(Alliance News) - The FTSE 100 was called higher on Wednesday, after US President Donald Trump paused his 'Project Freedom', the military operation to escort ships through the Strait of Hormuz, and said that "great progress has been made toward a complete and final agreement" with Iran.
Here is what you need to know before the London market open:
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MARKETS
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FTSE 100: called up 123.9 points, 1.2% at 10,343.01
GBP: higher at USD1.3587 (USD1.3569 at previous London equities close)
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ECONOMICS
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Retailers bracing for the effects of the Middle East conflict have urged the UK government to cut domestic costs to help them keep prices down for consumers. The British Retail Consortium said four in five people feared the Middle East conflict would push up food prices, and called on the government to help by easing pressure on businesses from higher national insurance, packaging levies, new regulations, and business energy charges. The BRC said retailers were already absorbing "significant" additional costs from the conflict, including rising energy and shipping costs, with knock-on effects for fertiliser, manufacturing and logistics. It warned that those costs would inevitably filter through to the till over the coming months.
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BROKER RATINGS
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Shore Capital raises HSBC to 'hold' (sell)
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Goldman Sachs cuts Dr Martens price target to 71 (76) pence - 'neutral'
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UBS cuts Fermi to 'neutral' (buy) - price target 6 (8) USD
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COMPANIES - FTSE 100
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Next updates on trading for its first quarter ended May 2. Says full-price sales rose 6.2% on-year, beating its forecast of 4.0% growth by GBP28 million. Attributes this to "exceptionally strong growth" of 12% in the first five weeks. Total UK sales increase 4.4% with online sales up 10%, although retail store sales decrease 3.4%. Total online international sales increase 13%. Next says the extra GBP28 million from sales adds GBP8 million in profit, causing Next to increase its full-year pretax profit guidance to GBP1.22 billion from a previous guidance of GBP1.21 billion. Next maintains its full-price sales target. For post-tax earnings per share, the firm raises its guidance for financial year 2027 to 792.9 pence from 787.3p. The company says its guidance for EPS assumes it completes GBP510 million of share buybacks this year, with GBP196 million bought back so far.
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Smith & Nephew announces a new USD500 million share buyback, "reflecting confidence in [its] 2026 performance and strong balance sheet and free cash flow generation." Also says first-quarter revenue totals USD1.50 billion, up 6.6% from USD1.41 billion the year before, with 3.1% underlying growth or 4.7% on an adjusted daily sales basis. "First-quarter performance was in line with our expectations, with strong execution in Sports Medicine and solid performance in Advanced Wound Management and the rest of Orthopaedics," Chief Executive Officer Deepak Nath says. Smith & Nephew leaves full-year guidance unchanged, saying it is on track for underlying revenue growth of around 6%, trading profit growth of around 8%, around USD800 million in free cash flow and adjusted ROIC exceeding 10%.
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Diageo says third-quarter reported net sales increase 2.3% to USD4.48 billion for the three months ended March 31, from USD4.38 billion, with organic growth of 0.3% and a 0.4% increase in volumes. "Strong organic net sales growth was delivered in Europe, LAC and Africa with some benefit from Easter timing and advance sales ahead of the upcoming FIFA World Cup. In North America, organic net sales declined high-single-digit reflecting continued US Spirits weakness," Diageo says. "Asia Pacific net sales declined slightly with weakness in Chinese white spirits offsetting low-single-digit growth in international premium spirits, and with the latter benefiting from later timing of Chinese New Year." Says its 'Accelerate' programme is on track to deliver around USD300 million in savings by the end of the current financial year, guidance for which it keeps unchanged. This includes a 2% to 3% decrease in organic net sales, flat to low-single-digit organic growth in operating profit, and free cash flow of USD3 billion, up from USD2.7 billion for the previous year.
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COMPANIES - FTSE 250
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JD Wetherspoon issues a trading update for the 13 weeks ended April 26. Says like-for-like sales increase 3.4% on-year, while year-to-date sales increase 4.3%. Total sales increase 4.1% in the quarter and by 4.9% in the year to date. Company still anticipates year-end net debt between GBP740 million and GBP760 million, with interest costs totalling approximately GBP47 million, in line with the previous year. "As many hospitality operators, including Wetherspoon, have reported, there have been substantial increases in costs, which may result in profits slightly below market expectations," Chair Tim Martin says.
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Trainline publishes results for the year ended February 28. Net ticket sales increase 7% to GBP6.32 billion from GBP5.91 billion in financial 2025. Revenue rises 2% to GBP452.7 million from GBP442.1 million. Adjusted earnings before interest, tax, depreciation and amortisation rise 11% to GBP176.6 million from GBP159.1 million, "with operating leverage and cost discipline more than offsetting [the] impact from [the] previously-flagged commission rate reduction." Pretax profit rises to GBP114.3 million from GBP80.9 million. For the current year, Trainline expects GBP6.2 to GBP6.45 billion in net ticket sales, GBP440 to GBP455 million in revenue, and adjusted Ebitda at around 2.9% of net ticket sales, with the International Consumer segment reaching breakeven.
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OTHER COMPANIES
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Reach says it is on track to meet market expectations for the full year, although "we continue to be cautious on digital revenues." For the full year, company-compiled analyst consensus forecasts adjusted operating profit of GBP95.9 million. Reach expresses confidence that it can deliver its planned reduction in operating costs. Digital revenue falls 8.1% annually in the first quarter ended March 31, with direct revenue down 4.5% and indirect falling 11%. Print revenue decreases by 6.6%, with circulation revenue down 5.5% and advertising revenue down 13%. Group revenue declines by 6.9%. Attributes the fall in digital revenue to on-platform referral volumes, "mainly from Google," being "materially lower". The "ongoing disruption in search and referral volumes" is "a continuation of the trends we first reported on in July," Reach says. Adds: "These ongoing headwinds reinforce the validity of our three priorities and we continue to execute our strategy and diversify revenues. Actions include growing off-platform audiences, expanding video content and successfully launching premium subscriptions which are now live across 11 sites." Reach Chief Executive Piers North says: "We are undoubtedly in the middle of yet another big shift in the media world as the digital referral landscape continues to change, but we are navigating this uncertainty appropriately. We have the benefit of our scale and a portfolio of trusted brands, reaching 35 million people every month and we continue to develop new revenue streams, in particular with our growing subscriptions business."
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By Emma Curzon, Alliance News reporter
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