(Alliance News) - J Sainsbury misses underlying profit guidance and warns of the impact of the war in the Middle East, London Stock Exchange Group raises its forecasts and WH Smith suspends its dividend.
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 0.5% at 10,427.26
GBP: lower at USD1.3496 (USD1.3506 at previous London equities close)
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ECONOMICS
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UK public sector borrowing fell last month to the lowest figure for March since 2022, official numbers showed. According to the Office for National Statistics, net borrowing by the UK government amounted to GBP12.61 billion in March, narrowed from GBP13.98 billion a year earlier and less than GBP12.82 billion in February. Borrowing was higher than the FXStreet-cited market consensus of GBP10.4 billion, however. Even so, it was the lowest March borrowing figure since 2022, when borrowing was GBP5.54 billion. Borrowing in the financial year that ended in March was initially estimated at GBP132.0 billion. This was 13% less than GBP151.2 billion in the financial year to March 2025 and GBP700 million less than the GBP132.7 billion forecast by the Office for Budget Responsibility. The current budget deficit was GBP50.9 billion in the financial year to March 2026, which was 33% less than GBP76.1 billion the year before.
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BROKER RATINGS
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Jefferies raises Croda International to 'buy' (hold) - price target 3,500 (3,000) pence
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COMPANIES - FTSE 100
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J Sainsbury reports underlying pretax profit below expectations, with a cash dividend below what was expected, but adds a GBP100 million share buyback. The grocer says pretax profit from continuing operations rises to GBP619 million in the 12 months to the end of February from GBP607 million a year earlier. Revenue excluding VAT but including fuel climbs 2.7% to GBP33.65 billion from GBP32.77 billion. Basic earnings per share jump to 17.3 pence from 10.9p, while diluted EPS rise to 16.9p from 10.7p. Underlying pretax profit rises 1.3% to GBP718 million from GBP709 million, below the company-compiled consensus of GBP730 million. The firm says sales excluding fuel increase 4.9% to GBP25.9 billion, while Argos sales rise 0.7% to GBP4.1 billion and fuel sales fall 8.2% to GBP3.6 billion. Grocery sales grow 5.2%, while retail underlying operating profit falls in line with expectations by 1.1% to GBP1.03 billion, due to "significant operating cost inflation" and "investment in value in a more competitive market". The company declares a full year dividend of 13.7p, up 0.7% from 13.6p a year prior, but below consensus expectations for a dividend of 13.9p. J Sainsbury says it will return an additional GBP100 million of the net proceeds from the sale of its banking operations this year, alongside a core buyback of GBP200 million. It has already returned GBP300 million of the net proceeds to shareholders through a GBP250 million special dividend and a GBP50 million incremental share buyback. Looking ahead, the company says it has made a positive start to the new financial year, with grocery volume growth ahead of the market. It expects underlying operating profit between GBP975 million and GBP1.08 billion. For financial 2026, it reported total underlying operating profit of GBP1.03 billion, up 1.1% from GBP1.01 billion. The company warns that the duration and extend of impacts from the conflict in the Middle East is "very uncertain", which is reflected in its profit guidance. "We will do everything we can to support our customers and colleagues over the coming months, with absolute focus on keeping prices low," says Chief Executive Simon Roberts.
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London Stock Exchange Group hails a "record performance" in the first quarter of 2026 and raises its guidance, with total income up 9.8% on an organic constant currency basis. The exchange operator and data provider reports 6.3% growth in its subscription businesses, along with "very strong growth" in trading volumes. Looking ahead, it now expects 2026 organic constant currency total income growth excluding recoveries to be in the upper half of the guidance range of 6.5% to 7.5%. It forecasts an improvement in its constant currency earnings before interest, tax, depreciation and amortisation margin of between 80 and 100 basis points. The firm completed GBP1.1 billion of share buybacks in the first quarter, and said it is "well on track" to finish its GBP3 billion buyback by February 2027. "We have had a great start to 2026 across the board: our leading, multi-asset class trading venues have been critical sources of liquidity, price discovery and risk management for customers, while engagement with our trusted data to inform decision-making has been at record levels," says Chief Executive Officer David Schwimmer. "We are confident in the outlook and the delivery of all of our financial targets for the year."
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COMPANIES - FTSE 250
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WH Smith reports higher revenue but a wider loss for the first half of the year, suspends its dividend and takes a "more cautious outlook" for the remainder of the year due to the conflict in the Middle East. The Swindon, England-based travel retail operator says pretax loss widens to GBP25 million in the half year to February from a restated GBP4 million loss a year prior. The basic and diluted loss per share jumps to 20.0 pence from 5.5p. Total revenue for the period climbs 4.5% to GBP748 million from GBP716 million. Headline profit before tax and non-underlying items falls 86% to GBP3 million from GBP21 million. The company says its UK trading performance in the first half was impacted by disruption from the refurbishment of multiple large airport stores and inflation headwinds. The firm suspends its dividend, compared to an 11.3p interim dividend a year ago, to "reduce debt" and strengthen its financial position. WH Smith says it is taking a more cautious outlook for the rest of the year due to the impact from the conflict in the Middle East on passenger numbers and consumer confidence. It now expects to deliver financial 2026 headline group profit before tax and non-underlying items between GBP90 million and GBP105 million, down from GBP108 million last year. It initially guided for a figure between GBP100 million and GBP115 million for financial 2026. "Moving forward, the board and management team will have a relentless focus on driving cash, cost discipline and strengthening the balance sheet. As a first step, the board has taken the prudent decision to suspend the dividend," says Executive Chair Leo Quinn.
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OTHER COMPANIES
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Asos reports lower revenue but a narrower loss for the first half of the year. The London-based online fashion retailer says the pretax loss narrows to GBP137.9 million for the six months to March 1 from a pretax loss of GBP241.5 million a year prior. Revenue falls 14% to GBP1.12 billion from GBP1.30 billion. Gross merchandise value drops to GBP1.17 billion from GBP1.28 billion. Looking ahead, the company says its current trading is in line with expectations. It adds that GMV growth shows "further sequential improvement" in the third quarter to date, and starts the process to pursue refunds related to GBP7 million in tariffs paid in the first half. "We have taken proactive actions to help mitigate inflationary impacts and supply chain issues arising from the conflict in the Middle East. We continue to monitor developments closely and are continuously reviewing a range of levers to protect profitability whilst ensuring seasonally relevant product arrives to meet customer demand," Asos adds. The company leaves its financial 2026 revenue guidance unchanged.
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By Michael Hennessey, Alliance News reporter
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