10th Jul 2025. 8.58am

Regency View:
Update

Regency View:
Update
Celebrus rally on robust final results
Celebrus (CLBS) shares rallied sharply from lows this week following a stronger than expected set of full year results that highlighted both financial resilience and strategic progress. Investors were encouraged by a 13.9% increase in annual recurring revenue to $18.8 million, signalling healthy demand for Celebrus’s core software offering. Despite a modest decline in total revenue to $38.7 million, software revenue rose 9.4% year on year to $30.3 million, while gross margins improved meaningfully, up nearly 900 basis points, reflecting the Group’s ongoing transition away from lower margin third party hardware sales.
Underlying profitability also impressed. Adjusted profit before tax climbed 14.5% to $8.7 million, driven by expanding software margins and a more focused commercial model. Earnings per share rose accordingly, with adjusted diluted EPS up 36% to 18.24 cents. A modest 3.8% rise in the full year dividend to 3.27p underscored management’s confidence in the outlook, even as year end cash declined to $31.5 million due to working capital movements tied to its legacy hardware division. Notably, from 1 April, the Group will implement accounting changes including straight line revenue recognition for licences, suggesting more predictable earnings quality going forward.

Operational momentum continues to build, with new contract wins from a global airline and a major fintech firm, alongside meaningful upsells from existing clients in the US and Asia Pacific. Celebrus Cloud is now the default deployment option, and the company’s revamped sales pipeline, driven by direct prospecting, partners and inbound marketing, positions it well for future growth. With ARR already approaching $20 million at the start of the new financial year and a strong committed revenue base, the market has responded positively to signs that Celebrus is transitioning from a period of operational headwinds into one of more consistent, software led expansion.
EQTEC stays grounded despite strategic progress
EQTEC (EQT) shares remain pinned near long term lows despite the company delivering a packed full year update that showcased strategic progress and a clearer roadmap for the future. While revenue dipped to €2.2 million and operating losses edged slightly wider, the bigger headline was a €19.4 million net loss, driven largely by a €14 million impairment on legacy assets in Croatia. Yet behind the numbers, management took meaningful steps to simplify the business, consolidate control over key infrastructure, and secure lifeline funding through two equity raises and debt refinancing agreements that extend maturities out to 2027.
The business now centres on two reference plants, one in Italy, one in Greece, both of which are showing signs of traction after operational setbacks. The Italia MDC facility underwent major refurbishment, with new management installed and insurance backed repairs underway. In Greece, EQTEC worked directly with local partners to complete and commission the Agrigas plant, while also delivering technical upgrades. Cost rationalisation has cut overheads, including a streamlined European footprint anchored in Barcelona, and the group is increasingly prioritising high margin engineering and licensing contracts over capital heavy project builds.

Still, sentiment remains subdued. Investors appear cautious, with macro uncertainty, policy headwinds and legacy baggage continuing to weigh on appetite. However, the evolving partnership with CompactGTL offers a glimmer of longer term upside. EQTEC has now secured a 10% stake in its synthetic fuels pilot plant and the ability to draw up to £1.5 million in further equity support over the next year. With reference sites approaching stability, a growing US pipeline, and a more disciplined capital structure, EQTEC is trying to prove that its technology led modular gasification model can move from promise to repeatable commercial success. For now, though, the market wants to see more delivery before re rating the shares.
Kitwave drops after profit warning hits sentiment
Shares in Kitwave (KITW) dropped sharply lower following a shock profit warning tucked inside what initially appeared to be a broadly solid interim results statement. Despite delivering record revenues of £376.2 million for the six months to April and reporting a 22% rise in adjusted operating profit to £13.2 million, management revised full-year profit expectations lower. The downgrade was driven by a perfect storm of factors: weaker foodservice demand in tourism-heavy locations, higher-than-expected costs linked to the consolidation of the South West distribution hub, and an inability to fully absorb new employer National Insurance charges.
The sharp reaction reflects the surprise nature of the downgrade rather than any deterioration in the fundamental business model. Underlying performance across retail and wholesale was strong, and the Creed Foodservice acquisition continues to enhance Kitwave’s national delivery network. Operational cash flow also remained robust, with pre-tax cash conversion at 106%, allowing the company to reduce leverage and maintain a rising dividend. Management’s long-term buy-and-build strategy remains firmly in place, but investors will need time to digest the near-term margin pressure and the knock to earnings visibility.

We appreciate the timing of our second tranche buy in June has been very poor, and this sometimes happens with unscheduled updates. However, we have a successful long-term track record of taking profits from Kitwave and we believe in our long-term view on the stock.
Next 15 warns on profit after misconduct scandal at U.S. subsidiary
Next 15 (NFG) shares fell after the company issued a surprise profit warning, citing a sharp downgrade to expectations for fiscal 2026. The update came just a day after the group revealed potential serious misconduct at its California-based venture-building subsidiary, Mach49. Three senior members of the Mach49 management team have been dismissed, and the company has begun reporting the matter to the relevant authorities. The alleged misconduct was uncovered during the review of a final earnout payment related to Next 15’s 2020 acquisition of Mach49, which will now be cancelled.
The developments mark another setback for the group, which had already cut forecasts in 2024 after Mach49’s largest client opted not to renew its contract. The latest issues have further weakened confidence in the unit’s ability to generate revenue from its pipeline. While the company has not disclosed the nature of the misconduct, it has acknowledged that the fallout is likely to impact conversion of future commercial opportunities. Analysts had been forecasting adjusted operating profit of £80.5 million for FY26, but this figure is now likely to be revised materially lower.

In a further announcement, long-serving CEO Tim Dyson will retire after 33 years, with Sam Knights, currently CEO of a Next 15 subsidiary, set to take over the role. Whilst we appreciate that the combination of a sudden leadership change and operational disruption at Mach49 has weighed heavily on sentiment, we believe it is prudent not to react hastily. For now, we will continue to hold the stock. We will assess the new leadership’s strategic direction and await further clarity on the full financial and reputational impact of the misconduct before making any changes to our position.
Solid State navigates contract timing headwinds
Solid State (SOLI) reported final results slightly ahead of its revised expectations, despite a sharp year-on-year decline in revenue and profit driven by the timing of major communications and defence contracts. Revenue fell 23% to £125.1 million, while adjusted operating profit dropped nearly 65% to £6 million. These figures reflect a pull-forward of revenue into the record FY23/24 period and the delay of a significant defence contract now expected in FY25/26. Management stressed that these timing effects made for an optically weaker FY24/25, rather than a deterioration in the quality of the underlying business.
Despite the headline weakness, the business made strategic progress, including securing a $25 million communications order for delivery in FY25/26 and expanding into the U.S. with new IoT contracts and the acquisition of Q-Par Antennas. The group also completed its acquisition of Gateway Electronic Components and continued investing in infrastructure, including a new value-added facility in the UK. The order book grew 14% to £101.6 million as of May, providing visibility for a return to growth in FY25/26.

Management remains confident in meeting current year market expectations, supported by a normalisation in customer order patterns and improving operating margins. While reported earnings were significantly down, the group points to a strengthening quality of earnings and improved operational gearing. With structural growth opportunities across defence, medical and IoT, Solid State appears positioned to rebound strongly, assuming execution on delayed contracts remains on track.
Supreme delivers record profits and expands beyond vaping
Supreme (SUP) posted another year of record performance, with adjusted EBITDA rising 6% to £40.5 million and revenues increasing 4% to £231.1 million for the year ending 31 March 2025. While headline profit before tax grew modestly to £30.9 million, the group saw strong gross margin expansion to 32%, thanks to improved manufacturing efficiency and its growing non-vape portfolio. The Drinks & Wellness segment more than doubled revenue, driven by the acquisitions of Typhoo Tea and Clearly Drinks, marking a major step forward in Supreme’s diversification strategy.
Strategic acquisitions contributed around £40 million of annualised non-vape revenue and allowed Supreme to further reduce its reliance on its core vaping segment. The company also made significant operational progress, investing in expanded manufacturing capacity, relocating to a new headquarters in Trafford Park, and renewing a £40 million borrowing facility to support further growth. While adjusted net cash fell due to M&A outflows, management maintained its commitment to shareholder returns, proposing a full-year dividend of 5.2p per share, up 10% year on year.

Looking ahead, trading in FY26 is off to a positive start and is in line with current expectations. Management sees further opportunities in cross-selling, product innovation and M&A as it continues to leverage its extensive distribution network. With consumer affordability still a key theme, Supreme’s strategy of offering well-priced, quality branded goods looks well placed to support further profitable growth in a competitive retail environment.
Volex shares jump on strong results and upbeat outlook
Shares in Volex (VLX) surged higher following the release of strong full-year results that confirmed robust revenue growth, resilient margins, and positive momentum heading into the new financial year. Group revenue rose 19% to $1.09 billion, with underlying operating profit climbing 18.4% to $106.2 million. Growth was particularly impressive in the Electric Vehicles and Consumer Electricals segments, with organic revenue up 40.2% and 9.6% respectively. The Group maintained its operating margin at 9.8%, at the top end of its target range, despite inflationary pressures, highlighting the company’s pricing power and operational discipline.
Strategically, Volex made progress across multiple fronts. The full-year contribution from the Murat Ticaret acquisition helped bolster scale in specialist automotive applications, while new capacity investments in Türkiye, Mexico, India and Indonesia reinforced the Group’s global footprint. Cash generation was solid and the balance sheet remained healthy, with leverage steady at 1.0x. A final dividend of 3.0p per share was proposed, bringing the full-year total to 4.5p, up 7.1% year-on-year.

Looking ahead, the Group signalled a strong start to FY2026 and reiterated its confidence in meeting five-year strategic targets. With a diverse customer base, international manufacturing agility and deep-rooted supply chain partnerships, Volex remains well-positioned to navigate global trade challenges and capture long-term growth across its core sectors. The outlook remains upbeat, and management sees continued opportunity to build value through both organic initiatives and further M&A.
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