LONDON BRIEFING: BT Group lifts payout; Smiths Group cuts outlook

Thu, 21st May 2026 07:55

(Alliance News) - BT Group reports higher annual profit, raises its dividend and sets out a new payout plan. Smiths Group cuts its outlook, but Sage lifts its guidance. easyJet warns of "lower than normal visibility of forward bookings" due to the Middle East conflict.

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 0.3% at 10,400.64

GBP: lower at USD1.3430 (USD1.3456 at previous London equities close)

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ECONOMICS

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UK Prime Minister Keir Starmer will seek to regain control of the political agenda on Thursday with a series of announcements on the cost of living and giving power to local communities. Westminster remains focused on the Makerfield by-election, now confirmed for June 18, and the possibility of a leadership challenge by Greater Manchester mayor Andy Burnham. Allies of Burnham have suggested he may not launch a bid for the top job immediately if he returns to Westminster. Labour deputy leader Lucy Powell, who supported his previous bid to fight a by-election in Gorton & Denton, told LBC she did not "expect that's what Andy's coming in to do". But a contest is widely expected after Burnham's call for a "new path" and promise to "change Labour".

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BROKER RATINGS

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Jefferies raises Shell price target to 4,500 (4,400) pence - 'buy'

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COMPANIES - FTSE 100

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BT Group hails its "record-breaking Openreach full fibre build" and reports a rise in annual profit. The telecommunications firm says it has also upped its dividend, while setting out a new payout plan. Pretax profit in the year to March 31 rose 7.6% to GBP1.44 billion from GBP1.05 billion a year prior, BT says, though revenue edged down 3.5% to GBP19.65 billion from GBP20.36 billion. Profit was boosted by "lower depreciation and amortisation", the company explains. Chief Executive Allison Kirkby says: "Our record-breaking Openreach full fibre build hit its upgraded target and today reaches more than two thirds of UK homes and businesses, keeping us well on track for our 25 million milestone by the end of December. We extended our mobile leadership further, with EE winning best mobile network in three separate awards, bringing 5G+ to 73% of the population." BT has raised its final dividend by 1.9% to 5.87 pence per share from 5.76p, taking its total payout 2.0% higher to 8.32p from 8.16p. It will now look to grow the dividend by low to mid single digits per year from financial 2027 onwards, until "metrics consistent with a BBB+ credit rating are reached". After that, it says "residual cash flow will be available for enhanced distributions to shareholders". BT says it has extended its transformation plan by another year to financial 2030, upping the sum it is looking to save to GBP3.7 billion from GBP3.0 billion. For financial 2027, it expects adjusted earnings before interest, tax, depreciation and amortisation in the range of GBP8.2 billion to GBP8.3 billion. In the year just gone, it had risen to GBP8.23 billion from GBP8.21 billion. Separately, the firm says Patricia Cobian will succeed Simon Lowth as finance chief on September 1.

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Engineering firm Smiths Group has cut its annual view, amid Middle East disruption. Its performance was "resilient" in the third quarter to May 2, but cautions that the conflict "moderates growth in the near term". Third quarter organic revenue was flat in the third quarter, leading to 0.2% growth in the nine-month period. Smiths now expects organic revenue growth of around 2% for the full year, cutting its guidance from the 3% to 4% range. The outlook reflects a "GBP10 million impact in the third quarter and assuming continuing disruption in the Middle East", it adds. "We continue to prioritise the safety of our people who work in the region. We are also supporting our customers and remain well positioned to assist them as facilities are returned to service and production recovers. Looking forward, our view on the underlying strength of our John Crane business in the region remains unchanged. While the conflict creates some near‑term headwinds, it creates opportunity for incremental investment as the region rebuilds. The effects from the conflict are sharpening the focus on energy security and resilience, which we expect will continue to underpin structural growth in spending on energy infrastructure globally. The Middle East region represents [around] 7% of revenue for Smiths, primarily John Crane," Smiths says.

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Sage Group says it has lifted its top line guidance, after "strong momentum in the first half". The enterprise accounting software provider says pretax profit in the half-year to March 31 rose 11% to GBP262 million from GBP236 million, as revenue shot up 10% to GBP1.36 billion from GBP1.24 billion. Sage lifted its interim dividend by 8.1% to 8.05 pence from 7.45p. Sage now expects organic total revenue growth of "above 9%" for the full year. It previously expected growth to be "9% or above".

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COMPANIES - FTSE 250

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Budget carrier easyJet says the Middle East conflict has caused "near-term uncertainty", amid higher fuel costs and lower visibility. easyJet's pretax loss in the half-year to March 31 widened to GBP552 million from GBP401 million a year prior. "This result was broadly in line with expectations, excluding GBP25 million of unexpected additional fuel costs incurred in March due to the sudden impact of the Middle East conflict and a GBP32 million net increase in legal provisions across a number of historic cases," it adds. Revenue was 12% higher at GBP3.95 billion from GBP3.53 billion. easyJet says there "remains uncertainty over the FY26 financial outturn", due to loftier fuel prices and "lower than normal visibility of forward bookings". easyJet says its "intention is to now operate the full summer schedule on sale as planned". easyJet is 72% hedged for its fuel needs for the second half, at an average rate of USD726 per metric tonne, compared with the roughly USD1,350 spot price.

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Defence technology company Qinetiq Group says it swung to annual profit and it extended a share buyback. Pretax profit in the half-year to March 31 amounted to GBP155 million, swinging from a loss if GBP106 million. Revenue edged down 0.5% to GBP1.92 billion from GBP1.93 billion, it says. "We have delivered a resilient performance in more challenging markets, with organic revenue growth, margin expansion and strong cash generation driven by disciplined execution and restructuring. Our record order intake and GBP4.8 billion backlog provide clear visibility of sustainable growth and strong multi-year cash flows. Aligned to structural growth in global defence investment, we are a trusted partner delivering mission‑critical capabilities, well positioned to drive higher‑quality earnings and attractive, sustainable shareholder returns," Chief Executive Officer Steve Wadey says. Qinetiq's dividend was raised by 24% to 11.00 pence per share from 8.85p, it adds, and it expands its share buyback by GBP200 million, "commencing in March 2027, when we complete our current buyback commitment". For financial 2027, it expects revenue growth between 3% and 5%.

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OTHER COMPANIES

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Young & Co's Brewery reports stronger annual earnings and says it has got off to a strong start in the new year. Pretax profit in the year to March 30 jumps to GBP41.1 million from GBP18.1 million, as revenue climbs 4.6% to GBP508.2 million from GBP485.8 million. "I am delighted to announce another exceptional set of results, reflecting a record-breaking 12 months for the business. We achieved a significant milestone, surpassing half a billion pounds in revenue, with multiple pubs across the estate delivering record performances throughout the year," Chief Executive Simon Dodd says. "We are optimistic about the future, and are off to a strong start in the new financial year. We kicked off the year with our acquisition of Cubitt House London Pubs and entered a new era on the Main Market of the London Stock Exchange. The business has positive momentum, we are investing well and our acquisition strategy is on track. We cannot control the macroeconomic picture, but everything within our control, including our premium, well-invested portfolio of pubs and our people puts us in a strong position." Young's has upped its dividend by 6.0% to 24.44 pence per share from 23.06p.

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Tharisa reports its interim profit surged, getting a boost from robust platinum group metal prices. The platinum miner delivered pretax profit of USD69.9 million for the six months that ended March 31, multiplied from USD10.3 million a year earlier, it says. Revenue rose 28% to USD359.4 million from USD280.8 million. PGM prices had remained robust, underpinned by ongoing investments in clean air technologies, expanding applications in hydrogen energy, and increased investor interest in critical metals for the energy transition and AI driven technologies and data storage, Tharisa explains.

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By Eric Cunha, Alliance News news editor

Comments and questions to newsroom@alliancenews.com