LONDON BRIEFING: Unilever faces CMA concerns; Metlen plans arm IPO

(Alliance News) - Unilever faces UK competition concerns over its Foods merger with McCormick, while Metlen plans to float its METKA subsidiary in Athens. Taylor Wimpey lowers its full-year expectations as higher mortgage rates and living costs weigh on housing demand.

Here is what you need to know before the London market open:

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MARKETS

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FTSE 100: called up 0.4% at 10,792.49

GBP: higher at USD1.3333 (USD1.3323 at previous London equities close)

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ECONOMICS

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UK Prime Minister Andy Burnham has welcomed a GBP12 billion investment in wind farms as he prepares to head to the Cop31 climate summit in Antalya, Turkey. Energy company RWE and investment firm KKR have announced the funding which will deliver the Vanguard West and Vanguard East offshore wind farms off the Norfolk coast. The financing includes GBP1 billion from the state-owned National Wealth Fund. The wind farms are set to be delivering power by 2030, with construction set to begin early next year. Burnham says: "This major investment in UK renewables is a vote of confidence for building in Britain. "It is great news for billpayers because every turbine we put up is power under British control, not at the mercy of events on the other side of the world." RWE says the Vanguard projects represent one of the UK's largest offshore wind developments, generating around 2.8 gigawatts, enough to supply three million homes. Meanwhile SSE has announced the creation of 130 jobs in the latest stage of its Berwick Bank B wind farm project – 80 new SSE roles in Glasgow and 50 new Siemens Energy roles at Montrose Port. SSE chose Siemens Energy as the preferred supplier for turbines and substation platforms for Berwick Bank B, around 38 kilometres off the Scottish coast in the outer Firth of Forth.

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BROKER RATINGS

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Deutsche Bank Research raises Unilever to 'buy' (hold) - price target 5,350 (5,300) pence

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Barclays reinitiates THG with 'equal weight' - price target 42 pence

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Investec raises Asos to 'buy' (hold) - price target 560 (500) pence

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COMPANIES - FTSE 100

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The UK Competition & Markets Authority says the proposed GBP33.8 billion merger of Unilever's Foods business with Hunt Valley, Maryland-based condiment maker McCormick & Co Inc could substantially reduce competition in the UK. The watchdog says it is considering whether to accept undertakings from the companies to address its concerns, giving them until November 18 to submit proposals. If no undertakings are offered, the CMA will refer the merger for an in-depth investigation. McCormick, which owns brands including French's mustard and Frank's Red Hot sauce, agreed in July to merge with Unilever's Foods business and seek a secondary listing in London. The deal is expected to be completed by mid-2027.

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Metlen Energy & Metals announces plans to float its wholly owned Greek infrastructure subsidiary Metka on Euronext Athens through an initial public offering expected to raise around EUR250 million from the issuance of new shares. The offering will also include existing shares sold by Metlen, which expects to retain an indirect majority stake following the listing. Proceeds from the new shares will primarily fund investments in public-private partnerships and concessions, alongside selected opportunities in real estate and Southeastern Europe. METKA reports revenue of EUR869 million and earnings before interest, tax, depreciation and amortisation of EUR158 million for the 12 months to June 30, with a construction backlog of around EUR2.1 billion and adjusted net cash of EUR166 million. The company targets a dividend payout of approximately 35% of profit after tax and medium-term construction Ebitda margins in the low teens.

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Spirax Group reiterates its full-year guidance after reporting stronger organic sales growth and improved margins in the four months to October 31 compared with the first half. The thermal energy and fluid technology specialist says organic sales growth and adjusted operating profit margin for the first 10 months of 2026 are in line with expectations, supported by continued momentum across its three divisions. Steam Thermal Solutions benefits from a larger order book and stabilising demand in China, while Electric Thermal Solutions maintains strong growth, supported by semiconductor demand. Watson-Marlow Fluid Technology Solutions also reports accelerating growth in its biopharmaceutical business. Spirax continues to expect mid-single-digit organic revenue growth for 2026 and an adjusted operating profit margin above the 20.0% recorded in 2025, alongside cash conversion of around 90%. Net borrowings fell to GBP541.6 million on October 31 from GBP618.2 million on June 30, while its net debt-to-Ebitda ratio improved to 1.3 times from 1.6 times.

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COMPANIES - FTSE 250

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Taylor Wimpey lowers its full-year expectations as higher mortgage rates and living costs weigh on housing demand during a subdued autumn selling season. The housebuilder now expects around 10,500 UK home completions in 2026, excluding joint ventures, with adjusted operating profit around the bottom end of the company-compiled consensus range of GBP262 million to GBP299 million. Its net private sales rate falls to 0.60 homes per outlet per week between June 29 and November 8 from 0.63 a year earlier, while the cancellation rate remains at 17%. The order book stands at 6,839 homes, valued at around GBP1.98 billion, down from 7,253 homes worth GBP2.12 billion a year earlier. Taylor Wimpey continues to expect year-end net cash of around GBP250 million, after returning approximately GBP240 million to shareholders through dividends and buybacks. It also welcomes the UK government's Your First Home scheme, saying it is well positioned to participate as further details emerge.

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ITV reports a 1.2% decline in total revenue to GBP2.76 billion in the nine months to September 30 from GBP2.80 billion a year earlier, as weaker advertising demand offsets growth in digital revenue. ITV Studios revenue falls 1.3% to GBP1.33 billion from GBP1.35 billion, while Media & Entertainment revenue declines 1.0% to GBP1.43 billion from GBP1.45 billion. Digital revenue rises 7.0% to GBP461 million, with streaming hours up 29%. Total advertising revenue falls 1.0% over the nine months, including an 8.0% decline in the third quarter. ITV now expects total advertising revenue to fall around 5% to 10% in the fourth quarter and 2% to 3% for 2026 as a whole, and identifies GBP30 million in additional temporary cost savings. It maintains expectations for good full-year revenue growth at ITV Studios, with its adjusted operating margin at the lower end of the 13% to 15% range. ITV says the planned sale of its Media & Entertainment business to Sky remains on track for completion in the second half of 2027.

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OTHER COMPANIES

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Fuller, Smith & Turner expects full-year adjusted pretax profit to exceed current market expectations following a strong first half. The pub and hotel operator reports pretax profit of GBP28.5 million for the 26 weeks to September 26, up from GBP21.1 million a year earlier, as revenue rises 6.5% to GBP220.9 million from GBP207.5 million. Adjusted pretax profit increases 25% to GBP28.2 million from GBP22.5 million, while like-for-like sales at managed pubs and hotels grow 6.1%. Fuller raises its interim dividend by 6.0% to 8.35 pence per share from 7.85p. Like-for-like sales rise 5.8% in the first 32 weeks of the financial year, while Christmas bookings are 16% ahead of last year. Separately, the company announces that Richard Fuller will retire from the board on January 31 after 42 years.

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Heathrow Airport reports a 1.0% decline in passenger numbers to 7.3 million in October, despite strong demand during the half-term holiday period. Passenger traffic for the first 10 months of 2026 falls 0.6% to 70.2 million, with Middle East traffic down 23% year-on-year, partly offset by a 6.3% increase in Asia-Pacific passengers. Cargo volumes rise 5.8% to 145,137 metric tonnes in October, while aircraft movements decline 3.4% to 39,809. Heathrow also highlights progress on its proposed third runway expansion, including an agreement to use Welsh steel and support from regional airports. The airport says 60% of the economic growth generated by expansion is expected to benefit areas outside London and the South East.

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By Eva Castanedo, Alliance News senior economics reporter

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