Daily Stock Market Report (Wed 26th November 2025) - Budget LIVE, CBOX, BEG, PETS, JDG, IOM, KETL, SDY

Good morning! It's finally here!

We'll be following today's Budget news with a dedicated section inside this report, as it happens.

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Spreadsheet accompanying this report: link (last updated to: 10th November).

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Budget Live Stream (now finished)

12:34: The Chancellor begins her statement, with the OBR's analysis having already been published on their website!

12.39: Strong words on economic stability and debt reduction as a percentage of GDP.

12.41: Notes that the economic growth forecast at the OBR increased from 1% (at the start of the year) to 1.5%. Lower productivity forecasts from the OBR are blamed on the other political party.

12.44: Widens eligibility for EIS/VCT schemes so they can stay with companies for longer.  3-year exemption from Stamp Duty for companies who list in the UK.

12.46: Big ISA news: from April 2026, £8k of the £20k ISA allowance will be designated for investment rather than cash. Over-65s will still have their full cash allowance. 

12.52: First small modular nuclear reactors to be built with Rolls-Royce in Anglesey.

12.55: Government debt c. £2.6 trillion , 83% of GDP.  Deficit is £28.8bn, and deficits are planned until a surplus in 2028/2029. Debt is planned to be down by the end of the forecast period.

13.02: Pensioners whose schemes were rescued by the Pension Protection Fund will now enjoy inflation indexation.

13.07: Digital ID to crack down on tax evasion and fraud.

13.10: Welfare reform: face-to-face assessments for disability payments. Changes to universal credit to get more people back to work.

13.12: Abolishes access to Class 2 National Insurance contributions for people living abroad, and requires a minimum of 10 years of contributions to access the State pension.

13.13: Income taxes: freezes to personal tax thresholds for three years, to 2031.

13.15: Taxes on Investments: Increases basic and higher rate of tax on savings, dividends and property income by 2%.

13.18: Council Tax surcharge: an additional £2,500 to £7,500 will be charged on homes worth more than £2 million.

13.19: Salary sacrifice: from 2029, there will be a £2,000 cap on salary sacrifices into a pension.

13.19: CGT relief on employees of businesses will fall from 100% to 50% relief.

13.25: Gambling taxes: Increases remote gaming duty from 21% to 40%. Increases online betting duty from 15% to 25%. Abolishes bingo duty.

13.26: Will not increase NI, Income Tax or VAT rates.

13.31: Two-child benefit cap is scrapped.

13.34: National Living Wage: as previously reported, it is set to increase from £12.21 to £12.71.

13.39: It's done!

13.44: Response by Kemi Badenoch: describes the Budget as a tax raid on working people to fund handouts. Higher taxes on  workers, savers, investors, cars, pensioners, etc. "All it delivers is higher taxes and out-of-control spending".

Graham's summary: the FTSE is up 0.6% today, the pound is little changed against the dollar, and there's no meaningful change in the 10-year gilt yield. So as far as markets are concerned in the short-term, this has turned into a non-event.

Looking at the particular measures, the one that stands out is the ISA change. Most people reading this are likely to be far more interested in an S&S ISA rather a cash ISA anyway, but perhaps this measure will cause more money to flow into AIM/Main Market shares? Although there is no introduction of a "British ISA" that would have forced people to do this rather than invest internationally.

The National Living Wage increase is not new or surprising.

The freezes to tax thresholds may affect the consumer in the medium-term, but there is no immediate direct effect on businesses.

Higher taxes on investment income will affect small businesses and landlords, which I assume will mean more investors leaving the buy-to-let sector.

In gambling, the 888/Evoke share price (I hold this one) is down 13% in response to higher taxes. The land-based Rank casino group is up 12%.

An interesting Budget: not as dramatic as it might have been, but with plenty for us to chew on in the days and weeks ahead.

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Companies Reporting

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Graham's Section

Begbies Traynor (LON:BEG)

Up 1% to 108.65p (173m) - Acquisition - Graham - AMBER/GREEN ↑

Begbies already announced a small acquisition yesterday, which we didn’t comment on due to its small size. But let’s quickly do that now: it was the £1m acquisition of Network Auctions, a property auctioneer:

The addition of Network Auctions will add scale to our existing auctions business and further develop our national coverage in the south east of England.

Network Auctions will get folded into the Eddisons group.

Today’s announcement is a bit meatier:

• Kirkby Diamond (real estate consultancy) is bought for £8.25m

• Cash-free and debt-free purchase.

• Kirkby Diamond will also join up with Eddisons.

• 5 locations, 62 staff.

This acquisition extends Eddisons' strategic footprint to cover the entire M1 corridor, and aligns with our strategy to strengthen our service offering and expand our market coverage.

Key financials: Kirkby Diamond generated £6.2m revenue and “normalised” PBT of £1.1m in FY January 2025. Net assets £1.4m.

Valuation is 10x normalised after-tax profits, which is perhaps on the high side for a smaller business in this sector? But:

Deal structure: £5m up front,of which £3.5m is cash and the rest is new BEG shares. Earn-out of up to £3.25m if profits are maintained and increased in the coming years.

Let me revise what I just said: the valuation is probably reasonable, given the conditions attached in the earn-out!

The MD of Eddisons says “Kirkby Diamond is a great fit with Eddisons, culturally and strategically, and I look forward to taking forward the growth opportunities that the deal presents."

Ric Traynor says:

"Kirkby Diamond has excellent relationships with a broad range of clients and a strong track record of growth and we very much look forward to working with them as part of the group. The acquisition is in line with our strategy to develop our property advisory and transactional services division by enhancing and broadening our service offerings and geographical coverage. It takes the division to an annualised revenue run rate in excess of £50m derived from a wide range of property services and nationwide coverage."

Graham’s view

I’ve always had a lot of respect for Begbies, and I’ve found it interesting as a hedge against economic weakness (due to its restructuring/insolvency services).

However, it has expanded and diversified over the years, so it’s less of a pure-play on economic difficulties now than it was before. Which is perhaps not a bad thing, for investors who prefer a smoother performance.

As noted by Roland previously, the use of its own shares has caused gradual dilution:

But the company has also been delivering the profits to justify its strategy:

From a chart perspective, these shares first hit 108p in March 2020. They have taken a long time to grow into this valuation:

I’ve talked about the major factors at play here many times, as have Mark and Roland. See Dec 2024 for the last time I went over them. At the time, I said that a PER of 10x made sense for a large professional services business like this.

Today’s valuation:

Estimates: Equity Development are forecasting adjusted EPS of 10.8p in FY April 2026, and then 11.5p in FY April 2027.

So the market is very much sticking to a 10x P/E ratio (10.8p EPS forecast vs. 108p current share price).

I think this could offer some nice upside if the company continues to perform as expected.

Is it a quality compounder? Perhaps not in the traditional sense, though I’m sure management would point to their successful M&A strategy as evidence that it is.

I have noticed that their quality metrics have improved since last year, and I think they could improve further depending on the heaviness of the adjustments to this year’s results. 

These Stockopedia quality metrics are based on the unadjusted figures, so the adjusted figures would be even better:

And the StockRank has risen to an impressive 86:

Putting it all together, I think I’ve seen just enough to raise my stance on this to AMBER/GREEN. It's still trading around the level that I considered to be fair value, but I trust the M&A strategy to keep delivering. So I think an extra dose of optimism is justified.

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Roland's Section

Cake Box Holdings (LON:CBOX)

Down 1.4% to 207p (£91m) - Half Year Results - Roland - AMBER

(At the time of publication, Roland has a long position in CBOX.)

Today’s results from egg-free cake specialist Cake Box appear to be something of a mixed bag. The market reception has also been uncertain. I’ve been digging through the accounts and have found a few points I think are worth highlighting.

HY26 results summary

Let’s start at the top with a look at the headline figures. These accounts cover the half year to 28 September 2025:

• Group revenue up 53.5% to £28.8m

• -> Cake Box sales up 18.9% to £22.3m

• -> Initial contribution from Ambala acquisition of £6.5m

• Pre-tax profit down 7.4% to £2.6m

• Underlying EPS down 11.5% to 4.58p per share

• Interim dividend +5.9% to 3.6p per share

Revenue & sales: I think progress here looks broadly positive. At Cake Box, like-for-like sales rose by 6.3% (HY25: 2.0%), suggesting above-inflation sales growth in the seasonally weaker first half.

Total franchise sales rose by 14.6% to £47.6m while franchisee online sales rose by 25.9% to £11.3m (remember these are franchise sales, from which Cake Box receives a share).

The gap between LFL growth and total growth was bridged by 11 new store openings (9 Cake Box, 2 Ambala), taking the total to 284 at 28 September 2025.

Marketing efforts also seem to be bearing fruit. Traffic to the company’s website rose by 18% to 2.6m for the half year, while its email and SMS databases grew by around one third to 990k and 390k respectively.

Profitability & Leverage: the picture here looks a little more mixed to me.

While revenue rose by 53.5%, the accounts show a much larger 73.6% increase in overheads, to £12.6m.

As a result, H1 operating margin fell to 11.5% (HY25: 15.0%).

My hope is that stronger sales in the seasonally-important H2 will offset this increase in costs, so that the annualised impact is lower. But it’s certainly something I’ll be watching – the initial impact of the acquisition of Ambala appears to have been dilutive to margins.

Dropping down to pre-tax profit reveals another headwind. The company borrowed significantly to fund the acquisition of Amabala and is now paying hefty levels of interest. Finance expenses in H1 were £729k, up from £130k in the prior year.

As a result of this and the reduction in operating margin, Cake Box’s pre-tax profit fell by 7.4% in H1, despite a 50%+ increase in sales! Not ideal.

Net debt of £11.6m (excluding leases) does not look unmanageable to me, in itself. But this is an increase from the £9.0m reported at the end of March, despite the Ambala acquisition falling into the prior year.

Looking ahead, my feeling is that deleveraging might be quite slow as the company plans to spend £5m over the next three years on the construction of a new warehouse.

Current leverage works out at around 1.2x adjusted EBITDA, so doesn’t look too high on this measure.

Using my preferred comparison with net profit gives a multiple of around 3x – that’s also within my comfort zone, but I wouldn’t really want to see it much higher.

Accounting errors!

Scrolling down to the footnotes revealed some accounting restatements that have had the unfortunate effect of reducing last year’s reported profits.

These corrections were prompted by errors the company has discovered in its accounting for the acquisition of Ambala:

• £270k of fees associated with the acquisition were capitalised into goodwill when they should have been expensed;

• A £157k liability relating to deferred consideration should have been released in the FY25 results but was not;

• A £506k corporation tax refund was recognised in the accounts, but the company is obliged to pass this amount to the sellers so should also have recorded a corresponding liability. The impact of correcting this is that FY25 reported pre-tax profit has been restated at £5.88m (previously £6.15m).

In terms of impact and severity, none of this is a disaster. But it seems a bit sloppy and I think it’s also disappointing that these errors were overlooked by Cake Box’s auditor at the end of last year.

Checking back to June, I see that the FY25 results were delayed due to an audit requirement for more time to cover the acquisition of Ambala – but they still missed some errors.

This is not the first time Cake Box has suffered accounting errors, albeit the 2022 events were under a previous CFO and different auditor.

Outlook

Looking ahead, the momentum of the first half has continued into the second half of the year and we are on track to deliver full year performance in line with our expectations despite the consumer environment remaining challenging.

Today’s in line outlook statement implies a significant H2 weighting to results. The company’s H2 adjusted EPS of 4.6p still leaves nearly 10p per share to be earned in H2 to meet consensus forecasts of 14.3p.

There’s been a debate on how credible this is in the comments this morning. I can understand why investors might be sceptical – a big weighting to the second half of the year is often a sign of a possible miss.

In this case, it’s worth noting that Cake Box’s business has always had a significant H2 weighting for obvious seasonal reasons.

Crunching the numbers shows me that the H2 weighting last year was around 60%.

Applying the same calculations to this year suggests an implied H2 weighting of around 68%.

That’s a big increase, but my impression from today’s results is that the acquisition of Asian confectionary business Ambala may actually have increased the seasonality of this business. Management say that the Eid and Diwali celebrations – both in H2 – have always been a significant driver of profitability for Ambala.

Checking today’s segmental results shows that Ambala was loss-making in H1, but generated a pre-tax profit margin of 10.5% during the partial H2 period trading post-acquisition last year:

Management had a sensible opportunity to introduce some flexibility into full-year guidance today, but they chose not to. Make of that what you will.

Personally, I think there’s an increased level of uncertainty, but I can see a plausible case for Cake Box still making its full-year forecasts based on today’s guidance.

Estimates

House broker Shore Capital has taken its cue from Cake Box’s management and left its forecasts completely unchanged today:

• FY26E adj EPS: 14.3p

• FY27E adj EPS: 16.7p

• FY28E adj EPS: 19.2p

These estimates suggest earnings growth could outperform the wider sector, potentially justifying a low-teens earnings multiple:

Roland’s view

I hate to sit on the fence, but I think I’m going to mirror the StockRanks and cut my view by one notch to neutral after today’s half-year results.

I can see both opportunity and risk here, but on balance I am not sure I’d want to pay all that much more for Cake Box shares without some evidence that profitability and growth remain on track following the acquisition of Ambala. AMBER