Shore Capital Group

LN: SGR

£48.5m market cap

225p 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

In March SGR reported FY18 numbers close to expectations. Revenue of £43.3m was 3.7% ahead of the prior year, costs were up 8.4% as selective counter-cyclical investment was made to strengthen the business and pre-tax profits were down 11.1% at £4.1m. After a lower tax charge, diluted EPS were down just 3% to 12.5p and the dividend of 10p was unchanged. Capital Markets revenue was 6.5% lower reflecting the weak Q4 in equity markets but within this revenue from corporate retainers and transactions was higher y-o-y. Asset Management revenue was up 23% reflecting higher AUM (+6% to £920m), particularly within the private client, tax efficient investments area.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 41.9 6.9 4.6 12.8 17.6 N/A
2018A 43.3 5.5 4.1 12.5 18.0 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 16/04/2019
Industry outlook

SGR’s outlook comments were positive while acknowledging the uncertain current market backdrop. The Stockdale acquisition completed at end March, bringing in c 50 SME corporate clients. The initial cash consideration was £4.9m with a maximum deferred payment of £4.0m. Even on the maximum payment the price to book and earnings multiples (FY18 numbers) would be 1.6x and 7.5x. The enlarged group will benefit from scale, increased client diversity and, we assume, some cost synergy. Successful integration should benefit both returns and the valuation.

Last updated on 16/04/2019
Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 2.3 4.7 (17.3)
Relative* (0.4) (2.8) (18.7)
52-week high/low 285.0p/200.0p
*% relative to local index
Key management
Howard Shore Chairman
Michael Van Messel FD