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18 March 2020

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Curtis Banks – FY Results 

Share Price 197p

Mkt Cap £107m

Conflict Disclosure: No Holding

  • Results Revenue up 6% to £48.9m, adjusted PBT up 11% to £13.4m delivering an operating margin of 28.1%. Adjusted EPS up 10% to 19.4p. While gross organic growth in own SIPP numbers is reported at 7% but the attrition rate exceeded this. Total number (including third party administered) fell 1.5% to 76,541. The commercial property services is reported to be profitable in its first full year. DPS 9p. Outlook says 2020 started well but COVID 19 creates uncertainty for the remainder of the year.
  • Estimates Results are in line with expectations. Going forward PBT growth of 9% is expected which with lower SIPP numbers (the company charges per SIPP) may be aggressive.
  • Valuation PE 9.6X Yield 5%
  • Conclusion The shares are down 55% from their high.  While the revenue is relatively sticky it also has an ex growth look, which would suggest the 5% yield and low PE is appropriate.

20 March 2019

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.

6 September 2018

Curtis Banks – H1 Results 

Share Price 284p

Mkt Cap £153m

·         Results PBT is up 16% to £5.8m from revenue up 7.5% delivering an operating margin of 26.2% (2017A 24.7%). Will Self now takes over as Group CEO. Free shareholder cash is £9m.

·         Estimates Forecast look for 13% PBT growth in the current year to £12.1m. The company has delivered £5.8m of adjusted profit in H1 thus making forecasts for the full year look conservative but they look unlikely to change today

·         Valuation PER is 16.3X current year falling to 14.2X with PBT growth driven by margin improvement. The yield is 2.6%. JTC Plc as a comparator trades on 24X falling to 19.6X while having considerable net debt. Their EV/EBIT is 21.7X falling to 17.1X

·         View These shares are undervalued given the visibility on profit growth driven by margin improvement. With a new CEO better visibility on strategy is likely to give shareholders the confidence to bid the shares up