LONDON BRIEFING: Compass lifts outlook as GSK expands in China

Mon, 11th May 2026 07:56

(Alliance News) - Compass Group raised annual profit guidance after reporting double-digit first-half operating profit growth, while GSK announced a China partnership for hepatitis B treatment bepirovirsen and the final tranche of its GBP2 billion buyback. Elsewhere, Victrex warned higher energy costs linked to the Middle East conflict could weigh on demand as interim profit declined.

Here is what you need to know before the London market open:

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MARKETS

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FTSE 100: called 0.2% higher at 10,254.77

GBP: lower at USD1.3591 (USD1.3623 at previous London equities close)

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ECONOMICS

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The ITEM Club forecasts the UK will lose 163,000 jobs this year as the economic fallout from the Iran war hits manufacturing, construction, retail and hospitality sectors. The report predicts UK employment will fall 0.4% in 2026 as higher fuel, energy and materials costs, alongside shipping disruption and weaker consumer spending, weigh on businesses. South Wales and the Humber are expected to be among the hardest-hit regions due to their reliance on manufacturing and construction industries. The ITEM Club forecasts job losses of 5,700 in South Wales and 2,800 in the Humber. London is expected to lose 25,000 jobs this year, with further declines of 12,500 in Birmingham, 9,800 in Leeds and 6,200 in Glasgow as consumer-facing sectors slow. ITEM Club economic adviser Tim Lyne says lower-income regions are particularly vulnerable because households have fewer savings buffers and spend a larger share of disposable income on essentials such as food and energy. The report says publicly funded sectors including healthcare and education are expected to add jobs, though not enough to offset wider losses.

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BROKER RATINGS

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Exane BNP raises NatWest to 'outperform' (neutral) - price target 680 pence

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RBC raises BP to 'outperform' (sector perform) - price target 700 pence

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COMPANIES - FTSE 100

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Compass Group reports first-half pretax profit rose to USD1.47 billion from USD1.28 billion a year earlier, as revenue increased 11% to USD24.98 billion from USD22.57 billion. On an underlying basis, revenue for the six months ended March 31 rose 9% at constant currency, while organic revenue growth was 7.2%, supported by strong client retention of 96% and new business wins of USD4.1 billion, up 14% year-on-year. Underlying operating profit increased 12% at constant currency to USD1.84 billion, with operating margin improving to 7.4% from 7.2%. Underlying earnings per share climbed 12% to 72.8 US cents, while operating cash flow increased 14% to USD1.32 billion and free cash flow rose 11% to USD825 million. Compass raises its interim dividend by 13% to 25.5 cents from 22.6 cents. The group says it continues to benefit from strong demand for outsourcing, particularly in its Business & Industry division, while acquisitions including Vermaat in the Netherlands and Pro Care Management in Germany are strengthening its European platform. Looking ahead, Compass raises full-year underlying operating profit growth guidance to above 11% from around 10%. It continues to expect organic revenue growth of around 7%, supported by ongoing margin progression and contributions from acquisitions.

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GSK enters an exclusive collaboration with China's SBP Group to accelerate the launch of hepatitis B treatment bepirovirsen in mainland China, where the drug is under priority regulatory review. Under the agreement, SBP subsidiary Chia Tai Tianqing Pharmaceutical Group will handle importation, distribution and promotional activities for bepirovirsen across more than 5,000 medical centres in China, while GSK retains regulatory and medical oversight. GSK says CTTQ will purchase bepirovirsen under agreed supply terms for an initial 5.5-year period. Bepirovirsen is a potential first-in-class treatment for chronic hepatitis B, a disease affecting around 75 million people in China. GSK also gains the ability to review certain early-stage SBP pipeline assets for potential collaboration opportunities outside China. Separately, GSK launches the fifth and final tranche of its GBP2.0 billion share buyback programme, with purchases of up to GBP180 million expected to complete by June 26. The company says it has already repurchased around 114.4 million shares for approximately GBP1.82 billion under the programme.

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COMPANIES - FTSE 250

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Victrex reports a swing to a first-half pretax loss after booking a GBP60.6 million impairment charge related to its China manufacturing facility, while announcing plans to cut around 10% of jobs as part of a profit improvement programme. The Lancashire, England-based polymer solutions provider for automotive, aerospace, energy & industrial, electronics, and medical markets says pretax result for the six months to March 31 swung to a GBP44.0 million loss from a GBP17.2 million profit a year earlier. Underlying pretax profit fell 18% to GBP19.0 million from GBP23.2 million, while underlying earnings per share declined to 17.2p from 22.6p. Revenue rose 1% to GBP147.1 million from GBP145.9 million, with sales volumes up 6% to 2,137 tonnes from 2,018 tonnes, driven by its Sustainable Solutions division. The interim dividend is unchanged at 13.42p per share. Victrex says its profit improvement plan is progressing well, with early cost-saving benefits expected in the second half and at least GBP10 million of annual savings targeted in financial 2027. The group says it is simplifying the business and reducing headcount by around 10%, primarily in central functions, as part of efforts to create "a simpler, more differentiated and more customer focused business". Chief Executive James Routh says the company had "not adapted quickly enough to changed market conditions and we must now relentlessly focus on improving our execution". Looking ahead, Victrex expects full-year underlying pretax profit between GBP42 million and GBP44 million. However, it warns of potential implications for global demand and energy costs from ongoing events in the Middle East.

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Unite Group completes the sale of its St Pancras Way property to USAF for GBP186 million, with Unite’s share of proceeds amounting to GBP126 million. The company says it will receive around GBP115 million in cash, with the remainder in new USAF units, increasing its stake in the fund to 32% from 30% at the end of 2025. The disposal price represents a 1% discount to the asset's December 2025 book value. Following the sale, Unite extends its share buyback programme by GBP65 million to GBP165 million in total. The group says the additional tranche will be funded from disposal proceeds, while remaining funds will support development capex and university partnerships.

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OTHER COMPANIES

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CelLBxHealth says it expects 2026 revenue of at least GBP2.1 million, up 50% from 2025, as the company progresses its turnaround strategy and builds its sales pipeline. The Guildford, England-based liquid biopsy company, formerly called Angle PLC says first-quarter trading focused on organisational restructuring and cost reductions. Following a 60% headcount reduction last year, staff numbers were further reduced to 39 from 44 in the first quarter. CelLBxHealth says these measures are expected to reduce annual cash operating costs in 2026 by more than GBP6.6 million, with a further GBP0.1 million of savings targeted in the second quarter. Cash at March 31 stood at GBP4.3 million, in line with expectations and reflecting one-off restructuring costs. The company says it has appointed a new US head of sales and remains focused on commercial execution. It adds that it is in advanced talks with a major private US healthcare provider regarding two clinical studies using its Parsortix platform, and is close to signing a master services agreement with a top-10 global pharmaceutical company.

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Heathrow Airport said April passenger numbers fell 5.3% year-on-year to 6.7 million as the Middle East conflict disrupted some travel markets and prompted short-term changes to passenger plans. The airport says underlying demand remained resilient, supported by a 10% rise in transfer passenger demand as travellers rerouted through Heathrow's long-haul network. Cargo volumes were stable, highlighting the airport's role in global trade flows. Passenger traffic to the Middle East dropped 52% in April, while Asia-Pacific traffic rose 5.6% and Africa increased 6.8%. North America passenger numbers slipped 1.3%. Chief Executive Thomas Woldbye said Heathrow was supporting the UK government and airline partners on fuel planning and summer schedules to give passengers confidence ahead of the holiday season. He added that current fuel supplies remain stable despite disruption linked to the Middle East conflict. Heathrow says it will review and update its 2026 passenger forecast in June in light of the geopolitical situation.

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By Eva Castanedo, Alliance News reporter

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