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Daily Grime - MGR/JUP/EMG

ByJeremy Grime
Published 11/10/2019, 10:28
Updated 09/07/2023, 11:32

An indecent amount of newsflow this morning for the Friday morning after the AIM dinner.

  • TP ICAP (LON:NXGN) announces a £15m settlement with the FCA for not having proper controls in place and failing to act with due skill, care, and attention. These FCA investigations go un announced until there is a conclusion and it seems likely that just now there are others going on at the moment.

    • Miton Group (LON:MGRM) – AUM update

    Share Price 55pMarket Cap £95mConflict Disclosure: I Hold
    • Update Net outflows of 0.8% is probably a better result than the share price has been anticipating. And the majority of that was from multi asset funds with equity funds having a small net outflow of £4m over the quarter. AUM was down from £4.72bn to £4.68bn over the quarter
    • Estimates Average AUM over the first 9 months of the year is 7.4% ahead of prior year. Forecasts have been withdrawn on the merger with Premier. Prior to them being withdrawn forecasts anticipated 5% revenue increase to £29m for the year. In line.
    • Valuation PER 13 and yield 4.4% exclusing the special dividend which adds c 10% to the yield on the merger. Mkt cap/AUM 2%. Post the special dividend this will reduce to 1.8%.
    • Conclusion This stock is viewed as a play on the small cap market and these results suggest otherwise. With 27% added to earnings over 2 years post the merger there are reasons to be more excited.

    Jupiter (LON:JUP) – AUM Update

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    Share Price 318p

    Mkt Cap £1,455m

    Conflict Disclosure: No Holding

  • Update Net outflows of 2.8% of AUM (£1.3bn) led to a decline of 1.8% in AUM to £45.9bn. £1bn of this was from the European strategy where Alex Darwall is leaving in mid November to set up a boutique.

  • Estimates PBT fell 16% in H1. Full year forecasts anticipate a 14% reduction in profits for the year to £163m.

  • Valuation PER 10.9X and yield 7.5%. EV/AUM 2.5%

  • Conclusion While these numbers don’t read well there is valuation support. The shares recovered from the low of 290p at the beginning of the year. We can’t be far from the darkest day for this share.

    • Man Group (LON:EMG) – AUM Update

    Share Price 162p

    Mkt Cap £2,481m

    Conflict Disclosure: No Holding

  • Update Net outflows of $1.1bn in the quarter were 1% of AUM .Over the quarter AUM declines 1.5% to $112.7bn. Multi manager, absolute return and total return FUM all grew while systematic long only shrank 5% driven by redemptions from small cap and emerging markets strategies and discretionary shrank driven by redemptions from Japan and US equity strategies.

  • Estimates In H1 adjusted PBT was up 3% year on year against FUM which was up 5% delivering $157m PBT. FY estimate anticipates $183m in H2 which looks ambitious.

  • Valuation Per 10.8X Yield 4.5%. EV/AUM 1.9%

    • Conclusion We saw outflows from Japan with Polar and now Man Group. Small cap redemptions is also a feature of current increased liquidity and risk aversion. Man Group tends to perform in a risk on environment. It is hard to know when that may return. But the shares are cheap. Except the outflows are from higher margin products. We could see further downgrades before the bottom.

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