£116.6m market cap
25.3p 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
As a regionally focused specialist asset manager, the acquisition of NVM’s VCT business in November 2019 accelerates Mercia’s aim to be the UK’s leading regional investor and achieving an evergreen balance sheet. With the associated placing, Mercia has extended its cash runway, strengthened its share register, increased the free float and reduced its share overhang. Yet Mercia’s shares continue to trade at a discount to NAV – even before considering the embedded value of the fund management business.
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 | 22.6 | N/A |
| 2019A | 10.7 | (1.4) | 3.0 | 1.00 | 26.5 | 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
After a difficult 2019 for patient capital, Woodford-related issues are now being actively resolved and with a recovery of sentiment there is the scope for the closing of NAV discounts. The acquisition of NVM’s VCT business accelerates Mercia’s transition from investing off its own balance sheet towards increasingly becoming a manager of third-party funds. This reduces the monthly cash burn and takes Mercia a significant step forward, with management targeting an evergreen funding model by FY22.
Last updated on 24/02/2020
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Share price graph
Balance sheet |
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| Forecast net debt (£m) | N/A |
| Forecast gearing ratio (%) | N/A |
Price performance
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Key management |
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| Dr Mark Payton | CEO |
| Martin Glanfield | CFO |
| Julian Viggars | CIO |
Content on Mercia Asset Management
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