Daily Stock Market Report (Tue 29th Sep 2026) - CARD, ZIG, SUS, BMS, SNWS, BAG

Good morning! No major overnight news to report; the big story yesterday was the new Your First Home Scheme (essentially the new version of Help to Buy).

Scores on the doors at the end of yesterday:

• Persimmon (LON:PSN) up 14.7%

• Barratt Redrow (LON:BTRW) up 11.7%

• Taylor Wimpey (LON:TW.). up 11.5%

• Crest Nicholson Holdings (LON:CRST) up 11.0%

• Vistry (LON:VTY) up 10.7%

We won’t get full details on the scheme until Budget Day on October 28th. The main points are that it applies to England only, that only a 2.5% deposit will be required, and that the government will also put in a 20% loan, so that the remaining mortgage will be for just 77.5%.

Asking home buyers for just a 2.5% deposit on a starter home sounds risky to me, but from an investment point of view this is clearly going to make life a bit easier for housebuilders - it’s a more generous scheme than Help to Buy, and (as with Help to Buy), any losses on these loans will be shared with the taxpayer!

Overnight market movements:

• The FTSE is up 0.2% at 10,725

• S&P 500 is down 0.1% at 7,675

• Brent crude (December) is up 1.7% at $99.50/bbl

• Gold is up 0.7% at $4,145/oz

• Bitcoin is up 0.4% at $83,800

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The Agenda is complete - update 10.30: added details of Vesuvius takeover situation.

All finished for today! Cheers.

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Companies Reporting

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Graham's Section

S&U (LON:SUS)

Down 2% to £19.30 (£235m) - Interim Results - Graham - GREEN =

The chart here has been remarkably stable. I last looked at it in August, at the Q2 trading statement.

The Q2 statement assured us that things were going well, but today’s H1 results give us the details:

• Revenue up 11% to £57.3m

• PBT flat at £15.7m

• Net receivables up 27% to £541m

• Impairment charge flat at £8.2m.

I’ve emphasised the receivables line to show the enormous growth that the company has achieved over the past 12 months.

This is confirmed when we look at the company’s two divisions individually:

Advantage Finance (Motor Finance): advances to customers (£105m) are up by an enormous 49% compared to H1 last year. This reflects the changed regulatory situation, with the company now free to grow its business as usual.

Also worth highlighting that the impairment charge here (£7.5m) is lower than last year’s, and that live monthly repayments (92%) are also better than last year (90%).

Aspen Bridging (Property Bridging): although there has been no regulatory disruption here, conditions in the property market have not been helpful and S&U has been acting cautiously. Advances to customer (£102.8m) are down by a few percentage points compared to last year, and PBT falls from £5m to £4m. There is a slight rise in the impairment charge, from £0.2m to £0.6m.

Balance sheet equity has nudged slightly higher to £251m, a fully tangible figure, as post-tax profit of nearly £12m was offset by dividend payments of nearly £10m. It’s worth noting that this is higher than the market cap.

The first interim dividend will be 36p per share (last year: 35p).

Outlook: At the last update, Chairman Anthony Coombs quoted Abraham Lincoln. Today, he quotes St Paul.

St Paul’s letter to the Galatians reminds us that as we sow, so shall we reap. S&U’s recent trading and results reflect our determination to make the necessary investment at the right returns to maximise our rewards in the future. The economic and political backdrop remains uncertain, but S&U is well placed to navigate it. Current trends indicate our ability to do just that, to the benefit of our customers and shareholders.

Funding: S&U has borrowings of £285m out of total facilities of £330m, and needs access to a bigger facility to keep growing - “a possible additional requirement of up to £300m in the next three years”.

We are told just a little more about this today:

S&U has embarked upon a securitisation programme with two banking partners who together, will provide up to £600m of facilities at an improved rate over the next 3 years.

The combined deal will provide flexible and scalable funding in line with our credit appetite and methods of operation. It will also give certainty over the credit cycle and do so at a cost saving on S&U’s existing facilities. Over time, the deal should lead to an improved valuation of the Group’s loan book and its earnings.

Graham’s view

I’ve been a fan of this business for a long time and I’m very much inclined to stay GREEN on it today.

The major attractions remain, namely, a cheap earnings multiple and a discount to book value, for a family-owned business with many decades of heritage and continuing family involvement.

Returns have been suppressed in the last few years, in large part due to the FCA and broader market concerns around motor finance.

But looking forward, the company remains hugely ambitious to grow. This £600m securitisation deal will allow for massive additional scale which should prove to be a helpful tailwind for their ROE. So I continue to like the story here.

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Smiths News (LON:SNWS)

Up 4% at 70.2p (£174m) - Post Year-End Trading Update - Graham - GREEN =

This cigar butt stock has evolved into what looks to me like it could become an interesting growth opportunity, but the share price doesn’t reflect it yet:

As a recap, this magazine/newspaper announced in recent months that far from shrinking, it’s expanding its distribution network to a fully national scale, having won several big contracts from major newspaper houses.

Today’s trading update continues the excellent news flow:

Smiths News (LSE: SNWS), the UK's largest news wholesaler and a leading provider of early morning end-to-end supply chain solutions, is pleased to report that it expects to deliver results for the 52-week period ended 29 August 2026… ahead of market expectations*.

Smiths distributes Premier League stickers, Match Attax cards, and the like. These high-margin products are highly profitable products for everyone who gets to touch them along their route to the customer. Demand for them was “stronger than expected” in H2.

On top of that, the World Cup boosted performance; every second year gets a boost to news and magazines from the World Cup or the Euros, so we can expect a slightly quieter summer next year.

The company helpfully tells us that market expectations were for adjusted operating profit of £37.2m.

Looking ahead:

Moving into FY2027, trading has started positively and the Company has begun its transformational programme to establish a national distribution footprint to service the new contract wins announced in H2 FY2026, ahead of the first go-live in July 2027.

Estimates

Thanks to Canaccord Genuity for publishing on Smiths News today. They’ve raised pre-tax profit estimates for FY August 26 by about £1m (the new adj. EBIT forecast is £38.6m, previously £37.5m).

Canaccord have cut their FY27 forecasts, but say they are doing that merely to bring their forecasts in line with consensus. Their new adj. EBIT forecast for FY27 is £36.1m.

Unfortunately, there is as yet no visible impact of the new contract wins on forecasts. These contracts will start to go-live in July 2027, in time for FY August 2028, but the adj. EBIT forecast for FY28 is unchanged at £35.9m.

Graham’s view

I was GREEN on SNWS already: they have just announced they are beating forecasts for FY26, and the share price hasn’t moved much. So clearly, I’m staying GREEN on this today!

The StockRanks love what they see:

On the StockReport, the dividend yield (7.6%) is shown as higher than the P/E ratio (6.5x). Those numbers will adjust slightly based on today’s share price, but I just want to highlight that a dividend yield higher than a P/E ratio is a traditional sign of a very cheap stock.

The dividend per share (5.5p) is well-covered by earnings per share of over 10p, and cash flow generation has been excellent. The company has recently been reporting net cash balances, having previously been in net debt. So this is a strong GREEN from me.

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A.G. Barr (LON:BAG)

Down 2.7% at 583p (£653m) - Interim Results - Graham - AMBER/GREEN ↓

A.G. BARR, the multi-beverage business with a broad portfolio of market-leading UK brands including core brands IRN-BRU, Rubicon and Boost, today announces its Interim Results for the 26 weeks ended 1 August 2026 (H1 26/27).

Euan Sutherland’s interesting CEO career has brought him to this company. It continues to do well:

• Revenue +8.5% to £247m

• Adjusted PBT +2.6% to £36.1m

I’m glad to see that statutory PBT is £33.0m, so once again, the results are quite clean. There were one-off costs associated with integrating one of the acquisitions, and the slight decline in statutory PBT is attributed to them.

It’s probably nothing to worry about, but the company’s cash position has crashed from £41m net cash a year ago, to £47m of net debt today. This is after they spent £53m buying Fentimans and Frobishers, while also spending big on capex. They seem relaxed:

Through the strongly cash generative nature of our business we expect to close the financial year in a small net-debt position.

They previously said that they’d be fine with a leverage multiple of up to 2.5x.

Annoyingly, the word “organic” can’t be found in today’s report. They made these two acquisitions in early 2026, and the report covers the six months to the end of July/early August. So an organic growth rate would be really helpful. They say they are growing ahead of the market, but I don’t trust this without a clear delineation of how much revenue was generated from the pre-existing business versus the acquired businesses.

Checking footnotes and the broker note, I see that Fentimans alone contributed £15m of revenue to these results. That seems to account for most of the revenue growth achieved by the company in the period. I really think this should be much clearer.

CEO Comment:

Looking ahead, we remain confident in the significant opportunities for the business and our ability to build on this momentum in the second half. With our acquisitions now fully integrated and our investment programme progressing well, we remain on track to deliver full year performance in line with market expectations. We will continue to focus on delivering above-market growth and creating sustainable long-term value for our shareholders.

These expectations are for 48p of adjusted EPS (source: ShoreCap).

Graham’s view

There have been a few wrinkles to performance here lately. The company has suffered from supply chain issues (now resolved) and seen its cash balances dwindle and reverse into debt. I can forgive these as temporary issues. But I can’t help the nagging feeling that the underlying growth here is not as good as you might think, especially considering the amount that has been spent on acquisitions and the company’s claim that it’s growing faster than the wider drinks market.

The good news is that they are still guiding for a ROCE of about 19%, which is fine.

As I’m a little uninspired by these results, I’ll put us on AMBER/GREEN today. Hopefully I can put it back to GREEN again soon. I still think the shares offer pretty decent value:

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Roland's Section

Card Factory (LON:CARD)

Up 3.7% at 75p (£247m) - Half-Year Financial Report - Roland - AMBER/GREEN =

This well-known high street retailer warned on profits late in 2025 due to lower high street footfall, but it’s not warned again since then and has been an interesting case study in StockRank recovery:

So far, Card Factory’s share price recovery has not really reflected the rise in its StockRank. But today’s results are in line with expectations and suggest the company could be well positioned ahead of the key festive trading period. Let’s take a look.

Half-year results summary

These accounts cover the six months to 31 July 2027. Any analysis of these figures has to carry the caveat that Card Factory’s profits are always heavily weighted to the second half of the year, for obvious reasons.

With that said, these numbers look fairly reasonable to me, if a little subdued:

• Revenue up 5.3% to £582.7m, aided by the acquisition of Funky Pigeon

• Store sales -0.7%, like-for-like store sales -2.0%

• Adjusted pre-tax profit down 3.8% to £12.7m

• Adjusted EPS up 1.6% to 2.9p

• Interim dividend up 7.7% at 1.4p

While the decline in like-for-like (LFL) store sales seems a little disappointing, the company believes that changes made during the first half are now starting to deliver results, with LFL now positive:

We have been encouraged by trading since the half year, with UK store Like-for-likes improving from H1 levels and returning to positive growth in recent weeks. While it is still early in the period, this provides encouraging evidence that the actions implemented at the end of the period and beginning of H2, are gaining traction.

Wholesale was another positive in H1, with sales to retailers such as Aldi up by 13.6% during the period.

Card Factory’s model also appears to be working well in the Republic of Ireland, where total store sales rose by 24.3% and LFL sales were up 5.6%.

Cash flow and Balance sheet: we’ve had concerns about debt in the past, but although debt levels rose slightly during the first half, leverage remains acceptable (if not ideal):

• Net debt up 10.8% to £87.4m vs H1 25

• Covenant leverage (exc leases) of 1.1x EBITDA (H1 25: 1.0x)

The increase in debt reflects cash outflows on last year’s final dividend and the current share buyback programme. However, the majority of free cash flow is generated in H2 and forecasts suggest this should net out over the full year to deliver a reduction in year-end net debt.

Outlook

CEO Darcy Willson-Rymer sounds confident ahead of the key ‘golden quarter’:

We have strong Golden Quarter plans in place, supported by significant product newness, targeted value investment and an increased focus on driving customer traffic.

But not too confident! This is an in line outlook statement, with the usual risk that profits could be hit by a bad Christmas, as happened last year:

[…] the Board remain confident in expectations for Adjusted PBT in FY273, with performance weighted to H2 and the key Christmas trading period, as usual and as expected.

I can’t see any updated broker notes today, but consensus figures on the StockReport suggest full-year earnings of 12.8p, giving a similar 77% H2 weighting as last year.

Roland’s view

These results aren’t exactly sparkling and suggest trading conditions on Britain’s high streets remain challenging. However, Card Factory’s current valuation isn’t exactly sparkling either and suggests investors also remain quite cautious.

Against this backdrop, I think Card Factory’s valuation looks quite interesting:

I am not surprised the StockRanks view this as a Contrarian play:

Although I think there’s still some risk that peak trading will disappoint, as it did last year, I am inclined to think Card Factory offers value at this level.

The company’s quality metrics look acceptable and my sums suggest the 7%+ dividend yield should be covered this year.

Growth isn’t strong enough for me to be fully positive, but I’m quite comfortable leaving our AMBER/GREEN view unchanged today.

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ZIGUP (LON:ZIG)

Up 5% at 458p (£1.04bn) - AGM Statement - Roland - GREEN =

Shares in this van hire, fleet solutions and accident repair group are up by 5% today after a positive outlook statement in today’s AGM update:

[...] we expect our adjusted PBT for the year to be at the top of the current range of market expectations of £163.2 - £170.0m.

The main driver for this seems to be continued growth in the company’s Spanish business, continuing a theme I discussed in July’s full-year results:

• Average vehicles on hire “more than 5%” ahead of last year;

• Spanish fleet is now “in excess of 80,000 vehicles” (FY26: 78,000).

FMG (UK incident management) volumes are also said to be strong, aided by the recent renewal of a Motability contract “by one of our largest insurance partners”.

The UK & Ireland hire business (Northgate) saw revenue fall by 5% last year and my reading of today’s update suggests growth remains more challenging in Zigup’s home market – the company notes that “simplification actions are continuing at pace” in UK&I.

Roland’s view

I was positive on Zigup in July. Although my inclination would be to take an AMBER/GREEN view here, I am going to stay GREEN for now to reflect today’s positive nudge to guidance and the quite reasonable valuation:

The StockRanks also support a fairly positive view, although they do reflect the somewhat average quality metrics of this capital-intensive business. 

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Braemar (LON:BMS) 

Up 5.8% at 238p (£79m) - HY27 Trading Update - Roland - AMBER ↑

The last time we looked at this shipbroking business was in May 2025, when Braemar warned on profits. Much has changed since then, given the situation in the Middle East, so I think it’s probably time we updated our view on this business.

Braemar has a 28 February year end, so today’s update covers the six months to 31 August 2026,

Key points are positive, as I would expect given the impact of the situation in the Middle East:

• Revenue up 16% to £74.3m, “driven by a strong rate environment”

• Underlying operating profit up 7% to £6.0m, “after making £1.4m of strategic investments to drive future growth”

• Net debt reduced to zero at 31 August 2026 (H1 26: £5.6m)

• Strong forward order book of $73.4m (FY26: $72.5m)

Outlook - this is an in line update:

The board remains confident that the Group will deliver in line with market expectations for the full year. Increased volatility across shipping and energy markets has lifted average rates in our chartering business and underpins strong demand for our advisory and risk management services. We expect the strategic investments made in the first half, including senior hires and the establishment of our power desk, to convert to profitable growth in the second half.

Broker forecasts have also reset somewhat since last year’s profit warning and appear to support the view that trading is expected to improve as a result of recent changes:

Roland’s view

The valuation looks undemanding for a business that’s returning to growth:

The catch is that quality and momentum are relatively weak:

In reality, my concern with these half-year results is that they aren’t stronger. For comparison, sector leader Clarkson (LON:CKN) (disc: I hold) recently reported H1 revenue growth of 39% and a 48% increase in pre-tax profit.

Braemar’s profit margins appear to have weakened in H1, with (adjusted) profit growth of 7% failing to keep pace with revenue growth.

I wonder if Braemar isn’t big enough to reap the full rewards from the current situation, or if it simply doesn’t have the right market presence.

Whatever the explanation, Braemar’s relatively subdued performance is unfortunate for shareholders – tanker markets are said to be truly exceptional (£) at the moment. Big profits in boom markets help to offset inevitable periods of cyclical weakness.

Another concern for me is that Braemar’s quality metrics are also rather average. I wonder if this is a reflection of its cost base - this is a business that depends on highly-incentivised brokers:

It’s possible that profitability will improve over time. Forecasts suggest much stronger profit growth next year, with FY28E EPS expected to be up by 31%. Based on the current balance sheet, this suggests return on equity could improve to double digits, closer to that of Clarkson.

Personally, I think Braemar’s recent performance and mixed track record justifies a more modest valuation until we see evidence the company’s quality metrics and/or growth rate are improving.

After all, the company’s shares are still lower than they were 10 years ago:

I’m going to move our view up to AMBER (neutral) today to reflect my mix of views on this business.