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  • Anexo notes yesterday’s high court judgement against Volkswagen that VW subverted pollution tests and if the 8000 cases being handled are successful this may lead to a significant profit in 2021 at the earliest. PE 6. Yield 10%.
  • FCA statement this morning states that companies may raise 20% of share capital without a prospectus, rather than 10%, alongside other measures to help companies raise capital quickly. It is a reminder of the significant issuance to come. I can’t help but suspect that Cenkos and Numis will be beneficiaries and note that Cenkos is trading at cash.
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S&U – FY Results

Share Price 1620p

Mkt Cap £196m

Conflict Disclosure:No Holding

  • Update –. PBT up 2% to £35.1m from revenue up 8% to £89.9m. EPS up 3% to 239p and final 50p dividend to be paid making 120p for the year. Loan book up 9% to £301m and net borrowings £117.8m. No furloughed staff. Guidance withdrawn and a rousing outllok statement referring to 82 years of success. March collections was “just below normal” while the bridging market is “frozen”.
  • Estimates –Gross debt is £121m of which only £3m is repayable within 12 months. As new lending slows the company becomes increasingly cash generative.
  • Valuation Having just delivered a 16% ROE the company trades at a 10% premium to book. CAPE is 12.2. Shares are down 35% from February.
  • Conclusion This is a survivor and is well placed to emerge stronger. I hope the payment of a final dividend will be well rewarded by the market.

River & Mercantile – Trading Update

Share Price 167p

Mkt Cap £143m

Conflict Disclosure: No Holding

  • Update Net inflows in the quarter were £434m or 1%. Performance was -5.3%. Interim dividend will be paid of 4.4p/share.  No performance fees expected in current year and advisory fees of £2.7m estimated for Q1. Future redemption notified amount to £1.6bn and £66m of mandates transitioning in.
  • Balance Sheet Net assets of £61m and £25m cash at December place the company in a strong position. The company was forecast to make a 20% EBITDA margin.
  • Valuation The yield is 6%. On previously forecast earnings the PE is 13.5X. Shares are down 45% since February.
  • Conclusion The company has been investing and after this trough year was forecast to grow 21% in 2021. This may now be a more acute trough but the maintenance of the dividend will add confidence that the company will prosper on the other side.

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