Shore Capital Group

LN: SGR

£48m market cap

222.5p 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’s FY18 numbers showed revenue +3.7% with the benefits of diversification evident as growth in Asset Management more than offset Capital Markets weakness. Costs increased 8.4% as selective counter-cyclical investment was made and pre-tax profit was 11.1% lower. After a lower tax charge, diluted EPS were down just 3% to 12.5p and the dividend of 10p was maintained. Notable recent transactions include SGR’s role as joint broker, co-bookrunner and underwriter for Marks & Spencer’s £601m rights issue in May while, in June, July and August SGR was involved in placings for BATM Advanced Communications, Sosandar, AFH, Begbies Traynor and Gore Street Energy Storage Fund.

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 17.4 N/A
2018A 43.3 5.5 4.1 12.5 17.8 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
Industry outlook

SGR’s outlook comments were positive while acknowledging the uncertain market backdrop, which has persisted subsequently. 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 benefits from scale, increased client diversity and, we assume, some cost synergy. Successful integration should benefit both returns and the valuation.

Last updated on 31/10/2019
Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 61.8 8.0 (12.8)
Relative* 64.6 11.8 (14.7)
52-week high/low 255.0p/137.5p
*% relative to local index
Key management
Howard Shore Chairman
Michael Van Messel FD