Mortgage Advice Bureau – FY Results
Share Price 575p
Mkt Cap £294m
- Results Revenue up 13% to £123m, GP up 10% to £28.4m and PBT up 8% to £15.7m. EPS up 9% to 25.9p. DPS up 9% to 23.3p. Adviser numbers up 13% over the year and since the year end have increased a further 2% to 1,234. The outlook statement cautions that those appointed representatives involved in estate agency sector are pausing their growth so the number of appointed representatives may grow at a slower rate in 2019 before resuming growth in 2020.
- Estimates Forecasts for 2019 assume 15% revenue growth. Looks like a downgrade today
- Valuation PER 20 yield 4.6% on a 90% payout ratio
- Conclusion The company has weathered the slow down in housing transaction as volumes were taken up by buy to let. As buy to let transaction slowed the end of QE boosted the transfer market. This is the first time that there seems to be nothing to take up the slack this year. Shares likely to fall to the level that the yield support will hold them at.
TP ICAP – FY Results
Share Price 303p
Mkt Cap £1710m
- Results Revenue a little better than flat at £1.76bn. PBT up 5% to £245m and EPS up 3% to 34.2p. Integration cost savings (revised previously) are on track with £71m cost savings achieved to date. Outlook is confident with a renewed strategy founded on four strategic pillars and a sense of purpose. Net tangible assets are £236m and debt outstanding is £624m although most of this is due in 2024.
- Estimates These results are in line. Going forward 3% revenue growth is assumed which looks in line
- Valuation PER 9.7X yield 5.7%
- Conclusion This company is cheap in valuation terms. I just struggle to understand why to own it. There is revenue growth in a couple of the new divisions such as institutional services and data and analytics but they are too small to move the dial materially. I can’t see it becoming a large company and there remains integration risk under a new CEO. I will pass quietly by on the other side of the road.