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Higher prices lift miners

The miners that have reported so far delivered strong earnings and cash flows, driven primarily by higher commodity prices rather than production growth. Stronger copper, platinum group metal (PGM) and gold prices supported Anglo American, Glencore, Valterra and AngloGold, while Glencore’s marketing business also benefited from volatility stemming from the Iran war. Importantly, all four maintained their focus on shareholder returns, with most excess cash returned through dividends or share buybacks.

Operational performance was mixed, although all four remain on track to meet their full-year production guidance. Valterra delivered strong growth against a flood-affected comparative period, while Anglo American continued to simplify its portfolio ahead of the Teck merger. The divestment of its coal assets has been announced and the sale of De Beers is progressing, with the merger expected to conclude within the next six months. Glencore maintained its production guidance despite raising its cost expectations due to higher fuel and other input costs.

More broadly, costs are rising alongside commodity prices, offsetting some of the benefit from stronger pricing. AngloGold’s costs increased sharply due to higher fuel prices and royalties, although management still expects them to remain within its full-year guidance range. Anglo American provided a positive surprise, with higher by-product credits enabling it to lower its full-year copper unit-cost guidance.

Anheuser delivers stable growth

Anheuser-Busch InBev reported a strong first-half 2026 performance, highlighting the resilience of its premium beer portfolio and the continued benefits of disciplined revenue management. Organic revenue increased 5.7%, supported by volume growth of 0.8% and revenue per hectolitre growth of 4.3%. Importantly, the group achieved the balance investors have been looking for, namely positive volume growth alongside strong pricing and margin discipline.

Underlying organic earnings per share increased 11%, while free cash flow rose 13% to around US$5.7 billion. The strong cash generation allowed the company to continue reducing debt, with net debt to earnings before interest, tax, depreciation and amortisation (EBITDA) improving to 2.86 times from 3.27 times a year earlier. Gross margin expanded by 110 basis points and operating margin improved by 70 basis points, reflecting favourable mix effects and operating leverage.

Growth in the group’s premium brands remained a key driver, with Corona, Stella Artois and Michelob Ultra each delivering double-digit revenue growth. The no-alcohol and Beyond Beer categories also continued to gain traction, growing 27% and 44% respectively.

Regionally, Latin America remained the standout performer, with particularly strong contributions from Brazil, Mexico and Colombia. China was the major area of weakness, with declining volumes and profitability due to softer consumer demand and unfavourable weather conditions. Overall, management maintained its guidance and remains confident of delivering EBITDA growth within its long-term target range of 4% to 8%.

BAT maintains cautious outlook

British American Tobacco (BAT) delivered a solid first-half 2026 result that was broadly in line with expectations, demonstrating continued progress in its shift towards smokeless products while maintaining the profitability of its traditional cigarette portfolio. Group revenue increased 2.9% on a constant-currency basis, adjusted operating profit grew 3.5%, and adjusted diluted earnings per share rose 7.9%, supported by lower finance costs, tax benefits and the ongoing share buyback programme.

The standout feature of the result was the performance of its newer product categories. Revenue grew 18%, contribution increased 55% and contribution margins expanded by 330 basis points to 13.8%. Smokeless products now account for 19.8% of group revenue, driven primarily by strong growth in oral nicotine products.

Velo remained the key success story, with US revenue more than tripling and market share continuing to expand. Vapour products also returned to growth, while heated tobacco products remained under pressure due to strong competition and inventory adjustments in Japan.

The US remained BAT’s primary growth engine, delivering revenue growth of 8.5% and operating profit growth of 10.1%, supported by strong pricing and continued adoption of Vuse and Velo products. Traditional cigarettes remained resilient, with pricing more than offsetting declining volumes.

Management maintained its full-year guidance but expects revenue and profit growth to be towards the lower end of its guidance ranges, making execution in the second half particularly important.

IHG: technology strengthens the model

InterContinental Hotels Group (IHG) is one of the world’s largest hotel companies, with a portfolio of well-known brands spanning luxury to budget accommodation across more than 100 countries. Its asset-light franchise model means that more than 97% of profits are derived from fees rather than property ownership, generating resilient earnings and strong cash flows.

The group’s recent commentary on artificial intelligence (AI) went well beyond the usual focus on productivity. Its revenue-management system now uses AI to optimise room pricing across its hotel network, while conversational search and integration with ChatGPT allow guests to find live availability, pricing and amenities directly. Predictive analytics used in marketing have also generated returns on investment three to four times higher than previously.

These capabilities build on an already strong commercial platform. Around 83% of room revenue is generated through channels managed by IHG, while loyalty members account for 67% of room nights. These members are around 10 times more likely to book directly and spend roughly 20% more than non-members. We believe this strengthens both the economics of attracting and retaining guests and the group’s proposition to hotel owners, which should support further hotel signings.

IHG has been a strong performer for the Global High Quality Fund since 2019, delivering an annualised return of more than 16%. Consistent share buybacks have also contributed to returns, with around 25% of its shares retired over the past decade. However, following the resulting re-rating to 27 times forward earnings, we have trimmed the position in line with our valuation discipline.

ADP: paying one in six US workers

Automatic Data Processing (ADP) is one of the world’s largest payroll and human resources technology providers, serving more than 1.1 million clients across approximately 140 countries. The business operates through two segments. Employer Services, which accounts for around 70% of revenue, provides payroll, tax filing, employee benefits and human resources management. Professional Employer Organization Services provides outsourced employment administration through ADP TotalSource. To put its scale in context, ADP pays one in six workers in the US, underlining its leading position in human capital management software.

ADP’s fourth-quarter results capped a strong financial year, with revenue growth, margin expansion and earnings per share growth all coming in at the upper end of guidance. New business bookings grew 6%, client retention remained near record levels, and pricing was stronger than management had anticipated.

Encouragingly, the company’s next-generation enterprise platform, Lyric, is gaining traction, with active clients up 94% year on year and win rates improving. AI capabilities are also featuring increasingly in client discussions, suggesting that ADP is making progress in expanding its presence among larger enterprise clients. Guidance for the new financial year points to continued steady growth, aided by higher returns earned on funds held on behalf of clients, a high-margin revenue stream that also provides some protection if interest rates remain higher for longer.

The shares have rebounded strongly since April’s broad software sell-off, when concerns about the potential for AI to disrupt traditional software business models weighed on the sector. ADP’s shares have risen almost 50% from those lows as investors have become more confident that its scale, client relationships and compliance expertise provide a durable competitive advantage.

We continue to see ADP as a high-quality business capable of compounding earnings over the long term, supported by recurring revenue, consistent share buybacks and a strengthening position in enterprise human capital management.