- The glamorous world of Speciality Financials site visits rumbles on apace today with the S&U site visit to Grimsby
- Urban Exposure provides a positive update today having committed £230m of lending commitments since IPO at an average LTV of 62.6% while Close Brothers has such a conservative view of the world they have nothing better to do than buy back their shares at £15 39p.
Tatton Asset Management – Trading Statement
Share Price 267p
Mkt Cap £149m
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Statement AUM is up 16.3% over 6 months to £5.7bn. Moprtgage services continued its growth rate with 1,290 members (March 18 - 1,219). IFA support business increased member firms to 382 (March 18 - 368). Outlook is confident and “in line”
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Estimates Revenue is expected to grow 14% to £17.7m in the year to March 2019 which deliveres 20% PBT growth to £7.8m. The driver of growth is the asset management business which is highly scalable. Last year asset management accounted for 48% of the revenue but growing its AUM at an annualised 33% growth rate at the moment makes a 14% revenue growth target for the business as a whole look somewhat unchallenging
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Valuation PER to March 2019 is 23.6 falling to 20X March 20 with a 3% dividend yield
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Conclusion The high growth rate and scalability of the AUM platform makes this potentially a large company. Early buyers will be well rewarded
International Personal Finance Plc – Q3 Update
Share Price 220p
Mkt Cap £494m
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Update Total credit issued grew 6% driven by digital growth or 39%, mexico growth of 13% against European credit declining 7%. Annualised impairment was 25.2% of revenue which is lower than most non standard lenders. Morses Club achieves lower of course. Further legislation in Poland and Romania is announced yesterday is likely to reduce the European lending further next year.
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Estimates Europe is in line with expectations while Mexico is a little behins expectations on account of smaller balances per customer. Digital is expected to move into profit in 2019. Market forecasts look for £109.1m PBT to Dec 18 which is a 12% increase from 2017. In 2019 a 5% increase in PBT is expected. With further pressure in Europe there could be some downside risk on forecasts
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Valuation PER 7.1X yield 5.6% while the ROE is expected to be 15.9% and the shares trade at 1.1X book value.
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Conclusion The valuation is anticipating perhaps 50% reduction in profits. With the upside in digital and Mexico while Europe declines I suspect that is overly gloomy.
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