Manx Financial Group — Strong H122, well positioned for macro headwinds

Manx Financial Group (LN: MFX)

Currency in GBP

Last close As at 03/02/2023

GBP0.20

0.00 (0.00%)

Market capitalisation

GBP23m

Research: Financials

Manx Financial Group — Strong H122, well positioned for macro headwinds

Manx Financial Group (MFG) had a strong H122, with a PBT of £2.3m more than doubling and a return on average equity (ROE) of 16.8%. Loans grew 16% as the group continues to reposition itself into prime lending segment ahead of the more challenging macroeconomic environment. The net interest margin improved to 8.9% (8.5% in H121) and impairments remain under control with an annualised charge of 1.9% (2.1% in H121). Conister Bank (MFG’s bank) has formally applied for a UK branch deposit-taking licence on 25 October. This will give this Isle of Man bank a greater foothold in the UK for growth. The balance sheet is well capitalised (total capital 17.7%, CET1 of 14.2%) and still carries surplus liquidity to fund expansion plans. The bank is trading at an FY21 P/BV of only 0.8x despite its track record of ROE being above its cost of equity (COE, which we estimate at 10–11%) and ability to expand its balance sheet.

Pedro Fonseca

Written by

Pedro Fonseca

Analyst, Financials

Financials

Manx Financial Group

Strong H122, well positioned for macro headwinds

FY22 interims

Banking

1 November 2022

Price

14p

Market cap

£16m

Core Equity Tier I (CET1) ratio*

14.2%

*As at 30 June 2022

Shares in issue

115.0m

Free float

50%

Code

MFX

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

51.4

75.0

64.7

Rel (local)

50.0

84.3

76.7

52-week high/low

14p

8p

Business description

Manx Financial Group PLC is the holding company of a diversified financial services group which includes Conister Bank Limited, Conister Finance & Leasing Limited, MFX Limited, Blue Star Business Solutions Limited and Edgewater Associates Limited.

Next events

Trading update

November 2022

Analyst

Pedro Fonseca

+44 (0)20 3077 5700

Manx Financial Group is a research client of Edison Investment Research Limited

Manx Financial Group (MFG) had a strong H122, with a PBT of £2.3m more than doubling and a return on average equity (ROE) of 16.8%. Loans grew 16% as the group continues to reposition itself into prime lending segment ahead of the more challenging macroeconomic environment. The net interest margin improved to 8.9% (8.5% in H121) and impairments remain under control with an annualised charge of 1.9% (2.1% in H121). Conister Bank (MFG’s bank) has formally applied for a UK branch deposit-taking licence on 25 October. This will give this Isle of Man bank a greater foothold in the UK for growth. The balance sheet is well capitalised (total capital 17.7%, CET1 of 14.2%) and still carries surplus liquidity to fund expansion plans. The bank is trading at an FY21 P/BV of only 0.8x despite its track record of ROE being above its cost of equity (COE, which we estimate at 10–11%) and ability to expand its balance sheet.

Year end

Revenue
(£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

12/18

13.2

2.7

1.5

0.00

9.3

N/A

12/19

16.5

3.0

1.5

0.00

9.3

N/A

12/20

16.4

2.0

1.2

0.00

11.7

N/A

12/21

20.0

3.0

1.9

0.17

7.4

1.2

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Good momentum

The bank has positioned itself well to take advantage of recession resilient markets both in the UK and the Isle of Man. It has also been accredited by the British Business Bank to support UK SMEs through their government guaranteed loan schemes. And while the volatile markets have hurt MFG’s financial advisory business, its foreign exchange segment has done quite well. In September the group completed its acquisition of Payment Assist, the UK’s leading provider of auto repair point-of-sale finance, with a fast-growing loan book of £21.3m (9% of MFG).

Positioned for growth

Management has been moving into more prime, recession-proof sectors since the 2016 Brexit vote to both protect and allow for future loan growth. At the same time, the bank remains confident in its strategy mix of organic growth and acquisitions. A UK deposit banking licence will open greater avenues for growth, both in terms of business opportunities and funding.

Valuation: P/BV of 0.8x, with ROEs well above COE

There are no consensus forecasts for MFG, but its strong loan book and track record of growth bodes well for future revenue. MFG is trading at a P/BV of only 0.8x, which seems low given its track record of delivering ROEs above its COE (we estimate this at 10–11%). Its trailing FY21 P/E of 7.8x does not seem demanding, given the bank’s strong growth profile and potential. UK bank valuations are being affected by market concerns regarding macroeconomic and pollical uncertainty.

H122: PBT doubled

16% loan growth

MFG loan balances grew 16% y-o-y as MFG continued its strategy of repositioning towards the prime lending segment. The group reported that prime lending as a percentage of the total rose from 78.5% at the end of FY21 to 85%.

A key driver for loan growth has been the COVID-19 related government business support loans. Conister Bank has applied to continue participating in the government’s extension of the Recovery Loan Scheme, although it is likely that growth in this segment will slow down; additionally, it is dependent on government plans and policies. Wholesale funding arrangements and block discounting (structured product that allows companies to release money tied in commercial agreements with clients) have also been growing strongly.

Conversely, hire purchase and financial leases have continued to decline – they fell 9% and 32% y-o-y. This trend was expected and reflects the repositioning.

Despite the de-risking, the net interest margin has remained resilient and increased from 8.5% at end-June 2021 to 8.9% as a percentage of average loans.

Asset quality stable

Asset quality seems to be remaining under control. Impairment charges as a percentage of loans were 1.9% in H122; this compares with 2.1% in H121. Stage 3 loans as a percentage of net loans were 10.8% in H122, similar to end-June 2021 (10.4%). Impairments were 41% of stage 3 gross loans. This compared with 36% a year ago and 48% recorded at the end of FY21. About 76% of loans are collateralised.

Loans more than 30 days overdue were 10.7% of net loans, and this figure has been relatively stable over the last 12 months.

ROE of 16.8%

The doubling of net earnings in H122 resulted from a combination of strong revenue growth of 30%, while operating expenses rose 20% and impairment charges 6%. The reported ROE of 16.8% followed the 14.9% for the second half of FY21. In previous years, ROE has been relatively resilient and robust, at between 9% and 13%.

The market volatility adversely affected MFG independent financial advisory business and this has hurt fee income. Conversely, foreign exchange advisory business has benefited from the same. Manx FX’s revenue grew 6% and PBT by 5% y-o-y.

Healthy balance sheet

MFG’s balance sheet remains robust, and this is helped by the bank’s good profitability and capital headroom. The group can afford the 10% pay-out ratio started in 2021 without it materially interfering in MFG’s ability to grow and seize opportunities. MFG’s total capital ratio was 17.7% as at 30 June 2022 (it was 17.8% a year ago), while the regulator requires 14%. MFG’s CET1 ratio of 14.2% is also comfortable and higher than a year ago (13.7%) despite the balance sheet expansion.

Balance sheet liquidity remains fine and MFG benefits from a good retail deposit base in the Isle of Man and will be further bolstered by the ability to market for UK deposits assuming their branch banking licence is approved. Its loan to deposit ratio was 99% at the end of H122.

Exhibit 1: H122 vs previous interims – selected numbers

H119

H120

H121

H122

H122 vs H121 (%)

Net interest income

8,877

7,811

8,555

10,532

23.1

Net fee income

(1,118)

287

478

986

106.3

Fee and commission expense

(2,934)

(1,870)

(1,878)

(1,517)

(19.2)

Depreciation on leasing assets

0

(203)

(173)

(16)

(90.8)

Core operating income

7,759

7,895

8,860

11,502

29.8

Other operating income

139

111

129

275

Gains on securities and asset revaluations

104

455

(1)

(113)

Total operating income

8,002

8,461

8,988

11,664

29.8

Operating expenses

(5,211)

(5,503)

(5,879)

(7,059)

20.1

Operating profit before impairments

2,791

2,958

3,109

4,605

48.1

Impairment on loans and advances to customers

(1,469)

(1,895)

(2,142)

(2,268)

5.9

Associates profit

46

(91)

59

0

VAT recovery

52

36

113

0

Profit before tax

1,420

1,008

1,139

2,337

105.2

Income tax expense

(184)

(16)

(122)

(160)

Net profit

1,236

992

1,017

2,177

114.1

Minority interests

0

5

12

(16)

Net attributable profit

1,236

997

1,029

2,161

110.0

Key ratios and balance sheet

NIM (NII as % average loans)

11.2

8.7

8.5

8.9

Impairment charge % average loans

1.8

2.1

2.1

1.9

Cost income ratio (%)

65.1

65.0

65.4

60.5

ROE (%)

12.1

9.0

8.9

16.8

Loan as % deposits

95.8

83.4

91.5

96.6

Total capital ratio (%)

17.0

16.0

17.8

17.7

Stage 3 loans as % net loans

5.2

7.2

8.3

8.5

Stage 3 loans as % gross loans

5.0

12.7

10.4

10.8

Impairments % stage 3 loans (net)

85.1

85.9

52.6

67.7

Impairments % stage 3 loans (gross)

53.1

26.7

28.5

32.4

Loans (£ thou)

170,035

181,581

211,445

244,923

15.8

Equity (£ thou)

20,986

21,870

23,133

26,987

16.7

Source: MFG


Exhibit 2:
Loan breakdown (H121)

Exhibit 3: Loan breakdown (H122)

Source: MFG

Source: MFG


Exhibit 2:
Loan breakdown (H121)

Source: MFG

Exhibit 3: Loan breakdown (H122)

Source: MFG


Exhibit 4: Overdue loans and impairments

Exhibit 5: Stage 2 and stage 3 loans as % of net loans

Source: MFG

Source: MFG


Exhibit 4: Overdue loans and impairments

Source: MFG

Exhibit 5: Stage 2 and stage 3 loans as % of net loans

Source: MFG

Payment Assist acquisition completed

MFG completed the acquisition of a 50.1% stake in Payment Assist in September 2022, after announcing the deal in May 2022. Payment Assist is a leading auto repair point-of-sale finance provider with a loan book of £21.3m and EBITDA of £2.5m in FY21. It is a fast-growing business (loans grew 72% and EBITDA doubled since 2019). It is a company with which MFG has worked with over the years, it knows the management well and sees both the growth opportunity and the leverage it provides as an entry to the UK.

UK deposit-taking licence via Conister Bank

Conister Bank has started the process of becoming the next deposit-taking institution in the UK and formally applied for a UK branch licence on 25 October. The bank has been expanding year-on-year, with total assets compounding over 20% per year in recent years. Obtaining a UK banking licence will allow the Isle of Man-based bank to extend its footprint in the UK. It intends to further disrupt the structured finance market and a UK branch licence, if granted, will give it a foothold in the UK deposit-taking market. In addition, it will allow the bank to gain greater access to the UK payments infrastructure as it opens up discussions with other service providers. Finally, there is the opportunity to explore more significant financial resources via government bodies such as the British Business Bank, which will only deal with UK corporations and non-financial resources, such as the UK employment market, with a specialist and diverse talent pool in the financial services industry.

2023 likely to be a challenging year

2023 is shaping up to be a challenging year. The economic slowdown is now a reality, as is the higher interest rate outlook. There is still much uncertainty to the extent of the downturn and how much rates will rise. Currently the overnight index swaps are pricing in a Bank of England policy rate of close to 5%, which would represent quite a considerable series of rate hikes in a very short period were this to happen.

Interest rate increases are often good for banks as they tend to boost interest margins. However, excessive rate hikes, especially when coupled with other issues such as a cost of living squeeze, can raise asset quality concerns for banks.

We draw comfort from the fact that MFG has been bracing itself for a recession for a couple of years, has a robust balance sheet, good interest margins and a strong franchise in the Isle of Man.

Valuation: Undemanding multiples

There are currently no consensus forecasts for MFG. However, MFG is currently trading at an FY21 P/BV of 0.8x, which is broadly comparable to banks in our peer sample that have similar resilient ROEs during the lockdown period. We note that MFG usually delivers ROEs that are above its COE (we estimate this at 10–11%). MFG P/E trailing ratios are not demanding if we factor the growth potential of a small bank such as MFG. In general, the valuations of the UK banking sector in general are currently depressed by the current macroeconomic and political uncertainty.

Exhibit 6: Challenger/specialist lender comparative table

Price
(p)

Market cap
(£m)

P/E (x)
FY20

P/E (x)
FY21

Div. yield (%)

FY 21

ROE (%)
FY20

ROE (%)
FY21

P/BV (x) last reported

MFX

14.37

16.5

11.6

7.8

1.2

8.8

11.8

0.80

Arbuthnot Financial

863

127

n.a

20.9

4.4

n.a.

3.2

0.64

Close Brothers

993

1473

7.7

8.6

0.0

10.0

12.4

0.90

Metro Bank

72

122

n.a

n.a

0.0

(17.9)

(16.3)

0.12

Secure Trust Bank

624

115

2.5

4.0

9.8

5.9

16.7

0.37

Paragon

427

994

12.6

8.1

6.1

9.1

12.7

0.86

Average ex-Metro & Arbuthnot

7.6

6.9

5.3

8.3

14.0

0.71

MFG versus average

53%

13%

(77%)

5%

(15%)

13%

Source: Refinitiv, Edison Investment Research. Note: Priced at 26 October 2022.

Exhibit 7: Financial summary

Year end December, £ unless stated

FY18

FY19

FY20

FY21

Profit and loss

Net interest income

15,568

17,929

15,470

17,980

Net commission income

(2,738)

(1,630)

384

1,282

Other income

336

233

551

785

Total operating income

13,166

16,532

16,405

20,047

Total operating expenses

(9,748)

(11,632)

(11,394)

(12,789)

Operating profit pre impairments & exceptionals

3,418

4,900

5,011

7,258

Impairment charges on loans

(857)

(1,900)

(3,950)

(4,360)

Associates

30

124

54

32

VAT recovery

119

(101)

906

113

Profit before tax

2,710

3,023

2,021

3,044

Corporation Tax

(243)

(350)

(53)

(234)

Tax rate

9%

12%

3%

8%

Profit after tax

2,467

2,673

1,968

2,810

Minority interests

0

0

(33)

(16)

Net income attributable to equity shareholders

2,467

2,673

1,935

2,794

Reported underlying earnings after tax

2,467

2,673

1,935

2,794

Shares and per share ratios

Average basic number of shares in issue (m)

131.1

131.1

119.0

114.3

Average diluted number of shares in issue (m)

172.8

172.8

155.5

150.8

Period end shares in issue (m)

131.1

131.1

114.1

114.3

Reported diluted EPS (p)

1.54

1.55

1.24

1.85

Underlying diluted EPS (p)

1.54

1.55

1.24

1.85

Ordinary DPS (p)

0.00

0.00

0.00

0.17

NAV per share (p)

11.4

12.9

14.4

16.6

Tangible NAV per share (p)

8.9

9.4

10.1

10.7

Income ratios and per share

Net interest/average loans

11.5

10.9

8.3

8.5

Impairments /average loans

0.6

1.2

2.1

2.1

Cost income ratio

74.0

70.4

69.5

63.8

Return on average equity

13.3

12.7

8.8

11.8

Return on average TNAV

17.2

16.9

12.3

17.6

Balance sheet

Net customer loans

148,278

179,370

193,143

229,251

Other assets

48,636

73,517

74,818

79,502

Total assets

196,914

252,887

267,961

308,753

Total customer deposits

158,500

209,933

218,285

253,459

Other liabilities

18,691

20,635

27,241

30,309

Total liabilities

177,191

230,568

245,526

283,768

Net assets

19,723

22,319

22,435

24,985

Minorities

0

0

84

56

Shareholders' equity

19,723

22,319

22,351

24,929

Reconciliation of movement in equity

Opening shareholders' equity

Profit in period

2,467

2,673

1,968

2,809

Other comprehensive income

(6)

(77)

(292)

236

Ordinary dividends

0

0

0

(185)

Minority changes from subsidiaries

0

0

(1,560)

(310)

Closing shareholders' equity

19,723

22,319

22,435

24,901

Balance sheet ratios

Loans as % deposits

93.6

85.4

88.5

90.4

Loans to equity (x)

7.5

8.0

8.6

9.2

Stage 3 as % loans

2.8

5.9

10.6

8.0

Impairments as % stage 3 loans gross

81.5

45.3

34.7

47.8

Impairments as % stage 3 loans net

327.3

75.1

51.5

85.9

Total capital ratio (%)

18.1

16.9

19.1

19.1

Source: MFG


General disclaimer and copyright

This report has been commissioned by Manx Financial Group and prepared and issued by Edison, in consideration of a fee payable by Manx Financial Group. 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 2022 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.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Manx Financial Group and prepared and issued by Edison, in consideration of a fee payable by Manx Financial Group. 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 2022 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.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

More on Manx Financial Group

View All

Latest from the Financials sector

View All Financials content

Research: TMT

The Pebble Group — Differentiated positions in promotional products

The Pebble Group operates within the large, global promotional products market, estimated by management at $50bn, under a highly experienced team. The group combines two operations: a fast-growing, high-margin SaaS business supplying independent distributors of promotional goods; and a dependable and expanding international business supporting brand engagement programmes for major global brands. The group has a strong balance sheet, with end FY21 net cash (excluding leases) of £12.1m, set to be exceeded in the current year. The share price does not, in our opinion, reflect the group’s positioning or opportunities.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free