Daily Stock Market Report (Thu 24th Sep 2026) - AT., RPI, VTY

Good morning. China and the US have agreed to extend their current trade war truce by two months until January following meetings between Donald Trump and China’s President Xi Jinping. The truce had previously been set to expire on November 10.

More broadly, oil remains over $100 and government bond yields have continued to rise, with with the yield on 10-year US Treasuries topping 5%. Here in the UK, it’s closer to 5.3%:

Finally, the FT reports that Chancellor John Healey may be willing to consider cutting the size of the UK’s fiscal buffer in order to minimise tax rises without making unnecessary cuts to spending. This is a reference to the headroom the government expects to have for meeting its target of balancing the budget by 2029-30.

Apparently, the Treasury believes bond market investors would accept a reduction in headroom without pushing bond yields up unduly.

Overnight market movements:

• The FTSE is down 0.3% at 10,682

• S&P 500 is down 0.3% at 7,682

• Brent crude (November) is up 0.1% at $103.14/bbl

• Gold is down 0.1% at $4,280/oz

• Bitcoin is down 0.3% at $84,158

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Spreadsheet accompanying this report: link.

Today's report is now complete. Sorry I wasn't able to cover all the stories of interest today.

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Companies Reporting

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Roland's Section

Ashtead Technology Holdings (LON:AT.)

Up 59% at 543p (£504m) (yesterday) - Statement re Possible Offer - Roland - TAKEOVER

US private equity firm Ember Infrastructure Management has made a possible offer for subsea equipment hire company Ashtead Technology:

• 615p per Ashtead Technology share

Details of the offer were made public at 4.07pm on Wednesday (yesterday), so this morning’s share price drop actually follows a c.60% rise yesterday:

Multiple proposals

This proposal follows three previous unsolicited offers from Ember, the first two of which were unequivocally rejected by Ashtead’s Board. It looks like there has been a bidding situation ongoing for a while, with Ember’s offers now having reached a level where Ashtead is prepared to consider them.

The company says it is considering the current proposal while also providing Ember with “preliminary due diligence information”.

At this stage, there is no certainty that Ember will make a firm offer, so this could still come to nothing.

Roland’s view

When I reviewed Ashtead’s half-year results at the start of September, I took a neutral view to reflect August’s profit warning and the continuing impact of the conflict in the Middle East.

However, I noted the continuing attractive profitability of the business and suggested that “Ashtead could offer value based on historic profits”.

Perhaps I should have been bolder! Congratulations to shareholders who chose to look through the short-term headwinds and saw an opportunity here.

In terms of valuation, 615p is equivalent to 15.6x FY26 EPS forecasts and only 13.2x FY27 estimates, so it doesn’t seem overly ambitious for a company with decent quality metrics:

Of course, there is some uncertainty to the outlook and it’s possible this will continue:

It’s worth noting that unlike the recent offer for Eleco, Ember’s proposal to Ashtead is well below the stock’s historic highs. If a firm offer is made, some shareholders could be forced to exit at a loss:

On balance I don’t have a strong view on the valuation here. My guess is that since Ashtead’s board have agreed to due diligence, they may be willing to accept a firm offer at this level if Ember wants to proceed.

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Raspberry PI Holdings (LON:RPI)

Up 10% at 698p (£658m) - Interim Results - Roland - AMBER =

This innovative low-cost computer specialist is one of the top three performers in the FTSE 350 so far this year, up 123% year-to-date (the other two are CMC Markets and XP Power). Profit (adj EBITDA) guidance has been upgraded today, but as I’ll explain I think the impact on earnings will probably be fairly modest and potentially hard to forecast.

I covered the business in a Stock Pitch in April, following which Graham reviewed the group’s half-year trading update in June. He took a neutral view at the time, noting the valuation was high but that risks relating to component shortages and price increases appeared to have been managed successfully.

Today we have full details of Raspberry Pi’s half-year performance and updated outlook commentary for the remainder of the year. Let’s take a look.

Half-year results summary

We already know that memory shortages have had an impact on the consumer electronics market, as AI system builders hoover up all available supplies at top prices. Raspberry Pi has emerged successfully from this, noting that its existing inventories, scale, financial strength and relationships with suppliers have enabled it to secure inventory and led to an increased level of confidence in being able to continue to do so.

Even so, I am surprised by today’s headline figures and the apparent distortion in Raspberry Pi’s “unit economics” in H1:

• Revenue up 90% to $256.9m

• Gross profit up 79% to $59.4m

• Gross margin down 2% to 23%

• Adj EBITDA up 108% to $40.3m

• Pre-tax profit up 216% to $19.6m

• Adj EPS up 192% to 13.9c

The 90% increase in revenue needs to be seen against the 17% increase in unit volumes, which rose to 4.2m in H1:

While the product mix within this volume changed somewhat, this tells us that the average price of products sold during the first half of this year rose by 62% to c.$61.

Today’s commentary confirms my figures are in the right ballpark:

[Average Selling Price per board] increased by 42% from $46.4 in H1 2025 to $65.9 in H1 2026 due to increases in the selling price of the product to cover the increases in the cost of component memory.

Profitability: while overall gross margin dipped in H1, the group’s EBITDA margin improved to 15.7% (H1 25: 14.3%) and its operating margin rose to 7.7% (H1 25: 5.9%). That’s quite a significant shift.

CEO Eben Upton notes that what’s happening in the memory industry is ultimately a normal cycle:

The current memory price cycle is a large, but ultimately typical, instance of a phenomenon that periodically affects the industry. As in previous cycles, sustained high prices are encouraging additional investment in foundry capacity, with meaningful new supply expected to come on stream in 2028.

Trading commentary: this business has its roots in supplying educational and hobbyist customers, but these days they form a minority of the customer base. The majority of the company’s output now goes to business customers, either end users or OEMs.

Demand from both classes of buyer was strong in the period and the company’s order backlog doubled in H1.

One key product launch during the period was AI HAT+2, which is an edge AI device that allows users to run LLMs and vision-language models locally, providing benefits in cost, privacy and latency. The company sees edge AI as a big growth area and intuitively this seems right to me.

Another area of emerging growth may be the defence industry. The company has a “Board-to-Board” initiative that’s being used to build relationships with senior decision makers at major OEMs:

Over the past 18 months, we have engaged with more than 50 C-suite leaders and have identified 26 projects, with an increasing focus on defence contractors and national militaries.

Outlook

Unit volumes are expected to increase on H2 as Raspberry Pi works through its backlog, having secured additional contract manufacturing capacity in H2.

However, the company says that the “exceptional unit economics” seen in the first half have moderated. One reason for this is that older stocks of (cheaper) memory are being depleted and replaced with higher-cost memory purchased more recently.

Despite this, adjusted EBITDA is “expected to be ahead of current market consensus”.

I don’t have access to broker forecasts today, but my impression is that previous consensus was for EBITDA of c.$58m – so a beat is not surprising based on H1 EBITDA of $40m.

Without access to any specific financial guidance for H2, it’s hard for me to estimate the likely impact on earnings. However, after an initial pop, the shares are up by less than 10% as I type. This suggests to me that the upgrade to earnings is unlikely to be greater than this.

The longer-term potential for growth could be considerably greater, though, if volumes continued to rise:

A strong pipeline of OEM opportunities and the increasing salience of its offering in key end markets mean that Raspberry Pi is well positioned for rapid growth in unit shipments in 2027 and beyond.

Roland’s view

Raspberry Pi’s half-year figures look remarkable to me. As I speculated with Computacenter (disc: I hold) recently, I can’t help feeling they could suggest that we may be nearing peak spending on AI.

Despite this, profitability is still somewhat average and with the stock trading on a forward P/E of 50, I think there’s already plenty of good news priced in for the near term.

There hasn’t been a consistent trend of broker upgrades, either. Prior to today, at least, expectations were for flat or lower earnings next year:

Of course, being too pessimistic is rarely a good way to make money in stocks, especially in a booming sector. So I may be wrong, or at least premature.

On a longer view, I still think Raspberry Pi is a high quality, differentiated business with the potential to deliver impressive growth over time. I also wonder if the company’s focus on edge AI and low-cost devices may also help it escape the impact of any slowdown in the boom in hyperscale AI.

To balance these conflicting views, I’m going to maintain our neutral view today.

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Vistry (LON:VTY)

Down 5% at 253p (£811m) - Half-Year Results - Roland - PROFIT WARNING (AMBER/RED =)

Today’s half-year results also include the conclusions of the CEO Review carried out by CEO Adam Daniels following his appointment in April. As expected these are quite poor figures, but the uncertainty they imply is made worse by the fact that Vistry has also warned on profits again today.

Half-Year Results Summary

H1 performance was already expected to be poor, with full-year profit dependent on a stronger performance in H2:

• Adjusted revenue (including JVs) down 9% to £1,703.3m

• Completions down 8% to 6,304 units

• Adjusted pre-tax loss of £(83.3)m (H1 25: profit of £80.6m)

• Reported pre-tax loss of £(661.3m)

• Adj EPS of (18.8)p

• Net debt £468.8m at 30 June 2026

• Average daily net debt was £799m in H1

The gap between reported and adjusted profits in H1 was particularly large. There were two main reasons for this:

• A £475m goodwill impairment charge relating to past acquisitions;

• A £73.2m building safety provision.

I am prepared to adjust out the goodwill impairment, given the circumstances. But as I’ve commented previously, housebuilders’ building safety provisions represent real future cash outflows and are ultimately a cost of doing business for these firms. I don’t see much justification in adjusting them out, especially as they are being incurred over multiple years.

Debt worries: the other point worth noting here is the high level of Vistry’s average daily net debt. This is the figure to monitor, in my view, not the much lower period-end figure.

As a sign of how dependent the company is on leverage, Vistry expects it will take three years (until FY29) to bring average daily net debt below £300m.

One way to accelerate this process might be to raise new equity, but the CEO appears to rule this out today:

We are committed to entering 2027 on the right footing and following the actions taken, do not anticipate any need to raise equity.

Instead, he’s planning to slim down the company’s land bank and streamline its operational structure, making this a slightly smaller but more profitable business than was previously the case.

Vestry’s lenders appear to be happy with this plan and have agreed the necessary covenant waivers to allow the company to progress into 2027:

Our banking group has demonstrated their support for the Group by providing waivers for the interest cover covenants for FY26 and HY27 that were subject to impact from the sizeable charges being taken in connection with the CEO Review

I count 28 mentions of the word covenant in today’s half-year results. It’s explicit that the company would have breached its interest cover covenants as a result of today’s accounts, so we have to assume that the company’s lenders have done the maths and are confident debt can be reduced without fresh equity.

I think this is positive for shareholders, but only in the limited sense of avoiding immediate dilution. There’s a risk that the alternative of several years’ suppressed earnings and cash flow could be equally painful for equity holders, if housing market conditions don’t improve to provide a favourable tailwind.

CEO Review: key points

We are repositioning Vistry as a specialist mixed-tenure housebuilder that will deliver consistent, cash-backed growth in earnings alongside highly attractive returns on capital. To achieve this the Group will need to be smaller, more focused geographically and with increased discipline and control in operational delivery and allocation of capital. Managed realisation of value from our asset base will support further de-leveraging, ensuring the Group has a robust platform from which to operate.

A key element of this will be the reduction of Vistry’s land bank from 51k to 36k plots, reducing capital employed and providing cash to fund debt reduction.

The company also appears to be steering slightly away from its previous goal of becoming a capital-light partnership builder. Daniels’ strategy is now for Vistry to become a leading mixed-tenure builder, with a 60:40 split between partner funded and open market homes.

The reshaped business will have reduced exposure to “underperforming South East areas” and greater exposure to the Midlands and the North of England. The end goal will be a business building c.12,000 homes per year (2025: 15.7k, 2024: 17.2k).

Outlook & Revised Guidance

Order book: Vistry has redefined its forward order book “to comprise only exchanged or otherwise legally contracted orders”, excluding those where formal exchange has not yet taken place.

This seems prudent to me, to say the least. But I can’t help feeling that the timing of this change also helps to mask the exact level of the decline in the group’s order book. I often find that when companies redefine their reporting metrics, the timing of the change is worth considering.

Today we’re given the following numbers, based on the new order book definition:

• September 2026 order book: £3.3bn

• September 2025 order book: £3.7bn

However, the group’s 2025 results reported a March 2026 order book of £4.5bn, using the old definition of orders. This does seem to suggest that c.£1bn of expected but not contracted work has now disappeared from the order book.

Profit guidance: after a £475m impairment in H1, Vistry expects a similar set of additional costs in H2 (my emphasis):

We are in the process of finalising the classification and quantification of items related to the exit from the South East of England, changing site strategies in the land bank and other strategic actions. We anticipate that the impact of these items in full year will be around £470m.

There will also be a £40m cut to pre-tax profit as a result of delays in certain partnership deals so they can be renegotiated to meet “our revised criteria”.

After all of these costs, Vistry expects FY26 adjusted pre-tax profit of c.£165m.

For contrast, in May the company cited a consensus FY26 forecast range of £168m to £283m.

FY27 adjusted pre-tax profit is now expected to be c.£185m.

While it’s welcome that this uncertainty has been narrowed down, I think it’s fair to say today’s guidance is a profit warning.

Roland’s view

One figure that hasn’t fallen today is Vistry’s tangible net asset value, which actually rises slightly to £2,520.7m or c.790p per share today (FY25: £2,312m).

With the stock trading at 253p as I write, Vistry equity can be purchased at a 68% discount to its tangible net asset value. For a housebuilder whose net assets are essentially homes and land, this is potentially attractive.

The size of the discount hints at the possibility of a distressed valuation. Given the company’s debt levels, I think it’s wise to be cautious. As I mentioned above, even if debt is reduced, equity holders could face a period of very lean returns while lenders take priority.

Even so, for investors with a deep value bent and a favourable view on the outlook for housing, I think this could be a situation worthy of further research.

While I think this business probably will recover over time, I’m going to leave our view at AMBER/RED today, to reflect the high level of leverage and the fact that the company needed a covenant waiver to avoid falling into default. From a factor-based perspective, we can’t ignore these risks.