This job is enjoyable sometimes. It was a real pleasure to hear a CEO of a fund manager describe launching a fund as like fishing. Its important to tie the right fly as well as being on the right bit of the river he explained. I had the feeling this was someone enjoying themselves. Of course no names mentioned.
S & U – H1 Results
Share Price 2560p
Mkt Cap £307m
Alpha FX – Trading Statement
Share Price 555p
Mkt Cap £185m
Park Group – AGM Statement
Share Price 67p
Mkt Cap £125m
Mortgage Advice Bureau – H1 results
Share Price 648p
Mkt cap £330m
- Results Revenue up 17% to £57.9m (2017A £49.6m) (2018FYE £118.4m). Gross profit was up lessto £13m (2017A £12m) (2018 FYE £27.2m). PBT up 11% to £7m (2017A £6.3m) (2018E £15.8m). and EPS up 11% to 11.7p. DPS up 12% to 10.6p. Unrestricted cash £12.5m (2017A £13.2m). Adviser numbers up 6% to 1138 although the average number was up 13% over the period.. Market share has gone from 4.2% to 4.7%. Outlook is in line with expectations.
- Estimates Our full year estimates assume 11% PBT growth to £15.8m, 10% EPS growth to 24.8pand a 24p dividend. No changes ahead of the analyst meeting although we expect to review our estimates post the meeting in the light of a slow property market currently.
- Valuation The shares trade at 25X December 2018 earnings and yield 3.8%. Our price target is 630p, a little below the current price and ahead of the analyst meeting there is no reason to change this.
- Conclusion The shares appear up with events. Buy to Let has slowed but first time buyers shows a small increase and the company expects a flat market going forward against which market share gains should enable them to grow. The company talks about vertical integration and new services which may be a sign of the existing model maturing. We remain of the view the shares are up with events.
CMC Markets – Pre Close
Share Price 165p
Mkt Cap £478m
Conclusion All these businesses will prosper in the medium term. The current period of volatility is a good opportunity. The valuations are roughly in order of client duration where the longer duration of a client corresponds to a higher valuation. Which looks reasonable. Though that shows the market is currently focussing on risk rather than reward. If it focused on reward it would apply a higher rating to the higher margin Plus 500. I have found in general it is good to buy in places where the market is focussing on risk