Daily Stock Market Report (Thur 12 June 2025) - NWF, CER, TSCO, HLMA

Good morning! Welcome to Thursday's report.

Spreadsheet that accompanies this report: link.

The Agenda is complete.

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Companies Reporting

Name (Mkt Cap)	RNS	Summary	Our view (Author)
Tesco (LON:TSCO) (£25.5bn)	Trading Update	Q1 LFL sales up 4.6%, UK market share +0.44% to 28.0%. FY exps unch: adj op profit £2.7-3.0bn.	AMBER (Roland) [no section below] Today’s update shows Tesco continuing to leverage its position as the UK’s largest supermarket (and one of the best managed). Market share has increased by 0.44% to 28%, nearly double that of second-place Sainsbury at 15.1%. Management says that the market remains “intensely competitive”, but the company is relatively well placed to deal with this thanks to its scale. UK LFL sales were up 5.1% ex-fuel in Q1, which I’d guess is slightly ahead of inflation. This supports the narrative on volume gains and increased market share. With a forward P/E of 14 and 3.6% yield, Tesco’s share price looks about right to me, so I’m leaving our neutral view unchanged
Halma (LON:HLMA) (£11.5bn)	Full Year Results	SP +5% Rev +11%, adj PBT +16% to £459.4m. 46th year of dividend growth. FY26 outlook “positive”: upper single digit organic revenue growth, adjusted EBIT margin modestly above the middle of the target range 19-23% (adjusted EBIT margin for FY March 2025 was similar at 21.6%).	AMBER/GREEN (Graham) [no section below] One of the most impressive stocks in the UK market has posted another strong set of results which I believe are ahead of expectations. There is a 7% increase in the final dividend. However, given the high valuation at which this stock trades, the trailing yield works out at only around 0.7% (forecast yield 0.8%). Applying a simple PEG ratio to the results gives an answer of 2.4x (adjusted) or 3.3x (actual). Given that the growth outlook is fairly modest this implies that the market places a very high premium on Halma’s earnings - a reasonable stance, given the solid track record. AMBER/GREEN seems to be a reasonable stance to take on this High Flyer, as its performance can’t be faulted. But given the valuation, I think that new investors here are likely to need a very long time horizon.
GCP Infrastructure Investments (LON:GCP) (£619m)	Interim Results	Net assets -6.6% YOY to £861.7m. NAVps -5% to 102.3p. H1 divi 3.5p (unch).
Cerillion (LON:CER) (£560m)	Proposed Secondary Placing (Wed - after market close)	SP -16% at 1,600p CEO Louis Hall announces plans to sell 1.3m shares at 1,500p, equivalent to c.£20m. My sums suggest this is equivalent to c.15% of his previous 30.5% holding, leaving him with a c.26% stake	AMBER (Roland) [no section below] This placing price represents a chunky 21% discount to yesterday’s closing price of 1,900p. It’s a little disappointing to see such a big discount, as it suggests to me that institutional demand may not have been that strong. Assuming this placing completes as planned, institutional buyers will enjoy an immediate profit while private investors will simply see the value of their shares slump. If Cerillion continues its strong long-term growth this may not matter too much. But a ValueRank of 4 and a forward P/E of 30 suggest to me that current growth expectations are in the price. The company also recently warned of an H2 profit weighting. I’m going to maintain the neutral view I took in May.
PayPoint (LON:PAY) (£534m)	Results for year ended March 2025	Rev +1.4%, adj PBT +10.2% to £68m. Extended buyback. FY26 outlook in line with exps.
Crest Nicholson Holdings (LON:CRST) (£486m)	Half-year Report	H1 in line, FY guidance unch. H1 rev -3.1%, completions -6%, adj op profit +92% to £11.9m.
Custodian Property Income Reit (LON:CREI) (£390m)	Full Year Results	EPRA EPS +4.9% to 6.1p, dividend +3.5% to 6.0p. NAVps +2.9% to 96.1p.
Origin Enterprises (LON:OGN) (£326m)	Trading Update	Rev +4.1% YTD, with good organic growth. FY adj EPS guidance 50 to 52 cents.
Idox (LON:IDOX) (£276m)	Half Year Results	Rev +4%, op profit +14% to £6.4m. Adj EPS +17% to 1.48p. Record H1 orders, outlook in line.
Norcros (LON:NXR) (£240m)	Results for year ended March 2025	Rev -6.1% (+0.9% LFL CCY). Adj PBT +0.3% to £36.5m. YTD sales -1.8% LFL, FY26 exps unch.
Benchmark Holdings (LON:BMK) (£178m)	Interim Results	H1 rev from cont. ops -22% due to sales pause. Adj EBITDA -56%. Net cash £126m. Outlook in line.
Team Internet (LON:TIG) (£155m)	10-year contract to operate .co domain	Colombia’s .co domain has over 3m registrations. TIG JV will retain 8% of gross revenue.
Motorpoint (LON:MOTR) (£139m)	Full Year Results	In line, rev +8.0%, return to profit with PBT of £4.1m. EPS 3.7p, div 1.0p. FY26: “positive momentum”
John Wood (LON:WG.) (£128m)	Extension of PUSU deadline	Deadline for firm offer from Sidara extended to 30/06/25. Working on refinancing and FY24 accounts.
JZ Capital Partners (LON:JZCP) (£122m)	Full Year Results	NAV -13% to $274.6m. NAVps -0.5% to $4.06. Realised $47.4m. Portfolio $167m + $77m cash.
Avation (LON:AVAP) (£98m)	Sale of ATR Aircraft from Orderbook	Opportunistic deal releases $5m in net cash proceeds, may be used to deleverage.
NWF (LON:NWF) (£86m)	Trading Update & Acquisition	Slightly ahead of expectations as strong Feed results offset a disappointing performance in Food. PBT also boosted by one-off finance savings. Acquisition in fuel distribution, no price given. Net cash £6m.	AMBER/GREEN (Roland) Profits for the year just ended should be higher than expected, due to a mix of trading benefits and one-off finance savings. I like this business but I’m a little concerned by slowing growth and apparent management issues in the Food business over the last year. I don’t want to over-react, given positive overall progress. But I think a measure of caution may be prudent until we learn more, despite NWF’s solid track record.
Christie (LON:CTG) (£38m)	AGM Trading Update	Encouraging demand with robust lender and investor appetite. Full year expectations unchanged.
Hercules (LON:HERC) (£37m)	Acquisition of Quality Transport Training	Increases capacity of Hercules Academy in West Midlands. QTT’s employees will transfer there.	No price given.
EnSilica (LON:ENSI) (£34m)	Contract Update	Extended royalty agreement, estimated worth c. $28m over 10 years (previously $15m over 5).
Gear4music (HOLDINGS) (LON:G4M) (£31m)	Asset Purchase	Buys stock from administrators with cost value of £2.4m. Price: £1.2m.
Manx Financial (LON:MFX) (£26m)	2024 Results Advance Guidance	FY Dec 2024: anticipating 41% increase in PBT to c. £9.9m. Results to be released by 25 June.
Revolution Beauty (LON:REVB) (£25m)	Update on Formal Sale Process	Evaluating proposals from a number of parties. Also engaging with shareholders re: equity raise.
Symphony Environmental Technologies (LON:SYM) (£18m)	Preliminary Results	Rev +4% (£6.59m). Operating loss £1.09m (previous year: £1.99m). Q1 loss substantially reduced.
Mind Gym (LON:MIND) (£17m)	Full Year Results	Rev -14%. Adj. EBITDA £1.0m, statutory loss £6.2m. Cash £0.6m.
Abingdon Health (LON:ABDX) (£13m)	€2m contract win for companion diagnostic health	Most revenue will fall into FY26. “..underlines the strength of our fully integrated CDMO service”.
Pod Point group (LON:PODP) (£9.5m)	Full Year Results & Recommended Cash Offer	Utility group EDF has made a cash offer of 6.5p per share (£10.6m), recommended by PODP’s board.	PINK
Mobile Tornado (LON:MBT) (£4.6m)	Full Year Results	Rev -10%. Adj. LBITDA £0.6m. New CEO. 2025: renewed sales momentum. Material uncertainty.

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Roland's Section

NWF (LON:NWF)

Unchanged at 172p (£85m) - Trading Update & Acquisition - Roland - AMBER/GREEN

NWF Group plc ('NWF' the 'Company' or the 'Group'), the specialist distributor operating in UK markets, today provides a trading update for the financial year ended 31 May 2025 ("FY25") and announces the bolt-on acquisition of Pinnock Brothers.

Today’s update from this AIM-listed distribution specialist is billed as ahead of expectations. However, the share price is flat this morning, with the market perhaps sharing my view that the majority of today’s beat is due to one-off finance savings rather than trading outperformance.

Let’s take a look.

Trading update: NWF has very precisely provided amended guidance for two different measures of profit today.

• Headline [adjusted] operating profit: this is expected to be “slightly ahead of expectations” for the year ended 31 May 2025 due to stronger trading than expected, albeit with a different mix – see below.

• Headline pre-tax profit: this is expected to be “ahead of expectations” – a larger upgrade. This is due to the operating profit beat plus the late delivery of some new vehicles, resulting in lower lease costs than expected.

• Year-end net cash was £6m after paying for acquisitions, also ahead of expectations.

Market expectations are helpfully provided in the footnote (useful, as we don’t have access to any broker notes for NWF):

• FY25 consensus headline operating profit: £16.0m (FY24: £14.2m)

• FY25 consensus headline pre-tax profit: £11.7m (FY24: £12.5m)

• FY25 consensus net cash: £3.1m

Assuming a beat of less than 5%, NWF shares are trading on c.10x earnings at current levels, which is fairly typical for this business:

This business trades through three semi-autonomous divisions, Fuel, Food and Feed. Today’s commentary on each of these is worth noting and contains some mixed news.

Fuel: fuel volumes last year were in line with the prior year, with an increase in demand for domestic heating oil offsetting lower commercial volumes. However, margins are said to have improved, with the benefit of cost savings and new initiatives to improve sales and fleet efficiency.

Fuels is the largest business and contributed over half group operating profit last year. However, it’s a mature market that’s arguably in the early stages of decline.

NWF’s strategy is to act as a consolidator, buying up smaller local firms. The company has made two acquisitions recently (including one announced today) that add 55m litres or 8% to NWF’s existing volumes. It will be interesting to see if this volume increase is reflected in the FY26 results.

Food: a year ago, NWF was using overflow storage to cope with strong growth and had committed to building a new warehouse to add capacity. In the intervening period, something seems to have changed:

The business had a disappointing year generating lower profitability than planned.

In today’s results the company reports average storage volumes of 156,000 pallet spaces last year (FY24: 137k), which was “lower than anticipated”.

The new 52,000 pallet warehouse at Lymedale completed to budget and schedule in Q1, but it has not filled up as quickly as expected:

The warehouse is operating well but continues to have excess capacity as conversion of the customer pipeline has been slower than anticipated, and continues to be a focus for the business.

NWF says that measures have been taken to improve performance in Food, including “management changes and a restructuring process to right-size the cost base”.

In addition to this, the company says it’s continuing to work with advisors on resolving IR35 payroll tax issues relating to “a conflict of interest” that was discovered in H1 (relating to the provision of transport services).

I’ve previously had a very positive view of the Foods business. But things seem to have gone a little off track over the last year.

Feed: it looks like some of the weakness in Food has been offset by a stronger performance in Feed, with “overall performance ahead of expectations”.

NWF says that strong milk prices have encouraged dairy farmers to maximise [milk] yields from their herds, boosting demand for feed. As a result, “volumes in FY25 were ahead of the prior year”.

An investment in “moist feed production” has also gone well, generating customer demand ahead of plan.

Roland’s view

I’ve previously been a fan of this business, which delivered strong growth under its previous long-time CEO Richard Whiting, who was in charge for 15 years before retiring in March 2024.

This steady track record is also reflected in an impressive 28-year record of dividend growth. Against this backdrop, I think the current 4.8% yield could be attractive:

However, I’m a little concerned by the apparent multiple problems in the Food business over the last year. To me, these seem to suggest possible problems with management and culture in this division.

While Fuel and Feed are both fairly mature markets with adequate capacity, Food was previously a core engine of growth for NWF. My impression from previous results webinars is that current CEO Chris Belsham saw this as a key market for expanding the business, potentially by creating a national footprint.

In fairness, changes are underway and last year’s setbacks may simply be a bump in the road. The Fuels business seems likely to remain a reliable source of profits and I believe both Fuels and Feed have sufficient scale to remain competitive in their regions.

On balance, I think the NWF shares look fairly priced at 1x book value and am encouraged by today’s upgrade. To reflect recent share price gains and my mixed view on last year’s performance, I’m going AMBER/GREEN ahead of the company’s full-year results in July.