Barclays upgrades guidance and launches £500m buyback

Barclays (BARC) delivered another solid quarter, achieving a return on tangible equity of 10.6% in Q3 and upgrading its 2025 target to above 11%. Profit before tax came in at £2.1 billion on income of £7.2 billion, up 9% year-on-year, with all divisions reporting double-digit returns. The bank also announced a £500 million share buyback and plans to move to quarterly buyback updates, signalling confidence in its capital generation and balance sheet strength.

For investors, the update confirmed Barclays’ steady progress towards its medium-term targets, including a RoTE above 12% by 2026 and at least £10 billion of capital returns over 2024–26. With a CET1 ratio of 14.1% and tangible net asset value now 392p, the bank is maintaining robust capital buffers while rewarding shareholders, reinforcing its position as one of the UK’s most reliable income and value plays in the sector.

BP steadies as refining margins strengthen

BP (BP.) issued a third-quarter trading statement indicating a broadly stable operational performance ahead of its full results in early November. The group expects upstream production to be higher than the prior quarter, supported by stronger gas output in its US bpx operations and increased activity in the gas and low carbon segment. Refining margins improved by an estimated $0.3 to $0.4 billion while turnaround activity eased, though oil trading was weaker and the Whiting refinery outage trimmed some of the benefit.

Investors will take reassurance from BP’s steady leverage profile and improving downstream margins, even as trading conditions normalise from last year’s extremes. With results due on 4 November, attention will turn to cash flow and shareholder distributions, particularly after a year of mixed sentiment across the oil majors.

Bytes builds resilience amid changing incentives

Bytes Technology (BYIT) delivered half-year results showing modest top-line growth and solid customer retention despite a softer public sector backdrop. Gross invoiced income rose 9% to £1.34 billion and revenue increased 2.5% to £108 million, helped by strong demand for services, which grew more than 40%. Operating profit dipped 7% to £33.1 million as higher headcount and wage costs offset lower bonuses, and earnings per share slipped 5.1% to 12.03p.

While profit margins have narrowed, Bytes continues to demonstrate consistency and customer loyalty across its base, with 98% of gross profit coming from repeat clients. As IT budgets stabilise, the business looks well placed to capture incremental demand from digital transformation and cybersecurity, areas where it has strong vendor partnerships and deep sector expertise.

HSBC faces scrutiny over Hang Seng bid

HSBC (HSBA) grabbed headlines this week with a $14 billion offer to buy the remaining 37% of Hong Kong’s Hang Seng Bank it does not already own. The move marks CEO Georges Elhedery’s first major strategic swing and drew a mixed reception from shareholders, who questioned the timing and valuation. The offer represents a 30% premium and would be funded by pausing share buybacks for three quarters while HSBC restores its capital ratio, a decision that unsettled some investors.

While the deal could eventually strengthen HSBC’s foothold in Asia and simplify its structure, the lack of transparency on cost synergies and credit risk has clouded sentiment. The valuation gap between buyer and target will take careful execution to justify, and the near-term pause in buybacks adds another headwind for investor confidence.

Morgan Advanced Materials under pressure as markets soften

Morgan Advanced Materials (MGAM) reported a mixed third-quarter update, with sales for the first nine months of 2025 down 3.6% year-on-year on an organic constant currency basis. The third quarter showed slight improvement, with revenue up 1.6%, suggesting stabilisation in several end markets. However, weakness persisted in the semiconductor segment as customers delayed orders into 2026, while European industrial demand became more uncertain.

For investors, Morgan’s latest guidance confirms a challenging near-term outlook but also underlines a prudent approach to capital management. The group’s long-term exposure to high-performance materials for energy and electronics gives it structural relevance, yet markets will likely wait for clearer signs of a demand recovery before re-rating the shares.

Mitie makes it look easy as guidance rises and buybacks return

Mitie (MTO) surged higher this week following an upbeat trading update that lifted full-year profit guidance and reignited share buybacks. The UK’s largest facilities management and compliance group now expects operating profit of at least £260 million for FY26, up from £234 million last year, supported by strong organic growth and an expanding contract pipeline. The announcement of a new £100 million buyback programme reinforced management’s confidence in the group’s balance sheet and operational momentum.

The integration of Marlowe, acquired in August for £350 million, is progressing smoothly and expected to deliver £30 million of cost synergies by FY28. Strong cash generation and a clear strategy for growth and shareholder returns underpin the investment case, and the latest upgrade signals that Mitie’s transformation into a more profitable, cash generative business is gaining pace.

Whitbread feels the heat as costs bite and profits cool

Whitbread (WTB) saw its shares come under pressure after reporting a dip in profits and revenue for the first half of FY26. Adjusted pre-tax profit fell 7% to £316 million and revenue declined 2% to £1.54 billion, as softer food and beverage sales and rising cost inflation weighed on margins. Accommodation sales at Premier Inn UK remained broadly flat but continued to outperform the wider market, helping offset some of the pressure from its Accelerating Growth Plan restructuring.

Despite the near-term drag from inflation and one-off restructuring costs, Whitbread reiterated its target to return £2 billion to shareholders through dividends and buybacks by FY30. The balance sheet remains robust, underpinned by a property estate valued between £5.5 billion and £6.4 billion, and management’s disciplined capital recycling provides scope for future reinvestment and income growth.