UK Equities: Diversification, Value, and Recovery Dynamics (Games Workshop, Rolls-Royce, Jet2, Cranswick, Shell, Plus500)
Andrea Bonini
Apr 11
6 min read
Updated: Apr 21
In recent years, following Brexit, the Covid-19 pandemic and other geopolitical disruptions, the UK has experienced higher inflation than its peers and slower GDP growth compared to the previous decade. However, how has the broader economy performed more recently?
In 2025, the UK market offered diversification benefits, as its leading indices (FTSE 100/250) remain more heavily weighted toward energy, materials, financials, and healthcare, while being less exposed to technology.
On the economic front, UK wages have started to outpace inflation since 2021. Household savings also remain unusually high: the UK savings ratio is above 15% of GDP, compared to below 6% pre-pandemic. This suggests a potential strong inflow of capital into the economy, should consumer confidence improve through monetary or fiscal policy.
Deal activity has rebounded, with approximately 30 bids for UK companies above £100m in 2025 (versus 26 in the same period of 2024). IPO markets have also revived markedly: UK listings raised £2.1bn in 2025 versus £0.78bn in 2024 — a ~170% increase in proceeds (23 deals vs 18).
Equities have once again shown signs of cyclical rotation, similar to the period when international and emerging markets outperformed between 2000–2008, before the prolonged US market outperformance until 2024.
These trends, combined with more stability in recent UK policy, point to improving sentiment for the equity market.
A few examples from a sample of UK-listed companies are outlined below: Games Workshop, Rolls-Royce, Jet2, Cranswick, Shell, Plus500.
Games Workshop Group
Games Workshop (GW) designs and sells “Warhammer” tabletop games and related media.
According to its 2025 Annual Report, recent results highlight strong geographic expansion: in FY2025, sales in North America rose 14.6% and in Japan 25.9%. Growth has also been particularly strong through independent retailers, more so than through online or owned stores, which improved visibility.
Its product offering is diversified across miniatures, books, video games, but also a planned film series with Amazon. This franchise model, supported by a loyal fan base, reflects strong intellectual property and a durable niche advantage.
Key metrics: GW is typically classified as a quality large-cap stock. Its 5-year beta is ~0.95 (below 1). The trailing P/E is ~30×, above the European leisure and entertainment industry (~20×). PEG is ~1.6 (vs industry median ~1.0), but its P/S is ~9.5× (higher than typical consumer-sector firms).
GW has virtually no net debt (total debt/equity ~15%) and cash returns through dividends and share buybacks are solid. Return on invested capital has been near 90% in recent years, well above peers, reflecting its asset-light intellectual property model.
Growth is almost entirely organic, driven by new stores and content. Sales and net income have grown ~15% YoY over the last three years. The balance sheet remains strong, with a current ratio of ~3.8, minimal leverage, and negligible interest expense.
Market share within its niche (tabletop wargaming) remains dominant, and the company continues to expand into new demographics and markets (US, China, mobile and online gamers).
Rolls-Royce Holdings
Rolls-Royce is one of the leaders in widebody jet engines, benefiting from robust airline demand exceeding supply and long-term service contracts.
The company is also developing advanced engines (UltraFan) for next-generation narrowbody aircraft, targeting entry into the market by 2030, which may provide significant further growth if proven to be competitive. It has further strengthened its aftermarket services business through digital monitoring and predictive maintenance, improving reliability and early fault detection.
Growth reflects both recovery and selective strategic initiatives:
· Acquisition of Siemens Energy’s aero business, enhancing capabilities in electrified aviation
· Expansion into naval defence and power systems, supported by long-term UK government contracts
· Investment in small modular reactors (SMRs), positioning the company within the energy transition
These developments reflect a broader strategic shift toward more resilient, service-based, and long-duration revenue streams compared to the historically cyclical civil aviation business.
Rolls-Royce’s business model differs fundamentally from companies like Airbus: while engine deliveries provide multi-year visibility through the aircraft production backlog (~20% of revenues), most of the economic value is generated through long-term service agreements (“power by the hour”), where revenues are linked to engine flight hours (~40% of revenues).
Key metrics: Rolls is viewed as a quality/cyclical industrial with a very large market cap (~£100bn). Beta is ~1.23. Its P/E is ~17×, and P/S ~4.7×. ROIC has improved to ~13.8% on strong operating leverage.
Over the last three years, revenue has increased by 29% and net income by 142% (with 2025 also benefiting from non recurring tax credits). Underlying EBIT has doubled, reflecting operational recovery.
Debt remains meaningful (~60%), but interest is well covered: operating profit (~£2.5bn) significantly exceeds annual interest (~£0.3bn). Liquidity is moderate (current ratio ~1.15). Rolls-Royce remains a key global supplier (third-largest engine manufacturer), with stable widebody market share and potential growth in narrowbody markets.
Jet2 plc
Jet2 is a UK leisure travel group combining airline operations and package holidays.
The company has expanded its fleet significantly: as of 2025 it operates ~130 aircraft, and has ~150 A321neo orders extending to 2035, improving fuel efficiency by ~20%.
Despite recent rising Jet fuel costs, its hedging strategy remains robust, with ~82% of next-12-month fuel hedged. Marketing initiatives and strong customer loyalty have also supported repeat demand.
Jet2 is a cyclical airline (beta ~1.24), but recent performance has been strong: FY2024 revenue rose 24% to £6.255bn, with net profit up 37%. Passenger numbers increased 9% to 17.7m.
Market share has expanded significantly, reaching ~20% of UK outbound leisure travel (from ~4% in 2015), with further growth targeted to 28% by 2027 thanks to fleet expansion.
Trailing P/E is very low (~5×) as market is carefully watching expansion’s costs; P/S ~0.29× (low). Current ratio ~1.40. Debt is moderate (total debt £1.27 bn vs equity £2.06 bn, D/E ~0.62). ROIC ~9% (typical for airlines post-recovery) and ROCE ~13%.
Over the longer term (2019–2024), revenue has roughly doubled.
Cranswick plc
Cranswick is a leading UK producer of pork, poultry, and prepared foods.
The company has grown through a combination of horizontal acquisitions and vertical integration, including the £24m purchase of JSR Genetics, which grants greater control over pig breeding and secures a supply of superior and healthier animals. It has tripled its own pig production over six years and recently acquired Blakemans Foods to enhance market share.
Long-term supermarket partnerships (10 years sale agreement with Sainsbury’s, and commitment to improve animals’ welfare with Tesco) support long term demand, while automation investments (e.g. Hull facility) aim to increase production capacity to ~50k pigs a week by 2027 (from ~35k currently).
Cranswick is typically viewed as a defensive, value-oriented consumer staples business. It has low beta (~0.57), moderate valuation (P/E ~19×), and strong balance sheet metrics (current ratio ~1.8, low leverage). Interest coverage ~16.6×, ROIC ~12.4% (high in food industry) and ROE ~15%.
Revenue grew from ~£2.01bn to £2.72bn between 2022–2025 (+35%), with net profit rising ~32%. Growth has been driven by both acquisitions and organic expansion.
Shell plc
Shell is a global energy major with upstream oil and gas and downstream refining operations.
Its integrated gas division provides LNG exposure, supported by long-term contracts (including with Qatar), although revenues volume remain cyclical.
The LNG market has benefited from global expansion, including US plans to double capacity over the next five years. However, bottlenecks remain, through geopolitical disruptions (e.g. Strait of Hormuz) limiting flexibility, as worldwide utilization is near full capacity and therefore new supply chains require significant lead times to be established.
Natural gas pricing remains regional, making LNG a balancing mechanism, which can create significant price volatility during supply shortages. Gas represents a larger share of Shell’s revenues compared to US majors.
Shell trades at a lower P/E (~15×) than many US peers. Its P/S (~0.85×) is aligned with European peers but remains at a discount to US counterparts. Beta is near 1, while ROIC (~7.5%) is in line with industry averages, FCFF yield is around ~6% (trailing EV/EBITDA ~5x), and interest coverage ratio is high (>10× operating profit).
The balance sheet remains strong: debt-to-capital ~30%, high interest coverage ratio, and a current ratio of ~1.30. Revenue declined from $369bn (2022) to $267bn (2025) because commodity prices normalised, with net income falling from $47.7bn to $17.9bn, but markets already priced that in back in 2022.
Despite this, Shell’s global scale, integrated operations, and growing renewables exposure remain key competitive advantages.
Plus500 Ltd
Plus500 is a growth stock and global fintech platform offering CFD trading across multiple asset classes and jurisdictions,
The platform attracts investors and benefits from volatility-driven trading activity, including call and put options, and therefore exhibits a very low beta (~0.36), making it an effective hedge for diversified portfolios.
It has expanded organically through marketing, geographic growth (more than 50 countries), and partnerships (for example in the US with Kalshi).
P/E ~15×, PEG ~1.15, P/S ~5×. Current ratio ~2.5 (very liquid with net cash of ~$775m). Long term Debt is negligible (Debt/Equity ~0.04).
The company and high returns (ROIC/ROE ~45%), reflecting its capital-light model.
Revenue grew from £726m to £792m between 2023–2025 (+9%), with net profit increasing modestly. The balance sheet is highly liquid, with significant net cash and minimal debt.
Plus500 remains one of the leading specialised CFD brokers globally.
Past performance is not a reliable indicator of future results.
The value of investments can go down as well as up, and you may not recover the amount invested.
Accordingly, no target prices or buy/hold/sell recommendations are provided in this free public article, where stocks are included for illustrative purposes within the UK market.
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