United Kingdom: solid earnings season, amid record buybacks and strong selectivity
27 AUG, 2026
It has been a particularly solid earnings season for British companies, with earnings growth significantly above expectations. Share buybacks remain a significant supporting factor, with over 55% of large listed UK companies having repurchased at least 1% of their own shares over the past year, the highest percentage globally. This reinforces earnings-per-share growth and highlights the attractive valuations and cash-generative nature of many British companies. A particularly interesting aspect is that earnings have generally outpaced revenue growth, testifying to the role played by cost discipline, operational efficiency, and margin management in driving these results.
While the UK economic backdrop remains uncertain, many companies have demonstrated a solid ability to protect profitability despite only modest revenue growth. The strongest results came from sectors such as banks and industrials, while areas of the market more exposed to domestic demand faced a more challenging environment.
For investors, the key message is that this is a solid earnings season, but not necessarily an equally solid narrative on the demand side. The growing divergence between companies that successfully convert revenue into earnings and those that struggle to do so underscores the importance of stock selection. UK equities offer a powerful combination of attractive valuations, resilient corporate fundamentals, and diversification relative to increasingly concentrated, technology-driven global indices. From a total return perspective, the UK offers a much higher dividend yield than other regions, even excluding the commodities sectors. With market leadership broadening and index concentration concerns persisting, we believe the environment is becoming increasingly favourable for active investment approaches in UK equities.
