Good morning. Concerns over rising US Treasury yields, rising fuel prices and potential AI disruption continue, but there was no major news overnight that seems likely to affect markets.

As expected yesterday, President Trump pushed back on a suggestion from Anthropic CEO Dario Amodei that AI development should be paced more carefully. He suggested in a social media post that the idea was a “SICK conspiracy” to favour China:

The only control or “guardrails” that AI needs is a STRONG AND SMART (High IQ!) PRESIDENT, and the U.S.A. has that, in spades!

US equity market inflows: an interesting data point reported overnight by the FT (paywall) shows that inflows into US equity markets are now greater than inflows into US Treasuries. The historic chart included in the article suggests the last time this happened was in 2009/10.

I think there’s probably more value in following company news today than trying to draw meaning from macro events, so let’s turn to today’s RNS feed.

Overnight market movements:

• The FTSE is down 0.1% at 10,681

• S&P 500 is down 0.2% at 7,605

• Brent crude (November) is up 1.8% at $107.54/bbl

• Gold is flat at $4,296/oz

• Bitcoin is down 0.9% at $77,462

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Ed Sheldon joins me (Roland) today.

Today's report is now complete. Sorry we couldn't cover everything of interest on this busy day.

Spreadsheet accompanying this report: link.

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Companies Reporting

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Roland's Section

Trustpilot (LON:TRST) 

Down % at p (£m) - AI, Enterprise and US momentum fuel strong growth [Half-Year Results] - Roland - AMBER ↓

It’s a lot easier for investors when companies provide meaningful titles for their RNS releases, rather than marketing hype. The fact that today’s half-year results from Trustpilot have been met with a double-digit share price drop suggests investors have quickly seen through the hype and focused on the numbers.

My impression of today’s results is a little mixed. While headline revenue growth is strong, profitability hasn’t benefited in the way I might have hoped. Let’s take a look.

Half-year results summary

Top line growth was strong and consistent with the company’s five-year annualised revenue growth of c.21%:

• Bookings up 22% to $171.2m

• Revenue up 23% to $151.4m

• Annual recurring revenue up 15% to $313m

Management highlights recent wins…

Strong Enterprise growth across all regions, with new business logos up 41% YoY alongside significant growth in customers signing >$100k contracts. New customer wins include Expedia, Halfords and Bending Spoons

… and also suggests Trustpilot data is becoming an important part of the AI ecosystem:

Trustpilot data increasingly underpins how AI evaluates and recommends businesses. Ranked #1 globally among cited review platforms according to new research by Seer Interactive.

However, profit and cash performance was more mixed:

• Adj EBITDA up 46% to $26.3m

• Adj EBITDA margin +2.8% to 17.4%

• Operating profit -18% to $4.4m

• Pre-tax profit +32% to $4.3m

• Adjusted free cash flow $16.0m (H1 25: $15.2m)

I think there are a couple of issues worth highlighting here.

One-off costs: Trustpilot booked almost $6m of adjusting items in H1. The majority of this relates to a €4m fine resulting from an alleged breach of the Italian Consumer Code “relating to a single unfair commercial practice”.

Trustpilot has also restated its accounts to reflect “an historical US sales tax exposure” that’s been found. Total exposure is $2.6m, including $0.8m applied to these results.

If we’re willing to overlook these items, then underlying operating profit rose by 89% to $10.2m in H1. This implies an underlying operating margin of 7%, up from 5% in H1 2025.

Operating costs & profitability: while it’s encouraging to see some improvement in underlying margins, my impression is that both margins and operating leverage are lower than I might have expected to see here. The underlying cause of this seems to be that operating costs are rising broadly in line with revenue:

• Cost of sales up 18% to $25.7m

• Gross margin: 83% (H1 25: 82%)

• Sales and marketing costs up 22% to $41.0m (27% of revenue, unchanged from H1 25)

• Technology and content costs up 21% to $38.6m (26% of revenue, unchanged from H1 25)

• General and administrative costs up 19% to $34.4m, excluding the one-off costs above.

What strikes me about the increase in all of these measures is that it’s almost exactly the same as the increase in revenue (+22%). For a business of this kind, I might have expected costs to be diminishing as a percentage of revenue.

It’s possible that the company’s cost growth will slow as it scales further, supporting higher operating margins. I guess it may depend if Trustpilot achieves the kind of ubiquity enjoyed by services such as Rightmove and Autotrader. Right now, it looks like achieving growth requires a direct input of sales and marketing effort, plus additional on-boarding and tech costs.

KPI metrics: operational progress?

The selection of operating metrics shared in today’s results seem mixed to me:

• Number of paying customers +5%

• LTM Net Dollar Retention rate -2% to 101%

• Average annual contract value up 18% to $11,513

• Number of active reviews up 20% to 394m

It’s hard to be certain without more data, but my impression of this is that churn could be relatively high level among smaller customers, while pricing power and upsell activity with existing customers could be limited.

A combination of attrition among SME customers and some larger new customer wins could inflate the average contract value without a corresponding actual increase in the number of larger customers.

I’m happy to consider alternative interpretations of these metrics, but that’s the feeling I get.

Outlook

Following a strong first half, we maintain our outlook for high-teens constant currency revenue growth for the full year and 2-3ppt YoY adjusted EBITDA margin increase for FY26. We remain confident in delivering sustainable growth and operating leverage over the long term, as laid out in March, given the significant market opportunity.

I don’t have access to broker forecasts today, but the 2026 consensus revenue estimate on the StockReport is $309m and last year’s EBITDA margin was 15.6%.

Combining this with today’s guidance suggests we could see FY26 adj EBITDA of c.$56m.

That gives the business an EV/EBITDA ratio of c.21x – not exactly cheap.

Roland’s view

Graham was AMBER/GREEN on Trustpilot in January and noted the relatively low valuation of the business when compared to annualised recurring revenue. Based on today’s results, I estimate the market cap at 3.7x ARR, unchanged from when Graham reviewed the business.

Checking the share price chart shows that the stock has risen since then, but has largely given back those gains following this morning’s falls:

EPS estimates were upgraded following March’s results, but consensus has remained largely unchanged since then.

I’d speculate that the lack of a further upgrade might help explain today’s sell-off – the shares also fell in July following an in-line update:

In the absence of an upgrade to expectations, I’m struggling to get on board with the valuation here. While the business may have the potential to become the dominant service in the trust market, I would argue that several years’ growth are already priced in.

I’m also a little uncomfortable with the sharp rise in costs which suggests the business is still needing to invest quite heavily to build further market share and brand awareness.

On balance, I’m going to move to an AMBER view today. I think this is a situation that could reward further research and in-depth understanding, but based on this review I think the shares are up with events. This view is also reflected in the very low ValueRank:

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Springfield Properties (LON:SPR)

Down 0.1% at 107p (£128m) - Final Results - Roland - GREEN =

We’ve covered this Scottish housebuilder a few times in recent months, notably in June when Graham upgraded our view to GREEN. I also took a look at the business in a Stock Pitch in March, so I’d recommend this past coverage to provide a more in-depth view on the company and its strategy.

In short, Springfield is developing homes for private and affordable sale and has an agreement to build rental housing for the renewable energy industry in the North of Scotland.

Today’s full-year results appear to be slightly ahead of broker forecasts, but this is tempered by some very slight reductions to forecasts for FY27 and FY28. Let’s take a look.

Full-year results summary

• Revenue down 13.2% to £243.7m

• Gross margin down 2.2% to 16.4%

• Pre-tax profit down 37.4% to £11.9m

• Adj EPS down 32.8% to 8.51p

• Net cash of £1.2m (FY25: net debt £20.9m)

• Total dividend up 50% to 3.0p

It’s worth remembering that last year’s results benefited from income from one-off land sales that were carried out in order to reduce debt.

Stripping this out shows that underlying revenue from private housing and affordable housing sales rose by 5.9% and 10% respectively last year. Underlying profitability is also said to have improved:

Significant year-on-year growth in adj. profit before tax when excluding the contribution from land sales in both years

Private housing: completions fell by 5% to 474 homes, but the average selling price rose by 11% to £348k to reflect a higher value mix of properties. Overall revenue rose by 5.9% to £165m.

Private sales generated a customer satisfaction score of 97% (FY25: 96%).

Affordable housing: completions rose by 3% to 243, with the average selling price up 8% to £224k. Springfield says this reflects increasing pricing across the sector following an increase in Scottish Government grant subsidies.

Balance sheet & buybacks: a reduction in debt over the last year has helped to strengthen the balance sheet, leaving Springfield with a small net cash position at the end of the year.

Like a number of larger housebuilders, Springfield shares continue to trade at a hefty discount to book value. I estimate a net tangible asset value per share of 145p from today’s accounts.

With the stock trading at 107p as I type, that means Springfield is trading at a discount of more than 35% to its tangible asset value.

In this context I’m not surprised to see the Board allocating some capital to share buybacks. In August the company announced plans to buy back up to 5,957,273 shares, equivalent to around £6.5m at current prices.

Buying back stock at such a hefty discount to book value should provide a useful boost to NAV and could also generate attractive returns on investment at current levels. Based on last year’s pre-tax profit, I estimate that buybacks today could generate a ROI of 9%.

Outlook

• North of Scotland: initial agreement signed for c.300 homes across six sites for “a major energy infrastructure provider” to accommodate workers upgrading the national power grid. The “main works agreement” for the first site is expected “imminently”.

• Private housing: reservation rate steady and in line with expectations.

• Affordable housing: “continued to secure new contracts on favourable terms”.

• Land bank: after deleveraging the balance sheet more quickly than expected, Springfield has decided to develop more of its Central Scotland sites rather than selling them. This is expected to generate additional revenue and profit in the medium terms.

Updated broker forecasts

House broker Cavendish has issued updated FY27 and FY28 forecasts today, plus new FY29 estimates. These present a slightly mixed picture, but I don’t think they detract from the value on offer here:

• FY26 actual (Cavendish calc): 7.6p

• FY27E adj EPS: 7.8p (-2.5% vs 8.0p previously)

• FY28E adj EPS: 11.1p (-3.4% vs 11.5p previously)

• FY29E adj EPS: 11.6p (new forecast)

The main changes to the forecasts relates to private housing, which is now expected to be slightly weaker than previously expected over the next couple of years. There’s also a reduction in revenue expected from land sales to reflect Springfield’s decision to keep more of its Central Scotland sites.

Rental income from the planned North of Scotland projects is expected to become a material contributor to revenue in FY28 (c.£20m) and a key driver of growth.

Roland’s view

I guess this is technically a profit warning, but I think it would be overly harsh to classify it in this way.

These are minor adjustments and could easily reverse again at some point, depending on macro conditions.

I don’t think anything in today’s results detracts from the attractive valuation of the business or the growth potential of the business from a combination of build-to-rent and (hopefully) a wider UK housing market recovery over time.

Today’s results show an improved balance sheet and suggest a positive outlook for earnings. When paired with a 35%+ discount to tangible book value, I think it’s appropriate for us to leave our GREEN view unchanged.

The StockRanks also remain positive, with Super Stock styling and strong or improving factor scores:

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Ed S's Section

Everplay (LON:EVPL)

Down 1.5% at 369p (£545m) - Half Year Results - Ed S - AMBER/GREEN ↓

Video game developer and publisher Everplay Group (formerly Team17 Group) has posted its H1 results today.

Key figures:

• Group revenue of £66.9m, down 8%.

• Adjusted EBITDA of £9.2m, down 52%.

• Profit before tax of £1.6m, down 89%.

• Basic EPS of (0.4p) versus 7.4p in H1 2025.

• Adjusted EPS of 3.7p versus 10.5p in H1 2025.

• Cash and cash equivalents of £57.1m.

• Interim dividend of 1.1 pence per share, up 10% on H1 2025 dividend.

Outlook:

• Strong start to H2 2026 trading, supported by record sales generated from Hell Let Loose: Vietnam and Wardogs, alongside continued resilience from the Group's back catalogue.

• Further new title releases expected in H2 2026, providing additional opportunities to drive growth through the remainder of the year.

• The Board now expects FY2026 revenue and adjusted EBITDA to be materially ahead of current market expectations, with adjusted EBITDA margin expected to be broadly in line with FY2025.

• Company-compiled consensus showed FY2026 revenues of £175.2 million and adjusted EBITDA of £50.7m.

We have entered the period with real momentum, and feel confident in materially exceeding market expectations for the full year. I am pleased to share that our major new releases, including Hell Let Loose: Vietnam and Wardogs, are performing well ahead of our expectations, breaking many sales and player number records.

With a strong balance sheet, resilient catalogue, growing portfolio of first-party IP and innovative third-party games, we are well positioned to deliver accelerated growth.

Ed S’s view:

Today’s H1 results from Everplay are a mixed bag. On one hand, performance figures for H1 look a little concerning both on a statutory basis and an adjusted basis (most of the adjustments relate to amortisation of acquired intangible assets – see table below).

On the other hand, we have news that FY2026 revenue and adjusted EBITDA are likely to be ‘materially ahead’ of current market expectations. We also have a healthy cash balance of £57.1m and a 10% increase to the interim dividend.

In the results, the company explains that the H1 revenue drop reflects the phasing of major FY2026 releases into H2. The adjusted EBITDA drop reflects lower revenues and investment ahead of the major H2 release programme.

The softer performance in the half compared to the prior period reflects the timing of the new release schedule in FY 2026, with larger titles in the second half, together with the timing of investment and other costs ahead of the associated revenue contribution.

Looking ahead, the company is very bullish on its prospects for the remainder of the year. It notes that it has made a strong start to H2, with new titles Hell Let Loose: Vietnam and Wardogs performing well ahead of expectations.

The Group is on track to deliver a record second half performance, returning to strong growth and a sharp improvement in margins, supported and corroborated by the very strong revenue performance from titles released so far in August and September.

When Graham last covered Everplay in late July, he awarded it a GREEN rating. However, since then, its share price has shot up from 239p to 369p – a rise of approx. 54% (it popped 21% last Friday on news that its Wardogs game had passed one million copies sold).

That’s a huge rise in less than two months. And it has implications for the risk/reward skew.

Is it still worthy of a GREEN rating today? Well, the company has told us that revenue and adjusted EBITDA for the year will be materially ahead, which is a big plus.

However, the valuation has risen significantly since late July – the trailing P/E ratio is now around 15. And given that adjusted EPS for H1 was only 3.7p, we’ll need a huge performance in H2 for the company to achieve the 26.8p per share full-year earnings forecast.

Note that the StockRank system gives the stock a low score of 27 for Value. On the plus side, the StockRank is rising – since the end of July it has climbed from 49 to 66.

Given the 50%+ rise in the share price in less than two months, I’m going to do something that is perhaps a little controversial and take the stock down a notch to AMBER/GREEN. I still see appeal in it, however, the risk/reward proposition isn’t what it was back in July.

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BRCK (LON:BRCK) 

Flat at 46p (£149m) - AGM Statement - Ed S - AMBER/GREEN =

BRCK Group – a distributor and provider of specialist products and services to the UK construction industry – has today provided us with a short AGM Statement:

“The trading environment in the first five months of our current financial year has been consistent with the outlook statement issued in July on publication of the Company’s FY2026 results when we commented that near-term market conditions remained challenging. The UK housebuilding industry continues to be subdued, and broader macroeconomic conditions mean there is limited visibility in the timing of a recovery in new housebuilding starts.”

“The Board’s expectations for the current financial year remain unchanged.”

The company goes on to say that it benefits from a diversified business model and that trading at its Design & Install division – which focuses on specialist work including cladding remediation and accounted for 20% of revenue last financial year – has started the new financial year well. It adds that it is encouraged by the improvement in the pace of Building Safety Regulator (BSR) approval decisions.

Ed S’s view:

Back in July, Roland gave BRCK an AMBER/GREEN rating and I think that remains appropriate today. Ultimately, the stock looks very cheap – it’s currently trading on a P/E ratio of less than six.

Note that the StockRank system gives it a 94 for value. The overall StockRank score is 84, which is solid.

Looking beyond the valuation, another attraction is the dividend yield. With analysts expecting a payout of 3.6p per share for FY2027, it stands at around 7.8%.

Earnings per share for the year are expected to be 8.0p. So, we have a dividend coverage ratio of about 2.2.

On the downside, the company notes that near-term market conditions remain challenging due to the subdued UK housebuilding industry. It adds that there is limited visibility in the timing of a recovery in new housebuilding starts (we’d need to see UK interest rates come down to improve affordability and at this stage it looks like rates may rise in 2026 so things may get worse before they get better).

One other thing to be aware of is that this company is a heavy ‘adjuster’. For example, for FY2026, statutory pre-tax profit was £6.3m while adjusted pre-tax profit was £38.3m (see Roland’s July write-up for a comprehensive analysis here).

Looking at the company through a value investing lens, however, I can see some appeal, especially when the big dividend yield is considered. So I’m happy to leave it at AMBER/GREEN.