ADVFN UK Market News

Author: Fiona Craig

  • Barclays highlights its top European aircraft engine stocks

    Barclays highlights its top European aircraft engine stocks

    Barclays has identified two European aerospace companies as its preferred investment opportunities within the aircraft engine sector, pointing to different attractions for investors looking for exposure to the industry.

    The bank’s assessment considers a range of factors, including financial strength, growth prospects, competitive positioning, operational delivery and balance sheet quality. Against these criteria, Barclays sees Safran and Melrose as offering particularly compelling, although distinctly different, investment cases.

    Safran (EU:SAF)

    Safran is Barclays’ preferred name in the European aircraft engine sector, with the bank describing the company as a “quality compounder” capable of delivering attractive returns consistently over the longer term.

    According to Barclays, Safran offers a particularly strong combination of growth, earnings visibility and resilience. Its leading position in engines for narrow-body aircraft remains a major competitive advantage, while expansion within its defence activities provides another potential source of growth.

    The company’s established record of operational execution also supports the investment case, alongside a positive net cash position that provides additional financial flexibility. Barclays believes these characteristics underpin a high-quality long-term market capitalisation growth story.

    Safran currently trades at a premium to many aerospace peers, but Barclays considers that valuation justified by the quality of the business. The bank also views the premium as reasonable when compared with other leading European industrial companies.

    Barclays has increased its price target for Safran to €390 from €370 and maintained its Overweight recommendation.

    Melrose (LSE:MRO)

    Barclays views Melrose as the more growth-oriented opportunity within its European aerospace coverage, highlighting the company as offering the highest free cash flow growth across the stocks it follows.

    The business also provides particularly strong exposure to rising original equipment production and the recovery in wide-body aircraft manufacturing, giving investors significant leverage to improving aerospace production volumes.

    Barclays acknowledges that uncertainty has increased following the Garden Grove scandal but believes investors have responded too negatively to the situation.

    Since the disclosure, Melrose’s relative share price underperformance implies approximately £1.4 billion of lost market value. Barclays considers this substantially greater than both the financial impact currently identified and its own estimate of the liability that the company is ultimately likely to face.

    The bank also notes that Melrose is smaller and more complicated to model than many of its larger aerospace peers. As a result, Barclays believes the shares may be less efficiently valued by the market.

    Rather than viewing that complexity purely as a disadvantage, Barclays sees it as an investment opportunity. Combined with what it considers the strongest growth profile within its coverage, this supports the bank’s Overweight recommendation and £7.10 price target for Melrose.

  • FTSE 100 edges lower as Iran tensions and Hormuz blockade curb risk appetite

    FTSE 100 edges lower as Iran tensions and Hormuz blockade curb risk appetite

    UK equities moved lower on Monday as investors remained cautious amid heightened tensions between the US and Iran and continued uncertainty surrounding the blockade of the Strait of Hormuz.

    The FTSE 100 was down 0.17% at 03:30 ET (07:30 GMT), while European markets also opened slightly weaker. Germany’s DAX declined 0.06% and France’s CAC 40 slipped 0.03%. Sterling was little changed against the US dollar at 1.3492.

    Geopolitical developments remained at the centre of market attention. U.S. Central Command said the number of commercial vessels redirected as part of enforcement measures linked to the US blockade of Iran had increased to 55, compared with 53 on August 8. Two vessels have been disabled and another two boarded to enforce compliance.

    CENTCOM also said more than 30 vessels had been permitted to pass through to deliver humanitarian assistance. Meanwhile, personnel aboard the USS Abraham Lincoln continued maintaining F/A-18E Super Hornets to ensure the carrier strike group remained prepared for operations.

    The latest developments followed comments from U.S. President Trump on Sunday suggesting Washington was adopting a “low-key” stance towards Tehran.

    “We are only semi-negotiating with them. We are just watching Iran with its huge inflation and the fact they have no money,” Trump said, according to Axios.

    A separate Wall Street Journal report published on Sunday suggested Trump could be prepared to move away from pursuing a formal nuclear agreement and instead declare success if Iran fully reopens the Strait of Hormuz. Negotiations nevertheless remain complicated by demands from Tehran, which include ending the naval blockade, withdrawing U.S. forces, easing sanctions and providing war reparations, according to Iran’s Supreme National Security Council.

    Developments in Gaza also remained in focus after Trump shared an opinion piece by Hillary Clinton supporting his peace proposal. Clinton wrote that there is “no alternative framework” beyond the “20-point plan.”

    Israel has rejected Trump’s separate 15-point Gaza proposal, with Prime Minister Benjamin Netanyahu saying Israeli forces “will not carry out any withdrawal until Hamas is genuinely disarmed.”

    UK labour market shows signs of stabilisation

    There were more encouraging signals from the UK employment market, with KPMG and the Recruitment & Employment Confederation reporting “rays of light” as permanent hiring stabilised for the first time since Liz Truss stepped down as prime minister in 2022.

    The REC/KPMG permanent placements index increased to 50 in July from 49.1 in June. The temporary billings index slipped to 51.9 from 52.9, although it remained at one of its strongest levels of growth since early 2023.

    “Despite ongoing uncertainty it’s encouraging that businesses are starting to press ahead with investment,” said Callum Licence, KPMG UK & Switzerland Group Head of Advisory. The improvement came after the permanent placements measure experienced its longest recorded contraction, lasting 45 months.

    REC Chief Membership & Innovation Officer Maxine Bligh said “rays of light are beginning to break through for the job market as employers revive hiring plans,” with July becoming the first month in almost three years in which permanent placements did not decline.

    Oil and gold prices move higher

    Brent crude gained 0.13% to $83.66 per barrel, while WTI crude edged 0.14% lower to $78.08. Precious metals strengthened, with gold futures rising 0.32% to $4,413 and spot gold gaining 0.27% to $4,353.82.

    UK company round-up

    Serica Energy (LSE:SQZ) confirmed that its $197 million offer for Pharos Energy is final as Israel’s Ratio Petroleum continues to challenge the North Sea producer with a marginally higher competing proposal.

    Plus500 (LSE:PLUS) reported a strong first-half performance, with Customer Income increasing 24% and revenue advancing 12% to multi-year highs. EBITDA also moved higher despite increased spending on customer acquisition.

  • Pharos Energy shares fall as Serica holds bid firm and Ratio offers more

    Pharos Energy shares fall as Serica holds bid firm and Ratio offers more

    Pharos Energy (LSE:PHAR) shares fell around 5% on Monday after Serica Energy (LSE:SQZ) confirmed that it would not increase its takeover proposal for the oil and gas company, potentially strengthening the position of competing bidder Ratio Petroleum Energy.

    Serica said it does not intend to increase or otherwise improve the financial terms of its £145.7 million ($196.59 million) proposal for Pharos, which was announced on July 26, except under certain specified circumstances, including the emergence of another offer. The decision follows a higher proposal submitted by Israel’s Ratio Petroleum Energy.

    Pharos’ board switched its support to Ratio’s improved proposal on Friday, which values the company’s shares at 32.8 pence each. This is marginally above the 32.67 pence per share offered by Serica and prompted the board to withdraw its previous recommendation in favour of the Serica transaction.

    Serica said its decision to maintain its existing terms demonstrates a “highly disciplined approach to M&A.” The North Sea-focused producer also indicated that it continues to assess a pipeline of alternative opportunities across the U.K. North Sea and other regions as part of its broader growth strategy.

    Ratio’s revised proposal would give Pharos shareholders 28.8 pence per share in cash alongside a 4 pence special dividend. Together, the payments represent a 29.2% premium to Pharos’ closing share price of 25.4 pence on June 23, the final trading session before Ratio announced its initial approach.

    The revised terms have intensified the contest for Pharos, which has producing oil and gas operations in Vietnam and Egypt. Ratio has argued that its experience securing regulatory approvals across several jurisdictions provides greater certainty that its proposed transaction can be completed successfully compared with Serica’s offer.

    Competition for Pharos comes against a broader backdrop of consolidation within the oil and gas industry, as producers pursue acquisitions to diversify their asset portfolios. Deal activity has also been supported by elevated crude prices since the Iran war began in late February.

  • Vistry shares tumble as insurer reportedly reduces supplier credit protection

    Vistry shares tumble as insurer reportedly reduces supplier credit protection

    Vistry (LSE:VTY) shares dropped sharply at the start of Monday’s session following a Financial Times report that Allianz Trade is reducing the level of credit insurance available to suppliers dealing with the UK housebuilder, potentially adding further pressure to the company’s cash flow.

    According to the FT, citing people familiar with the situation, Allianz Trade has informed suppliers in recent weeks that it is revising credit limits relating to Vistry. The changes could result in coverage being reduced by as much as 70%, although the ultimate level of protection will depend on Vistry’s financial performance over the coming weeks.

    Vistry shares were down around 7% in London trading by 07:27 GMT.

    Credit insurance is commonly used by businesses to protect themselves against the possibility that customers fail to pay for products or services. A reduction in insurance coverage can therefore prompt suppliers to seek payment upfront or impose tighter terms. However, because suppliers can obtain protection from multiple insurers, some may continue trading with Vistry even if their coverage is reduced. The FT said the changes to Vistry’s credit limits apply only to new trading arrangements and will not affect agreements retrospectively.

    Questions surrounding Vistry’s credit insurance position emerged last Tuesday after Travis Perkins finance chief Duncan Cooper told analysts during an earnings call that insurance cover had been withdrawn from a “fairly significant national housebuilder.” Discussing pressures affecting the wider construction industry, Cooper said stress could be seen “up and down both parts of the supply chain.”

    Those comments contributed to a sharp decline in Vistry’s share price, with the stock ending the session almost 10% lower in London. The FT subsequently reported, citing sources familiar with the matter, that Cooper had been referring to Vistry.

    The housebuilder’s shares have now lost nearly 60% of their value over the past year. Its difficulties date back to 2024, when the company disclosed that it had underestimated construction costs, leading to a series of profit warnings. Vistry has since responded by restructuring its management team and implementing measures aimed at reducing costs.

  • Serica Energy stands by final offer terms for Pharos Energy

    Serica Energy stands by final offer terms for Pharos Energy

    Serica Energy (LSE:SQZ) has confirmed that it will not increase the financial terms of its recommended cash offer for Pharos Energy (LSE:PHAR), maintaining the total value at 32.6683 pence per share despite the emergence of a higher competing proposal from Ratio Petroleum.

    Serica’s offer consists of 28.6683 pence in cash for each Pharos share alongside a 4.0 pence special dividend, giving shareholders a combined value of 32.6683 pence per share. The company has declared these financial terms final and said they will not be increased, except in the limited circumstances permitted under UK takeover rules.

    The decision reflects Serica’s emphasis on maintaining financial discipline when pursuing acquisitions rather than entering an escalating bidding contest. The competitive situation has intensified after Ratio secured irrevocable undertakings covering approximately 41.76% of Pharos Energy’s issued share capital.

    While Serica continues to pursue its recommended offer, management has highlighted a broader pipeline of potential growth opportunities in the UK North Sea and other markets. This provides the company with alternative options for deploying capital should its proposed acquisition of Pharos ultimately prove unsuccessful.

    Serica’s wider outlook reflects a combination of challenges and supportive factors. Financial performance has been mixed following a significant downturn during 2025 and uneven free cash flow generation. However, management has reiterated its production and cash guidance while highlighting improved liquidity, providing greater financial flexibility for future investment and potential acquisitions. Technical indicators remain moderately weak, while a high dividend yield provides valuation support despite a negative price-to-earnings ratio resulting from reported losses.

    More about Serica Energy

    Serica Energy is a UK-listed oil and gas company engaged in exploration, development and production, with its operations primarily focused on the UK North Sea. The group combines investment in its existing upstream portfolio with a disciplined mergers and acquisitions strategy designed to expand its asset base while maintaining financial prudence and operational focus.

  • Marshalls increases first-half profit and dividend despite subdued construction markets

    Marshalls increases first-half profit and dividend despite subdued construction markets

    Marshalls plc (LSE:MSLH) delivered a resilient performance during the first half of 2026 despite challenging conditions across UK construction markets. Revenue was broadly unchanged at £317.8 million, while adjusted operating profit increased 8.1% to £30.7 million and adjusted earnings per share rose 14.4% to 7.6 pence.

    The group also maintained a strong focus on cash generation and balance sheet management. Pre-IFRS 16 net debt declined to £136.8 million, while operating cash conversion reached 98%. Reflecting the improvement in earnings and financial discipline, Marshalls increased its interim dividend by 13.6%.

    Performance benefited from operational improvements and self-help measures being implemented through the group’s Transform & Grow strategy. Landscaping Products recorded an improvement in profitability, supported by a cost-reduction programme that is targeting £11 million of annualised savings by the end of 2026.

    Roofing Products remained resilient during the period. Marley Roofing continued to gain market share, while Viridian Solar benefited from demand linked to changing regulatory requirements. Trading within Building Products was more mixed, reflecting continued weakness in the new-build housing market and subdued conditions across parts of the wider construction sector.

    Despite the difficult market environment, the board maintained its full-year profit expectations. The outlook assumes there will be no material recovery in underlying markets during the second half, leaving execution of the company’s internal improvement initiatives as an important driver of performance.

    Marshalls’ broader outlook benefits from an improving balance sheet and positive share price trend, with the stock trading above key moving averages. However, weaker cash generation during 2025 and relatively thin and variable profitability remain considerations, while overbought technical signals could limit near-term momentum. Valuation also represents a potential headwind due to a high price-to-earnings multiple, although the dividend yield provides some support.

    More about Marshalls

    Marshalls plc is a UK-based manufacturer of building products and sustainable solutions for the built environment. The group operates through Landscaping Products, Building Products and Roofing Products and maintains a nationwide network of manufacturing and distribution facilities. Its strategy combines product development, technical and design expertise and sustainability initiatives as it seeks to strengthen its position as a leading supplier to the UK built-environment market.

  • Plus500 delivers record first-half results and increases shareholder returns

    Plus500 delivers record first-half results and increases shareholder returns

    Plus500 (LSE:PLUS) reported record interim results for the first half of 2026, supported by growth in customer activity and continued expansion of its diversified trading operations. Revenue increased 12% year-on-year to $462.9 million, while Customer Income reached its highest level in five years as the number of active customers rose 10%.

    The group maintained disciplined customer acquisition spending during the period while continuing to broaden its operations beyond its traditional OTC business. Revenue from non-OTC activities increased by approximately 30% and now accounts for around 15% of total group revenue. This segment includes the company’s CFTC-regulated prediction markets and futures operations, which have become an increasingly important part of its growth strategy.

    Plus500 also continued to develop its OTC offering, expanding its geographic reach and enhancing its 24/5 trading capabilities. The company is increasingly positioning itself as a diversified global trading platform rather than a business dependent on a single product or market.

    Shareholder distributions remain a major component of the group’s capital allocation strategy. Plus500 announced $182.5 million of additional returns through a combination of share buybacks and dividends, taking cumulative distributions since its 2013 IPO to approximately $3.1 billion.

    Further growth opportunities are being pursued through business-to-business partnerships in North and Latin America, while a recent acquisition in India is expected to broaden the company’s geographic footprint. Management believes these initiatives can support sustainable revenue growth and expects full-year 2026 performance to remain in line with current market expectations.

    The wider outlook is supported by strong margins, robust cash conversion and low leverage, alongside management’s confidence in the group’s strategic progress. A moderate price-to-earnings multiple and solid dividend yield provide additional support from a valuation perspective. However, technical indicators remain weaker, with the shares trading below key moving averages and momentum signals continuing to be negative.

    More about Plus500

    Plus500 is a global multi-asset fintech group operating proprietary technology-based trading platforms across OTC and non-OTC markets. Its activities include CFDs, futures and prediction markets, serving both retail and institutional customers. The company has an expanding presence in the US and offers products including single-stock futures, sports-based prediction contracts and 24/5 trading in stocks and ETFs as it develops a more diversified global financial services platform.

  • ECR Minerals raises £636,000 to accelerate Maddens Gold Project development

    ECR Minerals raises £636,000 to accelerate Maddens Gold Project development

    ECR Minerals (LSE:ECR) has raised approximately £636,250 through a placing of 363.6 million new shares on AIM as it looks to accelerate development of the Maddens Gold Project in Northern Queensland. Investors participating in the fundraising will also receive warrants, while the new capital will primarily be directed towards advancing Maddens towards potential production during 2026.

    Proceeds from the placing are expected to support several development activities, including underground mine preparation, the creation of ore stockpiles, trial alluvial mining and additional exploration. The funding also provides ECR with flexibility to pursue opportunities elsewhere within its portfolio of Australian gold assets.

    Management believes the historic grades and visible gold identified at the Maddens Underground Mine demonstrate the project’s potential to become a significant asset for the company. If production is successfully established, ECR expects cash generation from Maddens could make a meaningful contribution towards covering corporate overheads and reducing its reliance on external financing.

    Recent operational work has provided further encouragement, including a LiDAR survey that the company believes indicates additional exploration and development potential. ECR’s broader strategy is to establish multiple gold production streams that can be supported from a single operating hub, potentially improving capital efficiency as the project develops.

    The placing will result in dilution for existing shareholders, but management considers the fundraising necessary to capitalise on recent progress and move Maddens towards production. The company nevertheless remains exposed to financial constraints, including the absence of revenue, continued losses and ongoing cash consumption, which could create further funding requirements. Technical indicators are also weak, with the shares trading below major moving averages. A debt-free balance sheet and improvements in losses and cash outflows compared with earlier periods provide some financial support.

    More about ECR Minerals

    ECR Minerals PLC is a UK-listed gold exploration and development company focused primarily on projects in Australia. Its portfolio includes the Maddens Gold Project in Northern Queensland, which the company regards as its leading near-term production opportunity, alongside a broader collection of Australian exploration interests. ECR’s strategy is focused on advancing prospective gold assets through exploration and development with the objective of establishing future production.

  • ValiRx strengthens Cytolytix cancer IP with European patent progress and new filing

    ValiRx strengthens Cytolytix cancer IP with European patent progress and new filing

    ValiRx plc (LSE:VAL) has expanded the intellectual property portfolio of its majority-owned subsidiary Cytolytix after the European Patent Office indicated its intention to grant a second European patent covering polyleucine-based anti-cancer peptides licensed from King’s College London. The development adds further protection around Cytolytix’s early-stage oncology technology.

    The anticipated patent grant complements an existing European patent covering nanoparticle formulations of anti-cancer peptides. Together, the patents broaden the intellectual property surrounding Cytolytix’s therapeutic platform and could strengthen its position when pursuing future licensing agreements, strategic partnerships or external investment.

    Cytolytix has also filed a new patent application covering second-generation lipid-based delivery formulations for an oncolytic peptide. The filing is supported by experimental data indicating that the formulations can induce immunogenic cell death in triple negative breast cancer cells, potentially providing an additional mechanism through which the technology could stimulate an anti-tumour immune response.

    Management believes the combination of proprietary delivery formulations and immune-activating characteristics could support the development of differentiated oncology products. The technology is being considered for both human and veterinary applications, aligning with ValiRx’s comparative oncology strategy and potentially broadening the commercial opportunities available for the platform.

    Strengthening the intellectual property estate could improve Cytolytix’s ability to protect its technology as development progresses while increasing its attractiveness to prospective commercial partners. However, ValiRx’s broader outlook remains constrained by minimal revenue, continuing losses and ongoing cash consumption, which is putting pressure on shareholder equity despite relatively low debt. Technical indicators also remain weak, with the shares below major moving averages and MACD in negative territory, while conventional valuation metrics provide limited support given negative earnings and the absence of a dividend yield.

    More about ValiRx plc

    ValiRx plc is a UK-based life sciences company focused on early-stage cancer therapeutics and women’s health. The company provides scientific, financial and commercial support to help translate innovative research into potential clinical-stage medicines. Listed on AIM under the ticker VAL, ValiRx develops and incubates drug candidates through pre-clinical stages before seeking to out-license or partner promising assets through its subsidiary companies for further clinical and commercial development.

  • Tertiary Minerals completes Phase 4 drilling at Mushima North in Zambia

    Tertiary Minerals completes Phase 4 drilling at Mushima North in Zambia

    Tertiary Minerals (LSE:TYM) has completed its Phase 4 reverse circulation drilling programme at the A1 target within the Mushima North Project in Zambia. The campaign comprised 39 drill holes for a combined 3,639 metres and represents another step towards defining the scale and characteristics of the project’s near-surface polymetallic mineralisation.

    Preliminary results obtained using portable X-ray fluorescence analysis continue to support the previously identified silver-copper-zinc exploration target. The latest drilling has also provided further evidence of a higher-grade silver-copper zone within the broader mineralised system, adding to the company’s understanding of the A1 target.

    Among the latest results was an intersection of 15 metres grading 0.53% copper from a depth of 100 metres. Drilling also encountered wider intervals of lower-grade mineralisation, providing further indications of continuity across the deposit and supporting the geological model developed from earlier exploration campaigns.

    Samples from the programme have now been submitted for certified laboratory analysis, which will provide more definitive measurements of the mineralisation encountered during Phase 4. These assay results will be important in determining the next stages of technical work and refining the potential size and grade distribution of the deposit.

    Tertiary also intends to begin metallurgical testwork and progress towards the preparation of a JORC-compliant Mineral Resource estimate. Establishing a formal resource would represent an important development milestone for Mushima North, providing greater definition of the asset and potentially reducing geological and technical uncertainty as the project advances.

    The company’s wider outlook remains constrained by persistent losses and continued cash consumption. Technical indicators provide some support, with the shares trading above key moving averages, although conventional valuation measures remain difficult to justify while earnings are negative and the company does not pay a dividend.

    More about Tertiary Minerals

    Tertiary Minerals plc is an AIM-listed mineral exploration company focused on discovering and advancing polymetallic deposits. Its current portfolio has a particular emphasis on silver, copper and zinc opportunities in Zambia’s Iron-Oxide-Copper-Gold belt. The Mushima North Project, situated close to the historic Kalengwa mine, is being explored for near-surface mineralisation with the potential to support a sizeable polymetallic resource.