• Tungsten Chairman buys 474k shares at 42p.

Liontrust – AUM Update

Share Price 748p

Mkt Cap £410m

Conflict Disclosure: No Holding

  • Update Net Inflows of 4.6% and a negative market contribution gave a 4% increase in AUM over the 3 months to September to £14.6bn. That is an increase of 22% over 12 months, beating Impax.  Neptune acquisition was completed on 1 October adding £2.7bn AUM bring pro forma AUM to £17.4bn. This will dilute the economic advantage process from 48% AUM to 40% AUM and sustainable process from 32% AUM to 26% AUM.
  • Estimates 20% EPS growth is anticipated for the year to March 2020 to 55.9p, which is modest bearing in mind the accretion from the Neptune acquisition and the 20% underlying AUM growth. Currently Neptune is loss making but post £16m of reorganisation costs it is expected to be earnings enhancing from March 2020.
  • Valuation PER 13.4X and yield 4.3%. EV/AUM 2.8%.
  • Conclusion The shares are good value. Performance of the funds remains largely strong and with the new distribution for the Neptune funds and modest forecasts this feels a little like Jupiter IPO’s in 2010. Investors should not under estimate the influence of momentum in this business.

Alpha Financial Markets – Pre Close Update

Share Price 203p

Mkt Cap £210m

Conflict Disclosure: No Holding

  • Update Trading is in line with expectations with “progress” on a like for like basis.  The pipeline is reported to be “good”, despite uncertainty in political and economic environment.. The integration of Axxys, acquired in June is largely complete and it is reported to be performing to expectations.
  • Estimates None. Revenue in the year to March 2019 was £25m and PBT £3.2m.
  • Valuation PER 14.6X and Yield 3.4%.
  • Conclusion This is a high quality situation albeit perhaps not a secular growth market. Ultimately as fund manager fees come under pressure this will feed through. Though that is some years away yet. With £18m cash and the potential to make further acquisitions some strong accretive earnings enhancement can be anticipated over the next two years despits a modestly lacklustre statement this morning.