• Hong Kong Stock Exchange abandons its bid for LSE Group, due to lack of engagement.
  • REFS, that many of us were fed in our early years in the high chair of the investment world have been bought by Slater and Stockopedia.
  • EY reports the quietest quarter for IPO’s in a decade
  • Non Standard Finance appoints Panmure as Joint Broker alongside Shore Capital

Impax Asset Management – AUM Update

Share Price 246p

Mkt Cap £321m

Conflict Disclosure: No Holding

  • Update Net Inflows of 1.6% combined with 1.9% help from the market to increase AUM to £15.05bn over the quarter to September. For the full year AUM is now up 20%.
  • Estimates Forecasts anticipate £17.5m PBT for the year to September and a further 21% growth in the year ahead to £21.1m, EPS 12.7p which look reasonable in the light of 20% AUM growth.
  • Valuation PER 19.4X the year ahead and yield 2%. EV/AUM 2%
  • Conclusion The shares are cheap on an EV/AUM basis and expensive on a PER basis by virtue of the low operating margins the company achieves. Better operational gearing to the environmental theme can be obtained at Liontrust where the PER is 13.4X.

Finncap Group – Trading Update

Share Price 25p

Mkt Cap £43m

Conflict Disclosure: No Holding

  • Update Revenue for the 6 months to 30 September expected to be £14.2m and PBT £1.3m.The statement says 12 new corporate clients have been won, 8 sale mandates completed and 17 new sell side mandates have been won, as well as a debt mandate.
  • Estimates None. Revenue in the year to March 2019 was £25m and PBT £3.2m.
  • Valuation The NAV is £20.6m and if the company can do, say £3m PBT that would equate to a 12% ROE.  It trades at 2.1X book value.  PER using adjusted EPS last year is 8.8X, but adjusted EPS excludes share based payments and includes a nominal tax charge. Numis trades at 9.6X and yields 5.6%, or 1.6X NAV.
  • Conclusion Given current markets this is respectable. But it may take a while for the company to grow into the valuation given profits look likely to decline this year. The graph of brokers revenues below may help with perspective