Daily Stock Market Report (Wed 23rd Sep 2026) - W7L, JD., ASY, ING

Good morning! No major overnight news to report, just a couple of headlines that continue familiar themes we’ve been covering:

• Iran: after threatening to “annihilate” Iran if they don’t make a deal with him, President Trump says there have been “very good” talks in New York between US and Iranian envoys, through a Qatari mediator. Iran has reportedly made a proposal that sets out their conditions for ending the conflict. According to CNBC, “a senior Iranian official said Tehran could reopen the strait within a week if the U.S. eases military pressure and lifts its blockade of Iranian ports”.

• Rising interest rates: the ECB recently made its second interest rate hike and is expected to continue raising rates. Bloomberg quotes the president of Bundesbank saying yesterday: “I cannot exclude if we are being confronted for a longer time with high energy prices like this that we have to go into the mild restrictive territory of monetary policy”. Another rate hike is anticipated before the end of the year.

Let’s move on to the company announcements…

Overnight market movements:

• The FTSE is up 0.4% at 10,760

• S&P 500 is unchanged at 7,770

• Brent crude (November) is down 0.9% at $98.50/bbl

• Gold is down 0.5% at $4,335/oz

• Bitcoin is up 0.3% at $86,500

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The Agenda is under construction. Spreadsheet accompanying this report: link.

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Companies Reporting

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Graham's Section

Andrews Sykes (LON:ASY)

Up 5% at 569p (£238m) - Half-year Report - Graham - AMBER =

We haven’t looked at this equipment hire company in a while. A year ago, Mark was neutral. Let’s get up to speed.

We do have year-on-year progress:

• Revenue +8% to £40.9m

• Continuing EBITDA +9% to £14.8m

• Operating profit +3% to £10.3m

EBITDA is probably useful as one of the metrics for management to look at, but I definitely wouldn’t want to look past depreciation at an equipment hire company.

Net funds have increased to £14.5m (Dec 2025: £13.2m, June 2025: £6.9m), and this is after deducting £13m of leases. The cash balance is over £27m.

UK revenue was up 11.4%, driven by the hot weather: “With the UK experiencing record breaking temperatures in May and June, there was significantly increased demand for comfort cooling equipment which increased air conditioning revenues by almost 40% compared with the same period in 2025.”

Europe revenues were up 14%, but the UAE business had “an extremely challenging period due to the well-publicised geopolitical events occurring in the region”. UAE external revenues fell 28.8% and they also suffered a £1m bad debt.

Interim dividend is unchanged at 11.9p, accounting for the majority of the company’s H1 earnings per share (17.6p).

Outlook: more of the same, thanks to the heatwaves:

Trading in the second half of the year to date has been positively impacted by the continuing high demand for the Group's comfort cooling products seen in the UK and Europe at the end of the first half of the year… As the summer season ends, the Board anticipates the Group's UK and European trading performance will trend towards more normal levels.

The Middle East business remains “subdued”, but Andrew Sykes expect this will be more than offset by the strength in the UK and Europe.

Balance sheet: net assets are £55m and this is fully tangible.

Graham’s view

If this had a “value” earnings multiple - let’s say single digits - then I’d happily upgrade our stance on it.

This is a family-owned business with a really strong track record of profitability over many years.

Successful management is demonstrated by excellent quality metrics:

Although some may be put off by the extent of family ownership. The free float is actually tiny (Eoi Sykes is ownership vehicle used by the Sykes family, and JJ Murray is the Chairman):

However, the main reason I’m not upgrading our stance is simply the sector it’s in: equipment hire, where I believe there tends to be a ceiling on the economic returns that are possible, and where I suspect that Andrew Sykes is close to this ceiling.

And I’m used to seeing stocks in this sector trade cheaply, but Andrew Sykes does not. The trailing P/E is about 14x, and the ValueRank is very average (see below). Compare against the earnings multiples at the likes of Speedy Hire (LON:SDY) and VP (LON:VP.)

Interestingly, there are no broker forecasts. That can sometimes be the case for family-run businesses that don’t need to raise capital and aren’t too concerned about their share price.

Overall, I do have a very positive impression of this business. It might be the best little equipment hire company that’s listed on the market. I just don’t see why it should be rated much more highly than it already is!

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Roland's Section

Warpaint London (LON:W7L)

Down 12% at 197p (£156m) - Interim Results - Roland - PROFIT WARNING (AMBER =)

This cosmetics business has been on a downgrade cycle over the last couple of years. The stock is down by 69% from its July 2024 highs. Earnings estimates for the current year had already been cut by nearly 40% before today’s half-year results, which include (another) profit warning.

Although Warpaint’s sales and profits are normally H2-weighted due to the importance of the festive period, the company says the H2 weighting will be “significantly” heavier than usual this year. While I believe there are some good reasons to believe this could happen, this guidance could also be a sign that the company is having difficulty meeting forecasts.

Today’s results provide mixed messaging on the outlook for the remainder of the year, as I’ll explain. What is certain is that as Martin has observed in the comments, this is a business that needs a good Christmas.

Half-year results summary

Warpaint’s headline figures for the half year do not make for reassuring reading. Sales fell sharply during the period, “with continued pressure on consumer spending and cautious ordering by retailers across a number of our principal markets”.

These figures would have been even worse without a £2.5m contribution from the Barry M brand, which was acquired in February 2026:

• Revenue down 17.8% to £40.5m

• Gross margin up 2.3% to 47.3%

• Adj EBITDA down 36.4% to £6.8m

• Pre-tax profit down 33.2% to £4.9m

• Adjusted earnings per share down 46.6% to 4.5p

• Net cash up 21.5% to £20.7m

• Interim dividend up 6.3% to 4.25p

The improvement in gross margin is encouraging and suggests efforts to improve sourcing are paying off. Even so, the underlying increase in gross margin was only 0.8%; the remaining 1.5% came from selling through Barry M inventory that was acquired at a discount to book value.

More broadly, it looks like the loss of volume has resulted in a nasty dose of reverse operating leverage, with profits falling faster than sales. Warpaint’s operating margin for the half year dropped to 12.8% (H1 2025: 15.3%).

Looking at the split across the group’s brands suggests the weakness was broad based, with further headwinds from some adverse timing effects, especially in the US and Australia:

• W7 sales down by 19.8% to £23.9m

• Technic sales 29.8% to £8.7m

• Brand Architekts sales down 24.1% to £4.4m

• Barry M: this brand was acquired out of administration in February 2026 for £1.4m and contributed £2.5m sales of the period. Margins are said to be “slightly higher” than W7 and Technic and the deal has also enabled the company to expand its relationship with Superdrug.

Positive progress: a big chunk of today’s management commentary is used to highlight recent progress with new and existing customers. Here’s a flavour, from CEO and 20% shareholder Sam Bazini:

Importantly, our brands and customer relationships remain strong. We have made encouraging progress with a number of major retailers, including Rossmann, Superdrug, Tesco and Tigotà, ecommerce continues to grow, and the Barry M brand has been successfully integrated into the Group.

Outlook & Broker Estimates

Based on the company’s detailed commentary, I think there probably are some good reasons to expect a stronger H2 weighting than usual this year.

At the same time, I think it’s fair to say that the targets being implied for the second part of the year and for Q4 in particular are quite demanding. Today’s Q3 update provides additional detail on this.

Q3 update: sales for the nine months to 30 September are expected to be c.£69m, with Q3 revenue of £28.5m around 5% higher than for the same period last year.

Crunching the numbers tells me that in 2025, the company generated c.73% of revenue in the first nine months of the year, leaving 27% for Q4.

Today’s figures suggest that in 2026, management expects to generate around 66% of revenue in the first nine months, leaving 36% of sales for Q4.

To make matters worse, revenue is now expected to fall slightly short of expectations this year, with additional profit contribution being expected as a result of higher margins:

The Board currently expects revenue for the year ending 31 December 2026 to be towards the lower end of the range of current market expectations and Adjusted EBITDA to be within the current range of analyst forecasts

(Note: we’re told that consensus forecasts prior to today were for revenue of £103.3-112.6m and adj EBITDA of £22.4-24.0m.)

With thanks to Research Tree, we have access to updated forecasts from Shore Capital this morning. Shore is Warpaint’s NOMAD and joint broker, so its numbers should be a good indicator of management thinking.

Shore Capital’s analysts have trimmed revenue expectations and cut earnings forecasts for both 2026 and 2027 today:

• FY26E revenue: £103.5m (-4% vs £108m previously)

• FY26E adj EPS: 18.3p (-8.5% vs 20.0p previously)

• FY27E revenue: £106.0m (-6.4% vs £113.3m previously)

• FY27E adj EPS: 18.5p (-12.3% vs 21.1p previously)

I think it’s notable that the cuts to 2027 estimates are actually larger than those for 2026.

It’s also worth highlighting that these forecasts imply that Warpaint will need to generate 75% of earnings in H2 this year. That’s significantly more than usual.

Roland’s view

Today’s results will be a disappointment for investors (including me) who were hoping that June’s in-line update indicated a turning point after a series of downgrades:

However, I think it’s fair to say that there are still some points in favour of this founder-led business. Warpaint remains a relatively high margin and cash-generative business, with a strong balance sheet.

• Trailing 12-month return on capital employed of 18.7%

• TTM return on equity of 14.8%

After this morning’s fall, Warpaint is now trading on less than 11x 2026 forecast earnings, with a covered 7% dividend yield. I’d argue that a fair amount of bad news is already priced in.

The business is still expected to return to growth next year, with today’s forecasts suggesting that both sales and profits will rise in 2027.

So what could go wrong? In the near term, I guess the main risk is that H2 sales will fall short of revised expectations and higher margins will be unable to pick up the slack. That could result in another profit warning in Q4/Q1.

On a medium-term view, perhaps the bigger risk is that the company’s core W7 and Technic brands will lose their growth momentum and will be replaced in shoppers affections by other contenders.

I don’t know how likely this is. While I think the company’s increasingly strong presence with major retailers including Superdrug, Tesco and Walmart is probably a positive factor for longevity, I wouldn’t rule out further pressure on margins.

I moved our view on this business up by one notch to neutral in June. Given that today’s downgrade is relatively mild and the valuation looks undemanding, I’m going to leave that previous AMBER view unchanged today.

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JD Sports Fashion (LON:JD.).

Down 3% at 76p (£3.6bn) - Half-Year Results - Roland - AMBER =

We last covered this footwear retailer in August, when JD used its Q2 update to warn on profits (again).

Today’s half-year results leaves guidance unchanged and doesn’t seem to contain anything much of note.

As expected, half-year profits are down sharply, leaving a substantial H2 weighting if JD is to meet revised forecasts:

• Sales down 0.7% to £5,899m

• Gross margin down 0.2% to 46.8%

• Operating margin down 1.2% to 5.0%

• Adjusted pre-tax profit down 19.7% to £282m

• Adjusted earnings down 13.75 to 3.97p per share

While us Brits tend to think of JD as a UK-centric business, the company now generates the majority of its sales and profits (38% and 42%) in North America, following a series of acquisitions over the last decade.

Unfortunately, it’s this region that also placed the biggest drag on the groups’ results in H1. The UK was the other main detractor from performance.

H1 adjusted operating profit:

• North America down 32% to £123m

• Europe down 2% at £52m

• UK down 15% to £94m

• Asia Pacific up 4% at £25m

As previously, management blames performance in North America on “weaker core consumer sentiment”, and a “highly promotional market”. JD also mentions what are euphemistically described as “footwear product cycle headwinds”. As far as I can see, this is a coded way of referring to the ongoing turnaround at Leverage Shares 2x Nike Etp (LON:NKE2), whose products generate c.40% of JD sales.

It’s probably worth revisiting the chart I’ve used previously showing JD and Nike’s share price performance over the last 10 years:

Profitability & Balance Sheet: while the fall in operating margin to 5% in H1 was a little disappointing, I think this probably needs to be seen in the context of full-year performance. From what I can see, consensus forecasts suggest the full-year margin should return to c.7%, broadly in line with prior years.

Net cash of £168m at the end of the period is a reminder that JD remains a fairly cash-generative business, as well.

I don’t see any imminent fundamental concerns, if JD can deliver on existing forecasts.

Outlook

Full-year guidance was cut in August, but is unchanged today:

• FY27 adjusted pre-tax profit of £700m to £800m

• FY27 free cash flow of £460m to £520m

If JD can deliver on this free cash flow guidance, then that could see the stock trading with a free cash flow yield of c.13%. In my view, that is probably too cheap for this business.

Consensus earnings forecasts also suggest a very moderate valuation:

Roland’s view

JD’s quality and value credentials support a strong StockRank and Super Stock styling.

The company’s StockRank has moved steadily higher this year, too – potentially a positive indicator:

Against this backdrop I’m a little conflicted. I respect the factor scores and the apparent value on offer here.

However, I’m wary about JD’s persistent poor momentum and the risk that H2 earnings could disappoint. Perhaps my main concern is that JD’s fortunes appear to be so closely linked to those of Nike – a business it has no control over.

Today’s H1 EPS of 3.97p means that JD needs to deliver 63% of its earnings in H2 in order to meet FY27 consensus estimates of 10.7p per share. I’m not sure how likely this is.

For these reasons, I’m going to retain my previous neutral view on JD today, with the caveat that the shares could be cheap and would probably deserve an upgrade on any sign of improving momentum.

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Ingenta (LON:ING)

Down 14% at 70p (£11m) - Interim Results - Roland - AMBER =

This micro cap software business provides intellectual property and content management systems for the publishing industry. I’d guess this could be an interesting niche in the AI era, with opportunities for innovation.

Checking back through the archives, I see Graham was AMBER/GREEN in April and moved our view down to AMBER in June to reflect a lack of visibility on earnings.

Half-year results summary

Today’s results highlight Ingenta’s strong balance sheet but don’t show much sign of the growth I’d hope to see in a business of this size:

• Revenue down 2% to £5.1m

• Adj EBITDA down 22% to £0.7m

• Adj earnings per share 14.7% to 5.00p

• Interim dividend unchanged at 1.75p

• Net cash of £4.6m (Dec 25: £4.7m)

Looking a little more closely suggests to me that the company has some sticky core customers, but is not generating much in the way of new business:

• Commercial revenue up 5% to £3.9m, driven by “additional Managed Services revenue from the existing customer base”.

• Content revenue down 7% to £1.3m, “due to lower implementation and consultancy revenue”.

• 92% of group revenue was recurring in nature.

Despite my scepticism, Ingenta says that the half year was a positive period for new business, with over £2m of new revenue secured to be delivered over the next three years:

The new business includes providing our ConChord IP management software to an influential US record label, a new contract for the deployment of Edify to a leading US university publisher and the provision of our legacy commercial software products to an international trade publishing customer in the Australian market.

Management also says that Ingenta has “significant sales proposals awaiting customer decisions in H2 2026”.

Acquisition: In August, Ingenta acquired a 24.9% stake in a company called FirstAida Limited in July, in exchange for 798,061 shares. Based on today’s share price I estimate this at £559k. There’s also some deferred consideration due if FirstAida revenue tops £500k, plus an option to acquire the remainder of the business.

The company sees FirstAida as a strong fit, although it’s evidently also an early-stage business. Perhaps Ingenta’s chairman and 27% shareholder Martyn Rose is hoping FirstAida will provide new growth opportunities?

Strong strategic fit, extending Ingenta's capabilities into AI-led IP infringement investigation while creating significant cross-selling opportunities

Dr Dan Brown, founder of FirstAida and Entrepreneur in Residence at University College London, joins Ingenta's Board as Non-Executive Director

Outlook

Full-year expectations are unchanged, at least at the EBITDA level. However, efforts to ramp up sales activity appear to be running behind schedule:

The Board remains confident the Group is on track to meet EBITDA expectations for the year, and is actively pursuing a range of initiatives to enhance future performance and profitability. The Group’s plan to invest in its sales team has taken longer to execute than expected, given the difficulty in recruiting suitable personnel, but remains a priority for the second half of the year.

With thank to house broker Cavendish, I can see that 2026 forecasts are unchanged today:

• FY26E adj EPS: 8.6p

There are no forecasts for 2027 (indeed, these 2026 forecasts were only published in June).

Roland’s view

Ingenta appears to have some attractive characteristics, with strong quality and value metrics:

However, momentum is a clear weakness. Profits are expected to fall this year and there are no forecasts for 2027. Technical momentum has also been fairly weak recently:

This situation is reflected in the StockRank, which styles Ingenta as a Contrarian stock:

This situation might reward more in-depth research and understanding of Ingenta’s products and the sectors in which it operates.

However, my initial impression from this brief review is that a neutral view remains appropriate from our factor-led perspective, due to the lack of earnings visibility or momentum.

I’m going to leave our view at AMBER today.