Hits: 15

1 June 2020

MJ Hudson – Trading Update

Share Price 43p

Mkt Cap £74m

Conflict Disclosure: No Holding

  • Update –Reassures that the company remains confident of reporting profit in line with expectations to June 2020 albeit more from fund restructuring work while new fund launches have declined. The prospects for June 2021 will be reviewed when results for June 2020 are announced. 
  • Estimates £4.1m EBITDA to June 20 is on track and this is currently anticipated to grow to £6.5m EBITDA to June 21.
  • Valuation The company has c £11m net cash so EV/EBITDA is 15X June 20.
  • Conclusion There is no mention of acquisitions. The EV/EBITDA appears forward looking though acquisitions could change this.

18 March 2020

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MJ Hudson – H1 Results & Acquisition 

Share Price 56p

Mkt Cap 95m

Conflict Disclosure: No Holding

  • Update Underlying revenue growth of 25.8% to £10m. Adjusted PBT £0.3m. EPS 0.3p. Net cash £20.1m. The company reports a busy M&A pipeline. Outlook is cautiously confident without ignoring the COVID 19 risk. The company reports the acquisition of Meyer LLC, a marketing services and analytics business with a staff of 8 in New York and Vancouver. No numbers provided save it will be marginally EPS enhancing in its first full year.
  • Estimates FY revenue to June is expected to be £22m and PBT £1.2m.  These are expected to grow 23% and 260% to £4.3m to June 2021.
  • Valuation With £20m net cash the EV/EBITDA is 18.3X falling to 11.5X.  PE 118X falling to 25X
  • Conclusion The company appears to be doing what it says on the tin. Trading close to the 57p IPO price in December these markets may test whether the forward looking valuation can be sustained.

14 January 2020

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M J Hudson – Pre Close Update 

Share Price 59p

Mkt Cap £100m

Conflict Disclosure: No Holding

  • Update H1 revenues are £10.4m. Organic growth was 7%.The company acquired an ESG reporting business in July 2019 and the acquisition of Anglo Saxon Trust is expected to complete in the next 2 months. The board is confident that trading is in line (which is handy when the IPO was 12 December).
  • Estimates June 2020 house broker estimates £22m revenue, £4.1m EBITDA and £1.2m PBT. Net cash post IPO is expected to be £24.7m. Pro forma EBITDA pre investing costs is said to be £5.2m in June 2019. With £10.4m revenue in H1 that leaves an increase of £1.2m from H1. Perhaps half of that may come from The ESG acquisition and with AST scheduled to complete in H2 the organic targets look undemanding.
  • Culture I look forward to meeting this company.
  • Valuation EV/Revenue 3.4X. PE big. EV/EBITA 24X, but pre investing costs lower, perhaps below 13X.
  • Conclusion With 3 divisions of advisory, outsourcing, and data and analytics the business is unique. In the seemingly endless world of regulatory hosepipe squeezing it seems to me that the pricing pressure is moving from the brokers to the fund managers and the fund suppliers are further up the chain. This could be a good place to be as the data and analytics may be where the pricing power is over the next few years. But it is priced accordingly. It looks like 6 months until we get upgrades so hard to see short term excitement here.