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CORPORACION FINANCIERA ALBA
CORPORACION FINANCIERA ALBA
A portfolio rotation quietly driven
08 Sep 15
H1 15 net result decreased to €151m (compared with €289m at 30/06/2014), due to a lower share of profits of associates and capital gains on asset sales. Concerning the performance of the equity associates, the decrease of their income (-68% to €29.3m) came mainly from the loss recorded by Indra Sistemas (net loss of €436m for a 100% share, including non-recurrent effects consisting of provisions, impairment losses and profit overruns) and Alba’s sale of part of its holdings in ACS and Acerinox. The decrease was only partially offset by the consolidation of the holdings recently acquired in Bolsas y Mercados Espanoles (BME) and Viscofan. Alba continued to sell ACS and Acerinox shares, took the opportunity to sell the 1.2% of Indra acquired in Q4 14 at a favourable price and divested Antevenio, altogether for €315m. The main divestments achieved in H1 15 were the following: • 1.73% of ACS for €173m (IRR of 12% for 17½ years), resulting in capital gains of €85.4m; • 3.10% of Acerinox for €118.3m (IRR of 4.8% for 13½ years) and capital gains of €26.4m; • 1.2% of Indra for €21.7m; • the entire holding (14.5%) in Antevenio for €1.6m (while the holding was valued at €2.7m in our NAV – but the difference in absolute terms is small). During the period, Alba made new investments for a global amount of €296m, by acquiring: • office premises located in Madrid for €147m; • an additional 1.65% in BME for €50.8m; • an 8.02% holding in Euskatel’s share capital for €96.4m as a result of the IPO made by this company on 30 June. Established in 1995, Euskaltel is the leading telecommunications operator in the Basque country offering broadband internet, digital television, landline and mobile telephone services. Since it started, Euskaltel’s accumulated investment amounts to €1.9m. In 2014, the company recorded a turnover of €315m and a net profit of €37m. Alba is Euskatel’s second largest shareholder after Kutxabank. As we expected, Alba distributed in June a final dividend of €0.50 per share, which was recorded on the 2014 profit.
Mobilising the strategy
08 Dec 16
PCF has reported a good set of FY16 figures this morning. Pro forma 12 month adjusted pre-tax profit increased 38% YoY to £4.0m (FY15: £2.9m), 5% ahead of our estimate of £3.8m. Fully diluted return on equity remained broadly stable YoY at 13% but beat our forecast of 12.6%, driven by good loan book growth, up 14% YoY to £122m. Given the strength of the results the board has reinstated a dividend of 0.1p per share. Following Tuesday’s announcement of the approval of a banking licence, we believe that the group now has the capacity to accelerate its growth prospects. While the shares trade at 12.0x earnings and 2.0x reported book value, we do not believe this valuation captures the growth potential of the business.
VPC Speciality Lending Investments PLC – sticking to your knitting pays dividends
05 Dec 16
A 25% discount on a dividend paying vehicle suggests either (a) lack of belief in the NAV, (b) lack of belief in the dividend, (c) concerns over future delivery, (d) a shareholder’s base not normally exposure to “closed end structures” or (e) some combination of (a) to (d). We had a first meeting with the management team and London representative of VPC Speciality Lending to try to better understand why the share price had fallen quite so much.
Small Cap Breakfast
07 Dec 16
Creo Medical group—Schedule 1 update.. £20m raise. Expected market cap £61.2m, admission expected 9 December. ECSC—Schedule 1 from provider of cyber security services. Raising £5m. Vendor sale £0.8m. Target date 14 Dec. Expected market cap £15m. RM Secured Direct Lending - The secured direct lending fund intends to float on the Main Market on 15 December raising up to £100m
Better Capital – A tale of two funds
05 Dec 16
Our gut feel on the results is that BCAP’s Gardner disposal feels viable (albeit as a late Q1 transaction). Post Gardner, the exit profile for BCAP’s portfolio is slanted towards the years 2018/19 and not earlier; we view the market’s current pricing as cautious (14% disc to our estimate of FV). In contrast, BC12’s more consumer facing portfolio remains a work in progress and may well offer further disappointment before turning a corner; the market valuation (51% discount to NAV) is cautious but probably fair given the difficulties.
Panmure Morning Note 07-12-2016
07 Dec 16
PCF today announces that it has succeeded in achieving once its major strategic goals by being granted a UK banking licence. In line with prior guidance, the company aims to begin taking deposits in summer 2017 and will initially focus on lending to its core markets in consumer motor finance and SME asset finance. As well as supporting growth in the loan book, the banking licence will both diversify and reduce the cost of its funding base. More details are expected as part of the FY16 results tomorrow.
Meeting near-term headwinds
06 Dec 16
In its trading update IFG reported that performance has been in line with management expectations. The cooling effect of market uncertainty on growth in James Hay and financial advice client numbers, together with the impact of low interest rates, remain a near-term head wind for revenues. Even so, with Saunderson House continuing to increase profits, IFG expects to match 2015 earnings. The long-term growth opportunity presented by an ageing population and pension freedoms remains in place and to address this IFG is continuing investment to enhance its service and increase operational gearing.