Daily Grime - AUGM; PCF; IPX; NUM
Jeremy Grime | Dec 04, 2019 12:35
Augmentum Fintech (LON:AUGM) – H1 Results
Share Price 107p
Mkt Cap £125m
Conflict Disclosure: No Holding
- News Yesterday Zopa raised £140m at a 47% discount to it previous valuation enabling Augmentum to announce it H1 results. The implied pre new money valuation of Zopa was £188m. Despite this the NAV has increased from 103p to £112.2p/share. The largest holding is now Interactive Investor at 14.6% and Tide, the e-money app at 14%. This implies a read through valuation of Interactive Investor of £546m and the investment in Tide is through a convertible loan note.
- Valuation The shares trade at a 5% discount to NAV.
- Conclusion This is the first time Augmentum has come under pressure and the discount has been forgiving ahead of a down round on what was previously the company largest position. So the result is a good result under the circumstances. For a company harnessing the high growth available in fintech I feel a little uncomfortable about investing in convertibles to gain some protection which usually has a cost in sacrificing upside.
PCF Group plc (LON:PCF) – FY Results
Share Price 36p
Mkt Cap £90m
Conflict Disclosure: No Holding
- Results Loan book up 55% to £339m as the company moves up the credit spectrum with 74% of originations in the top 4 credit grades. Revenue was up 51% to £22.2m and PBT up 54% to £8m. EPS up 35% to 2.7p. DPS of 0.4p. NIM was 7.8%, impairment was 6.3% of revenue and cost/income ratio was 35%. ROE was 12.6% with a core tier 1 ratio of 18%. Outlook is well placed to deliver.
- Estimates Results look in line with forecasts and 24% EPS growth is expected in the coming year.
- Valuation The shares trade at a Price/Book of 1.5% for a ROE of 12.5%. PER 12.4X Yield 1.1%
- Conclusion Since August the shares have rallied from 25p to 35p and in the short term look up with events at the current valuation. However, by 2022 the company targets a £750m loan book and a ROE of 15% and the company is growing ahead of budget. That infers a 50% profit uplift by 2022 (3 years). So there is plenty to go for on a medium term view.
Impax Asset Management (LON:IPX) – FY Results
Share Price 298p
Mkt Cap £388m
Conflict Disclosure: No Holding
- Results The 21% uplift in AUM over the year drove revenue increase of 12% to £73.7m, a revenue yield of 53 bps. PBT was up 29% to £18.9m. Adjusted operating margin was 24.4%, down from 30% in the prior year. EPS up 35% to 12.2p and a DPS of 5.5p. New dividend policy of paying out 55% to 80 % of PAT which on these numbers would be 6.7p to 9.8p. Net cash £26m and solid outlook. The contribution from the Pax acquisition was lower than expected at £1.3m due to outflows from funds and markets. The consideration for this acquisition is expected to be £36.3m which looks high.
- Estimates Results look politely ahead of forecasts. And a 22% increase in PBT is expected going forwards.
- Valuation PER is 23X and yield 1.8%.
- Conclusion The company is well positioned and highly rated. The operating margin is however lower than the majority of it peers resulting in 25% ROE while it trades at 6.1X NAV. At the current rating there is little room for disappointment. After a strong run in the shares from 230p in September shareholders should be taking profit.
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Numis LON:NUM) – FY Results
Share Price 237p
Mkt Cap £248m
Conflict Disclosure: No Holding
- Results Revenue down 18% to £111.6m and PBT down 60% to £12.4m. EPS down 65% to 8.8p. Net assets down 3.5% to £138m. Corporate clients up 7 to 217, revenue per head was £404k and operating margin was 12.6%. Outlook “well positioned”
- Estimates Revenue and PBT looks in line with previously guided forecasts. Understandably there is no current year forecast. It would be wrong.
- Valuation PER 10.8X, Yield 5.1%
Conclusion With the highly volatile profit stream this is one to buy in difficult markets and sell in bull markets. Unless brokers are in structural decline (debate). My guess would be that fund raising on markets will increase once the private unicorn valuations have come to an end and this is an opportunity.
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