Daily Stock Market Report (Mon 17th August 2026) - TIME, MWE, TEP, GATC, SPR, GMS

Good morning. Expectations for a US rate rise have eased, leaving the dollar weaker after US government data revealed that retail sales fell in July.

Oil prices have edged higher as the US and Israel show signs of stepping up pressure on Iran and Lebanon, respectively, in the Middle East.

Closer to home, Housing Secretary Angela Rayner is expected to announce changes to the UK’s planning system today. These are said to include increasing protection for pubs (from being converted to other uses) and making it easier for housebuilders to build new homes close to existing rail and underground stations.

Many of the UK’s listed housebuilders are trading at intriguing discounts to their book value, as we’ve discussed here a number of times recently. So it will be interesting to see how the market interprets today’s changes – while they may make it easier to secure permission for some new developments, they won’t necessarily do anything to address the pricing and cost pressures that are squeezing builders’ margins.

Overnight market movements:

• The FTSE is up 0.2% at 10,776

• S&P 500 is up 0.2% at 7,795

• Brent crude is down 0.4% at $86.93/bbl

• Gold is up 0.3% at $4,395/oz

• Bitcoin is up 0.9% at $63,398

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Dr James Fox joins me (Roland) today.

Wrapping up there for today, thanks for all your contributions. 

Spreadsheet accompanying this report: link.

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Companies Reporting

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Roland's Section

Time Finance (LON:TIME)

Up 9.4% at 58p (£48.6m) - Recommended Cash Acquisition of Time Finance - Roland - TAKEOVER

Another day, another takeover. A number of you in the comments seem disappointed by the offer for Time Finance this morning and at first glance I can see why this might be. Today’s cash offer of 59p per share is only in-line with the stock’s 52-week high:

The premium to recent share price levels is also a little below the 30%-40% we often look for:

• +12.6% versus Friday’s closing price of 52.5p per share

• +23.5% versus the three-month volume-weighted average of 47.84p per share

• +27.5% versus the six-month volume-weighted average of 46.34p per share

A trade buyer consolidating the market? 

The bidder is Bentley Park, the parent company of asset-based lender Ultimate Finance. So this is a trade deal, not a private equity takeout. My impression is that the two companies lending products overlap in a number of areas, such as asset-backed finance and invoice finance.

Bentley Park believes that the combined Ultimate Finance and Time Finance business would be well-positioned as a significant independent alternative lender with a combined net loan book size of nearly £650 million (based on the companies' respective unaudited loan books as at 30 June 2026). Bentley Park believes the Combined Group would have the scale, product breadth and funding infrastructure to serve UK SMEs across a full spectrum of their working capital and asset investment needs.

Ultimate is larger, with a net loan book of c.£429m at the end of June 2026 versus Time’s loan book of c.£218m.

The two companies are more evenly matched in terms of profit, though. Checking the 2025 accounts for Ultimate Finance Group Limited shows revenue of £54m and an operating profit of £7.5m.

The equivalent figures for Time Finance last year were £37.1m and £7.9m, so Time Finance seemingly enjoys a higher operating margin.

Is the price fair? 

Today’s offer does not look overly generous compared to forecast earnings for Time Finance. The 59p bid represents a multiple of just 7.7x FY27 forecast earnings of 7.7p.

However, when valuing lenders we also need to consider net asset value and return on equity.

Time’s year-end was on 31 May. The company issued a trading update in June, which Graham covered here. This showed net tangible assets of £50.1m (54p per share) at the end of May 2026.

Based on consensus earnings forecasts, this suggests Time Finance generated a return on tangible equity of 13% last year.

For contrast, today’s 59p offer represents a 9% premium to tangible book value.

For a mature, slow-growing business I’d argue that this might be a fair price. But Time Finance is not mature or slow growing – earnings have been growing at double-digit rates in recent years.

The latest forecasts I can see for Time Finance from house broker Cavendish suggest net tangible assets could reach 61.5p by May 2027. That would put today’s offer at a 4% discount to NTAV. This seems a little low to me, especially as I would expect the combined group to enjoy some cost savings from de-deduplication and greater scale. All in all, I don’t think this offer is overly generous.

Already a done deal? 

Time’s Board notes that the offer “will present an opportunity for Time Finance Shareholders to accelerate the crystallisation of certain value from their investment”.

All three of the company’s largest shareholders plus its directors have already indicated their support, representing c.47.4% of shares in total:

This leads me to speculate whether the decision to sell the business was prompted by one or more of the group’s largest shareholders, seeking an exit.

Based on this level of support, I think Bentley Park’s offer is near-certain to succeed unless a higher, competing bid emerges in the meantime.

Roland’s view

The Time Finance directors appear to have adopted a cakeist approach to justifying their recommendation of today’s offer. On the one hand, they say:

The Company has a demonstrable track record of delivering organic growth in its lending book for 20 consecutive quarters to 31 May 2026. The Time Finance Directors therefore remain confident in Time Finance's ability to succeed as an independent business.

On the other hand, they suggest that “the Acquisition presents a compelling route to fully realise the Company's long-term strategic and operational potential in the most efficient way possible”.

On balance, I think Time Finance shareholders are probably going to miss out on the benefit of continued profitable growth if this takeover succeeds.

However, I would caveat this by saying that Time Finance’s returns on equity (including goodwill related to past acquisitions) are distinctly average:

It’s also worth remembering that as we’ve seen numerous times over the years, small-cap niche lenders are relatively risky and can fall victim to unexpected problems.

Shareholders who want to oppose the offer will have the opportunity to vote no. A 75% vote in favour is required for the scheme to be approved, so it’s not impossible that a show of unity from private investors might successfully oppose the deal.

Unfortunately, I suspect today’s offer means we will lose another decent business from the AIM market.

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Telecom Plus (LON:TEP)

Up 4% at 891p (£696m) - AGM Trading Update - Roland - AMBER ↑

Following June’s profit warning, the good news today is that Telecom Plus has left full-year guidance unchanged.

Execution across all operational areas is progressing at pace, and we remain confident in meeting our guidance for FY27 and on track to deliver on our long-term goal of £175 million of adjusted profit before tax by FY31.

The company expects to achieve an adjusted pre-tax profit of £80 to £90m in FY27, implying an ambitious c.20% compound growth rate between FY27 and FY31.

Gathering momentum?

Today’s AGM Trading update highlights some positive metrics suggesting this utility reseller (which trades at Utility Warehouse) might be regaining some of its lost momentum. These figures cover FY27 year-to-date (April - July):

• Annualised multiservice customer growth is “running slightly ahead of our 10% target for the full year” and is well ahead of the 3.9% achieved in FY26.

• Cross-selling activity is being ramped up, with c.17,000 core services cross-sold so far, putting the business on track for its target of 50,000 services cross-sold in FY27.

• Insurance re-platforming onto OpenGI (an insurance tech platform) is progressing well, on track to launch motor insurance in H2 FY27.

• New advertising and marketing campaign is on track to launch in Q3, including television and radio “activations”.

• IT upgrades are progressing with an increasing proportion of customer interactions being managed with “no human intervention”.

• Partner activity (self-employed sales agents) is running at record levels, with an average of c.4.9k Partners active each month so far this year (from c.4.2k in H2 FY26).

• Partner recruitment is also performing well, with total partners now at >85k, from c.77k at the end of FY26.

Problem solving: these updates suggest Telecom Plus is dealing with the issues identified in June’s results – problems including renewed price competition from major energy suppliers, ageing IT and continued issues with its insurance offering, which is a relatively recent addition to the company’s portfolio.

Attractive returns from buybacks?

The company also confirmed that the £40m buyback programme announced in June is roughly 50% complete, with 2.44m shares repurchased at an average of 816.66p and £20m remaining to be deployed. This may have accounted for some of the recent strength in the share price:

Telecom Plus abandoned its long-held dividend-only policy earlier this year, cutting the payout and switching some of its shareholder returns into buybacks. A further buyback is expected in FY27, with details to be announced in November.

Using the 8% pre-tax return hurdle favoured by Next suggests buying back shares could be generating value at current levels. Taking the mid-point of this year’s profit guidance suggests buying back shares could generate a 12% return at the current market cap.

The much-reduced dividend now offers a forward yield of c.3.8% – a far cry from the levels seen in the past, but in line with market averages.

Roland’s view

My conclusion in June was that Telecom Plus’s management had become complacent during a period of bumper profits and growth and had failed to plan for the (inevitable) normalisation of market conditions and increase in IT capabilities that would be required.

Today’s update suggests to me that progress is being made at remedying these shortcomings. This will come at a cost, though. Telecom Plus is planning to spend an additional £55m per year from FY27 onwards on a mix of price cuts, partner recruitment, marketing and IT upgrades.

This year’s pre-tax profit guidance of £80-90m is c.35% below last year and is expected to have a 15%/85% H2 weighting – even more skewed than the more normal 25/75 split reported last year.

An H2 weighting is normal for this business due to higher gas and electricity consumption during the winter. But the extreme H2 weighting suggests to me that visibility on full-year earnings could be pretty weak until quite late in the year.

I think it’s too soon to know how much confidence investors can have in Telecom Plus’s turnaround. But I’m encouraged to see that chairman Charles Wigoder now appears to be taking a more active role in running the business again.

Wigoder remains the group’s largest shareholder and ran the business for many years, prior to stepping down to a non-executive position more recently.

I was AMBER/RED on Telecom Plus in June, following a profit warning:

With guidance reiterated today and tentative signs of operational progress, I’m happy to return to a neutral view. I also note the StockRanks are looking increasingly positive, with Contrarian styling and a recent mini-Jump:

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James's Section

MTI Wireless Edge (LON:MWE)

-6.6% at 62p (£53m) - Interim Results - James - GREEN  ↑

Shares have really pulled back this morning, but on face value, the half was strong. Revenue rose 11% to $26.7m, operating profit 21% to $3.0m, and gross margin improved to 33.8% from 32.5%. Strip out Q1, which was reported in May, and the second quarter grew roughly 15% – an acceleration.

• Revenue up 11% to $26.7m

• Operating profit up 21% to $3m

• Gross margin 33.8%, from 32.5%

• Attributable profit up 15% to $2.49m (group net profit up 28% to $2.53m, flattered by minorities)

• EPS 2.88 US cents, up 15%

My take is that the problem is in the antenna division. Revenue fell 20% to $6.6m and segment profit slipped to $596k from $696k. Management suggested the issue is timing – $6m of antenna orders were won in April and most of that revenue due in the next 18 months.

That covers some of it, but not all of it. The same 20% decline showed up in Q1, when the culprit was weak E-band 5G backhaul sales in India (and today’s statement confirms that Indian sales remain slow). This is the second consecutive quarter of decline in the division that carries the defence story, and only one of those quarters has a timing explanation.

It’s also worth considering that Israeli strikes in southern Lebanon over the weekend may be contributing to the pullback this morning.

Let’s take a step back. MTI is an Israeli group built on one core skill – wireless communication in harsh environments – pointed at three different end markets: antennas for defence and 5G backhaul, Mottech's remote control systems for irrigation and water distribution, and MTI Summit, which distributes and integrates radio frequency components in Israel.

As management, and my colleague Ed Sheldon pointed out in his excellent June article, the company’s end markets are in growth mode. A management quote pulled from the FY results read:

Our target end-markets remain in growth mode. Military conflicts are increasingly reliant on electronics, a shift which is to MTI's advantage, especially when coupled to a global increase in government defence budgets. Demand is increasing for our ABS® antenna solution for E-Band 5G backhaul, representing a substantial opportunity over the medium term and scarcity of water is behind the ongoing drive by governments and businesses to significantly improve the efficient use of this fundamental resource.

That's the thesis. And with a market cap around £53m and revenue driven by a handful of sizeable contracts, lumpy half-years come with the territory – a couple of orders slipping a few weeks moves the division's numbers.

Thin coverage, but encouraging numbers

Just two brokers cover MTI, so there isn't much of a consensus to speak of – but their combined price target of $1.32 sits around 47% above where the shares opened this morning.

The quality metrics are the strongest part of the investment case. Return on capital is 17.5% and return on equity 17%, both ahead of the five-year average of around 15%. The operating margin is 11.6% and improving. The F-Score is 8 out of 9, the Z-Score of 5.24 sits firmly in the safe zone, and net gearing is minus 25% – $8.2m of cash against almost no debt. The QualityRank is 97 and the StockRank 90 – these are very strong indicators.

The valuation isn't demanding either. After this morning's fall the shares trade on around 14x forecast earnings, 8.8x EV/EBITDA and 1.4x sales, with a forecast yield near 4.4% covered 1.6x.

Forecasts still show 5.80 cents for 2026, below the 6.02 cents already earned on a trailing basis, and 5.90 cents for 2027. No growth is in the numbers at all.

That looks beatable. Attributable profit for the half was $2.49m, already half of the $5m the market expects for the full year – and the first half is normally the smaller one. Last year H1 delivered 43% of the annual figure, with the balance coming in H2.

James’s take

Today’s results are light on guidance – that’s not unusual. But after a significant pullback versus the prior year comparator in the antenna division, some investors will have wanted more reassurance about the second half than “in line with market expectations”.

However, nothing here is broken: two of the three divisions grew strongly, margins improved, returns on capital are 17% and the balance sheet still holds net cash.

The bit that’s missing is the confirmation. The April orders need to arrive, antennas need to stop shrinking, and neither broker has changed their forecasts in three months. Running some simple maths, if the year splits like last year's did, $5.8m of profit isn't a stretch, putting the shares on around 12.4x forward earnings – enticing for a company with a net cash position. Today's fall looks like disappointment at unchanged guidance rather than anything in the numbers, and I have left my positive view unchanged.

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Gattaca (LON:GATC)

Down 0.7% at 168.25p (£53m) – Trading Update – James – GREEN =

Gattaca isn’t a stock I’ve followed particularly closely over the past couple of years – as far as I was concerned it was a suburb of Liverpool. That said, this is a very interesting business and a stock that has surged somewhere in the region of 50% since March. Today’s numbers reinforce why investors were bullish, but the modest pullback suggests the rapid appreciation may be slowing. The numbers are good, but nothing more than the market was expecting.

• Net fee income up 11% to £43.2m (FY25: £38.8m), up 7% like-for-like

• Contract NFI up 16%, up 14% LFL

• Permanent NFI down 3% LFL, up 5% including the InfoSec acquisition

• Underlying pre-tax profit c.£6.1m (FY25: £3.3m), against guidance of £6m

• Net cash £15m (31 July 2025: £15.7m)

The first thing to note is that today's beat is small – £6.1m against £6m of guidance. But that guidance was only set on 14 May, when it was raised from £4.5m. So against where the year started this is a big improvement, and against what the market has expected since May it's a rounding difference. Consensus EPS of 13.3p hasn't moved in three months. That's why the shares aren't going anywhere today.

Gattaca is a specialist recruiter, formerly Matchtech, placing engineers and technical staff into infrastructure, defence, energy, mobility and digital technology. Ignore the £418m revenue line on the StockReport, which is mostly contractor payroll passing through. Net fee income is the number that matters.

Underlying pre-tax profit rose 85%, from £3.3m to £6.1m, on net fee income up just 11%. That's some operating leverage. A recruiter's cost base is mostly consultants' salaries, so once that's covered, additional fee income falls largely to the bottom line. Gattaca's costs rose 4.5% while fees rose 11%, meaning £2.8m of the extra £4.4m of net fee income dropped through to profit. Conversion – profit as a share of net fee income – improved from 8.5% to 14.1%.

The impressive part is that it did this with fewer people. Sales headcount ended the year 4% below where it started, so each consultant billed materially more. Panmure Liberum made the same point in May, noting part of the upgrade came from not hiring as fast as planned.

That's worth pausing on, because it isn't repeatable. Headcount rose 3% in Q4 and management now plans "targeted investments in sales consultants". New consultants cost money months before they bill anything, so FY27 carries that expense up front while the revenue follows later.

Still not expensive

Mark ran these multiples in his May note when the shares were 130p. Forecasts haven't changed since, so the only thing that's moved is the price. At today's 168.25p:

At 130p those P/Es were 9.8, 9 and 7.9, with a 4.6% yield on this year. So the rating is up by roughly a third. It's still not expensive – strip out the cash and you're paying under 9x this year's earnings. However, today's £15m of net cash is slightly below the £16.7m Mark's model assumed.

Only one broker covers the stock, and Panmure's 185p target is just 9% above the current price. The broker suggested the forecasts were “very cautiously set” in May.

James’s take

The valuation looks great, especially when adjusted for cash. However, I’m certainly cautious that recruitment is a cyclical business. This is seemingly the best year the business has had in years, and permanent fees, which usually turn first in a downturn, grew 5% at group level but slipped 3% excluding the InfoSec acquisition, and the board flags "cautious customer decision-making". That said, I’m keeping this on Green as the metrics still support some appreciation, but at this elevated price, investors should remain vigilant.