FirstGroup to buy York Pullman Bus Co, Paragon delivers confident outlook

London open

The FTSE 100 is expected to open 32 points higher on Friday, having closed up 0.03% on Thursday at 7,529.73.

Stocks to watch

FirstGroup on Friday signed a deal to buy York Pullman Bus Company for an undisclosed sum. York Pullman provides home-to-school and college contracted services and private hire operations including rail replacement services, and operates a small number of local bus routes on behalf of several local authorities. It has a mixed fleet of more than 130 vehicles with varying passenger capacity which has enabled it to build a broad range of customers. For the year ended to December 2022, York Pullman reported revenues of around £10m and profit before interest and tax of £2m.

Paragon Banking, the FTSE 250-listed mortgages, savings accounts and business finance provider, has delivered a confident outlook for the current financial year as it reiterated guidance following a solid first quarter. New lending across the business for the quarter to 31 December was significantly down at £610.7m, from £861.7m the year before, though the bulk of that decrease comes from buy-to-let lending which was expected. "The board's FY24 guidance for margins, new business flows, operating costs and RoTE remain unchanged, although margins are currently running slightly ahead of expectations," the company said.

3i Infrastructure said in an update on Friday that its portfolio companies, including TCR, ESVAGT, Future Biogas, Tampnet, Valorem, and DNS:NET, had shown positive recent performance, with TCR expanding its global presence and ESVAGT signing a significant 15-year contract. The FTSE 250 firm noted the recent completion of the sale of its 25% stake in Attero, which yielded €214m in net sale proceeds and represented a 31% uplift in valuation. It said it was on track to meet its 2024 dividend target of 11.9p per share, with a solid financial position, having reduced its cash balance by paying an interim dividend in January.

Newspaper round-up

Car owners who pay for their insurance monthly rather than with a one-off lump sum are being charged interest of more than 30%, research has found, in what has been described by campaigners as a “poverty premium”. Insurers give customers the choice of paying one annual premium or breaking it up and paying over the course of the year. – Guardian

Britain’s beleaguered stock market has left City bosses increasingly nervous about the threat of foreign takeovers, according to new research. The majority of FTSE 350 board members surveyed by investment broker Deutsche Numis said their companies are at a greater risk of being acquired by buyers overseas in 2024. – Telegraph

The United Arab Emirates’ stake in the telecoms operator Vodafone is a threat to Britain’s national security, ministers have found. Deputy Prime Minister Oliver Dowden intervened to demand protection from the Gulf state after it became Vodafone’s biggest shareholder with a 14.6pc shareholding worth £2.7bn. Mr Dowden said Vodafone, which holds sensitive Whitehall contracts and owns critical infrastructure including undersea cables, was at risk of “material influence” by the UAE. – Telegraph

The chairman of The Spectator called on the government to block the Abu Dhabi-backed bid for the Telegraph newspaper group last night on the grounds that no foreign state should own major UK media assets. Speaking on Newsnight, Andrew Neil said: “You cannot have a major mainstream newspaper group owned by an undemocratic government or dictatorship where no one has a vote.” – The Times

US close

The Dow and S&P 500 both hit new record highs on Thursday after an upside surprise in US economic growth lifted sentiment, with airline stocks and IBM among the most prominent risers of the day.

The Dow gained 0.6% to a new closing peak of 38,049.13 with only four constituents in negative territory by the end of play.

The S&P 500 rose 0.5% to set the fifth consecutive closing record of 4,894.16. The Nasdaq edged 0.2% to 15,510.5 – its highest in over two years.

The US economy grew at a year-on-year rate of 3.3% in the fourth quarter, according to preliminary estimates released by the Bureau of Economic Analysis on Thursday.

This was a big slowdown from the significant 4.9% expansion registered in the third quarter, but will have come as a surprise to many economists who are broadly looking for growth of just 2.0%.