Daily Stock Market Report (Wed 11th March 2026) - HBR, FOUR, LGEN, BBY, SUPR, IPF, BOY, FORT, NICL

Good morning!

Leaving it there for now, thank you. Spreadsheet accompanying this report: link.

---

Companies Reporting

---

Graham's Section

4imprint (LON:FOUR)

Down 9.5% to £34.98 (£984m) - Final Results - Graham - AMBER ↓

4imprint Group plc (the "Group"), a direct marketer of promotional products, today announces its final results for the 52 weeks ended 27 December 2025.

A fairly weak outlook statement for 2026 has soured the mood here.

Before getting into that, the 2025 results show everything down by 2%:

It was a “resilient performance amidst a volatile macroeconomic environment”.

The number of orders declined 3%, while the average order value increased 1% - resulting in an overall 2% revenue decline.

Gross margin is flat at 32%. The company previously thought it would achieve something closer to 33%.

Roland observed these trends at the January trading update.

At that update, 2025 PBT guidance was raised from >$142m to >$149m. We see today that the actual result was $150.8m.

Stockopedia’s EPS forecast trends show that the market did get overly pessimistic about the 2025 result. However, there has not yet been any recovery in the 2026 forecast, which remains gloomy (the light blue line below):

Cash is down year-on-year but remains solid at $133m.

The Outlook from the Chairman is worth pasting in full:

Trading results in the first two months of 2026 have been in line with the Board's expectations. Orders and revenue are slightly down compared to the same period in 2025, reflecting continued uncertainty in the market. As anticipated, tariff-related costs are being phased in by suppliers and tariff policy continues to evolve. Whilst these factors may influence revenue and margins in 2026, the business will continue to be managed to deliver solid financial results in the near term, and best position us to take advantage of opportunities that will present themselves as economic and market conditions improve.

Despite a challenging environment, our view of the prospects of the business is unchanged. The Board is confident in the Group's strategy, competitive position, and long-term growth opportunity.

If you made it through all of that, I think that the message is pretty clear: the business is going to be under pressure in 2026.

Estimates: Edison have published on this today (many thanks to them for that). They say they have “made no material changes to our FY26 forecasts”.

Cross-checking against their prior note, I observe the following changes for FY26::

• Revenue of $1,322m has been reduced by only $1m.

• Operating profit of $116m is up by $1m.

• Adjusted EPS of 324.6c is lower by only 2 cents.

So they are totally correct: the changes to FY26 are indeed minimal.

Of greater significance are their new FY27 forecasts:

• Revenue of $1,341m

• Operating profit of $123m

• Adjusted EPS of 341.6c

It’s worth mentioning that, as a mid-cap, many brokers cover this stock in addition to Edison.

And when I check these new Edison forecasts against what is currently in the market, these new forecasts are really not that bad - revenue is a little lower, but operating profit and EPS are a little higher.

I’m therefore not going to interpret today’s release as a profit warning, despite the share price falling 10% and the weak-sounding outlook statement from the company.

Graham’s view

My best interpretation of today’s fall in the FOUR share price is that it’s primarily a consequence of the uncertainty in this statement: “tariff-related costs are being phased in by suppliers and tariff policy continues to evolve. Whilst these factors may influence revenue and margins in 2026, the business will continue to be managed to deliver solid financial results in the near term.”

This simply doesn’t inspire confidence - even if broker estimates are unchanged.

The stock hasn’t recovered yet from the weakness in early 2025:

It’s interesting if we go back to last year’s full-year results announcement, in March 2025.

That was just before Trump’s official introduction of tariffs. The stock slid sharply after those full-year results, and then continued to fall before eventually reaching a bottom after “Liberation Day”.

This is the outlook statement a year ago:

In the first two months of 2025 revenue at the order intake level was slightly down compared to the same period in 2024, reflecting continued uncertainty in the market. It is possible that market conditions, including potential tariff impacts, may continue to influence demand in 2025. From our experience, however, as business sentiment improves, demand for promotional products increases as does our ability to gain market share.

Despite a challenging near-term environment, our view of the prospects of the business remains unchanged. The Board is confident in the Group's strategy, competitive position and growth opportunity.

If we change a few of the numbers, this could have just as easily been written in 2026.

So actually, a vague and cautious outlook statement has become normal for 4imprint.

And considering how EPS forecasts have evolved, they have been right to be cautious.

Roland was AMBER/GREEN on this in January, at a market cap of £1.2 billion.

I’m in two minds about this. Some positives:

• Strong cash position.

• Excellent quality metrics. QualityRank 93.

• Very limited downgrades to forecasts today.

• Passes some of my favourite bullish stock screens (Greenblatt’s Magic Formula, Ben Graham Deep Value).

But there are also some clear negatives:

• Limited growth even if it hits forecasts.

• A weak start to 2025 requires improvement later in the year to hit those forecasts.

• Consensus EPS forecasts have been unstable.

• Tariff-related uncertainty (not just policy itself, but policy effects over time as price rises feed through the system).

• What is the long-term competitive advantage? I get that its commercials have raised 4imprint’s brand awareness, but why will customers still be choosing 4imprint in five or ten years? I’m not sure.

On balance, this is more of an AMBER for me. If I had to explain this downgrade in one sentence, I would say simply that the stock is too expensive given the fragility of its earnings forecasts:

---

Legal & General (LON:LGEN)

Down 5.6% at 242p (£13.8bn) - Full Year Results 2025 - Roland - AMBER ↓

(At the time of publication, Roland had a long position in LGEN)

Investors have taken a dim view of today’s results from Legal & General, after the UK’s largest investor (with over £1trn under management) missed consensus estimates on a number of key measures.

Core (adjusted) profits were slightly lower than expected, as was the group’s Solvency II coverage ratio, a regulatory measure of the group’s capital buffer.

One reason for the drop in the coverage ratio was that the company has cut its valuation estimates for a number of assets – something newish CEO António Simões is describing as addressing “legacy complexities”.

While the miss wasn’t large, it’s perhaps unexpected for such a large and well-followed business. The market has wiped more than £800m from the group’s market cap this morning:

As several of you have already commented, Legal & General is an extremely complex business that relies on a vast balance sheet and a slither of equity. This capital-light business model is not without risk and relies heavily on accurate long-term projections and modelling, skilled use of reinsurance and the maximisation of opportunities presented by regulations (and regulatory changes).

I guess the real fear behind today’s market reaction might be that downward valuations to asset values become a recurring problem, rather than a neatly-contained legacy issue.

2025 results summary

I am not an expert in life insurance or pensions, so I tend to confine my analysis of Legal & General to considering a few key numbers and understanding the general direction of travel of the group’s three main divisions.

While I’d usually aim for a higher level of understanding of a business that forms 5% of my main personal portfolio, in this case I choose to rely on the company’s scale, reputation and 190-year heritage to underwrite the quality of my investment.

Let’s see whether today’s results alter my comfort level with this approach.

Headline profit figures look broadly positive, but as mentioned above these figures are below company-compiled consensus estimates of £1,649m and 21.17p, respectively:

• Core Operating profit up 6% to £1,623m

• Core Operating Earnings Per Share up 9% to 20.93p

• Dividend up 2% to 21.79p per share

• New £1.2bn buyback (including £1bn relating to Meiji Yasuada transaction)

Personally, I place more emphasis on the group’s surplus cash generation, which underpins support for the £1.2bn dividend and any buybacks.

This surplus generation is governed by regulatory Solvency II rules. Legal & General reports a number of key measures:

• Operational Surplus Generation up 5% to £1,530m (+8% to 26.78p per share due to buybacks)

• Net Surplus Generation up 5% to £1,264m (operational surplus less capital required to support new business)

• Solvency II Surplus down 23% to £6,913m

• Pro Forma Solvency II Coverage Ratio: 210% (2024: 232%)

The City was expecting a Solvency II coverage ratio of 219%, so it seems that Legal & General has drained its surplus to a greater extent than expected over the last year.

A number of factors contributed to this and it does appear to be part of Simões’ strategy to reduce the coverage ratio to 160%-190%. However, it seems the main reason for last year’s fall was lower in-year returns and subsequent revaluations of some property and other assets:

Source: LGEN FY25 presentation

What strikes me is that the level of asset revaluations last year was very similar to that seen in each of the previous two years. This may reflect changing interest rates and other factors over the last few years, but I can’t help wondering if it’s a trend.

Divisional results: I’ll look at each of these very briefly.

• Institutional Retirement (operating profit up 6% to £1,168m): this business is a market leader in pension risk transfer (PRT). In 2025, the unit wrote £11.8bn of new PRT business (2024: £10.3bn). International volumes were lower, however, at £1.4bn (2024: £1.9bn). Management notes “the pricing environment has been challenging”, presumably reflecting much-increased competition in this market.

• Asset Management (operating profit flat at £402m): total assets under management rose by 5% to £1,197bn, reflecting market movements – the business saw overall net outflows of £28bn during the year. Costs edged higher, accounting for 75% of income (2024: 74%). The average fee margin rose to 9.1 basis points (0.091%), up from 8.8bps in 2024. This does rather highlight the large volume of low-margin products under management – presumably index trackers and similar.

• Retail (operating profit up 4% to £447m): profits rose due to “higher CSM release and investment margin” – in effect, annuities written in the past have been more profitable than originally expected. However, margins on new business tightened, falling to 5.9% (2024: 7.5%). Flows into Workplace DC pension schemes rose by 3% to £6.2bn during the year, but retail annuity sales fell by 14% to £1.8bn. Management continues to expect both the Workplace DC and retail annuity markets to double in size by 2034.

Outlook

Management reports a “healthy pipeline” of new PRT opportunities, with £17bn of transactions actively being priced on. An “increase in large transactions” is expected relative to 2025.

In asset management, the company expects revenue growth to outpace cost growth as the business sees the full benefit of new business written last year. The shift to higher-margin products is expected to continue.

Further growth is expected in retail, also.

Overall, the business is said to be on track to meet all of its medium-term targets.

Broker consensus prior to today suggested an increase in earnings to 24.3p per share in 2026. That puts Legal & General on a forward P/E of 10, with a potential 9% dividend yield.

Roland’s view

On the face of it, a P/E of 10 and 9% yield may represent a very attractive entry point to this share. If guidance for 2% annual dividend growth is maintained, the stock could offer a theoretical expected return of 11% annually (dividend yield + growth). That’s not bad for what remains a high quality, blue chip business.

I hold the shares for income and am unlikely to sell following today’s results.

That said, I have to admit my comfort level with my holding is slightly lower than it was prior to today’s figures.

The problem is that I don’t have any way of truly understanding whether this year’s miss is genuinely a one-off caused by legacy assets, or if there’s an underlying trend.

In my view, it’s not too hard to imagine that some of Legal & General’s investments in illiquid assets such as property and renewable energy are turning out to be less profitable than originally projected in different market conditions. We’ve seen this when looking at investment trusts specialising in assets in these kinds of markets.

While Legal & General does have deep collective experience of long-term modelling, the last decade has seen some unusual changes.

To reflect the black box nature of this business for outside investors, limited divisional growth and the market’s disappointment at today’s miss, I am going to move down one notch to take a neutral view – consistent with the StockRank.

---

Balfour Beatty (LON:BBY)

Up 6% at 743p (£3.6m) - 2025 Full Year Results - Roland - AMBER/GREEN

Like Costain yesterday, Balfour Beatty appears to be in a fairly good position at the moment. Its share price has risen by more than 70% over the last year:

Today, this FTSE 250 construction group has reported both revenue growth and an overall improvement in operating margins, to 2.9% for “earnings-based businesses” (2024: 2.7%):

• Revenue up 8% due to “UK power transmission and US buildings demand”

• Underlying profit from earnings-based businesses up 16% to £293m

• Underlying earnings per share up 9% to 47.6p

• Dividend up 12% to 14.0p

• Order book up 23% to £22.7bn

• Average monthly net cash up 58% to £1,212m

One uncomfortable exception to last year’s good news was the group’s US Construction business, where margins fell from 1.1% to 0.6%. This drop was caused by cost overruns on a highway project in Texas, which offset improved profitability in the US Buildings business. Management says cost recoveries are being pursued, but this is exactly the kind of issue that periodically causes trouble for large construction groups.

Fortunately, Balfour Beatty’s broad business and UK scale were enough to dilute the impact of this issue, supporting an overall increase in profit last year.

As with Costain, net cash also improved last year leaving the group with average monthly net cash of £1,212m (2024: £766m).

Outlook

A 23% increase in the order book to £22.7bn gives confidence in the outlook for 2026 – assuming no further cost overruns afflict the business.

On balance, I don’t think this is quite as attractive as Costain. Margins are lower, as are returns on capital employed, at just 11% for 2025 (Costain: 16%).

The complexity of having US and UK businesses and an actively-managed £1.1bn investment portfolio is also less attractive to me than Costain’s tighter focus on UK infrastructure.

While I can see some good qualities here, I think there’s also a little more risk. With Balfour Beatty already trading on 14x 2026 forecast earnings, I am going to opt for an AMBER/GREEN view today.