Daily Grime - SGR/EQLS

Shore Capital is to cancel it AIM listing as it believes the lack of liquidity results in a mispricing of its shares while the costs are high. The company will maintain its listing in Bermuda to enable shareholders to continue to hold shares in their ISA. 75% approval required. I wonder how many more of these we will see with the increased aversion to small and illiquid companies

Equals Group (LON:EQLS) – H1 Results

• Results. Revenue up 21% to £14.6m. EBITDA up 78% to £4.7m. This 32% EBITDA margin. One off costs were significant such as a marketing rebrand costing £725k so adjusted PAT was only modestly ahead after higher depreciation charges and amortisation. EPS was down slightly at 1.72p (2018 1.79p) as more shares were in issue. Currency transactions are still 85% of revenue with the balance coming from banking transactions while corporate customers are now 68% of revenue. The outlook shows H2 revenues up 18% while a global citi group partnership has been entered into and a revolving credit facility product is in beta testing as well as Hermes FX being acquired. “Confident” of meeting market expectations

• Estimates FY EBITDA is expected to be £11.6m. PBT £10.9m and EPS 6.2p. No dividend yet.

• Valuation 2019 PER 16X, falling to 13.6X 2020, based on 18% undelying growth.

• Conclusion These results read like a Monzo or Revolut with the new products coming onstream alongside the recent fund raise enabling further acquisitions. Except it is profitable and on a PE of 16X. I can’t see a reason the shares aren’t more highly rated other than people remember a downgrade a few years ago when the profitability point was moved to the right.

Shore Capital (LON:SGRS) – H1 Results

Share Price 185p

Mkt Cap £40m

Conflict Disclosure: No Holding

Conclusion The company is de-listing just as the prospects look brighter. This could be the start of a trend. I am sad about that.