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Daily Grime - NSF; BRK

By Jeremy GrimeStock MarketsJan 16, 2020 09:48
uk.investing.com/analysis/daily-grime--nsf-brk-200436720
Daily Grime - NSF; BRK
By Jeremy Grime   |  Jan 16, 2020 09:48
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NSF
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Non-Standard Finance PLC (LON:NSF) – Investor Day

Share Price 23.5p

Mkt Cap £73m

Conflict Disclosure: No Holding

  • Results to Dec 2019 are expected to be in line with forecasts. Loan book and impairment targets unchanged. Everyday Loans (c.60% of profit) grew the loan book 17% to £218m. Impairments 22.4%. Guarantor loans (c23% profit) grew loan book 29% to £107m. Impairments 22.6%. Home Collected (c 17% profit) loan book shrank from £41m to £39.9m. Impairments were 27% (2018 32.6%). Borrowing were £323m and the company has signed a £150-£200m six year securitisation facility that may reduce lending costs by ( I guess) 2% which could potentially add £3m onto profits.
  • Estimates For the year to Dec 2020 38% PBT growth is anticipated giving 6p EPS and a 3.5p dividend. This estimate doesn’t include the potential financing upside from the securitisation.
  • Valuation PER 5.5X Yield 12.8% from a dividend 1.4X covered for Dec 2019. For 2020 the PER falls to 3.9X
  • Conclusion If we remove our rear view mirror and look forward only the shares are the wrong price. With Woodford and Invesco now out of the stock I suspect a more reasonable share price may be 40p.
  • Brooks Macdonald Group (LON:BRK) – Trading Update

    Share Price 2200p

    Mkt Cap £345m

    Conflict Disclosure: No Holding

  • Update AUM was down 1.5% in the quarter to December and flat over 6 months at £13.1bn. International increased AUM by 1.8% while UK discretionary grew by 1.3%. Termination of a Grosvenor Wealth account reduced AUM by £244m. Revenue and profits are said to be in line with expectations despite this. The outlook says expectations remain unchanged which are cautious over short term flows but optimistic over the medium term.
  • Estimates £23.9m PBT is expected to June 2019. Which is 137p EPS.
  • Valuation EV/AUM 2.3%. PE 16X Yield 2.7%
  • Conclusion The low valuation relative to AUM underlines the low profitability. This therefore is a play on margin improvement rather than growth. With lower flows than peers it may be alittle early but perhaps in 6 months time this could be a good recovery situation.

    Daily Grime - NSF; BRK
     

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    Daily Grime - NSF; BRK

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