Shore Capital Group

LN: SGR

£49.6m market cap

230p last close

Shore Capital Group is an independent investment group with three main areas of business: Capital Markets, Asset Management and Principal Finance (on-balance sheet investments). It has offices in Guernsey, London, Liverpool, Edinburgh and Berlin.

Investment summary

H118 results benefitted from the diversity in the group’s activities. Normal fluctuation in activity levels and the introduction of MiFID II meant lower revenue and profit for Capital Markets. However, a very strong performance from Asset Management (and lower central costs) more than made up the shortfall allowing both revenues (+6.5%) and pre-tax profit (+2.8%) to move ahead for the group. With a lower tax rate EPS increased by 11%. SGR has confirmed that it is in discussions with Stockdale Securities regarding a potential acquisition. Stockdale FY18 revenues were £11.4m and PBT £1.5m; it has c 60 corporate clients and was valued (September 2018) by its largest shareholder, Somers, at £7.5m.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2016A 39.4 6.3 2.4 5.8 39.7 N/A
2017A 41.9 6.9 4.6 12.8 18.0 N/A
2018E 42.2 5.2 4.1 11.5 20.0 N/A
2019E N/A N/A N/A N/A N/A N/A
Last updated on 14/02/2019
Industry outlook

Increased equity market volatility has created a more challenging background for SGR and particularly for Capital Markets with potential delays in equity issuance and M&A activity. Nevertheless, activity continues and, notably, Shore Capital was appointed as joint broker to Marks & Spencer (Dec). A resolution of some of the macro uncertainties could prompt a bounce-back in corporate activity. Asset Management appears well positioned to grow further and is looking to use its track record in private client tax-efficient products for institutional investors.

Last updated on 14/02/2019
Share price graph
Balance sheet
Forecast net debt (£m) 21.2
Forecast gearing ratio (%) 341
Price performance
%
1m
3m
12m
Actual 12.2 (6.1) (11.5)
Relative* 8.3 (7.5) (11.4)
52-week high/low 285.0p/200.0p
*% relative to local index
Key management
Howard Shore Chairman
Michael Van Messel FD