Daily Stock Market Report (Tue 13th Jan 2026) - PSN, SHOE, GAW, GAMA, RPI, HTG, TRST, PAGE, TMG, SAG

Good morning!

The avalanche of year-end trading updates has landed.

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Wrapping it up there for now! Thank you.

Spreadsheet accompanying this report: link (updated to 16th December).

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Companies Reporting

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Graham's Section

Shoe Zone (LON:SHOE)

Down 18% to 55.1p (£25m) - Final Results - Graham - BLACK (RED ↓)

We already had three profit warnings here in recent memory, and today brings yet another.

First, let’s review FY September 2025.

• Revenue £149.1m (FY24: £161.3m)

• Digital revenue up slightly, store revenue down.

• PBT £3.3m (FY24: £10.1m)

• Adjusted PBT £2.4m (FY24: £10m).

This PBT result is in line with expectations.

Net cash has increased year-on-year to £5.9m.

The store count has reduced from 297 to 269 and its composition has also evolved with only 68 original stores left from 112 last year. These have been replaced with new larger format stores, relocations, refits, etc.

Outlook:

Trading conditions remain challenging due to macro-economic pressure and higher wages, with expected profit before tax of approximately £1.0m for the year ending 3 October 2026.

Forecasting the next ten months must be difficult, so I wouldn’t bet on this £1m PBT estimate being too accurate.

However, it’s still a major downgrade from the £3.4m forecast for after-tax income that’s currently in the market..

Management commentary

This is one of those stocks that can easily and with some justification point to the challenged consumer as the explanation for its poor trading:

This was a challenging year, particularly in the second half, as consumer confidence declined further following the Government's October 2024 budget, and highly adverse fiscal policies. Persistent inflation, higher interest rates, and reduced disposable income contributed to negative economic and consumer sentiment in the UK. Sales were good when there was a reason to buy, such as the warm summer and the Back-To-School period, however, discretionary spending remained subdued as consumers exercised greater caution in what they were spending money on.

Leases: lease length is only 2.6 years, which is excellent and helps to reduce the risk for shareholders. And rents aren’t increasing.

Product margin reduces from 62.8% to 61%. I’m surprised it’s even as high as this!

Cash: it sounds like Shoe Zone has been running a tight ship. Inventory fell £5.4m as the number of stores reduced, and capex also collapsed to only £3.3m (FY £11.5m). They cancelled their profit share scheme. They also paid no dividend, and haven’t declared one today.

The result is that the cash balance was protected, and grew from £3.6m to £5.9m.

Outlook is appropriately downbeat:

Trading conditions remained challenging in the first quarter of the new financial year, with revenue down on forecast, reflecting ongoing macro-economic pressures that continue to weigh on consumer confidence resulting in lower footfall on the UK High Street, alongside the highly adverse Government fiscal policies. The Government's November 2025 budget included an additional increase in the National Living Wage, raising our cost base further, with broader measures not materially improving consumer sentiment. In light of these conditions, we expect a profit before tax of approximately £1.0m for the financial year ended 3 October 2026.

Graham’s view

I’ve been AMBER/RED on this, and I’m going to downgrade it further today, to an entirely negative view.

I would like to quality this with some positives:

• Management has acted very prudently to conserve cash with a wide range of cash-saving measures.

• This has resulted in a positive net cash position, before considering leases.

• Lease liabilities on the balance sheet are some £34.5m but they could have been much larger, if the average lease length was longer.

• Given the low average lease length (2.6 years), Shoe Zone has the flexibility to continue closing stores as necessary.

Those are the positives. The negatives are pretty clear: they sell a commoditised product, and external conditions play a huge role in deciding whether or not it’s possible for them to make a profit. For now, these conditions are not conducive to success.

So I’m RED, but this is very much a temporary view. I’m open to the idea that this could become an interesting turnaround at some point. But personally I wouldn’t go near it for now.

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Trustpilot (LON:TRST)

Up 11% to 208p (£819m / $1,103m) - Trading update for the twelve months ended 31 December 2025 - Graham - AMBER/GREEN ↑

This is a controversial one. Many readers have expressed some form of disgust over Trustpilot’s business model, and the stock has attracted the attention of professional short-sellers (Grizzly Research in particular).

But the share price is now higher than it was when Grizzly raided it:

Today’s full-year update shows excellent growth for FY December 2025:

• Bookings +18% (at constant currency)

• Annual recurring revenue +19% (cc)

• Revenue +20% (cc)

Adjusted EBITDA is projected to be ahead of expectations.

Cash: $48m, after buying back $72m of shares.

Buyback: extended by up to £10m/$13m.

Interesting little snippet: “Importance of Trustpilot in AI answer engine optimisation helping drive growth”.

In a rejoinder to short-sellers and sceptics who describe it as a sewer of fake reviews, they claim to have removed 7.8 million fake reviews.

CEO comment:

"2025 was a year of excellent strategic and financial progress, with growth accelerating in H2. Answer Engine Optimisation drove particularly strong growth in enterprise new business. This, combined with product innovation and improved gross dollar retention, positions us strongly for 2026. We reinforced our core commitment to trust, implementing new AI-enabled fraud detection technology, ensuring that both consumers and the 1.3 million businesses using Trustpilot can continue to build trust with confidence."

“Answer Engine Optimisation” is similar to SEO (search engine optimisation), but for AI bots:

People are increasingly asking AI tools for recommendations instead of relying solely on traditional search engines. Answer Engine Optimization (AEO) helps your business appear in those AI responses.

AEO works a lot like traditional SEO, but instead of optimizing for search engines, you’re optimizing for the AI systems people now use to find and evaluate businesses.

I’d never thought about this before, but it obviously makes sense. Traditional SEO is going to have to evolve for ChatGPT, Grok, etc.!

Graham’s view

I’m a huge admirer of Trustpilot’s market position, and my view hasn’t really changed in the light of the bear raids. I still think Trustpilot has very little direct competition, and has the potential to be an extremely successful business in the long-term.

For me, the question is more around whether the share price can be justified on valuation grounds.

In recent time, we've been neutral:

I’m actually more comfortable valuing this on a multiple of sales or on a multiple of ARR, rather than on a multiple of earnings. I think it makes sense to treat Trustpilot in the same way we should treat other high-quality software businesses with interesting long-term prospects.

Given the latest ARR of $296m, Trustpilot is today trading on a multiple of 3.7x ARR.

This is a little low, in my book. If we put it in a US context, it's normal for software companies to trade around 6-8x ARR.

Since Trustpilot is profitable, is trading at a modest ARR multiple, and has just informed us that 2025 was ahead of expectations, I’m going to revert back to AMBER/GREEN on this. I acknowledge this might be an unpopular stance! But I think there are enough reasons to justify it.

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Roland's Section

Persimmon (LON:PSN)

Up 0.5% at 1,421p (£4.5bn) - Trading Statement - Roland - AMBER/GREEN ↑

Today’s update flags up a strong recovery in volumes for 2025 and good progress on building safety remediation at this large housebuilder.

Profit upgrade: underlying pre-tax profit for 2025 is now expected to be at the upper end of expectations.

The company has helpfully included details of consensus forecasts in today’s update:

• 2025E underlying pre-tax profit of £428m (£415 - 440m)

Based on today’s guidance for PBT to be at the upper end of expectations, I think we can now expect a result between £428m and £440m for 2025.

Checking last year’s results, the equivalent figure for 2024 was £395.1m. So it looks like profits may have risen by around 10% in 2025. That’s not a bad result, in my view and suggests the group’s pre-tax margin may have risen from 12.3% to 12.9% last year. A useful increase.

Improved operating metrics: the increase in profit seems to have been driven by higher volumes rather than any improvement in profitability.

New home completions rose by 12% to 11,905, while the average selling price also edged higher.

Although private sales per outlet were unchanged, Persimmon also managed to end the year with a slight increase in its order book:

I think one thing that’s interesting about these figures is that they mask an improvement in private sales (to individual homebuyers) last year.

Like most housebuilders Persimmon now generates substantial sales from built to rent (bulk sales) as well as private sales. In its commentary, the company reports a number of positive metrics for private sales:

• Private selling price up 5% to c.£301k;

• Incentives stable at c.4-5%

• Sales rate excluding bulk sales rose by 4% to 0.59;

• Private sales in forward order book +4% to £680m

While Persimmon is still having to offer fairly material incentives (such as kitchen upgrades, etc) to complete sales, these figures are slightly more positive than the overall figures listed above.

The difference between the two is explained by softer bulk sales during the final quarter of the year. Persimmon attributes this to uncertainty ahead of November’s Budget.

On balance, I think it’s probably positive to see these tentative signs of strength in the core private sales business. Perhaps falling mortgage rates are helping to encourage transactions and liquidity in the housing market.

2026 outlook

Persimmon’s management isn’t pricing in too much optimism for 2026, but they echo my comments above about private buyer activity:

While we are not expecting any material improvement in market conditions this year, early indications from our Boxing Day marketing campaign are encouraging. Recent reductions in mortgage rates are helpful for our private customers although we remain mindful of continued affordability constraints.

However, sales elsewhere may remain weaker:

In addition, fewer bulk sales in the order book, and continued challenges in the registered provider market, are likely to slow our growth in these markets in 2026.

The end result is that volumes are expected to rise by less than 2% to 12,043 in 2026.

However, the company says its “unique level” of vertical integration should help the group manage continued cost growth.

Consensus forecasts for underlying pre-tax profit lie in a range of £461 - 487m. Based on the mid-point of this range, I estimate the group’s pre-tax profit could rise by c.9% in 2026.

Roland’s view

I’ve been neutral on this business for a while, purely on valuation terms.

Persimmon has been trading at a premium to its book value:

… but only generating a c.7%-8% return on equity:

For a property company that simply buys land, builds houses on it and then sells them, this valuation looks relatively full to me. To justify paying a premium to book value for a housebuilder, I’d want to see it earning a 10%+ return on equity.

However, today’s mild upgrade and 2026 outlook suggest to me that we could see a modest improvement in profitability in 2026. In addition, today’s positive update is itself a positive sign – our research has shown that one upgrade often follows another as expectations gradually edge higher.

Although earnings forecasts for Persimmon have drifted lower over the last year:

… more recently, the StockRanks have measured improving momentum:

In addition, our algorithms are now styling Persimmon as a Super Stock.

With this combination of trading and quantitative improvements, I’ve decided to move my view up by one notch to AMBER/GREEN today.

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Games Workshop (LON:GAW)

Down 2.5% at 18,390p (£6.1bn) - Half-Yearly Report - Roland - GREEN

Today’s update from Games Workshop hasn’t set the market on fire – the shares are down slightly as I write, but as usual with this business I am struggling to find any serious concerns in today’s results.

I’ll review the results in a moment, but first take a look at todays’ second RNS update – a dividend.

Dividend: rather than paying dividends on a fixed schedule, Games Workshop declares dividends when it has “truly surplus cash”.

The Board has today declared a dividend of £1.10 per share taking dividends declared so far in 2025/26 to £4.85 per share (2024/25: £4.20).

Last year’s total payout was 520p per share. Last year saw payouts in January and March, so I suspect we’ll see one more dividend this year. On that basis, it seems reasonably likely that the FY26 dividend could exceed last year’s payout.

Having said that, consensus forecasts shown on the StockReport are more conservative than this:

Based on these forecasts, the stock offers a yield of around 2.7%. Games Workshop’s share price growth means it’s no longer an attractive yield play, although it could still deliver strong income growth over time.

Half-year results summary

Moving on, today’s half-year results show a respectable increase in the group’s top-level numbers:

• Revenue up 10.9% to £332.1m

• Operating profit up 11.3% to £140.4m

• Operating margin: 42.3% (H1 25: 42.1%)

• Trailing 12-month return on equity: 64.7%

Drilling down one level reveals growth in the core retail business during H1, but a reduction in licensing revenue:

Licensing: this fall may explain today’s share price reaction – licensing revenue is almost pure profit and has helped to juice earnings growth in recent years.

However, the near-term pipeline of licensing revenue seems weaker than last year. Licensing revenue fell by 47% to £16m in H1, while the pipeline of licensing receivables due in the year ahead is just £12.5m (FY25: £30.0m).

86% of the royalty income generated in H1 came from PC and console game licences. Timing on future payments from the Amazon deal that has so excited investors remains harder to predict, as the company admits with its usual admirable transparency:

Our live action endeavour is still in development with our partners: Amazon MGM Studios, Henry Cavill and Vertigo. It is the nature of these things to take several years, and while we wish we could tie down a release the way we can with our core business, the reality is that, as with any licensing deal, delivery is not in our control. We leave it to our partners to manage their own businesses.

However, work is said to be “almost complete” on a standalone Warhammer Age of Sigmar episode for Prime Video.

Outlook: Games Workshop doesn’t provide forward guidance, but there are some consensus forecasts in the market. If correct, this estimates suggest earnings could dip slightly this year:

• FY25 actual: 594.9p per share

• FY26E: 563p per share

• FY27E: 611p per share

However, today’s H1 earnings of 319.2p per share represent 57% of current full-year forecasts. I don’t think it would be a massive surprise if the group’s full-year earnings were slightly ahead of these forecasts.

Roland’s view

Earnings forecasts were upgraded in November after a strong update which Graham covered here.

The shares rose sharply at the time but have drifted lower since:

On conventional measures the shares hardly look cheap on a P/E of 32. However, Games Workshop is hardly a conventional business. The group benefits from a differentiated product that appears to have both growth potential and pricing power, excellent management and superb high-quality financials:

While I wouldn’t buy the shares as a short-term trade at current levels, I don’t see any reason why they cannot continue to justify their valuation over the medium-long term.

The core business is continuing to grow and the company’s television and film efforts appear to have strong backers and are being developed methodically. I am confident they should eventually bear fruit.

The StockRanks also remain impressed, despite a low ValueRank:

With only slight trepidation, I’m going to leave Graham’s GREEN view unchanged today.