IGG/IPX/SNN

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  • Randall & Quilter completes another legacy transfer saying it expects to finalise more transactions in 2020.
  • Arden notes the 60% share price fall
  • The £7.8m market cap Tavistock Investments issues £650k new shares to a strategic investor at a 48% premium to the share price to pursue acquisition opportunities in the wealth and asset management space.
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IG Group – Q3  Update

Share Price 614p

Mkt Cap 2,269m

Conflict Disclosure: I Hold

  • Update Revenue of £139.8m is 29% up year on year, driven by a 31% increase in leveraged OTC product and an 11% decline in stock trading. For the 9 month period revenue is up 9% to £389.7m, which is a 3% increase in core markets and a 51% increase in significant opportunities. High levels of trading have continued into March with revenue of £52m in the first 12 days of March. Outlook is described as extraordinary.
  • Estimates The company has delivered 77% of full year to May revenue estimates in Q3 and 12 days into Q4 has delivered 87%.
  • Valuation PER 714.6, falling to 13.8X pre upgrades. Yield 7%.
  • Conclusion Good place to hide just now. With Plus trading on 7.4X and higher operational leverage their estimates can be disregarded as way too low.
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Impax Asset Management – AGM

Share Price 222p

Mkt Cap £289m

Conflict Disclosure: No Holding

  • Statement AUM at end February was £16.3bn, a rise of 8% over 5 months. During March the funds have generally performed in line with the market with modestly negative net outflows.
  • Estimates  A 12% revenue increase is expected for the year to September 2020. Likely to come down on the back of a 27% market fall in March, but who knows where the market goes between here and September.
  • Valuation PE 17.2 on current estimates.  
  • Conclusion I recall what was called “green” investing being very cyclical in 2008. As soon as there is a crisis ESG gets relegated down the priority list.  The most expensive quoted fund manager could also be the most vulnerable.
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Sanne Group  – FY Results

Share Price 468p

Mkt cap £686m

Conflict Disclosure: No Holding

  • Results. Revenue up 14.7% to £165m and PBT down 2.1% to £42.4m as operating margin declines from 31.1% to 28.2%. Underlying operating profit is said to be up 4.7% to £44.3m and underlying PBT down 0.5% to £40.4m. The group expects a “resilient” performance in 2020. Looks forward with confidence. The balance sheet has £129.6m debt on equity of £171m, of which £180m is goodwill.
  • Estimates Results are in line with consensus. 10% revenue growth and 15% PBT growth expected in 2020.
  • Valuation PE 17.3X Yield 3.1%
  • Conclusion The shares are expensive on a PE basis. EV/operating profit is also 17.5X. The company has a resilient business which is why it is so leveraged. Not one for this market.

jeremy@charltonillingworth.co.uk