Author: Fiona Craig

European equities moved higher on Tuesday, supported by gains on Wall Street overnight and ahead of the release of the latest regional economic activity data.

At 07:05 GMT, Germany’s DAX rose 0.3%, France’s CAC 40 climbed 0.4%, and the U.K.’s FTSE 100 added 0.2%.

Powell Speech in Focus

Global markets retained a positive tone after Monday’s Wall Street rally, following last week’s Federal Reserve interest rate cut and with investors anticipating further easing from the U.S. central bank’s remaining meetings this year.

New Fed Governor Stephen Miran, appointed by President Donald Trump, called for large rate cuts on Monday. Futures markets imply roughly a 90% chance of a quarter-point rate cut in October, and a 75% probability of additional easing in December.

Other Fed speakers scheduled for Tuesday include Raphael Bostic and Michelle Bowman, but market attention will primarily be on comments from Fed Chair Jerome Powell later in the session. These remarks are expected to be pivotal for near-term investor sentiment.

Eurozone PMIs Awaited

In Europe, focus turns to the flash PMIs for September, which will indicate whether the eurozone economy is maintaining resilience amid U.S. tariffs. The releases are expected to remain above the key 50.0 threshold separating expansion from contraction, though only marginally.

U.S. PMI data is also scheduled later, with forecasts pointing to a moderate slowdown in economic growth.

Burberry Recovery “Overpriced” – Jefferies

In corporate news, Burberry (LSE: BRBY) returns to London’s FTSE 100 on Monday, one year after leaving the top-tier index, ahead of its latest collection at London Fashion Week.

Jefferies, however, warned that expectations of a rapid turnaround at the luxury brand are “overpriced,” reiterating its “underperform” rating and citing potential downside of around 40%. The brokerage highlighted that optimism about Burberry’s ability to restore profit margins is facing a critical test.

“The emergence of broadly unchanged sales productivity in Q2, despite all the right commercial steps having been undertaken, would weaken the bullish narrative as H2 profit delivery demands a clear acceleration in momentum,” Jefferies said.

Oil Falls on Oversupply Concerns

Oil prices slipped Tuesday amid ongoing oversupply worries, following a preliminary agreement between Iraq and Kurdish regional governments to restart an oil pipeline.

At 03:05 ET, Brent futures dropped 0.7% to $66.14 a barrel, while U.S. West Texas Intermediate crude fell 0.6% to $61.89 a barrel, marking a five-session losing streak for both contracts.

Reuters reported that Iraq’s federal and Kurdish regional governments reached a deal with oil companies to resume crude exports via Turkey on Monday, potentially restoring around 230,000 barrels per day, which had been halted since March 2023.

The International Energy Agency’s latest monthly report indicated that global oil supply will increase more quickly this year, and a surplus could expand in 2026 as OPEC+ production rises and supply from non-OPEC sources grows.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Eurozone business activity grew at its fastest pace in 16 months in September, according to the latest S&P Global HCOB Flash Eurozone Composite Purchasing Managers’ Index (PMI). The index rose to 51.2, up from 51.0 in August, marking the ninth consecutive month of expansion.

The September reading slightly surpassed economists’ expectations of 51.1 in a Reuters poll. However, new orders remained stagnant after a brief increase in August, raising potential concerns about the durability of the eurozone’s growth in the coming months.

A PMI reading above 50 indicates expansion in business activity, while readings below 50 signal contraction.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Serco Group (LSE:SRP) shares rose 3.1% following the announcement that its MT&S business has been awarded a major contract to provide training and simulator services to the US Air Force.

The single-award indefinite delivery, indefinite quantity (IDIQ) framework is valued at up to $972 million (£720 million) over five years. Serco expects the contract to generate approximately $60 million (£45 million) in task orders in 2026, representing about 1% of group revenues.

The agreement covers over 20 US Air Force locations and is projected to reach a potential annual run-rate of $80–100 million from 2027, contributing around 25% to the core MT&S business. Analysts expect the contract to enhance group margins and support ongoing growth in Serco’s defense operations, following its recent acquisition of MT&S from Northrop Grumman.

While the contract’s immediate impact on near-term financials is limited, it reinforces consensus expectations for 2.5% growth in FY2026 and 4.5% in FY2027. Separately, Serco announced Michael LaRouche as the new CEO of its North America division. Analysts at Jefferies noted that his defense experience with Lockheed and Raytheon positions the company well for further progress in the region.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Kingfisher (LSE:KGF) has lifted its full-year profit guidance following a 10.2% increase in first-half earnings, driven by robust demand in the UK, sending shares up more than 19% in early London trading.

The home improvement retailer, which owns B&Q and Screwfix in the UK and Castorama and Brico Dépôt in France and other markets, now expects adjusted pre-tax profit at the upper end of its £480 million–£540 million range, compared with £528 million in 2024/25. Adjusted pre-tax profit for the six months ending 31 July reached £368 million, with sales up 1% to £6.81 billion.

Underlying like-for-like sales rose 1.9%, with Q2 growth of 1.4%. B&Q and Screwfix reported like-for-like gains of 4.4% and 3.0% respectively, aided by favorable weather boosting outdoor product sales. Retail profit margin increased by 40 basis points to 6.6%, supported by stronger gross margins and cost initiatives, leading to 16.5% growth in adjusted EPS to 15.3p.

Kingfisher also reported market share gains in the UK, France, and Spain. CEO Thierry Garnier stated: “Our expectations for our markets remain consistent with those outlined in March, while mindful of mixed consumer sentiment and political uncertainty.”

The company confirmed it is accelerating its £300 million share buyback program, now expected to complete by March 2026. Statutory pre-tax profit rose 4.1% to £338 million, while free cash flow increased 13.5% to £478 million.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Henry Boot PLC (LSE:BOOT), active in land promotion, property investment and development, home building, and construction, posted a 19% increase in revenue to £126.4 million for H1 2025, up from £106.0 million in the same period last year.

Profit before tax more than doubled to £7.8 million, compared with £3.7 million in H1 2024, while return on capital employed (ROCE) improved to 9.1%, up from 4.9%, though still below the company’s medium-term target of 10–15%.

The company completed and exchanged total land and property sales of £159.6 million (Henry Boot’s share: £99.3 million) and has already secured 80% of its budgeted 2025 sales. The board approved a 5% increase in the interim dividend, bringing it to 3.24p per share.

Tim Roberts, CEO, commented: “Operationally, we have had a solid first half in challenging markets, and we are also making significant strategic progress.”

Henry Boot’s land promotion division, Hallam Land, sold 1,222 plots in H1 2025, up from 843 in the same period last year, putting the company on track to exceed 3,500 plot sales this year. The total land bank now stands at 107,173 plots.

Net debt increased to £88.1 million from £62.7 million at the end of 2024, with gearing at 21.4%, reflecting investments in planning applications and expanding the home building land bank. In January 2025, Henry Boot increased its stake in Stonebridge Homes to 62.5%; the business completed 85 homes in H1, slightly down from 90 in H1 2024, with the average private sales price rising 3% to £391,000.

Additionally, Henry Boot sold Henry Boot Construction (HBC) to PWS Construction Limited for an initial £4.0 million, funded via a vendor loan note and including performance-based future payments. The transaction allows the group to focus on high-quality land, prime property development, and premium homes, the core of its medium-term growth strategy. Completion is expected by year-end 2025.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

IQE plc (LSE:IQE) reported a challenging first half of 2025, with revenue falling to £45.3 million from £66.0 million in the prior year. The decline was primarily driven by lower demand in wireless markets and delays in US military funding.

Despite these challenges, the company has made progress in innovation, particularly in GaN and microLED technologies, and maintains a strong pipeline of customers. IQE is conducting a strategic review, including potential sale discussions, while focusing on cost management and operational efficiency to navigate the current market environment and support future growth.

The company’s outlook is affected by ongoing financial pressures, including negative profitability and weak cash flow. Bearish technical indicators and unattractive valuation metrics further temper investor sentiment. While there are some positive developments in earnings and corporate activity, these are overshadowed by broader operational and financial challenges.

About IQE plc

IQE plc is a leading global supplier of compound semiconductor wafers and advanced material solutions. The company delivers innovative technologies across wireless, photonics, sensing, power, and display markets, serving sectors such as AI, data centers, military and defense, and consumer electronics.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

hVIVO plc (LSE:HVO) has published its interim results for H1 2025, reporting revenue of £24.2 million, in line with full-year expectations. While both revenue and EBITDA declined compared to the previous year, the company remains optimistic about returning to growth in 2026.

The integration of recent acquisitions, CRS and Cryostore, is nearing completion, and sales synergies are starting to materialize. Key contracts secured include a £3.2 million hLAB agreement and a letter of intent for a major Phase III human challenge trial. Early signs from the company’s diversification strategy are positive, with a strong sales pipeline and new service lines contributing to future growth prospects. Management expects high-single-digit revenue growth in 2026 as market conditions normalize.

The outlook reflects solid financial performance and attractive valuation metrics, including a low P/E ratio and steady revenue growth. However, technical analysis points to some bearish trends, slightly tempering the overall assessment. Recent corporate events were not factored into the score but provide additional optimism for the company’s trajectory.

About hVIVO plc

hVIVO is a full-service early-phase Contract Research Organisation (CRO) and a global leader in human challenge trials. The company provides end-to-end clinical development services to biopharma clients, specializing in infectious and respiratory disease trials. It operates the largest quarantine facility in London and offers laboratory services under the hLAB brand. Through subsidiaries CRS and Venn Life Sciences, hVIVO delivers early-phase clinical trial services and consulting to the biopharma sector.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Transense Technologies PLC (LSE:TRT) reported a 33% rise in total revenue and a 12% increase in profit before tax for the year ending June 2025, driven by strong performance in its SAWsense and Translogik divisions. SAWsense has transitioned to a full-service model, enhancing customer engagement in sectors such as robotics and aerospace, while Translogik expanded its client base and strengthened its sales operations.

Although royalty income from Bridgestone is expected to decline, the company remains confident in its strategic growth initiatives and ability to deliver returns to investors, supported by solid financial results and encouraging early trading in the new fiscal year.

The company’s outlook is primarily supported by strong financial performance and positive corporate developments, including strategic partnerships and increased management ownership. However, bearish technical indicators and the absence of a dividend yield temper the overall assessment.

About Transense Technologies PLC

Headquartered in Oxfordshire, UK, Transense Technologies develops and supplies advanced sensor technologies and measurement solutions. Its operations are divided into two main segments: SAWsense, which provides Surface Acoustic Wave sensor solutions for industries including aerospace and automotive, and Translogik, which delivers smart, connected tyre inspection equipment for commercial vehicles. The company also earns royalty income from Bridgestone iTrack, a tyre monitoring system licensed to Bridgestone Corporation.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Mpac Group PLC (LSE:MPAC) posted a 41.2% increase in revenue for the first half of 2025, driven primarily by acquisitions completed in 2024. The company faced a slowdown in order intake due to tariff uncertainties, particularly in the Americas, but maintained its full-year guidance.

Operational improvements and strategic consolidation, including the closure of a US facility and the opening of a new engineering hub in Malaysia, position the company for sustainable growth. Integration of acquired businesses is progressing as planned, and Mpac continues to focus on expanding its service offerings and cross-selling opportunities, although the timing of a broader market recovery remains uncertain.

The company’s outlook reflects strong financial performance and key corporate initiatives, offset by bearish technical signals and a relatively high P/E ratio. Profitability and operational risks linked to market conditions remain key considerations.

About Mpac Group PLC

Mpac Group PLC is a global engineering and technology leader, specializing in the design, precision engineering, manufacturing, and support of high-speed packaging equipment and solutions. Serving 80 countries across the Americas, EMEA, and APAC, Mpac focuses on growth sectors such as Food & Beverage and Healthcare. The company provides Original Equipment and Services for automated high-speed packaging, delivering stable and recurring post-sale revenue. Headquartered in Tadcaster, UK, Mpac employs over 1,000 people and emphasizes innovation and sustainable growth.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Surface Transforms (LSE:SCE) has reported a 72% rise in revenue to £8.1 million for the first half of 2025, driven by increased sales to OEM customers. The company improved its gross margin to 64% and reduced its operating loss to £5.2 million.

Ongoing capacity expansion projects, including the installation of a new furnace, are expected to boost manufacturing output to support future growth. Management anticipates full-year revenue of approximately £20 million, 10% above prior expectations. The company continues to focus strategically on expanding capacity, improving yield, and maintaining strong customer support and cash management to achieve sustainable growth.

While financial challenges and mixed technical indicators temper the outlook, recent operational improvements and strong insider confidence support a positive trajectory for the company.

About Surface Transforms plc

Surface Transforms is a UK-based manufacturer specializing in carbon-ceramic automotive brake discs. It is the only producer of these discs in the UK and one of just two mainstream global manufacturers, supplying major OEMs. Using proprietary Carbon Ceramic Technology, the company produces lightweight, high-performance brake discs for both internal combustion and electric vehicles, offering benefits such as reduced weight, longer lifespan, and superior braking performance.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.