(Alliance News) - AstraZeneca, Lloyds Banking Group and GSK report higher earnings in the first quarter.
In a rare boost for London's markets, which have seen an exodus of companies in recent years, PureTech Health says it will delist from Nasdaq and focus its listing fully in London.
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 0.1% at 10,320.69
GBP: lower at USD1.3500 (USD1.3505 at previous London equities close)
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ECONOMICS
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UK businesses face rising financial strain, with the number of firms in "critical distress" jumping sharply in the first quarter, according to corporate restructuring specialist Begbies Traynor Group. The number of companies in critical financial distress rises around 37% year-on-year to 62,193 in the three months to March, while those in "significant" distress increase 9.6% to 634,867. The report points to mounting pressure from higher taxes, including national insurance contributions, alongside weak consumer confidence, particularly affecting sectors reliant on discretionary spending. Energy and materials inflation linked to the conflict in the Middle East further exacerbate conditions. Hotels and accommodation firms are the most affected, with 69% reporting critical distress. Leisure and culture businesses follow at 66%, while 51% of sports and health clubs also report severe strain. BTG Managing Partner Julie Palmer says: "Businesses who are reliant on discretionary spending will have been hoping consumer confidence would make a comeback this year, but I fear they will be disappointed."
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BROKER RATINGS
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Goldman Sachs raises BP price target to 680 (650) pence - 'buy'
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RBC raises Barclays price target to 575 (550) pence - 'outperform'
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COMPANIES - FTSE 100
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AstraZeneca reports higher first-quarter revenue and profit, driven by growth in oncology and rare disease treatments. The Cambridge-based pharmaceutical firm says revenue rises to USD15.29 billion in the three months to March 31 from USD13.59 billion a year prior. Pretax profit increases to USD3.91 billion from USD3.40 billion, while diluted earnings per share improve to USD1.97 from USD1.87. The company says growth is supported by double-digit gains in key therapy areas and progress in its late-stage pipeline with multiple positive trial readouts and regulatory approvals. AstraZeneca plans a total dividend of USD3.30 per share for 2026, up from USD3.20 a year before, and says it remains on track to meet its 2030 targets. Looking ahead, the group expects revenue to grow by a mid-to-high single-digit percentage in 2026, with core earnings per share seen rising by a low double-digit percentage.
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Lloyds Banking Group reports first-quarter pretax profit rises 33% to GBP2.03 billion from GBP1.52 billion a year prior, as net income increases 9% to GBP4.79 billion from GBP4.39 billion. Underlying net interest income climbs 8% to GBP3.57 billion, supported by a higher banking net interest margin of 3.17%, up from 3.03% a year earlier. Underlying other income rises 11% to GBP1.61 billion. The underlying impairment charge falls to GBP295 million from GBP309 million, with the asset quality ratio at 25 basis points. Operating costs decline 3% to GBP2.47 billion. Underlying profit before impairment increases 25% to GBP2.30 billion. Return on tangible equity improves to 17.0% from 12.6%, while the CET1 capital ratio stands at 13.4%. Loans and advances to customers rise to GBP486.2 billion, with growth across retail and commercial banking, while customer deposits edge slightly lower to GBP495.9 billion. Looking ahead, Lloyds upgrades its outlook for underlying net interest income, now expecting it to exceed GBP14.9 billion in 2026. The bank reiterates guidance for a return on tangible equity of more than 16%, a cost:income ratio below 50%, and an asset quality ratio of around 25 basis points. Chief Executive Charlie Nunn says the group delivers "sustained strength in financial performance" and that its "differentiated business model remains resilient in the context of the current economic uncertainties."
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Pharmaceutical firm GSK reports higher first-quarter profit, supported by strong growth in Specialty Medicines. Turnover rises to GBP7.63 billion in the three months to March 31 from GBP7.52 billion a year prior. Pretax profit edges up to GBP2.14 billion from GBP2.11 billion, as improved operating performance offsets higher investment. Earnings per share increase to 43.2 pence from 39.7p, with diluted EPS at 42.6p from 39.3p. Cost of sales declines to GBP1.88 billion from GBP1.94 billion, aiding margin expansion. The company reports total operating profit growth, driven by favourable product mix, higher royalty income, and continued demand for Specialty Medicines, particularly in oncology, HIV, and immunology treatments. GSK generates GBP1.4 billion in cash from operations and GBP800 million in free cash flow during the quarter. The company declares a quarterly dividend of 17p per share, up from 16p a year prior, and continues its GBP2 billion share buyback programme, with GBP1.7 billion already completed. Chief Executive Officer Luke Miels says: "GSK has made a strong start to 2026, with good performance from our key growth drivers. Alongside operational delivery, we are focused on execution and accelerating research & development." Looking ahead, GSK reaffirms its 2026 guidance, expecting turnover growth of 3% to 5% and core operating profit and earnings per share growth of 7% to 9%, as it continues to invest in research and development and pipeline expansion.
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St James's Place reports higher funds under management in the first quarter, supported by steady inflows and client retention. Funds under management rise to GBP216.95 billion at March 31 from GBP188.59 billion a year prior, despite market volatility during the period. Gross inflows edge up to GBP5.23 billion from GBP5.14 billion, while net inflows fall to GBP1.53 billion from GBP1.69 billion, reflecting weaker market returns and higher outflows. The funds under management retention rate remains broadly stable at 95.3%, compared with 95.0% a year ago. The wealth manager says it delivers a "good start" to the year, with inflows supported by continued demand for financial advice amid geopolitical uncertainty and volatile markets.
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COMPANIES - FTSE 250
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Aston Martin reports first-quarter revenue rises 16% to GBP270.4 million from GBP233.9 million a year prior, as higher Specials deliveries boost performance. Pretax loss narrows to GBP65.5 million from GBP79.6 million, while gross margin improves to 34.7% from 27.9%, supported by higher average selling prices. The luxury carmaker says first-quarter performance is in line with guidance, with wholesale volumes broadly flat year-on-year at 939 vehicles. The company maintains its full-year 2026 outlook. Aston Martin expects wholesale volumes for 2026 to remain similar to 2025, while forecasting gross margin to rise to the high 30% range from 29% last year. The group also anticipates free cash outflow to "materially improve" in 2026, following a GBP410 million outflow in 2025.
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Primary Health Properties reports a "strong" start to 2026, supported by improving rental growth and progress on strategic priorities. The London-based healthcare facility investor says it generates an additional GBP3 million of income from rent reviews in the quarter ended on March 31, representing around 6% growth and an annualised increase of 3.4%, up from 3.2% in 2025. The annualised rent roll rises to GBP345 million from GBP342 million a year earlier. The company continues to deliver integration and cost synergies following its combination with Assura, with GBP7.8 million of annualised savings achieved, or 87% of its GBP9 million target. It expects to complete integration and reduce leverage to its 40% to 50% target range ahead of schedule. Primary Health Properties also progresses plans to create a new vehicle for its private hospital portfolio to reduce gearing and support growth, with a transaction expected in summer 2026. It maintains a positive rental outlook and a steady development pipeline, while reiterating its progressive dividend policy.
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OTHER COMPANIES
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PureTech Health plans to delist its american depositary shares from Nasdaq and concentrate trading on the London Stock Exchange, saying a dual listing is no longer necessary as the majority of trading volume and liquidity is in London. The Boston, Massachusetts-based biotech and pharmaceutical firm says the move will simplify its listing structure, reduce costs, and better align with its UK-focused investor base and governance. Following the delisting, expected around May 20, PureTech's shares will continue to trade in London, while its ADSs are set to move to an over-the-counter market. The company says the decision reflects a focus on disciplined capital allocation and operational efficiency. Separately, PureTech reports a swing to a 2025 pretax loss of USD110.9 million from a profit of USD23.8 million a year prior, as other income falls sharply to USD36.6 million from USD163.7 million. Total revenue edges lower to USD4.7 million from USD4.8 million. However, the operating loss narrows to USD98.5 million from USD136.1 million.
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Jet2 says it is maintaining close dialogue with fuel suppliers and airport partners to manage fuel supply risks, as the Iran war weigh on the sector. The Leeds-based tour operator and airline notes booking patterns have shifted, with customers increasingly booking closer to departure since the conflict in the Middle East began. Adds: "At present, Q1 (April, May, June) combined average load factor is in line with the prior year, with the current geopolitical uncertainty limiting visibility for the peak summer season and beyond." Despite this, demand remains resilient, with passengers booked to date up 6.2% year-on-year, supported by growth in both package holidays and flight-only sales. Summer 2026 capacity is 7.7% higher at 19.9 million seats. Jet2 says it is well protected against fuel price volatility, with 87% of its summer fuel requirement hedged. For the full year, the company expects operating profit between GBP435 million and GBP440 million, compared with GBP446.5 million a year prior, in line with market expectations. CEO Steve Heapy says: "Financial 2026 was another strong year for Jet2, topped off by the successful launch of operations at London Gatwick which is performing ahead of our initial expectations with over 400,000 passengers booked for the summer season.
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Heathrow Airport has warned it expects its passenger numbers for the rest of the year to be affected by the situation in the Middle East. Some 18.9 million people passed through its four terminals during the first three months of the year. This was a year-on-year increase of 3.7%, which the west London airport said was because it "temporarily absorbed demand from elsewhere". About half a million passengers per day usually use airports in Dubai, Doha or Abu Dhabi, which are vital hubs for travel between Europe and the continents of Asia and Australia. Airspace closures following the outbreak of the war in the Middle East on February 28 had a major impact on air travel. Much of the region's airspace has since reopened, but many people are avoiding flying there because of the war. In a trading update, Heathrow said: "While Heathrow has temporarily absorbed demand from elsewhere, passenger numbers for the rest of the year are likely to be impacted whilst there is significant uncertainty in the Middle East."
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UzNIF, the National Investment Fund of the Republic of Uzbekistan, sets an offer price of USD25 per global depositary receipt and UZS4.65 per share as it launches its initial public offering, implying a market capitalisation of around USD1.95 billion. The fund expects conditional trading of its GDRs in London and shares in Tashkent to begin around May 13, with admission to the London Stock Exchange and unconditional trading on both exchanges targeted for around May 18. The IPO comprises a dual listing in London and Tashkent, with around 30% of the company's share capital being offered by the Uzbek Ministry of Economy & Finance.
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By Eva Castanedo, Alliance News reporter
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