• An indicator of the death throes of capitalism appeared yesterday as the Pensions Regulator fined the FCA for pensions failings. The maximum find was levied of £2k.
  • Integrafin announced the placing by accelerated book build of 8.5 million shares by Michael Howard completed at 475p, very close to the 478p screen price.

Mortgage Advice Bureau– Trading Update

Share Price 696p

Mkt Cap £359m

Conflict Disclosure: No Holding

  • Update Revenue up 16% to £143m. Organic growth is declared to be 10% driven by a 14% increase in average adviser numbers. Revenue per adviser fell 3%. PBt is expected to be in line with expectations and cash was £21m, of which £7m is unrestricted.
  • Estimates A 16% increase in PBT is expected to Dec 2019 to £18.1m. This is expected to accelerate to 24% in 2020 which is £22.4m PBT. EPS 35.8p. Dividend 29.2p
  • Valuation PER 19.4X Yield 4.2%
  • Culture A glass door score of 4 evidences a positive culture while the CEO pay was £499k
  • Conclusion I have stressed the earnings this year to find the flaw and have failed. As long as the company continues to expand its network the company continues to be a growing cash generator. That looks unlikely to change, and may be helped by better housing markets this year.

SimlyBiz – Trading Update

Share Price 234p

Mkt Cap £226m

Conflict Disclosure: No Holding

  • Update Full year revenue is up 24% and EBITDA up 50% achieving a margin of 27% (2018 23%). Organic growth has also been delivered, defined as growth excluding acquisitions. Net debt is £27m representing under 1.6C EBITDA. Outlook say directors are confident that overall performance is broadly in line with expectations. The board is confident and optimistic.
  • Estimates a 28% revenue increase was expected to £65m and a 45% EBITDA increase to £16.6m so revenue looks a little behind but EBITDA a little ahead so the operating margin of 27% is ahead of expectations.  
  • Valuation PER 18.7X yield 1.8%. EV/EBITDA 15X
  • Culture The company scores well on Glassdoor reviews at 4.4 out of 5 as a good place to work in Huddersfield. CEO’s remuneration of £308k is not excessive.
  • Conclusion The Defaqto acquisition looks to be a very good one despite the 14X EBITDA multiple paid for the business. With 41% operating margins and cash generation being proven the shares could continue their re rating.

jeremy@charltonillingworth.co.uk