Mercia Technologies

LN: MERC

£115.9m market cap

38.2p last close

Mercia Technologies is a leading player in the funding and scaling of high growth businesses. Through its subsidiary managed funds (MFM) and its own balance sheet, Mercia provides a ‘complete capital solution’ to UK SMEs, with a focus on the Midlands and North UK.

Investment summary

Mercia Technologies (Mercia) is a leading player in the funding and scaling of high growth companies from the UK regions, with a business model that is significantly de-risked vs peers. £400m of managed funds are used to predominately support early-stage activity, while providing meaningful revenue to offset group operating costs. At its interim results in December, key portfolio companies had continued to deliver against commercial milestones, with Mercia well positioned for further progress in FY19. The shares continue to trade at a significant discount to NAV.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 6.7 (2.4) 2.8 1.26 30.3 N/A
2018A 10.2 (0.4) 3.5 1.17 32.6 N/A
2019E N/A N/A N/A N/A N/A N/A
2020E N/A N/A N/A N/A N/A N/A
Last updated on 21/02/2019
Industry outlook

Over the past decade, the IP commercialisation (IPC) sector has become significantly more established, with stocks generally trading at a premium to NAV up to 2016. Subsequently, investor sentiment has turned more negative and, in common with the sector, Mercia’s share price has fallen by c 40% since 2017. In 2019, investor expectations of material exits/value realisation across the sector are only likely to intensify.

Last updated on 21/02/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 34.0 26.1 4.7
Relative* 30.5 23.7 6.7
52-week high/low 42.0p/27.5p
*% relative to local index
Key management
Dr Mark Payton CEO
Martin Glanfield CFO
Julian Viggars CIO