Bellway annual profits slump, QinetiQ on track after second quarter

London open

The FTSE 100 is expected to open 23 points higher on Tuesday, having closed uo 0.47% on Monday at 8,292.66.

Stocks to watch

UK housebuilder Bellway on Tuesday reported a slump in annual profits, reflecting weaker demand due to higher mortgage rates, but said its forward order book had increased as economic conditions eased. The company said pre-tax profit for the year to July 31 fell 62% to £183.7m as completions slumped by a third to 7,654 homes. Its forward order book at the end of September was 5,109 homes, up from 4,636 a year ago and had a value of £1.43bn compared with £1.23m in 2023.

QinetiQ said in its second quarter trading update on Tuesday that it was on track to achieve high single-digit organic revenue growth and stable margins for the full year. The FTSE 250 company said it maintained solid order intake momentum, securing strategic contracts including a €284m aerial training deal with the German Armed Forces and a US Army aerial target systems contract. Cash conversion remained robust at 80%, while its £100m share buyback programme was progressing as planned, with £62m already completed.

Newspaper round-up

Britain is at risk of experiencing a repeat of the sharp increase in energy costs which has fuelled the continuing cost of living crisis because it relies too heavily on gas, according to an expert panel of industry leaders. The Energy Crisis Commission has warned that the UK is still “dangerously underprepared” for another crisis because it continues to rely on gas for its power plants and home heating. – Guardian

The rolling stock firm Porterbrook paid out £80m in dividends to its mainly overseas shareholders last year, accounts show, fuelling further calls for Britain’s trains to be nationalised. The firm’s train leasing arm made profits of £144m in 2023, when the railway was still beset by strikes over frozen pay and passengers faced widespread cancellations and fare rises of almost 6%. – Guardian

Fears of a tax raid in the Budget are deterring investment in Britain, the boss of one of the UK’s biggest construction firms has warned. Expectations of a capital gains tax raid and Labour’s foot-dragging on planning decisions have left the construction industry reluctant to commit to new projects, according to Mark Reynolds, chief executive and chairman of Mace Group. Mr Reynolds, who is also co-chair of the Construction Leadership Council, an industry body, said: “What we are not doing is making growth investments. We are not deciding to proactively invest in our capital plant and equipment, or invest in taking on new jobs. – Telegraph

The owner of Vauxhall will decide the fate of its UK factories “within weeks” amid a row over net zero targets for electric vehicle (EV) sales. Stellantis, the brand’s parent company, warned in June that it would be forced to mothball plants in Ellesmere Port and Luton unless ministers relaxed rules forcing manufacturers to sell a certain proportion of EVs. The company, which also owns Fiat, Citroen and Peugeot, makes electric cars and vans at Ellesmere Port and vans in Luton, employing more than 1,000 workers across both sites. – Telegraph

Google has become the latest artificial intelligence-focused company to strike a nuclear energy deal to meet rising power demand from data centres. The technology giant said it has signed the world’s first corporate agreement to buy energy from multiple small modular reactors, in a move it believes could help spur a nuclear revival in America. – The Times

US close

Major indices closed higher on Monday as market participants braced for a week packed with key Q3 corporate earnings.

At the close, the Dow Jones Industrial Average was up 0.47% at 43,065.925, while the S&P 500 advanced 0.77% to 5,859.85 and the Nasdaq Composite saw out the session 0.87% stronger at 18,502.69.

The Dow closed 201.36 points lower on Monday, the blue chip's first time closing above the 43,000-point watermark, while the S&P 500 also closed at a fresh record.

This week's primary focus will be earnings from a number of the nation's biggest names in business, including Bank of America, Goldman Sachs, Johnson & Johnson, Morgan Stanley, United Airlines, Walgreens Boots Alliance, Netflix and Procter & Gamble.

Also due out later in the week, September retail sales and industrial production figures will be published on Thursday, followed by housing starts and building permits numbers on Friday.