Q2 surprised, with guidance upgraded

Q2 beat due to better asset quality In Q2 BANCA IFIS reported a stronger set of numbers with PBT being c20% above our figure chiefly due to lower LLPs. Q2 23 revenues of EUR 173m were 2% above our number (EUR 170m) with higher fees and other income more than offsetting a softer NII (down c3% QoQ) with a broad-based contribution across businesses. LLPs were EUR 6m (vs EUR 17m last year) in the quarter and were lower than expected thanks to more resilient asset quality. Total management overlay re

Asset quality paid off in Q1

Q1 surprised thanks to lower cost of risk IFIS reported a stronger print with PBT being c.16% above our estimate, mainly due to lower cost of risk. Q1 revenues of EUR 176m were almost in line with our estimate (EUR 172m). It is worth mentioning that growth was driven by higher commercial banking revenues, while NPL business was stable with no major transactions in the quarter. Q1 23 LLP were EUR 10m (vs EUR 17m last year) and came in below our forecast of EUR 16m. It is worth highlighting that t

Delivering on growth ambitions

Q4 22 beat driven better NPL and rate sensitivity IFIS posted a stronger than expected set of number with 2022 net income (of EUR 141m) being c17% ahead of the guidance. In Q4 net income was EUR 35m (vs BNPPe of EUR 15m) and the beat came mainly from NII. The gap vs our estimate was mainly due to lower NPL headwinds (at EUR 22m vs our EUR 35m), rate sensitivity on credit book and higher income from investment portfolio. Below the top-line, lower than expected LLPs (at EUR 9m in Q4 net of the NP

Guidance confirmed despite headwinds

Bottom-line beat was mainly driven by trading gains IFIS reported a better-than-expected bottom line in Q3 22. The beat come mainly from trading and other revenues (EUR 14m) as the core business (i.e., NII and fees) was stable YoY and marginally below our estimate (i.e., 3%). Below the top line, we saw a lower-than-expected LLPs (despite EUR 7m of extra provision for concentration risk) as asset quality remains resilient, while costs came above our figure. This led net income to close at EUR 33m

Feedback from investor meetings: cyclical fears prevail

Elections confirm polls, with the right-wing coalition winning a majority of seats The Italian elections resulted in the right-wing coalition led by Giorgia Meloni of the Brothers of Italy winning a majority of seats in both lower and upper chambers, though far from the 2/3 needed to change the constitution. The new government will officially start in the week of Oct 10th, and after an initial phase of selecting ministers, it can begin effectively governing from early November. Thus, we may ne

Delivering in tough times

Cost control and lower LLPs led to better bottom line in Q2 22 IFIS posted another solid quarter delivering on the BP execution, despite the macro getting tougher. In Q2 22 net income was EUR 38m, 18% ahead vs our estimate of EUR 32m. NII came in line, while trading and other revenues compensated for lower-than-expected fees. LLPs were a touch better, with the main surprise coming from operating costs being the main driver of the bottom-line beat. CET-1 closed at 14.9% vs 15.7% in Q1 22. We note

An encouraging start to the year

Underlying trends were solid in Q1 22 IFIS reported a stronger than expected bottom line in the quarter with EUR 35m net income (+74% YoY) vs BNPPE at EUR 27m. The beat came from net revenues with trading gains from the property portfolio (of EUR 8m) being the main driver of the surprise. NII trend was solid with the bank outperforming the market both in factoring turnover growth and new leasing volumes. Below the top line, both LLP and Opex were in line with our forecasts. On cost of risk, we

Improving returns and stronger capital

The Italian leader in unsecured NPLs is ready to benefit from both the next wave of disposals and a growing factoring market. A leaner and more digital organisation should help in expanding returns, while stronger capital boosts the visibility on shareholder remuneration. A solid positioning built on specialised SMEs lending and NPL investing IFIS has built its solid positioning focusing on profitable niches targeting SMEs'' needs, while being a specialised investor in NPLs. The bank is the l

Transformation delivered

IFIS is generating balance sheet growth across many businesses including core trade receivable financing (with initiatives in pharmaceuticals and multi-utilities) and distressed retail loans. Despite this growth, capital ratios remain exemplary. In 2016 and beyond, this loan growth should deliver underlying, sustainable profit growth. Credit remains excellent. Our forecast 2016 PBT and EPS are largely unchanged.

Core businesses continue strong growth

The group’s strategy to replace bond profits with flows from sustainable business operations continues to be delivered, broadly speaking. Strong growth in the core trade receivables business and in the distressed loans operation meant the group net profit from financial activities fell just €2m to €57m (Q315 vs Q314) despite a €13m reduction in bond portfolio contribution. The bond portfolio contributed less than 10% of group’s net profit from financial activities (Q314 33%). Costs were well con

Positioned for strong growth

The key development in Q215 was the already announced crystallisation of the bond portfolio profits, generating a pre-tax gain of €124m. This realised gain is now in regulatory capital. The core business continued to show good growth, especially in the distressed loans and tax receivables units (revenue growth was 9%), and credit quality remained excellent. Further investment has been made to grow existing and new business lines.

Expanding new business streams

In the past week Banca IFIS has made two announcements that reinforce confidence in our expected profit growth. On 23 June it announced the acquisition of three NPL portfolios with a total nominal value of €883m, increasing the number of customers by c 100k (to 900k). On 17 June it announced an expansion into the niche pharmacy market. IFIS has strong capital and liquidity and can exploit market opportunities to grow.

NewRiver REIT+ (NRR, House Stock at 85p) - High quality earnings story – upgrade potential

LIBERUM: PensionBee: Hitting milestones despite headwinds

NextEnergy Solar Fund - H1/24 interim results and asset recycling update

NextEnergy Storage Fund now has 100 operational assets with a combined installed capacity of 933MW and exclusivity over, or ownership of the project rights for, most of its c£500m pipeline of domestic and international solar and energy storage assets. H1/24 performance was robust, with power generation in line with budget and the 36MW Whitecross solar farm energised. The first sale from the asset recycling programme has been completed post-period, with the proceeds being used to reduce short-ter

NFT INVESTMENTS PLC (NFT PZ) - NAV Rises to 4.3P per share

Regional REIT - Dividend rebase pragmatic and sustainable

Regional REIT’s (RGL’s) post-pandemic recovery in new lettings paused in H123, as occupiers adopted a cautious ‘wait and see’ approach, although rents increased and the strong ‘return to the office’ supports RGL’s expectation that leasing will accelerate. With DPS lowered to match reduced income prospects, the shares have fallen sharply, maintaining a sector-high dividend yield. Including asset sales focused on low-income properties, our forecasts show the rebased dividend to be fully covered an

Initial Equity Trading Comments - 1 December 2023

JPMorgan Claverhouse

JCH’s consistency and pure UK equity exposure mark it out from its peers…

Henderson Far East Income - Cautious of continued volatility but value on offer

In our last review of Henderson Far East Income (HFEL) in July, Attractive yield despite modest dividend increase, we drew attention to the dividend increase from what is comfortably the highest yielding fund in the AIC Asia Pacific Equity Income sector. It was pleasing to see that in the company’s published full year results to the end of August, the dividends paid by the company were covered and that over £1m was added to the revenue reserves over this period. In this note we examine the drive

DSW Capital+ (DSW, House Stock at 51p) - H1 results –promising outlook

Personal Group Holdings - Solid interims

Personal Group’s interims show strong growth momentum, with revenue up by 34% and EBITDA increasing by 75%. Given strong new insurance sales have continued at the start of H2 and retention levels have remained robust, the group is confident in meeting full-year expectations. The balance sheet remains strong (H1 net cash of £22.6m) and confidence in the outlook is reflected in the 10% increase to the interim dividend. Overall, this is an encouraging set of results and underlines the resilience of

Georgia Capital - NAV per share stable in local currency in Q222

Georgia Capital’s (GCAP’s) NAV per share in Georgian lari total return (TR) terms remained broadly stable in Q222 (a 0.2% increase) after absorbing the impact from lower public market multiples and higher discount rates in Q122 (when NAV per share declined by 16.5% in TR terms). Having said that, the continued appreciation of the Georgian lari against sterling (driven by the strong local economy) resulted in a solid 14.4% NAV TR in sterling terms in Q222 (-2.1% in H122). We also note that the sh

BioPharma Credit - A quality dividend play with FY22 yield of 12%

BioPharma Credit (BPCR) is on track to deliver a strong (possibly record-high) annual NAV total return (TR) in FY22 on the back of a high investment level in H122, rising interest rates benefiting its floating rate loans, as well as healthy prepayment and make-whole fees from the early loan repayments in recent months. This has allowed BPCR to announce a US$0.045 special dividend, which implies a 12.0% dividend yield for FY22 on the current share price. The above-mentioned fees also provide BPCR

Utilico Emerging Markets Trust - Emerging market growth opportunities at a discount

Utilico Emerging Markets Trust (UEM) is managed by Charles Jillings, together with deputy portfolio managers Jacqueline Broers and Jonathan Groocock, at specialist investor ICM. Jillings is frustrated by the trust’s wide discount, which he believes does not accurately reflect UEM’s strong past performance and future growth prospects. The fund has a consistently low beta and has outperformed the MSCI Emerging Markets Index over the past one, three, five and 10 years due to successful stock select

The Hardman & Co Monthly: September 2023

Feature article: Equity Income – UK or Global? Should investors widen their horizons? Introduction: ► The UK Equity Income sector (UKEI) is the fourth-largest investment company (IC) sector in the Association of Investment Companies’ (AIC) universe, with £12.5bn of assets (as at August 2023), and is the traditional home for investors looking for income in the equity market. ► The UKEI not only provides investors with a better dividend yield than the ge

First quarter of 2020

The covid-19 pandemic has had a devastating effect on the share price of property companies, with 31% wiped off the value of their total market capitalisation during the first quarter of 2020.