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Research: Financials
Record sees itself at the beginning of a new stage as it develops its capabilities as an asset manager rather than purely a supplier of specialist currency overlay services. The progress so far is good with the FY22 results beginning to show the benefits of diversification and the introduction of new, higher fee-margin products. More of these are in development and investment in systems and staff should underpin operational gearing if the group succeeds in its aim of reaching FY25 revenue of over £60m.
Record |
Changes taking effect |
FY22 results |
Financial services |
11 July 2022 |
Share price performance
Business description
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Analysts
Record is a research client of Edison Investment Research Limited |
Record sees itself at the beginning of a new stage as it develops its capabilities as an asset manager rather than purely a supplier of specialist currency overlay services. The progress so far is good with the FY22 results beginning to show the benefits of diversification and the introduction of new, higher fee-margin products. More of these are in development and investment in systems and staff should underpin operational gearing if the group succeeds in its aim of reaching FY25 revenue of over £60m.
Year end |
Revenue (£m) |
PBT |
EPS* |
DPS** |
P/E |
Yield |
03/21 |
25.4 |
6.2 |
2.73 |
2.30 |
24.6 |
3.4 |
03/22 |
35.1 |
10.9 |
4.37 |
3.60 |
15.3 |
5.4 |
03/23e |
41.3 |
13.1 |
5.30 |
4.40 |
12.7 |
6.6 |
03/24e |
45.1 |
14.4 |
5.39 |
4.55 |
12.4 |
6.8 |
Note: *EPS is diluted. **DPS excludes special dividends.
FY22 results: Strong progress in line with expectation
Record’s March year-end assets under management equivalent (AUME) of $83.1bn were up 3.7% during FY22. This mainly reflected net inflows ($2.4bn). We calculate that average AUME in sterling terms increased by 17.4% for FY22 compared with FY21. Reflecting flows into higher fee-margin products and helped modestly by performance fee income of £0.5m, FY22 revenue increased by 38% to £35.1m. Continued investment in new products to diversify further, to modernise IT systems and to develop and retain staff contributed to a 25% increase in operating costs. This still allowed an increase in the operating margin from 24% to 31% and a 76% increase in pre-tax profit to £10.9m. Diluted EPS rose from 2.73p to 4.37p. This in turn supported a rise in the ordinary dividend from 2.3p to 3.6p while a special dividend of 0.92p took the total dividend for the year to 4.52p versus 2.75p.
Background and outlook
Record acknowledges the current difficult macroeconomic and geopolitical background for markets but sees the progress it is making on its strategy to diversify, modernise and move to become a specialist alternative asset manager as creating an exciting outlook for the group. To make this more tangible, it has stated its aspiration to achieve revenue of over £60m in FY25, reflecting the realistic potential it sees in existing products and those in development. Subject to inflation and other developments, the group sees scope to reach an operating margin of 40% in the same year.
Valuation
Our FY23 earnings estimate is increased by 11% mainly as a result of updated sterling/US dollar rate and fee-margin assumptions. We have also introduced an FY24 forecast. P/E and EV/EBITDA multiples are above the UK asset manager peer average (see Exhibit 5), but delivery of revenue of £60m in FY25 would sharply reduce the prospective multiple and in the meantime the yield is attractive at 6.7% including the special dividend.
Record in numbers
We have updated our compilation of information Record provides on AUME, fee income, clients and asset class exposure (Exhibit 1). This includes our calculations of estimated average fee rates by strategy and hedging fee exposure by underlying asset class.
We highlight several points:
■
Hedging services in total account for 88% of AUME and 64% of management fees, reflecting the lower fees that apply to passive hedging. The growth in dynamic hedging and currency for return since FY19 has reduced the proportion of management fees accounted for by passive hedging from 52% to 35% in FY22.
■
Since 2017 AUME has increased from $58.2bn to $83.1bn in FY22 (compound annual growth of 7.4% in AUME). The average fee rate rose slightly over the period, from 5.2bp to 5.6bp.
■
The longevity of clients: measured by AUME, 60% have been in place for over six years. However, with the renewed focus on growth over the past two years there is a healthy inflow of new clients, which often start with a relatively low AUME level: by number, 40% of clients have joined Record within three years.
■
Geographically, the United States accounts for 37% of revenue followed by Switzerland (31%).
■
We estimate 56% of hedging mandate fees relate to underlying equity assets, 17% to fixed income and 27% to other assets.
Exhibit 1: Record profile in numbers (FY22 except where indicated)
Analysis by strategy |
||||||||||||||||||||
AUME (%) |
Management fees (%)* FY19 |
FY22 |
Est. average fee rate (bp)** |
|||||||||||||||||
Dynamic hedging |
12.8 |
20.6 |
29.4 |
13.2 |
||||||||||||||||
Passive hedging |
75.6 |
52.0 |
34.5 |
2.5 |
||||||||||||||||
Currency for return |
6.0 |
8.0 |
16.2 |
15.5 |
||||||||||||||||
Multi-product |
5.4 |
19.4 |
19.9 |
18.3 |
||||||||||||||||
Cash |
0.2 |
N/A |
N/A |
0 |
||||||||||||||||
Total |
100.0 |
100.0 |
100.0 |
5.6 |
||||||||||||||||
Value |
$83.1bn |
£22.3m |
£34.1m |
|||||||||||||||||
Client analysis |
||||||||||||||||||||
Concentration |
% AUME |
% fees |
Longevity (years) |
% Clients |
% AUME |
|||||||||||||||
Top 10 |
52 |
73 |
0-1 |
13 |
5 |
|||||||||||||||
Next 10 |
35 |
18 |
1–3 |
27 |
15 |
|||||||||||||||
Balance |
12 |
8 |
3–6 |
29 |
20 |
|||||||||||||||
6–10 |
11 |
18 |
||||||||||||||||||
>10 |
20 |
42 |
||||||||||||||||||
100 |
100 |
100 |
100 |
|||||||||||||||||
Geographical analysis and AUME progression |
||||||||||||||||||||
By country |
% revenue |
By invoice currency |
% revenue |
AUME progression |
($bn) |
|||||||||||||||
US |
37 |
US dollar |
50 |
2017 |
58.2 |
|||||||||||||||
Switzerland |
31 |
Swiss franc |
28 |
2018 |
62.2 |
|||||||||||||||
Europe (rest) |
20 |
Euro |
10 |
2019 |
57.3 |
|||||||||||||||
UK |
8 |
Sterling |
7 |
2020 |
58.6 |
|||||||||||||||
Other |
4 |
Other |
4 |
2021 |
80.1 |
|||||||||||||||
100 |
100 |
2022 |
83.1 |
|||||||||||||||||
Underlying asset class exposure of dynamic and passive hedging AUME (%) |
||||||||||||||||||||
Dynamic |
Passive |
Estimated % of hedging fees |
||||||||||||||||||
Equity |
91 |
30 |
58 |
|||||||||||||||||
Fixed income |
0 |
34 |
18 |
|||||||||||||||||
Other |
9 |
37 |
24 |
|||||||||||||||||
100 |
100 |
100 |
Source: Record, Edison Investment Research. Notes: *Management fee excluding performance fees. **Fee rate is our own calculation and within each strategy there will be a range of mandate types and fee structures/levels. Rounding may mean some columns do not sum.
FY22 results analysis
AUME and management fees
As announced in the April Q422 trading update, Record’s AUME increased by $3bn in FY22 (+3.7% and 8.6% in sterling terms). As shown in Exhibit 2, this mainly reflected net AUME inflows ($2.4bn), with positive underlying market moves since March 2021 and exchange rate and scaling moves adding $0.6bn.
Using reported quarter-end figures we calculate that average AUME for the group increased by 22% and 17% in dollar and sterling terms, respectively. The average level of AUME in FY22 benefited from the full inclusion of a large dynamic hedging mandate announced in September 2020 that was included in the $6.6bn inflow seen in that segment in FY21.
Exhibit 2: AUME movements and management fees
Year end March |
AUME movements ($bn) |
End period AUME ($bn) |
Average AUME (£bn) |
Management fees (£000) |
|||||||
FY21 |
FY22 |
FY21 |
FY22 |
% change |
FY21 |
FY22 |
% change |
FY21 |
FY22 |
% change |
|
Net inflow |
|||||||||||
Dynamic hedging |
6.6 |
1.4 |
9.3 |
10.6 |
14.0 |
3.8 |
7.6 |
99.1 |
5,623 |
10,020 |
78.2 |
Passive hedging |
2.1 |
1.1 |
61.5 |
62.8 |
2.1 |
42.7 |
46.3 |
8.5 |
11,377 |
11,768 |
3.4 |
Currency for return |
0.0 |
0.4 |
3.9 |
5 |
28.2 |
2.6 |
3.5 |
38.9 |
2,005 |
5,513 |
175.0 |
Multi-product |
1.0 |
(0.5) |
5.2 |
4.5 |
-13.5 |
3.0 |
3.7 |
23.6 |
5,873 |
6,782 |
15.5 |
Cash and futures |
0.0 |
0.0 |
0.2 |
0.2 |
0.0 |
0.2 |
0.1 |
(4.2) |
|||
Total |
9.7 |
2.4 |
80.1 |
83.1 |
3.7 |
52.2 |
61.3 |
17.4 |
24,878 |
34,083 |
37.0 |
Markets |
8.4 |
0.3 |
|||||||||
FX and scaling |
3.4 |
0.3 |
|||||||||
Total change |
21.5 |
3.0 |
|||||||||
Opening AUME |
58.6 |
80.1 |
|||||||||
Closing AUME |
80.1 |
83.1 |
Source: Record, Edison Investment Research
Key points from the income statement
The profit and loss (P&L) account for FY22 is set out in Exhibit 3. We comment on key areas below, with comparisons versus FY21 unless stated.
■
Management fees increased by 37% reflecting the 17% higher average AUME (in sterling terms), and a higher fee-rate mix. Of the £9.2m absolute increase in management fees, the largest changes were in dynamic hedging and currency for return. The £4.4m increase in dynamic hedging fees resulted from full-year inclusion of the 2020 mandate win mentioned above together with a $1.4bn inflow in FY22. Currency for return fees increased by £3.5m benefiting from the launch of the Record Emerging Market (EM) Sustainable Finance Fund during the year (a $1.2bn inflow and, we estimate, a fee rate similar to comparable actively managed fixed income funds at 50–60bp).
■
Fee rates, on a like-for-like basis, have been reported to be broadly stable during the year, but changes in the mix of AUME meant the group average increased from 4.8bp to 5.6bp. Notable contributors were the increase in average dynamic hedging AUME (the large mandate taken on in FY21 diluted the fee rate in the category but contributed to the increase in the group average rate) and the Record EM Sustainable Finance Fund within currency for return (where we calculate the average fee rate rose from 7.9bp to 15.5bp).
■
Total revenue rose 38% with a £0.5m performance fee earned (£0.1m) as increased interest rate differentials in the market created better opportunities for enhanced passive hedging mandates to add value.
■
Administrative expenses increased by 25%, within which personnel costs before the group profit share (GPS) increased by 5%, with the average number of employees at 82 versus 83. The GPS increased by 78%, reflecting the rise in operating profit. As a percentage of pre-GPS operating profit (34%) the payment was towards the top of the group’s 25–35% target range in recognition of the progress made in implementing strategy and the need to incentivise and retain staff. The resulting increase in total personnel costs was 23%. Non-personnel costs rose 33% to £7.2m including costs related to the modernisation of IT systems, increased data costs that have accompanied this and the introduction of new products and the cost of office space in London. Ongoing costs related to new systems and continuing investment to support client service and product innovation are expected to remain a feature of the group P&L.
■
With the full benefit of FY21 inflows and further inflows in FY22, revenue growth outpaced cost increases and pre-tax profit increased by 76%. A higher effective tax rate of 20% (capital spending and research allowances together with deferred tax movements lowered the prior year rate to 13%) meant the increase in diluted EPS was 60%.
■
The ordinary dividend for FY22 is increased from 2.3p to 3.6p representing a payout of 80% of basic earnings per share. The group now targets an ordinary dividend payout in the range of 70–90% of annual earnings allowing for sustainable growth. Subject to market conditions, the board still intends to pay out earnings in excess of ordinary dividends, taking into account capital requirements (including regulatory requirements and a buffer for operating expenses, working capital and investment expectations). Such payments would usually be in the form of a special dividend and for FY22 the payment is 0.92p (versus 0.45p) giving a total dividend of 4.52p (+64.4%) and a 100% payout of basic earnings per share.
Exhibit 3: FY22 P&L analysis
£000s |
FY19 |
FY20 |
FY21 |
FY22 |
% change vs FY21 |
Dynamic hedging |
4,598 |
3,995 |
5,623 |
10,020 |
78.2 |
Passive hedging |
11,610 |
12,026 |
11,377 |
11,768 |
3.4 |
Currency for return |
1,775 |
1,982 |
2,005 |
5,513 |
175.0 |
Multi-product |
4,325 |
5,130 |
5,873 |
6,782 |
15.5 |
Management fees |
22,308 |
23,133 |
24,878 |
34,083 |
37.0 |
Performance fees |
2,333 |
1,819 |
81 |
499 |
516.0 |
Other investment services income |
332 |
611 |
453 |
570 |
25.8 |
Total revenue |
24,973 |
25,563 |
25,412 |
35,152 |
38.3 |
Cost of sales |
(385) |
(255) |
(399) |
(219) |
(45.1) |
Gross profit |
24,588 |
25,308 |
25,013 |
34,933 |
39.7 |
Administrative expenses |
(16,704) |
(17,741) |
(18,934) |
(23,726) |
25.3 |
Other income/expense |
(8) |
82 |
41 |
(372) |
N/A |
Operating profit |
7,876 |
7,649 |
6,120 |
10,835 |
77.0 |
Net finance income |
113 |
88 |
33 |
21 |
(36.4) |
Profit before tax |
7,989 |
7,737 |
6,153 |
10,856 |
76.4 |
Taxation |
(1,559) |
(1,365) |
(802) |
(2,225) |
177.4 |
Profit after tax |
6,430 |
6,372 |
5,351 |
8,631 |
61.3 |
Diluted EPS (p) |
3.25 |
3.26 |
2.73 |
4.37 |
60.4 |
DPS (p) |
2.99 |
2.71 |
2.75 |
4.52 |
64.4 |
Tax rate |
20% |
18% |
13% |
20% |
Source: Record, Edison Investment Research
On product investment performance, Record reports that central bank tightening and increased interest rate volatility has enabled the enhanced passive hedging product to add value; over FY22 a representative account recorded a positive return of 13bp relative to a fixed-tenor benchmark and since inception there was a positive return of 9bp per year. For comparison, the average fee rate in passive hedging is under 3bp. Episodic strength in the US dollar created the conditions for dynamic hedging to add value for US investors. For a representative account the value added in FY22 was 60bp and the since-inception return was +46bp per year.
Within currency for return products, the Record EM Sustainable Finance Fund (US dollar share class) had a negative return since inception (28 June 2021, -0.94%) but significantly outperformed relevant indices such as the JP Morgan GBI-EM Global Diversified Index (-12.07%). Finally, the multi-strategy product generated a positive return of 0.58% and a since-inception return of 0.83%, with volatility of 3.08% per year.
Strategy and three-year plan
Group management make clear it is very pleased with the progress of the strategy adopted following the appointment of Leslie Hill as chief executive two years ago. The three strands – diversification, modernisation and succession – are all advancing and starting to bear fruit as evidenced within the FY22 results and commentary.
On diversification, the launch of the Record EM Sustainable Fund and a new Luxembourg-based municipal bond fund are illustrations of the group’s new emphasis of meeting clients’ needs and working in partnerships (with UBS Global Wealth Management for the former and Universal Investment and VTeam for the latter). This approach helps to gain early traction with investors, reduces launch costs and brings in third-party expertise to broaden Record’s potential reach while still earning higher fee-margins as an asset manager than in its traditional overlay hedging products. Looking ahead, the group has devoted considerable effort to develop its capabilities in sustainable investment and is working on further impact and sustainable investment initiatives. Products involving supply-chain finance, syndicated loans and Sharia compliant finance are in the pipeline. Recent approval of the application for a licence from BaFin for the German subsidiary will facilitate development of a European asset management business, as will creating a suite of Luxembourg funds allowing Record to offer more to its partners and clients.
Modernisation of IT systems is enabling more effective delivery of Record’s established areas of expertise in currency and derivatives and should contribute to scalability and operational gearing as the group moves towards its three-year FY25 targets. As noted earlier, IT development and hence spending are expected to remain a feature at the group.
Succession. Development and retention of younger members of the team to take over management responsibility in due course has been a prominent theme. This has included promotions and hence financial reward, but also changes such as the opening of a London office, continuation of flexible working, mentoring programmes, development of sustainability capabilities and diversity and inclusion policies. Staff retention fell markedly in FY22 at 74% compared with 90% in FY21. However, this was a sign of the evolution taking place in the group with the need to change some management groups in line with the modernisation of systems and client-led approach to product development. This has been carefully managed and some senior staff have now taken alternative or advisory roles, retaining their expertise within the group.
To make clear the board’s confidence in the outlook for the group and the growth potential it sees, a three-year plan with a revenue target of over £60m in FY25 has been set out. While the detail behind this aspiration has not been given, it reflects a bottom-up assessment of potential for growth in each product area with the promising development of new, higher fee-margin products a key element of the expected growth. In addition to the revenue target, Record sees an operating margin of 40% as being achievable in FY25 (subject to the effects of inflation) as higher AUME brings into play the scalability of the modernised systems now in place.
Outlook, estimate changes and financial position
The macroeconomic and geopolitical background for equity and fixed-income markets is challenging and this is likely to have some effect on the progress Record makes over its three-year plan and our forecast period to end-FY24. However, the development of new products and the diversity of clients’ underlying assets provide some mitigation.
Exhibit 4 sets out the headline differences between estimate and outcome for FY22, changes in our FY23 estimate and our newly introduced FY24 estimate. For FY22 the outcome was close to expectation. For FY23, full inclusion of the Record EM Sustainable Finance Fund introduced in Q222 is a contributor to growth. In this case it seems reasonable to allow for further net allocations to the fund and, as previously, we have assumed $0.4bn (and the same for FY24). Similarly, we assume a $1bn inflow into the municipal bond fund in each year although the revenue effects of this are lower given the expected fee rate of c 13bp. These assumptions are indicative with risks in both directions. The changes for FY23 compared with our old forecast arise primarily from updated sterling/US dollar rate and fee-margin assumptions. As usual, our estimates do not include any assumed performance fees so any that are crystallised would represent upside from our figures.
Exhibit 4: Estimate changes
|
Revenue (£m) |
PBT (£m) |
EPS (p) |
DPS (p)* |
||||||||
|
Old |
New |
Change (%) |
Old |
New |
Change (%) |
Old |
New |
Change (%) |
Old |
New |
Change (%) |
03/22e/a |
35.2 |
35.2 |
0 |
11.0 |
10.9 |
(2) |
4.40 |
4.37 |
(1) |
3.80 |
3.60 |
(5) |
03/23e |
39.3 |
41.3 |
5 |
11.6 |
13.1 |
13 |
4.77 |
5.30 |
11 |
4.40 |
4.40 |
0 |
03/24e |
45.1 |
14.4 |
5.39 |
4.55 |
Source: Edison Investment Research. Notes: *Dividend excludes any special payment. For FY22 Old = our estimate and New = reported.
Our dividend estimate shown above excludes special dividends. Based on our FY23 and FY24 basic earnings estimates and assuming a near 100% payout, we pencil in special payments of 1.05p and 1.1p respectively, giving total dividends of 5.45p and 5.65p.
The group figure for net cash and money market instruments managed as cash at the year-end was £17.3m (a comparable own cash figure for FY21 was £16.2m after stripping out the non-controlling interest share of cash held by seed funds). Summarising the cash flows, net operating cash generation was £11.4m while dividends absorbed £6.5m and share buybacks £4.5m: investing activities and other movements added £0.7m giving the £1.1m increase in own cash.
The group capital position remains strong. At the end of FY22 Record had regulatory capital resources of £25.3m compared with a regulatory capital requirement of £5.4m (FY21 £9.4m). The introduction of new products may increase the capital requirement, but the capital position is seen as well able to support the growth envisaged in the three-year plan.
Finally, while we have yet to include a forecast for FY25, it is interesting to consider a scenario that could generate the over £60m revenue and 40% operating margin the group seeks. For this illustration we have excluded any contribution from performance fees. Starting with AUME, we envisage most of the growth required falling within the multi-product category but also allow for additional inflows in currency for return and dynamic hedging. Our scenario assumes average AUME of just over $94bn compared with existing estimates of $85.7bn and $88.5bn for FY23 and FY24, respectively. We allow for a marked increase in multi-product fee rate at 28bp (compared with 18.4bp assumed for FY24, for example) and a smaller increase for currency for return both reflecting the effects of new higher margin products, with fee rates potentially ranging between 20bp and 50bp. The overall group average fee rate is assumed to rise to 7.8bp (compared with 5.9bp and 6.2bp respectively in our FY23 and FY24 estimates). This gives revenue just above £60m. On costs we allow for an 18% increase in total operating expenses compared with our FY24 estimate, reflecting mainly an increase in group profit share but still generating considerable operating leverage and matching the target 40% operating margin. This would give pre-tax profit of c £24m and diluted EPS of just over 9p.
Valuation comparison
Exhibit 5 shows an updated version of our comparative valuation table, with a selection of quoted UK fund managers. Year-to-date, the comparator asset managers share prices are down 32% on average, while Record shares are 18% lower, potentially a reflection of its lower sensitivity to equity market volatility and the growth it is demonstrating. It trades at a premium to the average calendarised P/E and EV/EBITDA multiples for the comparators, although delivery of growth in line with the group’s three-year plan would bring the final year multiple down to c 7.5x. On our estimates, Record’s prospective yield (including special dividend) would be 8.1% for FY23 and 8.4% for FY24.
Exhibit 5: Comparing valuation with UK fund managers
Price |
Market cap (£m) |
P/E 2022e (x) |
EV/EBITDA 2022e (x) |
Dividend yield (%) |
|
Ashmore |
212 |
1,508 |
10.9 |
4.3 |
8.0 |
City of London Investment Group |
425 |
215 |
8.8 |
N/A |
7.8 |
Impax Asset Management |
578 |
766 |
15.3 |
10.3 |
3.6 |
Jupiter |
142 |
788 |
9.7 |
3.4 |
12.0 |
Liontrust |
922 |
599 |
8.4 |
5.0 |
7.8 |
Man Group |
250 |
3,956 |
8.9 |
6.1 |
4.9 |
Polar Capital |
476 |
480 |
10.7 |
4.6 |
9.7 |
Schroders |
2,730 |
7,467 |
13.0 |
8.4 |
4.5 |
Average |
10.7 |
6.0 |
7.3 |
||
Record |
67.00 |
127 |
13.2 |
9.3 |
5.4 |
Source: Refinitiv, Edison Investment Research. Note: P/E and EV/EBITDA on a calendar-year basis. Record’s (FY22) dividend yield excludes the special dividend. Priced at 8 July 2022.
Exhibit 6: Financial summary
Year end 31 March |
£000s |
|
2019 |
2020 |
2021 |
2022 |
2023e |
2024e |
PROFIT & LOSS |
|
|
|
|
|
|
|
|
Revenue |
|
|
24,973 |
25,563 |
25,412 |
35,152 |
41,268 |
45,110 |
Operating expenses |
|
|
(17,089) |
(17,996) |
(19,333) |
(23,945) |
(28,136) |
(30,692) |
Other income/(expense) |
|
|
(8) |
82 |
41 |
(372) |
(40) |
(40) |
Operating Profit (before amort. and except.) |
|
|
7,876 |
7,649 |
6,120 |
10,835 |
13,092 |
14,378 |
Finance income |
|
|
113 |
88 |
33 |
21 |
34 |
51 |
Profit Before Tax |
|
|
7,989 |
7,737 |
6,153 |
10,856 |
13,126 |
14,429 |
Taxation |
(1,559) |
(1,365) |
(802) |
(2,225) |
(2,494) |
(3,607) |
||
Minority interests |
|
|
0 |
48 |
0 |
0 |
0 |
0 |
Attributable profit |
|
|
6,430 |
6,420 |
5,351 |
8,631 |
10,632 |
10,821 |
|
|
|
|
|
|
|
|
|
Revenue/AUME (excl. perf fees) bps |
|
|
4.9 |
4.9 |
4.8 |
5.6 |
5.8 |
6.2 |
Operating margin (%) |
|
|
31.5 |
29.9 |
24.1 |
30.8 |
31.7 |
31.9 |
|
|
|
|
|
|
|
|
|
Average Number of Shares Outstanding (m) |
|
|
198.1 |
197.1 |
196.2 |
197.3 |
200.8 |
200.8 |
Basic EPS (p) |
|
|
3.27 |
3.26 |
2.75 |
4.52 |
5.61 |
5.71 |
EPS - diluted (p) |
|
|
3.25 |
3.26 |
2.73 |
4.37 |
5.30 |
5.39 |
Dividend per share (p) |
|
|
2.30 |
2.30 |
2.30 |
3.60 |
4.40 |
4.55 |
Special dividend per share (p) |
|
|
0.69 |
0.41 |
0.45 |
0.92 |
1.05 |
1.10 |
Total dividend (p) |
|
|
2.99 |
2.71 |
2.75 |
4.52 |
5.45 |
5.65 |
|
|
|
|
|
|
|
|
|
BALANCE SHEET |
|
|
|
|
|
|
|
|
Non-current assets |
|
|
2,161 |
4,868 |
5,153 |
6,084 |
5,366 |
4,648 |
Intangible Assets |
|
|
288 |
470 |
420 |
562 |
512 |
462 |
Tangible Assets |
|
|
761 |
751 |
683 |
401 |
221 |
41 |
Investments |
|
|
1,112 |
2,472 |
3,046 |
3,447 |
3,447 |
3,447 |
Other |
|
|
0 |
1,175 |
1,004 |
1,674 |
1,186 |
698 |
Current Assets |
|
|
31,427 |
31,149 |
28,045 |
27,141 |
27,847 |
27,852 |
Debtors |
|
|
7,562 |
8,704 |
8,006 |
9,883 |
11,217 |
12,062 |
Cash |
|
|
12,966 |
14,294 |
6,847 |
3,345 |
2,717 |
1,877 |
Money market instruments |
|
|
10,735 |
7,958 |
12,932 |
13,913 |
13,913 |
13,913 |
Other |
|
|
164 |
193 |
260 |
0 |
0 |
0 |
Current liabilities |
|
|
(6,158) |
(6,955) |
(5,992) |
(6,210) |
(6,359) |
(6,275) |
Creditors |
|
|
(2,736) |
(3,009) |
(3,426) |
(4,721) |
(5,358) |
(5,762) |
Financial liabilities |
|
|
(2,621) |
(2,191) |
(1,696) |
0 |
0 |
0 |
Other |
|
|
(801) |
(1,755) |
(870) |
(1,489) |
(1,001) |
(513) |
Non-current liabilities |
|
|
(29) |
(901) |
(407) |
(1,085) |
(1,085) |
(1,085) |
|
|
|
|
|
|
|
|
|
Net Assets |
|
|
27,401 |
28,161 |
26,799 |
25,930 |
25,769 |
25,140 |
Minority interests |
|
|
60 |
132 |
0 |
0 |
0 |
0 |
Net assets attributable to ordinary shareholders |
|
|
27,341 |
28,029 |
26,799 |
25,930 |
25,769 |
25,140 |
|
|
|
|
|
|
|
|
|
No of shares at year end |
|
|
199.1 |
199.1 |
199.1 |
199.1 |
199.1 |
199.1 |
NAV per share p |
|
|
13.7 |
14.1 |
13.5 |
13.0 |
12.9 |
12.6 |
|
|
|
|
|
|
|
|
|
CASH FLOW |
|
|
|
|
|
|
|
|
Operating Cash Flow |
|
|
7,026 |
6,543 |
6,798 |
11,355 |
10,939 |
11,367 |
Capex |
|
|
(72) |
(243) |
(230) |
(75) |
(170) |
(170) |
Cash flow from other investing activities |
|
|
(561) |
1,513 |
(6,210) |
(3,392) |
(116) |
(99) |
Dividends |
|
|
(5,517) |
(5,888) |
(5,290) |
(6,512) |
(9,793) |
(10,450) |
Other financing activities |
|
|
(613) |
(943) |
(2,368) |
(5,019) |
(1,488) |
(1,488) |
Other |
|
|
205 |
346 |
(147) |
141 |
0 |
0 |
Net Cash Flow |
|
|
468 |
1,328 |
(7,447) |
(3,502) |
(628) |
(840) |
Opening cash/(net debt) |
|
|
12,498 |
12,966 |
14,294 |
6,847 |
3,345 |
2,717 |
Closing net (debt)/cash |
|
|
12,966 |
14,294 |
6,847 |
3,345 |
2,717 |
1,877 |
Closing net (debt)/cash inc money market instruments |
|
23,701 |
22,252 |
19,779 |
17,258 |
16,630 |
15,790 |
|
|
|
|
|
|
|
|
|
|
AUME ($bn) |
|
|
|
|
|
|
|
|
Opening |
|
|
62.2 |
57.3 |
58.6 |
80.1 |
83.1 |
87.4 |
Net new money flows |
|
|
(4.5) |
4.6 |
9.7 |
2.4 |
3.4 |
1.4 |
Market/other |
|
|
(0.4) |
(3.3) |
11.8 |
0.6 |
0.9 |
0.9 |
Closing |
|
|
57.3 |
58.6 |
80.1 |
83.1 |
87.4 |
89.7 |
Source: Record accounts, Edison Investment Research
|
|
Research: Consumer
musicMagpie (MMAG) provides a cost-effective and sustainable alternative to buying and selling consumer technology and physical media. Future growth is supported by the positive tailwinds of increasing awareness of sustainability issues and the growing importance of the circular economy. It has a significant growth opportunity from the rental of technology, which is expected to generate greater revenue and profit over the life of a device than an outright sale. The addition of the new recurring subscription revenue has the potential to accelerate annual revenue growth from mid- to high-single digits and significantly increase profitability (low-teens EBITDA margin from FY26). Our DCF-based valuation is 168p per share.
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