Author: Fiona Craig

Elementis PLC (LSE:ELM) reported first-half 2026 results that exceeded market forecasts, with higher revenue, profit and earnings per share supported by continued momentum across both its Personal Care and Coatings businesses.

Revenue increased to $318.2 million during the period, representing organic growth of 4.7% at constant currency compared with the same period last year. The result was above both the Jefferies forecast of $317.8 million and the broader market consensus of $314.4 million, while also marking an improvement from the 2% organic growth recorded in the first quarter.

Earnings Outperform Analyst Forecasts

Adjusted EBIT reached $73.2 million, comfortably exceeding both Jefferies’ estimate and the consensus forecast of $70.6 million. Diluted adjusted earnings per share also came in ahead of expectations at 8.5 cents, compared with the Jefferies estimate of 7.8 cents.

The company said the stronger performance reflected improving demand across its core markets and continued operational execution.

Coatings and Personal Care Drive Growth

Elementis’ Personal Care division generated revenue of $109.2 million, delivering organic growth of 2.9% year over year. Adjusted EBITA for the segment rose to $41.6 million, while the operating margin improved by 30 basis points to 38.1%.

The Coatings business delivered an even stronger performance, with revenue increasing organically by 5.6% to $209.0 million. Adjusted EBITA climbed to $43.2 million, and the division’s margin expanded by 250 basis points to 20.7%.

Outlook Remains Positive

Elementis ended the first half with net debt, excluding pensions and lease liabilities, of $163.8 million, equivalent to a net debt-to-EBITDA ratio of 1.1 times.

Looking ahead, the company expects full-year 2026 adjusted EBITA to be in line with current market expectations of $135.2 million. Management said a strong third-quarter order book provides confidence in the outlook, although it continues to monitor the potential impact of the Middle East crisis on global demand, raw material costs and supply chain conditions.

Mondi plc (LSE:MNDI) reported second-quarter EBITDA ahead of market expectations on Thursday and lowered its capital expenditure guidance for the year, while highlighting improving trading conditions during the first half of 2026.

The packaging and paper group generated EBITDA of €167 million in the second quarter, including a negative €43 million fair value adjustment related to its forestry assets. The result was above the Bloomberg consensus forecast of €160 million.

Capital Expenditure Guidance Reduced

Mondi revised its maintenance spending outlook lower, reducing expected expenditure for the year to €80 million from its previous guidance of €100 million. After investing €20 million during the first half, the company expects to spend the remaining €60 million in the second half of 2026.

The group also cut its capital expenditure guidance to between €500 million and €550 million, compared with previous expectations of around €550 million.

Meanwhile, finance cost guidance was left unchanged at €125 million, while depreciation and amortization guidance was lowered to €475 million from the previous range of €515 million to €525 million.

Pricing Actions Support Improving Trading Conditions

Mondi said business performance strengthened throughout the first half of the year as pricing initiatives helped offset rising input costs, particularly higher wood prices in Central Europe and increased energy expenses.

The company expects the full earnings benefit from recent price increases in corrugated packaging and industrial bags to be realized during the second half of 2026 due to the normal delay between price implementation and financial impact. Additional pricing measures are also planned for September.

Impairments Weigh on Results

During the period, Mondi recognized total impairments of €296 million.

The largest charge was a €206 million impairment related to its new Duino mill in Italy, which has annual production capacity of 420,000 tonnes and is currently increasing output. The company invested €240 million in capital expenditure and acquisition costs for the project.

A further €39 million impairment was recorded against Mondi’s office paper mill in Austria.

Germany remains one of Mondi’s largest markets, accounting for approximately 18% of group sales, while between 15% and 18% of revenue is generated from customers in the building and construction sector.

Drax PLC (LSE:DRX) maintained its full-year 2026 earnings outlook after reporting first-half adjusted EBITDA of £279 million. The result was down 39% from the same period last year and came in slightly below analyst expectations of £289 million, primarily due to weaker-than-expected performance from its Biomass Generation business.

The Biomass Generation division reported adjusted EBITDA below market forecasts, while the company’s Pellet Production operations performed in line with expectations during the period.

Pellet Production Meets Expectations

Drax produced 1.9 million tonnes of wood pellets during the first half of 2026, with Pellet Production delivering earnings broadly in line with analyst forecasts.

The company said first-half performance leaves it on track to achieve full-year adjusted EBITDA consistent with current market expectations. Drax continues to expect 2026 adjusted EBITDA of around £665 million, within the analyst consensus range of £643 million to £681 million.

New 2029 Growth Targets Announced

Alongside its interim results, Drax introduced an upgraded medium-term earnings target, forecasting adjusted EBITDA of between £650 million and £800 million by 2029.

The new target excludes any potential contribution from the proposed BSIF acquisition and represents an increase from the company’s previous guidance of £600 million to £700 million. The revised outlook incorporates expected earnings from its expanding Batteries and Battery Energy Storage Systems (BESS) operations.

Management expects the Batteries/BESS business to contribute between £50 million and £100 million of EBITDA by 2029. Current analyst forecasts estimate approximately £627 million of EBITDA for 2029 on a like-for-like basis, including around £50 million from the BESS division.

Strong Balance Sheet Supports Growth Plans

Drax ended the first half with net debt equivalent to 1.3 times EBITDA, reflecting a relatively conservative leverage position. The company also reported available liquidity of £630 million through cash reserves and committed credit facilities, providing financial flexibility to support future investment and strategic growth initiatives.

Rentokil Initial PLC (LSE:RTO) shares fell almost 17% on Thursday after the pest control specialist warned of softer demand in its North American residential business, overshadowing second-quarter earnings and revenue that came in ahead of market expectations.

By late morning in London, the stock was down 17.1% at 367.5 pence, making it one of the weakest performers on the FTSE 100 and marking its lowest level since September 29, 2025.

Second-Quarter Results Exceed Expectations

Rentokil reported adjusted profit before tax of $459 million for the second quarter, comfortably ahead of the S&P Global Visible Alpha consensus forecast of $442.7 million. Revenue increased 6.7% year over year to $3.59 billion, also surpassing analyst expectations of $3.56 billion.

The stronger earnings performance was supported by improved margins across the pest control business, particularly in North America, where profitability increased despite slower sales growth.

Slowing U.S. Residential Demand Raises Concerns

Despite the earnings beat, investors focused on signs of weakening demand in Rentokil’s largest market. Organic growth in the North American pest control business slowed to 2.4% during the second quarter, down from 2.8% in the first quarter.

Management also warned of “some weakness in North America residential lead flow towards the end of Q2 and into July.”

The comments mirrored recent caution from U.S. competitor Rollins and prompted concerns that growth could weaken further during the second half of the year.

Full-Year Guidance Maintained

Despite softer residential demand in North America, Rentokil reaffirmed its expectation that full-year results will be in line with current market forecasts, indicating that stronger performance in other parts of the business should help offset weakness in the U.S. residential segment.

Current market expectations point to full-year revenue of approximately $7.3 billion, adjusted profit before tax of $972 million and an adjusted EBITA margin of 16.3%.

Analysts at Jefferies described the quarterly results as encouraging but said investors are likely to remain focused on the outlook for U.S. pest control demand, which could continue to weigh on sentiment even after the stronger-than-expected earnings performance.

Magnum Ice Cream (LSE:MICC) reported stronger-than-expected first-half core earnings on Thursday, supported by ongoing cost-saving initiatives introduced following its separation from Unilever in December. The company also said momentum has continued into the crucial summer trading period.

Second-quarter 2026 sales of Ben & Jerry’s increased 9.2%, outperforming the wider North American ice cream market while continuing to gain market share, according to the company.

“Our key summer selling season got off to a strong start,” CEO Peter ter Kulve said in a press release. “We grew and gained share in all regions, including the U.S., our biggest market.”

Summer Trading and Cost Savings Support Performance

Magnum said its first-half earnings benefited from lower supply chain costs and savings generated through its corporate transformation programme, helping improve profitability following the spin-off.

The company’s adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) increased to €880 million ($1.0 billion), compared with €853 million in the same period last year. The result exceeded the analyst consensus forecast of €843 million compiled by the company.

Spin-Off Performance Remains Under Scrutiny

Since its Amsterdam listing, Magnum Ice Cream has attracted investor attention as the first major test of its ability to accelerate growth as an independent business. The company is seeking to strengthen sales of brands including Magnum, Cornetto and Ben & Jerry’s while navigating changing consumer preferences.

The business also faces a shifting market environment as the growing popularity of GLP-1 weight-loss drugs influences eating habits, while the Trump administration’s “Make America Healthy Again” campaign continues to shape the consumer health debate in the United States.

Primary Health Properties PLC (LSE:PHP) reported a strong set of first-half 2026 results, with higher rental income and earnings driven by its merger with Assura and the continued resilience of its £6.0 billion healthcare property portfolio. The company, which focuses on healthcare real estate across the UK and Ireland, also made significant progress in reducing costs, strengthening its balance sheet and enhancing shareholder returns.

Net rental income increased substantially during the six months ended June 30, while adjusted earnings also rose sharply as the benefits of the Assura combination began to flow through. The portfolio continued to deliver stable performance, supported by high occupancy levels, long-term leases and a tenant base that is largely backed by government-funded healthcare organizations.

Merger Synergies and Debt Refinancing Progress

PHP said it has already delivered approximately 92% of its targeted annual cost synergies from the Assura acquisition, helping reduce its operating cost ratio to one of the lowest among UK real estate investment trusts.

The company also completed several strategic initiatives aimed at strengthening its financial position. These included establishing major joint ventures to recycle capital and lower leverage, as well as refinancing £1.2 billion of debt facilities. Management said these actions have improved financial flexibility while preserving the value of the group’s property portfolio.

Dividend Growth Continues

The board increased the company’s dividend for the 30th consecutive year, extending one of the longest records of annual dividend growth in the UK listed property sector.

Management said the combination of stable government-backed rental income, operational efficiencies and disciplined capital management positions PHP to continue generating reliable income and long-term value for shareholders.

Investment Outlook

Primary Health Properties continues to benefit from an attractive valuation, supported by a relatively high dividend yield and a moderate price-to-earnings ratio. However, investors remain mindful of higher leverage following the Assura acquisition, while free cash flow weakened significantly during 2025. Technical indicators also remain subdued, with the shares trading below key moving averages and momentum remaining negative. Even so, the company’s resilient healthcare property portfolio and consistent income profile continue to underpin its long-term investment appeal.

About Primary Health Properties

Primary Health Properties PLC (LSE:PHP) is a UK-listed real estate investment trust specializing in healthcare properties across the UK and Ireland. Its portfolio includes primary care centres, private hospitals and other healthcare facilities, with approximately 76% of rental income supported by government-backed tenants and long-term lease agreements.

Following its merger with Assura, the company has expanded its scale while improving operational efficiency through cost synergies and capital recycling initiatives. PHP remains focused on delivering dependable rental income, maintaining a strong balance sheet and providing shareholders with sustainable, progressive dividend growth through investment in essential healthcare infrastructure.

Greencoat UK Wind (LSE:UKW) reported a strong first half of 2026, with its portfolio generating 3,003 GWh of electricity, exceeding budget by 4.9%. The higher output helped drive net cash generation of £222 million and produced dividend cover of 1.9 times.

Net asset value at the end of the period stood at £2.9 billion, equivalent to 134.1 pence per share. Despite delivering a total shareholder return of 9.2% during the first half, the company’s shares continued to trade at a significant discount to net asset value.

Debt Refinancing Strengthens Financial Position

The company refinanced £200 million of debt due to mature in 2026, replacing it with new long-term facilities that extend to between 2032 and 2034. Total group debt was also reduced to £2.07 billion, further strengthening the balance sheet.

Greencoat UK Wind said its capital allocation strategy remains focused on increasing inflation-linked shareholder returns while continuing to reduce debt and selectively invest in additional renewable energy assets that can support future cash generation.

Dividend Target Increased

The board reaffirmed its commitment to growing shareholder income by raising its 2026 dividend target to 10.7 pence per share. A second-quarter dividend of 2.68 pence per share has been declared, bringing total dividends relating to the first half of the year to 5.36 pence per share, representing total distributions of £115.7 million.

Management said the current 24.2% discount between the share price and net asset value reflects wider pressures affecting the renewable infrastructure sector, including higher interest rates and policy uncertainty, rather than any deterioration in the company’s underlying business. The board believes improving market conditions and a healthy pipeline of investment opportunities could help unlock long-term shareholder value.

Investment Outlook

Greencoat UK Wind continues to benefit from reliable cash generation, moderate leverage and an attractive dividend yield, making it appealing to income-focused investors. However, recent earnings volatility, weaker profitability and the absence of free cash flow during 2025 have weighed on investor sentiment. Technical indicators also remain subdued, with the shares trading below longer-term moving averages. Even so, the company’s strong operational performance and disciplined capital allocation strategy provide support for its long-term outlook.

About Greencoat UK Wind

Greencoat UK Wind PLC (LSE:UKW) is a listed renewable infrastructure investment company focused on owning and operating UK wind farms. Its objective is to provide investors with sustainable, inflation-linked income through ownership of operational renewable energy assets while supporting the UK’s transition to cleaner electricity generation.

Since its launch, the company has distributed approximately £1.5 billion in dividends and reinvested around £1.1 billion of surplus cash into additional renewable energy projects. Its investment strategy prioritizes growing shareholder distributions, maintaining a strong balance sheet and selectively expanding its portfolio to preserve long-term cash generation and support future returns.

Brave Bison (LSE:BBSN) has submitted an improved takeover proposal for System1 Group PLC, seeking to acquire all outstanding shares it does not already own and create what it describes as AIM’s leading challenger in the marketing technology and data analytics sector.

The offer values System1 at approximately £43.1 million, or 327 pence per share, and will be financed entirely through a senior debt facility, with no new equity issuance required. Shareholders would receive a combination of cash and Brave Bison shares under the proposed transaction.

Combined Business Targets Greater Scale

If completed, the acquisition would create a business with pro forma net revenue of approximately £79 million and adjusted EBITDA of £14 million. Brave Bison believes the enlarged group would also benefit from cost synergies through the consolidation of corporate functions, property and IT infrastructure.

Management said the increased scale would enable the combined company to invest more heavily in product development, strengthen its artificial intelligence capabilities and compete more effectively with larger rivals in the marketing technology industry.

The company also believes the larger business could benefit from improved share liquidity and broader index inclusion, potentially increasing its appeal to investors.

Strategy Focuses on AI and Platform Growth

Brave Bison said the proposed acquisition would bring together complementary businesses with recurring, high-margin platform revenue streams and AI-driven marketing technologies. The group believes the combination would create a more diversified business capable of serving a broader range of global clients while attracting additional talent and accelerating innovation.

Investment Outlook

Brave Bison has strengthened its financial position in recent years through improving revenue growth, a return to profitability and relatively low leverage. Positive technical indicators also reflect the company’s recent share price momentum. However, the shares continue to trade on a relatively high valuation, while earnings and cash flow have shown some volatility, leaving investors focused on whether recent improvements can be sustained over the longer term.

About Brave Bison

Brave Bison Group PLC (LSE:BBSN) is a UK-based digital media and marketing technology company providing data-led advertising, social media, content production and AI-enabled marketing services. The company works with more than 700 clients across the UK, Europe and the United States, offering technology-driven marketing solutions with a diversified customer base.

System1 Group PLC operates in the marketing research and analytics sector, developing platform-based tools that help brands measure and improve advertising performance. Its AI-powered products and scalable, high-margin software platform complement Brave Bison’s existing capabilities, supporting the strategic rationale behind the proposed acquisition.