ORCH/TUNG

Hits: 26

  • FCA wrote to companies announcing results on Friday asking them to put it in the “too difficult” box and delay. S& U obliges this morning.
  • Plus 500 directors tucked away another c.£14m of stock announced Friday.

Orchard Funding Group – H1 Results

Share Price 77p

Mkt Cap 16.5m

Conflict Disclosure: No Holding

  • Update Loan book up 7.8% to £34m and revenue up 3% to £2.86m. A rise in admin costs of £280k leads PBT to fall from £1.18m to £1m. EPS 3.75p. The company states it is beginning to see the shoots of opportunity from its strategic acquisitions last year and is entering adjacent markets while it expects to re submit its bank license application in April.
  • Estimates Adjusted PBT of £1.8m is expected for FY to July 20. Having delivered £1m in H1 and bank license costs increasing this looks reasonable.  
  • Valuation TNAV of £15.3m is close to the £16.5m markets cap. PER 22 yield 3.9%.
  • Conclusion The company is quietly grinding it out. Expansion into adjacent asset classes is essentially filling the hopper for when the funding availability expands should it get a bank license. A safe place to hide just now with growing potential on the other side.  

Tungsten  – COVID statement

Share Price 21p

Mkt Cap £26m

Conflict Disclosure: No Holding

  • Statement At 10 March the company had £2.2m net cash. As well as £3m headroom on the revolving credit facility. The company has been contacted by some of their largest global buyer looking to increase electronic invoicing as part of their response to the pandemic. The company accepts the volume of invoices may slow with an economic slowdown but regards this positively. Trading remains in line.
  • Estimates   £2.7m EBITDA and £2.3m PBT loss expected for April 20 rising to £5.1m EBITDA and £0.4m PBT for April 21.
  • Valuation 0.7X revenue has the potential to be a multibagger if it navigates the virus and the route to profitability without a capital raise.
  • Conclusion The company was looking like it could get away without a capital raise until the global slow down arrived. The fact that electronic invoicing could increase on the back of companies going office less is significant reassurance. One for the brave.

jeremy@charltonillingworth.co.uk