Daily Stock Market Report (Tue 11th August 2026) - SPX, SHOE, BWY, CML, ATYM, RGG

Circular AI funding at Nvidia: the biggest financial news story overnight is that Nvidia is turning to major institutions for $500 billion to help fund AI infrastructure. The original statement can be read here.

Here’s the key paragraph:

Memorandums of understanding signed with six of the world’s premier financial institutions to create these partnerships aim to establish the first compute financing platforms of their kind at global scale to enable the AI infrastructure buildout across NVIDIA’s ecosystem, including leading frontier AI labs, enterprises and AI clouds. Under these strategic partnerships, NVIDIA will work with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to create dedicated pools of capital at significant scale at attractive rates for NVIDIA customers.

In other words, Nvidia is helping to arrange cheap debt for their AI industry customers, in order to further boost demand for Nvidia's processing power.

I would categorise this news story in the same way that I categorise the forthcoming AI IPOs, expected to be at eye-watering valuations, and the other very large fundraising deals we’ve seen this year, such as the $80 billion equity raise carried out by Alphabet recently. These are all signs of the financial industry treating the AI trade as a one-way bet, and therefore allocating vast sums of capital to it on extremely generous terms.

Overnight market movements:

• The FTSE is unchanged at 10,860

• S&P 500 is flat at 7,758

• Brent crude (November) is up 0.3% $85.95/bbl

• Gold is down 0.4% at $4,370/oz

• Bitcoin is down 0.3% at $64,000

Wrapping it up there, cheers! Spreadsheet accompanying this report: link.

Companies Reporting

Graham's Section

Shoe Zone (LON:SHOE)

Up 21% at 74p (£34m) - Trading Update & Share Buyback Programme - Graham - AMBER/RED ↑

A tiny but powerful trading update:

Shoe Zone is pleased to announce that trading has continued positively throughout July and as a result of this, cash and equivalents as at 25 July 2026 stood at approximately £7.0m ahead of original budget. The Board continues to expect an adjusted loss before tax* of no greater than £1.0m for the financial year ending 3 October 2026.

With a market cap as low as Shoe Zone’s, a £7m cash swing is a very big deal.

There is a second RNS:

Following its trading update released earlier today, Shoe Zone announces that it intends to conduct a share buyback programme of ordinary shares of £0.01 each in the capital of the Company… up to a maximum aggregate consideration of approximately £3.47 million.

Shares bought back “will be initially held in treasury and then cancelled periodically.”

Estimates: many thanks to house broker Zeus for publishing on this today. They have left adj. PBT forecasts unchanged at minus £0.5m (FY September 2026) and then +£0.5m (FY September 2026).

In terms of cash, Zeus already raised their net cash estimate for SHOE by £6.1m, after the July trading update. They raise their estimate by a further £1.7m today, getting an FY 2026 net cash estimate of £11.4m, and this is after the buyback. Without the buyback, they’d get a net cash position of £14.8m. That's more than half of last night's market cap.

Graham’s view

With the company’s profit/loss guidance and forecasts unchanged, the unexpected additional cash appears to be coming primarily from inventory control.

Checking the July trading update, I see that the company’s sales received a boost from their “warehouse closing down sale”, along with favourable weather. These sales appear to have very successfully cleared out inventory, resulting in a big cash boost.

Going further back, I see that the cash performance of the business has been improving. At the most recent interim results (H1 to March 2026), there was an inventory position of £28m (down from £34.5m a year earlier). Inventories had been as high as £38m in September 2024.

So the inventory movement alone had already freed up £10m. Taking any seasonality out of the picture, since March and September will have different requirements, the year-on-year benefit of lower inventory was £6.5m between March 2025 and March 2026, and that was before the warehouse closing down sale and the sales boost from stronger weather.

But I think there are a few things to highlight, before we get too excited.

Firstly, the overall revenue growth here is not amazing. Sales were £149m in 2025. Sales are expected to come in at £143m in the current year, and then £143m again in FY 2027 (Zeus have revised down their sales forecast for FY 2027 today, as it’s one week shorter than FY 2026).

The July trading update did see revenue forecasts increased, but only by a couple of percentage points. And there is no increase to revenue forecasts arising from today's update.

Secondly, the P&L situation remains unexciting. The company is now trading around breakeven, and is expected to remain around breakeven next year. A better cash position doesn’t mean that the company is suddenly profitable - it’s simply holding less stock than it did before.

The decision to send this cash boost directly to shareholders in the form of a buyback is a bold move, and it’s not one that I’d typically recommend for a loss-making company that isn’t planning to liquidate.

However, it’s worth mentioning that Shoe Zone is a family business run by two brothers (the CEO and Chairman) who together own the majority of the shares. They have both been involved in the business for decades.

In that context, the share buyback becomes more interesting - if we can trust the judgement of the Smith brothers and the Board, then perhaps the buyback is reasonable and is a good sign that the shares are undervalued? They wouldn’t recklessly endanger the financial security of the business they’ve been managing for so long, would they?

This buyback for c. £3.5m will spend only about a quarter of the company’s expected year-end net cash position (prior to the effect of the buyback), while potentially reducing the share count by about 10%, depending on the price achieved. Putting it that way, it sounds like a smart move.

The SHOE chart is interesting. These shares traded over 250p as recently as March 2024:

Putting it all together, I’m inclined to raise our stance on this by one notch, to AMBER/RED.

My reasons are:

• The positive July trading update did boost forecasts, and we haven’t accounted for that yet.

• The strong cash position covers a large percentage of the market cap.

• The Smith brothers are both highly aligned and highly experienced managers of the business.

My reasons for not going any further than AMBER/RED are:

• It's obviously still loss-making. It’s still operating in a highly competitive, commoditised industry with zero barriers to entry. It’s not what we might call a “high-quality” business, and its overall financial performance leaves a lot to be desired right now.

• The recent cash boost arises from inventory control. That’s not a bad thing, but it is difficult to repeat.

• While I’m inclined to trust the decision-making of the managers here, this is a retailer with plenty of lease liabilities (£34m at last count) and so having lots of cash on hand is not really a luxury, but a cushion against hard times.

So in summary: SHOE has issued some really encouraging news in the last few months, and I’m happy to upgrade our stance, but only by one notch at this stage.

Rentguarantor Holdings (LON:RGG)

Up 4% at 54.9p (£83m) - Unaudited interim results - Graham - AMBER/GREEN =

RentGuarantor (AIM: RGG), a leading provider of rent guarantee services, which includes property protection, to tenants and landlords in the UK private rental sector, is pleased to announce its unaudited interim results for the six months ended 30 June 2026 ("H1 2026" or the "Period").

I tentatively turned AMBER/GREEN on this in June and the share price is up by over 70% since then.

It has doubled in just a few months:

Today’s results are pretty exciting, as you might expect, as it grows from a small base:

• H1 revenue +250% to £3.4m. Applications more than doubled and the average size of each contract increased from £731 to £915.

• Adj. EBITDA improves from a £124k loss to a £110k profit.

• The H1 operating loss improves from £440k last year to only £10k, effectively at breakeven.

I think this bit might be key: “Signed a total of 367 partnership agreements with letting agent entities or letting agent groups (H1 2025: 224).”

The relationship between RGG and letting agents puts RGG right in front of landlords and tenants, as a solution to the new environment where evictions, including in cases where there are rent arrears, has become more complex. Note this, too:

We also announced a strategic partnership with the National Residential Landlords Association, or NRLA, affording RentGuarantor visibility to its 111,000-strong membership as we jointly create a co-supported education and training programme, aimed at helping landlords to manage risk and protect their rental income.

High visibility among their target audience, combined with the fact that RGG are solving new, serious challenges in the rental market, helps to explain the rapid growth they are experiencing.

Fundraising: £1m raised in June 2026, and another £2.15m received from warrant holders since then. Bank balance now c. £10m, a very healthy warchest for a company of this size.

AI: it’s obligatory for companies to explain their AI strategy in the current environment. RG say they are developing AI tools that “could illustratively have the potential to increase capacity for processing tenant documents to approximately 100,000 contracts per year by 2029”. (Context:3,700 contracts were completed in H1.)

Outlook: “The results have given the Board confidence in the Company's ability to meet market expectations on the financial performance for the year.”

Dividend: considering the growth opportunity and the fact that RGG has recently been fundraising, I don’t think a dividend makes a lot of sense here, but they say they “will consider the introduction of a dividend policy as part of its assessment of the Group's full-year results and future capital requirements.”

Graham’s view

This is one of the most exciting growth stories I cover in this report.

I’ve been AMBER/GREEN (moderately positive) on it, and I’m inclined to leave that stance unchanged after today’s in-line outlook statement.

If you judge it purely on the current numbers, the valuation is bonkers. The ValueRank is only 4, with a market cap of 10x current-year sales. The StockRanks take a fairly dim of view this:

However, if you’re willing to look further ahead, the valuation is much less extreme.

Estimates: For FY June 2027, Cavendish are forecasting PBT of £4.6m, rising to £8.5m in FY 2028. The valuation multiples would start to look very attractive, if these numbers materialised.

These estimates should of course be taken with a barrel of salt, as it’s impossible to predict the growth of early-stage businesses with such precision.

For me, the bottom line is that I wouldn’t want to bet against a business that’s growing like RGG is, and that is doing so from a position of strength. It’s well-capitalised and its founder-CEO, who has decades of property investment experience, is also the largest shareholder.

I’m not going fully GREEN because clearly it has a lot of work to do, if it’s going to grow into this valuation. But a moderately positive stance continues to make sense to me. It's worthy of further research, for growth-oriented investors.

Roland's Section

Spirax (LON:SPX)

Down 8.5% at 7,000p (£5.1bn) - Half Year Results - Roland - AMBER/GREEN =

In March this year, I upgraded our view on this industrial group to be moderately positive. That view hasn’t yet been reflected in share price action, but I’m interested to see if the latest results from this group – a global leader in steam management solutions – justify my confidence.

Half-year results: “first half in line”

Today’s half-year numbers haven’t received a very warm welcome from the market, but my initial impression is that they are relatively positive and suggest the business may be regaining some momentum:

• Revenue up 5% to £863.8m

• Adjusted pre-tax profit up 9% £152.3m

• Reported pre-tax profit up 54% to £135.4m

• Adjusted EPS up 9% to 150.0p

• Interim dividend up 3% to 50.4p per share

• Net debt down 6% to £618.2m (1.6x leverage)

Revenue growth of 5% is consistent with the 5% organic growth rate reported last year and is ahead of global industrial production (IP) growth of 1.8%.

Trading commentary: “strong orderbooks”

All three of the group’s divisions saw sales growth during the first half:

• Steam Thermal Solutions (STS): revenue up +1% to £419.8m

• Electric Thermal Solutions (ETS): revenue up 10% to £232.9m

• Watson-Marlow Fluid Technology Solutions: revenue up 8% to £211.1m

This doesn’t seem a bad result to me against a backdrop of rather weak global industrial growth:

Source: Spirax H1 2026 results

The table above suggests that IP growth is expected to improve in H2 this year. This is reflected in the company’s expectations for H2-weighted profits and higher margins in H2, driven by the core STS business, where headwinds in China are easing:

In STS, the unwind of the strong orderbook at the end of the first half is driving sales as anticipated and we expect second half sales growth to be ahead of the first half. We also expect margin to be higher than the first half, consistent with our typical 45%:55% weighting of operating profit. This reflects operating leverage from higher second half shipments driving a full year margin broadly in line with that of 2025.

Strong sales growth in ETS benefited from exposure to the (booming) semiconductor sector, which contributed a higher proportion of sales in H1 than during the same period last year (2025: 13%).

Performance in the Watson-Marlow business also sounds promising. This division has exposure to the biotech and pharmaceutical sector, which is driving growth:

WMFTS organic sales growth was 7%. In Biopharm, new order intake remained ahead of sales, with Q2 orders reaching the highest level of any quarter since the COVID-related peak of 2021 and ahead of pre-COVID levels, underpinning continuing sales growth

WMFTS is also the most profitable division, with an impressive 25%+ operating margin. However, all three parts of the business enjoy (adjusted) margins that I see as suggesting strong market share and durable competitive advantages:

Profitability is recovering: these results show a welcome improvement in group-level profitability, after a period of cost-cutting and restructuring. On a statutory basis my sums suggest the Spirax’s H1 operating margin improved to 17.9%, compared to 15.6% for FY25.

More importantly, perhaps, I estimate return on capital employed of 14.2% for the 12 months to 30 June, with a return on equity of 15.9%. These figures are all comfortably ahead of the 2025 numbers:

Why I’m not adjusting ROCE: I should say that Spirax provides its own adjusted measure of return on capital employed, which it reports at 35% for H1 2026. This relies on using adjusted operating profit together paired a narrower “more operational” definition of capital employed than the standard calculation I use. Notably, it excludes the impact of past acquisitions (e.g. goodwill).

Calculating ROCE based on an idealised alternative reality doesn’t seem that helpful to me as a potential investor.

Fortunately, Spirax also reports return on invested capital (ROIC), which includes the impact of acquisitions and disposals. ROIC was 13.3% in H1 – much more closely aligned with my view on ROCE. In my view, this is a more useful metric for investors to follow.

Creating value for shareholders: despite my comments above, I see Spirax as having an attractive level of profitability, with a track record of creating value for shareholders over time. The stock’s book value has risen at a compound average rate of 10% annually since 2016 despite a slowdown since 2022:

Building book value while maintaining attractive returns on equity is the core mechanism behind compound returns – mathematically, profits must rise over time.

Outlook

Commentary from CEO Nimesh Patel today sounds confident to me (my emphasis):

Continuing momentum in end markets such as Semicon and Biopharm as well as strong orderbooks, underpin our expectations for second half revenue and profit growth and we are reiterating our full year guidance.

A c.9% share price fall on the back of in-line guidance seems a little harsh to me for a business of this quality, but perhaps the market was pricing in an upgrade after a long period of in-line guidance:

It’s probably fair to say that Spirax does not look especially cheap, despite its above-average quality:

Roland’s view

This is a business I’ve often admired and considered as a possible long-term investment. Long-term shareholder returns have been excellent, but this was also an example of a quality mid-cap that became priced to perfection at the end of the zero interest rate era:

Rising interest rates combined with a slowdown in demand to trigger a brutal de-rating. Spirax is still down by more than 50% from its 2021 highs.

I haven’t done the research needed to gain an in-depth understanding of this business and its end markets. But today’s results show positive sales growth at improved margins and flag up the expectation of a stronger H2.

On balance, my view that the outlook is improving here is unchanged. The only question mark for me is whether growth will be strong enough to support and extend the current valuation.

The StockRanks suggest a similar view, with High Flyer styling reflecting strong quality and momentum but a weak value score:

Spirax isn’t cheap enough for me to turn fully positive, but I’m comfortable leaving my AMBER/GREEN view unchanged today.

CML Microsystems (LON:CML)

Up 5.5% at 290p (£48m) - AGM Statement - Roland - AMBER ↑

We haven’t looked at this radio frequency electronics firm for a year, since it reported a £7m sale of surplus land.

The shares have gone nowhere since then and the business has remained loss-making. But today’s AGM Statement suggests a return to profitability may now happen sooner than expected.

AGM update: “encouraging momentum”

CML’s financial year ends on 31 March, so today’s FY27 commentary relates to the period from 1 April onwards:

• CML has entered FY27 “with encouraging momentum following a positive final quarter [to FY26]”

• The company is seeing “firmer demand across all key market verticals”

• Year-to-date revenue is in line with expectations, but order intake is ahead of expectations.

The Board remains confident in its growth strategy and a return to operational profitability now looks likely to be achieved earlier in the current financial year than previously expected.

For some more clarity on the exact meaning of this statement, I checked for any updated broker notes.

Outlook & Updated forecasts: Broker coverage for CML is limited – the company qualifies for our Neglected Firms Screen, which flags up under-researched stocks.

However, CML’s house broker Shore Capital does maintain forecasts and has kindly made its latest note available on Research Tree today.

Shore appears to be responsible for the forecast shown on the StockReport and its estimates are unchanged today:

• FY27E revenue: £23.9m

• FY27E adj EBITDA £4.0m

• FY27E adj pre-tax profit: £(0.1)m

• FY27E adj EPS: (0.2)p

My conclusion is that today's AGM statement is guiding for a return to run-rate profitability at some point in the current year, but is not indicating a return to full-year profitability in FY27.

Roland’s view

CML is quite closely held and fairly illiquid. I note that MD Chris Gurry and another family member appear to control c.15% of the stock. There are also a couple of other named individual investors with big holdings.

A look at the long-term chart suggests this business is somewhat cyclical:

owever, CML had a c.£13m net cash position at the end of last year and has paid an 11p dividend for a number of years, providing a c.4% yield. While uncovered by earnings, this payout (c.£1.8m/yr) does look affordable against net cash.

I suspect that this stable dividend reflects the heavy insider ownership – not necessarily a bad thing, in my view.

One point that could be worth noting is that Gurry added to his shareholding in March, spending c.£52k on stock at 210p. Based on our records, it’s the first time he has purchased shares since August 2012. Make of this what you will.

Shore Capital’s latest note comments that CML has exposure to “attractive structural growth markets” that include 5G, Industrial IoT, satellite communications and defence.

I haven’t done the research needed to understand this business. I don’t know, for example, if there are any similar areas of exposure to Filtronic.

However, the positive tone of today’s update and the prospect of revenue growth and a return to profitability suggests to me that this situation could be worth further research.

I certainly don’t see any reason for us to maintain a negative view any longer, so I’m going to move CML up to neutral today.