Secure Trust Bank - Solid interim results

Secure Trust Bank (STB) reported H122 PBT of £24.7m, including an £8.1m gain on the disposal of its Debt Managers Services (DMS) unit. Reported return on equity (ROE) was 12.5%, and the underlying ROE was 8.3%. Pre-provision operating profit was up 22% y o y driven by a 23% increase in core loans. Underlying earnings were down 52% y-o-y as impairments returned to a normal level (annualised 1.4% of loans in H122) after the unusually large COVID-19 related loan reversals in H121. STB’s capital pos

Updating forecasts post H1'22 results

Storebrand may find momentum earlier than expected

Storebrand’s H1 22 results were very strong and offered a glimpse of the profitability potential once the short-term negative effect of higher rates and inflation is absorbed. While we had expected a tougher quarter on profitability, the performance delivered and metrics disclosed imply very little probability of headwinds ahead. In a tough macro-economic environment, Storebrand’s idiosyncratic risk-return profile now seems very attractive.

Secure Trust Bank - Strong loan momentum in Q122

Secure Trust Bank disclosed in its Q122 trading update that balance sheet momentum is strong and the business remains on track to deliver on management’s medium-term growth targets. Loan and core loan growth were 4.5% and 4.8%, respectively, in the three months to 31 March. We are forecasting 17% and 18% growth for the full year. Deposit growth was similarly fast paced with a 4.1% increase in the three months and on track for our forecast of 17% for FY21. We note, however, that the economic slow

Ultimately a safe haven despite the high price?

Storebrand has released a very robust set of Q1 22 results. While we tend to qualify the war’s ripple effect to be, so far, moderate to low we believe that the firm’s structure could actually enable it to navigate these uncertain times driven by inflation, potential recession and tumbling markets. The announced NOK500m share buy-back is a move in this direction with a demonstration of confidence.

Secure Trust Bank - FY21 earnings beat with momentum

Secure Trust Bank (STB) reported FY21 PBT of £56.0m (£57.4m normalised, we forecast £52.7m) and a ROE of 15.9%. The beat was driven by provision reversions: the loan loss ratio was 0.1% versus 0.3%. The numbers otherwise were in line with our expectations. Revenue was flat year-on-year, but pre-provisions profit fell by 18% since costs rose 12% as STB invested for growth. We are forecasting 15–17% annual loan growth for FY22–23 as management sees good risk-adjusted opportunities despite the infl

Strong CY21 results

Secure Trust Bank - Selling debt purchase loan book

Secure Trust Bank (STB) disclosed on 11 March that it is exiting the debt purchase market by agreeing to sell its Debt Managers Service (DMS) portfolio to Intrum UK Finance, a debt purchase specialist. The deal is expected to complete towards the end of Q222. DMS accounts for 4% of STB’s loans balance and STB disclosed that DMS made a small £0.5m loss in 2021. The deal looks to be earnings enhancing. STB estimates that £72m of risk weighted assets will be released (about 50bp of capital), which

Hybridan Small Cap Feast 11/03/22

What’s cooking in the IPO kitchen? Aquis Exchange (AQX.L) the exchange services group, announced its intention to apply for admission of the Group to trading on the Apex Segment of the Aquis Stock Exchange Growth Market. Aquis' shares will continue to trade on the AIM market of the London Stock Exchange plc to satisfy certain regulatory requirements. The Group is targeting admission to the AQSE Growth Market on 29 March 2022. Private equity firm Blue Owl Capital is planning to list assets from i

Profitable exit from debt purchase market

Disappointing results and scepticism on distributions despite quality

The disappointment stems from Storebrand’s FY release. Guaranteed pension’s net profit sharing has limited the damage but lower distributions than expected as well as a dented path towards buy-backs confirm our view that the firm is currently too expensive, despite the quality of its high growth.

Secure Trust Bank - Pre-close shows loan growth ahead of forecasts

STB disclosed in its pre-close trading update that loan growth is strong and ahead of our forecasts. STB said that it saw a record level of new business lending in Q421 at £471.1m (+52% year-on-year). The core loan balances were up ‘by double digits’ year-on-year versus FY20, compared to our forecasts of 6% (core loans) and 2% (total loans). There were no new statements regarding margins or asset quality, although the news regarding the latter was quite upbeat in the Q3 update. We take note of t

Very strong Q4'21; positive momentum continues

Secure Trust Bank - New tech and lower impairments

Secure Trust Bank (STB) announced that it has acquired AppToPay for an undisclosed ‘small amount’ and plans to use AppToPay’s proprietary technology platform to develop and grow its digital Buy Now Pay Later (BNPL) business. STB has also disclosed that its FY21 loan impairments will be ‘materially below’ analyst consensus of £12.9m (Edison: £12.7m). This is welcome news, although most investor attention regarding impairments has moved to focus on FY22. We are adjusting our FY21e EPS by 7% to 226

Profit upgrade & small acquisition in BNPL space

LIBERUM: Plus500* - A new five-year incremental, annualised revenue objective of $500m

A breakout year

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%

LIBERUM: Aquis Exchange* - Continued revenue growth and investment in the future

Regional REIT - Continuing to deliver income-led returns

With pandemic restrictions lifted and the return to work underway, Regional REIT’s (RGL) H122 results show good and continuing operational progress. The sharp rise in energy prices affected property costs, but this should moderate with government support measures. Combined with income seasonality and fully fixed/hedged borrowing costs, RGL expects a stronger H222 performance and reiterated its full-year DPS target of 6.6p.

SHORE CAPITAL - Gore Street Energy Storage + (GSF) - House Stock at 123p

NAV steps up on rental growth and tighter yields

With results two weeks away, PRSR has flagged that it now expects EPRA NAV will be “no less than 116p”. This is +11% in H2 alone and 10% ahead of our 106p forecast; driven by +5% rental growth and tightening valuation yields. There has been further development progress in Q1’23 to date, with 55 homes completed taking the estate to >4,800 homes. We note a strong rental performance against a more challenging macro-economic backdrop. The shares trade on a 25% discount to reported FY22 EPRA NAV with

Morning Note – 22 September 2022

SP Angel Spec Sits: MircoSalt® Salt Shakers Launch (TEK LN)

Salarius announced a product line expansion for MicroSalt®. Demand for MicroSalt®, as a low sodium salt alternative, has resulted in a new line of table salt shakers for direct to consumer and business sales starting 1 October 2022. MicroSalt® Salt Shakers are going to be launched at Expo Food Eas as part of: The Natural Products Expo being held 28 September to 1 October 2022 in Philadelphia, US.

Hybridan Small Cap Feast 27/09/22

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** 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 company. Raising between £5-10m. Independent Living REIT plc, intends to float on the Premium Segme

Cenkos: Time Finance plc -- Time for growth

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.

Tavistock Investments FY 2022 Results

Tavistock’s full year results confirm the year to March 2022 was its most impressive to date with a balance sheet changing disposal and continued growth of the advisory business. The highlight of the year was the transformational disposal of Tavistock Wealth, the Group’s wealth management business, for up to £40m. The initial £20m receipt enabled debt repayment, share buy backs and dividend payments but the Company still ended the year with a net cash position of over £15m. The retained advisory

WH ireland: Jarvis Securities (JIM) - Skilled persons review – modest changes to dividend line

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.

Hybridan Small Cap Feast 22/09/2022

*A corporate client of Hybridan LLP ** Arranged by most recent first *** Alphabetically arranged Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** 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

Morning Note – 26 September 2022

WH Ireland: LifeSafe (LIFS) - H1 results demonstrate strong demand for attractive safety product

This morning's H1 results reflect the strong momentum of LifeSafe's business, three months on from the IPO. Sales of £1.3m are close to double FY21A as well as being ahead of the £1.2m indicative position highlighted in LIFS' August 16th update. A major patent award is a significant technology affirmation and the company's new li-ion battery fire extinguishing fluid has been demonstrated widely to industry leaders, with promising prospects in the industrial market sector. LIFS is a developer