Blog

Babcock International Group (LSE:BAB) shares swung sharply on Tuesday after the defence contractor missed out on a major Swedish naval contract to France’s Naval Group.

The stock initially dropped around 3% following the announcement but later recovered those losses to trade broadly flat as investors reassessed the impact of the decision.

Sweden confirmed it will acquire four frigates from Naval Group in a deal valued at 40 billion Swedish crowns, equivalent to roughly $4.25 billion. Frigates are multi-role warships used in a range of naval defence and security operations.

Babcock had been competing for the contract, making the outcome a setback for the UK defence group’s ambitions in the European naval market. Investor sentiment weakened immediately after Sweden selected the French contractor, although the share price later stabilised.

The decision highlights intensifying competition across the European defence sector as governments increase military spending and modernise naval fleets amid heightened geopolitical tensions.

More about Babcock International Group

Babcock International Group is a British defence and engineering services company providing support across naval, military, aviation and nuclear sectors. The group works closely with government and defence customers in the UK and internationally, with operations focused on critical infrastructure, fleet support, training and complex engineering services.

Diploma (LSE:DPLM) shares rose more than 5% after the specialised distribution group delivered stronger-than-expected first-half results and raised full-year guidance for the second time this year.

Revenue increased 17% to £851.1 million in the six months to March, while adjusted operating profit climbed 33% to £208.9 million, slightly ahead of market expectations of around £206 million.

The group’s adjusted operating margin expanded by 300 basis points to 24.5%, supported by operating leverage, strong execution and favourable trading conditions across key end-markets.

Adjusted earnings per share rose 36% to 109.2 pence, while the interim dividend was increased 5% to 19.1 pence per share. Return on average trading capital employed improved by 360 basis points to 22.7%.

The Controls division delivered the strongest performance, recording 26% organic growth and margin expansion of 430 basis points to 33.5%. Organic growth in Seals reached 2%, while the Life Sciences division reported 4% growth.

Following the strong first-half performance, Diploma upgraded its full-year outlook for the second time in two months. The company now expects organic revenue growth of 12%, compared with previous guidance of 9%, while the anticipated contribution from acquisitions has been increased to 6% from 3%.

Management maintained its adjusted operating margin forecast at around 25% and said the revised outlook implies roughly a 6% upgrade to consensus adjusted operating profit expectations of £428 million.

“This is another strong update from Diploma, highlighting the strong momentum in the business,” Stifel analyst Sam Dindol commented. “The shares are trading on a one-year forward P/E of c.29.3x, slightly above the five-year average and within the range of quality compounding peers. We are Buyers and see upside from further compound growth.”

More about Diploma

Diploma PLC is an international specialised distribution group supplying products and services across the Controls, Seals and Life Sciences sectors. The company focuses on technically demanding applications and operates through a decentralised model serving customers across industrial, healthcare and infrastructure markets.

SSP Group Plc (LSE:SSPG) reported a 9.3% increase in first-half underlying operating profit but said conflict in the Middle East has slowed sales momentum at the start of the second half.

The travel food and beverage operator said like-for-like sales growth eased to 3% during the opening weeks of the second half, compared with 5% growth sustained across both quarters of the six months ended 31 March.

Underlying pre-IFRS 16 operating profit rose to £50 million from £45 million a year earlier on an actual currency basis. Revenue increased 6.2% at constant currency to £1.76 billion, supported by 5% like-for-like sales growth and 1.2% growth from net new space.

Chief Executive Patrick Coveney said, “This has been a period of resilience and progress for SSP,” adding that the group’s “geographically diversified business model and disciplined operational execution” had supported performance against “a challenging backdrop for the global travel sector.”

The company said like-for-like sales growth in Asia Pacific and EEME weakened sharply from 14% in March to 0% in the first weeks of the second half, with Gulf operations running at roughly 60% of normal trading volumes. The affected region accounts for around 2% of group sales.

SSP maintained full-year guidance, forecasting underlying earnings per share of between 13.6 pence and 14.8 pence after buybacks, based on current foreign exchange rates and assuming no significant deterioration in trading conditions through the remainder of the year.

Operating profit margin improved by 10 basis points to 2.8% on a pre-IFRS 16 basis.

Regionally, North America delivered underlying pre-IFRS 16 operating profit of £28.3 million, representing growth of 17.4% at actual exchange rates. Continental Europe reduced its operating loss to £8.7 million from £12.1 million a year earlier.

The UK division generated £22 million of operating profit, down 6% year-on-year due partly to insurance proceeds and compensation payments received in the prior period. Asia Pacific and EEME contributed £35.3 million, up 3.8% at actual exchange rates.

The company also confirmed it has completed around 60% of its £100 million share buyback programme, equivalent to approximately 4% of issued share capital as of 15 May.

An interim dividend of 1.6 pence per share was declared, compared with 1.4 pence a year earlier.

Free cash outflow before dividends and buybacks totalled £176 million, including a working capital outflow of £123.8 million and capital expenditure of £92.7 million, which was lower than the prior-year level of £130.1 million.

Net debt on a pre-IFRS 16 basis stood at £819.8 million, with leverage measured at 2.2 times EBITDA, above the company’s target range of 1.5 to 2.0 times.

SSP also announced plans to exit roughly one-third of its Continental European Rail estate, which currently comprises around 330 units. The company intends to focus on larger, higher-density locations, with the closures expected to begin mainly during the 2027 financial year.

More about SSP Group Plc

SSP Group Plc operates food and beverage outlets in travel locations including airports and railway stations across multiple international markets. The group partners with a range of global and local brands and serves customers through a geographically diversified network spanning North America, Europe, Asia Pacific and the Middle East.

Crest Nicholson (LSE:CRST) has postponed the release of its half-year results until 16 July as the UK housebuilder continues discussions with lenders regarding a temporary easing of its banking covenants.

The company previously reduced its annual profit guidance amid ongoing pressure from higher interest rates and rising construction costs, which have weighed on confidence across the housing market.

Earlier this year, Crest Nicholson warned that under a severe market downturn scenario it could breach its interest-cover covenant as early as April.

Management said discussions with lenders are “progressing constructively” and are expected to conclude by mid-July.

The delay comes as UK housebuilders continue to face weaker housing demand, elevated financing costs and pressure on margins across the residential construction sector.

More about Crest Nicholson

Crest Nicholson Holdings plc is a British residential property developer focused on building mixed-tenure communities across England. The company develops a range of homes for private buyers, affordable housing providers and institutional partners, with operations concentrated in the South of England and the Midlands.

Jadestone Energy (LSE:JSE) reported record production for 2025 of 19,829 barrels of oil equivalent per day, supported by higher liftings, improved operational performance and a 19% reduction in production costs. The company also recorded stronger safety metrics and a 20% increase in adjusted EBITDAX during the year.

Despite the improvement in underlying cash flow and lower net debt levels, Jadestone posted a net loss after tax of US$110.7 million, largely due to an impairment charge of US$88.2 million. The group also completed the monetisation of its interest in the Sinphuhorm asset while continuing to maintain progress across its reserves and resources portfolio.

In early 2026, the company further strengthened its financial position through the issuance of a heavily oversubscribed US$200 million Nordic bond. Proceeds from the financing were used to refinance Jadestone’s reserves-based lending facility, helping significantly reduce net debt by April.

Operationally, Jadestone advanced the Nam Du/U Minh gas project in Vietnam after securing development approval and finalising a gas sales agreement. However, the company also highlighted temporary production challenges linked to cyclone damage at the Stag field and maintenance-related downtime at the Okha FPSO. Management said these disruptions are not expected to materially affect full-year guidance, which remains unchanged.

The company’s broader outlook continues to be constrained by weak financial metrics, including declining revenue trends, negative profitability, elevated leverage and negative cash flow generation. Technical indicators remain mixed but generally soft, with the shares trading below short-term moving averages and momentum indicators remaining subdued. A relatively low price-to-earnings valuation provides some offset to these pressures.

More about Jadestone Energy Inc

Jadestone Energy PLC is an independent upstream oil and gas company focused on the Asia-Pacific region, with producing and development assets across Australia, Vietnam, Malaysia and Thailand. The group specialises in offshore oil and gas operations and aims to generate resilient cash flow through a diversified portfolio exposed largely to Brent-linked pricing.

Tern plc (LSE:TERN), the AIM-listed investor focused on Internet of Things technology companies, has raised £222,000 through an equity placing involving the issue of 37 million new ordinary shares at a price of 0.60 pence each.

The fundraising follows the company’s earlier open offer and utilises most of the remaining share issuance authority approved by shareholders at Tern’s recent general meeting.

Management said the net proceeds will be used for the same strategic purposes outlined in connection with the previous open offer, with additional details on the allocation of funds from both capital raises expected in due course.

Admission of the new shares to trading on AIM is anticipated around 22 May 2026. Following admission, Tern’s total issued share capital will increase to 855,543,681 ordinary shares. While the placing results in modest dilution for existing shareholders, it also strengthens the company’s funding position as it continues supporting its portfolio of IoT-focused businesses.

The company’s broader outlook remains weighed down by weak financial performance, including a sharp decline in revenue, ongoing losses and negative operating and free cash flow generation. Technical indicators also continue to reflect a longer-term downtrend, although some early signs of oversold stabilisation have emerged. Valuation remains difficult to justify given the absence of earnings and lack of dividend support.

More about Tern plc

Tern plc is an AIM-listed investment company focused on Internet of Things and connected device technologies. The group invests in and supports early-stage technology businesses operating across IoT-related markets, aiming to build long-term shareholder value through portfolio development and strategic growth initiatives.

Luceco plc (LSE:LUCE) reported a strong opening quarter for 2026, with revenue rising approximately 11% year-on-year by around £68 million. Growth was supported by broad-based demand across the group’s core product portfolio and continued momentum in energy transition-related markets.

Electric vehicle charging remained one of the company’s fastest-growing segments, with revenue in the category increasing by around 80%. Luceco said more than 18,000 EV chargers are now connected to demand flexibility programmes, strengthening its position within the expanding electric vehicle infrastructure market.

The group said disciplined pricing actions helped offset higher commodity costs during the quarter. Meanwhile, bank net debt declined to roughly £66 million, with leverage improving to approximately 1.4 times EBITDA, leaving the balance sheet comfortably within management’s target range and supporting further investment activity and bolt-on acquisitions.

Following trading ahead of expectations and resilient demand across key product categories and geographic markets, Luceco upgraded its outlook for full-year 2026 adjusted operating profit to above £40 million. Management said the improved guidance reflects increased confidence in the company’s growth trajectory despite continuing macroeconomic and geopolitical uncertainty.

The company’s broader outlook is supported by improving financial performance, particularly a strong recovery in cash flow generation and higher operating profit. Valuation metrics also remain attractive, with a relatively low price-to-earnings ratio combined with dividend support. Technical indicators remain positive due to a strong share price trend, although elevated RSI and stochastic readings suggest momentum may be becoming overextended in the near term.

More about Luceco plc

Luceco plc is a UK-listed designer and manufacturer of residential and commercial electrification products and systems. Its portfolio includes wiring accessories, LED lighting, electric vehicle chargers and portable power products, distributed through professional, wholesale and retail channels across multiple international markets.

Avacta (LSE:AVCT) reported continued progress across its oncology pipeline during 2025, advancing multiple generations of its proprietary pre|CISION platform. The company said AVA6000 and AVA6103 are now in clinical development, while AVA6207 continues to advance through preclinical dual-payload studies.

Management highlighted encouraging efficacy and cardiac safety data from AVA6000, alongside the launch of the FOCUS 01 Phase 1 trial for AVA6103, which is targeting six advanced cancer indications. The company also reported ongoing expansion of its intellectual property portfolio, particularly around sustained-release and dual-payload delivery technologies.

Avacta strengthened its management team during the year with several appointments across finance, scientific and medical leadership roles. The group also reinforced its financial position through £32.5 million of equity fundraising and revised terms on its convertible bonds, extending its projected cash runway into early 2027.

The company expects important clinical data updates from both AVA6000 and AVA6103 during 2026. Management also confirmed that discussions regarding potential partnership agreements are ongoing, with such deals potentially providing non-dilutive financing opportunities and supporting wider use of the platform across additional oncology applications.

Despite progress in development programmes, the company’s broader outlook remains weighed down by weak financial performance and negative technical indicators. Continued funding requirements and the absence of major commercial partnerships remain key risks. Valuation also appears unattractive given ongoing losses and the lack of dividend support.

More about Avacta Group plc

Avacta Group plc is a clinical-stage biopharmaceutical company focused on oncology therapies. Its proprietary pre|CISION peptide drug conjugate platform is designed to deliver highly potent cancer treatments directly to tumours by targeting fibroblast activation protein within the tumour microenvironment, aiming to improve efficacy while reducing systemic toxicity.