Daily Stock Market Report (Wed 7th Oct 2026) - BOWL, HSW, CAML, AVON, LIKE/HEAD

Good morning!

It was a tough day for Asos (LON:ASC) (down 7%) and its customers yesterday with a hacking incident that saw some ASOS app users receiving a copy of the extortion note sent to the ASOS data protection officer and IT teams.

In an announcement published shortly after 3pm yesterday, ASOS said:

Basic personal information including name and contact details may have been accessed. We do not believe that payment-card information or account passwords, were impacted.

Hopefully that’s the case - no payment or password info accessed. But it’s still a potentially serious data breach. And what makes the case unusual, and troubling, is that the hackers also managed to communicate to customers via app notification, on top of the data breach.

Cyber attacks are often costly in terms of short-term customer sentiment and in terms of remediation, but the affected companies usually recover quite quickly, in my experience. I suppose the major exception to that statement is Marks and Spencer (LON:MKS) but even in that case, the company has pulled through.

Overnight market movements:

• The FTSE is down 0.3% at 10,510

• S&P 500 is flat at 7,820

• Brent crude (December) is up 1% at $101.60/bbl

• Gold is down 0.7% at $4,135/oz

• Bitcoin is down 1.5% at $84,350

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Companies Reporting

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Graham's Section

Hostelworld (LON:HSW)

Down 8% at 93.8p (£112m) - Trading Statement - Graham - PROFIT WARNING (AMBER/GREEN ↓)

[At the time of writing, Graham has a long position in HSW]

It’s been a poor week for my portfolio, with another profit warning hitting me today.

However, unlike IG group (LON:IGG), this is a tiny position for me. Which is just as well.

New guidance

The Board now expects to deliver FY 2026 revenue growth of approximately 10%, and an adjusted EBITDA in the range of €20.0m to €21.0m (FY 2025: €19.9m), representing an adjusted EBITDA margin of c. 20%.

For FY 2027… the Board now expects net revenue growth in the mid-single digits.

These numbers are hardly disastrous, but they are a downgrade compared to what the market previously pencilled in.

For FY26, revenue growth had previously been expected at around 12% (to €105m). New guidance: 10%.

For FY27, revenue growth had previously been expected at over 10% (to €117m). New guidance: mid single digits.

All told, I think this leaves the new FY27 revenue forecast at only around €108m, almost €10m lower than previously expected.

In terms of profitability, the new EBITDA forecast for 2026 is €2-3m lower than previously expected. The new EBITDA margin guidance (c. 20%) is a couple of percentage points lower than previously expected.

So I’m afraid there is no bright spot in this guidance: lower revenues, and lower profitability on those revenues.

Explanation?

The Mid East conflict is blamed for dampening long-haul volumes.

In Q3, Hostelworld’s net transactions fell 2% year-on-year. 30% of their bookings are on routes between Europe and Asia/Oceania. They estimate that the conflict has hurt volumes by 4%.

Furthermore:

The softness in long-haul demand has since extended beyond those routes, with higher travel costs and stronger destination currencies weighing particularly on demand between Europe and the Americas.

So it’s not just the Mid East Conflict that’s to blame. Hostel-based travel generally is suffering, due to what I’d describe as affordability issues.

Net cash: €3m, after a dividend worth about €1m was paid last month.

CEO comment talks positively about the company’s strategic progress:

The platform continued to strengthen. Almost two-thirds of our bed-nights are now booked in the app, where the social network lives, and engagement accelerated, with chat users up 37% and messages up 77%. The higher commission rate funded increased investment in paid social to grow the member base.

Graham’s view

I’m not panicking here, partly because I don’t own many Hostelworld shares, and also because the company remains profitable and is still growing. It’s just a shame that growth is now expected to be noticeably lower than we previously thought.

This is not a blue-sky share that was trading at a sky-high valuation before this warning. As of last night, it was trading at a P/E ratio of less than 8x:

To my eyes, this is bargain territory for a successful online travel agent with a well-defined niche. The market has been very sceptical about this one - and based on today's profit warning, one could easily argue that the market has been right so far.

My comments on this stock in July still ring true: I argue that the shares were attractively priced, while also acknowledging that there was “every chance of a minor profit warning if Middle East disruption continues.”

We’ve now had that profit warning, and for 2026 it is fairly minor: €2-3m lower EBITDA, and revenue growth that’s 2% below expectations.

What bothers me more than the 2026 downgrade is the 2027 downgrade. Mid-single digit expected revenue growth seems rather weak to me, especially considering the company’s strategic progress when it comes to building its own social network and various other new features for its users.

I’m downgrading our stance on this to moderately positive, as it appears that I was overly optimistic here. It still strikes me as a bargain in P/E terms, and the company should have excellent reinvestment options with all the cash flow it’s generating.

So I’ll be watching carefully to see what they do with this cash flow. Over the past year, I’ve questioned their capital allocation: they spent €10m on a tiny events discovery business which the CEO insists was a good deal. They also spent £4m on a share buyback at higher prices than the current level.

Hopefully, it’s more obvious that their use of cash over the next year is working out well for shareholders. I still think this company is seriously undervalued, but I appear to be in a minority position - and the company’s actions don’t seem to be convincing anyone thus far.

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Likewise (LON:LIKE) (and Headlam (LON:HEAD) - suspended)

Up 7% at 38.5p (£136m) - Strategic Acquisition - Graham - GREEN ↑

Let’s do some financial archaeology: here’s a Headlam RNS from September 2016, almost exactly 10 years ago.

Headlam (LSE: HEAD), Europe's leading floorcoverings distributor, announces that, after more than 25 years with the business, Tony Brewer is stepping down as Group Chief Executive. Tony, who was Group Chief Executive for 16 years, has been instrumental in building the group, and the board would like to place on record its thanks and appreciation for all that he has achieved.

Mr. Brewer was replaced by the Finance Director, who offered “not only an in depth knowledge of the group's operations and financials but also a strong skillset for the future development of the business.”

But things haven’t worked out well for Headlam over the past ten years. For eight of those years, it has been competing with Likewise.

Today, Headlam says that “it has become clear that a sale of certain parts of the business and assets of the Group represents the best and most deliverable outcome for creditors”. Furthermore:

…it is unlikely that the funds secured from the Disposal and any further realisation event(s) will be sufficient to meet the claims of the unsecured creditors in full. Consequently, it is unlikely that there will be any return of capital to the shareholders of the Company.

Headlam’s net debt as of June 2026 was £36m.

This might not seem very large compared with expected annual revenues of over £500m, but it is when the company is unprofitable and illiquid.

The buyer of Headlam’s businesses and assets is… Likewise. Under Tony Brewer..

For £14.9m, Likewise is buying:

The 90,000 sq. ft. freehold Thatcham Distribution Centre, with its operating assets, and inventory on premises

The trade and assets of Crucial Trading

The trade and assets of Concept Flooring in West Bromwich and Stoke-on-Trent

Principal intellectual property

…and probably a few smaller assets, too.

110 employees will transfer over.

And this is nice:

The Company has also entered into an agency agreement to assist the joint administrators during the next nine months to sell Headlam's remaining inventory in an orderly manner as to not disrupt the UK floorcoverings market.

“Disruption” (cheap, firesale prices) would be unhelpful for Likewise and for Headlam's creditors. So it’s nice for them to be able to “assist” the administrators in preventing that.

Comment by Likewise CEO Tony Brewer:

The Acquisition is a key milestone for the Group as it now becomes the leading distributor of floor coverings in the UK. The acquisition of the Thatcham Distribution Centre adds significant capacity to the growing Likewise distribution network and the purchase of well-known brands together with the Crucial Trading and Concept Floors businesses are very welcome additions.

Estimates

As noted by iwright in the comments under this report, Likewise’s house broker Zeus (many thanks to them) have been looking at this deal.

They note that Likewise has “acquired selected assets rather than the whole revenue base”, i.e. Likewise have not suddenly purchased £500m of revenue - far from it. But they are “well placed to capture a meaningful share as customers seek continuity of supply”.

In terms of capacity, Zeus says that Thatcham centre adds 17% to capacity and that together with other sites, capacity is set to rise to 728,000 square feet, up 37%. But earnings forecasts have not yet been updated for the assets that have been acquired.

The 2027 forecasts as they stand are for revenue of £210m, EBIT of £8.2m, and adjusted EPS of 1.4p.

Graham’s view

It seems to me that Likewise is only going to take a small fraction of Headlam’s lost revenue. I’d like to know what Headlam’s expected capacity is in pound terms. I think it is still shy of their £300m revenue target, although it may be close.

But revenue is less interesting than profitability and Likewise should enjoy a significant boost to its pricing power, now that its rival has been absorbed and dismantled.

I’m going to boost our stance on Likewise by two notches today, to fully GREEN, because this seems like a dream scenario for the company: the loss of a major competitor, the purchase of its most useful assets from administrators, and control of its leftover inventory.

It doesn’t get much better than that in terms of a boost to competitive positioning.

Likewise diluted its shareholders in July but the resulting cash boost means that it can easily afford this acquisition. Almost like they saw this coming.

Bravo, Tony Brewer.

Likewise shares are not cheap in P/E terms, but this is a low-margin business and I think a small increase in profitability on revenues approaching £300m could quickly change this picture. The market cap is <£140m.

This isn’t the type of business that I’d be inclined to stay GREEN on long-term. But when news flow is as positive as it is today, I think it makes sense. Zeus were forecasting after-tax profits of £5m in 2027, before this happened. Surely there will have to be substantial upgrades here in due course, stretching out to 2028 and beyond

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Roland's Section

Hollywood Bowl (LON:BOWL)

Up 7% at 264p (£444m) - Full Year Trading Statement - Roland - AMBER/GREEN =

Share price movements are often triggered by a mismatch between investor expectations and reality. Shares can fall on good news and may rise on bad news.

When I covered Hollywood Bowl’s half-year results in May, I suggested that the positive market response suggested “investors were expecting much worse”. I have a similar feeling today.

Hollywood Bowl’s share price is up by 7% in early trading this morning, despite today’s full-year update revealing a marked slow-down in UK trading during the second half of the year, which ended on 30 September.

Fortunately, the first half of the year was strong enough to allow Hollywood Bowl to maintain guidance for profits to be in line with expectations. Given the downward drift to consensus this year, this may be better than some market participants were expecting:

Full-year update - key points

I think it reflects well on companies when they present good and bad news with equal clarity, as Hollywood Bowl has done today.

Management has provided a full breakdown of revenue for H1, H2 and the full year, split by geography and including LFL figures – all the numbers investors want to see:

The contrast between total revenue and like-for-like figures makes it clear that Hollywood Bowl has continued to expand over the last year, building out its Canadian business and expanding its UK footprint:

• Four new centres opened, taking group estate to 95 centres

• Remains on track for 130 centres by 2033

Ongoing investment in the group’s Canadian operations also appears to have driven improved LFL performance in H2.

Unfortunately, LFL growth was still negative last year, with particular weakness in the UK:

• UK revenue fell by 2.6% in H2, with like-for-like revenue down by 5.6%

• Full-year LFL revenue fell by 1%, suggesting that existing centres may have seen lower volumes and/or seen pressure on pricing.

Outlook & Guidance: FY27 remains a mystery at this stage, but the company does provide in line guidance for FY26 profits today:

Expected to deliver Group Adjusted PBT growth for FY26 in line with expectations

Management says that “disciplined cost controls and dynamic pricing” helped to mitigate the impact from the weather. Profit expectations are unchanged with respect to consensus forecasts, details of which are given as:

• FY26 adj pre-tax profit consensus range: £48m to £53.2m

• Mean of analysts’ forecasts: £51.0m

In H1, adjusted PBT was £32.1m, so the consensus range implies a figure of £16m to £21m for H2.

Hollywood Bowl doesn’t indicate where in the range pre-tax profit is expected to fall, but for context I think the equivalent figure last year was £49.4m (given as adjusted pre-tax profit pre-IFRS 16).

Based on these figures, it’s possible that profits could fall this year while remaining technically in line. However, my guess is that a small increase in profits is more likely.

Broker consensus EPS estimates on the StockReport support this view with a FY26E estimate of 22.6p, 5% ahead of the 21.5p reported last year.

Roland’s view

UK consumer spending is under pressure and a scorching UK summer meant that indoor attractions were likely to suffer. The company admits that UK performance was “heavily impacted” by the weather.

Growth in Canada remains promising and the group’s margins appear to have remained broadly stable last year, although we can’t be exactly sure yet.

Overall, I think this is a respectable performance. I don’t see any reason why Hollywood Bowl can’t continue its gradual expansion in the UK and Canada.

The StockRanks view Hollywood Bowl as a Contrarian stock, with strong value and quality but uncertain momentum. That seems fair to me. While growth is currently quite weak, I think the valuation already reflects this, with a P/E of 11 and 5%+ dividend yield.

My view remains broadly positive, so I’m staying at AMBER/GREEN today.

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Central Asia Metals (LON:CAML)

Up 1.6% at 153p (£269m) - Q3 2026 Operations Update - Roland - AMBER/GREEN =

CAML owns the Kounrad copper operation in Kazakhstan and the Sasa zinc-lead mine in North Macedonia. The company is also in the process of acquiring Australian firm Cygnus Metals, which owns a copper-gold mine in Canada.

Today’s operational update looks broadly positive to me and appears to support full-year production guidance:

The increase in zinc and lead production at the Sasa mine is attributed to “a significant improvement in head grades plus greater tonnes mined and processed”.

Assuming similar levels of production during the final quarter of the year, it seems fair to assume CAML will meet full-year production guidance, which is unchanged today:

• Copper: 12,000 to 13,000 tonnes

• Zinc in-concentrate: 18,000 to 20,000 tonnes

• Lead in-concentrate: 26,000 to 28,000 tonnes

The company is also keen to highlight the positive impact of high metal prices in Q3:

• Average realised copper price was $14,218 per tonne (+43% vs Q3 25)

• Average realised zinc price was $3,841 per tonne (+34% vs Q3 25)

• Average realised lead price was $1,859 per tonne (-5% vs Q3 25)

Source: TradingEconomics.com

Outlook & Broker Estimates: high commodity prices are reflected in forecasts for what could be record profits this year (I’m not completely sure).

With thanks to house broker Cavendish, we can see that earnings per share are expected to be nearly 50% higher than in 2025. Cavendish forecasts are unchanged today:

• FY25 actual adj EPS: 29.2p

• FY26E adj EPS: 42.3p

• FY27E adj EPS: 38.3p

• FY28E adj EPS: 28.5p

Earnings are expected to fall from 2027 onwards, although this is probably a little speculative at this stage – no one knows what will happen to commodity prices.

Cygnus dilution: what we do know is that there will be a significant increase in the number of shares in issue when the all-share acquisition of Cygnus Metals (ASX:CY5) is completed, which is expected in late October.

Cygnus shareholders are expected to own around 30% of CAML’s enlarged share capital, which I expect to increase from 177m to c.250m CAML shares.

Cygnus is pre-revenue, so there will be some initial dilution to CAML earnings per share and to the company’s dividend.

As far as I can see, this dilution is not yet reflected in broker forecasts for CAML. When broker estimates are updated, we could see forward earnings fall by c.30%, if I’ve understood correctly.

The flipside to this is that Cygnus provides a growth opportunity for CAML, to offset the maturity of its current assets.

Roland’s view

Without looking in detail at CAML’s existing assets or those of Cygnus, I can see some potential risks here.

• Dilution: see my comments above. I estimate that adjusting 2027 EPS estimates to allow for the Cygnus shares increases CAML’s FY27E P/E to around 8x. The dividend yield may also fall, assuming the same total payout is split across the increased number of shares.

• Commodity price risk: it’s common to see commodity producers trade on low earnings multiples when prices are high. This reflects the likelihood that prices will fall at some point in the future. I think that’s relevant here, even though it seems possible that copper prices could remain elevated for an extended period due to growing demand.

• Execution risk: CAML is acquiring Cygnus with the intention of developing its Chibougamau copper-gold project in Canada. We have to trust that the company has studied the project and understood its likely development cost correctly. Even if they have, CAML will likely need to divert free cash flow from its producing assets to fund Chibougamau. This may reduce the amounts available for shareholder returns (or result in an increase in indebtedness).

• Empire-building risk: as I’ve commented before, we have to hope that management’s acquisition decisions (Cygnus and previously Sasa) are actually creating value for shareholders rather than just adding size for the sake of size. It is not uncommon for miners to acquire assets that prove less productive or more costly than originally expected.

Taken together, I think these factors help to explain CAML’s seemingly low valuation:

Having said all of that, I do think CAML remains reasonably valued and is a fairly decent business. The StockRanks suggest a similar view and apply Super Stock styling:

I’m happy to leave our AMBER/GREEN view unchanged today, with the caveat that investors need to consider commodity pricing as well as company performance when considering this stock.

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Avon Technologies (LON:AVON)

Up 15% at 2,190p (£660m) - Strategy Teach-in and FY26 Trading Update - Roland - AMBER ↑

Teach-In: the first part of today’s announcement from protective equipment specialist Avon deals with new financial targets being shared with analysts at a presentation today. In short, the company will target annual EPS growth of “greater than 10%”, supported by modest organic growth and selective acquisitions.

That’s all in the future, however.

FY26 update: what is more concrete today is that Avon now expects FY26 results to be materially ahead of expectations, following a strong close to the year:

The Group has seen strong momentum in recent months, with the order book rising significantly since the half year results.

Highlights mentioned include new US Air Force orders and the renewal of the Australian Defence Force programme.

Upgraded guidance:

• FY26 revenue growth of approximately 12.5% (previously c.9%)

• FY26 adjusted operating margin of 14% to 16%, albeit this includes the effect of some beneficial one-offs in the year. The FY25 operating margin was 12.8%.

• Return on Invested Capital (ROIC) to be “significantly above” previous guidance of >17%.

Broker estimates: with thanks to broker Zeus and Research Tree, we have access to updated forecasts today.

• FY26E adj EPS: 142.4c (+18% vs 121c previously)

• FY27E adj EPS: 157.6c (+21% vs 130.6c previously)

• FY28E adj EPS: 174.0c (+17% vs 148.7c previously)

Zeus appears to have confidence in the increased size and visibility of Avon’s order book for future years.

Roland’s view

We’ve been cautious about Avon, with Mark maintaining an AMBER/RED view in July, citing the stock’s low ValueRank and declining momentum.

I share Mark’s concerns about valuation, especially as reported (not adjusted) profitability metrics have been very average in recent years:

However, momentum appears to have recovered and Avon has now generated a string of broker upgrades over the last 18 months:

Against this backdrop, the valuation isn’t necessarily unreasonable. I think it’s fair to move up to a neutral view today, despite the indifferent StockRank: