Archived article: Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
“Markets reacted with relief to news of an extension on the US-China trade deadline which was set to expire today,” says AJ Bell Investment Director Russ Mould.
“However, this relief was measured given the market had largely anticipated such an outcome. Asian stocks were higher overnight and the FTSE 100 got a boost from a mining sector whose fortunes are heavily entwined with the Chinese economy.
“The latest UK jobs data suggesting a further softening in the labour market and recruiter PageGroup’s latest numbers were of a piece with this downbeat backdrop.
“Subdued hiring not just on these shores but also in Europe saw profit really tumble and, significantly, PageGroup continues to trim its own headcount as it looks to get costs under control and weather the current storm.
“US inflation figures will be closely watched later as the market tries to get a read into the US Federal Reserve’s decision next month on interest rates.”
Spirax
“One-time shining star of the UK engineering space Spirax has seen a spanner thrown into the works in recent times.
“The company has long focused on thermal energy management and industrial pumps but has undergone a material shift through acquisitions to position itself for long-term drivers such as the energy transition. This, in turn, has arguably increased the complexity and risk around the business.
“Uneven operating and financial performance left the shares trading at multi-year lows ahead of today’s first-half results – with highs above £170 marked in 2021 a distant memory.
“That context helps explain the enthusiasm with which these latest numbers have been received. Suggesting, as they do, that a management team of CEO Nimesh Patel, who took the helm at the beginning of 2024 to be joined by chief financial officer Louisa Burdett in July of last year, may be getting a handle on its problems.
“Earlier in the year the company had flagged a significant second-half weighting to its 2025 revenue and profit. This is often a recipe for a profit warning as a hoped-for improvement in trading fails to materialise. However, a better-than-expected first six months of the year has largely wiped out this second-half weighting.”
Entain
“Earlier this year it looked like Entain’s recovery story might be over before it had really begun as CEO Gavin Isaacs left after less than six months in the role.
“However, today’s update is the latest indication that his successor Stella David is making tangible progress in turning around the company’s fortunes.
“A significant milestone revealed in the results is the company’s BetMGM operation moving into profitability. Combined with momentum in its online business this helped support a notable upgrade to full-year expectations.
“Given the company’s previous balance sheet issues, investors are likely to adopt a ‘show me the money’ mindset and in this context, improving free cash flow is likely to be taken positively. The company’s £500 million medium-term target is garnering some credibility.
“It’s not all good news as the company’s physical outlets are not seeing any growth and the company continues to face potential regulatory and tax headwinds, with a gambling levy being floated ahead of this year’s Budget.
“However, in terms of what it can control Entain seems to be getting more right than it is getting wrong right now.”
Bellway
“Housebuilder Bellway has belied some of the gloom around the sector with its full-year trading update. Completions and average selling prices are both notably higher and, crucially, a smidge above guidance.
“One sticking point for investors may be that the profitability is not keeping pace with the improvement in revenue. The release is light on detail in this respect but a margin approaching 11% is only a modest improvement on the 10% posted in 2024.
“The company faces inflationary pressures both as a result of tax changes and other rising cost inputs and, while the market is holding up OK, prices are not necessarily keeping pace.
“Ironically government changes aimed at removing obstacles in the planning system are causing a logjam in the short term as local planning authorities adjust. Bellway and its peers will hope this period of adjustment is not too protracted.”
Russ Mould: Investment Director
Russ Mould is AJ Bell's Investment Director. He has a Master's degree in Modern History from the University of Oxford and more than 30 years' experience of the capital markets.
He started out at Scottish...
