Daily Stock Market Report (Thur 7th August 2025) - RBN, EMR, SDG, MER, EPWN, RCP, VANQ, MGAM

Good morning and welcome to Thursday's report!

All done for today, thank you.

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Spreadsheet accompanying this report: link.

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Companies Reporting

Name (Mkt Cap)	RNS	Summary	Our view (Author)
CRH (LON:CRH) (£49.1bn)	25Q2 Results	Revenue +6% to $10.2bn, Net Income +2% to $1.3bn, Adj EBITDA +9% to $2.5bn. “nderlying demand in our key end-use markets remains positive and we are pleased to raise our guidance for 2025.” FY25 guidance: Net income of $3.8bn-$3.9bn; Adjusted EBITDA of $7.5bn-$7.7bn.
Intercontinental Hotels (LON:IHG) (£13.4bn)	Half-year Report	Underlying rev +5%, op profit +13% ($604m). On track to meet consensus profit expectations.
WPP (LON:WPP) (£4.3bn)	Interim Results	LFL revenue & op profit margin outlook unchanged. FCF guidance £1.1-1.2bn (prev: £1.4bn).	BLACK
Hikma Pharmaceuticals (LON:HIK) (£4.2bn)	Half-year Report	H1 core op profit -7% due to change in product mix. Reiterates full year guidance.
Spectris (LON:SXS) (£4.1bn)	Half-year Report	Orders -2% LFL, sales +1% LfL. Full year adjusted op profit to be in line with management exps.	PINK (under offer)
Harbour Energy (LON:HBR) (£2.94bn)	Half-Year Results & $100 million share buyback	Production guidance 460-475 kboepd. Upgrades free cash flow outlook to $1.0bn (from $0.9bn).
RIT Capital Partners (LON:RCP) (£2.7bn)	Half-year Report	NAV total return 3.4%. Strongest contribution from Private Investments with 9% return.	GREEN (Graham) [no section below] We don’t normally give this any coverage but I’ve been increasingly interested in investment trusts lately, and what they can do for a portfolio, and I know that many readers like to follow them, too. RIT Capital Partners uses bottom-up investment selection in three categories: quoted equities, private investments, and “uncorrelated strategies” (this bucket includes absolute return, credit, bonds and real assets). The idea is to create a balanced portfolio with more consistent returns than you would get from investing 100% in quoted equities. I think the annualised return over the last 10 years is about 7% (the total return is 102.7% over that timeframe). Volatility around the Covid era was still quite high with a drawdown of about 35%, so it would be wrong to think that returns are perfectly smooth. But for a less dramatic approach than pure equities, I think this trust could have some merit. Today’s results show all three of its pillars generating positive results, and modest gearing of 5.8%. I’m GREEN on it due to the large share price discount available: the share price is £19.42, versus NAV of £26.80, and a buyback is underway.
Deliveroo (LON:ROO) (£2.7bn)	Interim Financial Report	Revenue +9%. Loss for the period of £19m due to costs associated with DoorDash acquisition.	PINK (under offer)
Just (LON:JUST) (£2.18bn)	Interim Results	Underlying operating profit £192m (H1 2024: £249m). Strong sales outlook for H2.	PINK (under offer)
Serco (LON:SRP) (£2.1bn)	Half year results	Rev +5% at constant current, organically +3%. Revenue and profit guidance unchanged.
Great Portland Estates (LON:GPE) (£1.37bn)	GPE Completes 141 Wardour Street, W1	Two thirds of building already let or under offer significantly ahead of ERC.
Volex (LON:VLX) (£664m)	AGM Statement	Q1 in line, organic revenue +10.4%. Confident in ability to meet FY2026 expectations.
Morgan Advanced Materials (LON:MGAM) (£630m)	Half-year results	25H1 Revenue -9% to £522.6, adj. Op Profit - 19% to £58m, adj. EPS down 27% to 10.8p. Net debt excl. lease liabilities up 12% to £249.1m. Full year revenue guidance unchanged but full year adjusted operating profit now expected to be around the bottom of the consensus range.	BLACK (AMBER/RED) (Mark) [no section below] With revenue down 9% in H1, it is easy to see why they are struggling to hit their FY operating profit expectations. Helpfully they quantify the range here: consensus range for 2025 adjusted operating profit is £126.3m to £115.6m. 2xH1 adj. operating profit of £58m = £116m, so we can quite easily guess 2x10.8p = 21.6p FY EPS assuming finance charges and adjustments are constant. This is an 11% miss, and with the shares falling 13% today, this remains on a forward P/E of about 9. Not expensive, but then with no real top line or bottom line growth for a decade, they should be. Their adjusting items are restructuring and an ERP implementation, which should be normal parts of running this sort of business, so on an unadjusted (i.e. real) basis the figures look worse. On top of this, there is a decent chunk of debt which has increased 12% over the last year to £249m. They have a decent ROCE, but all the signs are that they can’t reinvest capital at similar rates to generate growth so it does them little good. The more I look at this, the more it looks like an expensive plodder, at least on any of the financial figures we’ve had over the last decade.
Petrotal (LON:PTAL) (£364m)	Q2 2025 Financial and Operating Results	Average Q2 2025 sales & production of 20,578 & 21,039 (Q1: 23,286 & 23,281 respectively). Revision of 2025 production guidance to a range of 20-21kbopd down from 21-23kbopd, on capital spending of $80 million. Q2 Net Income of $17.5m (Q1:£30.8m), cash $142.1m, including $99.3m unrestricted cash
Mears (LON:MER) (£333m)	Interim Results	Revenue +4% to £559m, PBT +5% to £32m, average daily net cash flat at £66.7m, EPS +20% to 27.7p partly due to share count reduction. “The Board expects adjusted profit before tax for the full year to be modestly ahead of market expectations. This positive performance also gives the Board increasing confidence in its expectations for the next financial year.”	AMBER/GREEN (Graham) Those who are more comfortable with this sector might argue that I should be fully GREEN on this stock now, but I'm conscious that earnings are forecast to decline in the years ahead (even after strong upgrades today at Panmure Liberum). Mears has very high exposure to asylum-related contracts whose long-term future is uncertain. As such, I do think that a cheap-ish earnings multiple might be fair.
Gore Street Energy Storage Fund (LON:GSF) (£314m)	Voting Advisers Recommend Vote Against Resolutions	“Both PIRC and ISS have issued clear guidance to shareholders to VOTE AGAINST all resolutions proposed by RM Funds.”
Vanquis Banking (LON:VANQ) (£264m)	Interim Results	25H1 PBT continuing ops of £6.2m (24H1: £46.1m loss), Return on Tangible Equity 3.1%, in line with guidance. Customer balances up 7%, improved credit quality. Financial guidance for 2025 and 2026 remains unchanged. “Vanquis did not participate in discretionary commission arrangements (DCAs), so the Group would not be in scope for this element of any Financial Conduct Authority (FCA) motor finance compensation scheme.”	AMBER/GREEN (Graham) I can upgrade this now as we have a positive, stabilising trading update. The last time I looked at it, it issued a profit warning, and before that, it was suffering from a variety of problems. The balance sheet looks very safe and it trades at a big discount to NAV, so I’m happy to give it an upgrade.
CLS Holdings (LON:CLI) (£258m)	CLS secures over 8,000 sq. ft at The Coade	Lettings totalling 8,040 sq. ft (747 sqm) at The Coade, 98 Vauxhall Walk, London at an average of £48/sqft.
accesso Technology (LON:ACSO) (£176m)	5-Year Extension with Six Flags	Confirms a key enterprise contract renewal as part of its long-standing partnership with Six Flags for accesso Passport® eCommerce ticketing platform across all 42 theme and water parks in North America.
Epwin (LON:EPWN) (£124m)	Recommended Cash Offer	120p cash, 32% premium to last night’s close.	PINK (GREEN) (Mark) This offer from an industry player highlights the value that was on offer here. While I think the chance of a counter offer is slim, and if I held, I’d be tempted to recycle the proceeds into other UK building products suppliers, I see no reason to change the rating at this stage.
Sanderson Design (LON:SDG) (£36.1m)	Half Year Trading Update	HY25 sales down 4% to £48.3m, of which licensing +7% to £4.4m. Net cash £7.5m (FY24: £5.8m) due to planned inventory reduction. FY expectations unchanged.	AMBER/GREEN (Mark - I hold) This is an inline statement. However, it also allays some of my recent concerns about the company’s willingness to cut costs, and the impact of US tariff uncertainty on US sales and licensing deals. As such, the discount to TBV and low forecast EV/EBITDA look increasingly out of place.
Empresaria (LON:EMR) (£22.7m)	Interim Results	25H1: NFI flat at £23.4m, adj. PBT +350% to £0.9m, Net debt excl. leases £16.1m (FY24: £15.1m), no dividend.	PINK (AMBER/RED) (under offer) [no section below] Flat NFI is actually a credible result in current market conditions and compared to larger recruiters who are all down mid-teens per cent. The problem here is that sensible recruiters run with net cash to see them through the tough times. Here there is significant net debt. There may well be an aspect of window dressing here as well, as gross debt is much larger than net debt: “As at 30 June 2025, the Group had financing facilities totalling £37.9m (31 December 2024: £39.6m). Excluding invoice financing, undrawn facilities at 30 June 2025 were £3.7m (31 December 2024: £4.1m).” This means that the acquirer will need to make sure they can fund the debt and working capital as well as the equity. Last week on the DSMR I questioned the credibility of the bidders, and the balance sheet here doesn’t add to the re-assurance that the possible offer will become a firm one.
Robinson (LON:RBN) (£20.9m)	Surplus Property Update	Parts of Walton Mill sold for £700k (+ contingent £315k if there is a resale within 18mo) vs £546k book value. Boythorpe works option agreement gives company £2.85m (vs £613k BV) if buyer receives planning permission within 24 months.	AMBER (Mark) [no section below] It feels like Robinson have been trying to sell this surplus land forever. Although in reality it has only been about a decade. The good news is that they have finally got a number of these parts across the line, and the delays have meant a reasonable uplift in sales price versus book value. Boythorpe in particular could be material. However, so far they have only received a £20k option payment from a buyer seeking planning permission on the site. The cash, together with previous agreed sales, is earmarked for debt reduction. This seems very sensible and reduces the risk here, but is unlikely to excite current or prospective shareholders. The valuation is modest but it probably should be for a plastics packaging manufacturer in a world where every customer will be trying to eliminate single-use plastics wherever possible.
Altitude (LON:ALT) (£14.4m)	Annual Results	FY Revenue +24% to $37.3m, adj. Operating Profit +21% to $3.7m, adj. EPS +11% to 2.24c. Cash $0.7m (FY24:$1.5m).
KRM22 (LON:KRM) (£15m)	Trading Update	H125 revenue +12% to £3.7m, Adjusted EBITDA flat at £0.3m. Cash balance £1.4m (24HY: £1.0m). ARR +20% to £7.2m.
Blackbird (LON:BIRD) (£14m)	Contract win	“... a contract win with an OEM partner for use at a global Winter Games in 2026.”	GN: This is a Reach announcement, i.e. a non-regulatory press release.
React (LON:REAT) (£11m)	Contract Wins	“The Group continues to make encouraging commercial progress, securing a high volume of small and medium-sized contracts in each of its divisions” No figures given.

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Graham's Section

Mears (LON:MER)

Up 3% to 397p (£343m) - Interim Results - Graham - AMBER/GREEN

Mears Group PLC, the leading provider of housing services to the public and regulated sectors in the UK, announces its interim financial results for the six months ended 30 June 2025 ("H1 2025").

A great headline here: Excellent first half performance; solid growth in Maintenance activities and strengthening operating margin.

Some key points:

• Revenue -4% (£559m), “with some normalisation in the Group’s Management-led activities”.

• PBT +5% (£32m).

• Adjusted operating margin improves from 5.2% to 5.6%.

There are “new orders to a value approaching £1.5bn” in an “abnormally busy period for contract rebids”, and Mears has achieved 100% contract retention.

Major customers mentioned include Milton Keynes City Council, Moat Homes, London Borough of Brent and Aberdeenshire Council.

Current trading and outlook:

The business has continued to perform strongly. Increasing confidence in growth momentum of Maintenance-led activities

The precise timing of the normalisation of AASC revenues [GN note: asylum accommodation and support contract] remains uncertain, but there is a clear political drive to see all hotel accommodation exited during 2026, reflected in today's guidance.

The Board expects adjusted profit before tax for the full year to be modestly ahead of market expectations. This positive performance also gives the Board increasing confidence in its expectations for the next financial year

AASC revenues have been responsible for a large percentage of Mears’ total revenues in recent years, so it’s crucial to try to understand how long this might last for.

In a longer “outlook and guidance” section later in the report, the company provides the following:

ARAP is the “Afghan Relocation and Assistance Policy”.

So both AASC and ARAP are expected to see revenue reductions in the years ahead, with particularly large revenue reductions from AASC.

PBT guidance for FY 25 (left-hand column) and the “Medium term” (right-hand column).:

The margin guidance is for an operating margin of 5.3-5.6% (FY25) and 5-6% (Medium term).

Let’s do the calculation for FY25 - a company like Next (which I own) would do this for us, but not every company is like Next!

FY25 maintenance revenue: £600-606m.

FY25 management revenue: £677m.

FY25 total revenue: £1,277m - 1,283m.

Adj. operating margin 5.3-5.6%, so adj op profit should be c. £68-72m (FY24: £63.6m).

Other factors will reduce that to a lower PBT figure, and then apply 25% tax.

Still, it creates a modest earnings multiple:

Broker estimates

Panmure Liberum have put forward an EBIT estimate of £67.7m for the current year (EBIT is typically the same as operating profit). This is consistent with my calculation of c. £68-72m.

Their previous forecast was only £62.5m.

Future years also get upgraded, but they are still falling with lower AASC/ARAP revenues.

The new EBIT forecast for FY26 is £59.1m (previous forecast: £52.6m).

The new EBIT forecast for FY27 is £56.1m (previous forecast: £50.7m.

EPS is forecast to fall from 50p (FY25) to 41.2p (FY26) and then 38.5p (FY27).

Graham’s view

This is a Super Stock with a StockRank of 99, which is a good reason for me to stay positive on it. Last time, Roland was AMBER/GREEN.

I’m inclined to leave this at AMBER/GREEN, but it’s a close decision. Perhaps I should be fully GREEN?

Pros:

• Cheap earnings multiple.

• The positive earnings surprise today is material with upgrades of >10%.

• 100% contract retention proves a high level of customer satisfaction.

• Net cash of £81m before leases.

Negatives:

• High lease liabilities of nearly £300m (it’s the nature of the business, so a harsh criticism).

• The declining forward profile of earnings suggests that it perhaps should trade on a cheap earnings multiple.

• High exposure to particular contract types (AASC/ARAP) that might not be around long-term.

Most of the negatives are to do with the type of business this is, rather than anything Mears has done wrong. By its very nature, this is a lowish-margin services business tied to large contracts that may be lumpy at times.

On balance, I am more comfortable with AMBER/GREEN, but someone who is more comfortable with the sector might feel that fully GREEN is justified, especially considering the very strong StockRank.

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Vanquis Banking (LON:VANQ)

Up 13% to 116.2p (£261m) - Interim Results - Graham - AMBER/GREEN

This is encouraging:

The turnaround of Vanquis remains firmly on track and is gaining momentum. The Group delivered two consecutive quarters of profitability in the first half and has grown gross customer interest-earning balances over the last three quarters.

I was neutral on this in March, which was overly negative, but the company had just released a profit warning with a big impact on 2025 numbers. It looks like I’ll be upgrading my stance today.

Motor finance: no regulatory impact here (but don’t hold me to this!) as Vanquis did not pay discretionary commissions, and their position “is clearly differentiated from the unfair relationships decision” in the test case. The last time we looked at this, they said something similar - this is really just confirmation of what we already knew.

Financial highlights:

• H1 PBT from continuing operations of £6.2m, ROTE 3.1% (guidance: low single digit ROTE).

• Customer balances grew 7% to £2.46bn, with VANQ set to exceed previous guidance of £2.6bn by the end of the year.

• Complaints down 36% year-on-year, with a big reduction in Financial Ombudsman fees, and complaint costs to fall again in H2.

Income Statement: Net interest income hasn’t changed, but impairment charges and operating costs are both much lower, which gives rise to the small profit (vs. very large losses in previous periods).

Balance sheet: tangible net asset value inches higher to £362m. So the stock is trading at a 28% discount to this.

Tier 1 Ratio: a standard measurement of bank safety, this is slightly lower now at 18.5% but still very high by traditional standards. Perhaps even too high! There is a point at which banks aren’t taking enough risk. Although given the recent losses here, it’s understandable that investors would want the reassurance of a strong balance sheet.

Retail deposits provide 84.6% of VANQ’s financing and the average cost of funds is 5.3% - this is on a downward path as rates gradually fall.

Outlook: unchanged, except that customer balances are ahead of the previous target for 2025.

There is no dividend, which is fair enough given the circumstances. Management are focused on “deploying capital to support growth initiatives”. The dividend question will be addressed again when they’ve delivered their strategy next year.

Graham’s view

I tend to look positively on cheap lenders, although I haven't been able to get off “AMBER” on this due to the losses it was experiencing, and then the profit warning in March as it began to stage a recovery.

In hindsight I was too slow getting positive on it, but for what it’s worth I’m happy to be AMBER/GREEN on VANQ today.

Positives:

• There is still a large discount to tangible NAV.

• No motor finance regulatory issue (I think!)

• Accounts are much, much cleaner than they were before:

There is no dividend yet but for investors who can look past that, I think it's a nice candidate for further research:

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Mark's Section

Sanderson Design (LON:SDG)

Up 9% to 54p - Half Year Trading Update - Mark (I hold) - AMBER/GREEN

While sales here are in line, they are also down:

Group sales in the six-month period were in line with Board expectations at £48.3 million (H1 FY25: £50.5 million), down 4% in reported currency and down 3% in constant currency

Product sales are worse if you consider that licensing sales have grown:

Licensing revenue performed well at £4.4 million (H1 FY25: £4.1 million), with strong growth of 22% in underlying performance (licensing revenue excluding accelerated income under IFRS 15)

However, this is undoubtedly good news as licensing is relatively high margin. The picture is complicated as the accounting regulations require them to recognise the licensing revenue from minimum guaranteed sales upfront, whereas the cash will be received over the next few years as products are developed, launched and sold by licensees. The risk is that if the company pushes to make licensing sales for a period, this will show strong growth, but when the signing of new deals tails off the accounting regulations will mean they show declining revenue. That this figure is growing in a tough retail market is a good sign. Good underlying performance is nice to have, but should be expected from previously signed deals. H2 as stronger than H1 on the licensing side last year. They say FY licensing revenue is expected to be broadly similar (i.e. slightly below)

Looking at the details, all regions are struggling, apart from the US. I’m generally not a fan of US exposure, given the highly uncertain tariff and decision-making environment there. However, their designs appear to be gaining traction in this market, despite the headwinds:

The weakness in internal manufacturing is due to their focus on delivering sales from inventory in the period. So it is good news when they say:

Third-party manufacturing at £9.2 million was in line with the same period last year and, as mentioned earlier, our factories' future financial performance has been transformed by the restructuring initiatives implemented earlier this year. The decrease in internal manufacturing revenue at £5.3 million (H1 FY25: £8.0m) was in line with our planned inventory reduction strategy. We continue to expect manufacturing to achieve break-even, or slightly better, for the current financial year.

I have a theory that they have been slow to react to weakening market conditions and cut costs, and part of this was due to the strength of the licensing revenue. The initial downturn in trading last year seems to have caught them by surprise, and given how strong the licensing revenue was last year, and their net cash position, they could still report a profit on lower volumes, so didn’t want to make employees redundant unnecessarily. However, this lack of action in a market that continued to be weak has led to a brokers’ consensus that looks like this:

They appear to have grasped the nettle now, though. As well as getting manufacturing to break-even on reduced volumes, they are targeting central costs:

Continued focus on cost efficiencies - management is well-advanced with a new initiative to further reduce central overhead costs by approximately £1 million on an annualised basis.

Given the consensus for net profit this year is £3.7m, this would be material to the bottom line, at least when fully implemented. However, the impact is already accounted for this year as they say “The Board's expectations for the full year remain unchanged.” Unsurprisingly, given this statement, brokers’ forecasts are unchanged. The other aspect of this that is potentially positive is that one way to get manufacturing to break-even would be to re-allocate some of the costs centrally. They don’t appear to have done this.

One of the other risks of being tardy to implement cost-cutting measures was that their net cash was reducing, and combined with a new lease on their Chiswick headquarters, meant their financial position was weakening:

This appears to have reversed in 25H1, where they have seen an increase in net cash (excl. leases):

The Group's balance sheet has strengthened in the first half with net cash of approximately £7.5 million as at 31 July 2025 compared with £5.8 million at 31 January 2025 (H1 FY25: £9.6 million). The increase in cash reflects a planned reduction in inventory and net cash is expected to continue to build in the remainder of the financial year.

Paid-for research provider Progressive have £8.5m net cash pencilled in for the FY, rising to £11.8m in FY27. Based on their forecasts, Progressive calculate the business is trading on 2.8x EV/EBITDA, dropping to 2.6x for FY27. This looks too cheap, given that the company now appears to have taken the appropriate action to adapt their business to current market conditions.

Mark’s view

This is ultimately an inline update. However, it also allays some of the concerns I’ve had about this business: were they willing to cut their coat according to their cloth? Would further licensing deals be difficult in current market conditions? Would tariffs have a severe impact on their US business? As such, the current rating of 2.6x FY27 EV/EBITDA looks too low for a company that looks close to a cyclical low in trading. Backing up this view, I calculate that they still trade at a discount to TBV, and I am sure that their intangible assets have value, too, as they are generating decent licensing revenue. I am happy to retain my AMBER/GREEN view (and holding).

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Epwin (LON:EPWN)

Up 30% to 118p - Recommended Cash Offer - Mark - PINK/GREEN

Good news for holders here as it is a takeover offer. The premium offered is the fairly standard 30%ish to last night’s close. Shareholders will get 120p in cash. It doesn’t look particularly generous compared to where the company’s shares have been trading at various points during this year:

However, it is above the level that the shares have traded at in the last 5 years, and I’d imagine that isn’t a coincidence.

Even adjusting these figures in my head for the 30% rise today, this does look like the company is being sold on the cheap:

However, we have to accept that the medium-term revenue growth here is fairly lacklustre:

And the long-term average returns on capital nothing to write home about:

It has been a fairly consistent cash generator, though, and I can see why an acquirer would want to own this:

The acquirer is Laumann Group, a German family-owned business with €1.6bn of sales and €0.8bn of net assets. They are a market leader in PVC window profiles through their brands VEKA and GEALAN, also offering aluminum frames and facade systems, including PVC-based solutions like VEKAPLAN and Vinylit. So they seem a good fit as an industry acquirer:

In the view of the Laumann Board, the Acquisition aligns closely with Laumann's strategic priorities and will help to accelerate the implementation of Laumann's growth plans within the UK, as well as unlocking additional opportunities for operational synergies through sharing know how and technical infrastructure, scale benefits, and complementary offerings across key end-markets.

The offer is recommended by the Epwin board, although they only hold 0.6% of the equity. Laumman has irrevocable undertakings from Kennedy Capital Investments Limited, the trustees of The Anthony James Rawson Business Will Trust and Pentwin Group Limited in respect of a total of 40,500,000 Epwin Shares, representing, in aggregate, approximately 29.8 per cent. They also have a LOI from Otus Capital Management giving around 35% of the shares intending to vote for the offer scheme in total. They may get more now the offer is public. However, I don’t think these would stop a counter-offer if it was forthcoming.

Given the industry, I’m not sure any counter-offer would be that generous. Epwin’s board say:

…the valuation multiple implied by the Acquisition of 6.1 times Epwin's 2024 post-IFRS 16 Adjusted EBITDA is consistent with recent transaction multiples in Epwin's segment of the building materials sector;

However, it does highlight two things, Firstly that wider industry players may be seeing the possibility of a recovery in UK building products on the horizon. Secondly that very similar company, Eurocell is on almost the same rating as Epwin prior to this offer, which may highlight the value there as well:

Mark’s view

Roland rated this as GREEN following their AGM statement in May and he has been proven right to do so as an industry player has also seen the attraction. While I think the chance of a counter offer is slim, and if I held, I’d be tempted to recycle the proceeds into other UK building products suppliers, I see no reason to change the rating at this stage.