Mercia Asset Management

LN: MERC

£96.2m market cap

31.7p last close

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.

Investment summary

Mercia Asset Management is a regionally focused specialist asset manager, aiming to become a leading regional venture capital, private equity and debt provider. Mercia remains well positioned for further progress in FY20 with key portfolio companies strategically well placed, together with firepower from the group’s £168m of free cash and £30m of unrestricted balance sheet cash. The shares trade at a c 40% discount to NAV, even before considering the embedded value of Mercia Fund Managers (10p+).

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2018A 10.2 (0.4) 3.5 1.17 27.1 N/A
2019A 10.7 (1.4) 3.0 1.00 31.7 N/A
2020E N/A N/A N/A N/A N/A N/A
2021E N/A N/A N/A N/A N/A N/A
Industry outlook

2019 has so far been a difficult year for patient capital, with stocks continuing to trade at a material discount to NAV. However, with Woodford-related issues now reaching their conclusion, there is scope for a recovery of sentiment and the closing of the NAV discounts as investors search for value. We expect investors to continue to differentiate between stocks that demonstrate progress and offer the potential for meaningful exits in a realistic time frame and those that do not.

Last updated on 11/11/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 10.5 (3.9) 2.6
Relative* 9.1 (5.8) (1.0)
52-week high/low 38.7p/23.1p
*% relative to local index
Key management
Dr Mark Payton CEO
Martin Glanfield CFO
Julian Viggars CIO