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Daily Grime - MAB1; CBG; SUS

By Jeremy GrimeETFsSep 24, 2019 08:25
uk.investing.com/analysis/daily-grime--mab1-cbg-sus-200432916
Daily Grime - MAB1; CBG; SUS
By Jeremy Grime   |  Sep 24, 2019 08:25
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Strange times. Pictures of a 16 year old venting her anger at the UN, while we await a decision as to whether our government has acted illegally. Meanwhile we learn the Softbank founder secures his WeWork shares for loans from banks such as Credit Suisse (SIX:CSGN) and provides loans to staff in order to invest in the Vision fund. We Work IPO bank pitch documents are revealed by the FT too coiinciding with with Metro Bank pulling its 7.5% senior unsecured bond issue. At the same time airlines triple their fares to repatriate Thomas Cook customer.s I find myself wondering if WeWork is the next Thomas Cook (LON:TCG).

News

  • Park Group – AGM Having moved into shiny new offices last week the company is rebranding to Appreciate Group Plc and is implementing new ERP system. Work on the new product continues. Trading is in line. Getting a little impatient here. – I hold
  • Begbies – Acquires a restructuring advisory business for up to £1.6m, which is 2.7X revenue or 8X profits.
  • Knights Group – AGM – Confident of delivering on market expectations
  • Mortgage Advice Bureau (LON:MAB1) – H1 Results

    Share Price 568pMkt Cap £293mConflict Disclosure: No Holding
    • Results. Revenue up 5% to £61m. PBT up 6% to £7.4m. Adjusted EPS up 5% to 12.3p. Average number of advisers up 13% to 1,242. Gross mortgage lending up 6%. Current trading is in line and the company is confident in achieving its strategic aspirations.
    • Estimates Given the recent acquisition the 11.2% EPS growth to Dec 19 looks likely.
    • Valuation PER 19.7X, Yield 4.4%
    • Conclusion I am always wary when market consensus is that a mortgage network is not cyclical. We have slow housing transactions, buy to let under pressure and a move from 2 year to 5 year mortgages creating a slow down. But as long as the adviser number keep growing so do the earnings. Perhaps even in a downturn they will pick up more advisers. So it looks OK – just expensive for underlying 6% PBT growth.

    Close Brothers (LON:CBRO) – FY Results

    Share Price 1375p

    Mkt Cap £2.08bn

    Conflict Disclosure: No Holding

  • Results Adjusted group operating profit fell 3% to £270.5m. Banking was up 1% to £253.7m, asset management down 6% to £21.8m and Winterflood down 29% to £20m. The large part of the group – the bank- grew the loan book 5.7% to £7.6bn with a stable NIM of 7.9% and stable bad debts of 0.6% while the cost/income ratio increased to 50%. Tier 1 ratio was 13% and the ROE is 15.7%. Preben Prebensen standing down. Outllok statement “well positioned
  • Estimates EPS of 136.7p is in line with comprehensively guided expectations. 1.8% EPS growth is anticipated in the year ahead.
  • Valuation PER a little below 10X and yield 4.8%. Equity is £1.4bn and ROE 15.7% means it trades at price/book of 1.5X
  • Conclusion The shares are cheap. With no synergy between the divisions there is a chance a bid comes now the CEO is standing down – perhaps from private equity. It is possible to get to £20 on a SOTP valuation. In the meantime it is a safe haven.
  • S & U (LON:SUS) – H1 Results

    Share Price 2100p

    Mkt cap £253m

    Conflict Disclosure: No Holding

  • Results – Revenue up 7% to £47.7m, PBT and EPS both up 3% to £17.1m and 116.5p respectively. Loan book up 7% to £298.5m and gearing of 75% (£125m). Aspen Bridging has contributed 502k to profit from a £24.7m loan book. Importantly the bad debt charge has decreased from 26.2% revenue to 24.3%. MD of the car finance business stepping down. Outlook contains a wonderfully phrased economic outlook but concludes the outlook is more encouraging than a year ago.
  • Estimates – These results are in line with expectations and going forward forecasts look for 6% PBT and EPS growth over the full year which looks very reasonable as Aspen is increasing its contribution
  • Valuation – ROE is c 17% and the shares trade at 1.4X book value. PER 8.5X Yield 5.9%
  • Conclusion – Cheaper than Close but I guess it is car finance. Now with comfort over impairments and the business starting to become a little more diversified there is a lot of upside over coming years. With the shares down 20% over 12 months it is easy to see them retrace that is short order.

    Daily Grime - MAB1; CBG; SUS
     

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    Daily Grime - MAB1; CBG; SUS

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