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In a good summation of my career it seems the FTSE has now gone nowhere in 18 years. It closed at 6930 at the end of 1999 and the FTSE future is currently indicating an open of 6862. Of course this excludes dividends.

Boohoo got rumbled on watchdog last night for resetting the clock after adverts urged people that the offer ends at a fixed time. A statement out this morning reassures that they have taken the advertising standards authority guidance on board and the matter is closed. 

Monzo – Placing

Mkt Cap £1.02bn

  • Placing – This week Monzo raised £2m from its existing investors after launching its £20m crowd fund raise on Monday. Yesterday it opened the round on Crowdcube to its customers and raised the balance of £18m in just 2 hours 45 minutes.
  • Estimates – No
  • Valuation – Revenue in the year to February 2018 was £1.8m while the operating expenses of £35m resulted in a £33m loss.  So that’s a revenue multiple of 555X.  In the internet bubble we valued eyeballs when we couldn’t use financial metrics. Perhaps if we use current accounts as an eyeball equivalent the valuation is £1,000 per customer. That looks very reasonable against the valuation of Barclays 24m customers at £1,120 per customer
  • Conclusion If millennial customers are as valuable as Barclays customers this could be a unique opportunity. Or the millennials have just seized power from the fund managers. Sometimes I feel like I have travelled to a strange land where my plane has landed in a very pleasant field of opium poppies. So lets not worry about things like a bear market in equities.

M&A – Plenty

  • Global Risk Partners disclosed a rune rate of £35m EBITDA from £110m of insurance broking revenue having made 12 broking acquisitions this year thus increasing EBITDA 73%. Backed by Penta Capital
  • Qatar owned SEIB insurance brokers yesterday acquired the equine book of insurance business from Greenwood Morland Insurance Brokers for an undisclosed sum
  • M J Hudson acquired Amaces, a data analytics company in the Us for an undisclosed sum.

Impax Asset Management – FY Results 

Share Price 218p

Mkt Cap £284m 

  • Results The company reports AUM up 72% largely as a result of the US acquisition. Net inflows over the year to Sept 18 were 14% which were weighted towards the early part of the year with net inflows slowing post the acquisition of Pax. Revenue was up 101% to £65.7m and PBT up 150% to £14.6m delivering a 22% PBT margin. Adjusted EPS was 12.4p and the normalised DPS for the year was 4.1p. Since the period end AUM has declined to £12.2bn as a result of markets but inflows continue and performance is strong
  • Estimates At the period end the revenue run rate was £69m giving a revenue yield on the AUM of 56 bps. Forecasts to September 2019 assume £78m of revenue which will need better markets or strong inflows to achieve
  • Valuation Forward PER is 19.1X and yield 2.5%. EV/AUM is 2.3%. Cheap on an EV/AUM basis but because of the comparatively low operating margins the PER is high.
  • Conclusion The shares are up 311% over the last two years. Net inflows continue at a slower rate but with the shares looking expensive there may be cheaper stocks elsewhere in this market.