CMC/IPF

Hits: 28

  • M&S cuts dividend. There was a full range of sandwiches on offer yesterday at the petrol station. No panic buying there.
  • Dart Group CFO and CEO buy 20k shares each yesterday.
  • As the mortgage holiday is extended to buy to let Paragon Banking Group retail bonds 6% 2024 trade at 62p, giving 100% cash return over 4 years if it survives. A little out of tune with the equity price indicating market dislocation starting.
  • Investec warning on the back of a difficult operating environment in UK and South Africa exacerbated by COVID 19 in Q4.
A picture containing drawing

Description automatically generated

CMC Markets – COVID statement

Share Price 135p

Mkt Cap 391m

Conflict Disclosure: No Holding

  • Update After taking a dig at IG Group’s recent outages by saying their technology platform has held up well the company guides that since their 3 March update trading has been in excess of double that seen in normal market conditions both in CFD and stockbroking. Net operating income expected to be ahead of consesnsus for March 2020. Another pre- close due on 3 April.
  • Estimates Given the March 2021 estimates are lower than 2020 as the regulatory changes work through this is the normalised year to price the shares off and no guidance is provided beyond the year just ending. £73m PBT consensus for March 2020 is currently expected to fall to £49m.
  • Valuation PE for March 2021 9.8X, compares to 13.2X for IG Group and 6.3X for Plus 500
  • Conclusion Anything in this sector is a good place to hide, but upgrades didn’t stop IG or Plus 500 from falling. This is a time when only balance sheets matter.
A picture containing drawing

Description automatically generated

International Personal Finance – COVID statement

Share Price 72p

Mkt Cap £162m

Conflict Disclosure: No Holding

  • Statement The company has suspended agent home visits in Poland and made arrangements for customers to pay remotely. In the first 10 weeks of 2020 there was no discernible impact of COVID-19 on credit issued or collections. However, actions now taken, together with Hungary’s allowing consumers to avail of a debt repayment moratorium, the company now expects collections and credit issued to be adversely impacted, but is unable to quantify this. Further update on 30 April
  • Estimates In Dec 20 £63m PBT is expected from revenue of £883m.
  • Valuation NAV is c £436m. Loan book £973m. The company notes an equity to receivables ratio of 45%. Of the NAV c. £66m are intangibles.
  • Conclusion After so many legislative and regulatory headwinds it is hard to imagine IPF being high on governments list of people to help.  If the company closed it doors and ran off its short duration loan book shareholders may well get more than the current share price.

CMC/IPFjeremy@charltonillingworth.co.uk