Author: Fiona Craig

Reckitt Benckiser (LSE:RKT) delivered stronger-than-expected first-half 2026 earnings, reporting adjusted operating profit ahead of market forecasts while announcing a new £500 million share buyback programme aimed at enhancing shareholder returns.

Adjusted operating profit declined 15% year over year to £1.46 billion, comfortably exceeding the S&P Global Visible Alpha consensus estimate of £1.40 billion. Adjusted diluted earnings per share reached 152.1 pence, also beating analyst expectations of 140.7 pence.

Revenue for the period decreased 8.1% to £6.41 billion, primarily reflecting the disposal of the Essential Home business. Adjusted operating margin narrowed by 100 basis points to 23.6%, although management noted that profitability was stronger than the company’s own internal expectations.

Alongside the results, Reckitt announced a share repurchase programme of up to £500 million, which is scheduled to be completed over the next 12 months. The company also increased its interim dividend by 5% to 88.6 pence per share.

Underlying trading remained resilient despite the headline revenue decline. Like-for-like net revenue increased 2.6% during the first half, with momentum improving in the second quarter as growth accelerated to 4.2%. The company reported stronger performance across all product categories and geographic regions.

Emerging Markets continued to lead growth, with like-for-like sales rising 8.5% in the first half. China delivered another quarter of double-digit growth, while India recorded high-single-digit gains. Trading also improved across developed markets, with Europe showing sequential progress and North America returning to positive growth during the second quarter.

Looking ahead, Reckitt reaffirmed its guidance for 2026, continuing to expect Core Reckitt like-for-like revenue growth of between 4% and 5%, alongside an adjusted operating margin in the range of 24.9% to 25.6%.

The company said lower oil prices, continued productivity initiatives and a stronger product mix in the second half are expected to support profitability, helping offset ongoing macroeconomic uncertainty and elevated raw material costs.

Weir Group PLC (LSE:WEIR) delivered stronger-than-expected first-half 2026 results, with revenue and adjusted earnings per share exceeding analyst forecasts, supported by robust order growth and particularly strong demand during the second quarter.

The engineering group generated first-half revenue of £1.269 billion, representing constant currency growth of 5% and coming in slightly ahead of the company-compiled consensus forecast of £1.262 billion. Adjusted EBITA totaled £239 million, broadly matching market expectations, while the adjusted EBITA margin was 18.8%, a decline of 100 basis points compared with the same period last year. On a reported basis, revenue increased 6% year over year.

Adjusted earnings per share reached 54.6p, surpassing the consensus estimate of 53.6p by around 2%. The performance reflected resilient demand across the company’s core markets despite a more challenging margin environment.

Order intake was a standout feature of the results, rising to £1.426 billion during the first half, 3% above analyst expectations of £1.379 billion and 8% higher than a year earlier on a constant currency basis. Weir recorded a book-to-bill ratio of 1.12x, improving from 1.01x for the full 2025 financial year. Original equipment orders increased 10% year over year, while aftermarket orders rose 8%. The Minerals division continued to perform particularly well, with orders climbing 7% and achieving a book-to-bill ratio of 1.15x.

Momentum accelerated during the second quarter, with original equipment orders in the Minerals business jumping 19%, the strongest quarterly growth recorded in two years. Aftermarket demand also reached a record level, increasing 8% over the same period. Meanwhile, the company’s Micromine software business remains on course to deliver annual recurring revenue growth of more than 25% during fiscal 2026.

Net debt increased to £1.449 billion from £1.274 billion at the end of 2025, primarily reflecting the acquisition of ESEL and the timing of cash flows. Despite the increase, the company’s net debt-to-EBITDA ratio remained at a manageable 2.2 times.

Looking ahead, Weir reaffirmed its guidance for the 2026 financial year, continuing to expect growth in constant currency revenue, adjusted EBITA and EBITA margins. The company also maintained its forecast for free operating cash conversion of between 90% and 100%, while confirming that its Performance Excellence programme remains on track to generate cumulative savings of £90 million.

Shares in Lancashire Holdings (LSE:LRE) fell 5.6% during today’s trading session to 623p after the specialist insurer reported first-half 2026 results that came in below market expectations. Earnings per share were $0.56, around 15% below analyst forecasts, while overall profit missed consensus estimates by approximately 14%. The weaker performance was largely attributed to additional reserve provisions linked to the 2024 collapse of the Francis Scott Key Bridge in Baltimore, which increased claims costs and weighed on profitability.

The impact was also reflected in the group’s underwriting performance. Lancashire reported an undiscounted combined ratio of 90.8%, around 500 basis points weaker than analysts had expected, while the discounted combined ratio reached 80.7%, missing consensus by approximately 310 basis points. Gross written premiums also declined 6.1% compared with the same period last year, highlighting slower premium growth at a time when investors had been looking for continued expansion.

Market expectations had been elevated ahead of the earnings announcement after Lancashire shares moved above their 200-day moving average during the previous trading session, a level often viewed as a positive technical signal. The disappointing financial results prompted investors to reassess the company’s near-term outlook, accelerating selling pressure following the release.

Before the announcement, the consensus analyst recommendation on the stock was “Hold,” with an average price target of around 675p. At least one major brokerage maintained a “buy” recommendation with a target price of 698p, although those valuations are likely to come under renewed scrutiny following the weaker-than-expected results. Broader market conditions offered little support, with major U.S. equity indices trading largely unchanged and the FTSE 250, where Lancashire is a constituent, providing limited assistance to sentiment.

The combination of an earnings miss, weaker underwriting performance driven by higher catastrophe reserve charges and elevated investor expectations heading into the results contributed to the sharp share price decline. Following the sell-off, the stock moved closer to the lower end of its 52-week trading range of 549p to 700p.

St. James’s Place (LSE:STJ) reported first-half 2026 results that came in ahead of market expectations, with adjusted profit after tax reaching £224 million, approximately 14% above analyst forecasts.

During the first six months of the year, the wealth manager generated net inflows of £2.7 billion, broadly in line with consensus estimates. Funds under management increased to £240.8 billion, exceeding analyst expectations by around 2%, while the client retention rate improved by 10 basis points year over year to 95.4%.

The company also announced a £128 million share buyback programme, consisting of a £45 million ordinary repurchase alongside an additional £83 million buyback funded through the release of a provision. St. James’s Place maintained its interim dividend at the level anticipated by the market.

At 30 June, the business employed 4,951 advisers, an increase of 17 compared with the end of 2025 but one fewer than a year earlier. Management reaffirmed its expectation that adviser numbers will remain broadly stable over the full year.

Adjusted profit also benefited from a lower effective tax rate of 19%, compared with 23% during the same period last year. Operating expenses remained well managed, although the company noted that a greater proportion of planned investment spending will fall in the second half of 2026.

During the period, St. James’s Place introduced changes to the timing of partner remuneration, moving from annual to monthly payments. The company said the adjustment would not affect the parent company’s profit and loss account, stating, “this change will not affect the parent company’s profit and loss statement, as market risk is hedged and there is no net interest income benefit from retaining cash for a year.”

Elsewhere, pension inflows were below historical levels, while unit trust and ISA products continued to attract healthy investor demand throughout the first half.

Aberdeen Group (LSE:ABDN) reported a 21% increase in adjusted operating profit to £151 million for the first half of 2026, supported by modest revenue growth and continued cost discipline. Net capital generation rose 47% to £163 million, while the group’s capital position strengthened, with total capital coverage improving to 229%. Management reaffirmed its full-year guidance, targeting at least £300 million in adjusted operating profit and approximately £300 million in net capital generation for 2026.

Interactive investor was the strongest-performing division during the period, with adjusted operating profit rising 18% to £84 million and net operating revenue increasing 22%. The platform attracted record net inflows of £6.8 billion, while customer numbers grew 14% to 525,000 and cash balances increased significantly. Although the business continued investing in technology and brand development, it also improved operating efficiency relative to assets under administration, reinforcing Aberdeen’s strategy of expanding its presence in the UK direct-to-consumer investment market.

The Adviser division generated adjusted operating profit of £41 million, broadly unchanged from the previous year, on slightly higher revenue. However, it continued to experience difficult net flow conditions, recording £1.3 billion of net outflows despite stronger gross inflows. To address this, the company appointed a new chief executive for the business, aiming to convert recent improvements in customer service and product offerings into stronger commercial performance. Client satisfaction also improved during the period, as reflected by higher net promoter scores.

Within the Investments division, adjusted operating profit increased 9% to £38 million as cost savings and transformation initiatives more than offset a modest decline in net operating revenue. Investment performance also improved, with 86% of assets outperforming their benchmarks over three years, comfortably exceeding the company’s 70% target. The business experienced net outflows of £5.6 billion, excluding liquidity products, largely due to withdrawals from lower-margin equity strategies. These were partly offset by inflows into fixed income and real assets, while recent acquisitions are expected to contribute more meaningfully to earnings during the second half of the year.

Looking ahead, Aberdeen expects interactive investor to continue growing in line with customer acquisition while maintaining improving cost efficiency. The Adviser business is forecast to deliver broadly stable profitability in the second half as efforts continue to restore positive net flows, while the Investments division is expected to benefit from acquisitions and improved market conditions. Management continues to target medium-term annual growth in net capital generation of between 5% and 10%, supported by the group’s recent return to the FTSE 100 and strengthening operational momentum.

Aberdeen’s outlook is underpinned by improving profitability, stronger cash generation, low leverage and a healthier balance sheet. Positive technical indicators also support the investment case, while the company’s valuation remains attractive thanks to a modest price-to-earnings ratio and an appealing dividend yield. Continued pressure on adviser flows, potential margin compression and near-term investment outflows remain the principal risks.

About Aberdeen Group

Aberdeen Group PLC is a UK-based asset and wealth management company operating across retail investing, financial advice and institutional investment management. Its core businesses include interactive investor, a digital investment platform serving individual investors, an Adviser division supporting financial advisers, and an Investments business managing multi-asset, fixed income, real assets and specialist investment strategies for clients around the world.

The company focuses on growing assets under management and administration, improving investment performance and increasing capital generation, with particular emphasis on expanding its direct-to-consumer business and specialist investment capabilities. Its recent return to the FTSE 100 reflects its scale within the UK financial services sector.

Aberdeen generates recurring income through platform subscriptions, investment management fees and treasury activities while maintaining a disciplined approach to cost management and capital allocation. The group’s strategy combines operational efficiency, balance sheet strength and targeted investment to support sustainable long-term growth and consistent shareholder returns.