News
Hansard (LON:) appoints new NED from Willis. He has also been Director for International markets at Lloyds (LON:) of London, where crucially he was responsible for overseeing Japan alongside other countries.New River REIT acquires Bravo Inns for £17.9m, being 6.8X EBITDARandall & Quilter (LON:) Director, Mark Langridge stepping down. He will continue part time advising on legacy companies.Woodford’s stake in Eddie Stobart logistics off loaded at 6p vs the suspension price of 71p equating to a write down of £56m for the Woodford Equity Income fund and the Income Focus fund. Ramsdens Holdings PLC (LON:) –
Share Price 200p
Mkt Cap £62m
Conflict Disclosure: No Holding
Results Statement opens with “on track to meet full year expectations”. Underlying PBT was up 12% to £5.7m. Forex revenue up 15%, Retail up 22% and Pawnbroking up 17%. 3 stores were opened in the period and 4 acquired which add to the 123 established stores. EPS was up 22% to `15.5p and H1 dividend is increased 13%. Net cash is £12.3m. Three further stores expected to open in H2 and the seasonally important H2 has made a solid start. Board is confident.Estimates FY PBT is expected to be £8m from £53.6m revenue. EBITDA expected to be £9.8m. Given we have underlying PBT of £5.7m in H1 that looks somewhat better than “on track”.Valuation 2X Book value for an ROE of 17.5%. PER 9.8X Yield 3.6%. H&T trades on 8.6X.Conclusion The shares have sold off on the back of H&T’s FCA review announced in November. This is a time in the cycle when the stars are aligned for Ramsdens and it looks like an opportunity on a two year view.Mercia Asset Management – Acquisition
Share Price 32p
Market Cap £97m
Conflict Disclosure: No Holding
Acquisition Acquires VCT fund management business NVM for up to £25m, £16.6m up from 75% in cash, 25% in shares. That is up to 9% of the £270m AUM, 3.5X revenue and 6.25X EBITDA. The company is raising £30m at 25p/share.Estimates Mercia was is forecast to make £2.1m EBITDA to March 2020 so this is transformational.Valuation The market cap will be £130m which is 15X historic EBITDA, but at the 25p placing price it is 12.5XConclusion Of every £ of AUM at NVM 2.3% turns up in NVM’s EBITDA which is breathtaking profitability. If this can grow the shares will be a good investment.