London Pre-Market: Sector Divergence as Tech Wins, Recruitment Wanes

📈 Today's Key Themes

Pre-market signals point to a divergent opening for London stocks, with technology and pensions sectors showing resilience while recruitment and property face headwinds. Journeo's (#JNEO) significant contract win in New York City highlights potential for international expansion, contrasting with Hays' (#HAS) profit warning, which underscores persistent economic uncertainties. XPS Pensions Group's (#XPS) strong annual results further emphasize the sector-specific nature of current market conditions, suggesting investors may need to be selective in their approach.

💡 Company Updates

Annual Results

XPS Pensions Group (#XPS) reported impressive annual results, with revenue growing 18% year-on-year to £231.8 million (excluding NPT). The company's adjusted EBITDA increased by 27% to £69.7 million, with margins improving to 30.1%. Adjusted diluted EPS showed a substantial rise of 36% to 20.6p. The Administration division was particularly strong, with revenue growth of 30%. These results underscore XPS's ability to capitalize on market opportunities and improve operational efficiency. In contrast, Mountview Estates (#MTVW) faced challenges in the property sector, reporting a 17.4% drop in pre-tax profit to £31.3m and a 9.3% decline in revenue to £72.1m for the year ended 31 March 2025. The company cited fewer property sales due to market conditions as a key factor. Despite maintaining its final dividend at 275 pence per share, the results reflect the current difficulties in the UK property market.

Half-Year Results

NCC Group (#NCC) released interim results showing headwinds in its core business. Group revenue declined by 4.9% on a constant currency basis, with Cyber Security revenue down 6.6%. Adjusted EBITDA decreased from £25.5m to £21.5m. However, the company has eliminated its net debt, now holding a £0.3m net cash position. The challenging market conditions and increased competition in the cyber security sector are likely to impact investor sentiment.

🎯 Leading Developments

Technology Sector Resilience

Journeo (#JNEO) has secured a significant $2.7 million contract to supply display systems for the New York City subway network. This marks an important milestone in the company's international expansion and builds on its previous success with on-train display solutions in New York. The project, set to commence in Q4 2025, demonstrates Journeo's ability to compete in global markets and could potentially open doors for further international contracts. Read more

Recruitment Sector Challenges

Hays (#HAS) issued a profit warning, expecting FY25 pre-exceptional operating profit of around £45m, below analyst consensus of £56.4m. The company cited broad-based weakness in permanent recruitment markets globally due to low client and candidate confidence amid macroeconomic uncertainty. While the Temp & Contracting business remains more resilient, the overall outlook appears negative, with challenging market conditions expected to persist into FY26. This warning could have ripple effects across the recruitment sector. Read more

Mining Services Sector Growth

Capital Limited (#CAPD) announced several new contracts, including a major 3-year contract with a 1-year extension to provide borehole drilling services for the Reko Diq copper-gold project. The company has also secured new exploration drilling contracts with several mining companies, and its MSALABS division has been awarded new contracts and extensions. This positive news suggests strong momentum across Capital Limited's business lines and could indicate a broader uptick in the mining services sector. Read more

📅 Week Ahead

20 June 2025: Record plc (#REC) Announcement of results for the 12 months ended March 31st
20 June 2025: GSK plc (#GSK) FDA Decision on Shingrix Prefilled Syringe
20 June 2025: Intertek Group plc (#ITRK) Final dividend payment
20 June 2025: Grit Real Estate Income Group Limited (#GR1T) Admission of new ordinary shares on the LSE and SEM
20 June 2025: First Property Group plc (#FPO) Repayment due for bank loan of £4.61 million secured against Blue Tower

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Market Summary