Daily Stock Market Report (Wed 11th February 2026) - RWS, GLE, VP., IGR, GATC, BTRW, RENX, IOM

Good morning! I'm afraid there are several profit warnings sprinkled among today's updates.

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That's all for today, thanks!

Spreadsheet accompanying this report: link.

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Companies Reporting

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Graham's Section

VP (LON:VP.).

Down 11% to 493p (£201m) - Trading Update - Graham - BLACK (AMBER ↓)

Vp plc, the specialist equipment rental business, today provides a trading update for the ten months ended 31 January 2026.

This trading update strikes a reassuring tone without sugarcoating the bad news too much.

The Board remains confident that the Group, aided by its robust balance sheet and transformation of Brandon Hire Station, and underpinned by a focused strategy targeted at core sectors, is well positioned to take advantage of future market opportunities. However, current market headwinds, particularly in construction and water, where we have seen a slower than expected impact from AMP8, have resulted in a disappointingly muted January 'return to work' and a correspondingly slow fourth quarter ramp-up in activity volumes. Therefore Vp now expects to report a profit* for the current financial year within the range of £26-29m.

AMP is the water industry’s “asset management plan”, with the current plan from Ofwat running from 2025 to 2030.

With capital spending being dictated by Ofwat, I would have expected a high degree of predictability, but VP has been caught off guard in the short term. They now expect “meaningful increases in water revenues in FY27 rather than the current financial year”.

The good news is that FY27 starts at the end of March 2026, so perhaps we are only talking about a delay of a few months until spending ramps up as expected?

Other relevant industries:

• Energy transmission: growth and strong demand continuing

• Housebuilding: overall activity levels subdued

CEO comment:

Vp remains committed to its strategy of offering a diversified range of specialist equipment and expertise to clients across a portfolio of critical market sectors. While this diversity and breadth gives our business market-leading resilience and opportunity, it is not immune to general trading conditions in construction and delays to major infrastructure programme spend in key sectors

Estimates: I appreciate VP including their new profit forecast for FY26 in the RNS (adjusted PBT of £26-29m).

Going back to the interim results, published in November, I see that they were still expecting an in-line result of £37.3m.

That’s a very significant miss, and the fact that it has come so late in the financial year increases its seriousness - it implies a lack of visibility and/or a high degree of reliance on the timing of certain projects.

At the midpoint, it’s a miss against expectations of 26%.

Graham’s view

I should note in passing that the former CEO announced her intention to step down in September, and she was replaced only last week. I wonder what the connection might be between the CEO change and the profit warning: might the leadership transition have resulted in the company missing out on some work? Might the former CEO have had a suspicion that it would be difficult to hit forecasts?

That’s purely speculation, but it’s not unusual for management changes and profit warnings to go hand-in-hand. That might not be the case here, but it’s an interesting coincidence. The new CEO officially started only nine days ago!

As for the merits of this stock, we’ve generally considered VP to be a pretty good business, with some caveats. See coverage by Mark here and by Roland here.

Financial net debt was £156m at the interim results, which is of course a substantial figure, but it’s standard in the equipment rental industry. Rather like banking, it’s not possible to earn an acceptable ROCE without carrying substantial debts.

The problem with VP is pretty basic: a gradual downward trend in earnings estimates.

A slow start to Network Rail spending was previously blamed, and a subdued construction sector is understandable. But now we have a major profit warning from unexpectedly slow water spending. Every sector seems capable of disappointing - no sector is "safe".

But as the company is still profitable (depending on the heaviness of adjustments), and is arguably somewhat “cheap” (£200m market cap against adj. PBT of £26m+), with prospects for water spending to pick up in a few short months, I’m not inclined to take a very negative stance on it today. We were AMBER/GREEN before and I’ll just go down to AMBER for now. I think that does a good job of balancing the vulnerability of earnings estimates against its apparent cheapness.

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Gattaca (LON:GATC)

Up 5% to 128.5p (£41m) - Trading Update - Graham - GREEN =

Gattaca plc, the specialist staffing solutions business, is pleased to provide the following trading update for the six months ended 31 January 2026 ("H1 26").

I’m pleased to see that Mark was GREEN on this back in October. It appears that this small recruiter is able to perform even as larger ones struggle.

Key points:

• Net fee income up 7% like-for-like to £20.2m.

• Total group net fee income £21.2m including acquired revenue.

• Contract (+13% Lfl) outperformance Permanent (+2%).

Although this sounds a little ominous:

LFL Statement of Work ("SoW") NFI was down due to timing delays on major client programmes, with activity expected to remain subdued in the second half of the year.

Net cash as at January 2026 is £13m. Cash at recruiters is more complicated than it may appear - there can be large cash needs for working capital.

Outlook: FY26 adjusted PBT expected to be £4.5m (which is ahead of expectations).

Gattaca “expects to announce an interim dividend”, but it looks like there was an interim dividend last year, so this isn’t new.

CEO comment:

"I am pleased to see our positive momentum continue to build and to report that the Group is trading ahead of expectations. Our strategic investments in growth opportunities are delivering and we have the majority of our sectors experiencing year on year growth.

Estimates: thanks to Panmure Liberum for publishing on this today. Their previous estimate for FY26 PBT was £4m, so the new £4.5m estimate is a 12% increase on that.

They leave FY27 and FY28 estimates untouched. These estimates already looked ambitious:

• FY27 adj. PBT £6m

• FY28 adj. PBT £7m

And this is to be achieved with only modest increases in revenue. FY27 net fee income is seen rising by just 6% to £44.7m, and then the same percentage growth rate in FY28 is expected in FY28 (taking NFI to £47.4m).

Graham’s view

It’s impressive stuff and it makes me wonder if, as Mark suggested, smaller recruiters may have a structural advantage in current market conditions? Recruiters have been such a difficult sector, but GATC’s earnings estimates have been stable for nearly a year. Perhaps there is something about being small that enables more targeted activity in the most profitable segments?

In any case, we were GREEN on this prior to today’s update, so there is no reason to change that stance today. Gattaca enjoys a StockRank of 97 and trades at around 10x next year’s adjusted EPS forecast.

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Roland's Section

MJ GLEESON (LON:GLE)

Down 10% at 357p (£208m) - Results for Title - Roland - AMBER =

Gleeson’s focus on building affordable housing should be an asset in a market that’s being constrained by affordability.

Graham upgraded our view to neutral following January’s in line update. He noted that Gleeson warned on profits twice last year but could be cheap if the business was able to hit FY27 and FY28 earnings forecasts.

Unfortunately, the situation isn’t quite that simple. Today’s half-year results flag up a subdued performance in Q2 and warn that “a strong Spring selling season remains fundamental” to the company’s ability to meet full-year forecasts. A further update is promised in April.

The market has understandably interpreted today’s commentary as the precursor to a profit warning.

Here are the key points from today’s H1 results, which cover the six months to 31 December 2025:

• Revenue up 9.6% to £173.1m

• Operating profit down 17.6% to £4.2m

• Pre-tax profit down 52.8% to £1.7m

• Adjusted EPS down 43.8p to 2.7p

• Interim dividend held at 4.0p

• Return on Capital Employed: 7.6% (H1 25: 8.0%)

Stepping through the income statement, the first takeaway from these numbers is that profitability fell despite an increase in both selling prices and volumes:

• Home sales up 6% to 848

• Average selling price up 2.5% to £198,800

Unfortunately, costs rose more quickly than pricing which remains under pressure. Today’s commentary notes several cost headwinds:

• Build cost inflation of 2.6%, mainly due to labour rates;

• A higher proportion of (lower margin) bulk sales;

• Sales incentives “remained elevated at c.4.5%”.

Group overheads also increased, with administrative expenses rising by 14.7% to £26.5m. This was primarily due to higher staff costs.

Together, these factors reflect the fall in operating profit and the reduction in operating margin to 4.1% (H1 25: 5.8%).

Balance sheet/debt: the much larger fall in pre-tax profit mainly reflects an unfortunate side effect of lower H1 sales – debt levels rose as the company ramped up activity:

We ended the period with net debt of £22.5m (31 December 2024: £18.1m) which reflects the opening of nine new build sites and investment in build activity on established sites ahead of the important Spring selling season.

This is a 24% increase in H1 net debt, but it led to a 47% increase in H1 finance costs, to £2,270k.

One reason for this may be that Gleeson started the comparative period in June 2024 with a sizeable net cash position. In June 2025, net cash was close to zero, so I would speculate that the group may have traded for longer with a net debt position this year.

This level of borrowing doesn’t seem too alarming to me when set against forecast net profit of c.£18m for the current year. But the trend is worsening:

Gleeson shares also continue to trade well below their tangible net asset value. Today’s share price of 356p represents a c.30% discount to TNAV of 522p per share. If profits do start to recover, that could represent significant value.

FY26 outlook

Housebuilders traditionally depend on a strong calendar Q1, so the idea of an H2 weighting isn’t automatically alarming.

Today’s results include operational metrics suggesting performance has already started to improve, albeit sales have remained below the levels seen during the comparable period last year:

We are cautiously encouraged by early signs of a recovery in open market demand. Net reservation rates on open-market sales of 0.55 in the five weeks to 6 February 2026 are up 38% on the 3 months to December 2025 albeit not yet at the levels experienced during the same five-week period last year.

Looking at the order book, there is a marked improvement over the same point one year ago. However, checking back to last year’s FY25 results (June 2025) shows that most of this improvement actually took place in H2 25, not during the H1 just ended:

• December 2025: 978 plots

• June 2025: 845 plots

• December 2024: 597 plots

• June 2024: 559 plots

Gleeson Land: so far, I’ve only really talked about the Homes business. However, there is a possible wildcard that could help support FY profits – Glesson’s Land business. This buys land and secures planning, then sells the permissioned land to other developers.

It’s an inherently lumpy business. While Land contributed nearly 25% of group operating profit last year, it was entirely skewed to the second half of the year.

Based on the commentary in today’s results, I think it’s possible that something similar could happen this year:

• H1 26: revenue £4.5m, op loss £(0.6)m;

• H1 26: three land sale transactions;

• Planning secured on five sites expected to sell in FY26

• One site represents 50% of total plots forecast to sell in FY26. Completion is dependent on “finalising an agreed position on highways design”.

I have no idea what the likely timescale or uncertainty involved in the highways design issue might be. But it’s clear that a big chunk of expected Land revenue and profit is tied up in a single transaction. This could go either way, but I think it’s fair to suggest that the Land business may yet help Gleeson meet full-year profit forecasts.

Broker estimates: are forecasts still realistic?

In FY25, Gleeson generated c.84% of adjusted pre-tax profit during the second half of the year.

If the company is to meet current FY26 consensus forecasts for adjusted pre-tax profit of £24.3m, then this H2 weighting will need to increase to c.92%.

Based on the prospect of improved sales and a successful half year for the Land business, I think it’s fair to say that this remains possible.

However, I am not sure how likely it is, for three reasons.

Firstly, there’s always a risk that expected Land transactions could slip into FY27.

Secondly, my impression is that the company’s pricing power remains limited. Today’s H1 results show that Gleeson hasn’t been able to increase prices by enough to offset cost inflation. Many of these cost increases are per unit and won’t ease with higher volumes. For this reason, I suspect margin pressures may persist during the second half of the year, even if volumes do meet expectations.

Finally, higher debt costs could persist into H2 as well, placing additional pressure on pre-tax profits and net earnings.

Broker Cavendish has issued a Flash note on Gleeson today and notes similar concerns on pricing and costs. While FY26 estimates are unchanged today, Cavendish says “we will be reviewing our forecasts shortly”.

Roland’s view

On balance, I think it’s probably prudent to price in a 5%-10% reduction to FY26 profit expectations after today’s results. While the company could still potentially avoid a downgrade, it’s not something I’d want to bet on.

A further concern for me is the weakness in the build-to-rent market, where volumes have slumped over the last couple of years. This is also likely to mean that Gleeson has to price very competitively to continue securing bulk sales.

Consensus forecasts were left unchanged after January’s HY update, but I would not be surprised to see consensus edge lower in the coming weeks:

The key question for me today is whether I need to reverse Graham’s January upgrade and revert to a more neutral view.

While I probably could justify a shift to AMBER/RED, I think there’s probably enough value here to justify remaining neutral.

Gleeson’s balance sheet doesn’t look too stretched to me and the stock’s 30% discount to book value is at a level where I might start to take an interest in a profitable housebuilder. I also think it’s fair to expect a much stronger H2 result, even if it does fall below current expectations.

For these reasons, I’m going to take a chance and leave our view unchanged at AMBER today.

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IG Design (LON:IGR)

Up 27% at 61p (£59m) - Trading Update - Roland - AMBER/GREEN ↑

The StockRanks have been neutral on this celebration product manufacturer, as was I when I reviewed IG Design’s in line trading update in October.

However, events have moved on and today’s nine-month trading statement is confidently ahead of expectations.

Details are few but the upshot seems to be that both sales and profitability were better than expected through the first nine months of the year, including the key Christmas period.

This update covers expectations for the year ending 31 March 2026.

Key points:

• FY26 revenue now expected to be c.$280-285m (previously $270-280m);

• FY26 adjusted operating margin expected to be at the higher end of expectations at c.4% (previously 3-4%);

• FY26 net cash expected to be c.$55-60m (previously $40-45m)

Updated FY26 estimates

This guidance translates into a material increase in profit expectations for the current year. Progressive Research and Canaccord Genuity have both shared updated forecasts today – many thanks.

Previous consensus:

• FY26 adj op profit $9.7m

• FY26 adj EPS of $0.04

New forecasts:

• FY26 adj EBIT: $11.3m / $11.0m (Progressive/Canaccord)

• FY26 adj EPS: $0.074 / $0.07 (Progressive/Canaccord)

Taking the new consensus EPS to be c.$0.07, these forecasts leave IG Design trading on a FY26E P/E of c.12 after this morning’s gains.

FY27 outlook

The company says that the outlook beyond FY26 “remains consistent with prior guidance”.

Expectations are for annual revenue growth of 0% to 5%, with an adjusted operating margin of 4% to 5% and sustainable cash generation of $6 to $8m each year.

Using this cash guidance as a proxy for free cash flow suggests to me that the current valuation could equate to a forward free cash flow yield of 7% to 10% – decent value, albeit perhaps appropriate for a low margin, low growth business.

Roland’s view

My comments on valuation above exclude IG’s massive cash balance. Although this is highly seasonal, year-end net cash of up to $60m could now account for c.70% of the group’s market cap.

I can’t ignore this cash balance in my estimate of valuation. IG has paid generous dividends in the past and I wonder if the group could eventually be in a position to resume shareholder returns once more, perhaps using a mix of buybacks and dividends to generate shareholder value.

I’m going to upgrade our view by one notch today to reflect the group’s improved profitability, newfound stability and strong cash position. While I’m inclined to remain cautious until we’ve seen a full set of annual accounts for the restructured business (ex-Americas), I think a broadly positive view is probably fair.