Hits: 14

21 July 2020

Integrafin – Q3 Update

Share Price 516p

Mkt Cap £1,709m

Conflict Disclosure: No Holding

  • Update Net inflows of 2.3% in the quarter to June combined with market and other movements of 11.2% to increase AUM by 13.5% to £39.7bn.  Outlook is dependent on economic impacts on markets.
  • Estimates AUM are 5.1% ahead over the first 3 quarters while a 6% revenue increase is anticipated in the year to September 20.
  • Valuation PE 40X Yield 1.6. Nucleus trades on 31X.
  • Conclusion Hard to see what will stop the momentum. Reassuringly expensive.

21 April 2020

Integrafin – Q2 Update

Share Price 457p

Mkt Cap £1,515,

Conflict Disclosure: No Holding

 

  • Update Net inflows of 2.8% in the quarter and market movements of -13.8% take AUD from £38.3bn to £34.99bn. AUB flat over the year.

 

  • Valuation PE 37.8 Yield 1.9%

 

  • Conclusion It is interesting that the largest platform has the strongest flows. This may be a market where the winner takes 80%. Which could justify the valuation in the long run.

 

21 January 2020

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Integrafin – Q1 Update 

Share Price 455p

Mkt Cap £1,507m

Conflict Disclosure: No Holding

  • Update. Net inflows of 2.5% over the quarter to December bring FUD up 4% to £39.3bn. The company suggests that Transact had the highest net inflows of all advised platforms. FUD are now 24% higher that 12 months ago.
  • Estimates Forecasts to September 2020 assume 12% revenue growth which assumes steep pricing attrition given AUM are 24% up on 12 months ago. Room for upgrades perhaps as we get closer to the autumn.
  • Valuation PER 33.2X Yield 1.9%.
  • Conclusion 50% operating margins makes growth have a powerful effect on profitability. By 2022 the PER drops to 25X and with upgrades the shares may be discounting perhaps 3 years ahead.  Which is OK for the very long term investor. But not the value investor with a tin het firmly secured under the desk. This remains a market sensitive stock.

18 December 2019

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Integrafin – FY Results

Share Price 456p

Mkt Cap £1,510m

Conflict Disclosure: No Holding

  • Results AUD rose 14% in the year to September driving a 9% revenue increase to £99.2m. PBT was up 19.8% to £49m an operating margin of 49%. EPS 12.1p. The numbers are not adjusted for the listing costs in the prior year and if the £2.3m listing costs are stripped out the PBT growth is 13% rather than 19.8%.  Ian Taylor is to step down as CEO “to spend more time with the business”
  • Estimates Revenue is in line with expectations and PBT is 5% ahead. Going forward a 18% increase is anticipated to £55.2m.
  • Valuation PER 33.6X  yield 1.9%
  • Conclusion The culture in this company is hard to under estimate. It is unusual to have a CEO stepping down “to spend more time with the business”. And it is the only remuneration report that has the courage to say there is no LTIP because it encourages “dysfunctional” behaviour. Expensive but sometimes that’s OK when the culture is there. Unlike Hargeaves Lansdown.

23 July 2019

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Integrafin – Q3 Update  

Share Price 383p

Mkt Cap £1.27bn

Conflict Disclosure: No holding

  • Update Net inflows were 2.3% in the quarter to June bringing AUM to £36.4bn, an increase of 5.6% over the quarter. The statement also comments that costs are modestly below initial expectations.
  • Estimates Forecasts for the year to December 2019 look for 8% revenue growth and 15% PBT growth. An annualized growth rate of AUM and the comment on costs suggest we are in upgrade territory.
  • Valuation PER 33.9X and yield 1.9%
  • Conclusion The high valuation may be anticipating upgrades. Perhaps this high quality situation has a valuation which is 2 years forward looking. Long term holders can be happy with that.

17 May 2019

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Integrafin – H1 Results 

Share Price 406p

Mkt Cap £1.35bn

Disclosure: No holding

  • Results FUD of £34.4bn as previously announced represents a 15.6% increase over 6 months. Revenues up 6.7% to £47.6m and PBT up 19.8% to £22.4m. EPS up 25% to 5.5p Net assets are £101m of which £88m are tangible. Outlook is confident.
  • Estimates H1 revenues are 48% of FY revenues so estimates look sound.
  • Valuation  PER 31.6 yield 2.1%
  • Conclusions The growth outpaces the 2% margin contraction so this looks like a long term market leading compounder. I find the statement in their annual report that there is no LTIP “because it encourages dysfunctional behaviour” encouraging that this is a tightly run business.  Expensive but likely to stay expensive.  

24 April 2019

Integrafin – Q2 Update 

Share Price 387p

Mkt Cap £1.29bn

Disclosure: No Holding

  • Update FUD is up 8.7% over the quarter to March to £34.4bn. Net inflows were 2.9% (£926m).
  • Estimates 8% revenue growth looks very realistic given FUD are up 15% year on year against fee pressure headwinds.
  • Valuation PER 31. Yield 2.1%
  • Conclusion 2.9% net flows is consistent with December and ahead of the pack (see below). Integrafin is the first to report the quarter to March. AJ Bell, trading on 41X reported 2.5% in the quarter to December. Reassuringly expensive.

13 December 2018

Integrafin – FY Results 

Share Price 272p

Mkt Cap £925m

  • Results FUD were up 18% over the year to £33.1bn on the back of strong net inflows of 14.7% over the year. Revenue was up 14% as revenue margins continue to suffer attrition and PAT was up 10.1% to £32.9m. Adjusted PAT was £35.5m. The outlook refers to the resilience of platforms in bear markets. Adjusted operating margin was 47%. Dividend is increased 10%
  • Estimates Results appear to be a little behind consensus of £36.6m of adjusted PAT while revenue is bang in line. Going forward estimates look for 14% EPS growth which potentially could be aggressive if there is a prolonged slow down in commission.
  • Valuation 12 months forward PER is 22.8X and yield 2.8%
  • Conclusion With the shares having come back from the 400p high post IPO they look to be fair value.

24 July 2018

Integrafin – – Q3 AUD update  

Share Price 385p

Mkt Cap £1.3bn

·         Update AUD increased 7.2% over the 3 months to June against the FTSE all share which increased 7.9%.  Over 12 months the AUD are up 19.4%. Net inflows in the quarter were 3.2% and markets added 3.8%.

·         Valuation PER is 35X and yield 1.6%. EV/AUd is 3.7%. While the AUD yield something in the region of 30 bps the operating margin is 48%.

·         Conclusion The shares are up 96% since the company IPO’s in March and now trade at a valuation that can make investors reach for the defibrillter.  I hear that Nucleus was heavily oversubscribed at a valuation that represents c 22X.  This platform and IFA sector is where the growth is at and with the stickiness of AUM that can be hugely valuable.  But really ….35X.