Hot Off The Wires - The Day Ahead

Today's news and views, plus announcements from: TRIG, CRST, IDOX, FCRM, TRR, USF, & LSL.

Hardman & Co Insight: UK interest rates and “risk-free” gilts at their peak? Infrastructure stocks struggle

The share price performances of the nine Infrastructure Investment Companies (IICs) and of the 22 Renewable Energy Infrastructure Funds (REIFs) have been dire over the past year. Undoubtedly, the sharp rise in interest rates has presented the sector with serious challenges, especially since the yield on “risk-free” 10-year gilts has risen appreciably. Furthermore, the ongoing war in Ukraine and high inflation rates, from which many IICs and REIFs are partially ‒ if not wholly ‒ protected, contin

The Hardman & Co Monthly: August 2023

Feature article: UK interest rates and “risk-free” gilts at their peak? Infrastructure stocks struggle Executive summary Infrastructure/Renewable Energy Funds ► The share price performances of the nine Infrastructure Investment Companies (IICs) and of the 22 Renewable Energy Infrastructure Funds (REIFs) have been dire over the past year. Undoubtedly, the sharp rise in interest rates has presented the sector with serious challenges, especially since the yield on “risk-free” 10-year gilts has r

TRIG - Renewables Infrastructure Group

TRIG’s long-term inflation-linkage seems underappreciated by a market fixated on the short term…

Hot Off The Wires - The Day Ahead

Today's news and views, plus announcements from: SSE, MKS, AV/, KGF, HICL, TRIG, INCH, CHG, CBG, LMP, SEPL, & REGL.

TRIG - Renewables Infrastructure Group

TRIG’s consistent and inflation-linked returns are underpinned by a high-quality portfolio…

Hardman & Co Insight: Higher interest rates overshadow IIC/REIF prospects

Hardman & Co Research’s focus is on the nine quoted infrastructure investment companies (IICs) and on the 22 renewable energy infrastructure funds (REIFs), most of which saw their share prices fall during 2022, while the FTSE 100 rose by just 0.9%. In our Quoted UK Infrastructure and Renewable Energy – Prospects for 2023 publication, we have addressed the three key issues of recent months: higher inflation, extremely volatile power prices and rising interest rates.

TRIG - Renewables Infrastructure Group

TRIG’s attractions remain undiminished, yet trade on a discount of 4.5%…

Wind blowing in all directions

The Renewables Infrastructure Group (TRIG) is London''s 2nd largest listed investment trust dedicated to renewable energies. TRIG owns a GBP3.3bn portfolio of wind and solar generators across the UK and Europe with the bulk of it having secured government-backed PPAs that fix the price of electricity. Over 60% of TRIG''s forecast revenues until 2032 are fixed in nature. Defensive portfolio with some upside from power prices TRIG has high visibility on future cash flows, enabling the stock to off

TRIG - The Renewables Infrastructure Group

We look at TRIG’s key sensitivities to macro factors…

Inflation & Investment Trusts - Sep 2022

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

Assessing the impact of EU / UK actions

Governments taking actions We argued in the past that as the energy crisis lengthens and intensifies, governments would feel increasing pressure to prioritise protecting households over favouring private investments into the energy transition. The EU is now looking to cap revenues for non-gas power generators at EUR200 per MWh. The UK government chose to negotiate with renewable energy producers to swap the short-term market upside for long term fixed price CfDs. Assessing the impact In this not

Blue sky scenario in H1

Lifted by high power prices and inflation TRIG reported a ~15p increase to the NAV p.s. in H1-22, a 17.4% y/y increase and a figure 8.5% above our estimates. TRIG''s trading environment seems to be as good as it can be. Power prices has been increasing in Europe and the forward markets suggest that this situation will persist in the years to come. Inflation is also running at a much higher pace than expecting, lifting the value of TRIG''s assets given the indexation of some feed in tariffs and

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Primary Health Properties - Sustaining dividend growth

Interim results showed Primary Health Properties (PHP) to be well on track to meet its fully covered 6.7p DPS target, the 27th consecutive year of growth. Organic rent growth continues to increase, borrowing costs are nearly all fixed/hedged and the cost ratio is among the lowest in the sector. Despite this, the prospective dividend yield is now c 7%.

Primary Health Properties - Strategic and accretive Irish expansion

Primary Health Properties (PHP) has agreed to acquire Ireland’s first Enhanced Community Care (ECC) facility for a total consideration of €30m. With its interim results, PHP highlighted its continued plans for strategic expansion in Ireland, where higher yields support accretive investment in an expanding market. Alongside low-risk, value-creating asset management schemes and accelerating organic rental growth, this represents a key opportunity for continuing growth in income. Our forecasts are

Secure Trust Bank - V12 Retail Finance to support refreshed targets

In its Q323 trading update, Secure Trust Bank (STB) posted 1.7% q o q growth in net lending alongside 2.6% growth in its deposits. This was despite a 7% fall in new business lending from an elevated Q223 comparable as consumer spending weakened. More importantly, STB also hosted a capital markets day (CMD), where management reiterated the medium-term 14–16% return on average equity (RoAE) target and presented on the V12 Retail Finance business in detail. The RoAE should be supported by an improv

Hybridan Small Cap Feast - 30 Oct 23

30th October 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment obje

Discusssions underway to unlock value

The investment case pivots on the progress of strategic options under consideration for the two operating businesses. Specifically, these relate to the outcome of discussions with potential buyers for each entity, a process which has been simplified by their legal separation. We see potential scope to realise a net return above R&Q’s current market value. Initial discussions focus on Accredited, R&Q’s program management business for which it confirms receipt of interest from a number of parties

Uncertain outlook comes as no surprise

We take a positive view of Legal & General’s FY 22 results. Despite the tough environment, the Group managed to outperform expectations – something which was hardly a given for such a large asset manager. With L&G being widely exposed to the UK economy, it might be a call one does not want to make but the firm’s business remains one of spreads – as long as a default does not occur. We remain positive but concede that L&G embeds more risk than we had assumed.

More advantages than drawbacks from the market uncertainty

Despite the tough environment, Legal & General is capitalizing on the need for companies to transfer pension liabilities. The group has exceeded expectations in its larger segments: LGRI and LGC, but has encountered challenges within the Retail and LGIM business. This outcome can be attributed to the uncertain outlook in the UK, which bolsters the company’s performance in its core business but negatively impacts other areas.

The tide has turned

Having played a supporting role in the initial phase of the stock market recovery – breaking historical precedent in the process – the share prices of financial stocks, and banks in particular, have come back sharply since November. Demand for its shares meant that Polar Capital Global Financials Trust’s (PCFT’s) premium rating was recently at its highest level in more than five years, paving the way for share issuances. Banks were well-capitalised going into the pandemic, so the much-milder-tha

Allenby Capital TMT Update - 13.11.23 - MWE.L, CLCO.L, TERN.L

Please find below our weekly update covering themes that we feel that are of interest to investors and participants in the small and mid-cap TMT sector as well as commentary on recent newsflow.

Cenkos: Personal Group Holdings Plc -- Continuing to deliver

Personal Group released a half-year update showing continued momentum, with revenue up 34% and EBITDA increasing by 75%. Given the growth in recurring revenues and associated visibility this provides, the Board remains confident that trading is in-line with market expectations. Overall, this is a solid update and a continuation of the growth momentum seen in the second half of last year. On a FY23E PE of 12x, we continue to believe the market is underestimating the relevance of the group's offer

Personal Group Holdings - Solid interims

Personal Group’s interims show strong growth momentum, with revenue up by 34% and EBITDA increasing by 75%. Given strong new insurance sales have continued at the start of H2 and retention levels have remained robust, the group is confident in meeting full-year expectations. The balance sheet remains strong (H1 net cash of £22.6m) and confidence in the outlook is reflected in the 10% increase to the interim dividend. Overall, this is an encouraging set of results and underlines the resilience of