With the FTSE100 running into early January with a record breaking 14 consecutive “Up” days, and, at the same time, 12 successive new “All Time Highs”, 2017 has started on a promising note. News from a variety of Mid & Small Cap financials in the first half of January would appear to confirm the more positive sentiment.
WH Ireland announced today that it has agreed the sale of its Manchester Head Office building for £5.27m, just over £0.5m above its valuation in the latest published accounts, which will give a modest boost to net tangible assets and a substantial one, over £4m, to cash after repaying the balance of the attached mortgage. This news, combined with the rise in AUM to approximately £3bn at its November year end, (announced in its year end Trading Update on 19th of December), implying an encouraging net inflow of c£100m in their second half, and presumably a bit higher by now since the FTSE-100 has risen more than 5% since then, is enough to reaffirm our view that a sum-of-the-parts valuation would be twice the current share price of 122p, despite the small dilution from the placing in November.
Impax Asset Management
Impax recently announced that on 31 December 2016 Assets under Management had reached a new peak of £5,060 million, representing an increase of 12% in its first quarter, following a 59% rise in its financial year to end-September 2016. We published a separate note on Impax AM on the 16th of January, revising our fee income and profit forecasts upwards to reflect recent momentum behind growth in assets under discretionary/advisory management. See separate note:
A post-year-end trading update from H&T Group, the leading pawnbroker, estimated that 2016 profits would be “marginally ahead of current market expectations”: they had been revised sharply upwards only two months ago. The strength of the gold price on the back of sterling weakness and worries about President Trump’s economic policy has helped profit margins on scrap gold but that was (or should have been) already reflected in market expectations.
The additional profit growth came from better-than-expected growth in the core pledge book, up 6% to £41.3m, and in the newer personal loans, more than doubled to £9.4m, both of which should underpin further profit growth in 2017. The share price is up 40% in the last year but still well below peak levels.