Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

Daily Grime - Non-Standard Finance (NSF); Kingswood Holdings (KW)

By Jeremy GrimeStock MarketsNov 15, 2019 08:08
uk.investing.com/analysis/daily-grime--nonstandard-finance-nsf-kingswood-holdings-kw-200434293
Daily Grime - Non-Standard Finance (NSF); Kingswood Holdings (KW)
By Jeremy Grime   |  Nov 15, 2019 08:08
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
KWG
0.00%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NSF
-27.41%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
UEXU
0.00%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

  • Urban Exposure (LON:UEXU) responds to Tchenguiz’ recent proposal to spin out the management company saying it has received other proposals “along with other value enhancing opportunities” which it is considering.
  • Non-Standard Finance PLC (LON:NSF) – Warning and CFO Change

    Share Price 33p

    Mkt Cap £102m

    Conflict Disclosure: No Holding

  • Trading Update Operating profit is expected to be 10-13% lower than previous expectations on the back of slower trading in branch based lending (4-5%) and a step change in provisioning on the branch based and guarantor loans business due to the macro environment. Delinguency rates however are reported to be steady or have improved form H1 2019. Home Collected credit is performing well as the impairments reduce with a shortening of the loan book duration. Loan book growth targets are being revised down and impairment targets are being revised up in branch based and guarantor loans but down in Home Collected Credit. The CFO is standing down after Miles Cresswell-Turner standing down last month.
  • Estimates Adjusted EPS of 5.6p for the year to Dec 19 is likely to come down by 10-13% in line with the statement. The adjusted PBT number was expected to be c £21.7m per downgrades but the statutory number is still a loss of c £14m. The guidance is for a 50% payout ratio so the dividend estimate looks likely to reduce also.
  • Valuation PER 5.5X, Yield 8.9% . The NAV is £181m, but the tangible NAV is £49m.
  • Conclusion The second director leaving may be a function of the incentive scheme expiring in March 2020 out of the money. With shareholders likely to be asked to re incentivise management it seems possible that a corporate solution may be found instead. The shares are cheap on an earnings basis but are still 2X tangible book value. There may be upside on a corporate solution but bidders are unlikely to be generous.
  • Kingswood Holdings (LON:KWG) – Note

    Share Price 19p

    Mkt cap £40m

    Conflict Disclosure: No Holding

  • Note I don’t recall seeing a 48 page note written on a £40m market cap loss making wealth manager before. Pollen Street have a £40m convertible financing facility exercisable at a discount (16.5p) which is exercisable to fund acquisitions at Pollen Street’s option before December 2023. There is a make good agreement whereby the company is underwriting that Pollen Street will double its money to 33p per share and receive this in cash, which would effectively require a sale of the company. In the event of this not happening Pollen Street are fully secured on the assets of the company. Paragraph 4.6 of the document on 12 September for those interested.
  • Effect I am confident that no institution would invest on the basis of underwriting a private equity firm to double their money on acquisition as yet unknown. However, on the back of this note yesterday there was notable retail volume yesterday. The trade press carried headlines such as “consolidator Kingswood trumps horn over “undervalued” share price.”
  • View I suspect that retail investors may not be aware of the significant risk of losing 100% of their money in this stock, and I suspect such a structure would not be permitted on most markets. However, AIM companies are regulated by their Nomad. And with all those fees on offer for acquisitions and a possible sale of the company they are conflicted. It highlights the worst of AIM, which is bad for all participants.

    Daily Grime - Non-Standard Finance (NSF); Kingswood Holdings (KW)
     

    Related Articles

    Daily Grime - Non-Standard Finance (NSF); Kingswood Holdings (KW)

    Add a Comment

    Comment Guidelines

    We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

    • Enrich the conversation
    • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
    • Be respectful. Even negative opinions can be framed positively and diplomatically.
    •  Use standard writing style. Include punctuation and upper and lower cases.
    • NOTE: Spam and/or promotional messages and links within a comment will be removed
    • Avoid profanity, slander or personal attacks directed at an author or another user.
    • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
    • Only English comments will be allowed.

    Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

    Write your thoughts here
     
    Are you sure you want to delete this chart?
     
    Post
    Post also to:
     
    Replace the attached chart with a new chart ?
    1000
    Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
    Please wait a minute before you try to comment again.
    Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
     
    Are you sure you want to delete this chart?
     
    Post
     
    Replace the attached chart with a new chart ?
    1000
    Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
    Please wait a minute before you try to comment again.
    Add Chart to Comment
    Confirm Block

    Are you sure you want to block %USER_NAME%?

    By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

    %USER_NAME% was successfully added to your Block List

    Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

    Report this comment

    I feel that this comment is:

    Comment flagged

    Thank You!

    Your report has been sent to our moderators for review
    Continue with Google
    or
    Sign up with Email