UK Market Braces for Mixed Open as Construction Woes Offset Tech Resilience

📈 Today's Key Themes

The UK market is poised for a mixed open as the construction sector grapples with significant challenges, contrasting with resilience in technology and services. Full-year results from SIG plc and Ibstock plc reveal the extent of headwinds facing the building materials industry, while the automotive sector also faces pressures as evidenced by Dowlais Group's results. However, positive sentiment surrounds strategic moves such as Breedon Group's US expansion and Johnson Service Group's share buyback program, potentially offering some support to the market.

💡 Company Updates

Annual Results

SIG plc (#SHI) reported a challenging 2024, with underlying operating profit plummeting 52.7% to £25.1m. Revenue declined by 5.4% to £2,611.8m, while the statutory loss before tax widened to £44.8m. The company's underlying operating margin halved to 1.0%, reflecting severe pressure in the construction materials sector. The sentiment is very negative, with ongoing restructuring efforts and a cautious outlook for 2025.

Ibstock plc (#IBST) faced similar headwinds, reporting a 10% revenue decline to £366 million and a 26% drop in adjusted EBITDA to £79 million. The company's profit before taxation decreased by 30% to £21 million, while adjusted EPS fell 45% to 7.7p. Despite these challenges, Ibstock maintained a final dividend of 2.5p per share, bringing the total dividend for the year to 4.0p.

Dowlais Group plc (#DWL) reported mixed results in the automotive technology sector, with adjusted revenue declining 6.4% to £4,937 million and adjusted operating profit falling 8.7% to £324 million. The company's ePowertrain product line was particularly weak, accounting for about 70% of the revenue decline. Despite these challenges, Dowlais managed to slightly improve its adjusted operating margin to 6.6%.

Half-Year Results

In contrast to the construction sector's woes, Galliford Try Holdings plc (#GFRD) delivered strong half-year results, with revenue increasing 12.7% to £923.2m and adjusted profit before tax up 22.0% to £20.5m. The company's order book remains robust at £3.9bn, providing high visibility for future years. The positive sentiment is reinforced by management's expectation to exceed current market forecasts for the full year.

Foxtons Group plc (#FOXT) reported robust financial results, with group revenue up 11% to £163.9m and adjusted operating profit increased 38% to £21.6m. The company's profit before tax surged 121% to £17.5m, while adjusted earnings per share grew 47% to 5.0p. Foxtons' sales market share increased by 20% to 4.9%, demonstrating strong operational execution and effective strategy implementation.

🎯 Leading Developments

Breedon Group plc (#BREE) has made a strategic move to expand its US presence by acquiring Lionmark Construction Companies LLC for US$238m (£187m). This acquisition is expected to more than double Breedon's US revenue and diversify its product offering into asphalt and surfacing solutions. The sentiment is very positive, with the transaction expected to be immediately earnings enhancing for Breedon. Read more

Johnson Service Group PLC (#JSG) has announced the commencement of a £30 million share buyback programme, signaling financial strength and efficient capital allocation. The initial tranche of up to £15.0 million will start immediately, with the company citing a strong balance sheet as the rationale for the buyback. This move is likely to be well-received by investors and could potentially support the share price. Read more

De La Rue plc (#DLAR) provided a positive trading update, highlighting a significant escalation in its Currency business performance. The company's Currency division order book stands at £347m at the end of January 2025, with expectations of further growth in FY26. While net debt has increased due to working capital build-up and the separation of the Authentication division, the proposed sale of the Authentication division is on track to complete in H1 2025. Read more

Mkango Resources Ltd. (#MKA) announced the results of an independent study confirming that its HyProMag USA's recycled rare earth magnet production has an exceptionally low carbon footprint of 2.35 kg CO2 eq. per kg. This is approximately 95% lower than primary rare earth magnet production, providing HyProMag USA with a significant competitive advantage as demand for sustainable materials grows. Read more

📅 Week Ahead

6 March 2025: BP p.l.c. (#BP.) Publication of Annual Financial Report
6 March 2025: Rentokil Initial plc (#RTO) Preliminary Results Announcement
6 March 2025: Melrose Industries PLC (#MRO) Full year results announcement
6 March 2025: Entain Plc (#ENT) FY24 Results
6 March 2025: Endeavour Mining plc (#EDV) Q4 and FY-2024 Results Release
6 March 2025: Harbour Energy plc (#HBR) Full Year Results Release
6 March 2025: Grafton Group plc (#GFTU) Full year results reporting
7 March 2025: Just Group plc (#JUST) Results for the year ended 31 December 2024
6 March 2025: Coats Group plc (#COA) Full Year 2024 Results Release
6 March 2025: PageGroup plc (#PAGE) Full Year Results

View full calendar

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