Amoeba — Building on an exceptional year

Amoeba (PAR: ALMIB)

Last close As at 22/06/2024

EUR0.43

−0.01 (−2.27%)

Market capitalisation

EUR22m

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Research: Industrials

Amoeba — Building on an exceptional year

FY22 was an exceptional year for Amoéba in which it secured regulatory approval in the United States and a recommendation for approval in the European Union for the active substance used in its innovative biological fungicides. Now that these essential regulatory hurdles have been cleared, the company intends to construct a production plant capable initially of manufacturing sufficient active substance annually to treat 100,000 hectares of crops, 200,000 hectares when extended. Management plans to have this operational by early 2025 to support product roll-out, subject to Amoéba receiving regulatory approval for individual fungicides containing the active substance in 2024.

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Written by

Industrials

Amoéba

Building on an exceptional year

FY22 results overview

Industrial engineering

3 April 2023

Price

€0.67

Market cap

€33m

Net cash (€m) at end December 2022

3.1

Shares in issue

49.7m

Free float

96.2%

Code

ALMIB

Primary exchange

Euronext Growth

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(5.9)

(22.6)

(10.7)

Rel (local)

(6.2)

(31.1)

(17.5)

52-week high/low

€1.25

€0.49

Business description

Amoéba is developing biological fungicides for treating diseases such as mildews and rusts, which have a major economic impact on the production globally of a wide range of crops. These novel fungicides are based on the characteristics of the Willaertia magna C2c Maky amoeba.

Next event

AGM

25 May 2023

Analyst

Anne Margaret Crow

+44 (0)20 3077 5700

Amoéba is a research client of Edison Investment Research Limited

FY22 was an exceptional year for Amoéba in which it secured regulatory approval in the United States and a recommendation for approval in the European Union for the active substance used in its innovative biological fungicides. Now that these essential regulatory hurdles have been cleared, the company intends to construct a production plant capable initially of manufacturing sufficient active substance annually to treat 100,000 hectares of crops, 200,000 hectares when extended. Management plans to have this operational by early 2025 to support product roll-out, subject to Amoéba receiving regulatory approval for individual fungicides containing the active substance in 2024.

Year

end

Revenue
(€m)

EBITDA
(€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

12/20

0.0

(4.4)

(8.0)

(0.49)

0.00

N/A

12/21

0.0

(4.5)

(8.0)

(0.45)

0.00

N/A

12/22e*

0.0

(4.6)

(7.6)

(0.24)

0.00

N/A

12/23e

0.0

(7.7)

(9.1)

(0.18)

0.00

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. *FY22 figures are estimates due to the limited disclosure at the time of writing.

Operating costs increasing as company prepares for commercialisation

The company is not yet revenue generating. Grant income was €0.1m lower year-on-year in FY22, while total operating costs were €0.2m higher year-on-year, resulting in a widening of EBIT losses by €0.3m to €5.8m. At end-FY22, Amoéba had €5.5m cash (€7.3m end-FY21) on its balance sheet and €2.4m debt (€12.5m end-FY21). We have updated our FY22 estimates with the headline data provided so far and leave our FY23 estimates unchanged.

Seeking finance for commercial scale-up

Amoéba is seeking to raise €45m finance to fund operations and site expansion over the next three years. Because it will take time for Redbridge to secure this funding, Amoéba has agreed a new bond financing agreement with Nice & Green that will generate up to €8.4m cash (net), which enables Amoéba to get started on its manufacturing scale-up programme.

Valuation: Addressing a high-growth market

We are not attempting to calculate a valuation at present. The proposed production plant and extension will be capable of manufacturing sufficient active substance annually to treat 200,000 hectares of crops. In our March note, we estimate that this level of output could represent annual revenues of €26m and gross profit of €19.5m at full utilisation. This is a very small share of the global biocontrol agents market, which a report published by P&S Intelligence noted was worth c $4.9bn in 2021 and predicts will increase to c $13.6bn by 2030 (ie a CAGR of 12.2%), so further production facilities could follow.

FY22 performance

Modest widening of EBIT losses as company prepares for commercial launch of the product

The company is not yet revenue generating. Grant income was €0.1m lower year-on-year in FY22 and total operating costs were €0.2m higher year-on-year, resulting in a widening of EBIT losses by €0.3m to €5.8m. Industrial deployment costs increased as the company began to prepare for the establishment of its production facility. R&D expenses were higher as the activity related to field trials intensified, while sales and marketing costs were higher year-on-year because the company began to prepare for the commercial launch of the product. General and administrative costs, however, were lower year-on-year because of lower third-party fees. The losses were slightly wider than our €5.7m estimate, which had modelled grants and operating costs at double H122 levels.

Exhibit 1: Comparison of FY21 and FY22 performance

€m

FY21

FY22

Revenue

0.000

0.000

Grants

0.571

0.461

Industrial deployment costs

(0.767)

(1.110)

R&D costs

(2.178)

(2.525)

General and admin costs

(2.980)

(2.280)

Sales and marketing costs

(0.225)

(0.389)

Reported EBIT

(5.579)

(5.843)

Net finance costs (including change in fair value of derivatives and other exceptional items)

(2.238)

(2.180)

Reported profit before tax

(7.817)

(8.023)*

Reported tax

0.000

0.000*

Reported profit after tax

(7.817)

(8.023)

Source: Company data. Note: *Estimate.

Debt restructuring programme completed

During FY22, Amoéba concluded its debt restructuring process by fully repaying the €6.8m balance of the loan (which included interest) from the European Investment Bank and purchasing the warrants associated with the loan for €0.2m. During the year Amoéba generated €10.6m cash (net) from the issue of the fourth, fifth, sixth and seventh tranches of convertible bonds associated with the finance programme with Nice & Green.

At the end of December 2022, Amoéba had €5.5m cash (€7.3m end-FY21) on its balance sheet and €2.4m debt (€12.5m end-FY21) of which €2.1m related to the bonds issued but not yet converted by the year-end (these have since converted) under the convertible bond agreement with Nice & Green and €0.3m related to lease obligations.

In January 2023, Amoéba announced that it was terminating its convertible bond issue contract with Nice & Green and would not be issuing the optional eighth and final tranche of convertible bonds under the contract as initially planned. Instead, the company signed a contract with independent advisory firm Redbridge Debt & Treasury Advisory to assist it in its search for securing €45m finance to fund operations and site expansion over the next three years. Because it will take time for Redbridge to secure this funding, Amoéba agreed a new bond financing agreement with Nice & Green that will generate up to €8.4m cash net through the issue of three equal tranches of bonds between 30 June 2023 and 1 March 2024. The arrangement has enabled Amoéba to get started on its manufacturing scale-up programme (see below).

Progress against strategy

Securing regulatory approval

During FY22 Amoéba secured regulatory approval from the Environmental Protection Agency (EPA) in the United States and a recommendation for approval in the European Union for the active substance used in its innovative biological fungicides. The active substance is a lysate derived from W. magna (Willaertia magna C2c Maky) amoebae. The EPA confirmed that the active substance was exempt from maximum residue limits and any restrictions on how close to harvest the active substance could be applied to crops, provided it was applied in accordance with instructions for use and good agricultural practices.

The company was involved in over 120 field trials during winter 2021 and summer 2022. This most recent phase of trials (1) generated efficacy data for future marketing authorisations in Europe, Brazil and California (which has a separate regulatory framework from the rest of the US); (2) evaluated the potential of the company’s formulations on new targets such as soybean rust, black sigatoka on bananas, scab on apple trees and powdery mildew on tomatoes and cucumbers in greenhouses; and (3) ascertained the optimal application dose for treating mildews on vines (alone and in combination with copper), late blight on potatoes and several diseases on wheat. Two main formulations were tested: a suspension concentrate and a dispersion in oil.

Next steps

Regulatory approval: United States

Amoéba needs to obtain marketing authorisation from the EPA for individual formulations or products containing the active substance. It intends to apply to the EPA for market authorisation for products containing W. magna lysate in 2023 and expects that the approval will be awarded in 2024.

Regulatory approval: EU

The next steps are: (1) peer review (to be completed in Q323) in which representatives from several other member states review the information in the dossier assembled by Austria; (2) publication of the review by the European Commission and implementation of regulation approving the active substance (H124); and (3) decisions on the authorisation of products containing the active substance in the three individual geographical zones that the EU is split into (2024).

Field trial programme for FY23

Amoéba intends to undertake over 100 trials this calendar year. These will focus on (1) completing and generating data for future marketing authorisation dossiers in the EU and California; (2) confirming the results from studies on new targets carried out in 2022 (see above); (3) carrying out further field trials in the EU with potential early adopters of its products and approved contract research organisations to determine the optimal product formulation and application regime for treating vines and vegetables.

One of the performance evaluations taking place during 2023 is with Nissan Chemical Corporation under the framework of a Material Transfer Agreement. Nissan has started a performance evaluation study using a mixture of its established Leimay product with an experimental biocontrol product from Amoéba to control downy mildew on grapevines. This mixture has already been used in two trials in Italy during 2022, which showed that the mixture was more effective than either of the two products used on their own as well as showing significantly better performance than the conventional copper hydroxide treatment.

Scaling up production

Management intends to build a new production plant dedicated to biocontrol products capable of manufacturing 200 tonnes of finished product annually. This is equivalent to 40 tonnes of active substance per year, which would treat 100,000 hectares of crops. Management has identified a suitable location in Cavaillon in the south of France and applied for a building permit for the site. It plans to start construction work at the site later this year, subject to receiving planning approval, and to begin production there by early 2025. Amoéba will require €45m over the next three years to finance the Cavaillon production site and to continue its operational and research activities. In total, €23m of the financing will be for capital expenditure and the remainder for funding field trials, supporting the regulatory approvals process, registering products, establishing sales channels and adding production staff. Management is considering constructing an extension to the facility, which would double output and cost another €10m. The French public investment bank BPI France is providing Amoéba with a €3.6m subsidy and a €2.4m recoverable advance to support the expansion programme.

Biocide opportunity being pursued through third parties

In December 2022, the EPA approved both live W. magna as an active substance and the Biomeba products containing it for use in closed cooling systems for the control of microbial slime, microbially induced corrosion and general microbial flora. Management intends to work with third parties who will take over production and/or marketing of Biomeba in the United States. Management has initiated the withdrawal of the biocidal active substance applications in Canada and Europe to conserve cash for commercialising biological control products.

Exhibit 2: Financial summary

31-December

€m

2020

2021

2022e*

2023e

INCOME STATEMENT

Revenue

 

 

0.0

0.0

0.0

0.0

EBITDA

 

 

(4.4)

(4.5)

(4.6)

(7.7)

Operating profit (before amort. and excepts.)

 

 

(5.9)

(5.6)

(5.8)

(8.8)

Amortisation of acquired intangibles

0.0

0.0

0.0

0.0

Exceptionals

0.0

0.0

0.0

0.0

Share-based payments

(0.3)

(0.0)

(0.1)

(0.1)

Reported operating profit

(6.2)

(5.6)

(5.8)

(8.8)

Net Interest

(2.1)

(2.5)

(1.8)

(0.3)

Exceptionals

0.1

0.2

(0.3)

0.0

Profit Before Tax (norm)

 

 

(8.0)

(8.0)

(7.6)

(9.1)

Profit Before Tax (reported)

 

 

(8.2)

(7.8)

(8.0)

(9.1)

Reported tax

0.0

0.0

0.0

0.0

Profit After Tax (norm)

(8.0)

(8.0)

(7.6)

(9.1)

Profit After Tax (reported)

(8.2)

(7.8)

(8.0)

(9.1)

Discontinued operations

0.0

0.0

0.0

0.0

Net income (normalised)

(8.0)

(8.0)

(7.6)

(9.1)

Net income (reported)

(8.2)

(7.8)

(8.0)

(9.1)

Average Number of Shares Outstanding (m)

16.2

17.8

31.5

49.1

EPS - normalised (EUR)

 

 

(0.49)

(0.45)

(0.24)

(0.18)

EPS - normalised fully diluted (c)

 

 

(49.31)

(45.06)

(24.25)

(18.43)

EPS - basic reported (EUR)

 

 

(0.50)

(0.44)

(0.25)

(0.19)

Dividend (EUR)

0.00

0.00

0.00

0.00

Revenue growth (%)

N/A

N/A

N/A

N/A

EBITDA Margin (%)

N/A

N/A

N/A

N/A

Normalised Operating Margin

N/A

N/A

N/A

N/A

BALANCE SHEET

Fixed Assets

 

 

6.9

6.1

5.0

9.4

Intangible Assets

2.5

2.5

2.5

2.5

Tangible Assets

4.3

3.5

2.4

6.8

Investments & other

0.1

0.1

0.1

0.1

Current Assets

 

 

6.2

8.4

6.7

2.2

Stocks

0.1

0.3

0.3

0.3

Debtors

0.0

0.0

0.0

0.0

Cash & cash equivalents

5.0

7.3

5.5

1.1

Other

1.1

0.9

0.9

0.9

Current Liabilities

 

 

(2.1)

(13.8)

(4.6)

(13.7)

Creditors

(1.1)

(1.0)

(1.4)

(2.1)

Short term borrowings including lease liabilities

(0.4)

(12.2)

(2.7)

(11.1)

Other

(0.6)

(0.5)

(0.5)

(0.5)

Long Term Liabilities

 

 

(9.0)

(0.5)

(0.4)

(0.3)

Long term borrowings

(8.2)

(0.3)

(0.2)

(0.1)

Other long term liabilities

(0.7)

(0.3)

(0.3)

(0.3)

Net Assets

 

 

2.0

0.2

6.6

(2.4)

Minority interests

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

2.0

0.2

6.6**

(2.4)

CASH FLOW

Operating Cash Flow

(4.3)

(4.3)

(5.2)

(7.7)

Working capital

0.9

(0.4)

0.4

0.7

Exceptional & other

0.1

0.5

0.0

0.0

Tax

0.0

0.0

0.0

0.0

Operating Cash Flow

 

 

(3.3)

(4.3)

(4.9)

(6.9)

Capex (including capitalised R&D)

(0.1)

(0.1)

(0.1)

(5.5)

Acquisitions/disposals

0.0

0.0

0.0

0.0

Net interest

(0.2)

(1.6)

(1.1)

(0.3)

Equity financing

0.0

0.0

(0.2)

0.0

Dividends

0.0

0.0

0.0

0.0

Other

4.5

10.1

10.6

0.0

Net Cash Flow

1.0

4.1

4.4

(12.7)

Opening net debt/(cash)

 

 

2.7

3.6

5.2

(5.1)

FX

0.0

0.0

0.0

0.0

Other non-cash movements

(1.9)

(5.7)

5.9

0.0

Closing net debt/(cash)

 

 

3.6

5.2

(5.1)

7.7

Lease liabilities

0.7

0.5

0.4

0.3

Closing net debt/(cash) excluding property lease liabilities

 

2.9

4.7

(5.5)

7.4

Source: Company data, Edison Investment Research. Note: *Revised to incorporate data from press release on FY22 results except for net asset total. **Actual net asset total is €8.2m. We will update the balance sheet and cash flow when more detail is available.


General disclaimer and copyright

This report has been commissioned by Amoeba and prepared and issued by Edison, in consideration of a fee payable by Amoeba. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

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This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

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London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Amoeba and prepared and issued by Edison, in consideration of a fee payable by Amoeba. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

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United Kingdom

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Research: Financials

Manx Financial Group — Record PBT driven by niche growth strategy

Manx Financial Group (MFG) has delivered impressive growth in a weak economy through its strategy of investing in niche markets. PBT rose 71% to a record £5.2m and net attributable profit rose 55% to £4.3m due to a combination of organic growth and an initial contribution from 50%-owned Payment Assist (PAL). Return on equity (ROE) expanded to 15.9% from 11.8% in 2021. PAL was consolidated for just over three months and contributed 13.5% of PBT in FY22. Hence, we calculate a pro-forma PBT run-rate of c £6–7m in FY22. Furthermore, MFG continues to enjoy positive momentum within its chosen scalable and economically resilient high-return businesses.

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