Daily Stock Market Report (Wed 29th July 2026) - GRG, SGE, PAY, HSP, NICL, LRE, ABDN, KOO, AML, SDI

Fed interest rate decision: this evening, in addition to US company earnings, we’ll have an interest rate decision from the Federal Reserve at 7pm.

There are other central bank meetings this week - including the Bank of England tomorrow - but it’s the Federal Reserve decision that is most interesting as it holds the potential for a surprise rate hike.

The new Chairman Kevin Warsh, despite being appointed by President Trump to replace Jerome Powell, hasn’t given any assurances that he will conform to Trump’s rate-cutting bias. On the contrary, Warsh has refused to reveal which direction he believes rates should go in next, and has instead focused on the need for price stability. With inflation still above the Fed’s 2% target, this implies rate hikes and/or other inflation-reducing measures could be called on.

On Polymarket this morning, the probability of a 25 basis point rate hike is seen as 22%, with no change at 78%. The current Federal Reserve target interest rate is 3.5% - 3.75%.

Overnight market movements:

• The FTSE is unchanged at 10,870

• S&P 500 is down 0.1% at 7,425

• Brent crude (October) is up 3.2% at $84.75/bbl

• Gold is up 0.2% at $4,035/oz

• Bitcoin is up 0.2% at $64,050

All done for today, thank you! Spreadsheet accompanying this report: link.

Companies Reporting

Graham's Section

PayPoint (LON:PAY)

Down 4% at 600p (£358m) - 1st Quarter Results - Graham - GREEN =

The Q1 revenue numbers here are uninspiring: everything is down except for the small “Digital Payments & Open Banking” division.

However, PayPoint describes it as “solid” (really?) and that they are “on track to meet market expectations for FY27”.

Market expectations suggest that the company will generate £195m of net revenue this year, so Q1 has only generated 20% of this. But the business is seasonal in nature - e.g. Love2Shop vouchers being bought before Christmas - so I think it’s still entirely plausible that the company can hit these full-year expectations.

Rather than focusing on the weak year-on-year revenue, management commentary focuses on the business reorganisation they’ve been working on:

We have had a busy start to the year and, in the first quarter, achieved our primary objective of implementing the changes arising from our business reorganisation. While it is still early in its implementation, the initial indications are encouraging. We are already seeing clear signs of enhanced ownership and accountability, together with greater focus on product development, go-to-market strategy and business development across each business unit.

This reorganisation saw the company dividing into the four business units shown in the table above: Network Services, Digital Payments & Open Banking, Merchant Services and Love2shop.

Paypoint says that this is more transparent and accountable than the previous structure.

The previous structure didn’t look very different at first glance: Shopping, E-commerce, Payments & Banking, Love2shop.

However, the changes include new operating structures across divisions, with newly-defined management teams. So it seems to be more than just a superficial change in how things are categorised and labelled.

CEO’s comment concludes as follows:

With the business reorganisation largely complete, a solid first quarter performance delivered and a good trading rhythm established across the Group, we remain confident in making further progress in FY27 and meeting market expectations.

Network services (convenience store business): the lower net revenue in this key division relates to the difficulties in the parcel business which first appeared last year. There are “growing volumes from Royal Mail and other carriers continuing to build, but not yet offsetting the impact of the new InPost commercial agreement and lower store to store volumes.” As I recall, PayPoint agreed to new commercial terms that assumed higher volumes, but volumes went on to disappoint.

Share buyback: a £25m buyback is ongoing, which is the third tranche of an overall buyback programme. The first two tranches returned a total of £50m.

There are now fewer than 60 million shares outstanding, compared to 65 million a year ago, and 67 million two years ago. This is going to have a meaningful impact on EPS, assuming that profits can hold up.

Graham’s view

I’ve been a fan of this one for a long time, and it’s going to be difficult for me to change stance today, after an "in line" outlook statement.

It’s still considered a Super Stock by Stockopedia:

The weakness in Q1 revenue does cast some doubt in my mind on the company’s ability to hit its full-year forecasts. But look how cheaply it’s priced already:

When a stock is trading on a P/E multiple of 7x, there is always going to be some sort of a catch: poor quality, low visibility, some major risk factor, etc.

In the case of PayPoint, there have long been doubts about the company’s growth prospects. Its traditional bill payments business has long been considered to be on the way out. Recent full-year results (covered by Mark here) did show modest growth, in the aggregate, but I must acknowledge that today’s Q1 numbers aren’t too inspiring.

On balance, I’m inclined to stay GREEN on this, as I think the potential for a revenue/profit warning is priced in at this P/E multiple.

PayPoint has a long track record of excellent cash generation and the fact that it’s now applying this cash flow to reducing its share count could help to create significant upward pressure on EPS over time - assuming that business performance is reasonably stable. So I’m staying positive here.

Nichols (LON:NICL)

Up 1% at £10.25 (£375m) - 2026 Interim Results - Graham - GREEN =

This soft drinks group never provokes much controversy or comment, but I think it’s still worth highlighting.

Its interim results are excellent: revenue growth of 4.7% turning into a 35.6% growth in operating profit:

The reason is that there are no exceptional items in this H1 period. In H1 last year, there were £3.2m of adjusting costs to do with the “Business change Programme and Systems Development”.

I always love to see clean results, and it doesn’t get much cleaner than this.

The company also benefits from net finance income, rather than a net finance charge, which means that pre-tax profit (£15m) ends up being higher than operating profit (£14.1m).

That tends to reflect a very strong balance sheet: the cash balance at Nichols is £66.2m. In the words of management, this provides “significant flexibility to support the Group's growth strategy and capital allocation priorities.”

Return on capital: soft drinks companies are capable of producing famously high returns, and that’s the case here. Stockopedia’s calculations:

For its most recent calculation, the company gets a ROCE of 27.9%. That’s slightly worse than last year, if you ignore last year’s £3.2m exceptional cost. But it’s better than last year, if you don’t adjust that cost out. I prefer this year's result.

CEO comment:

"We are pleased to have delivered another strong period of strategic and financial progress, with revenue growth accelerating to 4.7% supporting further profit growth and record cash generation. Reflecting our earnings growth and revised dividend cover policy of 1.5 times, the Board has increased the interim dividend by 35%...

Supported by our strong portfolio of brands, geographically diversified model, robust balance sheet and significant financial flexibility, we remain confident in our ability to deliver sustainable growth and create long-term shareholder value. The Board's expectations for the full year remain unchanged and we remain confident in achieving our medium-term financial plans."

The yield here is 5.3%, according to the StockReport.

Outlook: “highly confident” in their ability to deliver further strategic and financial progress in H2. Full-year performance is expected to be in line, with market expectations given as adj. PBT of £35.1m.

Graham’s view

I acknowledge that this share doesn’t excite too many private investors, but I’ve convinced myself that it’s materially undervalued here:

This is far from just being a UK business: Vimto is the unofficial drink of Ramadan in the Middle East, and there are significant sales into Africa (£16m in H1, up 17% year-on-year, out of total sales of £89.5m).

When we also consider the rock solid balance sheet, I think a trade buyer would pay significantly more than 14x forward earnings for this business. I’m staying GREEN.

Lancashire Holdings (LON:LRE)

Down 6.5% at 617p (£1.51bn) - H1 2026 Results - Graham - BLACK (AMBER/GREEN)

Let’s take a quick look at the interim results from this catastrophe insurer.

Highlights:

• Gross premiums written $1,315 (down 3%)

• Insurance revenue flat at $930m

• Insurance service result rises 28% to $198.8m (GN note: this is the operating profit from insurance)

Despite the really nice increase in the insurance service result, these results have reportedly missed expectations. Alliance News says that the combined ratio was supposed to be 77.6%, but it came in at 80.7% (the lower the combined ratio, the better).

CEO Alex Moloney says:

Although the loss environment during the first half was less active than 2025, it was by no means benign. Against this backdrop, Lancashire delivered another strong result.

Rolling forward through the income statement, the main factors are:

• High insurance service result, as already stated

• Lower net investment return ($51.3m vs. $108.2m in H1 last year), due to higher interest rates and falling bond values.

• Lower insurance finance expense ($31.8m vs. $73m last year), which I think is consistent with strong underwriting and/or a favourable claims environment. In plain English, I think a plausible explanation is that the company’s long-term obligations to insured parties were smaller than they were last year.

The end result of all of the above is a strong “net insurance and investment result” of $226m, vs. $207m in H1 last year.

Boosted by some “other income”, PBT ends up at $151m, compared to just $119m in H1 last year.

Outlook: “On track to deliver high-teens RoE for full year 2026”.

Stockopedia calculated 19.6% for last year:

Commentary focuses on how the company will deal “excess capacity” in the insurance industry:

Looking ahead, we remain on track to deliver our guidance given at the start of the year of a high-teens RoE for 2026 and we are well positioned to manage the next phase of the cycle, in which we expect rates will continue to reflect the excess capacity in the industry. In this context, we will draw on our considerable experience and expertise to remain disciplined, and we have the agility to deploy capital where we see the best returns. Lancashire’s strong capital base, robust reserves, and more efficient use of reinsurance provide important levers to underpin performance and to manage the business through the cycle.

Graham’s view

This is a slightly strange situation. The company says that its “stable top line and strong combined ratio” were “in line with our expectations”, but various media outlets have reported that the numbers missed expectations. The market was evidently expecting a little more.

The commentary is also fairly downbeat, although nothing it said should be too surprising - insurers will indeed need to be “disciplined” while navigating the “excess capacity” that’s currently available.

For what it’s worth, I’m a fan of this business, and I’m going to run with AMBER/GREEN today on the basis that the market wasn’t pricing it for perfection anyway:

Specialist insurers can be fabulous long-term investments - think of the likes of Hiscox (LON:HSX) but also Lancashire Holdings (LON:LRE) itself: generous dividends and capital appreciation.

Tangible equity on today’s balance sheet is about £1.25 billion. The stock is only trading at a 20% premium to this, which I think is attractive given the company’s proven ability to earn high ROE:

The company will have a bad year from time to time, and I can’t predict the timing of when those bad years will occur, but on a long-term view I have to like the risk:reward this offers

Roland's Section

Greggs (LON:GRG)

Up 12% at 1,888p (£1.89bn) - Interim Results - Roland - AMBER/GREEN ↑

According to Research Tree’s Short Interest Tracker, Greggs is one of the UK’s top-five most shorted stocks, with more than 10% of its shares out on loan to investors who are betting they will fall. Or at least it was, prior to this morning’s results.

I can’t help feeling that this morning’s 10%+ share price rise on in-line results may reflect the closure of some short positions as previously-bearish investors conclude that the worst of Greggs’ problems have now passed.

That’s certainly the feeling I get from today’s results – and it’s a view that’s also been reflected by the StockRanks over the last few months:

Let’s take a look at what this food-to-go market leader has to say today.

Half-year summary

Greggs says it was able to grow both market share and volumes “in a challenging market”. Market research data cited by the company suggests its share of the relevant market may have risen by 0.3% to 8.7% in H1 – a respectable performance that highlights the group’s leadership in this segment.

Financial results for the period also look pretty solid:

• Revenue up 7.2% to £1,101.5m

• Pre-tax profit up 19.7% to £76.0m

• Diluted earnings per share up 21.2% to 54.9p

• Interim dividend unchanged at 19.0p per share

First of all, I commend Greggs for issuing such clean accounts. There are no adjustments to these half-year figures. Accounts for previous recent periods have also been very light on exceptional items. It just proves that heavy use of adjustments is usually a choice by management, not a necessity.

Running through the figures suggests that Greggs’ pricing power and same-store volumes remain under pressure:

• Company-managed stores like-for-like sales: +2.1%

• Franchise stores LFL sales: +1.3%

• The balance of sales growth came from new openings and increased distribution in grocery retailing.

The company says that LFL performance was aided by new menu items including Iced Matcha Lattes, “an enhanced salad range” and the “new Chicken Roll”.

New store formats including bitesize Greggs (a smaller shop format) and Greggs Express (a self-service format in convenience stores) are being trialled. The company opened its first international travel location with a franchise partner at Tenerife South Airport.

Around 100-110 net new shop openings are expected this year, with a further 10 Greggs Express trials.

Profitability improved as sales growth outpaced the 6.3% increase in operating costs during the period:

• H1 operating margin: 7.9% (H1 25: 6.9%, FY25: 8.5%)

• Trailing 12-month return on capital employed (ROCE): 17.3% (FY25: 16.1%)

Cash generation looks fine to me and the company reported a net cash position of £16m at the end of June, excluding lease liabilities. I don’t have any concerns about the balance sheet.

Capital expenditure also fell to £78m during H1, from £172m during H1 25. The company says it’s now passed the peak of its investment centre with the “substantial completion” of its Derby distribution centre.

Interestingly, full-year capex guidance has been cut from £200 to £180m. No detail is given on this reduction, but it seems a positive change to me, perhaps suggesting the company is maintaining a tight grip on expansion plans to ensure new outlets meet hurdle rates for profitability.

Normalising capital expenditure over the coming years is expected to allow more generous shareholder returns (my emphasis):

[...] capital expenditure will continue to normalise in the coming years as the new supply chain sites in Derby and Kettering are completed and we start to utilise the capacity that this creates. As the business moves to a more cash-generative phase, we expect to be in a position to increase returns to shareholders in line with our capital allocation policy.

Outlook

There’s no change to full-year guidance today:

As previously guided, the cost headwind from this increased capacity is expected to result in profits in the second half reducing year-on-year, absent a recovery in the consumer backdrop. The Board's expectations for the full-year outcome are unchanged.

I don’t have access to any broker forecasts for Greggs, but consensus estimates prior to today are for 2026 earnings of 124p per share, rising 4% to 129p per share in 2027.

Following this morning’s gains, this puts Greggs on a forward P/E of around 15x with a dividend yield of around 3.7%.

As we can see from the consensus trend chart, forecasts have also levelled out in recent months. I don’t expect much change after today’s update.

Roland’s view

I think there are two key factors to consider here:

• Can Greggs continue to expand?

• Can the company maintain current levels of ROCE as the business continues to grow?

If the answer to both of these questions is yes, then profits should continue to rise and the intrinsic value of this business should grow.

In terms of growth, new store openings do seem to be generating material sales growth. While it’s too soon to be sure, new smaller formats may also offer the opportunity to expand in areas where a full store wouldn’t be viable.

When I analysed the returns generated by incremental capital expenditure in July last year, I tentatively concluded that it was generating suitable mid-teens ROCE.

Today’s improved ROCE result (vs last year) suggests to me that this remains true. With capex now normalising after a period of elevated spending, I’d hope to see profitability stabilise if new capacity is utilised as expected.

We’ve been neutral on Greggs in recent reviews. In May Ed Sheldon rightly highlighted potential medium-term headwinds such as weight-loss drugs, UK consumer spending and cost growth.

I share these concerns, but I am inclined to think Greggs’ strong market share, quality and scale will allow the group to adapt. I think this is a fairly strong set of results that bodes well for the future, so I’m going to move our view up by one notch to AMBER/GREEN today.

Sage (LON:SGE)

Up 4% at 976p (£8.8bn) - Trading update for nine months ended 30 June 2026 - Roland - AMBER/GREEN =

(Disclosure: at the time of writing, Roland had a long position in SGE.)

FTSE 100 accounting software group Sage was a High Flyer for many years, but has been a casualty of the AI boom and the vague idea that cheap AI-written software might somehow replace SaaS products:

The stock’s Falling Star styling and subdued StockRank have reflected its unloved status, but I think we could soon see a more positive factor profile emerging for this high quality business.

As Ed S reported in May, Sage’s half-year results showed double-digit growth in sales and profits.

Today’s third-quarter update tells us that this performance continued into Q3. These figures cover the nine months to 30 June 2026:

• Total revenue up 11% to £2,062m

• Sage Business Cloud revenue up 15% to £1,762m

• Recurring revenue up 11% to £2,002m

Product development remains a key focus:

This reflects focused execution as we deepen AI capabilities across our platform, scale key products including Sage Intacct, and increase the value customers get from Sage. Demand from new and existing customers remains strong, with small and mid-sized businesses increasingly relying on Sage for finance, HR and payroll workflows, where getting it right is essential.

North America remains both the largest and fastest-growing region and now accounts for 45% of revenue:

• North America up 14% to £932m

• UKIA up 10% to £602m

• Europe up 7% to £528m

Outlook

There’s no change to expectations today:

We continue to expect organic total revenue growth for FY26 to be above 9%, and operating margins to trend upwards in FY26 and beyond, as we focus on efficiently scaling the Group.

Consensus forecasts have edged higher over the last year and suggest earnings per share will rise by 15% to 49.7p in FY26:

Roland’s view

Sage’s share price has recovered somewhat recently but remains below the 1,000p level first seen in 2023. That puts the stock on a forward P/E of 20, falling to 17 in FY27. I don’t think that’s excessive for an £8bn company with double-digit EPS growth and strong quality metrics:

More broadly, I think it’s worth remembering that Sage has a large installed footprint and deep institutional knowledge about accounting software and global tax and accounting rules. It also has the operational capacity needed to support a mission-critical record-keeping service for SMEs all over the world.

I don’t see much risk that these customers will move away from paid software solutions for accounting and payroll – it’s simply too important (and the cost is not really all that significant).

For me, the bigger risks of an investment in Sage are that it will fail to close the market share gap with its larger rival Intuit (NSQ:INTU) – or that it will fall behind smaller, newer rivals in terms of product innovation and service (including the usage and application of AI).

However, these are business-as-usual risks for most technology-focused companies, so I don’t see them as a reason not to invest.

Of course, I am inevitably biased about Sage, which is a top-10 holding in my portfolio. Even so, I remain comfortable with our AMBER/GREEN view, which I’m leaving unchanged today despite Sage’s sub-par StockRank.

Hargreaves Services (LON:HSP)

Up 3.7% at 814p (£281m) - Final Results - Roland - AMBER/GREEN =

Today’s full-year results from this industrial group appear to be in line with consensus expectations, but last year’s profits were boosted by some one-off items and are expected to be lower in FY27.

This week will also see CEO Gordon Banham (and 8.5% shareholder) stand down after 25 years. He’ll take on a new role overseeing the group’s German joint venture. Banham – who I regard very highly – will be replaced by Simon Hicks, who joined Hargreaves as Chief Operating Office in 2025.

Webinar: today’s Investor Meet Company webinar will be presented by Hicks and Banham, together with CFO Stephen Craigen, so might be worth watching for any interested shareholders.

The point I’m making is that this business may be approaching a period of change, after a strong performance in recent years.

FY26 results summary

There’s little to dislike about today’s full-year numbers:

• Revenue up 31.9% to £351.4m

• Underlying pre-tax profit up 93.2% to £34.0m

• Pre-tax profit up 130% to £40.3m

• Adjusted EPS up 75% to 79.1p

• Total dividend up 8.1% to 40.0p

• Net cash down 7% to £21.6m

• Net assets up 0.6% to £195.4m

Stripping out exceptional gains, these numbers give a FY26 operating margin of 8.2% and a return on capital employed of 11.6%. That’s above average for this business.

However, last year’s super-sized increase in revenue and profit deserve some explanation. In brief, several factors contributed to this growth:

• Additional work on some major infrastructure projects (e.g. HS2 and Sizewell C) where Hargreaves’ role has now also expanded to include supply chain management for “critical building supplies”.

• A £13m pre-tax gain relating to the sale of some assets, including renewable energy assets.

• A one-time benefit from the settlement with Tungsten West, terminating the previous mining services contract between the companies.

Divisional summary: Hargreaves’ operations are split across three main operating segments.

• Services (earthmoving & related logistics): revenue rose by 35% to £329.9m last year, supporting a 27% rise in pre-tax profit to £20.2m. Looking ahead, the company secured its first position on the Lower Thames Crossing last year and also scored contract wins at Drax Power Station and with Fortis IBA (incinerators) for logistics services.

• Hargreaves Land (development and sale of land for housebuilding and renewable projects): revenue rose by 7% to £21.5m while underlying pre-tax profit jumped more than 400% to £12.5m (FY25: £2.3m). The disconnect between revenue and profit growth is because the jump in profit was largely driven by the sale of two renewable energy packages for a total of £15.6m. These were held as investment properties, which meant that their sale was not included in revenue. Looking ahead, the company’s housing land pipeline includes 31 schemes containing over 12,000 residential plots over 1,615 acres. These are all at various stages of planning approval, but should gradually generate returns over future years. In renewable energy, the company’s remaining assets have an independent valuation of £9.1m, compared to a book value of £3.3m. So further sales could generate additional one-off gains.

• Germany (commodity trading and recycling JV): share of profits from the JV rose by 53.7% to £6.3m last year. Construction of a zinc processing plant is underway, supported by significant government-backed funding.

Outlook & Broker Estimate

Forward-looking commentary from CEO Designate Simon Hicks is positive but non-specific:

Looking ahead, the Group is well positioned for continued progress, supported by strong revenue visibility, a robust balance sheet, and exposure to long-term UK infrastructure, energy and development opportunities, providing confidence in delivering sustainable shareholder value.

Fortunately we have more specific guidance from Hargreaves’ joint broker, Cavendish.

Cavendish forecasts are unchanged today but confirm a significant fall in revenue and profits is expected this year, before a return to more normal growth in FY28:

• FY27E revenue: £293m (-16.6% vs FY26)

• FY27E adj EPS: 48.8p (-38.3% vs FY26)

• FY28E revenue: £301m (+2.7% vs FY27E)

• FY28E adj EPS: 50.7p (+3.9% vs FY27E)

These estimates put Hargreaves on a forward P/E of about 16.

There should be no real surprises here for Stockopedia subscribers: consensus forecasts have been flagging up the divergence between exceptional FY26 earnings and more normal FY27 profits since early this year:

Roland’s view

I’m on record as a long-term fan of this group and have great respect for the way Gordon Banham has managed Hargreaves’ exit from coal services and then gone on to generate a lot of value for shareholders from its land assets and by expanding the services business.

However, as I’ve commented before this is a fairly capital-intensive business. Last year’s bumper profits mean that return on equity peaked at 15.7%, but the average since 2021 is only 12%. Today’s forecasts from Cavendish suggest an adjusted ROE figure of c.8% over the next three years.

On that basis, I would argue that the current valuation of c.1.3x book value is probably high enough.

I’d also note that the change of CEO after nearly 30 years might bring some changes.

However, I think it is fair to argue that Hargreaves is in a good position to continue expanding its infrastructure services business. Any recovery in housebuilding could also accelerate further profits from land disposals – the group’s balance sheet remains strong and is almost entirely backed by tangible assets.

I’m disinclined to take a neutral view without a more concrete reason to do so, given the company’s track record of creating value for shareholders.

I’d also note that Harwood Capital remains the group’s largest shareholder, at 27.5%, and does not seem to have sold any stock yet.

In my view, it’s not too hard to imagine a catalyst emerging to prompt an upgrade to earnings over the next 12-18 months. In the meantime, dividend forecasts suggest the yield will be maintained at c.5% – not unattractive.

The StockRanks are also positive (although they have not yet digested today’s numbers):

I’m going to retain my previous AMBER/GREEN view today.