What’s new: Purplebricks’ interims to 31 October, confirm the 8% rise in instructions to 35,387 (1H last year: 32,850) and net cash of over £75m (as set out in the recent trading update). The full interim results for Purplebricks reveal:
- 6% rise in UK fee income to £49.1m (1H20: £46.3m) with Average Revenue Per Instruction “ARPI”, rising 3% to £1,392 (1H20: £1,353);
- “Deferral of fee income over the service period under IFRS15” reduced reported revenue 6% to £44.2m (1H20: £47.1m)
- 1% fall in UK gross profit to £29.6m (1H20: £30.0m) reflecting deferral of revenue, offset by rise in gross profit margin to 67% (1H20: 64%);
- £8.4m 1H adjusted EBITDA (110% above 1H20 comparative of £4.0m including central costs, and 53% above 1H20 UK division only: £5.5m);
- £75.8m net cash at end October 2020 (15 July: £66m; 30 April: £31m);
Companies: Purplebricks Group Plc
What’s new: Purplebricks’ trading update for the 6 months to 31 October, reveals:
- 8% rise in number of instructions to 35,387 (1H last year: 32,850) with a 20% increase for the 5 months since June (see Exhibit 2 for our analysis);
- 1H adjusted EBITDA “expected to be comfortably ahead of consensus for the full year of £3.5m”;
- Net cash at end October 2020 above £75m (15 July: £66m; 30 April: £31m);
- Interims will be published on Tuesday 15 December.
What’s new: Purplebricks Group results for the year to 30 April 2020, show the Australian and US units as discontinued; but include the Canadian unit sold for C$60.5m (i.e. £35m) in July. Investors will focus on the UK unit which revealed:
11% fall in UK revenue to £80.5m (FY19: £90.1m), as the number of instructions fell 23% (impacted by early Covid uncertainty and lockdown), but the average revenue per instruction “ARPI” rose 12% to £1,394;
UK gross profit margin improved to 64.1% (FY19: 63.0%);
UK marketing costs to revenue improved to 25.6% (FY19: 29.6%);
Spend on Digital capacity pushed UK operating costs 32% to £26.2m (FY19: £19.9m), as new management team pursued initiatives which are being “delivered at pace with significant opportunity for further innovation.”
UK adjusted EBITDA fell 53% to £4.8m (FY19: £10.2m).
What’s new: Yesterday, Purplebricks sold their Canadian business (acquired in July 2018) for all cash proceeds of CAN $60.5m (i.e. £35m or 11p a share).
Following the receipt of the proceeds Purplebricks will hold net cash balance of £66m (21p a share).
Vic Darvey, CEO, commented: "Over the last 14 months, Purplebricks has reset its strategy to give the Company a strong foundation for the next phase of its growth. The Company's hybrid, digitally enabled model is more relevant than ever and this simplification of the business will allow management to focus its time and the Company's resources on delivering growth in the core UK market."
Purplebricks’ interims to 31 October 2020 will show the Canadian business as discontinued. Purplebricks is due to report its results to 30 April on 3 August.
What’s new. This morning Purplebricks UK has provided an “update regarding current trading and the potential impact of COVID-19 and Govt guidance on the UK housing market.” Key points are:
1. Purplebricks first priority is health of people and customers: its online business model includes “video valuations, virtual viewings, connecting customers with potential purchasers via Purplebricks online platform.”
2. Govt restrictions on movement are weakening vendor and purchaser activity; deferral of completions would have a further negative impact.
3. Immediate cost-saving measures will materially reduce cash burn including suspending TV and radio advertising, reducing online marketing, taking advantage of the Government Job Retention Scheme.
4. Purplebricks currently has net cash of £35m and no debt.
What’s new. After an encouraging seasonal increase in Purplebricks’ instructions in January and February 2020, activity in recent days has slowed sharply and we see prospects for a prolonged period of low activity during the COVID-19 crisis.
Purplebricks is well capitalised with net cash of £41.6m on 30 October 2019. We expect group cash to be above £31m (i.e. 10p a share) on 30 April 2020 and 2021.
In 2019 management began closing Purplebricks’ Australian and US units. In December 2019 the guidance of less than £14m was repeated, implying 2H costs of under £5m. An adjusted October 2019 net cash of £36m.
Purplebricks interim results, in line with its 7 November update, reveal: Group revenue rose 1.9% to £64.8m on a pro forma basis (i.e. including acquisitions and excluding discontinued) split UK 73%, Canada 27%; UK Revenue fell 2.7% to £47.1m, with instructions down 15% to 32,850 and average revenue per instruction (ARPI) up 12% to £1,353; Canadian revenue rose 16.4% to £17.7m, with transactions down 4% to 20,486 and sellside ARPI up 15% to £728 and buyside ARPI up 19% to £3,595; Group gross profit was flat at £39.4m, with group gross margin 61%, down 130bps mostly due to the growth in buyside revenue in Canada; Adj Group EBITDA fell 48.8% to £4.3m with UK contributing £5.5m, Canada £0.1m and Homeday.de JV a loss of £1.3m; Net operating cash flow from continuing operations was £2.6m; Australia and the US closures going to plan, within £10-14m guidance; Cash at period end £41.6m fell £21.1m since 30 April 2019 (£62.8m) with £11.7m outflow relating to discontinued operations and £4.6m to investment in Homeday.de JV.
Purplebricks’ trading update for the 6 months to 31 October 2019 reveals: “At a Group level, pro forma revenue is expected to be broadly flat relative to the same period last year ... and the Group enjoyed profitable trading in the First Half.”
Purplebricks’ results for the year to 30 April 2019 rose 55% to £136.5m of revenue (above the midpoint of the £130m to £140m revenue range guidance provided in the 21 February and 7 May trading updates)
ReAssure Group plc - The Group is a leading closed book life insurance consolidator in the United Kingdom with 4.3m policies, £68.7 billion of assets under administration on a Post-L&G Illustrative Basis. It is considering a premium listing segment of the main market.
Voyager AIR The Company will focus on the acquisition, leasing and management of primarily widebody aircraft, with asset management services to be provided by Amedeo Limited he IPO will comprise a Placing and Offer for Subscription of Shares to raise up to approximatelyUS$200m·
IMC Exploration Group (NEX: IMCP), focused on acquiring and exploring prospecting licence areas which have high potential for natural resource, is looking to admit its shares to the standard list and will withdraw for the NEX Exchange. TBC
Uniphar, a diversified healthcare services business with a workforce of over 2,000, is looking to join AIM. Raise TBC, expected mid-July 2019
Companies: THR PGM SOS PURP TUNG CDM BIRD AAOG CGNR
Purplebricks has released a trading update, which confirms group revenue for the year to 30 April 2019 will be within the £130m to £140m range guided on 21 February, and also reveals: Purplebricks UK “continues to out-perform” in “challenging” market conditions and in 2019 it will focus on “further profitable growth”; The “Canadian business continues to perform well and [meet] … expectations”; The Australian business has not delivered the “progress the Board expected” and so “has been put into an orderly run down … pending closure”; In the US, “investment in marketing and other overheads” has been “materially scaled back” and a “strategic review” to assess “opportunities and risks” begun; Vic Darvey (previously MD of Moneysupermarket.com Group plc), who joined Purplebricks in January as COO, has been appointed Group CEO; Net cash on 30 April 2019 was at least £62.0m (31/1/19: £71.0m).
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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
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
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
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
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
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
AVI Global Trust (AGT) offers a genuinely different investment approach to those of competing trusts in the AIC’s global sector. It also has a good track record of beating its performance benchmark, the MSCI All Countries World ex the United States Index, with dividends reinvested and translated back into pounds. Some well-timed trades and a willingness to look through the current COVID-19 disruption affecting some businesses have helped drive strong performance from AGT over the past few months. The trust’s shares are on an attractive discount, 10.3% at close of business on 22 January 2021, and it is itself invested in a portfolio of high-quality family holding companies, closed-end funds and cash/asset-rich Japanese securities, which collectively trade at a weighted average discount of 30.1% (as at 18 January 2021) to the value of their underlying assets. The manager sees numerous catalysts to unlock value from AGT’s portfolio over 2021.
Companies: Avi Global Trust
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
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 biotechnology 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 index of 21.2%, the broader MSCI AC World of 12.7% and the average of its Asia Pacific sector peer group (see page 23) of 25.3%. PHI is the topperforming 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, companies exposed to the growth in electric vehicles (EV) continue to be a significant theme. 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.
Acorn Income Fund was launched in February 1999, and has a split capital structure with both Ordinary shares which receive a high level of income, during last year dividends of 23p were paid representing an increase of 10.6% on 2019 and offer a flat yield of 7.3%. It also has Zero Dividend Preference shares (ZDPs) which mature next February and offer a GRY of 5.9%. To mirror the two classes in the capital structure, the portfolio also has two distinct pools of assets; with 70%-80% being invested in UK Small Companies being managed by Unicorn Asset Management and the balance of 20%-30% invested in an income portfolio, predominately Corporate Bonds which is managed by Premier Miton Investors. This two pronged approach has enabled the trust to generate a strong total return for Ordinary shareholders of 213% over the past decade with annualised total return of 12.1%. The recent strong annualised dividend growth of 10.8% over the past five years and the current discount of 14.9% on the Ordinary shares offers an attractive entry point.
Companies: Acorn Income Fund