Rathbones Group: Cheap even at 75% of the targeted synergies, and with achievable expectations

We can see why Rathbones is as cheap as it is, just, at a stretch. There is minimal growth, indeed Q4 saw slight net outflows. The last margin guidance was lowered. The merger with Investec Wealth & Investment deal brings both execution risk and a risk of continuing funds under management/ advice (FUMA) attrition, indeed some has been seen. And yet this is a scale business, and the group, at £96bn wealth management FUMA plus £7bn in single strategy funds, has that rare ability to make a 22.3% un

Rathbones Group^ (RAT, Buy at 1,938p) - Damp Q1, FUMA+1.1%, numbers going up

Hardman & Co Insight - Asset managers had a poor 2022

Asset managers had a poor 2022: the S&P Composite 1500 Asset Management Index was down 22% and, according to the Investment Company Institute (ICI), worldwide mutual funds fell by 20%, from $76tr to $60tr. When bond and equity markets fall, the results are unlikely to be pretty: with revenues trending down and multiples contracting, there is a double whammy to contend with. So how do valuations shape up now, after a bullish start to the new year? The first chart is my favourite chart of asset m

Morning Song

Ergomed (ERGO LN) Oversold post interims: Buy | Findel (FDL LN) Positive H1 trading update. Well positioned for FY growth | First Derivatives (FDP LN) Material OEM contract win for Kx in Industrial Internet of Things | Oxford Metrics (OMG LN) FY in line: Vicon leading the way | Rathbone Brothers (RAT LN) FuM benefits from S&J acquisition, core IM stable at 2.6% annualised

Morning Song

Augean (AUG LN) Strong H1 PBT growth; material reduction in net debt | Brewin Dolphin Holdings (BRW LN) Impressive 8% annualised discretionary flows in Q3 | Burford Capital (BUR LN) H1 results – c.15% up on a strong comp – increasing estimates and TP | Earthport (EPO LN) Continued progress with operational changes | EKF Diagnostics (EKF LN) Exclusive agreement with Asahi Kasei expands US products portfolio | IDOX (IDOX LN) Framework in place for improved future performance | Marston’s (MARS LN)

Morning Song

1Spatial (SPA LN) Capital markets day highlights growth potential | Abzena (ABZA LN) Monetising the Abzena Inside portfolio | Consort Medical (CSRT LN) Prelims in line – another setback with Mylan | Gym Group (GYM LN) Positive corporate and premium pricing newsflow | N Brown Group (BWNG LN) In line update but number of moving parts might leave investors cold | Rathbone Brothers (RAT LN) Acquisition of Speirs & Jeffrey, no EPS accretion until FY20e | RhythmOne (RTHM LN) FY18 results show executio

Morning Song

Fulcrum Utility Services Limited (FCRM LN) Sector leading returns and earnings growth | Goals Soccer Centres (GOAL LN) Satisfactory AGM but weather impact higher than earlier guidance | Gresham Technologies (GHT LN) Positive AGM statement confirms Clareti momentum | Hill & Smith Holdings (HILS LN) Positive strategic US acquisition | Polypipe Group (PLP LN) Strategy update highlights growth opportunities | Rathbone Brothers (RAT LN) Q1 FuM -3.3%, flows remain modest in investment management

Morning Song

Centaur Media (CAU LN) Investor Day | IQE (IQE LN) Joint Venture starting to deliver | LiDCO Group (LID LN) Appointment of French distributor | Northgate (NTG LN) Complex update – change to fleet strategy | Rathbone Brothers (RAT LN) Solid FY17 outturn, some additional cost investment flagged | Surgical Innovations Group (SUN LN) Prelims to show strong growth | Wilmington (WIL LN) Interim results & new Chairman | Zinc Media Group (ZIN LN) Update and contract awards | Zytronic (ZYT LN) AGM Update

N+1 Singer - Morning Song 18-10-2017

Be Heard (BHRD LN) agenda21 appointed lead digital agency by Addison Lee | Eckoh (ECK LN) US secure payments continue strong momentum | Rathbone Brothers (RAT LN) FuM +2.5% in Q3, Investment Management net inflows remain modest

N+1 Singer - Rathbone Brothers - FuM +2.5% in Q3, Investment Management net inflows remain modest

Group FuM grew by 2.5% to £37.5bn in Q3. Investment management organic net inflows totalled 2.5% annualised on opening FuM vs our 3% assumption. Total net operating income grew by 7.0% yoy to £70.5m, driven by fee income growth alongside continued decline in commission income. We do not expect to make material changes to our forecasts. We reiterate our SELL recommendation with a 2100p 12m Target Price (16x FY18e PER), as margin weakness and low earnings growth weigh on the outlook.

Redde

Proposed share-for-share merger with Northgate

Lowland Investment Company - Is the tide turning?

Lowland Investment Company’s (LWI’s) unconstrained, multi-cap investment policy differentiates it from most peers in the AIC UK Equity Income sector. It offers investors broad market exposure, outside of the large, traditional ‘income stocks’ at a 13% discount to NAV. The underperformance of small- and mid-cap companies versus larger peers has slowed and a turnaround would be very positive for LWI. Portfolio returns are already benefiting from acquisition activity, spurred by low valuations, and

Foxtons Group (FOXT LN) - 1Q24 IMS shows real momentum

Foxtons Group plc first quarter revenue rose 9% to £35.7m (1Q23: £32.9m) with growth delivered across all business segments. Trading is in line with management's expectations.

PCI Pal - +25% FY23 revenue growth, FY24 growth of +28% reiterated

PCI Pal’s FY23 results show revenue growth of +25% to £14.9m, gross profit growth of +31% to £13.1m at a margin of 88%, and an outlook confirming robust momentum in H1 24. The FY23 results are as expected following the August trading update, and FY23 Total Annual Contract Value (TACV) is +23% yoy to £16.4m, with ARR +14% yoy to £12.6m due to £3.1m of contracts in deployment. We expect ARR will increase +35% and +31% to £17.0m and £22.2m in FY24 and FY25, as management lands and expands following

Foresight Solar Fund - Optimising capital allocation

Foresight Solar Fund (FSFL) celebrated its 10-year anniversary of listing on the London Stock Exchange with decade-high cash distributions from assets of £120.4m in its FY23 results (year end 31 December). FY23 also saw FSFL’s divestment programme come to fruition with the sale of a 50% stake in its Spanish Lorca portfolio at a 21% premium to its holding value. The proceeds of this divestment, along with free cash, were used to pay down the fund’s variable rate debt via its revolving credit faci

Tetragon Financial Group - FY23 growth driven by idiosyncratic factors

Tetragon Financial Group (Tetragon) posted a 6.4% net asset value (NAV) per share total return (TR) in US dollar terms in FY23. Tetragon’s returns normally have a low correlation with broader markets, and therefore its FY23 performance was below the 26.3% return of the S&P 500 Index, which rallied on the artificial intelligence (AI) theme. Tetragon’s FY23 return on equity (RoE) of 5.5% was below its target of 10–15% pa. That said, its performance since listing was within the target range at 11.3

Resilient FY24, confident long-term outlook

Vp’s full year update highlights sector-leading results, once again benefiting from the diversity of its end markets and the quality of its specialist businesses. With results expected to be broadly in line with expectations, we trim our FY24 PBT forecast by c.5% to £39.0m, a shade below the FY23 outturn (£40.2m). We consider this an impressively resilient performance set against a mixed market backdrop. Under new leadership, a strategic refresh is underway and management is confident in long

Zeus Top Picks for 2024 - 2023 review and outlook for 2024

On 9 January last year, we set out our ten top stock picks for 2023, for what turned out to be another relatively poor twelve months for UK equities due to two wars, stubbornly high inflation and further tightening of monetary policy. This was even as other major markets, such as the US, largely recovered in the year. In the 2023 calendar year, the AIM All-Share index fell 8.2% and is still 42% off its 2021 high. From the release of our 2023 top picks note, the average total return (assuming div

Vector Capital - Full year results illustrate challenging backdrop; dividend maintained

Vector Capital is an established commercial lending group, focused on secured short-term and bridging loans in the property sector. This morning, the group has reported full year results to 31 December 2023, illustrating the challenging market backdrop. While underlying trading was robust, with good demand being seen for new loans, provisions for bad debts relating to historical loans of £728k in the year led to a decrease in PBT to £2.1m (WHI est. £2.4m, FY22 £2.8m). Looking ahead, although VCA

Strong H1'23 results; forecasts upgraded