Daily Stock Market Report (Thur 5th March 2026) - BMY, AV., TW, RGG, HTG, SMWH

Good morning!

Today's Agenda is complete. Spreadsheet accompanying this report: link.

Companies Reporting

Graham's Section

Rentguarantor Holdings (LON:RGG)

Unch. at 28.9p (£42m) - Full Year Results - Graham - RED =

RentGuarantor (AIM: RGG), a provider of rent guarantee services to prospective tenants across the socio-economic spectrum wishing to rent property in the UK private rental sector, is pleased to announce its audited financial results for the year ended 31 December 2025 ("FY2025").

This stock moved onto AIM last August, and I’ve been a keen follower since then. Despite its strong growth rates, I have struggled to understand the valuation it has achieved. I’ve also found the frequency at which it publishes RNS announcements rather offputting (there were five in February!).

But let’s try to keep an open mind as we review these full-year results.

Highlights:

• Revenue +87% to £2.39m

• Operating loss £1.38m (“or £817k excluding AIM Admission costs and accelerated marketing spend”)

• Year-end cash reserves £2.05m

I can understand leaving out AIM admission costs from adjusted profit measures, but I’d have some difficulty when it comes to accepting the exclusion of marketing spend.

Additionally, the £2.05m cash balance should be considered in the context of the company raising £4m during the year. There has clearly been a significant cash drain, over and above the £1.38m operating loss, given that the company entered 2025 with a small net cash position.

Outlook

While there have been plenty of operational updates in the new year, the only financial guidance is that “the first two months of 2026 are showing further growth in revenues.”

We do also get an interesting note on the impact of the economy:

The current economic climate in the UK, combined with the Renters' Reform Act, presents a significant growth opportunity for RentGuarantor to scale its operations and establish itself as the leading provider in its sector. There has never been a more critical time for both landlords and tenants to protect their positions with a reliable rent guarantee solution. Landlords cannot afford sustained rental losses, and tenants benefit from avoiding the added stress and risk of potential possession proceedings…

With rental property likely to remain in limited supply, upward pressure on rents is expected to continue. At the same time, the private rental sector is undergoing substantial legal and digital transformation. RentGuarantor is well resourced, strategically positioned, and equipped with the expertise to capitalise on this shift and secure a valuable first-mover advantage.

CEO comment is pleased with the spending that was enabled by the fundraising efforts:

"FY2025 marked a pivotal year for RentGuarantor, with strong revenue growth, a strengthened balance sheet and meaningful strategic progress across the business. Revenues rose 87% to £2.39 million, and our improved cash position, underpinned by the total of c. £4 million raised in 2025, has enabled us to invest confidently in marketing, technology, product advancement and team expansion.

Cash flow analysis

As I try to get a greater understand of where the money has gone, here is the cash flow statement:

Checking footnote 20 (cash flow from operating activities), I see that over £700k left the company as it reduced outstanding payables.

Another footnote reveals that most of this (over £400k) was due to a reduction in “amounts due to related parties”. There is a long footnote explaining the related party transactions between the CEO and company itself.

To be clear, I’m not saying this to raise any suspicions - this is all fairly normal when studying smaller companies. I just think it’s worth understanding how the company managed to burn through over £2m when the operating loss was only £1.4m.

Graham’s view

You may wonder why I continue to study this company when I am so consistently negative about it.

The reasons are:

1. Very fast top-line growth. We don’t regularly get to study companies whose revenues are almost doubling year-on year.

The mission statement as expressed by RGG’s CEO is:

Unlike other property portals who have a subscription-based model with estate agents, Paul has a vision for RentGuarantor as being the premier online place to go for landlords and tenants.

It’s not easy, but I’m interested in finding quality businesses at an early stage in their development, before their quality is widely understood. RGG strikes me as something that has the potential to achieve this.

But I’m clearly not the only person who thinks this, as the shares apparently offer very little value. The ValueRank is only 13.

Given the lack of profitability, I think price to sales is the multiple we should be looking at: based on 2026 forecast sales of £4m, this is trading at 10x sales.

Even for a thriving, profitable SaaS business, that would be a demanding valuation.

Therefore, I am going to stay RED on this for the time being.

But I’ll be watching it closely. Forecasts suggest that it can turn a profit this year.

If RGG looks like it is on track to break even in 2026, and if I’m convinced that it’s fully funded through to profitability, my stance on this is likely to change very quickly. I could go straight to neutral at that point.

So I’m staying negative for now, but am very open to changing my mind - perhaps at the interim results this year.

WH Smith (LON:SMWH)

Up 1% to 613.5p (£775m) - Trading Update - Graham - RED =

This stock is now a shadow of its former self, after selling off its High Street business at a cheap valuation and then finding accounting errors in its North American division last year:

Today’s trading update does at least offer stability in terms of revenue generation. Group like-for-likes are up 2%:

This is achieved despite temporary airport store closures in the UK.:

As expected, total growth has been impacted by temporary store closures across all Heathrow Airport terminals as we continue to invest in the quality of our UK store portfolio. Our refurbished flagship stores are expected to open in April.

Looking at the areas not impacted by store closures, it’s a mixed bag: Hospital LfL revenue up 4% while Rail LfL revenue is down 2%, “against the backdrop of continuing consumer headwinds”.

In North America, where the accounting black hole was discovered last year, it’s again very mixed: positive trends in Airport Travel, but negative trends for Inmotion (electronics retailing) and in Resorts, “largely driven by a continued reduction in Las Vegas visitor numbers”.

Outlook is in line.

The Group has delivered a solid first half performance and is on track to deliver Group guidance for the year.

Looking ahead, we are mindful of the geopolitical uncertainty in the Middle East and the impact that this is having on passenger numbers across our key markets. We will continue to monitor the situation and focus on what we can control, including executing against our clear strategic priorities and strengthening our focus on cost and cash discipline.

Graham’s view

This is an old favourite of mine but I turned fully negative on it in December at the full-year results. I had plenty of reasons:

• FY25 results missing expectations

• FY26 guidance looking light against existing forecasts at the time

• An FCA investigation into compliance with listing rules, in the context of the large accounting error.

• Net debt of £390m excluding leases, or £874m including leases.

• Very unclean results with enormous “non-underlying items” including £138m of impairments.

• Deeply negative tangible balance sheet equity.

The company has since appointed an Executive Chairman, which does at least remove one of the concerns I had.

Overall, however, given that my downgrade was three months ago, and not all that much has changed since then, I think it makes sense for me to stay fully negative on this one

Roland's Section

Aviva (LON:AV.)

Down 2% at 653p (£20.0bn) - 2025 Results - Roland - AMBER/GREEN =

(At the time of publication, Roland had a long position in AV.)

Today’s results from this FTSE 100 insurer have received an indifferent reception from the market, but look pretty healthy to me. As far as I can see, they suggest investors can remain confident in the medium-term outlook for the business (and the dividend).

2025 results summary

Headline numbers show a big rise in profit and improved profitability, with CEO Amanda Blanc reporting that the business has achieved its “2026 financial targets one year early”.

• Operating profit up 25% to £2,203m, including £174m contribution from Direct Line

• Operating profit rose by 15% excluding Direct Line

• Cash remittances up 4% to £2,077m

• Return on equity up 1.8% to 17.5%

• Operating earnings per share up 17% to 56.0p

• Full-year dividend up 10% to 39.3p per share

• £350m share buyback

In a nutshell these figures show us that the group’s profits generated an attractive return on equity, reflecting the company’s capital-light strategy. Aviva says 68% of its profit is now from capital-light businesses.

Cash generation is another strength – broadly, the cash remittances figure above of £2,077m represents post-tax surplus cash returned to Aviva from its operating subsidiaries. This means that it’s a good proxy for the amount of cash available to support dividends and buybacks (as long as regulatory capital coverage ratios remain adequate, as they are here).

In this case, last year’s cash remittances comfortably cover the 2025 dividend of 39.3p (£1.2bn) and new £350m buyback.

Divisional trading: Growth was positive across all four of Aviva’s operating segments, as this slide from today’s presentation illustrates:

General Insurance (UK & Ireland): volume and profitability improved, with gross written premium up 27% to £9,787m and operating profit up 52% to £708m. The discounted combined operating ratio for the year was 89.7% (2024: 90.9%). A figure under 100% represents profitable underwriting.

Canada General Insurance: Aviva is Canada’s second largest Property and Casualty insurer, with a c.9% market share and 2.6m customers.

In 2025, gross written premiums rose by 2% to £4,358m, while operating profit climbed 49% to £408m. Combined operating ratio improved by 2.9% to 95.6%.

Insurance, Wealth & Retirement: this business offers individual retirement products such as annuities,, wealth management and bulk annuities. Aviva has a c.25% share of the UK life insurance market and a large share of the personal annuity market, which has really strengthened since interest rates returned to more normal levels, improving annuity rates.

Last year saw bulk annuity sales fall by 41% to £4.6bn, “reflecting a more typical year”. I think this has also become quite a crowded market, perhaps explaining the slowdown.

However, overall IW&R results were boosted by strong demand for products such as Health Insurance (especially from corporate customers) and wealth management. Operating profit from these two segments rose by 53% to £204m and by +36% to £175m, respectively.

Net inflows into the Wealth business rose by 6% to £10.9bn, representing 6% of opening AUM.

Aviva Investors: this is the group’s conventional asset management business. It’s relatively small and largely serves the group’s own requirements – year-end AUM was £262bn, of which £221bn was being managed for Aviva Group businesses.

Net inflows were £1.4bn last year, but AUM rose by 10% to £262bn over the year. This suggests market performance/investment gains of perhaps 9% for the full year.

Learning more: there’s a lot more detail in the results about each division and the detailed financial mechanics of the insurance business. For anyone wanting to get an accessible overview I’d suggest starting with today’s results presentation before drilling down further if desired. While company results presentations inevitably put a positive spin on results, for complex businesses like Aviva they are also a good way to get an overall understanding of the business.

Outlook & updated financial targets

Aviva updated its three-year targets for the business in November. These are:

• Operating EPS growth of 11% CAGR from 2025-2028;

• Return on Equity of >20% by 2028;

• Cash remittances of >£7bn cumulatively from 2026 to 2028.

Management says the group is “comfortably on track” to achieve its previous cash remittance target for >£5.8bn from 2024-26. Based on £4.1bn achieved to date, this suggests a 2026 figure of at least £1.7bn. That should provide continued support for the dividend, as a minimum.

Consensus forecasts have moved higher over the last year overall, despite recent dip:

Based on these FY26 estimates, Aviva shares are trading on a forecast P/E of 11, with a potential 6% dividend yield.

Roland’s view

I admire what CEO Amanda Blanc has achieved since taking charge at Aviva and today’s results don’t change that. If the company can maintain return on equity at the high-teens level achieved last year, then I think the current 6% dividend yield could still be a reasonably attractive valuation, despite the stock’s strong performance over the last few years:

I think Aviva remains an attractive choice for income at current levels and don’t see any reason to change our previous broadly positive view today.

Hunting (LON:HTG)

Up 4.5% at 535p (£823m) - Results for the year ended 31 December 2025 - Roland - AMBER =

LONDON, England. Hunting PLC (LSE: HTG), the precision engineering group, today announces its results for the year ended 31 December 2025.

2025 results summary

This engineering group is predominantly focused on providing parts and equipment for the oil and gas sector. Today’s headline numbers appear to be largely in line with consensus expectations:

• Revenue down 3% to $1,018.8m

• Adjusted EBITDA up 7% to $135.7m

• Adj pre-tax profit up 5% to $79.7m

• Adjusted earnings up 9% to 34.1 cents per share

• Final dividend up 13% to 6.8 cents per share

However, this comment from management made me wonder about visibility on future work, after the completion of major contracts for Kuwait Oil Company and ExxonMobil last year:

.. management is actively converting its high-value tender pipeline to backfill capacity and scale the order book.

Sure enough, Hunting’s year-end order book fell by 30% to $358m last year (Dec 2024: $508.6m).

On the assumption that all of these orders will be fulfilled in the current year, this means that revenue visibility is only around 35%, compared to c.50% at the start of 2025.

The outlook for the group’s OCTG product group (pipe connection products) appears particularly uncertain. This division generated 46% ($468m) of group revenue and 65% ($87.7m) of group EBITDA last year, but the order book has collapsed dramatically following the completion of last year’s big orders from KOC:

While I recognise that some of Hunting’s work is fairly short-cycle and will be both ordered and completed during the year, this doesn’t seem an ideal way to start the year. It may also help to explain the narrative about cost savings. In a separate RNS today, management have confirmed plans for a further $15m of cost savings by the end of 2027.

Profitability/balance sheet: profitability in this business has been fairly weak over the last couple of years, at least at a statutory level.

Today’s figures do show some improvement in this regard:

• Operating margin: 7% (2024: n/a)

• Return on capital employed: 8% (2024: n/a)

• Free cash flow: c.$103m (2024: $138m)

• Net cash: $28.1m (2024: $70.7m)

Profitability was acceptable but not especially impressive last year, in my view. With the stock trading on a FY26E P/E of 16, I think continued growth is already priced in unless there are further improvements in profitability.

Thankfully, adjusting items in these results were relatively modest, at $14.2m (2024: $109m). This means the statutory profits are within a reasonable distance of the company’s adjusted measures.

Outlook

Hunting made two acquisitions last year and appears to have some interesting technology.

Management says that events in the Middle East could cause “some tender and order slippage” but are not expected to have a material impact on “long-term growth trajectory”. The potential impact on near-term revenue isn’t clear to me – in addition to client projects, Hunting also has some of its own facilities in Dubai.

Guidance is vague but positive:

Overall, Hunting is anticipating further earnings growth in the year ahead and, having demonstrated that the Group can deliver growth and returns against a challenged macroeconomic backdrop, the Directors remain confident that our skilled workforce will rise to these challenges as we continue to deliver our Hunting 2030 Strategy.

Fortunately, broker Canaccord Genuity has provided an update today that’s available on Research Tree – many thanks.

Canaccord’s forecasts for the year are largely unchanged.

• FY26E adj EPS $0.46 (prev. $0.45)

• FY27E adj EPS $0.60 (unch)

Interestingly, the broker’s analysts characterise Hunting’s order book as having “normalised” after an exceptional period. So perhaps I don’t need to be too concerned about revenue visibility.

These forecasts leave Hunting trading on what seems a fairly strong valuation to me, given the modest profitability:

However, it’s possible that US peers are more highly rated, as is often the case.

It’s also fair to say that double-digit earnings growth expectations for the current year mean the PEG ratio of 1.0x is reasonably attractive and could indicate an attractive valuation.

Roland’s view

In February, Mark commented that Hunting’s only strong factor score was its MomentumRank. This remains true, at least prior to today’s full-year results being digested by the algorithms:

Given that the company’s broker has left its 2026 and 2027 forecasts unchanged today, I have to assume that analysts are reasonably convinced that Hunting can refill its order pipeline and deliver on current forecasts.

Even so, I can’t help feeling that much of the good news is already reflected in the share price here, especially as earnings estimates have been trending lower over the last year:

To reflect unchanged forecasts and the company’s rather average profitability, I’m going to leave our neutral view unchanged today. This is also reflective of the StockRank Style at the time of publication: