Mercia Asset Management

LN: MERC

Market Cap£165.9m

Last Close 37.7p

Mercia Asset Management is a regionally focused specialist asset manager. Its stated intent is to become the leading regional provider of supportive balance sheet, venture, private equity and debt capital in transaction sizes typically below £10m.

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Investment summary

Mercia Asset Management has completed the sale of its second largest holding, Faradion (a leading sodium-ion battery technology company), for £100m to Reliance New Energy Solar, a subsidiary of India’s Reliance Industries. Mercia will receive total cash proceeds of £19.4m from the sale, including initial unrestricted cash proceeds of £18.6m, plus a further £0.8m ringfenced for three months. The sale value represents an uplift of approximately 50% over Faradion’s conservative carrying value of £12.9m at 30 September 2021, an NAV uplift of c 1.5p per share. Based on the unrestricted cash proceeds, the sale delivers a 4.2x return on Mercia’s direct investment cost of £4.4m and an IRR of c 72%.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2020A 12.7 0.3 (15.5) (4.55) N/A 294.2
2021A 23.4 7.1 36.9 8.38 4.5 28.8
2022E N/A N/A N/A N/A N/A N/A
2023E N/A N/A N/A N/A N/A N/A
Industry outlook

COVID-19 fears have largely abated and private company valuations remain strong. Sustained growth in AUM and profitability, supported by material realisations and exits are the key metrics by which to judge success.

Last updated on 21/01/2022
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Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 6.2 (3.3) 50.8
Relative* 4.4 (6.0) 36.0
52-week high/low 43.2p/23.7p
*% relative to local index
Key management
Dr Mark Payton CEO
Martin Glanfield CFO
Julian Viggars CIO