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Daily Grime: KGH; OPM; PFG; STB; ASHM

By Jeremy GrimeStock MarketsJan 15, 2020 09:03
uk.investing.com/analysis/daily-grime-kgh-opm-pfg-stb-ashm-200436670
Daily Grime: KGH; OPM; PFG; STB; ASHM
By Jeremy Grime   |  Jan 15, 2020 09:03
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ASHM
-0.66%
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PFG
+0.56%
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RQIH
+1.93%
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STBS
-0.42%
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TIME
-0.58%
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INCE
0.00%
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News

  • Ince Group (LON:INCE) raises £12m by Accelerated Book Build at 45p/share almost 50% below the 89p share price. There is also a £2m staff offer. For general working capital purposes. The net debt at 30 September was £10.4m. H1 2019 EBIT was £4.4m.
  • Randall & Quilter (LON:RQIH) Roger Sellek, joint CEO, resigns effective immediately. He joined from AM Best last June. Nothing to see here.
  • Knights Group Holdings (LON:KGHK) – H1 Results

    Share Price 369p

    Mkt Cap £273m

    Conflict Disclosure: No Holding

  • Results Revenue up 34% to £32m. PBT up 20% to £5.3m and EPS up 9% to 5.95p at underlying level. Net debt £17.1m at 30 October. 43 fee earners recruited in H1 taking the total to 290 at October. 2 acquisitions were made in H1 in Birmingham with 52 fee earners. Outlook refers to a strong start to H2, confidence in meeting expectations for full year and a further 31 accepted new positions to start in H2.
  • Estimates PBT of £13.9m is expected for full year to April 20 which will need a strong H2. That’s based on £72m revenues requiring £40m in H2, a 25% uplift on H1.
  • Culture 15 Reviews on Glassdoor provide an average score of 3.4/5. Comments from former staff range from “No politics” to “corrupt”.
  • Valuation PER 31X Yield 0.9%
  • Conclusion The risks of net debt increasing are highlighted by Ince Group’s fund raise today. On 31X the shares are too high.
  • Ashmore Group (LON:ASHM) – AUM Update

    Share Price 547p

    Mkt Cap £3,898m

    Conflict Disclosure: No Holding

  • Update Net inflows of 3.6% over the quarter coupled with market tailwinds lifted AUM 7% over the quarter to December 2019 to US$ 98.4bn. Relative performance is good over 3 and 5 years in fixed income but over 1 year is weaker with the exception of equities which accounts for 5.2% of AUM. Outlook refers to a positive outlook for emerging market flows and says the company is well positioned.
  • Estimates 19% PBT growth is expected for the full year to June predicated on 13% revenue growth to £357m. With 7% AUM growth in H1 this looks reasonable.
  • Culture 8 Reviews on Glassdoor award a score of 3.4 out of 5. Comments range from “nice place to work” to “nice people terrible culture”.
  • Valuation EV/AUM 4.6%. PE 19.4X Yield 3.3%
  • Conclusion The statement says that underperformance is to be expected at times of market volatility where risk is added to capture long term upside. With the shares at an all time high they look up with events.

    1pm PLC (LON:OPM) – H1 Results

    Share Price 37.5p

    Mkt Cap £33m

    Conflict Disclosure: No Holding

  • Update Revenue down 2.5% to £15.6m reflecting change in product mix. PBT down 22% to £3.2m. EPS down 14% to 2.7p. Net Assets up 4% to £56.1m. Loan book up 1% to £143.5m. Origination increased 87% of which 65% was brokered to other lenders. Bad debt provisions increased from 1.9% to 2.2% while investment in personnel and operations increased the cost base. Outlook refers to laying the foundations in a satisfactory H1 alongside opportunities for organic and strategic growth.
  • Estimates Full year PBT to May 20 is expected to be £7.6m which will need £4.4m in H2. This could be aggressive given the increase in costs.
  • Valuation PER 5.7 Yield 2.9%.
  • Conclusion The shares are cheap but there is no catalyst here to change that. The shares are up from their lows of 24p last August and may tread water over the next 6 months.
  • Provident Financial (LON:PFG) – Trading Update

    Share Price 421p

    Mkt Cap £1,069m

    Conflict Disclosure: No Holding

  • Results Q4 is in line with plans. Vanquis modestly above expectations, Moneybarn grew receivable but an increase in impairments delivers a result below the plan while CCD continues to improve in line with the plan. Outlook is well placed.
  • Estimates £162m in the Dec 2019 PBT consensus which is expected to grow 10% to £178m in the current year. EPS 52.9p and DPS 32.1p.
  • Culture Galssdoor rating of 3.3 for Vanquis from 131 reviews. More recent reviews appear more positive and refer to good management appointments.
  • Valuation PER 8X Yield 5.7%
  • Conclusion This looks like a great recovery situation. On 8X with plenty of yield it is possible to see 50% plus upside over 2 years.
  • Secure Trust (LON:STBS) – Trading Statement

    Share Price 1610p

    Mkt Cap £297m

    Conflict Disclosure: No Holding

  • Update Both loan book and revenue have grown in H2 while lending discipline has not been compromised, nor pricing. The increase in the Bof E capital buffer from 1% to 2% from December 2020 may impact the balance sheet. Outlook is cautiously optimistic.
  • Estimates No change to 2020 guidance. A 16% PBT increase is expected to £47.8m
  • Culture Glassdoor score 3.3. Comments such as “good solid traditional bank” underline the conservatice nature of the company.
  • Valuation PE 10X Yield 5.3%
  • Conclusion The shares have a good yield and if we are in for an economic uptick will do well.

    Daily Grime: KGH; OPM; PFG; STB; ASHM
     

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    Daily Grime: KGH; OPM; PFG; STB; ASHM

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