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I sense we are in a phase when the good news is starting to arrive after companies have taken the COVID opportunity to withhold dividends and guidance. 


  • Augmentum Fintech highlights that Zopa has today been awarded its full bank license.
  • Tavistock Investments guides that trading in the first 2 months of the year has been ahead of expectations. Which is odd given it withdrew its guidance for market expectations 16 days ago.


Alpha FMC – FY Results

Share Price 173p

Mkt Cap £179m

Conflict Disclosure: No Holding

  • Results Revenue up 17% to £90.9m. Adjusted EBITDA up 22.9% to £20.2m but 17.8% adjusted for IFRS16. Cash generation was 106% which could be a result of slowing trading towards the end of the period. EPS up 17.9% to 14.2p. No final dividend. Net cash £21m at year end which increased to £23m by June. Current trading is reported to be “solid” and the group is investing selectively in strategic hires. No guidance due to COVID uncertainty.
  • Estimates Results are ahead of expectations and original forecasts were for 7.8%PBT growth going forwards before guidance was withdrawn 
  • Valuation PE 12.2X on numbers just delivered.
  • Conclusion With current trading solid and cash growing during lockdown alongside hires being made this company appears to be thriving during lockdown. Which makes the withheld dividend and lack of guidance disappointing. The shares are 30% below February as traditionally they traded at 20X. When management release all the caution they shares can be expected to  return to previous highs.

Brooks Macdonald – Acquisition

Share Price 1705p

Mkt Cap £275m

Conflict Disclosure: No Holding

  • Acquisition Acquires Lloyds Bank International Channel Islands wealth management and funds business for up to £9.63m largely up front in cash. There is also a reciprocal introductory agreement. The business has £1bn of AUM which is below 1% of AUM. By bringing investment management in house and outsourcing administration the company expects to drive a material uplift in profitability.
  • Estimates Guidance is for 8-10% EPS accretion in the first financial year post completion, before revenue synergies. The PE multiple for the acquired business post restructuring is guided as 4.5X, implying post tax profit of c£2m.
  • Valuation On year to June 2022 when the acquisition is expected to be restructured the shares trade at 11.9X before 8-10% accretion. Brewin trades at 14X Sept 22 PE. Net cash will reduce from c £35m to c. £26m. EV/AUM 1.9%
  • Conclusion The shares have been in decline through a period of restructuring since 2017. Now the cash has built up its good to see the company on the front foot again. Revenue expectations are for 4% growth next year so there could be forecast upside as well. Looks like the recovery play.

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