Daily Stock Market Report (Wed 16th September 2026) - SUPR, GAW, CTA, FTC, BTRW, VLE

Good morning everyone! I’ve not been around much for the past week, except for posting last Friday’s Week Ahead article.

That article focused on the Federal Reserve’s interest rate decision which is due this evening (7pm UK time).

Markets are pricing in a 90% probability of a rate hike today, which is an important event for several reasons:

1. It will be the first rate hike since 2023, a change in the trend which has seen rates fall from 5.5% to the current 3.75% (or more precisely, the rate is currently 3.5%-3.75%).

2. It will prove that the Fed is willing to act on persistently above-target inflation, even when it can point to valid supply-driven excuses for this inflation (i.e. the closure of the Strait of Hormuz).

3. It will prove the independence of new Fed Chair Kevin Warsh, despite pressure from President Trump (who appointed Warsh to this position).

So there’s a lot on the line.

Overall, the market is expecting two rate hikes in the remainder of this year and for another rate hike in early 2027.

It makes for an interesting backdrop at the Bank of England, which will be publishing its own interest rate decision tomorrow.

Overnight market movements:

• The FTSE is up 0.3% at 10,685

• S&P 500 is up 0.2% at 7,600

• Brent crude (November) is down 0.5% at $108.25/bbl

• Gold is up 0.8% at $4,325/oz

• Bitcoin is up 0.1% at $76,000

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Calling it there for today, thanks all. Spreadsheet accompanying this report: link.

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Companies Reporting

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Graham's Section

Games Workshop (LON:GAW)

Down 0.1% at £176.90 (£5.9bn) - Dividend Declaration - Graham - GREEN =

The briefest of updates, but it was concealed within an RNS titled “Dividend Declaration”, and therefore I missed it in my early sweep of today’s announcements::

Games Workshop, the maker of Warhammer, announces that trading to 30 August 2026 is in line with the Board's expectations for the current financial year.

Thanks to today’s new 70p dividend, dividends in the current financial year are running ahead of where they were this time last year. Total dividends last year were £4.85.

Graham’s view

I tend to be GREEN on this one. Since my last comment on it in July, I note that the valuation has cooled: £5.9bn market cap today, vs. £6.7bn market cap then.

If I’d been watching the technicals more closely, I’d have noted it falling through the 50-day moving average around the time I wrote that note in July.

The earnings multiple has fallen from around 33x to 28x:

While I tend to rant and rave about the quality of Games Workshop, there is something healthy about the occasional pullback of any highly-rated stock.

And some readers here raised some excellent points in July as to why they might take a more cautious stance.

Let’s take note of a couple of the reasons why investors might be a little cautious.

Flat/declining dividends

Although dividends in FY27 are running ahead of FY26, that year was itself a weaker one than prior years. And FY27 is expected to be similar to FY24 and FY25.

2023: £3.25

2024: £5.10

2025: £5.20

2026: £4.85

2027: £5.15 forecast.

Now if you look back to 2023 and any prior years, you’ll instantly see that the company these days is paying out far, far more than it ever did before. And if you still believe in the company’s long-term trajectory, I don’t think a couple of flat years should be a concern. Growth doesn’t happen in a straight line.

But it’s true that in the short-term, the company hasn’t been generating enough surplus cash to increase its annual dividends much compared to 2024/2025.

This in turn relates to…

Lumpy licensing revenue

Licensing revenue is almost pure profit for Games Workshop, so that it has the potential to generate enormous amounts of surplus cash, but it ebbs and flows. It was £52.5m in 2025, and then fell to £32.9m in 2024.

Or to put it another way: in FY25, licensing activities boosted operating profit by 23%. In FY26, they boosted operating profit by only 12% (my own calculations).

It’s difficult to put a value on this business, due to this inherent lumpiness and the fact that it depends on what other companies wish to do with the brand, and whether they are successful. Or in the words of Games Workshop:

…the viability and ongoing success of any of our licensing deals is broadly out of our control, we are reliant on the successful development and delivery of projects by our licensing partners.

Looking ahead, there is a long-term, ongoing partnership with Amazon. An article in Variety last month discussed the animated series that is currently in development.

Multiple new video games have also been announced over the past year and there is a major release coming up in December: Warhammer 40,000: Dawn of War IV. One million Steam users have apparently put this game on their wishlist.

So it seems that there’s a lot to look forward to in terms of future licensing profits, and successful shows and video games could in turn help to further boost demand for the company’s core physical products (I suppose the relationship goes both ways).

For these reasons I’m happy staying GREEN on Games Workshop, even at a P/E multiple of 28x!

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Volvere (LON:VLE)

Down 6.5% at £20.20 (£44m) - Half-year Report - Graham - AMBER/GREEN =

(At the time of publication, Graham has a long position in Volvere.)

Volvere plc (AIM: VLE), the growth and turnaround investment company, announces its unaudited Interim Results for the six months ended 30 June 2026.

It’s important that I highlight that I have a very strong personal interest here: Volvere is 26% of my single-stock portfolio.

That may sound extreme - and I guess it is - but it was 32% in March. It would have been even higher if I hadn’t been selling it earlier this year!

My plan remains to gradually reduce my holding.

So with that disclosure nice and clear, let’s move on and look at these interims.

Volvere only has one operating subsidiary, the pie maker Shire Foods. Let’s scroll down to see how it’s doing:

• H1 revenue down 7% to £22.2m.

• Underlying profit down 76% to £695k

Management remind us that they did previously warn that profits in Shire would be down in 2026. They explain that FY25 “included relatively high sales of "value" products for one of our large retail customers” and that one particular low-margin product was discontinued during FY25.

The 76% reduction in H1 underlying profit is severe, but it’s worth pointing out that this is a seasonal business.

Last year, 55% of Shire’s revenues were generated in H2, along with the majority of its profits. So we can still reasonably hope for a rebound in the second half. They have been building inventory in advance of winter and, having reduced headcount, are now recruiting again for Q4 and “for the volumes we can reasonably predict for 2027”.

Some grounds for optimism?

After a full re-tender, we were pleased to be able to maintain our partnership with our largest customer. One of our largest customers continues to innovate heavily with us in the savoury pastry category and we have been encouraged by the resulting level of sales. We have launched a range of mini pies and expect to see these forming part of more customers' party food offerings over time. Whilst launches with our fuel station food-to-go customer have taken longer than initially anticipated, we are now seeing incremental sales in the second half of the year as further new products are launched, with early indications of robust volumes and a strengthening partnership.

Food manufacturing is highly competitive and businesses like this are often reliant on a handful of key customers. So I’m under no illusion that Shire deserves a sky-high valuation. But I do think it deserves some sort of earnings multiple that makes sense.

Indeed, later in today’s results statement, Nick Lander breaks from tradition and tell us something about how Shire is expected to perform this year: “Shire's internal revenue target for 2027 shows growth not only over the full year forecast for 2026, but also over that achieved in 2025. As noted above, the impact of costs is harder to predict - but volume is the key driver in the business - and it is for this reason that we continue to be confident in Shire's medium-term outlook.”

This doesn’t reassure us on profits at all, at least not in the short-term, but it does indicate that the company is still winning plenty of business. In a tough year for profits, I’m satisfied with this performance.

Acquisitions and future strategy: they are adopting a “cautious” approach to investment decisions.

Whilst we have looked at a number of targets in the period, our primary management focus has been on ensuring Shire's implied long-term value to the Group is recognised and protected. This is, I believe, our most important task.

Graham’s view

My view is the same as I expressed before: I believe that Volvere should be thinking about how and when it might sell Shire Foods and return capital to shareholders.

Today’s balance sheet has net assets of £44m (excluding the minority interest in Shire Foods), which is fully tangible and matches the company’s market cap.

Within these net assets, cash is £25m and “current asset investments” another £5.3m.

Shire generated an underlying PBT of £6m+ in 2024 and 2025 and while it won’t do that in 2026, it seems that there is a good chance of another strong performance in 2027.

As things stand, Volvere’s 80% stake in Shire is being valued at only about £14m. The implied earnings multiple is about 3-4x.

So I think that Volvere should be trying to buy back its own shares at around the current level (£20). They seem very open to the idea:

Whilst the Company did not purchase its own shares in the period, it remains committed to doing so where the Board considers it in the interests of all shareholders to do so. This could include substantial holdings where a shareholder wishes to sell all or part of their holding. Any shareholder who wishes to do so is invited to contact the Company's joint broker, Hobart Capital Markets LLP.

They did not make any buybacks in H1, due to “more retail demand for the Company's shares”, with the stock reaching highs of £26-27.

I’m staying AMBER/GREEN on this for the same reasons as before. I think it’s very cheap, even with lower profitability in the short-term. I think that management are highly trustworthy. And I appreciate their cautious approach to risk management. But I also believe that the right thing for them to do is probably to liquidate, and I’m not convinced that is going to happen any time soon.

I remain a very grateful shareholder, although with my holding likely to continue reducing over time:

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Roland's Section

Supermarket Income REIT (LON:SUPR)

Up 1.6% at 84p (£1.13bn) - Annual Results for y/e 30 June 2026 - Roland - AMBER/GREEN =

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

Supermarket Income REIT’s discount to book value has narrowed from a peak of around 25% in early 2025 to c.5% today. This alone makes it relatively unusual in the UK market. It’s also one of the larger players, with a market cap comfortably above £1bn.

This recovery partly reflects the resilient cash flows of its tenants and appealing high dividend yield. But I think it’s probably also a reflection of the way SUPR has adapted to the impact of higher interest rates and inflation by cutting costs and scaling up its portfolio.

The result has been that SUPR has comfortably outperformed the FTSE 350 Real Estate Index since the start of 2025:

Today’s results show the evidence of the REIT’s revised strategy, but they also confirm that last year’s dividend was not covered by earnings. I don’t think this is a serious concern, but it does deserve an explanation.

FY26 results summary

The highlights table in this morning’s results gives us most of the information we need to review performance over the last year:

I tend to focus on the EPRA metrics rather than the IFRS numbers. EPRA is a trade body whose formulae are intended to focus on rental income while excluding unrealised changes to portfolio valuations. This means the EPRA numbers are a better proxy for cash generation and thus dividend cover.

Portfolio value/NAV per share: the big change over the last year is a 23.7% increase in the value of SUPR’s portfolio to £2bn. This reflects £454m of property purchases during the year, some of which were carried out through the company’s £855m joint venture with alternative asset manager Blue Owl.

The increase in portfolio value isn’t reflected in NAV per share because SUPR also raised £100m in new equity last year. This is pretty standard practice for REITs, but it’s difficult to do when your shares are at a large discount to NAV. Many listed REITs can’t raise equity at the moment for this reason.

SUPR’s EPRA NTA per share was essentially unchanged at the end of the year, suggesting to me that the equity raise was well judged to allow the business to expand with the right mix of dilution and leverage.

Supermarket tenants favour long leases and rarely close stores, providing some attractive characteristics for a landlord:

• 12-year average unexpired lease term;

• 80% of rental income is linked to inflation;

• 70% of rental income comes from investment grade tenants;

• 90% of rental income comes from groceries (a highly defensive market).

Expense ratio: one of the attractions of the REIT model is that it’s often possible to manage a larger portfolio without a corresponding increase in costs. That’s evident here. SUPR’s EPRA cost ratio fell from 13% to 9.2% last year, reflecting both additional scale and the lower management fees that took effect in July 2025.

Management claim to have one of the lowest cost ratios in the sector:

Dividend cover: EPRA earnings per share only supported 93% of last year’s 6.2p dividend. This would normally be a concern for me, but in this case I think it’s a transitional effect from the creation of the JV. This saw SUPR move some of its owned assets into the JV, freeing up cash for new acquisitions.

Deploying the cash into new properties took some time, resulting in a temporary loss of rental income. Today’s results suggest this shortfall has now been addressed:

Source: SUPR FY26 presentation

Leverage: SUPR’s loan-to-value ratio did rise last year. Drilling down into the results suggests this mainly reflects the impact of the JV, which is more highly geared than SUPR’s own portfolio. I don’t see any real concerns here given the quality and longevity of the company’s tenants.

SUPR has also refinanced successfully over the last year, increasing its average debt maturity while maintaining a hedged interest rate between 4.4% and 4.8%.

Outlook: the main guidance point is for dividend growth of at least 2% annually from FY27. A dividend target of 6.3p per share has been set for the year ending 30 June 2027.

The main attraction of a REIT is usually income, so I think this focus makes sense.

Broker forecasts prior to today suggest dividend cover should rise back above 1.0x this year, as recent acquisitions contribute a full year of earnings. As far as I can see, today’s guidance is in line with existing expectations:

Roland’s view

SUPR’s management (who are regular buyers of the stock) plan to continue expanding and diversifying the portfolio, with a view to doubling the value again:

Source: SUPR FY26 presentation

While the company’s plans to expand and diversify its portfolio aren’t without risk, I think the core appeal of this specialist business should remain safe.

I was attracted to the stock because of its niche focus and high quality tenants and am happy to continue holding and collecting the generous income.

The reduction in the stock’s discount to NAV means the value on offer isn’t quite as attractive as it was, but the shares still offer a forecast dividend yield of 7.6%. That’s still very competitive, in my view.

I was AMBER/GREEN on SUPR in March and don’t see any reason to change that view today.

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CT Automotive (LON:CTA)

Down 32% at 23p (£18m) - Half-Year Report - Roland - PROFIT WARNING (AMBER/RED ↓)

Today’s half-year results from this car parts manufacturer are unfortunately overshadowed by a hefty profit warning. This appears to have caught the market by surprise – understandably, given that we had an in-line trading update on 4 August (see here).

Here’s the explanation of what’s happened:

Since our last trading update, issued on Tuesday 4 August 2026, a key customer has contested standard contractual cost increase mechanisms in our business awards designed to protect both parties against FX movements and typically used across the automotive industry to adjust for the impact of inflation. Whilst we are confident that we will reach a successful outcome, discussions are ongoing and more complex due to the key customer currently being in Chapter 11 in the US.

This isn’t expected to have a material impact on FY26 revenue, but it is going to cause a big hit to full-year profits (my emphasis):

As a result of the negotiations we now consider FY26 Adj PBT to be in a range between $4.9 million and $9.4 million, a range the Board will seek to narrow based on the progress and conclusion of these discussions. FY26 revenue, supported by strong demand, is not expected to be negatively impacted.

Previous consensus for adjusted pre-tax profit was $10.2m, so this could be a big downgrade. However, I think the key takeaway here is the size of the guidance range. There’s clearly a very high level of uncertainty.

To its credit, the company does provide some additional explanation of this today:

The delta reflects $2.9 million of price increases which we are pursuing in full and a further $1.6 million of inefficiencies, post 15 September 2026, caused by the tightening of working capital largely related to this key customer.

Unfortunately, this also serves to highlight a secondary issue. Because the customer in question is in Chapter 11 bankruptcy protection, $4.5m of invoice factoring facilities previously used on this “key customer” have been withdrawn by the lender, forcing CTA to find alternative financing.

The working capital crunch was compounded by a number of other issues:

Availability of working capital, primarily due to FGI withdrawing $4.5 million of invoice financing on our key customer, and $6.2M being held in the Mexican VAT office, also had an impact on H1 26 profitability. Raw material for operations was constrained forcing CT Automotive to incur expedited freight costs ($1.1 million) and labour costs ($0.5 million). Additionally increased demurrage charges ($0.4 million) were incurred as containers remained at the port.

Net debt: as a result of all these issues, net debt is now expected to be higher than current market forecasts at the end of 2026. Singer Capital’s August note suggested year end net debt of c.$6m, which would be lower than the $12.2m reported today. I would guess that year end net debt is now likely to be closer to the half-year figure, or possibly above it.

Half-year results

Today’s warning would be disappointing enough if it came on the back of a strong H1. Unfortunately, that’s not the case. As Mark discussed in August, various temporary factors meant that CT’s full-year results were already expected to have a very heavy H2 weighting (previously estimated at 70-80% by broker Singer).

The headline numbers from today’s results confirm this. While revenue growth is encouraging, profit figures are less so:

• Revenue up 14% to $61.7m

• Gross profit down 1% to $16.4m

• Adj pre-tax profit down 57% to $1.6m

• Earnings per share down 55% to 2.1c

One factor that’s affected profitability during the half year was the working capital restriction mentioned above. Perhaps a good example of why it’s so important for some businesses to have more liquidity than they might appear to need.

Trading commentary: it’s not all bad news. The company says it has secured six new contract wins so far this year, with annualised revenue of $6m once fully ramped up. Further opportunities are in “advanced discussions”.

Increased sales are expected to provide some offset to the impact of the legal situation with “our key customer”.

The company’s plants in China and Turkey are said to be operating well. Its Mexico plant is continuing to ramp up and is expected to support around 40% of annualised revenue over time. A new paint line is expected to reduce dependence on imports with long lead times.

Outlook

The Board expects strong demand to continue in H2 26, and revenue for FY 26 to remain broadly unchanged with increased sales performance offsetting the uncertainty surrounding the price negotiations with our key customer.

This positive statement is of course offset by today’s guidance for adjusted pre-tax profit of $4.9m to $9.4m, versus previous expectations of $10.2m.

I don’t have access to any updated broker coverage today, but in any case I don’t think it’s possible to make a meaningful estimate of full-year earnings at this time.

Roland’s view

Markets hate uncertainty and I don’t like it when multiple items of seemingly unrelated bad news all start to accumulate at once.

I don’t know if the key customer referred to today is Marelli Group (which went into administration last year) or another large supplier. However, this is possibly a reminder that CT’s business is dependent on a relatively small number of large customers, reflecting the pyramid-like structure of the car parts industry.

CT Automotive has previously looked too cheap to us. For this reason, we’ve previously taken an AMBER/GREEN view, despite the evident risks.

While it might be tempting to dismiss these additional problems as further temporary issues (which they may be), I suspect the knock-on effects may continue into next year and could weaken the group’s financial position for a time.

Given the heightened uncertainty and balance sheet risks suggested by today’s announcement, I think we need to be more cautious. While my best guess is that leverage will remain manageable, visibility on earnings and cash flow now seems very poor indeed.

To reflect this situation, I’m dropping our view down by two notches to AMBER/RED today, pending further clarity.

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Barratt Redrow (LON:BTRW)

Up 9% at 303p (£3.9bn) - Full Year 2026 Results - Roland - AMBER/GREEN =

In April I upgraded our view on housebuilder Barratt Redrow, noting that “everything has its price” and suggesting shares in this FTSE 100 firm could be too cheap.

The stock has risen by c.15% since then, but my view is broadly unchanged and I think today’s results support the case for further patience.

Full-year results summary

Headline metrics for the 52 weeks ended 28 June 2026 are mostly positive:

• Revenue up 6.6% to £6,055m

• Completions up 5% to 17,667

• Adjusted operating profit up 0.6% to £598m

• Adjusted operating margin down 0.6% to 9.9%

• Adjusted EPS down 11% to 28.5p

• Tangible net assets per share up 0.7% to 439.8p

• Net cash unchanged at £773m

While underlying profitability suffered last year, this shouldn’t be a surprise. Input cost inflation and affordability issues for buyers are being felt across the sector, limiting builders’ ability to increase selling prices.

What’s more important to me when reviewing these companies is the value on offer and the current run-rate profitability. Are they still generating an economic return?

Here’s how these measures stack up based on today’s results:

• The current share price of 302p provides a 31% discount to stable tangible net assets of c.440p per share.

• Barratt reports an adjusted return on capital employed (ROCE) of 8.4% today

• I calculate a more standard ROCE of 4.8%

Barratt’s ROCE calculation suggests profits are probably covering the group’s cost of capital, whereas my ROCE estimate suggests a likely shortfall.

The key difference between them is that Barratt uses adjusted operating profit to calculate ROCE. The main exclusions are costs associated with legacy properties (building safety remediation) of £73.5m and restructuring costs of £32.5m relating to the merger with Redrow.

I would be inclined to include these costs as they are real cash outflows. The building safety issues will hopefully not recur, but they are undeniably a risk of doing business in this sector.

However, I don’t see the low ROCE as a dealbreaker at this point in the cycle, especially given the strength of Barratt’s balance sheet and its capital return plans.

Buyback benefit: one mitigating factor for shareholders is probably that the company has been buying back shares at large discounts to book value. This should be accretive to NAV, helping to offset the current lack of profitability. When market conditions improve, it should boost future earnings per share.

Buybacks totalled £100m last year, many of which must have been made at very attractive prices.

Outlook

Guidance for home completions has been trimmed today, with management now expecting to complete 17,500 to 17,900 homes this year (previously 17,700 to 18,200). This is blamed on “continued planning delays” and a resulting reduction in the number of expected sales outlets this year.

The good news, potentially, is that Barratt is ramping up its capital returns instead of its housebuilding.

In July the company announced plans for £400m of capital returns in FY27, including a c.£386m share buyback.

At current levels, this buyback could reduce the company’s share count by c.10% and provide a similar boost to future earnings per share.

Roland’s view

My view on this sector at the moment is that it could make sense to buy profitable housebuilders with strong balance sheets when they are trading at discounts to book value.

The main risk is the opportunity cost: I expect housing market conditions to improve at some point, but I have no idea how soon this might happen. It’s worth reiterating that there doesn’t seem to be any obvious catalyst on the horizon that could address the margin and volume pressures under which housebuilders are labouring.

Nevertheless, Barratt is a FTSE 100 housebuilder with good scale, a strong balance sheet and a large discount to NAV. I think a lot of bad news is already priced in, so I’m leaving my previous AMBER/GREEN view unchanged today.