With the January trading updates out of the way, we examine the outlook for the UK tech sector. As we entered January, the mood among investors was downbeat, given the tepid economic outlook, the changes announced in the UK Autumn budget, combined with the ongoing geopolitical uncertainties. However, the January trading announcements, across the sector, were better than expected, with two earnings outlook upgrades to every downgrade, on our estimates. While uncertainties prevail, including over the US regime transition and trade wars, attractive business drivers remain in place, and we see an increased opportunity for upgrades as the year progresses.
We have identified 21 takeovers of UK technology and technology-related businesses since the COVID-19 pandemic began in 2020, which have a deal value of at least £100m.
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