Hits: 3

Curtis Banks Group – FY Results

Share Price 291p

Mkt cap £159m

  • Results Revenue up 6% to £46.1m. Adjusted PBT up 13% to £12.1m and adjusted EPS up 13% to 17.3p. DPS up 28% to 8p. Outlook is confident. Undelying SIPP numbers grew 3% organic.
  • Estimates These results are politely ahead of expectations. 15% EPS growth expected in 2019
  • Valuation PER 15X yield 2.96%
  • Conclusion This is a very high quality situation. Its just hard to get excited about 3% organic growth. But its probably right to.

Alpha FX – FY Results

Share Price 640p

Mkt Cap £234m

  • Results Revenue up 73% to £23.5m. Underlying operating profit up 48% to £10m and underlying EPS up 30% to 22.7p. Client numbers up 55% to 482. During the year the company launched in Canada, launched an international payment platform and launched an institutional division. Outlook says Q1 has started well. Net cash is £36m and the statement refers to numerous investment opportunities.
  • Estimates Results are in line with upgraded estimates. The forecast 6% EPS growth in 2019 looks far too modest.
  • Valuation PER 26.4X yield 1.1%
  • Conclusion This is a difficult one to fault. I have tried. High ROE, high growth and repeat income with a strong balance sheet. Reassuringly expensive.

SimplyBiz – Acquisition

Share Price 191p

Mkt Cap £146m

  • Acquisition The company is acquiring defaqto for £74.3m which is a multiple of 14X historic EBITDA. The acquisition is finance via a placing, a vendor placing and the introduction of a new £37.5m bank facility. Post acquisition the company will have leverage of 2.3X EBITDA. The acquisition is expected to be earnings enhancing during the first 12 months of ownership
  • Estimates The earnings enhancement is a factor of financial engineering when a lot of the consideration is made up of debt. Paying 14X EBITDA suggests earnings enhancement will be small. Synergies are not set out in detail
  • Valuation PER for December 2019 is 15X pre acquisition and yield is 2.1%.

Conclusion This is a “strategic acquisition” which usually transalates as overpaying as indeed they seem to have done.  Notwithstanding that this is a high quality business trading at a reasonable price in PER terms