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Banca Systema (BST) is an Italian speciality finance provider with factoring as its main activity. The long payment times that characterise public administrations (PAs) in Italy, together with EU-mandated late payment interest, create an attractive opportunity with low credit risk for a specialist lender such as BST. In consumer finance, BST has established a strong position in salary and pension-backed lending and has a small but growing pawnbroking business, providing alternative sources of gr
Companies: Banca Sistema SpA
Banca Sistema (BST) is an Italian speciality finance provider with factoring as its main activity. The long payment times that characterise public administrations (PAs) in Italy, together with EU-mandated late payment interest, create an attractive opportunity with low credit risk for a specialist lender such as BST. In consumer finance, BST has established a strong position in salary and pension-backed lending and has a small but growing pawnbroking business, providing alternative sources of gr
Lending has grown by more than 40% year-on-year but mix changes and some lumpiness associated with late payment interest (LPI) have constrained earnings growth in 9M18. This effect should unwind as the business continues to grow. It would not require full delivery of the bank’s three-year plan targets, including ROE of over 18%, to warrant a higher valuation. The capital position remains strong with a CET1 ratio of 11.1%.
There was a small one-off provision in the first quarter but, that aside, trading was in line with management expectations and Banca Sistema (BST) continues to focus on delivery of its recently published three-year plan which, on our estimates, points to substantial growth in receivables and earnings between 2018 and 2020. The shares in this specialist lender remain modestly valued, both in relative and absolute terms.
Banca Sistema’s (BST) three-year plan has set clear targets, which point to faster growth in receivables and a lower cost of risk (and returns) than we had previously forecast. While there are risks in delivering any corporate plan, both the background in BST’s markets and the bank’s own planned actions to achieve its goals are encouraging. We have raised our estimates for 2019 and 2020 significantly, underlining the modest valuation of the shares.
Banca Sistema (BST) reported moderate earnings growth for FY17 with factoring income tempered by mix and price effects while SME loan interest contracted as the book is run off. Positives included strong growth in factoring turnover and pension and salary backed lending with benefits to flow through in FY18 and beyond. Capital ratios indicate good headroom for further growth. The shares are cautiously rated relative to peers and publication of the business plan expected in April is a potential p
Banca Sistema’s (BST) Q3 results showed continued growth in its main trade receivables financing and salary and pension-backed loan activities. Reported profits were augmented by a higher accrual rate for late payment interest but, excluding the element relating to prior years, BST still targets an ROAE of 20% for FY17. Given this and the potential for continued growth, the valuation in terms of price to book and multiples of our reduced earnings estimates appears very cautious.
Banca Sistema’s first half figures confirmed further strength in factoring turnover and overall loans outstanding. Market conditions for factoring in Italy remain favourable and salary and pension-backed lending continues to offer good opportunities with the potential for a lower capital burden subject to regulatory discussions. Banca Sistema still trades on modest multiples, but continued growth in the loan book combined with success in delivering a return on equity of over 20% should provide t
Banca Sistema’s (BST) main activity is financing trade receivables from the Italian public sector. It also purchases commercial receivables and has a growing salary and pension backed loan business. It aspires to be the leading independent speciality finance provider in Italy. A modest valuation, capital headroom, potential for increased penetration of public sector factoring in Italy, market share gains for BST and the development of diversifying businesses combine to make an appealing investme
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Duke have released their annual results for the FY22A year ending 31 March 2022 and are in-line with both their prior trading update and our own expectations. FY22A was a behemoth year for the business as it transitioned from a more defensive positioning during the outset of the pandemic to an expansionary phase as things began to settle. We have released forecasts for FY24E for the first time and is a useful gauge for what a normalised year looks like post-deployment of available funds during F
Companies: Duke Royalty Limited
Trident Royalties Plc (AIM: TRR), has released its interim financial statement this morning. These come after the release of a comprehensive Q2 update.
Companies: Trident Royalties Plc
Companies: Plus500 Ltd.
CLIG’s annual report & accounts is precisely in line with its pre-close update of 19 July, which revealed $102m of net inflows, Sterling value of Group Funds under Management “FUM” of £7.6 billion and recommendation of a final DPS of 22p (2021 final: 22p).
Companies: City of London Investment Group PLC
Results are consistent with August’s update and confirm a breakout FY22, as Made Tech materially scaled its business – growing revenue 120% y/y (organic) to £29.3m, an exceptional result, which in turn drove a return to profitability, AOP: £2.3m (PY:£-0.8m). This was achieved by Made Tech more than doubling its headcount and alongside this, also delivered sales bookings of £51.1m (+115% y/y) which includes Made Tech’s largest ever win. Made Tech’s y/e backlog is also up sharply at £38.2m (+133%
Companies: Made Tech Group PLC
Singer Capital Markets
Companies: Aquis Exchange Plc
Argentex has announced that it has been granted its Electronic Money Institution (“EMI”) licence by the Dutch National Bank, representing another milestone as part of its International expansion strategy. The license allows the Group to fully operate within the Dutch market and enables further expansion into other EU territories going forward. We do not make any changes to our forecasts but highlight that this is another positive step as part of Argentex’s International growth strategy providing
Companies: Argentex Group Plc
Companies: Gore Street Energy Storage Fund PLC
Facilities by ADF have released interim results for the period ending 30 June 2022 and in-line with their prior trading update. ADF achieved record revenues in H1/22A and has continued to grow their fleet to support future growth. The current trading and outlook remain in-line with our expectations, and we leave forecasts unchanged. The valuation remains attractive with an FY23E P/E ratio of 10.1x and a normalised FCF yield of c15%.
Companies: Facilities by ADF PLC
Companies: FNX JOG PCIP
Inflation has now persisted beyond most people's 2021 expectations for a “short term blip” following the COVID crisis, and investors are increasingly under pressure to generate positive real returns in the first highly inflationary (i.e., >5%) environment since 1991. We expect a degree of asset price volatility to continue across all asset classes for quite some time.
In this note we look at the factors behind the current inflationary environment, evaluate which ones are likely to persist and
Companies: AEWU BERI HICL HHI ADIG PCFT PHP TRIG RICA SERE SEIT
Capital Access Group
Time Finance released their FY22 annual results ending 31 May 2022 in-line with the trading update in July. It has also released a Q1/23A update which provides colour on the success of its new strategy focused on the core business. We leave forecasts unchanged and believe the company remains on track to hit our FY23E forecasts. Time looks significantly undervalued given it trades on a P/TNAV of 0.5x, an FY24E PE of 4.1x and over 65% growth forecasted in Adj PBT over the next two years.
Companies: Time Finance plc
We note Friday's RNS from JIM announcing that part of their business is subject to a Section 166 review and that there are restrictions in relation to certain of its Model “B" clients. JIM provides an efficient and cost-effective trading product together with an outsourced settlements and administration operation. The latter, intended largely for wealth managers, including IHT and pension schemes, fund managers and stockbrokers, is the Model “B” business stream alluded to in the announcement.
Companies: Jarvis Securities (JIM:LON)Jarvis Securities plc (JIM:LON)
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Streaks Gaming plc, a UK-based provider of conversational gaming products intends to join the Standard Segment of the Main Market this autumn. The flotation is expected to value Streaks at approximately £10.2m (pre-money) and will make it the first LSE-listed "pure-play" conversational gaming co
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