Hits: 15

24 April 2020

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Results are ahead of expectations and original forecasts were for 7.8%PBT growth going forwards before guidance was withdrawn 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.

9 April 2020

Alpha Financial Markets Consulting– Pre Close Update
Share Price 129p
Mkt Cap £133m
Conflict Disclosure: No Holding

Update Results expected to be in line with expectations (£18.9m PBT). Net cash £20m and very little effect from COVID 19. Some small projects have been delayed and some lengthening of client approval process has been experienced which may have an impact in the future so guidance withdrawn. CEO, CFO and NED’s volunteered a temporary 40% salary cut.

Estimates Current estimates expect 5% PBT growth to March 2021.

Valuation PE 9.3X for March 2020. Yield 5.3%

• Conclusion The shares have halved since February and look very good value for the first time since IPO. This is a high quality niche situation and this has the words opportunity written on it.

20 November 2019

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Alpha Financial Markets Consulting – H1 Results

Share Price 193p

Mkt cap £199m

Conflict Disclosure: No Holding

  • Results Revenue up 9% to £42.9m and EBITDA up 12.4% to £9.5m. EPS up 10% to 6.82p. Net cash £17.1m. As the company continues its global roll out the number of clients has increased from 252 to 350 over 12 months. US revenues grew 38% and new offices were opened in Denmark and Canada. Outlook is in line with expectations.
  • Estimates Forecasts anticipate £10m of EBITDA in H2 against £9.5m in H1.16% PBT growth in 2021 fading to 9% in 2022.
  • Valuation The PER of 13.8X and yield of 3.6%
  • Conclusion This is not a high growth underlying business but the global roll out coupled with the acquisition strategy have the potential to produce good returns, and the shares are reasonably valued. This looks like a GARP stock for the next few years.

5 June 2019

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Alpha FMC – FY Results & Acquisition 

Share Price 231p

Mkt Cap £233m

Conflict disclosure: No holding

  • Results Revenue up 15% to £76m. Adj. EBITDA up 18% to £16.5m. EPS up 23% to 12.05p. DPS of 6p up 16%. Outlook is confident. Uk and Europe was strong while the US suffered lower gross profit and margin although the number of clients is reported to have increased. Also the £9m (plus undisclosed deferred consideration) acquisition of Axxsys with 28 employees in the UK Canada and Denmark. The only financial information is that it is “earnings accretive”
  • Estimates These results look in line with forecasts. Going forward 16% EPS growth is expected
  • Valuation PER 17X yield 2.8%
  • Conclusion This looks a very reliable stock but I struggle to find any angle for excitement. Acquisitions could be the excitement.

11 April 2019

Alpha Financial Markets Consulting – Pre Close Update 

Share Price 254p

Mkt Cap £257m

Disclosure: No holding

  • Update Revenue and EBITDA expected to be in line with expectations.
  • Estimates Anticipate 15% revenue growth to £76m and 11.6p EPS
  • Valuation PER 19X and yield 2.5%.
  • Conclusion Expensive for a consultant that charges premium rates to fund managers. But it continues to deliver strong growth and changes in the financial markets show no sign of letting up.  Just hard to see the positive surprise here.