Results reading: Results for six months ended 31 August 2026
The first-half figures confirm the 16 September trading update, with one upgrade: management now says adjusted EBITDA came in ahead of expectations, where the update said only 'in line'. Against that, statutory profit is flattered by a £2.6m fair-value gain on the M&C Saatchi stake, free cash flow fell about 32% on the first half of last year, and the Group was outbid on a larger acquisition, leaving £95.2m of cash still undeployed.
What changed against what was known
-
Better
Management now says first-half adjusted EBITDA was ahead of its expectations, a small step up from the 'in line' wording in the September update. It rose 17% to £8.4m.
Then · 16 Sep 2026 · Share Buyback Programme Renewal and Trading Update“The Board confirms that trading for the six months ended 31 August 2026 was in line with management expectations.” -
New
The jump in statutory operating profit (£8.2m against £2.9m) comes mostly from a swing in the M&C Saatchi share valuation, from a £1.8m loss to a £2.6m gain. Operating profit before fair-value movements rose about 18% to £5.5m.
“Operating profit before fair value movements was £5.5m (2025: £4.7m).” -
Worse
Cash generation weakened. Free cash flow fell to £9.2m from £13.6m, and cash conversion dropped to 134% from 188%. Management says collection of trade receivables was weighted to the first half.
“Free cash flow from continuing activities was £9.2m (31 August 2025: £13.6m).” -
New
The Group was outbid on a larger acquisition. The September update spoke of continuing to deploy capital into bolt-on deals, so cash of £95.2m remains unused, with buybacks the main current use.
Then · 16 Sep 2026 · Share Buyback Programme Renewal and Trading Update“The Group continues to see an attractive and active pipeline of bolt-on acquisition opportunities and expects to continue deploying capital into value-accretive transactions.” -
New
The second buyback is already under way. By 29 October the Group had bought 7.9m shares for £13.1m in total. The first programme cost £10.0m, so about £3.1m has gone into the new £10m programme in roughly six weeks.
“As at 29 October, the Company had acquired a total of 7.9 million shares across the programmes for aggregate consideration of £13.1 million.” -
New
Revenue growth slowed to 13% in the half from 23% for the last full year, which included acquisitions made in May 2025. Recurring revenue share edged up to 82.7% and the adjusted EBITDA margin to 29.2%.
Then · 29 Jun 2026 · Financial Results for year ended 28 February 2026“Revenue increased 23% to £53.4m (2025: £43.3m).”Now · this report“Revenue increased by 13% to £28.8m (2025: £25.4m)”
What the notes say – not in the headline numbers
Operating cash flow was helped by a £2.9m working-capital inflow, which management links to the timing of trade receivable collections. Cash conversion was 134% against 188% a year earlier.
If the receivables benefit reverses in the second half, cash conversion and free cash flow could fall back.
“Cash conversion benefited from the timing of trade receivable collections, weighted towards the first half.”The M&C Saatchi stake was revalued up £2.6m to £18.0m. That gain lifts statutory operating profit and EPS (5.99p basic against 2.17p) but is not trading income.
Reported profit and EPS can swing with a listed share price, so underlying earnings are the better guide.
“The Group's 9.8% stake in M&C Saatchi plc was valued at £18.0m at 31 August 2026 (28 February 2026: £15.4m), an increase of £2.6m.”Diluted EPS of 5.52p sits about 8% below basic EPS of 5.99p because of Incentive Shares. The extract gives no performance targets for these shares, so they cannot be tested against actual results.
The Incentive Shares dilute shareholders, and the vesting conditions are not visible in this material.
“with diluted EPS reflecting the weighted impact of Incentive Shares in the current period and warrants in the comparative period.”Tax paid rose to £1.94m from £0.26m a year earlier, while interest and dividend income fell to £1.09m from £1.88m. Both held down free cash flow.
Higher tax and lower interest income reduce cash generation even if EBITDA keeps growing.
“Tax paid | (1,940) | (258)”A further £1.0m of deferred consideration for the HFX acquisition is still to be paid in May 2027, after £1.0m was paid in this period.
It is a small, known call on the £95.2m cash pile, but still a commitment.
“A further £1.0m of deferred consideration remains payable in May 2027.”Watch at the next report
- Whether second-half cash conversion falls back as the first-half receivables timing benefit reverses.
- Whether the Group completes a bolt-on or larger acquisition, or keeps putting cash into buybacks, given £95.2m of cash and a second £10m programme under way.
- Whether revenue growth holds in double digits and recurring revenue keeps rising from 82.7% of total.
Read 2 Nov 2026 against the last statement, the previous results and the open promises. Quotes are the company's words; the rest is our reading. Not investment advice.