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  • The FCA has published its proposals as we near the end of the 3 month moratorium on mortgage payments. It states that customers who can afford their mortgage payments should pay. I never thought that would be news. Customers who haven’t yet had a payment holiday can request one until 31 October and the ban on repossessions will continue to 31 October. 

Close Brothers  – Q3 Trading Update

Share Price 1081p

Mkt Cap £1,636m

Conflict Disclosure: No Holding



  • Results In Q3 the loan book reduced 1.2% to £7.53bn. NIM a little down to 7.7%. Bad debt charge was £86.7m which compares to £36.7m in H1. Asset Management experienced modest net outflows while AUM was down 7%. Winterflood experienced a substantial increase in volumes with daily averages being double H1. Outlook is highly uncertain.


  • Estimates  If the bad debt charge was maintained for 12 months it would remove £200m from profits which last year amounted to £264m. As they say, highly uncertain.


  • Valuation NTAV/share is 785p and NAV/share 930p so at 1081p the shares aren’t yet a bargain, but in normal conditions the shares are perhaps £15.


  • Conclusion I can’t help but feel that this company with such dominant positions in lending niches will receive a bid at some point or get broken up. With the current disruption and a change of CEO that could be sooner rather than later.


Premier Miton – H1 Results

Share Price 100p

Mkt Cap £158m

Conflict Disclosure: I Hold


  • Results Net outflows were 3.5% over the half and AUM was £9.145bn at 31 March but in the month of April has increased 8.5% to £9.9bn. Fee margins of 67.4bps gave revenue of £33.4m and adjusted PBT was £12.2m, a 36% operating margin. There are £7m of synergy cost savings to come over the next 2-3 years which would imply a pro forma margin of 47%. Cash was £29.3m, a little ahead of the £20.6m NTAV. Outlook “well placed”


  • Estimates FY estimate is predicated on £65m revenue which assumes a 7% decline in H2. Given AUM is down 12% on a pro forma basis over H1 this may be a little full.


  • Valuation EV/AUM 1.4%. PE 9.4X Yield 5.6%


  • Conclusion With the increased scale and the potential of those high margins post £7m cost savings the valuation upside is significant if flows can turn positive. While it doesn’t yet have momentum the upside risk is out of proportion to the downside risk. The shares have halved in 12 months. I have more confidence in this as a recovery play than Jupiter.


And just because we may never see another retail sales chart like it: