RentGuarantor Holdings PLC (AIM:RGG) reported trading materially above market expectations after delivering record operational momentum over the first eight months of the year.
The shares hit 87.7p, up 12%, as the market reacted to the company's upbeat trading statement.
Cavendish subsequently maintained its 'buy' stance on the rental guarantee provider, lifting its target price from 93p to 122p.
At the heart of the update is an eight-month revenue leap to £8.45 million, driven by a 174% rise in applications, a 311% increase in contracts, and a 39% improvement in average contract value.
That momentum is helping bankroll further expansion, largely propelled by the Renters' Rights Act, which is pushing higher-value tenants to secure professional guarantors rather than pay multiple months of rent upfront.
Those booming volumes flowed straight to the bottom line, delivering an adjusted net profit of £2.87 million for the year to date, compared with an adjusted net loss of £392,000 in the corresponding period last year.
On the same note, Cavendish highlighted this substantial operating leverage, prompting the broker to write a significantly upgraded 2.4p-per-share earnings forecast for the 2026 financial year straight into its numbers.
That cash generation is fortifying the balance sheet, with the cash position swelling to £7.5 million by late August, supporting continued investment and future growth.
Management is now targeting revenues in excess of £14 million and net profit in excess of £4 million for the 2026 financial year, and is considering the introduction of a formal dividend policy.
The Renters' Rights Act is currently being implemented, a major legislative shift which the Board expects to further support growth.
