Daily Stock Market Report (Wed 24th June 2026) - VTU, LIO, SGRO, PHP, AVG, BKG, CAV

Heatwave: the Met Office says there is “a risk of serious illness or danger to life” over the next few days. There’s a Red weather warning for London and surrounding areas, including parts of Wales. A maximum temperature of 39 degrees is possible today:

I made it to a big box retailer just before it shut yesterday evening, and picked up a tall, cheap, oscillating fan that resembles a skinny Dalek. About 90% of customers in the shop were there for the same reason, and supplies were rapidly diminishing! My new friend should be a wonderful boost to my productivity (and will therefore be included on my tax return).

Alan Greenspan passed away on Monday, aged 100. One of the first times I came across Mr. Greenspan was when I read the book Capitalism: The Unknown Ideal as a teenager. First published in 1966, it included several chapters written by Greenspan. I thought he was a genius! For example, he wrote this in a chapter called Gold and Economic Freedom:

"...prior to World War I, the banking system in the United States (and in most of the world) was based on gold and even though governments intervened occasionally, banking was more free than controlled. Periodically, as a result of overly rapid credit expansion, banks became loaned up to the limit of their gold reserves, interest rates rose sharply, new credit was cut off, and the economy went into a sharp, but short-lived recession. (Compared with the depressions of 1920 and 1932, the pre-World War I business declines were mild indeed.)...

When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve’s attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable)...

The “Fed” succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market-triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed.

Unfortunately, by the time I read this book in the early 2000s, there was nobody at the Federal Reserve who seemed to understand the Fed's role in creating booms and busts.

Overnight market movements:

• The FTSE is set to open down 0.4% at 10,415

• S&P 500 is up 0.25% at 7,380

• Brent crude (August) is down 1.1% at $76.30/bbl

• Gold is down 0.9% at $4,075/oz

• Bitcoin is up 0.7% at $62,850

The Agenda is complete.

Companies Reporting

Graham's Section

Liontrust Asset Management (LON:LIO)

Up 14% at 336.3p (£202m) - Annual Financial Report - Graham - GREEN ↑

While the results from this fund manager are poor, they aren't too far off the existing forecasts at Panmure Liberum.

• Revenue £123m vs. Panmure estimate £126m

• Operating profit £29.5m vs. Panmure estimate £30m

• Adj. EPS 36.7p vs. Panmure estimate 37.6p.

Net outflows during FY26 were very large at £4.2bn, but this was already known.

What’s more interesting is the outlook, and that’s where things are looking up.

Panmure have increased their EPS forecasts for FY27 (from 35.7p to 36.7p, matching the FY26 result) and for FY28 (from 41.7p to 43.1p). They also introduce a new FY29 EPS forecast of 49.7p, which sounds a little aspirational to me while still being within the bounds of possibilities.

At the current share price, that gives a P/E multiple of 9x for the current year, falling to 8x for next year.

The acquisition of River Global is going ahead at the end of this month, slightly sooner than expected, bringing in another £3bn pounds of AUM.

Current Trading Update

AUM as of last week was £21.4bn, up strong from £19.6bn at year-end (March 2026).

In Q1 of the new financial year, so far, there have been net outflows of £276m - a much slower pace of outflows than we saw last year.

CEO comment:

"The improvement in Liontrust's flows over the past nine months is testament to the expansion of our distribution internationally and broadening of client types. This reflects the significant development at Liontrust over the past couple of years, with net outflows now at £276 million for the current quarter with one week to go, and strategies such as Cashflow Solution benefiting from both strong performance and client diversification….

We have had a very positive response from both RGH and Liontrust clients to the acquisition and are pleased with the way in which the two companies have come together to ensure completion is as smooth as possible… We will take advantage of any other such strategic deals as and when they appear.

Dividend: this has been rebased at a much lower level. The total dividend for FY26 is 19p, vs. 72p in the prior year. At ;east 19p is covered very well by EPS.

Outlook: nothing too specific here.

Liontrust is showing positive results of all the progress we have made over the past few years. We are well positioned to take advantage of the opportunities ahead for active management.

Graham’s view

I’m glad I resisted the temptation to take a neutral stance on this last time, as I stuck to the view that “profits are profits”.

The algorithms take a similar view, calling it a Super Stock:

It’s unfortunate that outflows continue, but we can look on the bright side: outflows are currently much slower than they were before, and market movements are offsetting them very well. Plus, it looks like broker forecasts might have finally stopped falling:

So as a contrarian value play, I still like this. Indeed, I’m going to trust my instincts and go GREEN now, on the back of today’s upgrades.

Roland's Section

Vertu Motors (LON:VTU)

Up 2.8% at 75p (£234m) - AGM Trading Update - Roland - AMBER =

Today’s AGM update is short but relatively positive, with a modest upgrade to full-year profit guidance for the year ending 28 February 2027.

… the Board anticipates that full year results for FY27 will be ahead of current market expectations

Trading appears to be relatively positive despite well-documented headwinds:

The Group continues to trade positively in the financial year, with like-for-like volume growth in all channels: new retail, Motability, used vehicle and fleet and commercial. Aftersales is contributing to growth in Group profits year-on-year. Group margins remain stable and overall trading performance remains ahead of prior year levels.

One factor behind the company’s success appears to be the company’s growing tilt towards Chinese car brands. These are among the fastest-growing in the UK market at the moment due to their low prices, high specs and weighting towards EV models:

The Group will launch its first Omoda and Jaecoo dealership on 1 July 2026 […] another Group outlet will be re-franchised to Omoda and Jaecoo on 1 October 2026. The Group will have 15 sales outlets representing Chinese automotive brands following these openings.

Checking the company’s website, Vertu already has a number of BYD, MG and Geely franchises.

Sales of the Chinese brands sold by Vertu have rocketed this year according to SMMT (trade body) data for the year to May:

• BYD +113% to 31,553 (3.4% market share)

• Geely +n/a% to 4,378 units (0.5% market share)

• Jaecoo +369% to 27,996 (3.0% market share)

• MG +9% to 38,346 (4.2% market share)

• Omoda +169% to 15,078 (1.6% market share)

For context, popular brands such as Ford, BMW, Toyota, Peugeot and Volkswagen have all seen sales (and market share) decline this year, quite materially in some cases.

I expect Chinese car manufacturers to continue to carve out a permanent share of the UK market. This would repeat a process seen historically with Japanese brands and more recently with Korean firms Kia and Hyundai.

Cost savings are also being made by combining (presumably) underperforming sites into multi-franchise operations:

Cost benefits will arise from portfolio changes, such as the relocation in the coming months of Sheffield Mazda from a stand-alone site to a multi-franchise operation alongside the Nissan franchise in the city. Group operating costs remain tightly controlled.

Updated forecasts

Vertu doesn’t tell us what its new expectations for profit are, but fortunately we do have access to updated broker coverage today, adding some numbers to the commentary.

Here are the latest forecasts from Shore Capital, with thanks for making these available on Research Tree.

• FY27E adj EPS: 5.9p (+3.5% vs 5.7p previously)

• FY28E adj EPS: 6.3p (no change)

Today’s upgrade is limited to FY27 and is fairly modest. When set against the backdrop of downgrades earlier this year, we can see that expectations are still significantly lower than they were six months ago:

Roland’s view

UK car retailers (and European car manufacturers) have issues with the government’s ZEV mandate, which requires a fixed percentage of sales to be zero emission on pain of a financial penalty for each non-compliant car sold.

Manufacturers are forcing discounted EV stock on dealers, stimulating sales but putting pressure on dealers’ margins. Consumers still have mixed views on EVs and aren’t quite buying enough of them yet to meet targets, preferring hybrid models.

There’s pressure on the government to dilute its target of 80% ZEV new registrations by 2030. Perhaps the incoming Prime Minister will do this.

SMMT data and forecasts suggest EV market share will have risen from 16.4% in 2024 to 26.8% in 2026. The government targets for those years were 22% and 33% respectively, so it looks like adoption is running c.5% behind target. Even so, there’s clearly strong momentum in EV uptake.

Vertu has previously referred to this as an adjustment period and I think it’s fair to expect the situation to ease over time. But the structural challenges facing European automakers are significant, and I think it could take some time for profitability to improve.

In the meantime, forecasts suggest Vertu will continue to generate a 5% to 6% return on equity on its asset-rich balance sheet.

For me, this suggests the current valuation of 0.6x book value is probably about right, as it gives buyers today a c.10% expected return on cost of equity.

Looked at differently, a forward P/E of 12+ and a dividend yield of 2.8% seem high enough for a slow-growing, low-margin car dealership group.

On balance, I don’t think today’s slight upgrade is enough to justify an upgrade to our view, so I’m going to leave Mark’s previous AMBER unchanged.

SEGRO (LON:SGRO)

Up % at p (£m) - Prologis: Statement re Possible Combination and SEGRO: Statement Regarding Possible Offer - Roland - TAKEOVER (AMBER)

This FTSE 100 REIT is not a stock we’ve looked at before, but it’s the UK’s largest listed REIT, with a £19bn portfolio of logistics properties and – increasingly – data centre projects.

SEGRO’s share price spiked during the pandemic, but the valuation has since returned to more earthbound levels.

Prior to today’s bid news, SEGRO shares offered a small discount to NAV and a useful dividend yield:

That brings us up to date, so let’s take a look at today’s news.

Offer from Prologis

Prologis (NYQ:PLD) is a US REIT with a similar focus to SEGRO. Naturally, it’s a lot larger, with $235bn of assets under management. It’s also much more highly rated, with a £100bn market cap and a price/book ratio of 2.5x:

Here are the details of the Prologis offer:

• 0.084 new Prologis shares for each SEGRO share

• Based on the Prologis share price of $145.3 and GBP:USD exchange rate of 1.32 as at market close on 23 June 2026, the Proposal represented a value of 925 pence per SEGRO share.

SEGRO’s net asset value was last-reported at 925p, on an adjusted basis. So this is an offer at book value.

SEGRO’s board has rejected the proposal:

The Board of SEGRO has unanimously and unequivocally rejected the Proposal, which falls a long way short of SEGRO's own views on value.

The Board of SEGRO considered the Proposal together with its advisers and believed that the Proposal was opportunistically timed and sought to take advantage of the clear dislocation between SEGRO's current share price and its highly attractive underlying business and strong prospects. This has been accentuated by major geopolitical issues which have adversely impacted trading valuations across the UK and European real estate sectors relative to the US REIT sector.

This situation reminds me a little of the bid for Ramsdens yesterday.

It makes perfect sense for Prologis to use its shares to attempt to buy SEGRO at book value when Prologis shares are valued by the market at 2.5x book value.

Making an acquisition on this basis will theoretically lift the share price of the acquiring company, as it benefits from a re-rating of the acquired earnings. We can see above that the Prologis P/E is double SEGRO’s P/E rating.

Prologis comments on acquisition

Unsurprisingly, the US firm is quick to highlight the potential for share price gains:

SEGRO shareholders would receive shares in the world's largest logistics REIT with a $140.9 billion market capitalisation, unlocking, on closing, significant upside to the current share price.

Prologis also believes it is able to provide “accelerated growth” compared to what might be achievable by SEGRO as an independent business.

Using net asset value per share as a guide, performance over the last five years appears to support this claim, but a 10-year view shows the companies to be more evenly matched:

• Prologis 5y NAVps CAGR: 5.8% / 10yr CAGR 8.1%

• SEGRO 5y NAVps CAGR: 2.3% / 10yr CAGR 7.3%

Zooming out to take a 10-year view suggests that SEGRO’s claim of more difficult geopolitical conditions in the UK and Europe may have some merit. Until 2022, both companies were level-pegging on NAV growth:

Roland’s view

Whether either of these companies is really worth a significant premium to book value is a more nuanced question.

I would personally be very reluctant to buy shares in a REIT at more than 2x book value, especially as Prologis has a five-year average return on equity of just c.7%. If market conditions change there could be little to prevent the stock de-rating to trade closer to underlying asset value.

However, there’s no denying the scale and momentum of the US market and investors’ apparent willingness to support much higher ratings for US stocks. Prologis has also turbocharged its growth in recent years with a number of large acquisitions – I guess this could continue for a little while yet.

SEGRO shareholders can choose to sell into today’s spike or wait to see if Prologis comes back with a more convincing bid by the Takeover Panel deadline date of 22 July.

Personally, I would be inclined to continue holding SEGRO shares if I owned them and liked the sector. I think the valuation remains fair and don’t see any reason why the business can’t deliver further growth over the medium term.