Aquis Exchange (LON:)-
Share Price 475pMkt Cap £129mConflict Disclosure: No Holding- Results –.Revenue up 165% to £3.4m and the EBITDA loss was £160k. Cash was £11.2m. The number of trading members is only 29, up from 27, but the company is close to break even and since the year end has agreed to acquire NEX exchange for £1.
- Estimates. The company is forecast to lose £1m in the year to December 2019 from Revenue of £6.5m, before turning a profit of £2.4m in 2020.
- Valuation Chi X Europe was taken over 4 years post formation just as it turned profitable for $300m in 2011. Perhaps we shouldn’t concern ourselves that it trades on 53X Dec 2020 earnings.
Conclusion My recent meeting was one of those rare meeting you leave genuinely excited. In excitable moments I am imagining 3X upside until I remember they still only have 29 clients. And I hope NEX exchange can become profitable to disrupt the stranglehold of the expensive NOMAD’s. It is well financed so I suspect this company will succeed.
K3 Capital Group (LON:) –
Share Price 167p
Mkt Cap £71m
Conflict Disclosure: No Holding
Results – Revenue was down 18% to £13.6m driven by a reduction in the larger transactions completing. £5m EBITDA is a little ahead of expectations but as previously guided at the top end of the range. Net cash was £5.8m. EPS 9.43p and a reduced dividend maintaining the 80% payout ratio 7.6p DPS. The all important outlook statement has one key line “corporate finance transaction fee income in Q1 20 has exceeded the year FY19”. It concludes the company is “confident”3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure
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Conclusion Goin up
JTC Group – H1 Result
Share Price 475p
Mkt Cap £452m
Conflict Disclosure: No Holding
Results Revenue up 32% to £46.6m. Underlying EBITDA up 35% to £14.3m which is a healthy 30.6% EBITDA margin. Net debt is £60.9m, which is a full 1.9X pro forma EBITDA. Organic growth calculated at 8.2% and new business enquiry pipeline of £33.1m. Outlook is confident for 2019 and beyond.Estimates Full year PBT of £28.5m is anticipated, EPS 22.5p, from which a 5.3p dividend is expected.Valuation PER 21X Dec 2019, yield 1.1%Conclusion These are good results. I really don’t see the structural growth the company refers to so regard this company as an acquisition machine engineering organic growth from cross selling. Consequently with a leveraged balance sheet there could either be a placing or growth slows. I would be saying thankyou for the 45% share price appreciation this year.
Personal Group (LON:) –
Share Price 381p
Mkt cap £119m
Conflict Disclosure: I Hold
Results Revenue up 42% to £30m. PBT up 5.6% to £4.1m. EPS up 8.6% to 11.4p. DPS up 1.3% to 11.65p and net cash £19.2m. The £4.1m PBT is after a £542k provision release which may be non recurring. Transactional spend over the Hapi platform has increased strongly and the Saas business has increased revenue strongly while the delay in the Sage is holding back growth. The negative well as the slowing down of new business wins in the core insurance business. The new CEO’s strategy aims to double EBITDA by 2025. Outlook states that revenue and PBT are in line with expectations although EBITDA is now expected to be lower.3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure
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Conclusion This company has multiple potential exciting new business streams that could transform this into a growth business. But 85% of EBITDA is derived from the core insurance business which is a cash cow. The shares are valued as a cash cow, seemingly correctly. The patient investor may be well rewarded as the company transitions but there is no catalyst today.
