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  • Cenkos’ AGM statement reveals revenues for first 5 months ahead of prior year with a lower cost base. Mkt Cap £50m. NAV £25m

XPS Pensions – FY Results

Share Price 111p

Mkt Cap £226m

Conflict Disclosure: No Holding

  • Results Revenue up 9% to £119.8m, PBT flat at £11.4m and EPS flat at 9.8p.DPS 6.6p. Outlook is uncertain but currently low to middle single digit growth is expected in revenues. Net debt £56m.
  • Estimates Results are in line and forecasts anticipate 3% revenue growth and 7% PBT growth. 
  • Valuation PE 11.3X, Yield 5.9%.
  • Conclusion This is a private equity style ex growth but resilient company that used high leverage and dressed it up as a growth company for the market. It remains ex growth. Perhaps shareholders will be happy to accept a good yield while the debt is paid down but difficult to see the upside.

First Property – FY Results

Share Price 41p

Mkt Cap £45m

Conflict Disclosure: I Hold

  • Results As the company transitions from a property company to a fund manager it reports a 33% reduction in PBT to £5.52m.EPS 4.29p. Dividend maintained at 1.67p for the year. FUM was £567m, down 7% over the year which a 66% in UK properties with the balance in Romanis and Poland.
  • Estimates 5% revenue growth and 10% PBT growth is anticipated going forward.
  • Valuation Net assets 43p/share at cost or 55p/share on a mark to market basis. The revenue yield on the AUM amounts to c 55bps which perhaps makes the AUM worth 2%, or £11m.
  • Conclusion The fund management business is in for free, but it isn’t growing with no new funds launched during the year. Not exciting yet. 

Non Standard Finance – FY Results

Share Price 11.5p

Mkt Cap £36m

Conflict Disclosure: No Holding

  • Results Normalised revenue up 10% to £183.7m, Operating profit up 20% to £42.2m. Normalised PBT £14.7m while the reported loss was £76m after a £66m goodwill write down and Provident bid costs of £12.8m.  Normalised EPS 3.7p. Lending re started in May with collections running at 86% of pre lockdown levels. Audit report has a going concern uncertainty due to COVID 19. Net debt £285m. The company has breached covenants during COVID 19 preventing further draw down on its facilities and is in discussion with its lenders. It may issue equity
  • Valuation Net tangible assets £54m and market cap £36m. This is an unfortunate time to need to issue equity below NTAV.
  • Conclusion If the company goes ahead with an equity issue it should be a useful opportunity. Alternatively the company could go into run off where the short term loan book could deliver a return ahead of the current share price.

Secure Trust – Trading Update

Share Price 700p

Mkt Cap £130m

Conflict Disclosure: No Holding

  • Update Trading updates issued at 4.25pm tend not to imbue joy, but this looks like an exception. The slow down in lending where retail finance has been running at 50% of expected levels has led to a strong capital base and the company has remained profitable during April and May. As we come out of lock down volumes are recovering with motor finance particularly strong where used car prices appear to have hardened. “Well placed”
  • Estimates Forecasts are anticipating a small loss for this year followed by £7.4m PBT in 2021 and a recovery to £37m in 2022. This looks far too gloomy.
  • Valuation Net tangible assets £245m. Mkt Cap £130m. 
  • Conclusion Looks like a gift.


FBD Holdings – Update

Share Price 676c

Mkt Cap €337m

Conflict Disclosure: I Hold

  • Update AGM postponed to 31 July as a number of the farmer customers regularly attend. The proposed 100c dividend will not be proposed. €22m will be provided in H1 for business interruption claims that the company believes are not valid and will be tested in court in October. GWP is 3% lower in the first 5 months. Motor refunds of €7m and commercial refunds of €7m are expected which will be offset by lower claims frequencies. Investment returns are -1% for the year.
  • Valuation NAV is €375m and generally the company makes 15-30% ROE, while the shares stand at a 11% discount to NAV. The capital is building up with the dividend cancelled.
  • Conclusion This is not a joyful update but the strength of the balance sheet bodes well when the current uncertainties pass.

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