Financial Sector Shines as Metro Bank Returns to Profit, Manufacturing Faces Headwinds

📈 Today's Key Themes

The London Stock Exchange is poised for a mixed opening as pre-market announcements reveal contrasting performances across sectors. The financial services sector leads the charge, with Metro Bank (#MTRO) returning to profitability in Q1 2025. The construction industry also shows resilience, as evidenced by Cairn Homes' (#CRN) strong revenue growth. However, the manufacturing sector faces challenges, with Dowlais Group (#DWL) reporting a revenue decline and lowering its full-year guidance. This divergence highlights the ongoing economic uncertainty and its varying impact across different industries.

💡 Company Updates

Q1 Updates

Metro Bank (#MTRO) has delivered a strong start to the year, reporting a profitable Q1 2025 performance on both underlying and statutory bases. The bank saw a significant increase in Q1 2025 underlying profit compared to H2 2024, driven by higher net interest margins and continued strategic repositioning. With a strong commercial pipeline and improved capital ratios following a successful £250 million AT1 issuance, Metro Bank appears well-positioned for future growth. The company's confident outlook for meeting full-year guidance has contributed to a very positive sentiment surrounding the stock. Helios Towers (#HTWS) reported solid Q1 2025 results, with Adjusted EBITDA increasing 9% year-on-year to £111.1 million. The company reaffirmed its full-year guidance for 2,000 - 2,500 tenancy additions and Adjusted EBITDA of £460 million - £470 million. With sites and tenancies increasing 2% and 9% year-on-year respectively, and net leverage decreasing to 4.0x from 4.4x a year earlier, Helios Towers demonstrates a strong operational and financial performance.

Trading Updates

Cairn Homes (#CRN) anticipates revenue growth exceeding 10% for FY25, supported by a robust closed and forward sales pipeline of over 3,250 new homes worth approximately €1.25 billion. The company's positive medium-term outlook is underpinned by its market-leading position and scaled operating platform. With build cost inflation currently running below the FY25 expected level of c.2%, Cairn Homes appears well-positioned to capitalize on the strong demand across multiple tenures. In contrast, Dowlais Group (#DWL) faces challenges, reporting a 2.5% year-on-year decline in Q1 2025 adjusted revenue. The company now expects full-year performance to be towards the low end of its guidance range, citing macroeconomic uncertainty and industry forecast revisions. Despite an improved adjusted operating margin of 6.6%, up 80bps, the overall sentiment remains cautious due to the revenue contraction and uncertain outlook.

Annual Results

Afentra (#AET) reported a remarkable turnaround in its 2024 results, with revenue soaring nearly 7-fold to $180.9 million and a profit after tax of $52.4 million, up from a loss of $2.7 million in 2023. The company's financial health has significantly improved, moving from a net debt to a net cash position of $12.6 million. With a strong cash balance and successful integration of acquisitions, Afentra appears well-positioned for future growth. Kromek Group (#KMK) delivered an excellent set of results for FY 2025, with revenue ahead of market expectations, up at least 34% year-on-year to not less than £26 million. The company's financial position has been significantly strengthened, with a substantial reduction in debt and a move to a net cash position. Kromek's positive outlook and lack of negative sentiment indicators suggest it is well-positioned for continued growth in the year ahead.

🎯 Leading Developments

Genel Energy (#GENL) reported robust production and cash flow in Q1 2025, with gross output up 10% from the previous quarter to 82,081 bopd. The company's Tawke PSC continues to deliver consistent, reliable production and generate significant cash flow. Genel Energy's operational performance and cost efficiency set it apart from others in the region, contributing to a positive sentiment despite some industry uncertainties. ITM Power (#ITM) has been selected by Uniper for a significant 120MW green hydrogen project. The project, which will use ITM's POSEIDON 20MW electrolysis modules, represents a major partnership and expansion opportunity for the company. While the project is still subject to a Final Investment Decision in 2026, with operations targeted to begin by 2029, it demonstrates ITM Power's growing presence in the green hydrogen sector. Apax Global Alpha (#APAX) announced that Apax XI Fund will acquire 98.32% of Norva24 Group AB, a leading provider of underground infrastructure maintenance services in Northern Europe. The investment thesis is to support Norva24's growth as a private company, leveraging Apax's experience in the services sector. This strategic move could potentially lead to future revenue growth for Apax Global Alpha. Hemogenyx Pharmaceuticals (#HEMO) has raised £451,250 through a placing of new ordinary shares to continue its Phase I clinical trials for the company's HG-CT-1 cancer therapy. The new shares were issued at 180.5p per share, a modest 1.6% discount to the previous closing price. This funding will support the company's ongoing clinical development efforts, which could have significant implications for cancer treatment if successful.

📅 Week Ahead

9 May 2025: London Finance & Investment Group P.L.C. (#LFI) Termination of listing of Ordinary Shares on the JSE Limited
9 May 2025: LondonMetric Property Plc (#LMP) Deadline for LondonMetric to announce a firm intention to make an offer or state it does not intend to make an offer
9 May 2025: JPMorgan Global Growth & Income Ord (#JGGI) General Meeting of JGGI shareholders
9 May 2025: Man Group Plc (#EMG) Annual General Meeting
9 May 2025: Foresight VCT Ord (#FTV) Special dividend payment of 6.4p per share
9 May 2025: ACG Metals Limited (#ACG) Live presentation of FY24 Results via Investor Meet Company
9 May 2025: Maven Income and Growth VCT 5 PLC (#MIG5) Final dividend payment

View full calendar

Market Summary