Daily Stock Market Report (Mon 7th September) - WRKS, SRC, CNC, SDLF, ASHM, RGG

There is no one major news story to mention from the weekend, but rather a handful of smaller ones:

• The AfD in Germany has won a local state election in Saxony-Anhalt, attracting 44% of the vote, in a major blow for the ruling Christian Democratic Union.

• De Nederlandsche Bank (the Dutch central bank) has moved 86 tonnes of gold, worth about $11 billion, from North America to London. It did this "in view of increasing geopolitical unrest", so that it would be "readily available for use in a crisis situation". It previously held over 300 tonnes of gold in North America.

• Following on from the news last week of VW job cuts, Jaguar Land Rover has confirmed that "salaried and management team members" will be offered "the opportunity to leave the business". Up to 4,000 jobs could be cut, according to The Times. JLR employs 33,000 in the UK.

Overnight market movements:

• The FTSE is down 0.1% at 10,815

• S&P 500 is down 0.1% at 7,710

• Brent crude (November) is up 1.6% at $97.80/bbl

• Gold is down 0.8% at $4,395/oz

• Bitcoin is down 0.2% at $79,800

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Roland Head joins me today.

All done for today! Cheers. Spreadsheet accompanying this report: link.

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Companies Reporting

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Graham's Section

Standard Life (LON:SDLF)

Up 2% at 953p (£9.6bn) - Interim Results - Graham - AMBER/GREEN =

I don’t cover this one too frequently, but let’s take a look.

Standard Life plc was previously known as Phoenix Group Holdings plc. Standard Life is simply the main brand that it owns.

Financial KPIs for H1 to June 2026:

• Operating cash generation +6% year-on-year to £745m

• Solvency II leverage ratio 29% (Dec 2025: 33%)

• IFRS adjusted operating profit +25% year-on-year to £563m

• Statutory loss after tax £179m

The first three metrics above are all perfectly good.

Roland noted last year that the company was targeting a 30% leverage by the end of 2026. That has been achieved.

The number we’ll have to investigate is the fourth one, the statutory loss, along with the decline in shareholders’ equity (adjusted equity fell from £3.1 billion in Dec 2025) to £2.7 billion).

Here’s what the CEO says:

Standard Life continues to demonstrate exciting momentum against our vision to be the UK's leading retirement savings and income business. Our strong half year results reflect how we are helping more customers achieve better outcomes and we remain on track to deliver our end-2026 financial targets, while our profitable growth and strong cash generation is increasing our financial flexibility. The £2 billion acquisition of Aegon UK and our recently announced UK PRT partnership will further strengthen our capabilities and customer offering. Standard Life champions the belief that everyone's journey to and through retirement can be better and we look to the future with confidence."

The two core business have both seen large growth in H1 adjusted operating profit:

Pensions and Savings - adjusted operating profit up 36% to £244m.

Retirement Solutions - adjusted operating profit up 13% to £324m.

Coming up later this year is the £2bn acquisition of Aegon, which will create “the UK’s largest retirements savings and income business”.

Other players are said to be big in either Workplace or Retail pensions, while SDLF will have the #2 spots in both.

This will be paid for with £750m of cash and 181 million new SDLF shares (15% of the enlarged group). The amount of debt that will be used is “consistent with our target leverage ratio of 30%.”

The headline profit figures around this proposed deal are very encouraging: SDLF will acquire £160m of operating cash generation (FY25), expected to grow at mid single digits. They are also expecting £340m of one-off synergies and £110m of annual pre-tax cost synergies.

The price being paid is nearly a 20% discount to Aegon’s “Unrestricted Tier 1 capital”, which is conceptually similar to Aegon’s book value.

Statutory profits

Here’s the bridge between adjusted operating profit and the statutory loss:

The key number is Economic Variances, highlighted above. The explanation is that the company hedges its exposure to equity markets and interest rates. With equity markets rising in H1, this results in a loss on its hedges, with the corresponding gains not shown on the accounting financial statements.

Combine this £473m “Economic Variances” loss with nearly £300m of dividends and also nearly £200m of “other non-operating items” (shown in the above table), and you get the decline in balance sheet value we mentioned earlier.

It sounds to me as if lots of awkward costs have been lumped into “other non-operating items”:

Other non-operating losses in the period totalled £179 million (H1 2025: £184 million loss), the majority of which reflects £123 million of planned investment spend across our strategic priorities, with £56 million of other one-off items that includes £25 million expenditure on strategic transactions announced this year.

This does make me wonder if the “adjusted operating profit” figure of £563m is rather optimistic. Should we really ignore “investment spend” on “strategic priorities”?

If the figure in H1 last year had been much lower, I’d be more inclined to look past this, but that’s not the case. It was £184m in H1 last year, and £179m in H1 this year.

Graham’s view

Roland was AMBER/GREEN on this a year ago at 625p.

I’m comfortable leaving our stance unchanged today.

My reasoning is that even if the adjusted operating profit figures have been inflated by the adjustments, they are still close to £400m (£563m minus £179m). And that’s in just a six-month period.

In 2025, full-year AOP was £945m.

So in valuation terms, at a market cap of less than £10 billion, this does appear to still offer some value. The ValueRank is 61, is and yield is over 6%:

That’s before the Aegon acquisition, which brings with it some risk but has the potential to create a nice jump in the overall size of the business.

So this gets one thumb up from me.

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Roland's Section

Sigmaroc (LON:SRC)

Up 12% at 144p (£1.60bn) - Interim Results & Acquisition of AB Dolomitas - Roland - AMBER/GREEN ↑

We haven’t looked at this lime and minerals group since March, when Graham took a neutral view. Until this morning, very little had happened to the share price since then.

However, today’s in-line half-year results and acquisition news have prompted investors to nudge the shares higher, lifting the stock into positive territory for the year to date:

Half-year results summary

With signs of improvement in some end markets and the continued focus on operational excellence, the Board remains confident in delivering full year results in line with consensus expectations.

The headline numbers from today’s half-year results suggest Sigmaroc is on track to meet existing forecasts:

• Revenue up 2.5% to £523.1m

• Adjusted EBITDA up 11.3% to £131.2m

• Adjusted pre-tax profit up 11.4% to £75.1m

• Adjusted EPS up 12.2% to 5.23p

• Net debt down 7.2% to £462.6m

• Covenant leverage of 1.66x EBITDA (FY25: 1.80x)

The reduction in net debt and leverage is welcome and suggests the business is generating genuine free cash flow. A quick look at the cash flow statement confirms this view: my sums suggest the business generated around £27m of surplus cash during the period, mirroring the reduction in net debt.

Trading appears to have improved during the second quarter, with the company reporting a 1% increase in like-for-like “core” volumes for the half year.

This follows a 3% decline in volumes during Q1 due to severe weather, so we can conclude that core volumes rose by around 4% in Q2.

It looks like further improvement is expected during the second half of the year, with the company noting “seasonally stronger H2 trading trending ahead of the prior year”.

Pricing is said to be strong with “attractive dynamics” in key markets despite the situation in the Middle East.

Profit adjustments: when Graham looked at Sigmaroc’s FY25 accounts in March, he concluded that they were not clean.

Having looked at today’s half-year numbers, I’ve come to the same conclusion. £25m of adjustments are used to increase reported net profit of £34.8m by 72% to an adjusted figure of £59.9m!

Here’s the full list:

Opinions vary on how many of these are acceptable. Personally, I would not accept restructuring or share option expenses as in my opinion these are respectively business-as-usual and remuneration.

For an acquisitive business like this one, I’m also reluctant to accept too many acquisition-related expenses. They keep on coming and are an inevitable consequence of the business model.

“Other non-underlying” items are said to be professional adviser fees and similar, so I would guess some of these may also relate to restructuring and/or acquisition activity.

Profitability: in case it seems like we are overly petty about adjustments, I think it’s worth pointing out the difference these arbitrary exclusions make to the returns generated by a business.

I’ve calculated Sigmaroc’s trailing 12-month return on capital employed using adjusted and reported operating profit to illustrate this:

• TTM ROCE (reported op profit): 7.5%

• TTM ROCE (adj op profit): 9.7%

For a capital-intensive and relatively low-return business such as Sigmaroc, I would suggest that a 2% change in ROCE could be the difference between earning a return above the company’s cost of capital and failing to do so.

Outlook & Broker Estimates

Despite the positive reception given to today’s results, the company’s expectations for 2026 are unchanged.

The two broker forecasts that I can see for 2026 are unchanged or lower today:

• Panmure Liberum FY26E adj EPS: 11.2p (unch)

• Zeus FY26E adj EPS: 10.8p (prev. 11.0p)

The equivalent consensus figure on the StockReport is 10.9p, so it looks like brokers covering the stock have a fairly uniform view on 2026.

What has changed is the outlook for 2027, with both Panmure and Zeus upgrading their estimates for future years to reflect the expected contribution from today’s acquisition (which I cover below):

• Panmure Liberum FY27E adj EPS: 12.6p (prev. 12.4p)

• Zeus FY27E adj EPS: 12.7p (prev. 11.8p)

For some context, the 2027 consensus on the StockReport prior to today was 11.8p, so it looks like today’s acquisition is expected to add c.7% to 2027 earnings.

Pricing Sigmaroc against these revised 2027 EPS forecasts gives me a P/E of 11. That’s in line with the rating prior to today:

Let’s take a look at Sigmaroc’s latest purchase.

Acquisition of AB Dolomitas

AB Dolomitas is a producer of “high-quality dolomite” located in Lithuania. Dolomite is apparently a subgroup of high-grade limestone that’s “able to supply all of SigmaRoc’s core segments, whilst also being critical for the production of Green Steel”.

Dolomitas is said to be “an essential supplier to a significant network of companies and sectors” in the Baltic region. The company also has its own logistics network in the form of trucks and rail wagons.

Some key metrics about the acquisition:

• Dolomitas generated revenue of €70m and EBITDA of €18m in 2025 (25% margin).

• Sigmaroc is paying €110m (€90m cash + €20m new SRC shares), plus up to €8m for “certain non-core assets”, giving an acquisition multiple of c.6.5x EBITDA, slightly above Sigmaroc’s own EV/EBITDA multiple of c.7.5x.

• Dolomitas has annual production of c.3.5m tonnes of dolomite and c.25 years of reserves and resources, “with the potential to secure additional reserves and resources for another ~20 years”.

The size, valuation and purpose of this acquisition all look reasonable to me. It’s consistent with Sigmaroc’s existing geographic and market footprint and is small enough to be a bolt-on deal that shouldn’t have too much impact on leverage.

Roland’s view

We’ve been neutral on Sigmaroc in recent times, despite the StockRanks taking a more favourable view:

I can see some arguments in favour of staying neutral. I don’t think this is a business that deserves to be valued on a high earnings multiple. While quarries such as those owned by Sigmaroc tend to enjoy strong localised market share, they don’t generate high returns on capital. I don’t see this as a potential compounder:

On the other hand, earnings forecasts have edged higher over the last 12 months and have been upgraded again today (for 2027 and 2029). This positive momentum is encouraging, suggesting Sigmaroc’s acquisition-based growth model is delivering results.

As these upgraded numbers feed into investors’ valuation estimates, we could see the stock drift higher.

I wonder if there could also be some upside to 2026 forecasts if the “seasonally stronger” trends highlighted today continue.

Finally, I’m encouraged by the upwards StockRank trend seen over the last two years:

I’m going to take a chance and move our view to AMBER/GREEN today, with the caveat that I’d turn neutral if earnings momentum eases or if the valuation becomes too demanding.

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Concurrent Technologies (LON:CNC)

Up 4% at 275p (£238m) - Interim Results - Roland - AMBER =

Half-year results: today’s headline numbers look fairly strong, with a remarkable 110% increase in order intake for the half year. This means that 2026 YTD order intake has now equalled the £47.0m reported for the whole of 2025:

• Revenue up 10% to £23.2m

• Pre-tax profit up 19% to £3.2m

• Adj EPS +5% to 2.93p

• Order intake +110% to £46.9m

Profitability also improved in H1 relative to last year, with an H1 operating margin of 14.4% (H1 25: 12.8%). However, it seems that margins may weaken slightly in H2. My reading of today’s upgraded guidance is that revenue will grow faster than profit during H2, depressing margins (my emphasis):

The Board is confident in delivering FY26 revenue materially ahead of market expectations. Profit for FY26 is expected to be ahead of market expectations.

The company obfuscates the reasons for this slightly, in my view, blaming both the phasing of revenue and profit recognition from a large contract and “some material one-off people related costs in the year”.

I’m not completely sure how to interpret the likely impact of this on 2027 margins, but I don’t think there’s anything serious to worry about and would guess that margins will remain broadly stable.

Broker estimates: however, I do think it’s interesting that broker Cavendish (at least) has not chosen to upgrade its EPS forecasts today, pointing out that its 2026 adj PBT forecast of £8.3m is already ahead of £8.0m consensus.

For a more rosy view, paid research house Equity Development are now forecasting 2026 EPS of 7.5p for Concurrent, nearly 10% above Cavendish’s unchanged 6.8p forecast.

My feeling is that any upgrade to consensus after today’s results could be relatively modest.

More broadly over the last year, it’s worth remembering that the trend in earnings forecasts has been slightly negative. This means that any upgrade following today’s results only seems likely to return expectations to where they were at the start of 2026:

Roland’s view

Concurrent is in good health, performing well and continuing to grow. Ultimately, I think the question here is around valuation.

While recent growth has been strong, quality metrics are only slightly above average…

… and the shares are already trading on a rolling forecast P/E of 32:

I would need to see more rapid earnings growth or stronger quality metrics to persuade me to take a positive view, so I’m staying neutral today.