, which is compiled by S&P Global, fell into negative territory for the first time in five months, easing to 49.5 from 50.4.
German business sentiment improved in May, according to a survey released on Thursday by the Ifo Institute. The business climate index ticked up to 87.5 from 86.9 the month before, while the expectations index rose to 88.9 from 87.4. The current situation index printed at 86.1 in May versus 86.4 in April.
Applications for mortgages in the US slumped last week as the average long-term mortgage rate hit its highest in three months, according to data out on Wednesday from the Mortgage Bankers Association. The MBA's Market Composite Index showed that mortgage applications fell 5.1% in the week ended 16 May, following a 1.1% increase the previous month. This was the first decline in three weeks.
Construction output in the eurozone inched higher in March, according to data from Eurostat, though the year-on-year rate of change showed the sharpest drop in activity in five months. Seasonally adjusted production in the construction industry across the single-currency region rose by just 0.1% in March, following a 1.2% slump the month before.
China cut its key lending rates on Tuesday, as widely predicted, as the country looked to shore up the economy amid heightened trade tensions. The People's Bank of China lowered both the one-year and five-year loan prime rates (LPR) by 10 basis points each, to 3.0% and 3.5% respectively. Both are now at the lowest level since 2019, when the LPR mechanism was overhauled.
Australia's central bank on Tuesday cut its benchmark interest rate to a two-year low, citing the uncertainty caused by US tariffs and cooling domestic inflation. The Reserve Bank of Australia cut the main cash rate by 25 basis points to 3.85% and remained cautious on further easing after a two-day policy meeting.
The European Commission has slashed its forecasts for economic growth across the EU and eurozone over the next two years as trade tariffs hit activity more than previously thought. The Commission now expects EU GDP growth to accelerate to 1.1% in 2025 and 1.5% in 2026, according to the Spring 2025 Economic Forecast released on Monday.
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