Contract Wins and Profit Warnings: A Tale of Two Markets in London

📈 Today's Key Themes

Pre-market updates paint a picture of a divided London market, with some companies reporting significant wins while others grapple with economic headwinds. Volvere plc (#VLE) stands out with an impressive 74% increase in profit, bucking the trend of cautious outlooks. In contrast, Future plc (#FUTR) reports a challenging half-year with a 1% organic revenue decline, highlighting the ongoing economic uncertainties. The market sentiment appears mixed, with positive developments in contract wins and acquisitions for companies like Staffline (#STAF) and Touchstone Exploration (#TXP), offset by profit warnings and revenue declines in other sectors.

💡 Company Updates

Annual Results

Volvere plc (#VLE) has delivered a stellar performance in its final results, reporting a 74% increase in profit before tax to £6.34 million and a 14% revenue growth to £49.04 million. The investment company's food manufacturing segment performed strongly, driving overall results. Despite acknowledging future cost challenges, Volvere's cash position strengthened, with cash and available-for-sale investments increasing to £27.84 million. The positive sentiment is reflected in the stock's pre-market movement, up 7.53% to 2,070.00p.

Half-Year Results

Future plc (#FUTR) faces headwinds in its 2025 half-year results, reporting a 1% organic revenue decline and a 3% decrease in total revenue to £378.4m. The media company's adjusted operating profit fell to £100.7m, although margins remained stable at 27%. Future's cautious outlook, expecting a low single-digit decline in FY 2025 organic revenue, has contributed to a pre-market share price decline of 1.59% to 745.00p. The company cites economic uncertainties and challenges in the US digital advertising market as key factors impacting performance.

The Character Group plc (#CCT) reports mixed results in its half-year financial report, with revenue decreasing by 8% to £53.0m. However, the toy and giftware distributor managed to increase statutory profit before tax to £3.2m from £2.2m, while underlying profit before tax remained stable at £2.1m. The company's gross margin improved to 29.3% from 27.2%, and its net cash position strengthened to £16.0m. Despite these positive aspects, Character Group has withdrawn market guidance due to challenging trading conditions and international trade uncertainties.

Trading Updates

Workspace Group Plc (#WKP) warns of a £7m headwind on Trading Profit expected for the year ending 31 March 2026. The flexible workspace provider attributes this to a lower opening rent roll, further large unit vacations, and additional costs from macroeconomic pressures. Despite these challenges, the company expects Trading Profit for the year ending 31 March 2025 to be in line with consensus. The market has reacted cautiously, with the stock up 1.45% to 454.00p in pre-market trading.

🎯 Leading Developments

Major Contract Wins

Staffline Group plc (#STAF) has secured a significant new contract with a leading food and drink logistics provider. The initial two-year contract, with a one-year extension option, involves the mobilization of around 3,000 temporary workers across driving, warehousing, and security activities. This strategic partnership is expected to strengthen Staffline's leading position in the logistics sector and materially enhance the Group's performance. The market sentiment is very positive, with analysts suggesting this could provide good revenue visibility over the contract term.

Solid State plc (#SOLI) has announced a follow-on $5.2m IoT contract award from a US customer. The contract, to be delivered by the company's Solsta division from Q2 FY25/26 to Q3 FY26/27, showcases Solid State's combined hardware and software capabilities, as well as its growing international footprint. This development is seen as a positive step in the company's expansion of its international business.

Strategic Acquisitions and Expansions

Touchstone Exploration Inc. (#TXP) has completed the acquisition of Shell's Trinidad Central block, significantly expanding its production and operational capacity in the region. The $28.4 million cash acquisition includes four producing natural gas wells and a gas processing facility. This move is expected to strengthen Touchstone's production base and onshore presence in Trinidad, with analysts viewing it as a positive development for the company's growth strategy.

Tekcapital plc's (#TEK) portfolio company, Guident Corp, has secured a contract with the Boca Raton Innovation Campus (BRiC) to deploy its autonomous surveillance and inspection robots. This partnership marks a significant expansion into the growing autonomous robotics market for Guident. The deployment of WatchBot robots at the 1.7-million-square-foot multi-tenant office campus is seen as a transformational opportunity that could have substantial long-term benefits for Tekcapital.

"This contract represents a transformational expansion of Guident's business into the growing autonomous robotics market, which could have significant long-term benefits for Tekcapital." - Harald Braun, Guident's Chairman and CEO

📅 Week Ahead

19 May 2025: Diageo plc (#DGE) Fiscal 25 Q3 trading update
19 May 2025: Hikma Pharmaceuticals PLC (#HIK) Xyrem® Antitrust Litigation jury trial start date
20 May 2025: Smiths Group plc (#SMIN) Q3 Trading Update
20 May 2025: Diploma PLC (#DPLM) Half Year Results Release
20 May 2025: LondonMetric Property Plc (#LMP) Announcement of full year results
21 May 2025: SSE plc (#SSE) Full-year results presentation and Q&A session
21 May 2025: Intermediate Capital Group plc (#ICG) Full year results announcement
21 May 2025: JD Sports Fashion Plc (#JD.) FY25 results/Q126 update
22 May 2025: Investec Group (#INVP) Full year results release
22 May 2025: Johnson Matthey Plc (#JMAT) Announcement of results for the year ending 31st March 2025

View full calendar

Market Summary