House prices rise as buyers shrug off stamp duty

The UK‑based chip part supplier reported a 47 per cent drop in pre-tax profits to £30.4 million in the six months to the end of June. Revenue fell 8.7 per cent to £522.6 million.

The company now expects its annual adjusted operating profit to fall at the lower end of the company-compiled forecasts of £115.6 million to 126.3 million, compounded by weak market conditions and foreign exchange headwinds.

The shares dropped 14 per cent to 194p, down 31½p.

Serco shares have surged to an 11-year high, levels last seen during the government contractor’s near-death experience amidst a cocktail of fraud and corporate hubris.

The magic ingredient has been the belated recognition by investors that Serco too is a major beneficiary of the defence dividend as governments on either side of the Atlantic crank up military spending. Serco holds a range of military contracts in the UK and US. In the UK, it has the contract to manage the UK Armed Forces Recruitment Service.

Half-year profits of £146 million showed modest, albeit better-than-expected, growth. However, it was a 12 per cent surge in defence revenues and the fact that 80 per cent of order intake was in the sector, that blew the doors off.

Serco shares rose 7.5 per cent or 15.8p to 225.2p, up nearly 66 per cent since the turn of the year.

The North Sea-focused oil company has announced a $100 million share buyback as it raised its annual production forecast, boosted by its Wintershall Dea acquisition and cost controls in the first half of the year.

Harbour Energy’s production guidance was narrowed upwards to 460-475 kboepd (thousand barrels of oil equivalent per day), from 455-475 kboepd. It also expected to record free cash flow of $1 billion in 2025, up from the $900 million previously. Revenue jumped to $5.27 billion from $1.92 billion in the same month last year. However, it reported a $174 million loss, compared to $57 million profit last year.

Analysts at Jefferies said: “[The] share buy-back, unchanged dividend, FCF increase and production guide narrowed upwards are positives that override a P&L net loss miss in the first half.”

Harbour Energy shares rose 13 per cent, or 26½p, to 230½p. The company has been shifting capital away from the UK and focusing on international assets for future investments after UK tax changes in 2024 removed incentives for reinvestment.

RIT Capital Partners has hailed a stand-out performance in its private investments arm while warning it was hit by the weaker dollar in the six months to June.

The former Rothschild Investment Trust, a member of the FTSE 250, declared a net asset value total return of 3.4 per cent, which beat its inflation benchmark of 3.3 per cent but trailed its equity performance yardstick of 3.9 per cent.

The private investments arm produced a 9 per cent total return, boosted by the realisation of investments in Scale AI, the artificial intelligence group partly bought by Meta, and Xapo, a cryptocurrency bank. Its investment in Webull, the investment platform for day traders, also boosted net assets.

The effect of the weaker dollar, which fell 10 per cent against sterling, was reduced to 3.2 per cent by currency hedging.

RIT’s new chairman Philippe Costeletos recognised that narrowing the discount to net assets, which worsened from 24 per cent to 27.4 per cent, was of “paramount importance” to shareholders. Since the start of 2023 RIT has spent £300 million in share buybacks attempting to close the gap.

UK car parts supplier Dowlais reported a 6 per cent year-on-year fall in first-half pre-tax profits to £104 million due to lower volumes and tariffs, which it said were lower than initially anticipated. Revenue fell 4.7 per cent to £2.81 billion.

Liam Butterworth, chief executive, said: “Looking ahead, we remain on track to offset the tariff-related headwinds in the second half, and we continue to expect our full-year performance to be towards the lower end of our guidance range.”

The company is one of the latest British quoted companies to be acquired by US rival. It has agreed a £1.2 billion takeover by American Axle & Manufacturing, which it expects to be completed in the fourth quarter.

The shares edged up 0.8 per cent to 71¼p.

London’s leading share index has fallen from its closing high yesterday, ahead of today’s expected Bank of England interest rate cut later and as investors considered another slew of corporate results.

The FTSE 100 fell 26 points, or 0.28 per cent, to 9,138.25.

Intercontinental Hotels Group, which has brands such as Six Senses, Crowne Plaza, and Holiday Inn, was the biggest riser, gaining 8.8 per cent after reporting upbeat first-half results.

IHG reported a 1.8 per cent rise in global revpar (revenue per available room), the key industry indicator, a 13 per cent rise in operating profit to $604 million, and revenue up 6 per cent to $1.17 billion. Investors seemed to ignore a slowdown in the US due to tariff uncertainty.

Generic drugmaker Hikma shares fell 8.3 per cent on uncertainty about the impact of tariffs and the lower first-half profit.

WPP, the advertising group, was also among the biggest fallers after underlying revenue continued to slide over the first six months of the year and halved its dividend.

The food delivery group has forecast annual core profit of between £170 million to 190 million, the upper end of its previous forecast range, boosted by an increase in orders.

Deliveroo’s gross transaction value (GTV) – the cost of all food orders and delivery fees on its platform and a key industry metric – rose 9 per cent in the first half to £3.79 billion.

However, it made a £19.2 million loss, compared to a profit of £1.3 million in the same half last year, due to higher costs associated with its £2.9 billion takeover by US rival Doordash. The deal is expected to close in the final quarter of the year.

Deliveroo made its first-ever annual profit of £2.9 million in March and analysts have forecast full-year GTV of between £7.6 billion and £7.7 billion for 2025, compared with £7.4 billion last year.

The shares, which have risen 39 per cent of the past year, edged higher this morning to 177½p. It floated at 390p a share.

Britain’s biggest advertising group said its new chief executive, Cindy Rose, would lead a review of strategy and future capital allocation policy when she takes over at the start of next month as it announced first-half results.

Underlying revenue has continued to slide at WPP over the first six months of the year as the advertising group halved its dividend.

Rose’s appointment was announced just a day after a bruising profit warning last month, where revenue and margin guidance was slashed.

Revenue less pass-through costs – fees paid to external suppliers – declined 4.3 per cent, and worsened to a 5.8 per cent fall in the second quarter, as a tough macroeconomic backdrop pushed major brands to pull back on their marketing spending.

Mark Read, the outgoing chief, said it had been “a challenging first half given pressures on client spending and a slower new business environment”. The group has cut its workforce by 7,000 over the past year.

The full-year outlook for a 3-5 per cent decline in revenue and a 50-175 basis point fall in the headline operating margin, was maintained, although operating cashflow is now expected to be between £1.1 and £1.2 billion this year, down from previous guidance about £1.4 billion.

House prices rose again last month as the buyers continued to return to the market after a slowdown in demand following the end of the stamp duty holiday, data from the mortgage lender Halifax showed.

House prices rose by 0.4 per cent in July, the biggest monthly increase since the start of this year. The average house price is now £298,237, 2.4 per cent higher than a year ago.

Amanda Bryden, head of mortgages at Halifax, said: “Challenges remain for those looking to move up or onto the property ladder. But with mortgage rates continuing to ease and wages still rising, the picture on affordability is gradually improving.”

She said the second half of the year will see a notable rise in homeowners coming to the end of fixed-rate deals. “While most borrowers coming to the end of five-year fixed-rate mortgage deals will see their monthly repayments rise. Those coming off a two-year fixed-rate are very likely to see their monthly payments come down.”

The central bank’s monetary policy committee (MPC) is expected to cut interest rates by a quarter-point to 4 per cent at midday. However, the committee is once again expected to be split. Jack Barnett has more on why economists are forecasting the reduction in borrowing costs here.

The decision is likely to weigh on investors this morning, with the FTSE 100 forecast around 8 points lower when trading begins. Last night the index closed up 0.24 per cent, or 21.56 points, at a new high 9,164.30.

Asian stock markets rose and Japanese shares hit a record high this morning, lifted by tech-led gains on Wall Street, upbeat earnings, growing expectations of US rate cuts and the prospect of a meeting between President Trump and President Putin over the war in Ukraine.

Markets seemed to shake off Trump’s latest tariff moves, including an additional 25 per cent tariff on India over purchases of Russian oil. Trump’s threat of a 100 per cent tariff on chips and semiconductors was also taken in stride, as the president promised to exempt companies such as Apple that move production back to the United States.

The dollar weakened against a basket of currencies on hopes of US rate cuts and concerns about Trump’s attempts to interfere with key institutions such as the Fed and the Bureau of Labor Statistics.