Strong H1 and forecasts upgraded

H1 results released today confirm the positive trajectory indicated in recent newsflow. Vertu had a strong H1, achieving record revenues of £2596.5m, just ahead of H1 FY26. Adjusted PBT of £23.8m was some 19% above the prior year as Gross Profit grew across the business. The new car market is demonstrating good growth, including a rebalancing towards (higher margin) private sales. Management actions in expanding into older vehicles and continuing investment in technology are showing benefits, whilst Vertu is gaining representation with the Chinese brands. The results disclose that the full results for the year ending 28 February 2027 are now expected to be ahead of current market expectations. We have adjusted our forecasts again to reflect the positive news.

Strong H1 and forecasts upgraded

Today’s trading and strategic update for the 12 months ending 30 September discloses that revenues and earnings for the 15m ending Dec 26 are expected to be below management and market expectations with a range for revenue of £47.0m to £51.0m and for adjusted EBIT loss of £-0.5m to £-3.9m. Our previous forecasts were £56.5m and profit £3.0m respectively. For FY27 the revenue is also now expected to be lower than market expectations whilst, as a result of the more assertive action on costs, adjusted EBIT is now expected to be at or above current market expectations of £3.5m. The principal reasons cited for the lower than expected revenue are changes in Vicon’s established end markets, research funding pressure, delays to major projects in IVMS and uncertainty regarding a few sizeable Vicon contracts.

Trading update – familiar challenges

EARNZ yesterday evening announced H1 results to 30 June 2026, showing a 79% increase in revenue to £8.4m and a small EBITDA loss of £0.4m. The ‘buy and build’ energy services group also announced the conditional acquisition of certain assets of profitable London-based GEM Environmental Services for a maximum consideration of £23.6m over two years. EARNZ expects it to be earnings accretive in the first full year of ownership and a ‘step change’ in building a ‘c.£130m turnover business with a double digit EBITDA margin’.

‘Step change’ deal announced

Nexus Infrastructure has indicated in its year-end trading update that it expects a loss for the 12 months to 30 September, against expectations of a modest profit, primarily reflecting ‘the continued challenging market backdrop’, impacting most leading housebuilders. Although the group, which delivers ‘front-end’ earthworks to the development and utilities sector, should be an early beneficiary of an upturn in construction activity, it ‘has remained focused on operational efficiency, cost discipline and cash management’. As such, the Board has removed the CEO position.

Building slowdown prompts cost-cutting drive

STB’s recent announcement of the second tranche of its £10 million share buyback programme provides confidence in its current capital position and future capital generation. We forecast a 13.4% FY26E CET1 ratio, climbing to 13.8% and 14.4% in FY27E and FY28E. Adjusting forecasts for a 13% required CET 1 ratio we forecast a Return on Required Equity – continuing businesses – adjusted, of 13.0% for FY26 rising to 15.4% in FY27, and 16.5% in FY28 providing options for capital redeployment and distribution.

Focus on Return on Required Equity

As a continuing part of its refreshed strategy to ‘climb the value chain’, leading structural steel specialist Severfield has bolstered its senior management team with the appointment of Terry Fitzmaurice as Chief Commercial Officer. We believe this will further sharpen client and partnership focus as part of its plan for higher margins and returns.

Senior hire reinforces refreshed strategy

In a trading update ahead of the group’s AGM, SDI reports that it has continued to see positive momentum in the first few months of the current financial year. Good organic growth has been assisted by strong contributions from businesses added more recently to the portfolio. The group expects to deliver FY27 results in line with market expectations, highlighting a resilient performance despite broader macroeconomic challenges. We remain confident long term given SDI’s successful ‘buy and build’ model, particularly given recent delivery on the group’s acquisition strategy, gaining complementary businesses with strong niche positions and international reach.

AGM; Current trading in-line

Ahead of Friday’s AGM, Accsys Technologies has released a trading update confirming FY27E underlying group EBITDA will be ‘broadly in line with market expectations’, on lower revenue but improved margins. However, it guides that destocking by distributors, especially in its US JV, prompted by fears over inflation from the Middle East conflict, means that adjusted EBITDA, which proportionately includes the JV contribution, will be lower than expected. We have reduced our estimates for FY27E and FY28E, but maintain them for the rest of the period, in the expectation that the pioneering timber product group’s strong growth trajectory will recover.

Growth temporarily held as distributors destock

EARNZ, launched in 2024 by the highly experienced team behind Mears and Sureserve, has embarked on a ‘buy and build’ strategy to improve the energy efficiency of UK homes and commercial buildings. Its current five businesses already offer a broad but complementary suite of services including heating maintenance and installation as well as insulation. Much of this is supported by large government programmes to tackle fuel poverty. The group intends to continue acquisitions, building critical mass in a fragmented market, which offers significant longterm growth, we believe.

Buy and build growth path to aid energy crisis

Oxford Metrics yesterday announced the acquisition of Captive Devices a specialist in markerless motion capture of facial expressions and movements. The total consideration is for up to £750,000, made up, subject to the usual adjustments, of £250k cash, £300k shares and £200k cash contingent. Founded in 2024 by experienced gaming industry professionals, Captive Devices has already achieved sales to major studios. The deal adds an exciting new set of products, solutions and knowhow to Vicon, whilst providing Captive Devices with access to Vicon’s market leading international customer base.

Acquisition highlights market evolution

Watkin Jones highlights its continued diversification strategy in the face of rental sector challenges in today’s update for the year to 30 September 2026. As stated in its Q3 update, a small number of transactions had the potential to complete in Q4, but the Board now concludes it is unlikely that all of them will be finalised by the year-end, with the FY26E adjusted operating profit likely to match the first half. However, net cash should exceed the £61m at the half year and the group remains ‘well positioned to capitalise on the attractive long-term fundamentals’ of private rental.

FY outlook dependent on transaction timing

The trading update released today provides encouraging news. Both new and used vehicles are performing well and ‘Value Cars by Vertu’ has been launched successfully. The portfolio exposure to leading Chinese brands is building; the focus on costs is a constant. Management welcomes the government consultation on the ZEV mandate, albeit with a note of caution. Orders for the July-September quarter ahead of the September plate change give management the confidence to anticipate FY27 results ahead of market expectations, and we raise our FY27 adjusted PBT estimate accordingly.