Morning Note – 31 January 2023

Belvoir Group - Resilient and diverse business model supports long-term value

Belvoir’s FY 2022 year-end statement details a resilient performance against lower activity levels in the housing market and the high degree of uncertainty that the Autumn mini budget created. We have upgraded our FY 2022E EPS by +2% and now forecast a decline of less than -10% against the very strong 2021 comparative. The recurring lettings revenue accounts for c.56% of Group gross profit and is supported by rising rents. Rents on new tenancies were up +10.8% during the year and will progressiv

Morning Note – 5 September 2022

Belvoir Group - Strong pipelines, diversifying and potential to invest

Organic revenue growth in lettings of +3%, +6% in financial services and an 11% contribution from acquisitions combined to offset the natural decline in revenues from sales as the market normalised from very high levels, resulting in a +12% increase in group revenue (+1% organic). The benefits of continuing to invest both directly (by buying smaller competitors and diversifying into financial services) and indirectly (by loaning funds to franchisees to acquire – which yields both a financial ret

Morning Note – 1 August 2022

Belvoir Group - Lettings and Financial Services drive revenue growth

In a positive H1 statement, Belvoir has detailed revenue was up +11% in the six months to June 2022 despite 2021 being an exceptionally strong year for the property sector. This was driven by Management Service Fees up +1% (with c. +4% growth from Lettings more than offsetting a reduction in Sales as the residential property market normalises as expected) and revenue from Financial Services up +19% (including +12% from acquisitions). The number of mortgage advisers increased by +24% to 301 from

Morning Note – 26 May 2022

Hybridan Small Cap Feast 24/05/22

*A corporate client of Hybridan LLP Dish of the day Joiners: EnSilica (ENSI.L), has join AIM. EnSilica provides an end-to-end service for the design and supply of mixed signal ASICs, outsourcing certain elements such as the wafer fabrication of the manufacturing and packaging to third parties - otherwise known as a Fabless Semiconductor Model. ASICs are Integrated Circuits or semiconductor chips developed for a particular use or product rather than for general purpose usage. ASICs help

Morning Note – 24 May 2022

Belvoir Group - Investing in the Financial Services network

Belvoir has acquired TIME Group Ltd, an appointed representative of Mortgage Advice Bureau (MAB) for an initial £3.7m cash cost. TIME provides mortgage and related financial services and is a good step forward in Belvoir’s growth strategy, within which the potential in Financial Services plays a key part. The initial cost represents 5.8x FY 2021 PBT and we have upgraded our FY 2022E EPS by +3% and 2023E by +7%. In FY 2021, Belvoir’s Financial Services division grew revenue by +44% organically an

Morning Note – 4 April 2022

Belvoir Group - Recurring, reliable Lettings and a substantial FS client base

Belvoir has reported a very strong set of FY 2021 results supported by housing transactions, but most importantly evidencing the long-term value and potential in growing the Lettings and Financial Services (FS) business. Revenue was up +37% (25% organic) and adj. EPS up +36%, all backed by strong cash flow. While housing transactions will likely now normalise, the group is well placed to continue to grow its Lettings business (which is benefiting from higher rents) and further expand its Financi

Support Group - finnCap Business Services quarterly sector note

Topic of the quarter: The Order Book Myth. Business Services has a range of companies with significant order books that should provide valuable visibility in these uncertain times. However, orders can be delayed or cancelled, definitions vary and delivering them profitably is an obvious challenge. We have screened the companies we keep an eye on in the wider sector for size of order book relative to sales, and then looked at their historic ability to deliver EPS at least in line with expectation

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.

Hybridan Small Cap Feast - 21 Feb 23

21 February 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 objec

Ambitious winds of change

M&G’s FY 22 results were strong. It was also the opportunity for new CEO Andrea Rossi to depict clearly his strategy for the upcoming months. While the impetus is clear and the objectives are ambitious, we rather believe in a structural improvement of the business (driven by the higher rates environment) than a commercial one.

Hybridan Small Cap Feast - 06 Mar 23

6 March 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 objective

LIBERUM: Alpha Group International* - Highly attractive global growth opportunity

Critical Metals Plc - Initiating Coverage - 20th March 2023

Critical Metals is a British company that has acquired a 70% interest in a producing Molulu copper mine in the Katanga region of the DRC. The focus of the company is in the natural resources sector in Africa focused on the strategic or critical metals as defined by the United States Government Survey list in Open-File Report 2018-1021 and the Critical Raw Minerals as defined by the European Commission. The main catalysts for 2023 will be the announcement of the first sales of copper ore. This i

LIBERUM: Pollen Street * - Clear fundraising momentum

Hybridan Small Cap Feast - 14 Mar 23

14 March 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 objectiv

Positive update - EPS upgraded by 5% p.a.

H&T (initiation of coverage): Pawnbroking royalty, with strong, profitable growth

Founded in 1897, H&T is the UK’s leading pawnbroker, with 269 stores, and it has gained a strong pawnbroking market share in recent years. While it is growing ancillary gold buying and forex products, its core is pawnbroking and related retail services. As other small-sum, short-term lenders have withdrawn, H&T’s well-capitalised, low-risk proposition has unique growth opportunities, with the pledge book up over 50% in 2022. The lessening of legitimate competition at a time of heightened demand

NAHL Group - Finals

NAHL generated growth in both its Personal Injury (PI) and Critical Care divisions, the former despite a continuation of subdued market conditions – hence market share gains. Results were in line with our forecasts but with a significant reduction in net debt which is especially welcome in the current high interest rate environment. Group strategy remains intact and in PI that means building the embedded value of future cash flows in NAL while flexing enquiry placements to maximise cash generati

Oakley Capital Investments Ltd (OCI): 2022: NAV returns driven by EBITDA growth

The January trading statement announced NAV (662p per share), total NAV return (24%), NAV growth driven by EBITDA growth (65%), modest multiple expansion (35%), investments (£271m), realisations (£244m), available finance, including cash (£210m), and commitments (£929m). The detailed results announcement highlighted i) 2022 exits, on average, 70% above carrying value, ii) 22% investee company average earnings growth, iii) weighted average EV/EBITDA of 15.9x, below listed market levels, iii) a PE

Interims in line, undervalued high quality income stream

Income quality stands out here: lfl rental growth continues, occupancy is full and rental collection is strong. The asset class is demonstrating the ability to perform in challenging conditions, reflecting the structural undersupply of high quality PRS homes in the UK. Pre-announced, EPRA NAV was largely unchanged at 117p in H1 with no yield compression and all rental earnings distributed. We make no changes to forecasts at this stage. We see an attractive total return with the shares trading at

HgCapital Trust - Improving its commitment coverage ratio

HgCapital Trust (HGT) posted a 5.4% NAV total return (TR) in FY22, mostly assisted by continued good earnings momentum (revenue and EBITDA across the top 20 holdings increased in 2022 by 30% and 25%, respectively) and the average 28% uplift to end-2021 carrying value achieved on exits. This was only partly offset by lower multiples and higher net debt across HGT’s portfolio (with net debt to last 12-month EBITDA for the top 20 holdings at 8.0x at end-2022). HGT’s recent balance sheet measures st

Sanctioned by an over-optimistic market

The group was heavily sanctioned for having failed to beat the market’s expectations, posting contrarian net interest margin attrition and warning of limited interest rate tailwinds ahead.