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Daily Grime - Is TBC a Win?

ByJeremy Grime
Published 21/02/2020, 11:01
Updated 09/07/2023, 11:32

News

  • K3 Capital Group (LON:K3C) The deputy Chairman’s wife, Elisabeth Ford sold 100k shares yesterday at 252p. Tony Ford sold in September 18 at 300p. Following the warning on 5 June 18 his wife bought shares at 127p. A 98% gain in 9 months is masterful. The shares closed down 7% at 247p

  • Plus500 (LON:PLUSP) CEO and CFO bought 1k shares each at 828p and 831p. These directors have traded the shares well historically. The shares were down 3%.

    • LSE Michael Bloomberg stated he would sell his company if he got into the White House yesterday. Should Bloomberg be acquired by an exchange the competitive threat to LSE/Refinitiv could be significantly enhanced. The shares reached a new high yesterday.

    Rathbone (LON:RAT) FY results

    Share Price 1958p

    Mkt Cap £1,103m

    Conflict Disclosure: No Holding

  • Results AUM was up 14% over the year to £50.4bn made up of a 11.7% uplift in Investment Management AUM and a 32% increase in Unit Trust Management AUM. PBT was down 3.2% to £88.7m on the back of a £39m increase in costs. “Growth led investments”, Software impairment costs of £3.1m and the increased FSCS levy of £4.5m are singled out. The retired CEO’s accelerated executive awards and cessation of box profits are also mentioned. Underlying EPS was down 7% to 132.8p while statutory EPS was 50.3p. Outlook is confident so the dividend is raised 6% to 70p. The costs stripped out of underlying include Acquisition costs, £4.7m of Speirs & Jeffrey integration costs of £4.7m and £3.1m software written down.

  • Estimates Results are a little shy of the £91.4m consensus I am seeing. Going forward 4% PBT growth is forecast.

  • Valuation Per 15.1, Yield 3.5%

  • Culture The results major on Governance, Culture, Purpose, Shareholder engagement etc. The chairman is to step down as his tenure has exceeded 9 years. The gender pay gap however is 43% and the glassdoor reviews are average at 3.6.

  • Conclusion The industry as a whole is face stiff headwinds in terms of fee pressure deriving from increasing customer choice coupled with increasing costs while the unit trust business is sub scale in a consolidating industry. In such an environment consolidation would seem to be the logical conclusion. In the absence of that it is hard to get excited.

    • TBC Bank (LON:TBCG) – FY Results

    Share Price 1310p

    Mkt Cap £722m

    Conflict Disclosure: No holding

  • Results Underlying PBT is up 20% to GEL 545m which equates to a ROE of 22.6%. The cost of risk reduced significantly from 1.6% to 0.7% while the cost income ratio was up from 37.8% to 39.5%. NNIM reduced to 5.6% from 6.9%. Tier 1 ratio was 14.6%. The outlook is confident and the medium term targets are reiterated of 20%+ROE, cost income below 35% and loan book growth of 10-15%.

  • Estimates Results are in line with estimates and the 2020 estimate for 10% PBt growth doesn’t correspond with the outllok statement aiming for 10-15% loan book growth and a reducing cost income ratio. Potential for upgrades.

  • Valuation The net asset value is £714m which is close to the current market cap on which a 22% ROE has just been reported. IN PE terms that is 5.2X and the yield is 5%. Bank of Georgia trades at 6.1X and yields 5.6%.

  • Culture 67% of the staff are female and the Glassdoor staff reviews give it a high ranking of 4.1.

    • Conclusion The shares are down 30% over the past 2 years while growth and performance have continued to be strong. This is a time to win this one.

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