Stake in 8AM acquired, net inflows solid

Tatton has now concluded the acquisition of 50% of 8AM and has an option to acquire the remaining 50% of 8AM in due course.The deal looks a solid strategic fit. It adds c. £0.8bn of ‘assets under influence’, with 8AM running a range of Model Portfolio Services and funds which are complementary to Tatton’s and provide existing IFA clients with an extended product range. Tatton also gains the benefit of a broader financial adviser base. It is expected to be earnings enhancing from FY23 onwards.

Stake in 8AM acquired, net inflows solid

Tatton has now concluded the acquisition of 50% of 8AM Global Limited (8AM) for a total consideration of £7.0m (£3.5m payable now, funded through the issue of new shares, plus two performance-linked cash payments after 12m & 24m). Tatton has an option to acquire the remaining 50% of 8AM in due course. The deal looks a solid strategic fit. It adds c. £0.8bn of ‘assets under influence’, with 8AM running a range of Model Portfolio Services and funds which are complementary to Tatton’s and provide

8AM Acquisition Completed – 2-4% EBITDA Upgrades

Tatton Asset Management has announced the completion of a 50% stake in 8AM, following regulatory approval. We update our model on the back of this, reflecting the positive financial impact of the investment. We see 2-4% EBITDA upgrades over the forecast period and 1-3% EPS upgrades, as the operating profit contribution more than offsets the higher sharecount as part of the share consideration. 8AM will provide TAM’s clients with access to an extended range of risk profiled investments, underpinn

Tatton Asset Management (TAM LN) - 8AM Global completion

Tatton has completed its acquisition of 50% interest in 8AM Global Limited “8AM” for total consideration of £7.0m, with an option to acquire the remaining 50% in due course. This news is accompanied by a positive trading update.

Strong finals, sustained flows demonstrate resilience

Tatton has maintained net inflows despite macro headwinds. YTD net inflows have exceeded £100m in the majority of calendar months. This is impressive validation of the role which MPS funds play in delivering solutions to IFAs’ underlying clients. Market performance remains a headwind, but clearly out of management control. Final results were in line with our expectations, posting 27% growth yoy in adj. operating profit (+25% EPS yoy). We can not ignore that performance has restrained FuM, but re

Tatton Asset Management (TAM LN) - Results reveal 99% AuM retention

Tatton Asset Management’s results to March 2022 are in line with its April trading update, confirming profitable growth with high retention. Headlines are: • Assets under management (“AUM") rose 26.1% to £11.34bn (2021: £8.99bn) - £1,277m net inflows (2021: £755m); average of £106/month; 14.2% of opening AUM - Verbatim funds acquisition added £650m and the market a further £420m • Paradigm grew its B2B network of IFAs and performed well - Consulting member firms inc

A sector leader in both growth and profitability

Despite sharp market falls in Q4 of FY22 (Jan-Mar 22), AUM grew 26% y-o-y to £11.3bn (FY21: £9.0bn), with £1.3bn of net inflows (14.2% of opening AUM compared to a sector median of just 4.3%). Revenue grew 26% from £23.4m in FY21 to £29.4m, adjusted operating profit 27% from £11.4m to £14.5m, and adjusted operating margin increased from 48.8% to 49.5% (compared to a sector median of 32%), providing further evidence of operational gearing. Net cash increased 28% from £16.9m to £21.7m, even thoug

FY22 AuM In-Line & Further Uplift via Stake in 8AM

Tatton Asset Management’s AuM is up 26% yoy to £11.3bn and in-line with consensus, despite more challenging markets towards the end of the period. Continuously strong inflows come as encouraging. Paradigm has seen further growth with Consulting member firms up 3% to 421 and Mortgage firms up 4% to 1,674. Additionally, TAM announces the proposed acquisition of 50% of 8AM Global, which manages ~£0.8bn of AuM across risk-profiled MPS. We believe the -26% YTD share price performance is unjustified a

Strong flows in impressive FY22. New acquisition for FY23

AUM ended FY22 (31 Mar 22) on £11.3bn, +26% y-o-y (31 Mar 21: £9.0bn), in line with our previous forecasts. But more impressive, from a longer-term strategic perspective, is the fact that ‘organic’ net inflows of +£1.28bn exceeded our forecasts to make up for an investment performance which was hit by the market turbulence of Q4 (Jan-Mar 22). In fact, net inflows in H2 almost matched H1 (£625m vs £652m). Tatton has also entered into an agreement to acquire 50% of 8AM Global Limited (8AM), for

Tatton Asset Management (TAM LN) - Trading update & acquisition

Tatton Asset Management has issued a positive trading update for the year to 31 March 2022 “strong organic growth in line with expectations” and an agreement to acquire 50% interest in 8AM Global Limited (“8AM”) for £7m (see below for details). Tatton’s trading highlights are: • Assets under management (“AUM") rose 26.1% to £11.34bn (2021: £8.99bn; Zeus forecast £11.5bn, now updated to £11.3bn; forecast to March 2023 remains £12.7bn).

Interims: strong H1 AuM momentum drives earnings

Net inflows were strong during H1, with +20% AuM growth yoy to £10.8bn on a number of strong £100m+ flow months. This is evident in H1 earnings: adj. operating profit +38%, with an impressive 50% margin. This momentum has continued in H2 already (£11.2bn). We upgrade by 9% in the current year on slightly better revenues and lower costs. Tatton is delivering sustained AuM growth in a deep pool of opportunity, recurring fee income, 50%+ operating margins and ability to scale. We think it is deserv

Safe haven in a nightmarish environment?

After an incredibly volatile past week, Legal & General released an update clarifying its financials and objectives for FY 22. In all, L&G has been reassuring on the impact of the turmoil surrounding the Gilt market and LDI pensions, while it seems that failing schemes would ”only” impact pensioners rather than L&G directly.

Auctus on Friday - 30/09/2022

AUCTUS PUBLICATIONS ________________________________________ Challenger Energy (CEG LN): Discontinuing coverage - We are discontinuing coverage on Challenger Energy Group. Longboat Energy (LBE LN)C; Target price of £1.50 per share: 3-5 well programme in 2023. Increased resources estimate at Kveikje – There were no surprises in the 1H22 financials. The gross contingent resources estimates at Kveikje have been increased from 28-48 mmboe to 35-60 mmboe (2C-3C) based on a new CPR following post wel

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

SHORE CAPITAL - H&T Group (HAT) - House Stock at 438p - Capitalising on growth opportunities

Hybridan Small Cap Feast 05/10/22

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** TECC Capital plc, to be renamed EDX Medical Group, intends to join the AQSE Growth Market. EDX operates a molecular biology and diagnostics laboratory in Cambridge, UK, from which it performs research & development, provides Polymerase Chain Reaction (PCR) testing and genomic sequencing services, undertakes quality assurance and has established expertise in the design, development, validati

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

LIBERUM: Real Estate Investors* - Profitable sales drive NTA growth whilst reducing leverage

NextEnergy Solar Fund - Increase in Facilities Well-Timed

An increased in revolving credit facilities at NESF brings the total available to £205m with £115.5m currently drawn. We see this as well-timed as there is a lot of activity in the market for both PV and storage projects and the facility gives the fund the firepower to pursue the best opportunities in a timely fashion.

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.

WH Ireland: Avation (AVAP) - Emerging from the turbulence with a solid platform

Avation is a lessor of commercial passenger aircraft to seventeen airlines. The advent of COVID-19 brought with it the most challenging period ever in the industry's history. Avation took swift action to preserve liquidity and maintain cash flow through renegotiating its senior debt amortisation, thereby being able to provide support for customers. Today, the group's fleet consists of 39 aircraft, along with purchase rights over 5-years on a further 28 ATR 72-600s, one of the lowest CO2 emission

Morning Note – 26 September 2022

Hybridan Small Cap Feast 30/09/22

Dish of the day Joiners: No leavers today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Milton Capital Plc, a new type of special purpose acquisition company, intends to join the Standard Segment of the Main Market. The directors intend to search initially for acquisition opportunities in the technology sector. The focus for the prospective acquisition is megatrends. This includes sectors such as space, artificial intelligence, machine learning and blockchain technology. Ticke

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

Oakley Capital Investments Ltd (OCI): 1H’22: results prove NAV real, resilient and growing

We believe a significant driver to the whole listed PE sector trading at a large discount to NAV is investors’ concerns about whether the NAVs are real and conservative, and whether they can grow. For OCI, the detail in its latest results disclosure should, once again, abate any of those worries. In particular, we highlight i) realisations, on average, 52% above carrying value, ii) 18% growth in investee company EBITDA (which accounts for around three quarters of NAV growth), iii) a PEG ratio of