We’ll start with a reminder that bad actors may attempt to clone our personal profiles on Substack. This is usually an attempt to scam people by promoting terrible investments. For clarity, no one from SCL will be contacting anyone via the Substack messaging service. Indeed, we don’t have access to messaging on Substack, as it requires us to jump through hoops we are not willing to. If anyone contacts you from SCL on Substack, it is not us. Report the message to Substack as impersonation and delete the message.

Spam and scams are why new members can only join the Discord server via the Small Caps Live website. This has replaced direct Discord invites. All genuine investors are still very welcome to join in the discussions.

Camelia (CAM.L) - Kakuzi profits announcement

A poorly worded RNS quoting their separately listed Kenyan subsidiary leaves much doubt about the impact:

This profit warning notice arises from trading information, market forecasts and the unaudited results to 30^th June 2026 (which have been approved, issued and published today), among other data sources currently at the Board's disposal. We, therefore, wish to report that our net earnings for the period ended 31st December 2026 may be at least 25% lower than that reported for the year ended 31st December 2025.

The reality is that they don’t seem to know either:

This downgrade in Kakuzi's profit forecast is coupled with the events in the Gulf, which have created headwinds in several of the operating companies' expected trading profits for the full year. However, we are also seeing improved results in other of our businesses, supported by Camellia's articulated Value Enhancement Plan. As is typical due to seasonality, crop yields and realised prices for the remainder of the year continue to remain uncertain, therefore making the full-year outcome difficult to predict at this point in time.

This underlines the risks of agriculture and why reinvesting most of their windfall cash back into such businesses is unlikely to generate the ROCE stability listed-company shareholders demand. While this remains their stated strategy, we can see this trading at a discount to net cash, let alone net assets.

Empresaria (EMR.L) - Interim Results

The turnaround appears to be working here:

Group adjusted profit before tax for the year ending 31 December 2026 now expected to be at least £6.2m (28 July 2026 trading update: at least £5.2m), reflecting better than expected impact from disciplined cost management approach and improved management oversight

Revenue is flat and NFI is up only 5%, so, like most recruiters, this is all about cost-cutting, which, slightly ironically, usually involves firing a lot of staff.

Also, net debt remains at scary levels:

· Net debt stable at £17.0m (31 December 2025: £17.1m) · Disposal of Skillhouse in April 2026 delivered a £0.7m profit on disposal, with up-front cash proceeds of approximately £0.9m, £0.5m of which was used to reduce the Group’s Revolving Credit Facility and fund ongoing working capital requirements

This particularly stands out, as most well-run recruiters operate with net cash to manage working capital flows. They helpfully give us the average debt levels, which aren’t that much higher:

The average month end net debt during the period was £17.4m.

However, we expect some large intra-month working capital flows, and it stands out that gross debt was a whopping £32.1m. This is 5.2x forecast PBT, even after this week’s upgrade.

Goodwin (GDWN.L) - Preliminary Results

Much debate this week was about why they were leaving it to the last day to issue results. This was the reason:

To comply with IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations, the results of these businesses have been classified as discontinued operations in these financial statements.

The good news is that because of these accounting requirements, we got a clear breakdown of what is for sale. They are selling businesses accounting for 86% of existing profits

In light of this, this is important news:

The Board currently expects that a substantial part of the cash proceeds from any disposal resulting from its strategic review of the Mechanical Engineering division will be paid to shareholders.

They leave us with the feeling that this is perhaps a little more planned than merely a response to an unsolicited approach. Classifying the for-sale parts as discontinued under IFRS5 means that

• the sale is highly probable, meaning that:

  • the management of the entity to which the asset belongs is determined to sell the asset,

  • an active programme to locate a buyer is in place,

  • the asset is being marketed for sale at a price that is reasonable in relation to its current fair value,

  • the sale is expected to be completed within 12 months of the asset being classified as held for sale (subject to certain exceptions set out in the standard).

On top of this was the move we spotted of many of the Goodwins to more favourable tax regimes, and a seeming desire to keep the lid on a share price that was getting ahead of itself earlier this year.

This doesn’t mean that there isn’t very real interest in purchasing these businesses, and they are very savvy in picking a time when these parts are trading very well. Just that this is as much about them wanting to sell now as buyers wanting to buy now.

The valuation they will receive is open to much debate [see Discord for the details]. It seems like long-term holders will do very well out of this, as will those who bought when the share price halved in March. Only those who got carried away in the first few months of the year are at risk of being unhappy with the eventual outcome.

Kooth (KOO.L) - Meta Payout

Kooth’s broker Canaccord highlights this week that Meta’s settlement and subsequent allocation of proceeds to teen mental health potentially funds these States to pay Kooth:

Notably, Kooth’s three existing state customers stand to receive substantial payouts from the settlement. California is set to receive the largest payout of ~$1.5bn, potentially rising to ~$2.2bn, whilst New Jersey and Michigan could receive as much as $752m and $246m, respectively. Although states are yet to decide how funds will be allocated, California’s Attorney General stated the “settlement is earmarked for purposes related to the prevention or remediation of mental health or other harms to young Californians associated with social media use”.

Other states have shared a similar view, with Arizona’s Attorney General hoping funds are used for mental health counselling for public schools, in our view, right in Kooth’s sweet spot.

However, we’re not sure this payout alone moves the needle much, as we feel the California renewal is already highly likely, given the previous public statements by those who are most important in the decision-making process.

We’d be more interested in the intentions of the States that have settlements from Meta but don’t yet use Kooth to deliver services.

While we don’t feel this announcement perhaps warrants the rise in share price in and of itself, anything that helps accelerate the endgame is welcome. After all, the shareholder register has a private equity fund as the largest holder that would surely be open to an exit as long as the deal was above the £3 they had previously sold shares at, and Rockwood Strategic, who always have one eye on an exit at the right price in their holdings. Kooth would be a small but earnings-enhancing morsel for one of the US telehealth companies, especially if there are a lot of new State dollars sloshing around to focus their sales efforts.

That’s it for this week. Have a great weekend!

It has come to our attention that bad actors may attempt to clone our personal profiles on Substack. What they are up to, we have no idea, but it is usually an attempt to scam people by promoting terrible investments. For clarity, no one from SCL will be contacting anyone via the Substack messaging service. Indeed, we don’t have access to messaging on Substack, as it requires us to jump through hoops we are not willing to. If anyone contacts you from SCL on Substack, it is not us. Report the message to Substack as impersonation and delete the message.

Spam and scams are why new members can only join the Discord server via the Small Caps Live website. This has replaced direct Discord invites. All genuine investors are still very welcome to join in the discussions.

Here’s a selection of what we looked at this week. (Remember this is a summary of many opinions, and isn’t the view of any one commentator; check out the actual discussion on Discord if you want the nuance of the different opinions.)

Capital Limited (CAPD.L) - H1 Results

Revenue guidance is up again, showing some momentum behind the business:

Group revenue guidance for 2026 is raised to $430 - $450 million (up from $410 - $440 million as previously guided at our FY 2025 results), reflecting the diversification of the Group and the strong demand environment. MSALABS revenue guidance is reiterated at $85 - $95 million. Capex guidance is reiterated at $55 - $65 million with spend weighted towards H2;

However, PL keep their PBT estimate the same, saying:

Revenue guidance increased, but our PBT is unchanged, noting mobilisation charges in H2.

They have already guided that there will be exceptional costs from exiting the unprofitable Nevada and Mali operations.

And net debt is up:

Net debt at H1 2026 of $43.3 million decreased 21.8% on H1 2025 ($55.4 million), predominantly as a result of higher Adjusted EBITDA, offset by unfavourable working capital movements and net purchases in the investment portfolio;

And the bulk of the capex guidance for the year is yet to come.

This needs careful watching, as hitting leverage limits has led to suboptimal capital allocation decisions in the past, such as discounted placings and giving away the upside on their Predictive Discovery holding. However, we are still some way off those levels at the moment.

Overall, this felt like a neutral update, but the market seemed to like it. Perhaps buoyed by the recent gold price strength, too.

Gattaca (GATC.L) - Trading Update

On target for a slight beat:

Improved sales productivity per head and focus on costs driving increased margin conversion. As a result, the Group will deliver underlying Profit before Tax of approximately £6.1m (FY25: £3.3m), above previous guidance of £6.0m.

Net cash is starting to build again, which is particularly pleasing, as growing contract revenue typically sucks in working capital:

Statutory net cash at 31 July 2026 of £15m (31 July 2025: net cash of £15.7m, 31 January 2026: net cash of £13.0m)

Outlook is positive but perhaps a bit vague:

The Board expects to deliver further improvement in Profit before Tax in FY27.

But there is no change to FY27 forecasts by Panmure Liberum:

Our FY27E and FY28E estimates remain cautiously set, with modest NFI and profit growth. We nudge up our NFI, but keep adj. PBT unchanged at this stage, given that some of the headcount investment that was planned for FY26E is likely to fall into FY27E now.

£6.5m PBT is forecast, but perhaps leave the opportunity for further upgrades during the year.

The big question is whether the recovery started a little earlier in their sectors, or whether a major upswing is still to come that isn’t reflected in the forecasts yet.

The market has always been forward-looking, so despite decent gains over the past year, Gattaca has underperformed the sector over the last couple of months. Some of the larger recruiters have seen their share price double despite NFI declining and remaining loss-making. The light that investors are seeing at the end of the tunnel elsewhere is often a slower decline and smaller losses than before, ironically due to firing staff.

But it does beg the question: why buy the declining, loss-making ones when you can buy the profitable, growing one?

Goldplat (GDP.L) - Q4 Operating Results

We were slightly disappointed to have these released at 7:42, leaving us only 18 mins to react before market open, but at least the numbers were strong:

…a combined profit before tax excluding listing and head office and small subsidiary costs for Q4 of £3,439,000

Mark recently asked Claude to come up with an estimate of Q4 results in order to try to get a (semi) independent view. It came up with £1.6m-£2.6m-£3.4m as low-mid-high estimates for PBT. So this is clearly at the upper end of expectations.

Mark expected Claude was too optimistic about its £9m cash estimate, since Q3 had an unusually strong working capital profile. However, that profile has continued to the end of Q4, if not beyond:

Our cash balances in the group were stronger than usual at £8,820,000 at the end of Q4, due to balances payable to suppliers. The current cash balance remains strong at around £6,000,000. The cash balances will mainly be used to manage working capital requirements in the group, other capital requirements and shareholder distributions.

In light of this, the share price reaction was weak, considering this is effectively another ahead, and they’ve shown they can keep delivering even in a high but declining gold price environment. But this is August, and a broker that doesn’t seem to care about updating its numbers is probably making the market more inefficient than usual.

The improvement is still concentrated in South Africa, partly due to capacity constraints introduced in Ghana by the need to produce bars, not concentrate:

This is slightly annoying as it attracts almost double the tax rate and a small minority interest on the PBT. Sending material to Ghana would generate a higher net profit for the same material. This concern is probably behind both of these initiatives:

GRG invested a further £351k during Q4, bringing the total capital spend for the year at £720k. The capital was incurred to improve processes, increase recoveries and improve environmental management, which will increase our ability to recover gold from material received during FY2027.

And:

As announced in our Q3 operational update, we received our EPA license in April and we have commissioned our spiral equipment in the current quarter.

Mark calculates 4.7p EPS compared to Claude’s 4.8p estimate, mainly due to slight differences in tax/minority assumptions. In terms of cash, we have £8.8m, but this is said to be more like £6m on a normalised basis. This is about 3.5p per share.

So the company is trading around 3.1x last year’s earnings adjusted for normalised cash. 2.3x EV/EBIT if we want to use a more common metric. So this remains better value than it has been for many years on earnings multiples.

The dividend has also seen another quarterly increase:

For FY26, they will have paid out 0.66p, which is only a 3.7% yield. However, the annualised yield on the Q4 payout is more like 0.89p, for a 4.8% yield. We would be surprised if they increased this by £100k each quarter going forward, as they have recently. However, something like a £50k increase per quarter is possible, for a 1.31p dividend or a 7.1% forward yield.

Zeus now appears embarrassingly behind the times, as they haven’t issued an updated note despite a materially ahead statement at the start of July and now Q4 results giving all the key figures. This means their 2.9p EPS has likely been beaten by over 60%, and their dividend estimate, which was already exceeded by the end of Q3, has been beaten by the same amount.

Of course, all of this means very little if last year’s performance is a one-off. As already stated, the dividend almost certainly isn’t. We get the impression that FY26 was a little capex-heavy, with them investing to adopt the changes required in Ghana and improving SA.

In terms of the future, for earnings, South Africa in particular seems to be benefiting from the high gold price, as it allows them to profitably process low-grade material:

Although, in the short-term, the focus will be on extracting value from the current high gold price, in the longer term the aim is to find better visibility of supply through diversifying into other precious metals or other type of gold resources. In the interim, visibility of supply of low-grade soils for our milling circuits remains strong, with more than 12 months of material for processing on site and more under contract.

They appear to be making the most of the high gold price, while planning for an eventual retracement. During Q4, the gold price fell from $4,800/oz to $4,000/oz, with an average around the middle of that range.

The current spot is over $4500, and if it stays there, then I think we can expect a similar or slightly better quarterly performance than in Q4 for future quarters. Even if we assume there are no further benefits from the recent capex or the spiral circuit commissioning in Brazil, then we conservatively get around £2.5m PAT each quarter.

It would be naïve to think there will be no volatility around this, as different batches are processed and sourced. However, if the broad number is correct, we’d see around £9.5m profit after tax and minorities in the current year, for around 5.5p EPS. Net cash could build by around £5m, barring any major capex for something like the TSF processing. This would be 6.4p per share, and the cash-adjusted P/E drops to around 2x and an EV/EBIT of 1.6x.

Basically, you need a pretty negative view of the gold price and the company’s ability to source material to process for these multiples not to look far too low.

Hunting (HTG.L) - Half Year Results

Having originally been subject to much debate on SCL as a value share trading at a discount to TBV, we have been somewhat mystified by a share price that continued to climb, despite a broker consensus that was going firmly in the opposite direction:

These half-year results simply underline that mystery:

In summary, the order book, revenue & PBT are all down. In addition, net debt is up.

Part of the recent share price strength appears to be due to the company’s willingness to buy back its own shares:

Share buyback programme - the Group announced a second buyback programme in March 2026. The $40m programme is underway and is due to be completed by March 2028. By this point, the Company will have returned $100m to shareholders through two buyback programmes.

But how much shareholders’ cash has been wasted aggressively buying back shares at elevated prices ahead of weakening trading performance?

Potter & Moore (PAM.L) - AGM Statement

While this may not be an explicit warning, it certainly looks like a pre-warning warning:

Q1 trading remained challenging, in line with wider sector conditions. Revenue year to date is behind the same period last year, but broadly in line with internal management expectations, which remain weighted to the second half. Gross profit margin is also tracking below the prior year, reflecting recent input cost inflation ahead of price recovery anticipated over the coming months.

The H2 weighting had been flagged. But we weren’t necessarily expecting H1 to be below last year.

It is also concerning that there has been no update from Zeus, as it is clear Q1 was slightly behind management expectations; it is unclear whether they still think FY forecasts are likely to be achieved. They don’t actually say in line in the statement, so with Q1 slightly behind, and the second year running with a hoped-for H2 weighting, a small miss is probably the central case now.

In the past, they have not done AGM statements. The natural reason to start now would be that this is part of having broker coverage, but then why no broker update?

Ultimate Products (ULTP.L) - Pre-close trading update

This is another company that seems very keen to keep buying back shares into declining trading performance. When the leverage constraints in their capital misallocation policy prevented them from buying back shares into treasury, it didn’t seem to dampen their willingness to lend money to their EBT to achieve a very similar aim.

This week’s update shows revenue down, but this largely reflects the change of strategic focus to branded:

Gross margin is slightly down, meaning that the story about an improvement in quality by moving to branded products is hard to sell when the gross margin is still less than 25%. There is a certain irony that the business they chose to curtail (3rd party clearance) was their highest-margin one, and the channel driving branded growth (European discounters, especially Action) has the lowest GM.

However, adj. EBITDA appears to be in line (1% ahead) for FY26:

Unaudited adjusted EBITDA* was £10.0m, as sales mix reduced Gross Margin to 22.6% (FY25: 23.2%). Operating costs remained broadly stable at £22.8m (FY25: £22.3m) and included £760,000 of restructuring costs related to the transformation of the Group’s commercial function.

As this is a trading update, we don’t yet see how aggressively they adjusted to get there, though. And this reads like a warning for 2027:

Looking ahead to FY27, whilst the Group continues to strengthen its commercial function, the Board expects the current backdrop of subdued consumer demand and geopolitical uncertainty to persist. As a result, while it is early in the financial year, the Board currently expects FY27 trading to be similar to FY26.

The warning is confirmed by both the company-stated consensus and the titles of all the brokers’ notes.

However, overall it’s a relatively minor warning, with Shore only cutting EPS by 18%, for example. Strangely, the share price didn’t fall in line with this cut. Perhaps there’s some hope that they may be able to directly support the share price going forward, rather than via the EBT:

At the year end, the Group had net bank debt of £8.6m (FY25: £14.1m), which represents a net bank debt / adjusted EBITDA ratio of 0.9x (FY25: 1.1x), marginally below the Group’s targeted policy of 1.0x. The rolling 12-month average was 1.4x (FY25: 1.3x).

That’s it for this week. Have a great weekend!

Here’s a selection of what we looked at this week. (Remember this is a summary of many opinions, and isn’t the view of any one commentator; check out the actual discussion on Discord if you want the nuance of the different opinions.) To avoid spam, the only way for new members to join the Discord server is via the Small Caps Live website. This will be instead of direct invites via Discord. All genuine investors are still very welcome to join in the discussions.

Shoezone (SHOE.L) - Trading Statement & Buyback

The loss is in line:

The Board continues to expect an adjusted loss before tax* of no greater than £1.0m for the financial year ending 3 October 2026.

However, there is a cash beat:

…trading has continued positively throughout July and as a result of this, cash and equivalents as at 25 July 2026 stood at approximately £7.0m ahead of original budget.

They must have managed to reduce inventory to generate this cash beat on in-line losses. Or, more likely, they just did not add inventory since year-end, as net cash was £7.5m then. This is easier to do on weak but slightly recovering trading, as stock clears but there’s less pressure to build it up again.

This cash is going to be spent on a buyback of shares:

…intends to conduct a share buyback programme of ordinary shares of £0.01 each in the capital of the Company (”Ordinary Shares”) up to a maximum aggregate consideration of approximately £3.47 million (the “Buyback Programme”).

The buyback is over 10% of the outstanding shares at the time, so presumably they expected the share price to jump in response, which proved to be the case.

This does suggest they see recent losses as temporary rather than a permanent function of direct-to-consumer Chinese competition, which is our big worry here. But then plenty of companies have bought back shares at what turned out to be peak prices, when facing a fundamental shift in business conditions.

Titon (TON.L) - Trading Statement

It’s a profits warning here:

…reflecting the delayed MVS projects, lower WDH sales and resulting lower margins, the Group now expects FY26 revenue of approximately £17m, representing growth of around 7.5%, with underlying EBITDA¹ of approximately £0.3m.

This is versus £18.3m forecasted by Shore in a note just last month. The EBITDA has been slashed by 70%. Bear in mind that their year-end is in September, which makes this pretty late in the year to suddenly realise things are going wrong.

Both parts of the business are struggling too:

Mechanical Ventilation:

However, a number of customer projects have been rescheduled into FY27, and these delays together with the sales mix reported at the Group’s half year results have led to lower MVS margins.

Window and Door Hardware:

…sales have reduced more than expected year-on-year, as residential construction remains subdued.

That last point is understandable given current end-market conditions, but should have been more predictable than the company makes it sound. Perhaps the most charitable rationale for not updating us earlier was that things could have been much worse and they didn’t want to warn twice.

The company claims next year will look better, but Shore isn’t willing to put their name to anything beyond the next two months. What they have been willing to commit to is a reduction in FY26 year-end net cash from 2.3m to £1.9m, guided by the company, it seems.

Shore also argues this is undervalued, trading at a small premium to TBV, but this is exactly the sort of small cap that should trade at a discount given its history of being unable to make its assets productive.

We hear the new management has made a number of big improvements on the ground. However, these don’t appear to make any difference to the numbers so far. This could eventually lead to a strong turnaround. But there are plenty of building supply companies on single-digit multiples at the bottom of the cycle that also have the potential to recover strongly. Why buy into a loss-making one?

Realistically, smaller investors should demand more evidence that on-the-ground improvements are having a bottom-line impact, and a much bigger discount to TBV, before considering investing here.

It seems that the market is far from pricing in peak pessimism here. Indeed, the shares jumped prior to this update and barely fell on the news of such a large and unexpected late warning. Presumably, due to the Harwood/Rockwood effect. While many of us rate these guys as investors, there is no escaping that this may now be too small for them to bother with going forward.

Thruvision (THRU.L) - £3m Contract Win

£3m delivered in 27H2 looks fairly material given the £8m revenue forecast for the year:

· The award is expected to generate more than £3 million of revenue for Thruvision and relates to multiple Thruvision high-throughput people-screening systems

· Deployment across multiple major airports in South-East Asia to strengthen aviation worker screening and insider-threat detection…

· Delivery is expected during the second half of the financial year ending 31 March 2027

But then, some material project wins were required to meet the numbers. The market certainly liked this news, with the share price doing what you’d expect when a highly illiquid but well-followed name releases good news.

However, it looks like a weak H1 and a very high H2 weighting here, which may not be well received (even though some of H2 is now in the bag), especially for those who have bought in on momentum recently.

There’s also no mention of margins either. £3m in sales at 50% gross margin for new stock, versus 25% for clearing old kit, makes a big difference to the bottom line (and whether they run out of cash!)

Previous management had stockpiled machines to fulfil expected orders (perhaps including US Customs) that never came. Then they updated the model and had to sell the old ones at a discount. They don’t mention which model has been sold here. This is exactly the sort of detail we’d want the broker to ask about and share with investors, as it appears material to the investment case. However, we can’t see any updated coverage so far.

That’s it for this week. Have a great weekend!

Here’s a selection of what we looked at this week. (Remember this is a summary of many opinions, and isn’t the view of any one commentator; check out the actual discussion on Discord if you want the nuance of the different opinions.) To avoid spam, the only way for new members to join the Discord server is via the Small Caps Live website. This will be instead of direct invites via Discord. All genuine investors are still very welcome to join in the discussions.

Goodwin (GDWN.L) - Recent Press Speculation

A short and rather unexpected statement:

The Board of Goodwin confirms that it has commenced a strategic review to consider a range of potential options to maximise value for shareholders whilst ensuring continuity for all stakeholders, including customers, and the long-term prosperity of its businesses. These options include the potential sale of a substantial part of the Mechanical Engineering division, which includes GSC, GI, Noreva, Easat and Pumps.

This appears to be in response to an FT article.

The Mechanical Engineering division is most of the business, so selling a substantial part is close to a complete sale. We would be surprised if the family wanted to let this go, but perhaps they recognise this is a great time to sell such a business and they have plenty of better uses for the capital.

Ingenta (ING.L) - Acquistion of FirstAida & Board Appointment

We did wonder if something might come of the sale of a couple of blocks of shares to other software entrepreneurs last year. This deal appears to stem from those relationships:

Acquisition of an initial 24.9% equity stake in FirstAida (”Initial Stake”), an AI-driven business complementary to Ingenta’s existing IP and rights management offering

The initial stake has little impact on dilution. But we think shareholders have the right to feel a little unhappy about them issuing shares at the current price when they are sitting on a shed load of cash:

Consideration for the Initial Stake to be satisfied through the transfer of 587,930 existing Ordinary Shares in the Company held in treasury and the issue of 210,131 new Ordinary Shares in the Company, comprising in aggregate 798,061 Ordinary Shares in the Company (the “Initial Consideration Shares”)

It would seem logical that the requirement for this deal to be in shares comes from the seller’s views about the level of undervaluation at Ingenta. After all, he bought at a higher price last year. How much of a bargain they are getting is a little less clear:

As an early-stage company, FirstAida currently has minimal revenues and its assets consist of the agentic AI software. Its business model is to charge recurring revenues to publishing and legal advisory customers and it is expected to start to generate revenues from this source in H2 2026.

Ultimately, it’s only £520k’s worth of shares so far, adds a missing aspect to their product suite, and having an entrepreneur on the board is probably a good move; it would just have been more palatable if they’d recently bought those 800k of shares in the market at bargain prices.

On the one hand, Dan Brown has been given £520k of shares for a stake in a virtually pre-revenue company and is clearly set to benefit most in terms of cross-selling. On the other hand, it does look like a situation where the combination of the two companies will be genuinely more valuable than the sum of their parts.

As allegedly structured, the deal seems very low risk to Ingenta, as Cavendish say:

We have updated our share count to include the initial consideration shares which leads to a 6% increase in total shares outstanding and a 2% reduction in adj EPS from 8.8p to 8.6p given the intra-year dilution.

However, once revenue at FirstAida starts to grow, the acquisition dilution starts to build. We are concerned that they have an obligation, not an option, to complete if revenue hits £375k. Otherwise, why would it be said to be conditional on a revenue trigger with a waiver clause, rather than just saying they are minded to execute the option if revenue reaches £375k?

As part of the deal, Ingenta get a pretty strong non-exec

Appointment of Dr Dan Brown as a Non-Executive Director of Ingenta

As Entrepreneur in Residence at University College London (UCL)’s Computer Science department, Dr Brown has been instrumental in numerous spin-outs from UCL. Amongst these is Meganexus, a highly successful provider of secure software which was acquired in January 2026 by NEC.

For many, the biggest concern with Ingenta was that nothing would happen and the cash would continue to build on the balance sheet and be discounted by investors in any valuation, but this is certainly something!

Winkworth (WINK.L) - Commencement of Legal Proceedings

This is a shocker!

M Winkworth…announces that, following receipt of independent legal advice, yesterday it issued proceedings in the High Court of Justice, Business and Property Courts of England and Wales, Business List (ChD), against Simon Agace, the Company’s Non-Executive Chair.

The proceedings relate to alleged breaches of confidentiality, certain provisions of the relationship agreement entered into between the Company and Simon Agace on 5 November 2009, and associated duties as a director under the Companies Act 2006.

This is not just suing a non-exec Chairman, but the original driver behind the franchise model and 41.25% holder.

Not only that, but his son is the CEO and 5.7% holder.

Surely this is sure to get very messy, and major impacts on the business can’t be ruled out. How has the share price not halved in response? This may be illiquid, but smaller third-party holders probably still have the chance to get out before this ends up in court.

That’s it for this week. Have a great weekend!

Chesterfield Special Cylinders (CSC.L) - Board Changes & FY26 Outlook

Some big board changes:

Chris Walters, Chief Executive since September 2018, will step down from the Board by mutual agreement and leave the Company on 31 July 2026. Chris Webster, Chief Operating Officer since April 2022, will lead the business as Managing Director and joins the Board with immediate effect. Sally Millen, who joined the Company in June 2022 and was appointed as Director of Finance in November 2024, also joins the Board with immediate effect as Finance Director.

Walters has been here for a long time, but the replacements/board promotions have also had 4 years to try to turn this business, and so far managed to sell the part of the business that was actually doing ok to fund the part performing badly.

This is potentially even more worrying:

Richard Staveley, Non-Executive Director since May 2023 and representative of Harwood Capital, a major shareholder of the Company, will also step down from the Board on 30 September 2026.

If we remember correctly, they had this under the “realisation” part of Rockwood’s portfolio. With the scale of his fund rising and the size of the company shrinking, that realisation is perhaps increasingly looking like a market dumping of the holding.

We doubt there has been any real boardroom bust-up here; more likely that it’s just not worth Staveley/Rockwood’s time bothering with this anymore.

There is some hope, though, on the outlook:

The Company reconfirms its previously announced expectations for a strong and profitable second-half performance in FY26, supporting full-year market forecasts at levels similar to the prior year (FY25: revenue £16.6 million, adjusted EBITDA £0.8 million). The Company expects modest revenue growth in FY27 from defence newbuild contracts and lifecycle services, while hydrogen newbuild revenues, prudently removed from its forecasts, represent a potential upside.

We’re sure they can scrape their way to the EBITDA figure by firing people (including the CEO, it seems) and adjusting out the cost of firing them. But that doesn’t make them profitable; depreciation is a real cost for this business, and the cash burn was starting to look worryingly high at the half-year. Presumably, Rockwood would now not be supportive of any raise if it were needed?

Kooth (KOO.L) - Half Year Trading Update

Seems like a reasonable update:

Performance for the half year ended 30 June 2026 is in line with expectations. Revenues for the period are expected to be £30.8m (H1 2025: £32.1m), reflecting planned tapering of California product development revenue and a negative FX movement of £0.7m partially offset by revenues from a new contract with the State of Michigan.

Most importantly, no surprises, unlike last year, where the marketing spend spooked the market:

Adjusted EBITDA is expected to be £5.0m-£5.4m (H1 2025 £1.6m), reflecting strong California user engagement compared to the prior period in which Adjusted EBITDA had decreased in line with an accelerated investment in key areas of focus.

Net cash continues to build nicely:

Kooth’s balance sheet remains very strong, with unaudited net cash as at 30 June 2026 of £23.1m (H1 2025: £15.3m).

This is 42% of the market cap, making the headline multiples look much better than at first glance. Strong cash generation also suggests that Adj. EBITDA isn’t all BS earnings!

Luceco (LUCE.L) - 26H1 Trading Update

FY27 is now upgraded, showing that momentum just continues here:

With further clarity around the economics of Demand Flexibility, the benefit of continued operational efficiency gains in the UK and while remaining mindful of the broader economic backdrop, the Board expects Adjusted Operating Profit for 2027 to exceed current market expectations¹, with the potential for further significant outperformance dependent on Demand Flexibility.

Although it’s largely due to electric vehicle charging:

· Continued momentum in our Energy Transition revenue, including EV charging and Demand Flexibility, delivering revenue growth of c.120% year-on-year

· The Group’s core products continuing to contribute strongly with c.6% revenue growth

It seemed a strange reaction to a beat, as the share rice fell over 10% on the day, but the market appears to have been spooked by the following statement:

As expected, changes to the regulated mechanics of Demand Flexibility have begun to crystallise, and are expected to reduce recurring revenue per EV charger towards a more sustainable level early in the second half.

Even if this is in forecasts, as they say, any moderation to their key growth driver will take the shine off. We are tempted to say the share price response was an overreaction, but the share price has been on a tear this year. With the share price already rising over 100% on just a 23% upgrade to EPS, the price had probably just got ahead of itself.

Paypoint (PAY.L) - 1st Quarter Results

They claim that these results are in line with expectations, but the figures look bad:

In addition, the lack of broker coverage available to individual investors creates uncertainty.

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.

If that rhythm is mid single-digit declines in revenue for all but the smallest BU, then they appear to be out of time.

Portmeirion (PMP.L) - H1 2026 Trading Update

These are said to be in line, but the size of the net debt figure after the placing and tariff refund shows the state they got themselves in:

The Group’s net debt position was £6.2m at 30 June 2026 (FY25: net debt of £17.5m), reflecting the H1 loss, usual seasonal working capital outflow (seasonal peak in October), the net cash inflow from the successful equity raise completed during H1 and US tariff claim receipts.

Maybe they shouldn’t rub it in by bragging about having to do a massively dilutive placing at a huge discount:

Drive Higher Returns & Fortress Balance Sheet

Strengthen Balance Sheet - DELIVERED - £18.6m gross equity raise and new £36m ABL

There is a big variation in regional performance:

Such large variability cannot be due to underlying consumer demand in these markets, so their excuses may have some validity: in the UK, they have been competing with liquidation stock, and in South Korea, they have stopped pushing stock ahead of normal demand.

We’re not sure they have been quite as explicit as this before:

Wax Lyrical is non-core to the Group and disposal process will be implemented in the medium-term.

This makes sense, but this diworsification will have destroyed a lot of shareholder value over the years.

Staffline (STAF.L) - Interim Results

Nice jump in EPS leading to the upper end of market expectations:

Staffline well positioned to deliver full year results towards the top end of market expectations

Although still a big H2 weighting needed, and net debt has taken a jump as well.

Zeus raised EPS estimates by 8%, and recruiters have had good momentum recently. However, with the share price being so strong into this update, it is not surprising that many chose to use the results as an indication to take profits.

An exceptional June was partly driven by nice weather, leading to uncertainty about how much of the strong underlying momentum reported in May has continued. PanLib assume it is a one-off, whereas Zeus unwinds some of their relative conservatism with multi-year upgrades.

It is disappointing that current trading is only reported up until 4 weeks ago:

Strong trading momentum into H2 2026, illustrated by exceptional year-on-year Recruitment GB temporary worker hours in the final week of June up 18.3%

But the good weather has continued, even if the World Cup effect will now be over.

Shearwater (SWG.L) - FY26 Trading Update

Nothing wrong with this update, apart from perhaps the quote of adj. EBITDA rather than PBT:

The Group has delivered a strong trading performance in H2, driven by continued growth in the Services segment and momentum from several contract wins announced previously. As a result, revenue and adjusted EBITDA are now anticipated to be ahead of market expectations* with expected revenue of c.£42m, representing an annualised YoY increase of c.33% (FY25: £39.5m for 15-month period), and expected adjusted EBITDA of £2.5m, an annualised increase of 41% (FY25: £2.2m).

Still, an ahead is an ahead.

We tend to be a little sceptical about taking one year’s figures here, as so much is dependent on revenue recognition on contract signing, and here they end up with contracts signed at the end of the year (as presumably customers are keen to put pressure on them to get a good deal). They moved their year-end to try to remove some of this pressure, but this may have just moved the deadline. For example, they appear to have signed one deal on the last day.

Still, the momentum is moving in the right direction with the business, they are on a reasonable multiple (especially adjusting for the big cash pile), and are finally looking to do some shareholder returns with the cash:

The Group finished the period with net cash of £5.6m (FY25: £5.1m). In the near term, the Directors of the Company expect to issue notice of a General Meeting to seek shareholder approval for a proposed reallocation of capital between reserves on the balance sheet. This will provide the Group with flexibility going forward to buy back its own shares and/or pay a dividend, should the Directors determine that either represents an appropriate use of capital.

It’s just a shame they didn’t start this process earlier, as they would have been in a position to buy back shares when they had sold off in response to wider market weakness earlier this year. With stocks having bounced back, they risk paying more for the buyback shares and delivering less shareholder value (although we doubt shareholders care in the short term if it helps the share price continue its recent strong upward trajectory!).

That’s it for this week. Have a great weekend!

A lot of discussion this week on the SCL Discord server has been about a change IG is making to share brokerage accounts. It seems that non-leveraged, non-professional accounts are gradually being moved to Interactive Brokers as the back-end. The main impact is that investors with migrated accounts are likely to lose RFQ/RSP access. This is the system where the user inputs a trade, receives a price, and has 15 seconds to decide whether to take it. This often gives much better prices than the published spread in small caps, and has the benefit of knowing that an order has been executed immediately.

Many SCLers consider this a much better way to buy or sell shares in smaller UK companies than placing limit orders and leaving them open until filled. So this is a real loss to a platform that many use because of its low fees and flexible ISA advantages, and many will now choose to go elsewhere.

One quirk is that the new platform doesn’t appear to support Acquis shares, so owning an Acquis stock should enable investors to retain access to an IG account with RFQ/RSP access in the short term (although other holdings may be transitioned initially). We are guessing this situation will be sorted out eventually, but for those looking for some time to make a decision where to move their account to, this may buy some time.

Here’s a selection of what we looked at this week. (Remember this is a summary of many opinions, and isn’t the view of any one commentator; check out the actual discussion on Discord if you want the nuance of the different opinions.) To avoid spam, the only way for new members to join the Discord server is via the Small Caps Live website. This will be instead of direct invites via Discord. All genuine investors are still very welcome to join in the discussions.

Billington Holdings (BILN.L) - Contract Wins

Some sizeable wins announced this week:

…pleased to highlight three recent significant contract wins across a range of sectors with an expected combined value of circa £28 million.

The contracts, which are scheduled largely for delivery during 2027, represent further progress in the Group’s strategy of securing high-quality projects with strong end-user and sector credentials.

The share price has shown some strength recently, so we wonder if industry insiders have been aware of some of these. They are only said to be supportive of existing expectations rather than incremental to them:

Together, these projects provide further confidence for delivering 2027 in line with market expectations and strengthen our already healthy order book.

Together these are around a fifth of FY27 revenue expectations. Following the news, the share price promptly gave up the recent gains, meaning this is looking very cheap again on those FY27 numbers, especially if they can find a good use for the big cash balance.

Getech (GTC.L) - Contract Win

After last week’s contract win, momentum seems to be building:

…contract to deliver the first Europe-wide assessment of natural hydrogen potential and associated regulatory requirements, with an expected contract value to Getech of more than €1 million, to be realised over the course of FY26 and FY27.

It is actually a decent win, both in the amount (at least for this company) and in the fact that it is for Natural Hydrogen, which most of us thought would never generate anything of substance. It is EU grant money, effectively, but still money. We are not sure of the margins, but all of these parts are likely to be delivered by existing software or resources, so almost all of the revenue should drop through to EBITDA in reality:

Getech’s revenue for the project will comprise consultancy, data and software licence fees.

It is worth noting that a contract to scan the whole of Europe for hydrogen is worth just £1m, which gives an idea of the difficulty of really scaling this business up to generate large revenues and profits. However, it definitely feels like it may be setting up to beat the current numbers in the market.

Liontrust (LIO.L) - Trading Update

With Liontrust now reporting, the UK-ish-focused asset management trio is complete:

Although all three performances have bounced, Impax is proving to be a true outperformer, as it didn’t decline in the March-ending quarter, unlike Liontrust.

Liontrust is definitely now leading the way on outflows, though:

Premier Miton’s outflows on smaller AUM are starting to make it look subscale, though.

Impax has lost the IEM management recently, but following the tender, this was down to just £200m AuM or so and was always going to go out the door. So, it is a known headwind, but one nonetheless.

Nexteq (NXQ.L) - Trading Update

No further warning here is perhaps good news:

Further to the announcement on 21 May 2026, H1 trading was in line with management's revised expectations and the outlook for FY26 remains unchanged

However, cash is down to $10.7m which undermines one of the investment arguments which is that this is cheap on a cash-adjusted basis.

Interestingly, their broker, Cavendish, has them having $13.1m of gross debt at the end of the year, presumably a mortgage secured against the Taiwanese property. So, although the gross cash increases to $16.3m, the net cash is just $4.0m.

This suggests they are currently in a net debt position if they have cash of $10.7m. Something they appear to have carefully avoided mentioning in this update.

Not that we doubt the solvency here, and a mortgage is unlikely to have interest cover covenants or similar, which would cause problems with the current loss-making period. Just that it’s quite the fall from grace, going from $29m net cash to net debt in 18 months.

Of course, the assets largely remain the same as the cash has gone into property and inventory. Just that the assets of the business have become increasingly unproductive over time. Which questions why one would want to pay even book value here at the moment?

There’s an argument that problems are temporary. It was only 3 years ago that they made $14 million PBT, against a current market cap of £27m. It has been through cycles before.

The problem is that with such low gross margins, you need a huge recovery in revenue to get back to previous profitability. And such an investment strategy is almost always better when there are tangible signs of recovery. The overall downside may be protected by the assets, though, as they could always convert into a Taiwanese office REIT!

Reach (RCH.L) - Half Year Report

On an initial look at the headlines, it stands out that they managed to increase adj. EPS on lower adj. Op Profit and higher net debt:

As one may have surmised a lower tax charge is the cause. However, unravelling exactly how they got there and the future implications is a little tricky.

There’s also a huge jump in adjustments:

Much of these are non-cash write-downs or amortisation. However, restructuring has taken a huge jump and restructuring is business as usual for Reach as far as we are concerned. How else do you turn a 9% revenue decline into an operating profit down only 4%?

All of this is probably overshadowed by the halving of the interim dividend:

The Board paid a final dividend for 2025 of 4.46 pence per share in May 2026. An interim dividend for 2026 of 1.44 pence per share will be paid on 14 September 2026 to shareholders on the register on 31 July 2026 (2025: 2.88 pence per share).

In declaring an interim dividend of 1.44 pence per share for 2026 (FY25: 2.88 pence per share), the Board has carefully considered the Group’s current trading performance, cash obligations including pension deficit reduction payments and continued organic investment.

This wasn’t forecast by brokers until this week and is a clear flag that the Final dividend will be 2.23p, not 4.46p, for a 3.67p FY dividend, not 7.34p previously forecast. Something Panmure Liberum now confirm.

To be fair, the market was already saying the 12% yield was unsustainable, and 6% is reasonable, but it is understandable that there was some reaction to the disappointment versus broker forecasts..

For outlook, the company say:

We remain on track to meet market expectations for FY26.

Followed by this rather benign-sounding statement:

Looking ahead to 2027, we expect operating margins to remain at a similar level and industry headwinds to persist, including higher levels of circulation volume decline

However, this turns out to be anything but benign in the hands of their broker, Panmure Liberum, who say:

We hold our FY26 EBIT forecast constant, but reflecting ongoing headwinds in digital, and the uptick in circulation decline, reduce our FY27 EBIT forecast by 11%.

Unsurprisingly, the market didn’t like this, although the price isn’t that far below the May lows, so one could argue that only the irrational exuberance has been deflated from the price so far.

However, this is now approaching a 9% yield again following this week’s price falls, which may suggest some value if one thinks it won’t be cut further.

That’s it for this week. Have a great weekend!

Alumasc (ALU.L) - CEO Suspension & Trading Update

With a Friday update, we were expecting the inevitable profits warning, but not this:

…CEO, Pamela Bingham, has been suspended by the Board pending an investigation into matters relating to her professional conduct. The Company is undertaking a full investigation, supported by its professional advisors.

The CEO only joined in March, so perhaps the best that can be said is that whatever the issue is, it can’t have done that much damage to the business in that time. Not that it needed any help in this regard, with this now the third warning in a row:

…Group has delivered a performance broadly in line with the expectations set at the Q3 trading update,

The last warning took 24% out of EPS, but the market largely shrugged this off. Perhaps because the one before took a more modest 6% out of EPS, but led to a bigger fall than that.

At least they give us specific guidance:

Against this backdrop, we have delivered a resilient performance, with revenue and UPBT of £107m and £10m respectively, broadly in line with revised market consensus

Cavendish takes a further 12% out of adjusted EPS this time, giving around a 35% cut overall. However, they argue it is temporary, citing a significant increase in the order book. The company say:

Encouragingly, a refocused commercial strategy is starting to gain traction in key markets, and we exit FY26 with a strong order book, up 49 per cent compared to June 2025.

But the company doesn’t actually give us the figure. Nor can we see the figure in the Results to 30th June. Perhaps the only numbers we can use to calibrate this are the figures in the HY results. At the time, we commented that:

But Water Management had an orderbook of £7.6m, versus £22.7m revenue in H1 and Building Envelope £6.9m versus £19m revenue. This is only 2 months of revenue (for a relatively weak H1), and Cavendish doesn’t provide segmental forecasts, but logic dictates that this is likely to be less than 2 months of the revenue in each division in the bag.

Assuming the order book was similar at FY25 to 26H1 and is now 49% higher, it has increased from 2 months of 26H1 revenue to 2.3 months of FY27 revenue, based on the Cavendish forecast for FY27. It hardly seems something to get excited about.

And on profitability, it is highly likely that they have booked a whole load of exceptionals to get there, as they usually do. Perhaps the only saving grace is that the operating cash flow largely matches EPS, suggesting much of the massaging is non cash, at least in the short term.

There is an argument to be made that the whole sector is depressed and will bounce back once the housing market recovers. The question is why would you choose Alumasc for that play when it still trades at over 10x a highly adjusted EPS number, with a suspended CEO and a clear set-up for a fourth profit warning, versus a sector that is typically on 5-6x earnings at the moment?

Capital (CAPD.L) - Q2 Trading Update

These numbers look strong:

Perhaps we haven’t been following this closely enough recently, but this came as a big surprise to us:

During the quarter, we began demobilising from our drilling operations at the NGM complex in the USA and Sadiola in Mali, with equipment being redirected to higher‑returning opportunities across our existing portfolio.

We are not sure if previously flagged that they were effectively exiting the US, which was meant to be their big growth area

Ahead, but not ahead because of this:

The underlying performance across the broader operating business has exceeded our expectations while we will incur non-recurring termination and demobilisation costs associated with NGM and Sadiola, which will largely offset the better-than-expected performance in this first half period. We view these actions as an important step in optimising the portfolio for the medium term.

We are not sure that moving rigs should be considered exceptional for this business.

The good news is that there appears to be little change to the Reko Diq outlook as Barrick have reduced the pace of development:

Our operations at Reko Diq performed in line with our contract and our new waste mining contract at Sukari has ramped up faster than expected. MSALABS delivered another strong quarter and we were pleased to announce our joint‑venture with Mari Minerals in Pakistan, alongside increasing utilisation and several new laboratories expected to be commissioned later in the year.

Overall in line:

Revenue guidance for 2026 is reiterated as $410 - $440 million as previously guided at our FY25 results, reflecting the diversification of the Group and the strong demand environment; · The better-than-expected performance across the broader operating business in H1 will be largely offset by the one-off costs associated with the demobilisation at NGM and Sadiola;

It’s probably better than continuing to lose money to avoid losing face, but it’s certainly possible that all their efforts to diversify away from African drilling over the years (apart from MSALABS) have reduced shareholder value.

And it again calls into question the worth of these “long term” contracts.
In the past, we have seen a mining customer walk away from contracts in Africa just after Capital purchased the equipment. They never declared any termination fee. We have also seen a lab decommissioned after the unexpected closure of a mine.

The reality is that their end markets are so strong with demand for drilling and lab services that they will do well despite the headwinds. We just wish they had stuck to the African Drilling business, which remains the only bit that is proven to generate strong margins and returns on capital over the cycle.

Crest Nicolson (CRST.L) - Half Year Results

This looks like a further warning here:

Which is perhaps not surprising when H1 looks like this:

They only have a temporary covenant waiver until 30th September, rather than a more permanent package, which is also a possible disappointment.

Unsurprisingly, it’s the interest cover part that is the issue with a loss-making period. The waiver restricts them to drawing down more than £175m on the RCF, but this only becomes a problem in August 27 when £50m of notes become due.

So this buys them some time to sort things out.

Net assets down £38m:

Of which £29m is intangible.

This still compares very favourably to a £174m market cap. You have to assume an absolutely huge write-down to their land bank for there not to be value here. The big question is, will they survive to see the benefit of that? This week’s results don’t give an immediate resolution, but nor to they bring things to a head.

Getech (GTC.L) - Trading Statement & Contract Win

The good news is that they are growing again:

Trading strengthened over the course of the six-month period leading to the Company expecting revenue growth of 15% to £2.4m (H1 FY25: £2.1m) driven by a positive mix of new and retained business.

But this only just turns into +ve EBITDA:

This increased sales level and actions taken to reduce the cost base by c. 20% in 2025 have led to adjusted EBITDA improving to £0.2m versus a loss in the comparable period last year (H1 FY25: loss of £0.1m).

Other metrics are finally heading in the right direction, and cash is now building again:

Cash at bank on 30 June 2026 of £0.6m (FY25: £0.2m)

However, none of these metrics is really going gangbusters.

This is the most positive outlook statement for a while though:

Getech’s core markets, the Oil & Gas, Mining and Natural Hydrogen sectors, have seen increased exploration activity. This combination is expected to be reflected in the Company’s future performance given Getech’s proven credentials in identifying and de-risking new exploration projects.

Backed up by:

…we remain comfortably in line with market expectations for FY26.

So perhaps a chance of a beat, which would mean they had a very strong H2.

It still wouldn’t scream value on those metrics even with a modest beat, but FY27 forecasts show that it wouldn’t take much extra revenue for the numbers to look significantly better, and the cash flow would mean they’d have generated a third of their market cap in cash in 2 struggling years.

So still all to play for. But can they deliver? Today’s update suggests they may be in a better place to do so than in the recent past. As does the arrival of a contract win:

Getech, a leading locator of subsurface resources, is pleased to announce it has signed a multi-year agreement with a European‑headquartered oil and gas super‑major for access to its industry‑leading Globe platform. The new contract has a total value of $660k to be recognised over three years as annual recurring revenue.

£164k/year isn’t huge, but a new Super Major client is great signalling, and this will be high margin for a business where small amounts matter.

However, at this size, there is a question of whether they should be listed at all. Get rid of the board and listing costs, and profitability jumps materially. Most holders would presumably prefer some kind of different corporate action. The Globe database and tools clearly have value if Super majors use them, and there are data-first companies doing work in this space on huge multiples. You could probably argue for paying £5m for the business just to get you in the door on the sales call with the Super-majors! But whether they will ever generate sufficient returns from the current corporate structure to do more than pay salaries is open to much debate.

But it wouldn’t take much extra revenue for some serious operational gearing to kick in. But at this market cap range, and given recent history, it is firmly in the punt, not investment category. That is probably why we are seeing people using the recent good news as liquidity to exit rather than an opportunity to buy.

Headlam (HEAD.L) - Trading Update

We’re used to this sort of update by now:

For the Period, the Group has incurred significant operating losses, higher than H1 2025, reflecting the impact of reduced revenue offset somewhat by cost savings already achieved.

No light at the end of the tunnel:

More recently, post-Period-end, trading to date in July 2026 has been consistent with that seen in June.

And Basic maths suggests that the huge operating losses continue:

The Group’s net debt at the end of the Period was £(36.2)¹m compared to £(31.4)m at 31 December 2025, reflecting the impact of ongoing operating losses and one-off transformation costs offset by previously announced property disposal cash receipts of c.£15.3m.

This doesn’t sound good:

The Group is in regular dialogue with its lenders and continues to carefully manage day-to day operations and liquidity within its existing facilities.

That dialogue presumably involves the lenders repeatedly shouting “give us our money back,” and it sounds like the “within existing facilities” bit isn’t going to last for long:

These include, but are not limited to, and could combine, further support from its existing lenders, the sale and leaseback of the Coleshill HQ, further property disposals, a wider group refinancing, new partnerships and other broader corporate actions. Specifically, a refinancing process for the Group’s debt package is progressing at pace and financing offers have been received that would, if completed as currently proposed, advance additional liquidity to the Group.

It just smacks of too little, too late. They should be closing sites and consolidating, not selling and leasing back property.

The Strategic Review does not include seeking potential offers for the Company.

More fool them, as this looks like the only way out at this point.

Northern Bear (NTBR.L) - Preliminary Results

These headlines feel a bit confusing:

Adjusted EBITDA is flat, but adjusted EPS is up 18%, for example. Higher interest earned and lower financing (lease) charges are probably the difference.

However, what stands out is that they hold a huge net cash position for a £14m market cap company, resulting in another special dividend:

A final dividend of 2.5p per ordinary share is proposed. In addition, a special dividend of 5.0p per ordinary share is proposed to reward shareholders, following the excellent trading performance in FY26 and reflecting the non-recurring exceptional profits in that year.

Not all that is free cash, though, as customers’ prepayments play their part:

The lowest cash position during FY26 was £0.6 million net cash, the highest was £6.2m net cash and the average was £3.3m net cash.

Wish all companies would report these details as it would make getting to the heart of investment valuations so much easier. Even £3.3m average cash moves the valuation needle significantly when the company is trading around 5x adjusted earnings (adjusted down in this case).

However, the outlook suggests that even on an adjusted basis, FY26 may have been too good to repeat:

The latest expectations for FY27 are for underlying revenues to remain broadly consistent with the excellent underlying results in FY26 , notwithstanding our significant investments in both personnel and premises intended to generate further future opportunities and mitigate the negative effects of the present economic outlook.

Revenues flat and costs up suggest a weaker year for profit. This is already as forecast. However, the market rarely likes lumpy trading, so this may explain why the company still has a very low valuation.

However, trading is inherently hard to predict, and management are often conservative in guidance. The current period of exceptionally dry weather may provide another period of exceptionally positive trading, too.

Premier Miton (PMI.L) - Q3 Aum Update

Huge outflows, and unlike Impax they haven’t been saved by market performance:

Almost 10% of current AUM in net outflows in one quarter is pretty catastrophic in a very positive quarter for markets.

Adjusted EPS is only reduced by 7% by Cavendish, but surely this is too optimistic given those flows?

The broker forecasts a significant increase in AUM in the next FY, which seems a triumph of hope over judgment!

That’s it for this week. Have a great weekend!

MJ Gleeson (GLE.L) - Trading Statement

Seems good news, given the sector background:

The Group is expected to deliver an Adjusted Group Profit Before Tax¹ for FY2026 in line with current market expectations, including a robust performance from Gleeson Homes and the previously announced delays to site sales in Gleeson Land.

However, a quick look at the forecast evolution suggests otherwise:

10 July:

Adj. PBT - £10.1m with a range of £8.9m to £11.0m

Adjustments - totalling between £11.8m and £15.0m.

9th June:

Adj. PBT - £17.8m with a range of £16.4m to £18.5m

Adjustments - £7.0m and £10.2m +£0.3m + £4.5m

1st May:

Adj. PBT - £18.2m with a range of £12.9m to £20.5m

Adjustments - £7.0m and £10.2m +£0.3m + £4.5m

It would be unusual for a company to warn again severely a month later, and now we have a roughly halving of Adj. PBT and similar adjustments, meaning a statutory loss. So these are in line, but the damage has already been done.

Impax Asset Management (IPX.L) - Q3 AUM

Continued outflows are offset by a very strong fund performance:

Ouflows have moderated compared to recent quarters. However, it may be too soon to call this a reversal of recent trends:

This brings their outflows back in line with peers:

And to be clear, the performance here isn’t particularly exceptional compared to a strong quarter for global equity returns. It is just very strong compared to what they and their peers have managed recently:

Having a guess of where we may be after the final quarter. Let’s say +1% market performance (+£200m), -£900m of underlying flows and -£200m of IEM flows, leaving £22.4m of AuM. Singer has £21.9bn, Cavendish had £20.8bn, and the always ebullient Equity Development have £22.8bn.

On this update, Cavendish has raised their year-end AuM estimate from £20.8bn to £23.3bn. It is a bit of a mystery how they got there, though, as they have not provided any detailed reasoning. They say they have raised their outflow forecasts, though it looks like they're still below our guess above. An even bigger unknown than outflows is market movements.

We can use IEM’s NAV performance to judge market movements so far this quarter. In the last quarter, it was 20% vs 11.7% for AuM. Up to COB on the 8th it has done -3.2%, so we would assume AuM is down 1.7% or so. Not a good start, although the S&P has rallied since.

Further out, the forecast AuM increase from Cavendish is higher still in absolute terms, but some of this will represent percentage market growth from a higher baseline.

They do not provide an average AuM, so we have to assume they forecast a reasonable growth profile to the forecast year-end figures. With those caveats, I think we can trust that their EPS calculation is correct, leading to EPS upgrades of 8%, 28%, and then 20%.

It is likely that it is these upgrades that have led to the 20% rise in the share price this week. However, there is a risk that Cavendish will be walking these back unless the trend for increasing redemptions really has reversed and the funds start to outperform their benchmarks.

Mpac (MPAC.L) - CFO Appointment

After an exhaustive search, Mpac decide the guy already doing the job was best placed to continue:

He has played a key role as part of the Group’s executive leadership team, leading the Group’s M&A function. Duncan began his career in financial audit prior to joining Mpac in 2000.

He presumably also played a key role in leaving the business over-leveraged into a downturn!

Spectra Systems (SPSY.L) - Sensor order update

$.4m is a small order but likely to be high-margin given all the development work has been done.

22nd May they said:

we have received an order to produce additional sensors, beyond the $39.6M contract (RNS June,2024), by our customer for use by an affiliated organization. The additional sensors, worth $1.3M, will be delivered between 2026 and Q2 of 2027. An additional order for another affiliated organization is expected later this year along with an additional service contract.

This week:

confirmation of a second order to produce additional sensors, beyond the $39.6M contract (RNS July 16,2024), by our customer for use by a second affiliated organization. The additional sensors, are expected to generate revenue of $1.4M and will be delivered between 2026 and Q2 of 2027.

So not entirely unexpected.

We suspect the expected revenue may include the service contract, and it is only the physical sensors rather than all of the revenue which will be fully delivered by the end of Q2 2027. Still, it increased recurring revenue, and further small sensor orders will likely still keep coming.

System 1 (SYS1.L) - Final Results

In isolation, PAT being down 71% in an industry where the narrative is that AI will eat their lunch, which is quite worrying:

However, this was largely expected. £1.3m PAT looks a miss on a £1.5m consensus, and likewise 10.3p vs 11.3p EPS in Stockopedia. It looks to be a combination of comparing broker-adjusted numbers to statutory and a slightly higher tax charge than anticipated. Even so, it doesn’t look great, especially given that they reported EBITDA materially higher than expectations in March, driven by a staff cull.

However, most of the damage was done in H1 when they were barely profitable, so H2 is certainly a recovery of sorts.

And the outlook reflects that positivity:

FY26 ended with strong H2 momentum leading to improved trading trajectory into FY27

However, this looks worrying:

The Group will now be updating the market twice yearly, therefore will not provide Q1 and Q3 revenue updates

This is presumably for Partridge reasons, “Lynn, to the untrained eye, Q1 would have looked a bit rubbish and that we hadn’t bounced back.”

Vianet (VNET.L) - AGM Statement

Revenue +was 3.1% in Q1 YOY. Ahead of management expectation:

Following the strong operational and financial progress delivered during FY26, I am pleased to report that FY27 has started positively. Both our Hospitality and Unattended Retail divisions have delivered recurring revenue and gross profit growth during the first quarter compared with the prior year, with trading ahead of management's expectations. Group revenue for the first quarter grew by 3.1% year-on-year, with recurring revenue being 5.8% ahead representing approximately 88% of turnover - early evidence that the operational leverage built during FY26 is coming through.

But you have to ask how low those expectations were when an effectively inflationary rise was ahead. The answer is 1.9%, at least for the full year, at least according to Cavendish.

If they keep it up, they could do £16m instead of £15.8m revenue. Although Cavendish don’t seem convinced and leave forecasts the same.

If they meet all the forecasts on that broker note, that would be a whopping revenue CAGR of 1.45% over the 4-year period. This time last year, they forecast £16.9m for 2026, but eventually mangeed just £15.5m, so no wonder Cavendish have doubts. Is the narrative convincing enough to put this on a forward PE of 17.8? The numbers don’t seem to support that.

That’s it for this week. Have a great weekend!

Arcontech (ARC.L) - Trading Statement

An £800k win over 3 years doesn’t get the heart racing per se, but for a £2.5m enterprise value software company, signing £275k of ARR is actually quite significant:

Following a successful bidding process, Arcontech has signed a 3-year contract with a total value of approximately £800k with a major European bank for deployment of its software in various areas within its trading infrastructure. The contract is with a new customer and has strong expansion potential across the customer's wider market-data estate, with revenue recognition expected to commence in calendar Q3 2026.

It’s also a new customer - demonstrating that Arcontech can actually sign new customers is important signalling, as it is something they have struggled with recently. Trading is said to be in line overall, making the EV/EBIT of around 5 look very low. Even more so, if you believe the FY27 estimates, which drop the EV/EBIT to around 3. The market obviously fears that customers will gradually leave over time; there was a modest downsizing from one customer impacting this year, for example. However, if this is the start of a series of customer wins instead of exits, any future growth at all would make the current rating look a bit daft.

CMC Markets (CMCX.L) - Trading Update

Another big beat here:

As a result, CMC now expects net operating income for FY2027 to be at least £550 million, materially ahead of previous guidance of £460 million to £480 million, with EBITDA guidance of £250 million.

FY2027 guidance for operating expenses excluding variable remuneration of approximately £280 million remains unchanged.

Despite the scale of the upgrade, the share price move here look slightly bonkers, given that volatility can disappear as quickly as it arrived. There is pretty huge operational gearing, and we are seeing the benefit of that in the results. It is just very hard to judge if the current strong NOI performance is anything other than vol exposure. The company claim that it is due to:

The strength of this performance reflects the scale of our B2B platforms driving operational gearing and delivering higher profit margins as income growth is delivered against a largely fixed cost base.

However, we are more sceptical. It’s certainly possible that this is the case, but the FY26 numbers to 31st Mar were pretty much all a miss to the consensus on the company website. If this really has become a higher quality business, less dependent on vol, why did that jump in quality suddenly occur around March this year?

Instead, if this strength is due to a commodity price rise (volatility is essentially like a commodity for this business), then investors shouldn’t pay up for a single great year. The forward P/E isn’t crazy. The issue is whether a P/E is a good measure for a highly cyclical business. If it is, you probably need to try to estimate the underlying trend earnings and growth, and apply the P/E to that, not this year’s estimates. Easier said than done, which is why so many investors simply buy momentum and hope they are quick enough to get out when it turns.

Goldplat (GDP.L) - Trading Update

Some fairly basic maths told us this would be the case:

As a result of the continued high gold prices and strong volumes, and subject to a number of year-end adjustments, the Board expects that the Group’s results for FY2026 will materially exceed prevailing market expectations.

Still, nice to have it confirmed.

The timing of this update is a day after year-end, when they won’t have a month-end close, so they won’t have management accounts. It shows how confident they must be that Q4 was good.

The mention of volumes being good and no mention of recent gold price weakness are positives too, (not that this company has anywhere near the gearing to the gold price that miners have, there is exposure through inventory).

A lot of evidence suggests we should simply be buying companies that report “materially ahead” statements, no matter how strong recent price action has been, and in this case, this is the second “materially ahead” in a row. A few of us had an interesting debate as to whether buying commodity companies that report materially ahead statements makes sense. [See CMC markets above, too.] We sort of came to the conclusion that it depends where the beat comes from; if it is better than planned operational performance, it probably makes sense, less so for those statements driven by commodity pricing alone.

Strangely, we have still seen no actual update from their broker to guide us to the scale of the beat. We should get Q4 operating results from the company at the start of August, which means that we should be able to come up with our own rough figures. As usual, there is a huge edge available to investors at this market cap level for investors willing to do their own basic maths, instead of trusting broker numbers as gospel.

Unless the broker gets its act together and delivers a big jump in EPS in its forecasts, we could well be in for the third materially ahead statement in a row. Despite recent price strength, this remains one of the cheapest-rated stocks on the UK market. If management manages to avoid the banana skins that plagued their tenure earlier on, and deliver further EPS growth next year, a more material re-rating from their current 1x EV/EBITDA is sure to follow, despite the obvious risks of operating in this sector and geographies.

Kooth (KOO.L) - Broker Update

We are often critical of brokers’ notes. Brokers are obviously paid to put the company’s best foot forward, and it can often lead to notes being released for the most spurious of reasons [or not released at all, in the example of Goldplat above]. However, in this case, the broker appears to have picked up something that most of us would have missed:

If the State of California were to have given notice for the cancellation of the contract by June 2027, we would expect to have been alerted by today. On the contrary, on the 29th June, California’s Governor Newsom released a Children and Youth Behavioral Health Initiative (CYBHI) Legacy Report, naming Kooth’s Soluna as a core element of the success of the CYBHI, as well as announcing a balanced budget for California for 2026/7 ensuring the continued funding of healthcare. It is clear that the relationship will persist; and as we have repeatedly noted, will continue in an expected format…

The share price remains below the level when the market started to worry about the contract renewal and unexpected marketing spend. Both concerns appear to have proven to be unfounded.

James Latham (LTHM.L) - Final Results

Volumes up 7.7% LFL looks good. Although EPS is only up 2.7%, which shows the margin pressure:

Profit before tax is £25.1m, compared with last year's £24.3m. Profit after tax for the year is £18.6m compared with last year's £18.1m. Earnings per ordinary share is 92.5p compared with last year's 90.1p.

They appear to have avoided the warnings plaguing the sector, so this is probably a strong performance given the circumstances.

Cash of £51m looks reasonable, given they have started to spend on the National Distribution Centre. However, we would have liked a more detailed update on this, including where we are in the spend profile, to gauge the likely cash level to use in any valuation. We are still in the “trust us, this is going to be good” stage of this development. And if there is a management team you would want to trust with long-term investment, it would be this one. However, we have never been given any insight into why an NDC makes sense in a financial way.

Interestingly, there is a time-lapse camera of the National Distribution Centre available.

Sanderson Design (SDG.L) - AGM Statement

H1 trading similar to H2 last year. In line, but sounding fairly confident:

As announced in its Full Year results published on 29 April 2026, the Group entered the current financial year (”FY2027”) with good momentum and similar trading trends to that seen in the second half of FY2026.

This momentum has been sustained with the Group delivering year-on-year growth year-to-date. Consequently, expectations for the full year are unchanged.

The share price has been strong recently. However, in the final results, we found out that the company had lent money to its EBT to purchase shares, which appears to have been aggressively buying. However, we had no idea this was going on until then. We also have no idea when they will finish buying (surely sometime soon?), and given the illiquidity, the share price could well give back all of its recent gains when the EBT stops buying.

We were hearing rumours that some shareholders aren’t happy with the board here, so we thought the AGM voting may be interesting. As it happened, around 26% of those who voted voted against the Chair, a NED, and the Remuneration Report.

The most likely candidate is the company’s largest holder, LBV Asset Management. Things could be about to get messy here, and for the sake of smaller shareholders, we hope the distraction of a boardroom battle doesn’t damage the business.

Trifast (TRI.L) - Final Results

When one of the main highlights in the RNS title is:

Clear line of sight to 10%+ EBIT margins

But they’ve had to reduce revenue to achieve the current EBIT margin improvements:

Revenue down 7.3% to £207.1m (CER) and down 6.7% to £208.4m (AER) (FY25: £223.5m), as anticipated, reflecting softer market demand alongside the strategic decision to focus on the quality of revenue.

…you know things aren’t exactly going well. They even had to break out the dreaded “R-word”:

Resilient FY26 performance delivered through disciplined execution, despite a challenging macroeconomic and geopolitical backdrop.

Investors also need to ask if they are happy that the company have to exclude a huge chunk of IT costs to get to that heavily adjusted number?

Profit before tax was £0.1m (AER) (FY25: £4.9m), after Separately Disclosed Items, including £6.0m of Project Ignite costs expensed in the year rather than capitalised, reflecting the accounting treatment for cloud-based implementation costs.

We assume that they aren’t going to adjust out the benefits they achieve from the new IT system in future years. And even if they were allowed to capitalise the spend, they may well adjust out the amortisation.

If at first you don’t succeed, adjust, adjust, adjust again.

Wynnstay (WYN.L) - Interim Results

These aren’t bad, but many of us were expecting a big inventory gain on fertiliser to lead to much stronger results than these:

This is what they said on the topic:

Fertiliser markets experienced short-term volatility following geopolitical developments in the Middle East, providing a modest benefit to profitability through well-managed purchasing positions.

It seems the benefit was a very modest c£0.3m, and turned out to be nowhere near the scale of the impact on 2022, which was our benchmark for expecting stronger results:

While this provided a modest benefit to profitability, the impact was significantly lower than the dramatic market increases experienced following the outbreak of the conflict in Ukraine during 2022. Market movements were less pronounced, not all product categories experienced price increases and much of the spring season had already been contracted before prices moved higher.

The forward sales to arable farmers were well known, but considerable free stocks were indicated at the AGM. In these results, inventory was down to £50m from £53m, so the effect doesn’t appear to be shown in as yet unrealised gains. Without the fertiliser gain and Project Genesis, it looks like these interims would have been pretty bad. But this also underlines the good job Alk is doing in challenging conditions.

Their broker Shore say:

While key trading periods are still ahead reflecting the seasonal farming calendar, market conditions remain mixed with a risk of input cost inflation, so we leave our FY26F expectations unchanged at this stage. We would rather err on the side of caution, given the moving parts reflecting the significant uncertainty around the Middle East and the impact of higher fuel prices.

Weighting by half is a bit hard to estimate, as weather factors and inventory gains/losses each play a role. On an underlying basis, we think the best H1/H2 weighting to use to give an “outside view” of FY figures is 60/40. 20.9p H1 EPS then implies 35p FY. Adjust for non-recurring fertiliser gains, and you get 34p for the full year, implying a little less conservatism than last year in the 31.6p forecast. Fortunately, we appear to be in for a “good” rather than a “normal” harvest, providing some scope to beat further and a potentially good H1 from ongoing GrainLink sales and better farmer confidence.

However, a P/E of around 11 isn’t exactly cheap for this type of business, so the market is already pricing in Project Genesis to continue to improve historically very low returns on capital, and one of the legs of the investment stool (that investors would get excited about a big H1 EPS figure on one-off inventory gain, as they did in 2022), has been kicked out from under them this week.

That’s it for this week. Have a great weekend!

(Remember this is a summary of many opinions, and isn’t the view of any one commentator; check out the actual discussion on Discord if you want the nuance of the different opinions.) To avoid spam, the only way for new members to join the Discord server is via the Small Caps Live website. This will be instead of direct invites via Discord. All genuine investors are still very welcome to join in the discussions.

Gear4Music (G4M.L) - Final Results

We tend to hate promotional headlines to RNS:

Significant revenue growth, and EBITDA and PBT ahead of recently upgraded market expectations with a confident outlook

They always come across as a company trying too hard for Partridge reasons! (To the untrained eye, this could look rubbish and like I’ve not bounced back!) However, in this case, they certainly seem to be delivering:

Of course, aided by being the last man standing, to some extent. As we’ve said in the past, in a world where everyone appears to be abandoning listings, this is actually the benefit of being a quoted company. If this had been private, the banks could well have pulled the plug and liquidated the inventory when they ended up over-leveraged after the post-COVID boom abated. Knowing that shareholders would back it meant it could continue to trade and is now doing well, as the private competitors are folding.

FY27 trading is above estimates so far, and overall expectations are in line with risk to the upside, according to Progressive:

Double digit percentage revenue growth FY27 year-to-date against tough prior year comparatives

FY27 trading to date in line with board expectations and on track to deliver FY27 consensus market expectations

It would seem the market hasn’t really believed the broker’s FY27 forecasts (given the boom-and-bust track record), but that could well change following this week’s update.

Hercules (HERC.L) - AGM Statement

After giving us a set of interims at 10 am on a Friday, where they didn’t break out the adjustments they applied to get to their numbers (from a statutory loss), they now give us an AGM statement without reference to current trading. The only comparison is to 2022:

Hercules has undergone significant growth since listing almost four and a half years ago. We have been agile, executing on exciting new opportunities for our Labour Supply division within the infrastructure industry, while expanding existing relationships with our blue-chip client base to increase contract values. We are a much bigger business then we were in 2022.

If they had spent the £17.7m on acquisitions since 2022 that they have and not been bigger, there would have been something very wrong. As it happens, their current market cap is almost exactly that level, suggesting they have added no value in that time. Perhaps something is very wrong after all?

Ingenta (ING.L) - AGM Trading Update

This is the key line:

As a result of this new business momentum, the Company is expecting to deliver increased revenues in 2026 compared with 2025. The management team is continuing with previously announced plans to invest in building our sales and marketing resources, and the additional costs being incurred by the Company will result in EBITDA for the current year being a little lower than in 2025, despite the increased revenues.

The Adj. EPS impact calculated by their broker, Cavendish, is a little disappointing:

On reading the note, this table was a bit confusing at first. The changes appear to be a downgrade. However, the comparison here is to the previous year, as no forecasts were in the market until this week. In fact, some higher costs had always been flagged. In contrast, for many of us, the introduction of forecasts makes the company more valuable than before.

There is also a natural conservatism here from management. Last year, the market also feared a decline in EPS, and in the end, it beat that figure, meaning the decline was relatively minor. Some of this was due to a delay in hiring staff, but this wasn’t the only factor.

We think the company are also very happy with the sales progress:

The Board is pleased to report that since the start of the financial year, the Company has secured a number of new customer contracts across the full range of Ingenta’s major products and services, with total contract values exceeding £2m over a three-year period.

There are many £100m market cap companies that would have chosen to RNS £2m of new contracts on the day they were signed. Here we have a £10m market cap company waiting for the AGM so as not to appear too excitable!

The bad news, and what appears to have spooked the market, is that some of the legacy is running off faster than expected:

Some of the larger customers in this group have requested to move to shorter term contracts, which reduces our visibility over future revenue streams, and introduces a greater risk level to 2027 revenues and beyond. As a result, we are prepared for the new business wins described above to be subject to an offsetting impact from reduction in revenues from these customers in 2027, although some degree of mitigation will be achieved in future years by reducing costs related to the servicing of these customers.

This appears to be the cause:

Looking beyond the current year, as previously noted, there is ongoing attrition of some longer-term customers currently on our legacy platforms who have been seeking to move to global whole-enterprise software platform providers.

This sounds like customers are undergoing ERP projects. In this case, the notorious tendency of such projects to go over budget and over time is to the advantage of Ingenta shareholders. Indeed, Ingenta have spoken in the past about customers giving notice that they want to leave, and then actually not leaving as they find the true cost of replacing their services. Complicating matters further is that Ingenta often provide multiple services to customers, and customer attrition can often only be one of many services, making it hard to quantify the actual “at-risk” revenues.

Oddly, the term AI appears 8 times in this RNS. Compared with just once in the first 30 pages of the recent annual report. For example:

Key initiatives include AI-driven metadata extraction, automated content summarisation, multilingual search, and advanced content discovery tools, all of which are designed to address the evolving needs of global publishers and content providers. The Company's best-of-breed approach leverages AI innovations from leading technology vendors, ensuring continuous improvement while maintaining the governance and reliability demanded by enterprise clients. Additionally, Ingenta is exploring premium AI services, such as enhanced search and trend-based content collections, as part of its subscription models, creating new monetisation opportunities. This disciplined and pragmatic approach positions Ingenta to capitalise on the transformative potential of AI while preserving the stability and trust that underpin its long-term success.

They wouldn’t be the first company to jump on a bandwagon. However, management has spoken about its initiatives in this space in public before this week, and while it is probably a stretch to say they can be an AI winner, they are providing real services to customers based on AI and applying real tools to streamline their internal processes. It’s too soon to say if these will have a noticeable impact on their sales efforts or bottom line, or whether these are simply necessary to keep them level with competitors in the AI race.

The market reaction to this week’s announcement has taken the share price back to the level of last year when two institutions were effectively forced sellers (Premier Miton’s Closed End Microcap Fund was wound up, and Kestrel Partners merged with another fund and changed strategy to focus on unlisted investments). Since then, we have confirmation that sales efforts are delivering material contract wins, and the cash balance has increased further despite a higher dividend payout. EV/EBIT is now around 3x even on the probably conservative forecasts, and the FCF conversion is typically around 80%. It doesn’t need much to go right (or even just not terribly) for the current share price reaction to look like a significant opportunity for those buying the dip.

Jadestone Energy (JSE.L) - First Well in Malaysia Campaign Flows at 3,000 bopd

Some good news at last for this beleaguered oiler.

PM323 PSC has been successfully drilled and brought online at ~3,000 bopd.

3kbopd at $14/bbl premium to Brent, drilled 20% below budget. Next, well spudding will be immediately. It looks like they will manage the third well within the original $50-60m capex budget, too:

The Group's 2026 capital expenditure guidance of US$50-80 million remains unchanged.

Assuming that 3k is oil and initial decline is minimal, that well alone adds around $60m additional revenue on an annualised basis to their 60% Working Interest. We’re not sure of the exact opex figures, but it suggests the payback on these wells is very rapid. We ca see why they are keen to extend the campaign.

Ramsdens (RFX.L) - Recommended Takeover

Congratulations to holders, and to management, who seem to have timed this perfectly with a bid from the same company that bought H&T.

They are willing to pay a decent multiple of what’s likely to be peak earnings, which is certainly punchy. No way management couldn’t recommend a deal of this multiple in our opinion.

The Ramsdens Board recognises that the future performance of Ramsdens remains subject to a range of external factors and risks. In particular, Ramsdens’ recent earnings profile is closely correlated with movements in the gold price. The recent strength in the gold market, culminating in an intraday peak in excess of $5,500 per ounce on 28 January 2026, has been a supportive factor and an important part of the positive trading momentum delivered by Ramsdens over the last 12 months. However, any reversal in this trend could adversely affect trading outcomes.

We wonder whether they have been discussing it for a while, and whether a falling gold price and a rising share price were needed to get it over the line. However, it may be that things came to a head recently and may explain the management being less conservative in the last update.

Another clue is possibly them being more positive about expansion into H&T’s heartland of London / South East in the last call - this is exactly what you’d say if you were negotiating a price with H&T.

Of the offer conditions, the CMA is most likely to cause problems. However, competition concerns are less likely than you might think, given the industry’s highly fragmented nature. Although the industry is diverse and H&T/RFX have different regional focuses, the local market will need to be analysed wherever they have stores close to each other (which will take time), and a few stores may need to be sold.

We hear that some shareholders are unhappy about the price. However, this seems unrealistic to expect more, especially since any further large drops in the gold price may well make the next update a profits warning rather than the ahead statements shareholders have got used to.

Vertu Motors (VTU.L) - AGM Trading Update

A rare upgrade for Vertu:

As a result of the above trading and portfolio changes, the Board anticipates that full year results for FY27 will be ahead of current market expectations.

Especially so early in the year. Although this smacks of setting expectations too low with a view to being able to get the market excited in the future:

The actual upgrades from brokers are very small. Shore 5.7p to 5.9p, Progressive 5.7p to 6.0p. So again, this makes us question why they are bothering with an ahead statement that turns out to be so minor?

They may well be signalling something to the market, or trying to up the price a bidder will have to pay. However, even on the updated numbers, this is looking expensive on a P/ Eof 12 compared to its usual multiples. It is a brave investors who hold purely for the possible takeover offer. In our opinion, the recent Constellation buy is more likely to be a bid blocker than a first (second?) move.

That’s it for this week. Have a great weekend!

(Remember this is a summary of many opinions, and isn’t the view of any one commentator; check out the actual discussion on Discord if you want the nuance of the different opinions.) To avoid spam, the only way for new members to join the Discord server is via the Small Caps Live website. This will be instead of direct invites via Discord. All genuine investors are still very welcome to join in the discussions.

Anpario (ANP.L) - AGM Statement

The good news is that growth continues:

The Group has made a good start to the year with revenue and profit performance ahead of prior year and in line with full year analyst consensus expectations¹, despite well-reported geopolitical and related economic conditions.

We are always a little sceptical when the headline is revenue/profit ahead of the prior year, especially for a company that has often been priced to be trading ahead of consensus. And given recent performance here, there is always the concern that the market now expects that expectations will always be beaten, despite this being a relatively small company buffeted by volatile international markets.

However, it would be unusual for Anpario to upgrade at this point, exactly because of the nature of their markets and their conservatism. Surely they would be doing better if they had not had transport and organic acid headwinds, and those are now set to unwind.

Hence, EPS forecasts could well be beaten what with the buyback and strong H2 margin outlook.

Cash has been deployed well in the past and should be considered in the valuation model, but it is not as cheap as it once was, and 12x earnings doesn’t seem wildly the wrong price for a microcap such as this unless growth accelerates above forecasts. However, there are a plethora of business development initiatives that collectively should allow decent growth over the next few years. Let’s hope they come off.

CML Microsystems (CML.L) - Full year results

You always know where it is going when the highlights don’t contain any profit measures:

· Revenue of £20.45m (FY25: £22.90m), with a significant improvement in trading performance during the second half.

· Gross profit of £12.89m (FY25: £15.89m) equating to a gross margin of 63% (FY25: 69%), reflecting a higher contribution of NRE income in revenue mix.

· Cash balances at period end increased to £12.80m (31 March 2025: £9.92m).

After scrolling for what felt like about 20 minutes, we finally got there:

The reduction in product revenues year over year is the overriding factor in the Group delivering a loss from operations, excluding exceptional items, of £1.93m against an FY25 profit of £0.53m, again excluding exceptional items.

The increase in cash is due to selling off surplus property.

However, if a company seems completely disinterested in reporting an operating profit, perhaps that’s a sign that investors shouldn’t be interested in investing in it.

Mark’s Electrical (MRK.L) - FY 26 Results

If you think FY26 looked bad:

Adjusted EBITDA(1) of £2.5m (FY25: £4.2m) as previously guided. A much improved performance in the second half of the year with a good “peak” period outturn and decisive actions taken, delivering improved operational efficiencies and fixed costs savings.

· Diluted adjusted EPS of 0.67p(2) (FY25: 1.54p), statutory loss per share of 0.40p (FY25 loss per share: 1.38p).

· No final dividend is proposed as we prioritise delivering trading profit recovery in the year ahead.

· Robust balance sheet, with Group net cash of £4.4m (2025: £8.8m).

Things are about to get a lot worse:

Whilst we continue to target profitable growth, with the benefits of our rigorous focus in FY26 on efficiencies and operational cost controls expected to benefit the Group’s FY27 adjusted EBITDA performance, we are taking a more cautious outlook for the year ahead on sales growth and gross margin.

As we’ve probably discussed before, Marks’ real advantage was getting full vans of higher value kit, so the revenue per van was higher and the distribution cost margin lower. National distribution helped with this. However, they ran out of growth as customers traded down so went downmarket to keep volume and lost their advantage.

Maybe AO also cottoned on to the high-value van idea, but the reality was they were between a rock and a hard place: lose volume, and the distribution advantage weakens; go downmarket, and the distribution advantage weakens. Perhaps that advantage returns in better market conditions, but that’s not a bet any of us are willing to take, especially at the current price.

The current price has been held up by Frasers buying stock. However, a recent fridge-buying experience by an SCLer at Marks revealed what Frasers are interested in, as their credit offering was plastered across every page of the website. Providing credit for one £500 appliance is much less work than providing credit for 500 big mugs, or 50 golf umbrellas!

Even if they improved to best-in-class margins, say 4%, that’s £4m PBT, £3m PAT, then a P/E of 8m gets us to £24m, so about half the market cap.

Lower population coverage than AO is a potential problem because it means marketing doesn’t scale as well, especially regional advertising at the limits of their range. But the real marketing scale issue is the lack of market share within their area versus AO, and they have spent the last 3 years proving they can’t increase that without hitting margins. What they have left is customer loyalty, but anecdotally, according to Trustpilot, and according to the CMA they are blowing that.

The bull case is that AO loses focus on MDA delivery in its hunt for mobile and other revenue streams, plus perhaps stronger economic conditions. The bear case is that Currys start competing on service.

Oxford Metrics (OMG.L) - Interim Results

It is very Oxford Metrics to describe a £1m loss versus a £1.1m loss last year as a 10% rise!

Motion capture is growing again with a good Gross Margin. However, the unmentioned corollary is that smart manufacturing must be declining, making the previous rapid growth there look like an anomaly.

It’s great to say this is the strategy:

Doubling Group revenue through a mix of organic and inorganic activities

· Increasing recurring and repeatable revenue to c.25% of Group revenue

· Increasing Adjusted EBIT* margin to mid-teens

But there’s not much evidence of any progress. Their “medium-term ambitions” sound a lot like Bernard from Creighton’s “aspirations”, which turned out to be total bollocks in the end.

The only part of the strategy we truly believe is the well-flagged dividend cut:

The Group is rebalancing its approach to capital allocation, prioritising investment in strategic growth opportunities while maintaining balance sheet strength and flexibility for selective bolt-on and opportunistic M&A, with dividends paid as a percentage of free cash flow and selective share buybacks where appropriate.

Current management started with £70m in the bank and a business making £6m operating profit a year. The market cap is now £52m and half the cash is gone. Hands up who wants them to spend the rest? Anyone? Anyone….?

When the broker’s note from Progressive arrived, it looks a lot like they had just issued a closet profits warning via the broker:

So why did the outlook in the results not give any indication that full-year trading was below expectations?

The first six months of FY26 showed further progress for Oxford Metrics, with revenue growth, improved Adjusted EBIT and continued strategic progress across the Group.

The motion capture part of the business is a good niche with 60%+ gross margins. It just looks increasingly like it will never grow and faces an increasing competitive threat at the lower end via AI. There are few companies where £54m of revenue and £3.6m of EBIT are available for a £15m EV. However, the management repeatedly makes this look uninvestable through their statements and actions.

Record (REC.L) - Annual Financial Report

We are not entirely sure how an asset management business can turn +14% AUM and lower costs into an EPS miss and an unexpected dividend cut!

· AUM up 14% to $114.6 billion (FY25: $100.9 billion) with strong inflows from new business wins, and favourable foreign exchange and market movements

· Total revenue down 4% to £40.1 million (FY25: £41.6 million) due to mandate re-compositions and lower performance fees

· Operating costs down 2% to £30.4 million (FY25: £30.8 million) whilst still investing selectively in key areas that support strategic objectives

· Profit after tax down 23% to £7.0 million (FY25: £9.1 million) reflecting tax rate normalising following prior year deferred tax credits

· Basic EPS down 22% to 3.92 pence (FY25: 5.03 pence), broadly in line with expectations

· Final ordinary dividend of 1.45 pence per share (FY25: 2.50 pence) brings full year ordinary dividend to 3.60 pence (FY25: 4.65 pence), reflecting a dividend payout ratio maintained at 92%

Presumably this is the mix, as passive hedging is where the growth is and is much lower margin:

Part of the issue appears to be a major change in the tax rate, but we don’t remember them highlighting in the past that they were benefiting from tax credits that were about to run out. The risk here is that it is a value trap as revenue gradually declines, margins get compressed, and forecasts keep coming down. We are not entirely sure why institutions choose them to manage an absolute return currency product . Surely there are other larger outfits with better track records?

Still, there are a few asset managers growing AUM at the moment, even if they are suffering from the trend towards passive and facing the associated fee pressure. It would only take another 20% or so share price fall from here to see this back on a 10% dividend yield, and at those sorts of levels, it may be worth owning for the yield alone.

That’s it for this week. Have a great weekend!

(Remember this is a summary of many opinions, and isn’t the view of any one commentator; check out the actual discussion on Discord if you want the nuance of the different opinions.) To avoid spam, the only way for new members to join the Discord server is via the Small Caps Live website. This will be instead of direct invites via Discord. All genuine investors are still very welcome to join in the discussions.

MJ Gleeson (GLE.L) - Update on Gleeson Land

It seems that teh company can’t get its land deals over the line by the end of the financial year. If it’s only a question of delays, it’s potentially a profit warning that doesn’t really matter. The market certainly appears to have mostly shrugged it off. However, they say

There is no doubt that housebuilders, in the south of England, are reviewing and reappraising their land buying strategies and we anticipate these conditions will continue through the next financial year.

It is possible that these deals will never be completed, or the price will be negotiated down. Their broker Cavendish confuse matters further by saying:

While this pushes earnings into FY27E, we leave FY27E and FY28E forecasts unchanged, consistent with broader market conditions and peer commentary around land buying.

It sounds like they are saying that even if the land deals are completed in 2027, it will only cover the profits that would have been missed in 2027.

This update sounds a lot like the reverse of the recent Henry Boot one: its housebuilder part is doing ok, but it can’t complete its land sales! Perhaps they should merge and be mediocre at everything!

Overall, though, this probably isn’t their fault. Many in the sector are trying to sell their land bank to shore up their balance sheets, and mostly finding no buyers. Those with cash are clearly stalling as they know they will get much better deals in 6 months, or they can simply complete at the point that interest rates fall or demand returns to the sector.

Bellway is usually one of the most aggressive, and they are also talking cautiously this week:

Land investment has remained disciplined and highly selective...In response, we are maintaining a sharp focus on the monetisation of our well-invested land bank and work-in-progress position through FY26 and beyond to support improvements in asset turn and cash generation.

The book value of many of these companies is providing support, but when a lot of that value is tied up in land, it certainly doesn’t appear realisable at the moment.

Mpac (MPAC.L) - Trading Update & Sale of Mpac Lambert

The Group continues to focus on maintaining appropriate liquidity and covenant headroom. This position will be materially improved by the proceeds from the sale of Lambert.

It seems the liquidity situation was far worse than we imagined. This is why they are having liquidity issues:

Since 21 April 2026, trading margins have continued to be impacted by delays in customer decision making on capital investments, heightened competitive pricing pressure, and lower operational leverage arising from reduced OE volumes. Accordingly, the Board now expects first half margins to be below the prior year, and FY 2026 underlying profit before tax to be substantially below current market expectations on a like-for-like basis.

A 43% cut in EPS by their broker, Panmure Liberum, is certainly “substantial”! This is despite removing the Lambert losses.

In light of this, the 15% drop in share price in response looks far too small. The Lambert sale does buy them some time, but on the current rating, this was not priced to go bust, which is still a possibility.

However, the sale of Lambert was clearly flagged in previous comments, but also by the move of HQ from Tadcaster back to Coventry. While we are not sure the strategic reasons for the sale make much sense, £20m for a loss-making company with only £2.1m of assets seems like a good deal. But haven’t exactly covered themselves in glory by buying this for £15m in 2019. Inflation means they have lost money.

Despite the cut, it is tempting to think that this is reasonable value on about 10x forward EPS, but this ignores the still sizable debt pile, no tangible asset backing and a current ratio of 0.9, even after the sale, which means there is still little in the way of downside protection.

Is it really a bargain, as buyers this week seem to think? Larger competitors can be bought on similar multiples with a good track record, net cash, a much better gross margin, and a much more diversified business. Where’s the discount to buy a low-quality microcap?

On top of this, the company often makes quite a few adjustments to get to their EPS figures. We are doubtful whether this is worth 10x real earnings if it were debt-free, let alone 10x adjusted earnings with debt.

Paypoint (PAY.L) - Record profits…

They seem to have mixed up the RNS title with the byline. The title should be “Results for the year ended 31 March 2026”. Also, profits are down in real terms, with sub-inflation rises. Only the combination of buybacks paid out of a 35-40% increase in debt drives EPS forward.

We get confirmation that Collect+ is now ex-growth with the number of sites falling, parcels little better than flat and revenue down 4.9%. Looks like them selling half was the right move.

However, the new structure demonstrates where the growth is now:

PayPoint are at the heart of efforts to break the Visa / Mastercard tyranny:

In Open Banking, we have made further progress in executing our strategy and leveraging our extensive capabilities. In PayPoint, we are focused on winning business with both new and existing clients delivering Open Banking services and payments channels, all enabled by obconnect and Aperidata, with 26 new client services live in the year, including the Department for Work and Pensions, AccessPay, Gousto and the Insolvency Service for Confirmation of Payee. ... In addition, as a founding member of the UK Payments Initiative, PayPoint is closely involved in the rollout of account‑to‑account (A2A) payments in the UK, including exploring how these services can be made available in‑store to support inclusive access for all customers.

If all goes well, Digital Payments & Open Banking will go from the smallest to the most significant segment in five years. Network Services revenue is already effectively £8m less than stated due to 49% disposal of Collect+, and at current shrink / growth rates, it will be overtaken in about 5 years.

We’re not sure what their business model for open payments is, but suspect there is some transaction fee element. While the point of Open Banking is to simplify the payment chain, reduce costs and remove the network effects that created the current duopoly, potentially this could get very interesting from a PayPoint investor perspective as well as for retailers and consumers.

Vianet (VNET.L) - Final Results

A big summary table on Page 1 is normally a good thing. However, in this case, it's full of BS metrics. No EPS or PBT. Which are, of course, both down:

It's odd how they include the share price, but exclude the figure from last year. Perhaps, because it is flat.

We wonder whether they have only paid LSEG for one additional colour in the RNS, so they can pick only the metrics that have improved and leave out the ones that haven’t, to get an all-green table. Whatever the reason, Vianet appear committed to taking Partridgism to the next level.

On the plus side, they do appear to understand that their share price is only heading down by having a progressive yield expectation:

Because yield is obviously dividend over share price, a “progressive ambition” can be achieved with a declining share price, not just a rising payout.

These are supposed to be final results, but don't yet include a segment results table. Extracting the numbers from the narrative, it appears revenue is down in the vending machines division, despite all the talk of opportunity.

So we have a business with a poor track record that is on an Adj. PE of 20.8 (trailing) and a forward PE of 18.8. Normally, we like owner-operated businesses, but with a track record like this, we hope Mr Dickson gives his new CEO a free hand.

That’s it for this week. Have a great weekend!

(Remember this is a summary of many opinions, and isn’t the view of any one commentator; check out the actual discussion on Discord if you want the nuance of the different opinions.) To avoid spam, the only way for new members to join the Discord server is via the Small Caps Live website. This will be instead of direct invites via Discord. All genuine investors are still very welcome to join in the discussions.

Flowtech FluidPower (FLO.L) - Acquistion

The £0.4m consideration for the Acquisition has been financed from the Group’s own cash resources. It is expected that this cost will be fully recouped from customer receipts before the end of FY26.

...For FY27 the Acquisition is expected to deliver turnover of c.£4m and EBITDA of c.£0.5m.

Small numbers, but on the face of it, a huge bargain. We are not sure why any business person would sell at this price. The only reasons we can come up with are severe financial distress or that they will still owe the (former) parent holdco a significant sum post acquistion. Here is what the last set of accounts to 31st March 2025 show:

It can’t be the full amount shown here, as they say they’ll be reporting as a bargain purchase gain, i.e. they are buying for less than the tangible book value. However, if there is anything outstanding, then management credibility is a serious concern here. Even if it really is only £400k paid, we think they owe shareholders an explanation as to why they have got such a good business with a great manager for an absolute pittance.

Gulf Marine Services (GMS.L) - Broker’s Note Update

Following Q1 Results, their broker Zeus said:

Full year EBITDA guidance again maintained. GMS has again maintained its existing 2026 EBITDA guidance of US$105-115m. This remains the company’s original guidance for the year, which did not include the Qatar downtime or the newly acquired vessel. As such, it looks like, while the actual 2026 full year outturn may move within this guidance range, overall the newly acquired vessel can be expected to significantly compensate for the Qatar downtime. We look for further confirmation of this going forward, including at the H1 results.

It seems confirmation was not forthcoming, as this week’s updated note showed them taking 33% out of adj. EPS and net debt estimates increase by $67m, partly due to the vessel acquistion.

This gives the appearance of a stealth profits warning via the brokers, rather than RNS guidance, with EBITDA going slightly below the bottom of the guidance range.

In only the way a broker can, Zeus manage to downgrade forward EPS by 33% yet keep an identical earnings-based valuation of 32p!

Hercules Site Services (HERC.L) - Interim Results

A 10 am results release on a Friday usually means bad news. Which is quickly confirmed on reading the headlines:

• Underlying EBITDA* of £1.7m (H1 2025: £2.6m), reflecting planned investment in the Group’s future growth, including major technology enhancements, operational improvements and additional professional fees associated with the extended FY 2025 audit process

• Underlying pre-tax profit of £0.6m (H1 2025: £1.7m) and underlying EPS of 0.67p (H1 2025: 2.11p) reflecting the impact of acquisition, extended audit and integration costs, as well as continued investment in strategic growth initiatives

On the plus side, they did show revenue growth:

Another period of growth and strategic progress, with revenue increasing 8% to a record £59.2m (H1 2025: £54.6m)

But then forget to mention that they bought two businesses in the meantime, one of which added £11.1m annualised revenue, and the other £1.4m. It seems organic revenue is likely down.

We have been highly critical in the past of the company’s unwillingness to provide the breakdown or details of the difference between statutory and adjusted figures in their Interim Results RNS.

Unsurprisingly, we are left yet again scrolling down to find that the real figures are an operating loss:

At least non-recurring costs have reduced. But they want us to ignore major investments again. It seems highly unlikely that they will treat any returns these major investments yield in the future as exceptional!

A quick look at the balance sheet shows £10.3m of net debt. They are guiding for an H2 weighting, and they better hope it arrives, as the leverage multiples look a bit high if we annualise H1 EBITDA, even if we take their slightly questionable definition of adjusted EBITDA.

Unsurprisingly, given the balance sheet, they say:

There will be no interim dividend in FY2026 (2025: 0.6p) as a result of our commitment to systems development and enhancements to support the continued growth of the business. The Board will keep the Company's dividend policy under review.

But strangely forget to mention the lack of distributable reserves that would prevent its payment anyway.

Likewise (LIKE.L) - Trading Update

We’re not entirely sure how they are doing this:

On a like for like basis, Total Group Revenue year to date 31 May 2026 has increased by 16.5%, with Sales in the month of May up by 19.1% against the corresponding period last year.

Order intake continues to be positive as the Group takes exponential gains in market share.

However they are managing it, it looks like the death knell for competitor Headlam. It is hard to understand how you can be so badly outcompeted in flooring distribution by a smaller competitor.

Perhaps the only saving grace would be that it now looks like a win-win for Likewise to acquire Headlam. The big questions are: what are the costs of rationalising Headlam’s network? Whether there has been enough churn in Headlam’s shareholder register that they’d capitulate for an offer below TBV? And whether the CMA would get involved?

ME Group (MEGP.L) - Trading Update

It’s bad news here:

While there has been an improvement in trading through May, the Board does not expect trading patterns to normalise while conflict in the Middle East and the subsequent uncertainty in the macroeconomic landscape continue. Consequently, the Board is taking a more cautious view to the full-year outlook, and it now expects FY 2026 profit before tax to be in the range of £69 million to £74 million.

They have had several recent missteps, and their business must be more fragile than we expected if a remote war can put people off washing their clothes.

The share price fell 25% in response, which seems large compared to the PBT downgrade (£79.9m to £69-74m), but then this is probably a partial reversal of recent misplaced optimism for the stock.

We still contend that the time to buy this is on the first ahead statement, and this looks like it’s at least 18 months away now. However, assuming the dividend forecasts are not changed by this update, they are on an 8% yield, and maybe an 8ishx P/E, so any further significant falls may start to make it interesting to income/recovery investors.

Portmeirion (PMP.L) - Placing

Our reliance on government initiatives to shore up the finances here looks misplaced as they announce a large placing to improve the balance sheet. They are raising £17m at 50p plus a £2m offer for existing retail shareholders.

We love British understatement as much as the next guy, but for those who are wondering, the actual figure is something over 200%!

The Group acknowledges that it is seeking to issue new Ordinary Shares significantly in excess of 10 per cent. of its existing issued share capital...

On the positive side, this seems excellent news for the people of Stoke, and I hope that it marks a turning point in the fortunes of their pottery industry. On the face of it, this recapitalisation, and the refinancing/sale-and-leaseback it enables, solve Portmeiron’s liquidity issues in the medium term, giving them the best possible opportunity to restructure into a profitable business.

Given the level of cash raised, the irrevocable undertakings for the GM, the risk level has materially reduced here. However, so has the upside of any recovery if/when it comes.

That’s it for this week. Have a great weekend!

With the UK Bank Holiday, it was a boring week for materiel news, so this will be brief this week. (Remember this is a summary of many opinions, and isn’t the view of any one commentator; check out the actual discussion on Discord if you want the nuance of the different opinions.) To avoid spam, the only way for new members to join the Discord server is via the Small Caps Live website. This will be instead of direct invites via Discord. All genuine investors are still very welcome to join in the discussions.

Churchill China (CHH.L) - AGM Statement

The Company is pleased to note that hospitality sales remain broadly in line with expectations.

Broadly in line is, of course, slightly below. Which begs the question, why should they be pleased to announce this? Unless they actually expected worse than their own expectations!

So what this probably means is that they are slightly behind market expectations, but they were worried that things were going to be much worse, so they are pleased it’s only a minor warning today!

We may be nitpicking here, but it isn’t the most convincing update. For example:

remain confident in our long-term outlook

Suggests a lack of confidence in the short and medium term.

It’s still a well-run business and trades on a significant discount to Net Tangible Assets. At some point, this looks like it will be a good investment, but we just don’t see any indicators that that time is today.

Portmeirion (PMP.L) - Statement re Government support for UK ceramics

Seems good news:

The Board of Portmeirion Group PLC, the global homewares brand group, welcomes the announcement from UK Chancellor today that the UK Government will provide a £120 million fund ⁠to support the ⁠UK ceramics ‌industry.

However, there is zero detail from the Government behind it so far;

We look forward to finding out further details

At least things are moving in the right direction and are compatible with the company’s strategy.

The signalling is perhaps starting to make this look interesting. Even if the announced scheme doesn’t directly help them because of energy hedging, it would be embarrassing to announce it and have one of the most iconic companies go under.

A combined package of energy, labour and government guarantees on loans would significantly move the risk-reward ratio here.

RTC (RTC.L) - AGM Trading Update

They don’t do forecasts, but if they did, this sounds a lot like it would be a profits warning:

Rail:

significantly increased fuel costs, materially raising fleet expenses, and this is, and will continue to, unavoidably impact margins within our Rail and Energy divisions.

And

This uncertainty is contributing to more cautious hiring behaviour among clients, with some delaying, scaling back or, in certain cases, cancelling recruitment plans.

Energy:

Following the extension of targets to 2028, demand for new installations has softened in the short-term, reflected across the industry through workforce reductions...This has led to a short-term reduction in demand, which we anticipate will increase in the medium-term as these programmes scale.

Only conferencing appears to be going ok, presumably because lower rainfall means fewer delegates getting wet due to the leaks we experienced at the Derby conference centre during a Mello event!

Ultimate Products (ULTP.L) - New CEO & Q3 Trading Update

This is a bit of a shock. We had no idea Andy Gossage was looking to give up his role:

The appointment of Simon Harrison as Chief Executive Officer, following a thorough search process. Simon is currently the CEO of Princes Group PLC (LSE: PRN), the FTSE 250 international food and drink company, and will join Ultimate Products as CEO designate on 5 September 2026 before assuming the role of CEO on 26 October 2026….

Simon is replacing Andrew Gossage, who has notified the Board of his intention to step down as CEO with effect from 26 October 2026, following more than 20 years in executive roles with the Group. After a short sabbatical, Andrew will continue with the Group as a Non-Executive Director from 1 May 2027. As part of these changes, Simon Showman, who founded the business in 1997 and served as CEO until 2024, will move to a Non-Executive Director role with effect from 1 June 2026, while continuing as President and Founder.

Perhaps signficantly, Harrison has gone from a £750m market cap company to a £43m market cap company. Although his base salary at Princes was £500k, this isn’t too different to Gossage’s c£400k, so not a huge step to meet this.

We do feel a bit sorry for Gossage that the share price jumped as his departure was announced, but this is most likely down to the news acting as a catalyst for change.

The risk is that a more measured CEO is coming into a poorly performing business. Surely there will be a kitchen-sinking profits warning to come before we get a final reset?

We also got a Q3 update the following day:

Group sales are expected to be marginally ahead of market expectations, with profitability remaining in line with consensus, reflecting the change in sales mix

They at least appear to be slowly building a track record of avoiding further warnings.

It’s pretty cheap on 10x FY26 and 7x FY27 earnings, although that assumes quite a big improvement in prospects. However, this shouldn’t be a highly rated business. Its gross profit margin is less than 25%, PBT margin is mid-single digits, it has debt on the balance sheet, and a very volatile performance. These don’t scream high rating to us.

It seems unlikely that founders and long-term management have been running a good business into the ground with bad decisions; perhaps it's just not a very good business. For example, the EPS is below the IPO ten years ago. It also makes it that bit less likely that we're about to see an inflexion point in margins, with the biggest holders deciding to step down.

Finally, we got a CFO buy:

…on 28 May 2026, Chris Dent, Chief Financial Officer, purchased 23,923 ordinary shares in the Company ("Ordinary Shares") at a price of 52.25 pence per Ordinary Share.

This is a start, but it doesn’t really get anywhere close to meeting his contractual requirement for holding. Given his apparent reluctance to buy shares in the recent past, and his sudden interest this week, are we finding out what he really thought of his outgoing CEO?

Zotefoams (ZTF.L) - Trading Update

This seems strong:

The Group reports strong trading in the period, with overall revenue increasing by 26% year-on-year to £64.1 million. Performance reflects robust demand across key markets and the contribution from Overseas Konstellation Company (OKC), offsetting the anticipated moderation in Footwear.

But ultimately in-line:

The Board is encouraged by the solid start to 2026 and its full-year expectations remain unchanged.

This seems to be the problem:

The Group is actively monitoring the impacts of instability in the Middle East, has taken steps to mitigate the impact of raw materials and other cost movements, and is well-positioned to adapt to evolving conditions.

No indication of what these actions are; presumably, they are trying to renegotiate pricing with customers. This also puts the revenue numbers into context. Volumes are possibly down in EMEA, and perhaps not just in footwear:

The underlying EMEA business was stable against a strong comparator (£40.4m) which benefited from exceptionally high Footwear volumes. Footwear, which is the largest component of the Consumer and Lifestyle vertical, saw revenues moderate as expected. Transport & Smart Technologies, including aviation, space, and automotive applications, continued to grow maintaining the momentum observed last year.

We would have liked to see the phrase “continued to grow volumes”, not just “continued to grow”, in there to be sure that the momentum here wasn’t just commodity-driven price increases on lower volumes.

And this seems to lack detail, too:

Cash generation has been similarly robust, reflecting our ongoing focus on working capital efficiency.

Either they don’t know the period-end net debt from a month ago, or they aren’t willing to tell us, presumably for Partridge reasons:

Lynn, to the untrained eye, this could look like it’s rubbish, and that I haven’t bounced back.

That’s it for this week. Have a great weekend!

Also, an early promo for The Investors’ Summit on Friday, 18th September. The set of speakers is yet to be confirmed, and it has a different flavour to Mello, more inspirational keynote speakers rather than meeting company managements and idea generation. Given that the ticket includes catering and is in a great location, many SCLers also enjoyed this event last year.

Here’s a selection of what we discussed this week. (Remember this is a summary of many opinions, and isn’t the view of any one commentator; check out the actual discussion on Discord if you want the nuance of the different opinions.) To avoid spam, the only way for new members to join the Discord server is via the Small Caps Live website. This will be instead of direct invites via Discord. All genuine investors are still very welcome to join in the discussions.

Chesterfield Special Cylinders (CSC.L) - Interim Results

On the back of the recent profits warning, we get their interim results:

The adjusted EBITDA loss and declining net cash make it look like another raise may be on the way. They claim:

Cautious cost management measures are in place to help mitigate the impact of delays, and further cost management steps are available if delays continue

But surely this is firing people, and that has an upfront cost? It’s not entirely clear that they can afford to do this, nor that they won’t bear re-hiring costs if orders do eventually arrive. Not a great place to find themselves…and this time they have little left to sell to avoid further dilution.

Goldplat (GDP.L) - Q3 Ops Update

As expected by many SCLers, but perhaps not by the market, this was a huge quarter:

The two recovery operations achieved a strong combined operating profit for the quarter of £3,855,000 (FY Q3 2025 - £694,000) (excluding listing and head office costs, finance cost and foreign exchange gains/losses).

Although the split is a little different to what we were expecting:

The Ghanaian operation achieved a profit before tax for Q3 of £806,000 (FY Q3 2025 - £784,000) which was supported by the operations team delivering to plan and higher, albeit fluctuating, gold price.

The South African operation achieved a profit before tax for Q3 of £2,624,000 (FY Q3 2025 - £(15,000)) and was supported by the operations team delivering to plan, securing once-off batches and higher albeit fluctuating gold price.

At this point, we were expecting Ghana to be recovering more strongly than it has. It seems like there is more work to do to get that back up to the c£1.5m per quarter op profit, which is probably steady-state operations:

· As communicated in Q2 announcement, GRG is in process of investing £700,000, of which £374,000 have already been incurred to improve our processes to increase recoveries and environmental management.

· The local Ghana beneficiation requirement has impacted all aspects of our business, and we continue to review, update and align our process and procedures to manage risks and maximize margins.

Slow progress on the TSF which is a bit disappointing. However, at least they are exploring other options, so they are not beholden to DRD:

We believe information gathered from this, should be sufficient to enable us enter commercial discussions with DRD Gold on utilisation of their servitudes, plant and deposition capacity. We also continue to evaluate methods through which we can process the TSF, as a start, through facilities on our premises.

Cash building nicely:

Our cash balances in the group remained strong at £5,077,000 at the end of Q3, with cash being held up in debtors in South Africa due to higher levels of supply. Cash has increased since, to £9,160,000.

£9.2m cash is over 30% of the current market cap.

They have basically delivered higher PBT in the first three quarters of the year than brokers expected them to do for the full year, an estimate that was materially upgraded just a few months ago. And there is no reason to expect Q4 to be any worse than Q3.

Mark has increased his FY estimate from 4.5p to 5.0p EPS. If one is happy to take the current £9.2m net cash, then this looks cheaper today than it did before the announcement, and it was already one of the cheapest stocks on the UK market.

The lack of share price reaction may be because the broker hasn’t updated their forecasts in response. Perhaps they feel they can’t make another material upgrade so soon after the previous one. Either way, they’ve been consistently behind the curve, and given the quarterly reporting, it’s very easy to make your own basic calculations.

Although it’s slow going on the TSF, there is reason to think the story here isn’t all about a rising gold price. Having had a presence in Brazil for a few years now, gathering mine waste and shipping it to Ghana or South Africa, they appear to be starting to do some basic processing on-site. This will be a slow ramp-up as they add plant and equipment, but it could become a material third leg of their operations over time. As we have seen with the likes of Serabi, the high gold price is likely to encourage higher gold production in Brazil, leading to a larger supply of byproducts.

Jadestone (JSE.L) - Full Year Results

High oil prices are generating very strong cash flow as expected:

Net debt at 30 April 2026 was approximately US$5 million, consisting of US$117.4 million in cash (incl. restricted cash) and US$122 million of outstanding debt on the RBL Facility. The Group’s US$30 million Working Capital Facility remains undrawn.

Stag is not coming back on stream until the end of the year to take advantage, but is fully insured for costs and lost production.

The only bad news is that CWLH may be delayed due to some sub-sea damage. Up to 8 weeks.

The hedging impact was already known and obviously annoying given what’s happened with oil prices, but the c$20m of FCF per month over the last 4 months without stag or CWLH shows the impact oil prices have on companies such as this.

Nexteq (NXQ.L) - Trading Update

A second profits warning in a row here:

As a result of the continuing uncertainty in the Quixant business, FY26 Group revenue is now expected to be approximately 15% below previous market expectations1 with a consequential impact on adjusted profit before tax.

Blamed on:

US tariffs, and directly by higher costs for critical memory and storage components (DDR4 and DDR5), which have increased our customers’ prices to end markets.

Normally, the maths would be simple: 15% of $85m forecast revenue x 33% Gross Margin = $4.2m reduction in PBT. This is actually one of the advantages of being a low-margin business. Everyone loves a high-moat business until revenue declines and profits get wiped out.

In this case, profits get wiped out anyway. With a previously $2m PBT forecast, this would be more like $2m loss without any further management actions. There is hope that they will be able to mitigate this somewhat:

More pleasingly, current gross margin % performance is expected to continue through FY26. The Board and Executive team remain strongly focussed on cost management to mitigate the impact on profitability as far as possible.

Being focused on and actually achieving are two separate things.

When the updated numbers from Cavendish finally appeared, they showed breaking even for FY 26 and a strong rebound forecast for FY27. Given recent trends, break-even this year looks a stretch, let alone a bounce back of that magnitude in FY27.

We are not sure why companies do this. The drip drip of further profits warnings caused by unrealistic assumptions is far worse than taking a one-off hit and rebuilding confidence slowly. I guess this is why they say profits warnings come in threes, and we are only two down so far.

It looks increasingly out of place to have splashed $15 million on an office in Taipei. There’s a reasonable discount to TBV now, and at least some of the remaining assets are liquid. Although perhaps a Taiwanese property fund should trade at a discount to TBV, given the geopolitical risks!

Portmeirion (PMP.L) - Statement re Government Support

As we argued previously, there would have to be some support for the sector.

The Board of Portmeirion Group PLC, the global homewares brand group, welcomes the announcement from UK Chancellor today that the UK Government will provide a £120 million fund ⁠to support the ⁠UK ceramics ‌industry.

The obvious move to subsidise energy isn’t that important for Portmeirion, as they previously told us:

As part of our long term energy hedging process, in October 2025 we placed significant hedges for electricity at 100% of our requirements and gas at 80% at favourable rates through to 31 March 2027.

Greater certainty after March is useful, but so far, all we have from the Goveremt is hand-waving:

We look forward to finding out further details

The signalling is perhaps starting to make this look interesting. Even if the announced scheme doesn’t directly help them in the short term because of energy hedging, it would be embarrassing to announce it and have one of the most iconic companies go under.

A combined package of energy, labour, and government guarantees on loans would significantly move the risk-reward ratio here.

Synectics (SNX.L) - AGM Trading Update

This former PI favourite, now fallen on hard times, is still travelling hopefully:

first five months of the year ending 30 November 2026 (”FY 2026”) broadly in line with management expectations.

i.e., slightly below expectations.

Revenue and profitability for the full year will be weighted towards the second half of the year, consistent with the historical profile of the business1.

Subject to energy sector activity normalising through the second half, the Board currently expects trading for FY 2026 to be in line with market expectations2.

i.e., hoping an H2 recovery will save them.

The forecast numbers here were already massively cut in March.

This week’s update contains no specific order book number, which, given the only very short-term visibility over revenue, doesn’t give great confidence that they can hit even the reduced numbers. Many of us had already used this correlation to avoid the last warning:

The bounce back in the share price following the last warning looks premature, and it was no surprise to see the share price fall on this update. However, in what we can only surmise is a masochistic desire by some shareholders to be hurt again, the shares have since bounced back. Surely, at this point, it would just be cheaper to pay a dominatrix than buy Synectics shares.

That’s it for this week. Have a great sunny Bank Holiday weekend!

Here’s a selection of what we discussed this week. (Remember this is a summary of many opinions, and isn’t the view of any one commentator; check out the actual discussion on Discord if you want the nuance of the different opinions.) To avoid spam, the only way for new members to join the Discord server is via the Small Caps Live website. This will be instead of direct invites via Discord. All genuine investors are still very welcome to join in the discussions.

Angling Direct (ANG.L) - Final Results

These figures were already known from the trading update:

They seem keen to point out that Europe continues to do badly:

So perhaps they are finally ready to bin this?

The outlook is not great, though:

The strong momentum seen in FY26 continued into FY27, with Group revenue in February growing 9.7% and UK revenue also increasing 11.8%. However, following the onset of the Middle East conflict, the Group has experienced softer trading with Group revenue in March and April increasing 5.4% and UK revenue increasing 7.6%

Turns out people are fishing less due to the war in Iran!

Guidance is in line for FY27, but only after aggressive cost savings:

The additional costs incurred to date as a result of the conflict, such as distribution fuel surcharges and increased freight, are relatively insignificant and have been fully mitigated. The Group can continue to review levers to offset further additional costs through savings elsewhere in the short-term, such that FY27 guidance is not impacted at this stage

So, the typical sort of soft warning that we are so used to these days. Management appears to be keen to prevent the share price from falling too far, so they also provide “upgraded medium-term objectives”:

• UK business on a flightpath to revenue of £125m

• UK business on a flightpath to >£8m Adjusted EBITDA

• Growing Europe’s largest fishing club, MyAD, and leveraging its value

• Development of a sustainable European business, focusing on Germany and the Netherlands and funding any profitable expansion from existing cash

• Deployment of cash in line with a formal Capital Allocation Policy and on a flightpath to a >15% Adjusted ROCE

• Angling retail’s largest responsible employer

Helpfully (for them), they’ve managed to avoid defining the medium term or committing to a delivery date for these! Their only firm commitment seems to be to that European business…which is a shame.

Character (CCT.L) - Interim Results

They’ve managed to turn a poor revenue performance into a reasonable EPS performance:

Adjustments here seem fair as they are just excluding derivatives.

They don’t really seem to explain how they have made those savings in the RNS. Instead, we have to turn to their broker to provide the narrative:

 The profit improvement was driven by a 240bps improvement in gross margin to 31.7% due to changes in geographic mix away from the lower gross margin US sales, favourable FX due to a strengthened GBP vs. USD, and a cleaner inventory position.

 We note that the group had moved to working on a “direct to retail” basis with Smyths Group in the UK, Germany and France this year, which would have supported gross margin as well.

 The company also successfully implemented cost-control measures including lower carriage outward costs from renegotiated rates and a reduction in fixed overheads. The full benefit of the fixed overhead reduction is expected in 2H’26E.

All seems sensible actions, but we’d prefer if the company told us this, not relying on a broker’s note that not all investors can read.

Normally, at this point, we’d be worried, as H2 was loss-making last year. However:

Full year results expected to be significantly ahead of current market expectations

Quote some upgrade too, with Panmure doubling their PBT to £5m, suggesting that they have an even better H2 than H1.

We continue to anticipate flat turnover for the 2026 financial year as a whole. However, with the geographical mix, some exciting new additions within our product portfolio, a projected largely clean inventory position at the year-end (reducing the need for significant provisions) and favourable FX rates, we expect to maintain the improved HY26 gross margin for the remainder of this financial year. We also expect the benefit of the cost management measures to continue in the second half and beyond. In addition, the benefit of the rental and/or the potential sale of Infinity House will reduce costs yet further and will substantially strengthen the Group’s balance sheet and liquidity.

Fair play to management here for quite the turnaround, even if it is cost-driven rather than sales-driven.

However, it is hard to get excited by a forward P/E of 12 for a business that usually trades on a single-digit P/E, even though it looks better on an EV basis. The broker’s upgraded 300 pence Price Target is only 9% above the current price, which suggests that there isn’t huge upside in the near term. However, on a sales basis, they are still in a trough from which a recovery would be very impactful.

CT Automotive (CTA.L) - Notice of Results

This bland title hides that this announcement is more material than it sounds - we find out why the CFO was fired:

During the preparation of the FY25 Financial Statements, certain prior period accounting misstatements have been identified, the most significant of which relate to an incorrect posting in the consolidation when converting from local GAAP to IFRS and the misclassification of a customer prepayment in 2021. None of these prior period accounting adjustments affect working capital or cash, nor do they impact the underlying operational performance of the business in FY25 or the Group’s expected future financial performance.

The current impact is limited to:

Adjusted profit before tax is now expected to be $9.5 million (rising to $10.0 million including non-cash foreign exchange gains), below previous guidance of $10.0 million and largely due to a pricing overstatement in a contract with a UK customer and the re-working of certain lease accounting calculations in China.

The initial thought is that it could have been a lot worse than a 5% miss on PBT, and means that this remains on a P/E of less than 3.

They certainly appear to have put these issues behind them now:

The Board has been concerned by the discovery of these prior period accounting misstatements and has conducted a comprehensive review of the Group’s balance sheet and historical accounting treatments. This has been well supported by MHA Audit Services LLP, the Group’s new Auditor selected in September 2025. Additional controls have been implemented to ensure there is no recurrence of these errors.

But they haven’t exactly covered themselves in glory, and it will take a while before the market is willing to give them the benefit of the doubt.

Eurocell (ECEL.L) - Trading Update

Surprisingly strong figures form the Branch network:

Although all the commentary is about how tough trading is:

Trading conditions have remained subdued in 2026. Ongoing challenging macroeconomic conditions and weak consumer confidence have been compounded by uncertainty over the impact of conflict in the Middle East on demand and supply chains. This has continued to affect activity levels in both the repair, maintenance and improvement (RMI) market and new build housing.

This seems a reasonable business, so a few of us were hoping for a big downgrade to mark the bottom before recovery. This update wasn’t it:

However, the effect of this backdrop on consumer confidence and new build housing market activity over the near term remains difficult to assess, which is reflected in the range of analysts’ forecasts for the year⁽¹⁾.

⁽¹⁾ Company compiled range of analysts’ forecast adjusted profit before tax for the year of £21 million to £23 million.

However, despite this commentary on the range of forecasts, they don’t explicitly say they are trading in line with this. This is better than last year’s AGM update, which was an explicit warning. However, this year they appear to at least be leaving their options open for a future warning.

Gattaca (GATC.L) - Trading Update

A big upgrade here:

Further to the Group’s interim results announcement on 24 March 2026, contract recruitment has continued to perform strongly leading to the Group trading ahead of market expectations.

As a result, the Board expects Group continuing underlying profit before tax for FY26 to be not less than £6.0 million (previous guidance: £4.5 million).

We did think that they were on for a beat, as one of us asked the following question on their recent Investor Meet Company call:

Historically, the company has been H2-weighted for profitability, delivering around two-thirds of EPS in H2. However, market forecasts are for just 9.3p for the FY. With 6.9p delivered in H1, this would be just 24% H2-weighting. Why is FY26 forecast to be so different to historical trends?

The scale of the beat is ahead of what many of us expected. Interestingly, brokers have also increased teh dividend expectations in line with the upgrades in EPS.

Some simple calculations show this still looks like great value, especially if you assume they can use that cash balance to drive further organic or inorganic growth:

Macfarlane (MACF.L) - AGM Trading Update

Like many companies at the moment, they manage to dodge a potential profit warning with plans to mitigate rising costs:

Management is taking actions to mitigate the significant inflationary impact on input prices and logistics costs caused by events in the Middle East.

You always have to wonder why if there was so much fat in the business like this and they could cut it easily without impacting operations, why they didn’t do it sooner?

It isn’t expensive, and they are flagging a better H2:

The Group's performance is expected to improve in H2 2026 as we build on the organic revenue growth momentum, benefit from the new equipment at Pitreavie and maintain strong control over operating costs.

However, it is hard to get excited about 8x earnings with forecast EPS growth so anaemic, and they only appear to be in line because we’ve had to be aggressive on costs or pass through, in order to hit meh forecasts.

The time to buy is probably when things are going well enough for them to upgrade, rather than struggling to make the numbers.

Maintel (MAI.L) - Placing

Perhaps the world’s least surprising placing, nor that they required a 33% discount to get it away:

…announces that it has conditionally raised approximately, in aggregate, £5 million (before expenses) through a placing of New Ordinary Shares ("Placing") at the issue price of 80 pence per Ordinary Share (the "Issue Price") and the issue of convertible loan notes ("Convertible Loan Notes").

The big question is, have they raised enough, given that this only reduces the debt by around a third:

What is interesting is the reasons for raising new equity now. It seems they were possibly being prevented from bidding for public contracts due to the state of their finances:

● approximately 33 per cent. of the net proceeds will be used to strengthen the Company’s balance sheet providing contingency against short term liquidity variances linked to the delivery of newly signed projects, allowing further headroom in meeting financial criteria required in public sector tenders, and accelerating the review of its operating model; and

● approximately 67 per cent. of the net proceeds will be used to provide sustainable working capital resourcing for the Group, enabling the further diversification of the Company’s procurement strategy, achieving better terms with suppliers and improving the reported payment performance in preparation of the full application of the newly adopted Procurement Act.

We may see more raises like this at companies that have public sector exposure and questionable finances.

Vertu Motors (VTU.L) - Final Results

Profits came in very slightly ahead of the top of the forecast range. Probably more impactfully:

· Strong start to FY27, trading profit for March and April 2026 was ahead of the prior year. · The impact of the Middle East conflict driving fuel price volatility, pressuring consumer confidence, disposable income and vehicle demand is being monitored. No material adverse consumer trends are visible today.

They are working on fixing their Jaecoo and Omoda problem:

The Group intends to introduce further Chinese brands such as Leapmotor, Jaecoo, Omoda, Lepas and Chery into the Group’s portfolio in the coming months.

Also a positive is the profit on one of the sites that was closed and sold, though the suspicion is that the site was closed because it was worth more to somebody else:

The freehold property at Barnstaple was very swiftly sold in March 2026 for £1.5m being £0.5m above book value.

The long-running issues with the Glasgow residential site sale continue, with the buyer failing to pay even the discounted price agreed. We had hoped they had other sites that could be used for housing, but market conditions and government policy have become increasingly obstructive to this.

The recent fundamentals appear unchanged: The industry overall is currently marginally profitable at best, with earnings at Vertu only remaining positive because they don’t have to pay rent on most of their sites. It is reasonable to hope this will change sometime in the next few years, and they are clearly flagging possible aggressive expansion in the sweet spot between an upturn being in sight and valuations remaining cheap. In the meantime, the market is focused on sub-par returns on capital and thus valuing Vertu below tangible book, claimed at 75.9p on 28th February, with property gains since.

That’s it for this week. Have a great weekend!

A short and late summary this week due to travel, but just time to remind everyone that hot on the heels of a successful Mello Birmingham, the best UK investment conference for meeting company management (in our opinion) returns to Chiswick next month, on Tuesday 2nd and Wednesday 3rd June. The lineup is already looking very good:

Many SCLers will be making the effort to be there. Tickets are currently on General sale and will move over to Final Release on 12th May. Even better, we have a 25% discount code for you: SIMPSON25

Here’s a selection of what we discussed this week. (Remember this is a summary of many opinions, and isn’t the view of any one commentator; check out the actual discussion on Discord if you want the nuance of the different opinions.)

Paypoint (PAY.L) - Resolution of Claim

This sounds like bad news:

The CAT has:

Found PayPoint liable for an historical infringement of competition law, which ceased in 2018, concerning certain contracts under which it provided energy OTC prepayment services;

However, this is the last of two legal cases resolved, and the amount awarded is small:

Awarded damages of £169,334

Especially compared to the initial claim:

Importantly, the CAT’s findings confirm that PayPoint’s past contracts with energy suppliers were not a significant factor in G365’s lack of success. G365’s initial claim was for £172.2 million – meaning that PayPoint defeated more than 99.85 per cent of G365’s claim value.

So this usefully removes a risk factor.

As they were found liable, Paypoint are unlikely to recover any legal fees, but these have been expensed as incurred, probably a minimal amount in the current period. We wonder if they have to pay the other side’s fees, though:

The tribunal may apportion costs based on issues won or lost, rather than awarding 100% of costs to the overall winner, as seen in cases where a party only succeeds on specific grounds.

So hopefully they only have to pay 0.15% of the amount.

Portmeirion (PMP.L) - Preliminary Results

Given our previous commentary, we immediately scroll to the going concern statement:

Given these factors the Directors also acknowledge that conditions outlined in the going concern scenarios represent a material uncertainty which may cast doubt over the Group’s and the Company’s ability to continue as a going concern

As background, covenants for the RCF were set in August 2024, breached, relaxed in September 2025, then breached again in March 2026, delaying the results. A waiver has now been agreed for March/April 2026, with a formal relaxation from May 2026, allowing results to be published on a going concern basis.

However, these covenants will again be broken if revenue is more than 9.5% below target, with damaging cost-cutting at the -7.5% level. We usually see stress tests relative to the previous year or other known figures, but here the target is unknown, with no clue from their broker, either.

However, surely the government will have to support this sector given multiple recent failures. Given that Portmeirion has helpfully fixed their energy costs before the attack on Iran, it is unclear whether they will benefit from any assistance, but what would be ideal would be a low-cost liquidity loan so that they can restructure without undue time pressure or being bled dry by the banks.

The investment risk here still looks very high. It is a relief that the covenants have been relaxed, although clearly this could have happened sooner and would not have caused a delay in the results. There are a number of actions that should improve liquidity, also mentioned in this week’s update:

• Inventory write down £2.9m (& being carefully managed so the product doesn’t get dumped in Korea & ruin one if their best markets)

• US Tariff claim of $3m

• Potential sale of Wax Lyrical (with the potential to wipe out the debt)

• Potential sale & leaseback of Trantham Lakes property valued at £11.7m (on books for £5.2m)

So, unless faced with a liquidity crisis, the asset backing should ensure good returns for lenders and equity holders from here.

Ramsdens (RFX.L) - Trading Update

It seems the 18th March update was indeed conservative when they said:

the Group now expects its profit before tax for FY26 to be at least £24m* and, if the favourable gold price and trading conditions continue, potentially up to £28m.

Despite the gold price immediately falling and never fully recovering, they now say:

the Board now expects its profit before tax for FY26 to be at least £28.5m* and, if the favourable gold price continues and summer currency volumes are in line with last year, potentially up to £31.5m.

Cavendish calculates this to be a 19% EPS upgrade, but this time they have also applied it to the following year:

Given the continued strength in the gold price combined with the strength in the underlying business, we increase our FY27E PBT forecast by 19.1% on higher precious metal and pawn broking profitability, but – given the prevailing gold price – we see further upside risk to this and our FY27 forecasts, which assume a nine-carat gold price of £32/g, which is materially below the prevailing price of c£42/g.

So we now have a current year forecast of 63.2p falling to 44.7p the following year. We should be very cautious about assuming that 44.7p, or even 2025’s 36p, represent normal earnings in a flat gold market. This statement from the broker doesn’t really fully describe the dynamics here:

While much of this upgrade is due to the purchase of the precious metals business, which has benefited from prevailing gold prices, we note the continued strength in the jewellery retail and pawnbroking businesses.

In fact, the other two strong sectors have been very significantly benefiting from the gold price, and all three will suffer (after varying lags) when it stabilises or substantially falls:

• Much of pawnbroking uses the value of gold in items as security. Obviously, more will be lent when customers suddenly have more security to give. And in a significant number of cases, pawning something is a direct substitute for selling it, paying a fee for the effective option to buy it back for economic or sentimental reasons.

• Much of the jewellery sold contains gold, and so for the same number of units/weight sold, revenue will be naturally higher. Furthermore, profits will be higher because significant amounts of second-hand jewellery are bought at a significantly lower gold price.

This is also problematic from the broker:

we believe that a sum-of-the parts approach represents the fairest way of valuing Ramsdens

In fact, this is a highly integrated business. Most obviously, cash FX would be loss-making and worthless if it had to bear the store costs alone. Sales staff can push customers toward pawning jewellery or selling it; the former virtually ensures the customer will return, giving an opportunity for another transaction with the same or another item, whereas selling it offers a much greater, but one-off, benefit. Management can decide how much jewellery bought is retained for sale at higher margins or melted down for a quick profit. Only the FX card business conceivably has standalone value.

This makes the company exceptionally difficult to model from a valuation perspective, but here’s one possible way:

Share Price 445p

FY 2026 63p FY 2027 50p

Effective share price 332p

Sustainable EPS 30p => Underlying PE of 11x

This doesn’t make the company expensive, but it also prices in either further significant gold price rises or ongoing growth from their store roll-out, both of which have risks as well as opportunities.

Reach (RCH.L) - Trading Update

This is an in-line update:

We remain confident in delivering the reduction in operating costs, and are on track to deliver in line with market expectations for the full year.

However, it contains scary LFL revenue trends:

So we are not surprised to see the market take fright as digital revenue falls faster than "legacy" print revenue due to Google’s AI transition, and despite economic uncertainty hitting print advertising revenues.

That’s it for this week. Have a great weekend!

Here’s a selection of what we discussed this week. (Remember this is a summary of many opinions, and isn’t the view of any one commentator; check out the actual discussion on Discord if you want the nuance of the different opinions.)

Brave Bison (BBSN.L) - Final Results

An initially impressive set of results:

Until you see the scale of the adjustments required to get there:

The net cash also appears to be flattered by an unusually negative working capital position.

No explanation is given for what £12.8m of accruals represents, leaving more questions than answers. Cavendish sees this unwinding over the next year, leading to weak free cash flow.

We don’t doubt the scale of the Green brothers’ ambition, but at the end of the day, they are marketers, and the results reflect this.

Card Factory (CARD.L) - Preliminary Results

High street & employment costs are taking their toll:

However ,the dividend up and they are buying back 6.7% of the share count (if it doesn’t move the price), which shows a certian amount of confidence.

They give us an in-line outlook for FY27, but even they don’t sound totally convinced by this!

· Total Group sales, excluding the incremental benefit of Funky Pigeon, through the first three months of the financial year are in line with the same period in the prior year. · We are cognisant of the situation in the Middle East and the potential for impact on direct input costs such as container rates, energy and fuel surcharges. · The ongoing geopolitical instability also creates uncertainty in relation to inflation and consumer sentiment. · While we remain mindful of this external backdrop, the Board expects Adjusted PBT in FY27 to be in line with the current market consensus

Getech (GTC.L) - Final Results

Reasonable results considering where they found themselves a couple of years back:

· Revenue growth delivered, with 7.3% increase to £5.0 million (2024: £4.7 million), including annualised recurring revenue (ARR) of £2.8 million (2024: £2.9 million) reflecting high customer retention, with management’s primary focus for 2026 on growing ARR to cover cost base.

· Return to positive EBITDA of £0.5 million (2024: £0.6 million loss) reflecting improved operating performance and structural cost efficiencies. Adjusted EBITDA was £0.6 million

Looks like they may have run the cash balance much closer than would have been ideal:

Improving cash generation and liquidity, cash at bank of £0.2 million at 31 December 2025 - following a strong period of receivables in Q1 2026, cash at bank at 31 March 2026 increased to £0.8 million.

However, with that recovery to £0.8m things look back on an even keel. It’s almost 30% of the current market cap.

The outlook doesn’t seem too bad either:

Trading momentum has carried into 2026, with unaudited Q1 revenues 5% ahead year‑on‑year and EBITDA expected to exceed FY2025.

Surely, when things settle from current geopolitical events, companies will be exploring for more oil outside of the ME, and that will start with Getech’s data and tools.

Not necessarily an immediate uplift, but the good news is that they are involved at the start of an exploration process, not the end.

Interesting talk on the IMC call about a couple of transformational deals, which they refer to as “Globe Plus”, which would allow them to book much more revenue versus a normal Globe. This is what they say in the results:

Our sales pipeline contains multiple large opportunities for our flagship technology asset, Globe, any of which could transform revenues and materially add to ARR - our core focus.

They were clear that these aren’t in Cavendish’s forecasts. So, it is possible that the market would miss the significance of those types of deals if they are signed. Could be an interesting opportunity on any contract RNS. Although this is so illiquid, it may be hard to get stock on good news, even if the initial significance is missed.

Ingenta (ING.L) - Final Results

Pretty much everything is in line with what we expected following the trading statement. EPS is slightly ahead, but mainly because Cavendish didn’t model any interest income. Dividend in line, but still nice to see the 10% increase. This is the outlook:

FY26 revenue expected to be at least broadly in line with FY25, as revenue from new customer wins offsets anticipated attrition in legacy platform revenues with further guidance expected after the AGM.

It sounds like they are waiting for a couple of already bid deals to be landed.

Gross margin improves, but is offset by the sales & marketing increase

We’d argue that we’ve already had “early 2026”:

Growing sales pipeline for all Ingenta products with deals expected to be awarded in early 2026.

But otherwise fairly positive medium-term outlook:

· New sales and expansions of existing customer relationships in both Content and Commercial divisions expected to deliver significant additional revenue opportunities over the next 3 years. · Growing sales pipeline for all Ingenta products with deals expected to be awarded in early 2026.

However, nothing new, and a lot remains to be proven that they can actually deliver this.

We sstill struggle to get a feel for how much legacy remains. The picture is complicated by two things:

• SaaS transition. This decreases revenue but increases average cash balance in a situation where this part of the business is declining or being transitioned to newer products.

• Customers are announcing they are ending legacy services, but then coming back with packages of work because every IT system replacement takes far longer than originally planned!

So we can see why they are reluctant to give a specific number, but some better guidance would be appreciated. The lack of forecasts until they know how much of the current pipeline is likely to convert probably makes sense, but doesn’t help with valuation.

The current price is covered by the cash generation, even if they don’t deliver on the growth plans, so this remains pretty much a free option on that growth.

IQE (IQE.L) - Placing

It did seem a little strange that this stock kept going up on no news. Our understanding was that American retail investors became involved in pushing the story. Instead, they got hit with a huge fund raise at a 58% discount:

The Issue Price represents a discount of approximately 10.1% to the 12 month VWAP ending on 24 April 2026, being the latest practicable date prior to the publication of this announcement, and a discount of approximately 58.4% to the closing mid-market price of 47.6 pence per Ordinary Share on 24 April 2026, being the latest practicable date prior to the publication of this announcement.

It seems the company still did well to get it away at a premium to the price prior to momentum traders/US retail jumping on the bandwagon.

They admit they were effectively bust without this fundraising:

Should the Fundraising Resolutions not be approved by shareholders of the Company, no element of the Fundraising can complete and IQE will not receive the proceeds from the Fundraising. In such circumstances, the Company would be required to obtain alternative funding to meet its short-term liquidity needs and its financial position and prospects would be adversely affected were such funding not available

Perhaps not surprising when net debt was 10x adjusted EBITDA:

Revenue for FY 2025 is expected to be £97m, resulting in an adjusted EBITDA position of c.£3m and adjusted net debt of £31.5m. As at 31 December 2025, IQE’s cash position was £15.7m.

And we thought Victoria Carpets had a high leverage multiple!

IQE management mustn't be able to believe their luck that they went from potential insolvency to getting a huge placing away and (presumably) lots of in-the-money options, purely because US investors decided to buy it at any price! Shows why many of us choose to only fish in our home markets. You may be able to do this maths, but you don’t understand the culture. We suspect a rude awakening awaits our friends Stateside when they finally realise what they own.

Pebble Beach Systems (PEB.L) - Final Results

These look strong, at least at the bottom line following the big cost-cutting they engaged in last year:

Having halved both expensed and capitalised R&D to deliver these results with what appears to be little in the way of impact on the business, you have to wonder what on earth these people were doing and why it took so long for them to be fired?

Encouraging start to 2026, although the order book doesn’t suggest they are going to see anything like the improvement in profits that the cost-cutting delivered.

We were a little confused by whether these results were in line or not. Cavendish estimates were for 2.2p this year, so on the surface, 2.7p was quite a big beat. However, when the updated Cavendish note became available, it turned out they had calculated that these results delivered 2.1p EPS, a miss on the same methodology. When we finally worked it out, it seems like the company didn’t adjust out a £540k UK deferred tax credit in note 6, which is why their EPS number is higher than Cavendish’s.

They adjusted out the restructuring costs, but didn’t adjust out this one-off deferred tax credit. A bit cheeky that.

Sanderson Design (SDG.L) - Full Year Results

Possibly a slight beat on EPS at 5.4p vs Stockopedia consensus 5.2p and Progressive at 5.3p, but heavily reliant on adjustments:

For example, we are not sure how one-off these restructuring costs are:

As expected, this is a cost-led turnaround rather than a sales-led one, which isn’t going to deliver sustainable over the long-term:

Total annualised cost savings achieved in the year of £2.5m, including £1.5m in manufacturing and £1.0m in head office costs

This seems as positive as it can be in the circumstances, though:

The Board continues to monitor the external macro-environment with geopolitical volatility presenting a challenging backdrop for the financial year ahead. Against this, the Group entered FY2027 with good momentum which has been maintained and current trading is in line with full year expectations.

On the analyst’s call, they sounded pretty upbeat on the outlook, claiming they had great visibility. However, they didn’t appear to spot the last downturn in time to take appropriate action, so we are not sure how they square this circle.

£8.4m of cash flow from operations is particularly strong and shows further progress on inventory reduction as well as profitable trading. We should probably take off the £2.2m of lease payments, but it is still a very decent cash generation.

However, the dividend payout is pretty disappointing, and on the call, they suggested they wanted to keep £10m in cash to protect themselves from future downturns. They said the EBT buyback was an alternative to increasing dividends. We were surprised by this as most companies release an RNS with each EBT purchase (and sale in the case of Ultimate Products!) Here, we only found out that they were already purchasing shares in the EBT in a comment in these results. That probably explains why the share price has been so strong in the last month or so. However, with £500k of the £1.4m lent to the EBT left to go, it remains to be seen whether they can hold onto those gains once that buyback ends.

They adjust out the pension admin costs despite these being ongoing, but no longer have to make recovery contributions. Another snippet from the call is that the remaining pension scheme would need a low single-digit cash injection to offload. Another reason why we can’t expect any large dividend or buyback increases in the near term.

Warpaint (W7L.L) - Final Results

Q1 trading is pretty terrible, given that the cost and consumer impacts of the Iran war are yet to be seen:

The difficult trading conditions experienced in 2025 continued in Q1 2026 with unaudited Group sales for the four months to 30 April 2026 expected to be approximately £26.1 million (four months to 30 April 2025: £32.6 million). However, sales in April 2026 are expected to be in excess of those achieved in April 2025, with signs of recovery being experienced

They were already struggling to contain costs in these results:

So if Adj. EPS is down 25% on revenue +3% (although not quite comparable due to the Brand Architeks acquisition), we shudder to think what-20% sales would do to EPS.

We were getting ready to call an in-line statement obviously bollocks, but pointedly they didn’t make one:

Sales in 2026 are expected to be more second half weighted than prior years due to the timing of certain larger orders and planned customer rollouts from May 2026

In repsonse, Shore take 10% out of revenue and say:

On lower sales, we now forecast EBITDA of £24m, a c.12% downgrade that would still represent YoY growth of 12.5%. Our pre-tax profit expectation is lower at £20.5m, whilst our adjusted fully diluted EPS is reduced by 8% to 19.9p, YoY growth of c.12%. Conservatively, we look for a flat DPS YoY, taking EPS cover up to 1.5x. We anticipate a tick up in year-end cash to £16.8m.

This seems optimistic, so don’t think we can rule out further profit warnings during the year.

They’ve increased the dividend, though, and that should protect the share price somewhat. If it drops to say £1.30, it would be on a 10% yield. It may well be worth considering that sort of level, even if the outlook is terrible, and they are setting us up for a further warning

The other obvious miss is any sign of an investor presentation. At one stage, they seemed to present almost every month at one event or another. At least whilst everything was going well.

🎵“You only sing when winning, you only sing when you’re winning, you only sing when you’re winniiiing”

That’s it for this week. Have a great weekend!

Due to the persistence of bots wasting our time with spam, http://sclv.uk/ is now the official website of Small Caps Live and the only way for new members to join. This will be instead of invites via Discord. All genuine investors are still very welcome to join in the discussions.

Here’s a selection of what we discussed this week. (Remember this is a summary of many opinions, and isn’t the view of any one commentator; check out the actual discussion on Discord if you want the nuance of the different opinions.)

Billington Holdings (BILN.L) - Final Results

Results were as expected, and certainly nothing to write home about:

Cavendish previously had 18.8p Adj. EPS, so 27.1p is a fairly big beat, but still down significantly on the previous year, and heavily reliant on the adjustments. The Yate closure costs are genuinely one-off and should be more than covered by the sale of freehold land, though.

Net cash holds up well after the closure costs, but we still have no sign of what they plan to do with this, short of making the balance sheet bulletproof. They haven’t been willing to maintain a dividend with less cover, for example.

The all-important outlook is strong, though, and means a significant recovery in 2026:

With a healthy order book, growing pipeline of opportunities and a robust balance sheet, we entered 2026 with increased confidence and expect to deliver an improved financial performance in 2026, in line with market expectations.”

Cavendish confirms this:

Forecasts: We make no change to our FY26 forecasts. We introduce FY27 forecasts, based on revenue growth of 8% to £135m and operating margins improving to 7.0% giving adj PBT of £9.5m and adj EPS of 51.3p, YoY growth of 14.5%. FY27E year-end cash is expected to increase to £28.0m.

Things like this show this is a long-term focused business doing the best for all stakeholders:

Following a consultation with the affected employees at Yate, a proportion of them have now transferred to the Group’s Barnsley facilities and I am pleased to note that over 90% of the employees we unfortunately had to make redundant have now found alternative employment, many with assistance from Billington.

The forecasts make them look very cheap, especially if they make the FY 27 numbers. However, the market rarely gives it credit for the quality of the business and the long-term focus, but as these results show, any particular year can be pretty variable in EPS, and the market rarely likes this.

They make the point that they have a close to record order book:

And if we understood their comment on the IMC presentation correctly, they have forward bought the majority of their energy needs for the next 5 years at September 2025 prices. They are still seeing delays in finalising delivery on some projects, though, which may be a risk.

Ebiquity (EBQ.L) - Final Results

Poor-looking results with negative EPS even on an adjusted basis:

However, they generated cash, and the outlook is much better:

Q1 2026 has begun encouragingly with good demand for our integrated independent expertise and secured marketing effectiveness engagements which have an aggregate contract value of more than £10 million over their three-year terms. We expect Q2 to give us greater visibility on the full year outturn while, in the meantime, we will remain committed to cost discipline and profitability while investing sustainably in proprietary technology infrastructure and embedding AI capabilities more deeply into our operating model and client offerings.

It seems tough advertising markets are a potential benefit as marketing effectiveness becomes more important.

These initiatives are making an impact. We have entered the current year with encouraging commercial momentum, with good demand for our integrated independent expertise and having secured marketing effectiveness engagements with an aggregate contract value of more than £10 million over their three-year terms.

Cavendish say the outlook is brightening, but only manages to forecast 0.46p EPS for FY2026 and 0.75p EPS for FY27, making it hard to get excited about a FY27 P/E of 16x when the company is forecast to still have close to its current market cap in net debt. The presence of a large cash balance and an even larger debt pile suggests that the average net debt is significantly above the year-end value, too.

Fintel (FNTL.L) - Strategic Simplification

Fintel has entered into a sale and purchase agreement (the "SPA") with the Purchaser, pursuant to which Fintel has sold the entire issued share capital of Gateway Surveying Services Limited ("GSS") and APS Legal & Associates Limited ("APS"), for aggregate cash consideration of up to £1 million (the "Disposal").

This is what they sold:

Together, the two businesses contribute a significant proportion of non-recurring revenues generated from a largely fixed cost base. In the 12 months to 31 December 2025, the businesses generated combined Revenue of £11.2m, and EBITDA of £0.9m

These are small numbers overall. However, for ‘strategic simplicification’, they’ve sold a business to the ex-CEO for 1 x EBITDA, and he only had to pay £0.6m up front. He should get that back by the end of the year if he doesn’t bother with any capex. Perhaps they fired the wrong joint CEO, given this deal-making?

Supreme (SUP.L) - Trading Statement

“Significantly” ahead, although this is another company where they are maybe pushing the language:

Adjusted EBITDA is guided to be c.£40.6m (FY25A £40.5m), which compares with our forecast of £36.4m, so a material outperformance on our expectations (company compiled consensus £37m)

This is a 9.7% beat on adjusted EBITDA, which would not normally be this aggressively marketed. And it merely makes results flat compared with the previous year, rather than the previously forecast decline.

Mostly seems to be driven by vaping, which is the part of the business that makes this univestable for many. However, vaping is becoming more investable as governments regulate, so for those who can hold their nose, this isn’t expensive, and management is aligned, so presumably won’t do anything daft.

That’s it for this week. Have a great weekend!

For those of you who will be in Birmingham (or close by) the day before, we will also be meeting for pre-event drinks on the evening of Tuesday, 21st April, from 7:30 pm in the Old Joint Stock. Any SCLers are welcome to join us.

Here’s a selection of what we discussed this week. (Remember this is a summary of many opinions, and isn’t the view of any one commentator; check out the actual discussion on Discord if you want the nuance of the different opinions.)

Churchill China (CHH.L) - Final Results

Slight miss on EPS: 39.7p vs 40.9p forecast, but the broker PBT forecast was for £6.0m, which they hit on the nose, so it must just be a tax difference. No adjustments here, too, so this is a clean number. The dividend is in line at 21p.

Here’s the key part on energy prices:

The outbreak of the Middle East conflict has created uncertainty in the energy markets and, as an energy intensive company, Churchill has exposure to increasing prices. The Group manages its risk exposure and is materially hedged for the year-ahead. In 2026 the Group has open exposure to circa 16% of its gas costs and has forward purchased 64% of its gas requirements for 2027. The Group has modelled the impact of rising costs under a number of scenarios and, whilst profitability would be impacted, it is anticipated that it is only in a prolonged conflict with dramatically increased pricing, that this would materially impact the expected results.

As we suspected, the market looked past the miss and took heart from the comments about hedged energy prices on the morning.

Net cash up slightly to £10.8m, meaning the 33.5p dividend paid in 2025 was effectively covered, although £2m of the positive cash flow was reduced inventory.

However, we’re not sure they will be immune to secondary effects from consumer spending being squeezed by higher fuel prices, despite saying:

The Group has continued to maintain a good level of sales in the UK given our strong market position in the pub chain sector, which tends to be less impacted by economic sentiment compared with independents…

The hospitality trade continues to be relatively buoyant, however profitability remains under pressure. This has lead to good levels of replacement business but new installations in the rest of the world have been delayed and this has caused a reduction in turnover in this area of the business.

The results narrative and hedging position were better than many of us expected. Although if 2025 performance was based on a “buoyant” hospitality trade, we’re not sure how much faith we’d put in current-year forecasts, given the macro backdrop.

Concurrent Technologies (CNC.L) - Final Results

Adj. EBITDA looks ahead of forecasts, but if this doesn’t come through to EPS, this looks pointless. Capitalised development costs were over £4m and higher than D&A, which shows how inappropriate EBITDA is as a measure here for anyone other than their bankers.

When we actually get to EPS, 5.58p EPS is a big miss against forecasts of 6.58p, although the only 7% EPS growth looks like it’s largely due to a very low tax rate in 2024:

Indeed, it is this change of tax rate that seems to have confused the broker, too. When the note arrived, they took 14% out of forward EPS and roughly 9% out of all future years.

So when the company said that 2026 is expected to be in line, this presumably isn’t actually in line with the 7.8p EPS previously forecast, but the new 7.1p.

It is easy to think that this doesn’t matter, but shareholder returns are paid from post-tax returns, and on a forward P/E of over 30, a lot of faith is being placed on the future.

Given that the company has had qualified audits in the past, and has been slow to inform the market when they miss forecasts (in our opinion), issues like this don’t build a lot of confidence that they finally have their finances under control.

Crater (CRTA.L) - Trading Statement

This company has been listed for 55 quarters! If at first you don’t succeed…

Q1FY26 cash flow positive -the first positive cash flow quarter in its reporting history

…try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try, try again.

Gulf Marine Services (GMS.L) - 2025 Financial Results

Seem reasonable progress, at least on an adjusted level:

The reduction in net debt is slowing down, but overall now looks firmly under control. This is bad news tho:

Adjusted net profit increased to US$ 41.8 million (2024: US$ 32.2 million). The Board has decided not to declare dividend at this time pending further assessment of the geopolitical situation, while reaffirming the capital allocation policy.

Shareholders have been trying to get management to pay a dividend for a couple of years now, and management has repeatedly refused, despite saying they want to.

They are still not willing to give any guidance 4 months into the year:

Previously issued adjusted EBITDA guidance between US$ 105 million to US$ 115 million for 2026 is currently being assessed due to the ongoing geopolitical situation in the Gulf region.

Anticipate continued improvement on average day rates as the legacy contracts are being renewed at higher day rates.

Although higher rates are good news, as this is the key to making these assets productive. Adjusting items include asset write-downs, which have always looked likely given the assets’ unproductive nature, and an exceptional tax charge. It still leaves them on a discount to TBV, which could close if rates continue to improve.

They say the tax charge is one-off, which it certainly is for this particular tax issue. Although their overall normal tax charge is very low, which surely can’t remain forever?

With the lack of guidance and yet another period with no shareholder returns, these results were always going to be poorly received by the market. However, we are not sure how investors didn’t expect this to be affected by their key customers being bombed. And the signs were there that they either couldn’t or wouldn’t pay a dividend when they fought the EGM that was designed to force their hand.

So these were in line with what we expected. That doesn’t mean we were keen to buy the dip, though, given the risks.

That’s it for this week. Have a great weekend and see you in Birmingham!