Edison Investment Research is terminating coverage on Freegold Ventures, OnTheMarket, Martin Currie Asia Unconstrained Trust and Lighthouse Group. Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website.
Companies: Lighthouse Group
FY18 revenues were held back by the impact on client demand of the Q4 equity market correction and a levelling off in pension transfer activity. Nevertheless, revenue generated from affinity relationships continued to grow. Recurring revenue was up 10% and now accounts for more than 50% of customer revenue. The opportunity for the group to generate good long-term growth by meeting the need for financial advice, particularly within its affinity relationships, remains attractive.
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Companies: AVGLGTBGOZOOKWSFDEVAIRIDPBKSXLM
Circassia Pharma (CIR.L) - specialty pharmaceutical company focused on respiratory disease transferring from the Main Market. No funds being raised. Due 4 Feb.
Companies: STOB NFC BKY TSG TMT BIDS MSYS GEO SPE LGT
Lighthouse has confirmed that it is on course to meet board expectations for EBITDA and pre-tax profit for 2018, continuing the progress it made during the first half of the year. The potential to achieve good long-term growth through meeting the need for financial advice, particularly in the affinity business, remains in place.
Lighthouse (LGT) has announced a strategic agreement with Tavistock Investments (TAVI) that will provide it with access to Tavistock’s investment solutions. This will help deliver the broader offering Lighthouse seeks for its in-house asset management arm, Luceo. In conjunction with this agreement, Lighthouse has subscribed £1m to Tavistock’s £1.25m equity fund-raising giving it a 5.3% stake. Our valuation (c 44p) and estimates are unchanged at this stage.
Kropz, an emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa, a phosphate project in the Republic of Congo and exploration assets in Ghana, is looking to join AIM. Offer TBC, expected late Nov Titon holdings—international manufacturer and supplier of ventilation systems and window and door hardware. No capital raise. Due 10 Dec. Mkt cap c.£22m. Greenfields Petroleum (TSX-V:GNF) production focused company with operated assets in Azerbaijan seeking AIM dual listing including $60m private placement. Mkt cap $12.6m CAD Finncap—proposed acquisition of M&A adviser Cavendish Corporate Finance and AIM admission. Offer TBA Crossword Cybersecurity PLC* (NEX:CCS)—the technology commercialisation company focusing exclusively on the cyber security sector is investigating the possibility of AIM admission. The Company is proposing to raise up to £2.25 million before the end of December, conditional on Admission.
Companies: CGNR COG ABDP FLX LGT MMH TEK CRV MNO SIS
First half results from Lighthouse indicate that it is on track to meet market expectations for the full year, while the strength of its business providing financial advice to members of affinity partners was underlined by its success in renewing all eight of the contracts that have come up for renewal this year. This now accounts for 19% of group revenue and there is good scope to increase penetration in this area. Part of the c £5m of cash the group has available for investment is likely to be allocated here.
Lighthouse is a financial adviser and aims to provide well-researched solutions to individuals and corporates. It is differentiated by its leading position in serving the members of affinity partners, where it has 21 relationships with unions and other organisations. There is a significant opportunity to increase penetration in this area and success could generate earnings surprises, given the investment already put in place to support the activity.
We report on the performance of our momentum style screen since the last refresh three months ago and present the 25 new constituents. The screen underperformed small-cap and microcap indices modestly, though our previous focus stocks did significantly better. While momentum (as we express it) has outperformed smallcap significantly since inception of the screen in July 2016, this has arisen in shorter periods and appears to only coincide with a steadily rising small-cap index. We therefore consider this style screen to have limited predictive capability. We highlight seven stocks, which we think are interesting.
Companies: BMY CKT KEYS LGT MACF VER WYG
GoTech Group– AIM shell moving to NEX. the Company’s Investment Strategy will be to initially effectively become a UK, Canadian and Australian-focused medicinal cannabis and related products’ index tracker and investor. Due 25 Jun. Sovereign Mines of Africa PLC to be renamed The Barkby Group PLC after the acquisition of Turf to Table Ltd will join the NEX Exchange on 26 June 2018 after raising £547k at 9p with market cap of £3.42m
Companies: TRAK LGT LPA PYC ARE ZNWD HZM EDEN SCIR
Cradle Arc—holding company of a group of companies focused on the exploration and development of precious and base metals projects in Africa. Offer raising £2.4m with market cap of £20.13m. Expected late Jan 2018 Volex VLX.L—The global provider of cable assemblies is proposing to move from the main market to AIM on 19 January. £75m market cap. FYMar18E rev £241.5m and £7.19m PBT. OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m.
Companies: PEG LGT ESCH FFHHF GDP FCR 7DIG ARO
Companies: WJASEEPLIFARNCSRTBTGAMSPHTMSYMDPHLGTEKFANCRRGDIMMAGYTSTLCTHBOTBDOTDVERBVXPSCLPABCFULDNLVLGHZDVECSHOECAKEC4XDSCSMTPHIDPRBGFISHHOTCJOULHCMMXCT
Research Tree provides access to ongoing research coverage, media content and regulatory news on Lighthouse Group. We currently have 42 research reports from 4 professional analysts.
What’s new: Ahead of the publication of the Group’s interims results for the six months to 31 December 2020, CLIG has released a detailed trading update which reveals: Group consolidated FuM of US$11.0 billion (£8.0 billion), which is twice the FuM of US$5.5 billion (£4.4 billion) at the Group’s year end on 30 June 2020; The merger with Karpus Management Inc ("KMI") added c US$3.6 billion from 1 October 2020; Investment performance across CLIG’s investment strategies was “strong”, following “significant discount narrowing” and “good NAV performance”; Rebalancing of client portfolios resulted in US$ 290 million of net outflows.
Companies: City of London Investment Group PLC
Although 2020 will probably go down in history as one of the most challenging years experienced during our lifetime, it will also likely be chronicled as one of the best years for the recognition and appreciation of science. As we entered 2020, the COVID-19 pandemic was in its infancy. However, it rapidly evolved through the exponential rise in infections and mortality globally. Much has been achieved during the past 12 months in the fight against COVID-19, but, as we enter 2021, there are considerable concerns about the emergence of a mutant version of the virus and the second wave that we are now facing.
Companies: AVO ARBB ARIX BBGI CLIG DNL FLTA ICGT OCI PCA PIN PHP RECI STX SCE TRX SHED VTA YEW
Secure Trust Bank’s (STB) pre-close update confirms the upbeat trends evident in its Q3 update in November. The strong lending rebound continued into Q4, loan repayment holidays are at low levels, and the balance sheet has remained robust and liquid. STB reiterated that its FY20 PBT would be well ahead of £9.7m (we forecast £13.0m). However, the new COVID-19 restrictions introduced in December 2020 have affected consumer loan demand into 2021, as well as the Motor Finance business. Management expects to be better placed to disclose its outlook for FY21 when STB’s FY20 results are released on 25 March. Our forecasts (FY21 PBT £31.6m, ROE 9.1%) and fair value (1,756p per share) remain unchanged.
Companies: Secure Trust Bank Plc
Finals (9mths to Sep-20) are in line with expectations. Recurring fee income from 3rd party AuM (incl. PRSR) ensured solid profitability. The balance sheet is well resourced with £26m to develop seed assets. With a positive outlook following the launch of the £1bn JV with EQT, we see accelerating returns over the medium term. PRSR is also on track to materially complete the initial 5,200 portfolio this year. Sigma trades below our 200p+/share intrinsic valuation – which attributes no value to AuM growth, which is a strategic priority.
Companies: Sigma Capital Group plc
Allied Minds has announced that Joe Pignato has decided to step down as CEO and from the board with immediate effect. However, he will continue to support the company as CFO for an interim period as the board continues its search for a permanent CFO. As part of a streamlining process, Allied Minds will now become a board-led company with no immediate intention to appoint a new CEO. The chairman and NEDs (experienced VCs and private company investors) will represent Allied Minds on portfolio company boards (including Federated Wireless, BridgeComm and Spin Memory) with an intention to accelerate realisations where possible.
Companies: Allied Minds PLC
Sirius Real Estate has been a stand-out performer within the UK listed commercial real estate sector over the last three years, delivering a total shareholder return of 107%. The shares also offer a valuable portfolio diversifier for investors, with a geographic focus on Germany, and a focus on pro
Companies: Sirius Real Estate Limited
Further media reports that Dr Martens, the British Boot brand is planning an IPO on the LSE. It is currently owned by PE group, Permira who is expected to sell down its stake at the IPO. March 2020 YE the group had revenues of £672m and EBITDA of £184m. Deal size TBC. Upon Admission to AIM, Nightcap will acquire The London Cocktail Club Limited (the "London Cocktail Club"), which is an award winning independent operator of ten individually themed cocktail bars in nine London locations and one location in Bristol. Offer TBC Due mid Jan. HSS Hire Group, HSS.L transfer from Main to Aim. Mkt Cap c. £70m. Recently raised £52.6m. Leading supplier of tool and equipment for hire in the United Kingdom and Ireland and has provided equipment hire services in the United Kingdom for more than 60 years, primarily focusing on the B2B market. Due 14 Jan. VH Global Sustainable Energy Opportunities plc, a closed-ended investment Company focused on making sustainable energy infrastructure investments, today announces intends to launch an initial public offering of shares on the Official List (Premium) of the Main Market of the London Stock Exchange. Due by Early Feb.
Companies: IUG CBP KAT APP RST DIS NICL BOKU CNIC HE1
Pacific Horizon (PHI) generated a very impressive uplift in its NAV over the course of 2020. This reflects its focus on growth, and technology and biotech stocks in particular. These performed well as we attempted to adjust to life under the pandemic, thereby accelerating a number of structural trends. PHI provided an NAV total return of 86.1%, which eclipsed the return on the MSCI AC Asia Pacific ex Japan of 21.2%, the broader MSCI AC World of 12.7% and the average of its Asia Pacific sector peer group of 25.3%. PHI is the top-performing trust in this sector by a significant margin. Despite this stellar growth, PHI’s manager is not resting on his laurels. Emerging Asia still remains a high-growth and underresearched region, and he continues to focus on those themes he expects to do well over the next five years. For example, EV continues to be a significant theme and the manager has been increasing exposure to the commodities needed to deliver a greener future, but which the world is structurally short of, following long-term underinvestment.
Companies: Pacific Horizon Investment Trust
Martin Currie Global Portfolio Trust’s (MNP’s) manager Zehrid Osmani reports that his ongoing focus on long-term structural, sustainable business models was beneficial for the fund’s performance during the coronavirus-led market sell-off in Q120, with portfolio companies undertaking measures to protect their brand equity. He is encouraged by a general increase in investor awareness of environmental, social and governance (ESG) issues, an area of research that Martin Currie has focused on for several years, as he believes that ESG improvements can lead to higher total returns for shareholders. MNP’s performance has improved since the appointment of Osmani in October 2018, and its NAV is now ahead of its benchmark over the last one, three, five and 10 years.
Companies: Martin Currie Global Portfolio Trust
Vietnam Enterprise Investments (VEIL) is the largest and longest-established Vietnamese equities closed-end fund. The last quarter of 2019 and most of 2020 marked a period of portfolio repositioning for the fund. The team sold 14 holdings, and bought two, making the portfolio more focused (28 stocks at end 2020 versus 41 at end Q319) but better balanced by market cap as well as domestic and international business exposure. Over H220 the performance has picked up, with NAV total return of 28% versus 24% for the VN Index, after marginally lagging the benchmark over the past three years. The trust is well positioned for longer-term investors looking for an exposure to the fast-growing Vietnamese economy via a relatively large and liquid listed equities vehicle.
Companies: Vietnam Enterprise Investments
Redde Northgate has come through the COVID crisis in very good shape so far. We expect minimal impact on the former Northgate business from “lockdown 2.0”, a strong recovery in profits and a re-rating as normality returns and Redde reverts to mean. We could see further useful earnings upside from acquisitions such as Nationwide and revenue synergies not yet included. The Group is transforming itself into a mobility business which is higher returning, more diversified and has sustainable compounding growth prospects.
Companies: Redde Northgate PLC
AuM grew by +43% (+16% organic) to £29.4bn in Q3. Investment performance was strong (+£2.5bn) as COVID vaccine news propelled markets. Net inflows were maintained qoq (£792m). Sustainable was the stand out performer (+24%). AuM has broken through £30bn post-period end. Better than expected AuM drives +3% FY21e EPS and +5% in outer years. Continued distribution efforts in Sustainable, Global Equity and Multi-Asset funds stands to catalyse earnings. Alongside flow momentum, 12x FY22e PER is not reflecting this upside.
Companies: Liontrust Asset Management PLC
Volta Finance (VTA) posted a 5.7% decrease in NAV in 2020, recovering from the initial 32.4% drop in March. This was mainly supported by CLO equity tranches posting solid monthly returns in November and December 2020 at +11.0% and 9.7%, respectively. Volta had anticipated a downturn for some time and repositioned its portfolio into CLO equity over the last two years. During the early-2020 market turmoil, Volta’s manager focused on securing liquidity by fully deleveraging the portfolio and implementing cost-cutting initiatives. In December, Volta introduced a dividend policy to pay 8% of its NAV (in line with historical yields), which currently implies a prospective 9.2% yield on the share price.
Companies: Volta Finance
Litigation Capital Management (LCM) is an alternative asset manager specialising in disputes financing, with its main operations in Australia and the UK. The company provides funding for litigation in exchange for a share of any settlement and has built a strong track record of supporting winning c
Companies: Litigation Capital Management Ltd
Today's results reflect a period impacted by COVID-19, whereby five royalty partners entered forbearance, with four subsequently exiting post-period and returning to royalty payments. This has shown Duke as a supportive, long-term capital provider, assisting partners to periods of more stable trading. In turn, this has preserved shareholder value and enabled the group to return to cash dividends from Q3/21. With more positive economic conditions ahead in 2021, we see upside to Duke's royalty/equity values and ultimately NAV.
Companies: Duke Royalty
