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Daily Grime - RFX; MERC

By Jeremy GrimeStock MarketsDec 03, 2019 09:00
Daily Grime - RFX; MERC
By Jeremy Grime   |  Dec 03, 2019 09:00
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  • Hansard (LON:HSD) appoints new NED from Willis. He has also been Director for International markets at Lloyds (LON:LLOY) of London, where crucially he was responsible for overseeing Japan alongside other countries.
  • New River REIT acquires Bravo Inns for £17.9m, being 6.8X EBITDA
  • Randall & Quilter (LON:RQIH) Director, Mark Langridge stepping down. He will continue part time advising on legacy companies.
  • Woodford’s stake in Eddie Stobart logistics off loaded at 6p vs the suspension price of 71p equating to a write down of £56m for the Woodford Equity Income fund and the Income Focus fund.
  • Ramsdens Holdings PLC (LON:RFXR) – H1 Results

    Share Price 200p

    Mkt Cap £62m

    Conflict Disclosure: No Holding

  • Results Statement opens with “on track to meet full year expectations”. Underlying PBT was up 12% to £5.7m. Forex revenue up 15%, Retail up 22% and Pawnbroking up 17%. 3 stores were opened in the period and 4 acquired which add to the 123 established stores. EPS was up 22% to `15.5p and H1 dividend is increased 13%. Net cash is £12.3m. Three further stores expected to open in H2 and the seasonally important H2 has made a solid start. Board is confident.
  • Estimates FY PBT is expected to be £8m from £53.6m revenue. EBITDA expected to be £9.8m. Given we have underlying PBT of £5.7m in H1 that looks somewhat better than “on track”.
  • Valuation 2X Book value for an ROE of 17.5%. PER 9.8X Yield 3.6%. H&T trades on 8.6X.
  • Conclusion The shares have sold off on the back of H&T’s FCA review announced in November. This is a time in the cycle when the stars are aligned for Ramsdens and it looks like an opportunity on a two year view.
  • Mercia Asset Management – Acquisition

    Share Price 32p

    Market Cap £97m

    Conflict Disclosure: No Holding

  • Acquisition Acquires VCT fund management business NVM for up to £25m, £16.6m up from 75% in cash, 25% in shares. That is up to 9% of the £270m AUM, 3.5X revenue and 6.25X EBITDA. The company is raising £30m at 25p/share.
  • Estimates Mercia was is forecast to make £2.1m EBITDA to March 2020 so this is transformational.
  • Valuation The market cap will be £130m which is 15X historic EBITDA, but at the 25p placing price it is 12.5X
  • Conclusion Of every £ of AUM at NVM 2.3% turns up in NVM’s EBITDA which is breathtaking profitability. If this can grow the shares will be a good investment.

    Daily Grime - RFX; MERC

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    Daily Grime - RFX; MERC

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