SHRE saw revenue (excluding
interest) increase 7% year-on-year, up from the 1% growth in H1, as it
increased assets held by 34% yoy to £3.6bn.
Its acquisition of a book
of 8,000 client accounts (mostly ISAs) with c.£200m of assets under
administration, is expected to complete in April 2017.
The company, operating
under the Share Centre brand, gets 48% of its revenues from dealing commission
which increased 9% versus Q3 2015, in what management say was a particularly
"This growth was supported
by the Barclays Investment Club accounts acquired in February 2016, as well as
healthy trading volumes since the EU Referendum Result. The peer group
experienced an increase of 14%"
The lionshare of the rest
of its revenue comes from Fee income, which increased 6% yoy. Share's fee
income (47% of total) is considerably higher than its peers where fee income is
collectively only about 13% of revenues.
Whilst fee income increased
6% at SHRE, its competitors averaged 29% growth comparatively, which SHRE say
is due to the EU-referendum boosting trading activity:
"Fee-based charges are
often based on the value of customer holdings and therefore increase or
decrease with the value of those holdings, thereby penalising the customer in a
rising market as seen in the last quarter...
Whilst this positions The
Share Centre very competitively, especially against value-related fee
structures and particularly in weak markets, it does not benefit to the same
extent in rising markets as the last quarter demonstrates."
CEO Richard Stone said
Share's performance in Q3 was in line with expectations, saying the results
reflected the benefits of the acquisitions the firm had made and net account
transfers-in from other brokers.
"This new agreement
highlights our high quality customer service and compelling flat-fee pricing
The Share Centre remains a
compelling home for wealth management businesses looking to find a suitable
provider of execution-only services or looking to exit the execution-only
element of their operations."
Share's market share for Q3
was 10.08%, increasing 0.02% on Q2 but falling 0.8% yoy. The company's share
price opened up 3.45% this morning, and currently trades on a P/E ratio of 68.8
based on 2015 earnings of 0.4p per share, but looking to 2016 consensus
forecasts, analysts are expecting a loss per share of c.0.49p.