Daily Stock Market Report (Mon 15th June 2026) - BKS, LUCE, TMG, PEEL, AEP, IQE, TIG

Good morning. Markets are expected to rise today, as it seems the TACO trade (Trump Always Chickens Out) is back on again.

The US President announced a deal with Iran on Sunday that will extend the current ceasefire by 60 days and see Iran reopen the Strait of Hormuz for toll-free commercial traffic. In return, Iran will receive some sanction relief and undertake not to develop nuclear weapons.

The thornier topic of the Islamic Republic’s 9,000kg stockpile of enriched uranium has been kicked down the road for future talks, according to press reports.

Iran’s regime has also survived this conflict intact and we might argue that Trump’s original pledge to deliver an “unconditional surrender” appears to have been watered down somewhat. Even so, this looks like good news for markets and for the wider global economy. Assuming traffic gradually starts to flow from the Strait, we should hopefully see commodity bottlenecks and inflationary pressures ease over the coming months.

Of course, to date the ceasefire has seen numerous military acts by both Iran and the US, so the current deal may not bring complete peace. There could be a period of uncertainty before commercial activity in the Strait and the wider region returns to normal.

It may also be worth noting that while the deal is said to support a broader peace across the region, Israel is not signing.

Finally, it would be remiss of me not to mention that SpaceX closed up by nearly 20% on Friday, at $160.95!

Overnight market movements:

• The FTSE is set to open up 0.7% at 10,542

• S&P 500 is set to open up 1.3% at 7,524

• Brent crude is down 4.4% at $83.50/bbl

• Gold is up 1.7% at $4,288/oz

• Bitcoin is up up 2.1% at $65,698

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Spreadsheet accompanying this report: link.

Today's report is now complete. Thanks for reading and commenting, we'll be back in the morning.

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Companies Reporting

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Roland's Section

Beeks Financial Cloud (LON:BKS) 

Up 12% at 225p (£154m) - Third Market Edge Intelligence contract win - Roland - AMBER =

On Monday last week, I commented that it had been a tight race to meet FY26 revenue forecasts for the year ending on 30 June.

On Wednesday, Beeks announced further contract wins and I noted the broker’s view that Beeks was “largely on track” to meet FY26 revenue forecasts.

Today’s last-minute contract win will bring a further unspecified amount of revenue into FY26. However, at the risk of sounding cynical, the wording of the announcement does make me wonder if this is largely a renewal, with Market Edge Intelligence bolted on (my emphasis):

The customer, a leading North American exchange operator, has expanded its deployment of Beeks Analytics and will also deploy Market Edge Intelligence® in New York. Revenue recognition is expected to commence immediately.

A five-year deal with a total value of $3m implies $0.6m of revenue, annualised. Actual revenue recognition may not be on a straight line basis, but we aren’t given this information.

Indeed, given the proximity to the year end on 30 June, I can’t help wondering if the customer may have been offered favourable terms in order to bring some revenue forward into FY26.

Outlook: there’s no mention of FY26 expectations in today’s update, perhaps surprisingly at this stage.

In general, I would expect a company to reiterate its confidence in full-year guidance in a contract win announcement late in the year.

Roland’s view

Beeks’ share price has now retraced the losses seen in March, when the company’s half-year results left investors (including us) speculating on the likelihood of an H2 profit warning. That risk now seems to have receded:

Investors also seem excited about the prospect that Beeks’ new Market Edge Intelligence product could help the company become a higher-margin and more SaaSy business, potentially justifying a higher valuation multiple.

I can see this picture too, but I would like to see some concrete evidence first – Beeks has consistently been a low-margin and capital-intensive business in the past and we don’t yet have much information on the contribution Market Edge Intelligence is expected to make.

With a forward P/E of c.22 and no change to forecasts today (that I can see), I am leaving our neutral view changed. The StockRanks also remain cautious:

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Peel Hunt (LON:PEEL)

Up 3% at 99.4p (£122m) - Full-Year Results for the year ended 31 March 2026 - Roland - AMBER/GREEN ↓

This City broker is on Graham’s watchlist. He took a positive view on the company’s trading update in March when Peel Hunt upgraded its FY26 guidance – albeit seemingly at the expense of FY27:

Today’s full-year results confirm an impressive recovery in revenue and profitability last year, but strike a more cautious note about the year ahead.

Of course, the company’s outlook commentary was probably written before news of an Iran peace deal was confirmed. It’s possible that today’s geopolitical news will encourage animal spirits among would-be acquirers and IPO candidates. This could boost demand for Peel Hunt’s services, particularly in its recently-opened Abu Dhabi office.

Results for y/e 31 March: key points

Peel Hunt’s financial performance improved dramatically last year:

• Revenue up 57% to £143.5m

• Pre-tax profit of £21.1m (FY25: £(3.5)m

• Adjusted pre-tax profit of £32.0m (FY25: £0.8m)

• Earnings Per Share: 12.9p (FY25: (2.3)p)

• Dividend: 4.9p (FY25: none)

The balance sheet also remains strong – asset backing and strong cash generation are notable attractions here:

• Net cash up 136% to £26.9m (exc. leases)

• Net assets up 22.3% to £108.5m

Balance sheet assets are almost all tangible and largely consist of securities held for trading and very large debtor/creditor positions (clients and market counterparties):

• Market and client debtors: £642.3m

• Market and client creditors: £575.3m

I would argue that Peel Hunt’s balance sheet strength and liquidity are an integral requirement of this business model, so the group’s net cash isn’t all surplus to requirements.

For businesses of this kind, I generally see dividends and buybacks as a more useful indicator of truly distributable cash.

For example, the 4.9p dividend declared today will cost around £6m, or about 40% of last year’s earnings.

One exception to this might be if Peel Hunt was acquired by a larger peer, when it might be possible to free up some additional distributable cash by combining two companies’ assets.

Profitability was very respectable – a characteristic of this type of business in good years:

• Operating margin: 16.3%

• Return on equity: 13.7%

Trading commentary

The biggest winner of the year was Peel Hunt’s investment banking business:

Investment Banking: although the company’s client base remains unchanged at 147 companies last year, the average market cap of its clients rose by 30% to £1,130m. This reflected the addition of one FTSE 100 firm and seven FTSE 250 clients to its roster, taking the total number of FTSE 350 clients to 62 (FY25: 52).

A number of clients appear to have been lost through the impact of M&A activity, although Peel Hunt also benefited from such activity, with “exceptional performance in our M&A advisory franchise”.

IPOs also made a positive contribution. While general IPO activity remains “relatively subdued in the UK”, Peel Hunt acted on the UK’s largest IPO last year (I think this may have been Princes (LON:PRN) ) and sounds confident about its ability to win future opportunities:

We are confident that our deep relationships with relevant private companies and their owners, as well as our ability to connect with a broad range of UK and international investors, will enable us to play a leading role in the revival of the UK IPO market over time.

The upshot of the company’s involvement in fee-generating corporate activity was a 153% increase in investment banking fee income to £57.9m. Much of this appears to have cascaded through to bonus payments for employees, despite a reduction in headcount:

Execution Services: this business also performed well last year “despite ever-increasing competition”. Management says its focus is on using technology to strengthen connectivity and unlock incremental liquidity for clients.

Given that revenue from execution services rose by 41.9% last year, I am not sure this commentary really explains the full scale of the increase. I would hazard a guess that the macro backdrop and associated market volatility over the 12 months to 31 March also made a large contribution.

In FY25, for example, revenue from execution services only rose by 13.6% despite very similar management commentary.

Even so, it’s good to see Peel Hunt continuing to compete successfully in this market.

Research & Distribution:

Our business remained resilient in FY26, with moderately increased revenues. This is a good outcome given wider economic turbulence that included unpredictable US policies and market uncertainty in the run-up to the UK government's 2025 Autumn Budget.

A number of changes were made to Peel Hunt’s Research and Equities teams last year “including key internal leadership positions and a new management group”. These changes are said to have increased collaboration and also made it easier to retain “top talent”.

Peel Hunt opened a new office in Abu Dhabi in November to help expand its international distribution and liquidity reach. Commission revenue across its international offices is said to have risen last year, perhaps suggesting this is a more prospective area for growth than the mature UK market.

Strong relationships in Research and Distribution may also help Peel Hunt win other more lucrative business:

We saw this advantage in action in FY26, with the strength of our Research & Distribution division pivotal to us acting on the largest UK IPO of 2025. It also underpinned several capital markets transactions, including a significant capital raise for Coats Group plc.

Outlook

While markets remain supportive of high quality transactions, renewed global inflationary pressures, the volatile outlook for benchmark interest rates and increased domestic political uncertainty have all weighed on UK market confidence and therefore transactional activity since the start of our financial year. A sustained recovery in UK ECM, IPO and M&A activity will inevitably depend on greater macroeconomic stability and the pace at which confidence rebuilds.

Peel Hunt’s own broker is a subsidiary of Stifel and doesn’t make its coverage available on Research Tree. This means I don’t have access to any updated broker forecasts for Peel Hunt today.

However, the outlook commentary and the lack of market reaction today suggests to me that current expectations are largely unchanged.

On this basis, our consensus forecasts indicate earnings could fall sharply this year unless transactional activity improves:

• FY26 actual EPS: 12.9p

• FY27E adj EPS: 6.3p

These estimates leave Peel Hunt shares on a FY27E P/E of around 16x.

Roland’s view

Peel Hunt’s share price has not been very strong recently, perhaps reflecting subdued expectations for the year ahead. As I write, the stock is actually trading below the level at which Graham took a positive view on 31 March:

I think the outlook and valuation at this point are dependent on whether any of the momentum seen last year can be maintained.

Graham has rightly flagged up previously that broker forecasts were stale and too low. It’s possible that this is the case for our FY27 forecasts too, but I don’t see any way to evaluate this at present.

A look at Peel Hunt’s record since its 2021 IPO suggests the company has not yet managed to decouple its results from wider market conditions:

I think an AMBER/GREEN view could be more appropriate at this stage, to reflect the lack of earnings visibility and apparent double-digit valuation.

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Iqe (LON:IQE)

Up 23% at 57p (£762m) - Tower Semiconductor InP supply agreement - Roland - RED =

IQE shares have 10-bagged so far this year, as investors have speculated that the AI data centre boom could drive a surge in demand for the company’s optical data products:

Today’s supply agreement with US analogue semiconductor specialist Tower Semiconductor (NSQ:TSEM) sounds positive, but the near-total lack of numbers (and surprise litigation news) leaves me thinking that this agreement doesn’t necessarily justify a 20%+ jump in IQE’s market cap.

Here are the key points:

IQE's InP epiwafers will be used in several of Tower's advanced silicon photonics platforms for next-generation optical technologies, providing a high-quality supply base for Tower's product roadmap. IQE and Tower's collaboration includes technology for the production of 200Gbs/lane for pluggable transceivers and the prototyping of next-generation 400Gb/lane modulators, as well as other critical applications including optical-circuit-switches for deployment in datacentres.

Without further research into Tower Semiconductors, it’s not clear to me whether what proportion of this agreement relates to current products and which might still be under development. I think it’s a mix of both.

The agreement does include some volume guarantees, but we aren’t given any idea of how this might translate into revenue:

The agreement provides for a minimum purchase commitment by Tower in the first year, a reciprocal supply commitment from IQE, and minimum volume commitments thereafter.

Finally, there’s a surprise twist – in a separate settlement announced today, IQE and Tower have also settled an ongoing legal dispute:

Under a separate agreement, Tower will also provide a broad worldwide and royalty-free license to IQE for porous silicon patents which have been the subject of an IP dispute between the companies, settling all litigation in the matter.

I can’t find any mention of this litigation in last year’s annual report, so I’m not sure if it has been reported to shareholders previously or not. Again, we have no way of knowing how material this agreement might be for IQE in terms of financial impact.

Overall, I think it’s quite difficult for anyone to assess the likely commercial impact of this supply agreement without access to much more information than is provided today.

Outlook: there’s no comment on full-year expectations today, even though we are approaching the half-year mark. However, consensus forecasts prior to today have suggested continued losses in both 2026 and 2027 despite a recovery in revenue:

Roland’s view

IQE’s history of losses leaves me with two options for valuation, price-to-book value and price-to sales. Neither seems very appealing to me for a loss-making business:

Even on a forward-looking basis, IQE’s increased market cap of £762m leaves the business trading on 5x 2027 forecast revenue. With no profit.

In fairness, my understanding is that forecasts suggest IQE will return to (a small) profit in 2028.

Personally, I’d want something more than this to justify taking a positive view on this business. 

While the recent investment from long-term customer MACOM seems positive, it was carried out at 19.8p (today’s price 59p) and also included an issue of secured debt and various other protections.  In my view, it’s possible that MACOM simply wanted to secure its supply chain rather than invest in the long-term growth of IQE – the company’s debt levels looked worrying to me prior to the fund raise.

Ultimately, I can’t help feeling that we’ve been here before with IQE. The company’s stock has been through various boom and bust cycles in its 25 years as a listed business:

IQE’s profits peaked at c.£20m in 2015/16. The current market cap represents a multiple of around 38x those historic profits – more if recent share issuance is factored in.

While the past isn’t necessarily a guide to the future, the group’s revenue also remains below the peak levels seen in the past, meaning profit margins may need to be higher than previously to set a new benchmark for earnings:

In my view, IQE’s £760m market cap already prices in any likely upside for the next few years. The StockRanks style this as a Momentum Trap and I share this view.

I don’t see any reason to change our previous negative view today. RED

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Mark's Section

Luceco (LON:LUCE)

For a share price to drop 11% on the planned departure of a CEO seems a little harsh:

…following 21 years of leading the business, John Hornby has decided to retire from the Group, with effect from 31 December 2026…John will be taking a sabbatical until late August 2026, and will remain as Chief Executive Officer and as a Board Director until 31 December, following which he will be available to the Group in an advisory capacity.

However, it is worth understanding that John Hornby has been a driving force behind Luceco over the years.

He originally joined British General as Operations Manager in 1997, before leading a MBO in 2000. He became group CEO in 2005 after a secondary buyout, with Luceco eventually listing in 2016. At IPO, he and his wife held a combined 20.8% of the equity, worth around £43m. Today that is around 15%, but he remains a multi-millionaire based on his successful running of the company.

Since listing, the revenue has doubled:

However, the group has been highly acquisitive, so you would have expected it to grow.

It is the combination of an impressive 20% average ROCE, together with the ability to show positive operational gearing that marks this company out as having delivered great shareholder value during this period. With operating profit for FY26 confirmed in today’s update (and recently upgraded):

The trading momentum described in the Group's Q1 Trading Update published on 19 May 2026 has been sustained through Q2-to-date. The outlook for the year ending December 2026 remains consistent with the commentary provided in that announcement and accordingly, the Board continues to expect Adjusted Operating Profit to exceed £40m, with the potential for further significant outperformance dependent on Demand Flexibility.

This means that operating profit has grown by 4x since listing. Unlike many acquisitive companies, this hasn’t come at the cost of a greatly expanded share count:

Despite fairly consistent delivery, the share price has been on a volatile ride (not helped by COVID, Russia invading Ukraine and UK housing market challenges):

Hornby, together with other management stakeholders have not been shy to take advantage of excessive market enthusiasm or pessimism for the company.

Sizeable trades for Hornby include:

• Selling at 235p in 2017

• Buying at 40p in 2018

• Selling at 300p in 2022

• Selling at 269p last month

Zooming in to this year, the share price has doubled:

Driven by multiple upgrades in EPS:

However, it is worth noting that the actual increase in EPS forecasts is only around 20%, meaning that the Value Rank is now only 35. This remains a high flyer, given the recent trends, but remains vulnerable to any mean reversion is share price:

It is also worth noting that when I reviewed their FY25 trading update in January, all of the strength in trading was concentrated in the EV charging part of the business and their core RMI market sales appeared to be flat.

Mark’s view

I’m not generally a fan of investing (or selling) purely based on one’s view of management quality. However, Hornby has been a clear driving force behind Luceco (or its predecessor) for almost 30 years. His history of correctly calling the short term trajectory of the share price, combined with his recent sale of £3m worth of shares, makes me think that his resignation at this time is signalling something. Perhaps not that the share price is materially overvalued, but that it is at least now up with events. 

In January with a share price of 148p, I was happy to keep our broadly positive view based on the undoubted quality of the business and modest rating. However, following a material re-rating, driven by upgrades in only one very specific part of the business, it is hard to argue that the shares are cheap. The algorithms still rate this as a High Flyer. However, this is exactly the sort of designation that investors will usually benefit from exiting on any sign of Momentum reversal. I’m not certain that Hornby’s resignation will be that trigger. However, there is enough uncertainty (as reflected by the share price drop today) that I think we should take a more neutral view of AMBER.

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Mission (LON:TMG)

Up 3% at 19p (£16m) - AGM Trading Update - Mark - AMBER/RED ↓

This is a fairly short update, but may be re-assuring, given that they warned in January for their results that were announced in March:

Trading in the current financial year remains in line with the Board's expectations. Against an ongoing backdrop of wider macroeconomic uncertainty this has been driven by continued strong Client retention, new Client wins and the benefits of the strategic actions completed earlier in the year to simplify and strengthen the Group's operating platform.

It is pretty bad form, in my opinion, to warn by a material amount after the period has ended. It suggests to me either a lack of management access to the numbers, or an unwillingness to share them in a timely manner. So this makes me a little wary at taking today’s statement at face value.

We didn’t get a chance to look at the FY numbers on the DSMR, so I’ve taken the opportunity to review the figures today. Headline EPS came in at 2.0p, but printing the historical StockReport suggests that around 3p was forecast, with over 5p forecast before the January profits warning. So that was a material miss in my book.

Not only that, but there was a huge difference between statutory and adjusted figures. The bulk of these were non-cash intangible write downs, but few of the rest look like they are one-off:

Then we get to the supposed good news, that net bank debt was down £0.5m to £9.0m. This is a key figure as high debt levels have been a major concern in the past. However, again I have to question how much the figures at the balance sheet date reflect economic reality. Payables increased by almost £8m with flat receivables. Seeing these figures rise on heavily declining revenue is particularly worrying:

A more normalised working capital profile would see net debt significantly higher than the reported figure. Today’s update doesn’t contain any update on financial position.

It is not surprising that the market didn’t like these results. However, the share price seems to have inexplicably recovered recently, perhaps as investors look to the future. The rating here looks very cheap at a forward P/E of around 3 (presumably for the 18 month period following a change of accounting reference date), if you believe that they are trading in line, the adjustments reflect economic reality, and the debt is under control. Sadly, the recent results make me doubt all of those.

Mark’s view

Graham downgraded this to AMBER following the January profits warning. Having now reviewed the FY numbers, I don’t think he has gone far enough. An EPS miss, even on very heavily adjusted figures, and worrying working capital movements, leave me with little confidence that today’s in line statement will reflect underlying economic reality when the true figures are revealed. AMBER/RED

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AEP Plantations (LON:AEP)

Up 2% at 1684p (£631m) - AGM Trading Update - Mark - AMBER ↓

AEP report a similar 5 month update to MP Evans did last week, and to me the recent story is remarkably similar. First they address the recent proposed changes impacting the industry:

Following the Indonesian Government's May 2026 announcement to centralise strategic commodity exports under PT Danantara Sumberdaya Indonesia ("DSI"), subsequent statements and a phased transition period have provided greater clarity. Exporters may continue direct overseas sales during the transition while meeting new reporting requirements to DSI, with full implementation expected from 1 January 2027. It is reported that DSI will serve as an intermediary facilitating and overseeing exports rather than acting as a trader; and that its mandate is to strengthen data-based supervision, not disrupt normal trading activities.

This policy does not directly impact the Group's business as the Group sells its CPO only to domestic refineries.

Again, minimal expected impact.

Then we get an update on production and pricing:

This includes a month of the Pinago acquisition, where they paid $162m for a 98.3% share.

This complicates matters slightly but I can make a guesstimate based on these trends to forecast the full year.

Like MP Evans, we are really seeing recent production growth as a recovery from a recent dip and the effect of the Pinago acquisition:

The recent strength in financials is mainly due to stronger pricing, particularly amongst the more volatile Palm Kernels:

[Note: AEP report Ex-Mill Prices versus MPE who report Mill-gate, the difference being who pays for transport.]

Costs continue to rise as you’d expect due to inflation. They don’t report separate PK costs but treat it like a by-product:

They don’t give us cost figures in today’s AGM update, so I’ve had to estimate based on an inflationary rise, offset by some scale advantages from the acquisition.

This still enables us to calculate an effective contribution and margin (a sort of operating profit without central costs):

So again, we see the margin recovering strongly, but only really back to 2022 levels, despite an acquisition this year.

However, the share price is now double where it was at the start of 2022, making the recent rise largely a re-rating by the market rather than a fundamental change in prospects:

There are some reasons to think that this isn’t entirely irrational. The company has become more shareholder friendly in recent years, with increasing dividends and an ongoing share buyback. Plus they have forecasts in the market, which they never used to. However, I would prefer if they’d been buying back their shares at £6 not £16. After all, the operational fundamentals of the business don’t appear to have changed much during this time.

This is an in-line update from the company, which means that the rating remains modest with a forward P/E of around 8. However, like MP Evans, analysts are expecting profitability to decline in future years based on lower commodity pricing. I’ve no idea if that is realistic or not, but there are good reasons to think commodity pricing for Palm Oil will always be cyclical.

Mark’s view

The similarities to MP Evans are striking. Investors have enjoyed strong gains here recently, but these are almost entirely down to positive moves in commodity prices, particularly the volatile PK pricing. While there are reasons for the AEP re-rating beyond simply commodity pricing - they have become more shareholder friendly of late - there is no escaping that future returns will almost entirely be dependent on where Palm Oil pricing goes from here. Personally, I have no idea whether Palm Oil prices will rise, fall or stay the same over the long term, so I just think we have to take a neutral view of AMBER.

We’ve been positive here most recently, so this feels like a big downgrade. However, that view has largely been driven by the algorithmic Stock Rank and recent upgrades. The Stock Rank remains high, but the last EPS forecast move was down, but a in many ways it feels like I should be positive on a 97 StockRank company:

However, I don’t think the StockRank can predict commodity pricing, and with the Momentum Rank starting to fall, the reasons for the commodity-agnostic investor to stay on board for purely technical reasons are starting to wane. I think consistency with MP Evans is also important as both companies are valued on similar multiples with similar outlooks. Palm oil bulls will want to own both for diversification; Palm oil bears, neither.

Of course, if any readers have done a detailed analysis of the global supply and demand characteristics of Palm Oil and feel they have a more informed view into where we are in the commodity cycle, I’d love to hear it.

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Team Internet (LON:TIG) 

Down 1% at 39p (£m) - FY25 and 2026 YTD Trading Update - Mark - RED ↓

This is a slightly strange RNS title, as it appears to be the FY25 results. A quick scan reveals why they may want to gloss over that. Huge falls across the board:

We don’t get any notes to the accounts, nor the Annual Report, of which it is said:

The Company will publish its audited Annual report for the financial year ended 31 December 2025 during the week ending 26 June. In advance of the publication of the audited Annual report, unaudited financial data is provided below.

The timing allows the Company and its auditors to fully reflect the impact of the favourable amendments to the covenants and maturities of the Company's borrowing arrangements described above.

It seems that without the covenant amendments the auditor may not have been willing to sign off the accounts on a going concern basis.

The result is we don’t really know what has gone into producing the adjusted figures, beyond a basic summary:

Non-core operating expenses are said to be:

Non-core operating expenses include items related primarily to restructuring, strategic review, and acquisition and integration costs, which are not incurred as part of the underlying trading performance of the Group, and which are therefore adjusted for.

I think it is safe to say that I will disagree with these being non-core for this type of business when we finally see them.

We do get to see a balance sheet, but I kind of wish I hadn’t. Current assets go down from $181m to $152m, while current liabilities go from $174m to $339m. Partly this is because the debt has become current, but even without this, net working capital is -$70m from -$41m last year. This would appear to be a highly stressed balance sheet even if they had no net debt.

It is good news that they have renegotiated debt facilities:

The Company is pleased to confirm it has recently completed a renegotiation of its existing debt facilities with our lenders, securing wider covenant headroom and aligning maturities in October 2027, which materially strengthens the Group's financial position and flexibility. The amendments also align the facilities more closely with the Group's current funding requirements and are expected to reduce commitment fees and financing costs, on a like-for-like basis….

We are still engaging with a range of debt providers albeit mindful of our renegotiated facilities and potential disposal of our DIS business, do so very much from a position of strength.

However, it strikes me that the banks had to “pretend and extend” as there are no tangible assets to speak of and they would not get repaid if they forced any action. Instead, their hope is surely that the company sells the Domains part of the business for enough to save their skin. This is the only part of the business that has any real long-term value, in my personal opinion.

The strategic review to unlock shareholder value is progressing well. Discussions continue with selected parties regarding a potential disposal of the DIS segment, which the Board will pursue where it delivers fair value. While there can be no certainty that any transaction will be agreed, or as to its terms, the Board expects the outcome of the strategic review, including any agreement relating to a potential disposal of DIS, to be announced in the first half of Q3. Subject to customary conditions and regulatory approvals, the Board expects any resulting transaction to complete during 2026. The Board confirms its guidance on quantum[1].

The footnote reveals that the company previously expects this to be worth more than $160m. If they achieve this this would largely repay the bank debt and their bankers would presumably breathe a big sigh of relief. However, any deal may include a working capital adjustment, which is likely to be negative in this case..

The update includes some details about FY26:

The Group's earnings performance in 2026 to date continues to progress in line with expectations. For the five months ended 31 May 2026, Gross revenue of USD 148 million, Net revenue of USD 50 million and Adjusted EBITDA of USD 16 million have been delivered.

The DIS and Comparison segments, unaffected by the Search transition, have delivered strong mid-teens net revenue growth and approximately 40% EBITDA growth year-on-year.

Which sounds reasonable, until I do some basic maths. In H1 last year Domains + Comparison did $16.1m EBITDA, pro-rata over 5 months this would have been $13.4m. If this is now up 40% year-on-year, these did $18.8m EBITDA, which means Search generated somewhere close to $3m LBITDA so far this year. Even if you consider EBITDA a valid metric here (I don’t), Search appears to have performed even worse than FY25 so far.

Mark’s view

This appears to be an example of diworsification, as a profitable, cash-generative but steady Domains business has been used as a springboard to acquire much lower quality businesses where changes to search trends and algorithms at major tech companies has meant large write downs in value. The cost of making these acquisitions has left them with a large debt, and a stressed balance sheet. The solution of selling the Domains business will leave the underperforming low-quality parts. Presumably, this will enable them to repay the debt and save their bankers' blushes. I’m not sure that shareholders will be able to say the same. RED