ITV shares soared on Friday after the group confirmed it had been approached by Sky with an offer to buy its media and entertainment arm for an enterprise value of £1.6bn.

The bid comes shortly after Liberty Global sold half of its stake in ITV, effectively clearing the way for a bid for all or part of ITV.

ITV shares soared 18% in early trade on Friday. Although shares spiked higher, ITV is only trading at levels seen in early October.

Nick Purves, Fund Manager at Temple Bar Investment Trust, previously argued on a UK Investor Magazine virtual presentation that ITV’s sum of its parts is worth far more than the value attributed to the group as a whole.

It appears that major players in the industry share this view, with Sky the first to make a move for the broadcasting arm. Talkover speculation has swirled around ITV for years, and it wouldn’t be surprising if other parties throw their hat in the ring.

The reported £1.6bn enterprise value seems a little low, given that the M&E business recorded £250m EBITA in 2024.

One would expect this to rumble on.

The FTSE 100 recovered losses on Thursday after the Bank of England left interest rates at 4%, as expected.

London’s leading index started the day positive, but the gains quickly turned to losses, and the FTSE 100 was trading down around 0.35% heading into the Bank of England’s interest rate decision.

However, the FTSE 100 popped higher in the wake of the interest rate decision, with the 9 voters split 5:4 in favour of keeping rates unchanged. Such a tight vote suggests that the Bank of England will cut rates at its next meeting, which has fired up the equity bulls.

“With economic growth stagnating and cracks appearing in the jobs market it seems only a matter of time before the next interest rate cut arrives,” said Rob Morgan, Chief Investment Analyst at Charles Stanley.

Beyond the Bank of England’s rate decision, it was a busy day for FTSE 100 corporate updates with BT, AstraZeneca, Hikma, Smith & Nephew, Sainsbury’s, and Diageo reporting results.

It was a bloodbath for some.

Hikma and Smith & Nephew were both down around 10% after delivering disappointing results.

Investors dumped Hikma after the pharma group reduced its profit guidance to $730m to $750m from $730m to $770m amid increased competition and supply chain issues.

Smith & Nephew

Smith & Nephew felt the market’s wrath after missing estimates. Following a strong run since the April lows, Smith & Nephew was vulnerable to a pullback, and investors took the opportunity to book profits on Thursday.

“A slight miss to expected revenue growth amid weakness in its US knee implants business has put Smith & Nephew in the hospital ward,” said AJ Bell investment director Russ Mould.

“Smith & Nephew is a turnaround story, and it was finally gaining traction after a long wait. However, today’s update might leave investors worried the recovery efforts are running out of steam.”

BT had a positive reaction to its half-year results, with investors focusing on a 2% dividend increase and looking past falling revenues. BT shares were 4% higher at the time of writing.

“Cash flow was the real disappointment, falling well short as spending and some other moving parts weighed more than expected,” explained Matt Britzman, senior equity analyst, Hargreaves Lansdown

“Expectations were low, and early trading suggests markets are taking a glass-half-full approach, but this update still feels softer than hoped.”

Diageo

Diageo shares fell by more than 4% after cutting its forecast amid continued growth woes. China is now proving to be a soft spot for the drinks giant that can’t seem to catch a break.

Adam Vettese, market analyst for eToro, said: “Diageo’s latest update reveals a somewhat concerning outlook with some signs of resilience but also significant headwinds, and a cut in forecast being the main talking point.”

“While there was a steady performance in Europe, the slowdown in the US and China poses a real challenge. The impact of elevated living costs is visible, with US consumers spending more but buying less. This is weighing heavily on premium spirits demand and profitability, as well as stiff competition in the tequila space.”

AstraZeneca shares were largely flat following the release of Q3 earnings, which showed 11% revenue growth.

We take a look at three dividend shares with strong income characteristics and yields that beat the benchmark FTSE 100 dividend yield of around 3.2%.

Our dividend shares for consideration include a UK equity trust, an exciting small-cap, and a FTSE 100 stalwart.

Dunedin Income Growth Investment Trust

The Dunedin Income Growth Investment Trust (DIGIT) offers an attractive proposition for income-focused investors seeking sustainable, growing dividends from UK equities.

DIGIT offers an attractive 6.5% dividend yield, substantially ahead of both cash rates and the FTSE All-Share Index. The trust is also targeting a 34% dividend increase next year.

The Trust boasts a 43-year track record of maintaining or growing its dividend, demonstrating resilient income delivery through multiple market cycles and periods of volatility. This could be particularly valuable given that global equities are trading near highs.

The Trust’s differentiated positioning includes 49% invested in sub-£10 billion companies and 17% in European holdings, providing investors with exposure beyond the mega-cap dominated FTSE All-Share.

Investors choosing the trust will benefit from a “triple discount”. Quality stocks are undervalued relative to the market, the UK market trades at a substantial discount to global equities, and the trust’s shares trade at a discount to net asset value.

Adsure Services

Aquis-listed Adsure Services has consistently increased its dividend since listing in 2023, and it yields 7.6% at the current share price of 25p.

The dividend is backed by recurring revenues from long-term contracts with government-funded organisations. Supporting its ability to increase dividends in the years to come is its ‘Fit for the Future’ strategic initiative that aims to drive underlying efficiencies through the deployment of cutting-edge technologies.

In addition to the deployment of new software to enhance the work of its internal audit operatives, the company is readying the launch of its proprietary ‘TIAA Insight’ AI tool designed to improve key utilisation metrics.

This promises to drive further expansion of Adsure’s EBITDA margin, which rose to 11.8% from 9.4% in the year ended 31 March 2025. EBITDA jumped 35% during this period.

This is a company to tuck away and await further growth. 

BP

BP is an age-old income favourite. Yes, it’s involved in oil extraction that isn’t ESG-friendly, but BP’s scale and ongoing demand for fossil fuels will support earnings in the years to come.

It’s also an ‘ugly duckling’ of a stock that has detached from its intrinsic value and lags behind peers such as Shell in terms of valuation.

Recent results were unspectacular but reaffirmed its ability to generate cash as operating cash flow rose to $7.8bn in the third quarter. Lower oil prices presented a headwind during the period, and investors will be pleased to see OPEC+ taking measures to manage the supply glut, which has weighed on prices.

BP is streamlining its business through a series of divestments that will bolster the balance sheet and provide a strong base for future growth.

With a 5.2% dividend yield, BP offers both value and the potential for capital appreciation. The firm is also committed to share buybacks, announcing $750m in fresh purchases this week.

A worthy addition to any income portfolio.

Vistry said it is confident it can deliver profit growth in FY25 in a trading statement released on Thursday, pointing to strong demand from its partner model despite challenging market conditions.

The group said demand from Registered Providers and Local Authorities has continued to strengthen significantly, and the company expects to conclude several new Partner Funded deals in Q4.

It was surprising to see shares dip in early trade, but the weakness was bought into, and Vistry turned positive as the session progressed.

Vistry’s overall sales rate since July 1st has jumped 11% compared to the same period last year, reaching 0.81, up from 2024’s 0.73.

Perhaps investors were put off by the falling order book, which fell to £4.3 billion from £4.8 billion in 2024.

“Vistry’s showing signs of returning to life after a dismal period of operational slip-ups and profit guidance downgrades, as the group saw its sales rates climb 11% higher so far in the second half,” explained Aarin Chiekrie, equity analyst, Hargreaves Lansdown.

“Importantly, the UK government’s £39 billion pledge to increase the amount of affordable housing is having the desired effect. The money is starting to flow, and that’s seen partner-funded activity pick back up, with several new deals expected to be confirmed in the final quarter. As these houses are built, that will convert into revenue and should help the top line return to growth territory.”

“House prices are on the rise, demand is outstripping supply, and build-cost inflation remains at manageable low single-digit levels, with the latter being helped by Vistry’s huge scale, allowing it to negotiate harder on building materials.”

Vistry said build cost inflation remains controlled at low single digits, with material pricing having stabilised, while labor cost pressures are being managed through improved work visibility and continuity.

Filtronic plc has landed a €7 million contract to supply RF assemblies for a major Low Earth Orbit (LEO) satellite constellation programme.

The three-year deal with a leading European aerospace manufacturer marks another milestone for the UK-based RF solutions specialist after announcing a string of new wins this year, including several with Elon Musk’s SpaceX.

Filtronic will produce complex RF assemblies in-house, specifically designed for the harsh conditions of the space environment.

The LEO satellite constellation market is experiencing rapid growth as companies race to provide global broadband coverage. Multiple operators are launching thousands of satellites to create these constellations, creating substantial opportunities for specialised suppliers like Filtronic.

“This contract highlights our increasing diversification across customers within the space markets and reflects the trust placed in Filtronic’s capability to deliver at scale for the most demanding space applications,” said Nat Edington, Chief Executive Officer.

“As demand for satellite connectivity continues to grow, this is another milestone in Filtronic’s mission to support the growing satellite market for Non-Terrestrial Networks, Mobile Satellite Services, and Direct-to-Device connectivity.”