(Alliance News) - UK economic growth beat expectations in February, while Tesco lifted its dividend and announced a GBP750 million buyback, and easyJet warned of a wider first-half loss despite strong holiday demand.
Here is what you need to know before the London market open:
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MARKETS
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FTSE 100: called marginally lower at 10,557.38
GBP: slightly lower at USD1.3574 (USD1.3577 at previous London equities close)
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ECONOMICS
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UK economic growth accelerates in February, beating expectations on stronger services and production output. Gross domestic product rises 0.5% in the three months to February 2026, up from 0.3% in the three months to January and ahead of the FXStreet-cited consensus of 0.3%. The January figure is revised up from 0.2%, while December is revised down from 0.1%. On a monthly basis, GDP increases 0.5% in February, accelerating from 0.1% growth in both January and December and exceeding expectations for a 0.1% rise. January is revised up from an initial flat reading. Services output, the largest part of the economy, grows 0.5% in the three months to February, driven by wholesale & retail trade and information & communication. Production output rises 1.2%, supported by manufacturing and energy supply, while construction output falls 2.0%. In February alone, services and production both increase 0.5%, while construction rebounds with 1.0% growth.
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UK trade data shows mixed performance in February, as higher imports outweigh a decline in exports. Goods imports rise by GBP2.3 billion, or 4.7%, driven by increased inflows from both EU and non-EU countries, while goods exports fall by GBP500 million, or 1.5%. Trade with the US improves, with exports rising by GBP500 million and imports declining by GBP400 million. Over the three months to February, the UK's total trade deficit in goods and services narrows by GBP300 million to GBP2.8 billion. However, the goods deficit widens by GBP1.0 billion to GBP57.1 billion, offset by a GBP1.3 billion increase in the services surplus to GBP54.2 billion.
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BROKER RATINGS
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UBS raises BP to 'buy' (neutral) - price target 700 (650) pence
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Berenberg cuts Antofagasta to 'hold' (buy) - price target 3,700 pence
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COMPANIES - FTSE 100
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Tesco reports higher annual earnings and lifts shareholder returns, but sets out a cautious outlook.
The supermarket chain says revenue excluding VAT but including fuel in the year ended February 28 rises 5.4% to GBP73.71 billion from GBP69.92 billion, while sales excluding both VAT and fuel increase 4.6% to GBP66.59 billion. Pretax profit climbs 8.5% to GBP2.40 billion from GBP2.22 billion. Adjusted operating profit edges up 0.8% to GBP3.15 billion from GBP3.13 billion, or 0.6% at constant currency, while free cash flow rises 12% to GBP1.96 billion from GBP1.75 billion. Tesco increases its annual dividend by 5.8% to 14.5 pence from 13.7 pence and announces a GBP750 million share buyback to be completed by April 2027. It also upgrades its medium-term free cash flow guidance to GBP1.5 billion to GBP2.0 billion, from GBP1.4 billion to GBP1.8 billion. Looking ahead, Tesco expects adjusted operating profit for the new financial year between GBP3.0 billion and GBP3.3 billion, with free cash flow in line with its upgraded range. It targets an additional GBP500 million in savings through its 'Save to Invest' programme. The company says it is providing "a wider range of guidance than we were previously planning" due to the conflict in the Middle East. "Much will depend upon the duration of the conflict and in particular, the potential implications for UK households and the economy more broadly," Tesco says.
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LondonMetric Property reports strong portfolio performance and asset activity ahead of full-year results. The London-based real estate investment trust, which focuses on logistics, healthcare, convenience, entertainment and leisure properties, says its GBP7.6 billion triple-net lease portfolio continues to perform well, supported by favourable real estate sector thematics and strong occupier demand. Net rental income rises around 16% to over GBP450 million, with occupancy at 98% and like-for-like income growth of 4.2%. LondonMetric expects to increase its annual dividend by 4% to 12.45 pence, marking its eleventh consecutive year of growth. During the year, the group sells 57 assets for GBP318 million at a blended net initial yield of 5.7%, as part of ongoing non-core disposals. It also completes 35 direct investments totalling GBP333 million, alongside acquisitions through M&A activity.
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Intertek acquires solar testing assets in India. The London-based assurance, inspection, product testing and certification company acquires the assets of a solar photovoltaic laboratory in Ahmedabad from Mitsui Chemicals India, expanding its presence in the fast-growing Indian solar market. The facility provides accredited testing and certification services for solar installations, materials and components, supporting both domestic and international clients.
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JD Sports exits its investment in Applied Nutrition following a share placing, as announced on Wednesday. The retailer sells 22.8 million shares in the Merseyside, England-based wellness brand, representing around a 9.1% stake, at GBP2.15 each, raising gross proceeds of approximately GBP49 million. Following the transaction, JD Sports no longer holds any interest in Applied Nutrition. Peel Hunt LLP has been appointed as the sole bookrunner for the placing.
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COMPANIES - FTSE 250
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easyJet expects a wider first-half loss but reports strong growth in its holidays business. The budget airline says it expects a headline pretax loss of GBP540 million to GBP560 million for the six months to March, with the underlying result "broadly in line" with expectations as revenue and costs track forecasts, excluding around GBP25 million of additional fuel costs in March linked to the Middle East conflict and a net GBP30 million increase in legal provisions. easyJet holidays continues to perform strongly, with customer numbers rising 22% in the first half and demand remaining robust. The second half is currently 67% sold, while the group expects full-year customer growth to increase by a low double-digit percentage year-on-year. Fuel costs remain a key uncertainty, with the company saying it is 70% hedged for the second half at USD706 per metric tonne, compared with current spot prices of around USD1,500. It adds that every USD100 movement in fuel prices equates to around GBP40 million of cost in the second half. CEO Kenton Jarvis says: "Our H1 financial performance worsened year on year, impacted by the conflict in the Middle East and the competitive environment in some markets. Following our busiest Easter holiday period ever, the operational ramp up into peak summer continues as planned. easyJet's financial strength from our investment grade balance sheet and GBP4.7 billion of liquidity mean we are well placed to navigate current geopolitical challenges while remaining focused on our medium term targets." The company will publish its half-year results on May 21.
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OTHER COMPANIES
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Beauty Tech Group reports strong revenue and profit growth in 2025 and expects profits to beat expectations in 2026. Revenue rises to GBP141.0 million from GBP101.1 million, driven by a 60% increase in own-brand revenue to GBP140.9 million. Pretax profit jumps to GBP15.2 million from GBP5.1 million, while adjusted Ebitda climbs 64% to GBP37.5 million from GBP22.9 million. The company says trading in early 2026 is "encouraging", with strong growth across its core business. It expects 2026 revenue to be in line with market consensus of GBP160.0 million, while profit is set to come in ahead of expectations, helped by the absence of IPO-related costs. Consensus forecasts point to adjusted Ebitda of GBP38.2 million for 2026.
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The National Investment Fund of the Republic of Uzbekistan confirms plans to proceed with an initial public offering, targeting dual listings in London Stock Exchange and Tashkent Stock Exchange. The IPO will comprise a domestic offering of shares in Uzbekistan and an international tranche of global depositary receipts, with cornerstone investors including BlackRock and Franklin Resources committing around USD300 million. All shares will be sold by Uzbekistan's Ministry of Economy & Finance as sole shareholder. The fund, which holds a USD2.44 billion portfolio of state-backed assets across sectors such as transport, energy and telecoms, aims to boost foreign investment and support the country's capital market development.
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By Eva Castanedo, Alliance News reporter
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