AI and Cloud Drive Growth for UK Tech Firms Amid Mixed Market Signals

📈 Today's Key Themes

Pre-market updates reveal a mixed bag for UK stocks, with technology and consumer sectors showing particular strength. AI and cloud services are driving significant growth for tech companies, while resilient consumer demand is boosting food and retail stocks. However, the banking sector faces challenges, highlighting the uneven nature of the economic recovery. This divergence in sector performance suggests investors may need to be selective in their approach as the market opens.

💡 Company Updates

Trading Updates

Netcall (#NET) reported robust growth in its FY25 Trading Update, with revenue up 23% to £48.0m and adjusted EBITDA rising 17% to £9.8m. The company's cloud business is thriving, with cloud ACV increasing by 52% and now accounting for 80% of total ACV. The sentiment is very positive, with Netcall's strong operational performance and positive outlook suggesting it's well-positioned for continued growth. Greencore Group (#GNC) delivered a strong Q3 performance, with revenue increasing 9.9% to £511.1m. The company raised its FY25 Adjusted Operating Profit guidance to £118-121m, up from the previous range of £114-117m. The very positive sentiment is driven by Greencore's robust financial and operational performance, outweighing cautious tones around economic uncertainty and inflationary pressures. Diaceutics (#DXRX) reported impressive H1 2025 results, with 22% revenue growth representing a 3-year CAGR of 25%. The company's Annual Recurring Revenue (ARR) is up 16% to £16.4 million. The very positive sentiment reflects Diaceutics' strong organic growth and solid financial position, with no debt and £10.4 million in cash reserves. Luceco (#LUCE) announced solid H1 2025 results, with revenue growth of c.15% to c.£125m and adjusted operating profit expected to be in the region of £13.5m - £13.8m, up approximately 10%. The company maintains a healthy balance sheet with a Net Debt : EBITDA ratio of c.1.6x. The very positive sentiment is underpinned by Luceco's competitive advantages and growth opportunities. Evoke (#EVOK) reported a 5% increase in Q2 group revenue and expects H1 Adjusted EBITDA to be in the range of £163-167m, representing a 43% increase at the midpoint compared to the prior year. The company remains confident in achieving its FY25 targets. The good sentiment reflects the positive tone of the update and strong EBITDA growth, despite relatively modest revenue growth.

Half-Year Results

Arbuthnot Banking Group (#ARBB) faced significant headwinds in its H1 2025 results, with profit before tax down 48% to £10.9m. Despite growth in customer deposits and funds under management, the loan book contracted by 5%. The bad sentiment reflects concerns over the significant profit decline and challenging economic environment, despite the company's strong capital position.

🎯 Leading Developments

Surface Transforms (#SCE) reported a remarkable turnaround in its manufacturing operations, leading to a 72% increase in revenue for H1 2025 compared to the same period last year. The company's manufacturing yield increased from 49% in Q1 2025 to 77% in Q2 2025. This operational improvement has eased cash constraints, with key customers providing £12.9m in cash advances. The very positive sentiment reflects the significant progress across the business and improved financial position. Read more Metals Exploration (#MTL) delivered exceptional quarterly results, with record gold revenue of US$70.5 million and record pre-tax free cash flow of US$47.2 million. The company's Runruno gold mine continues to demonstrate strong operational discipline, achieving high recovery rates and reducing all-in-sustaining costs. The very positive sentiment is driven by the company's financial and operational performance, as well as progress on its development project in Nicaragua. Read more

📅 Week Ahead

23 July 2025: GSK plc (#GSK) PDUFA date for FDA review of Blenrep
23 July 2025: J D Wetherspoon plc (#JDW) Next trading update
23 July 2025: FRP Advisory Group plc (#FRP) Full Year Results
24 July 2025: Lloyds Banking Group plc (#LLOY) 2025 Half-year results
24 July 2025: Centrica plc (#CNA) 2025 Interim Results
24 July 2025: Howden Joinery Group Plc (#HWDN) 2025 Half Year results release
24 July 2025: IG Group Holdings plc (#IGG) Full year results announcement
24 July 2025: Volution Group plc (#FAN) Release of pre-close trading update
24 July 2025: Wizz Air Holdings Plc (#WIZZ) Q1 FY26 results release
25 July 2025: WPP plc (#WPP) Half Year 2025 Results
25 July 2025: Jupiter Fund Management Plc (#JUP) Interim results for the period to 30 June 2025
25 July 2025: CMC Markets Plc (#CMCX) Annual General Meeting

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Market Summary