Small Caps
AIM
Yield
Allenby Capital
Reinvestm
Superior Returns
Outperformance
Reinvestment
Superior Returns
Dividends on AIM
March 2013
Dividends
AIM
Yield
Outperformance
Allenby Capital
Stock Market
Dividends
Small Caps
Camkids Group plc - Children’s outdoor
footwear, clothing and accessories
Camkids – Children’s outdoor
Footwear, Clothing & Equipment
This document is a marketing communication which has been produced by Allenby Capital Limited. It is non-independent research and has not been prepared in
accordance with legal requirements designed to promote the independence of investment research. Accordingly Allenby Capital Limited is not subject to any
prohibition on dealing ahead of the dissemination of this document.
Dividends on AIM
Table of Contents
Page
Overview
AIM’s dividend payers
Outperformance by dividend payers
Analysis of the Top 50
Methodology for selecting the ‘Super 12’
Results – The Super 12
3
4
5
6
8
11
Appendix I – Company profiles
Abbey Protection Plc
ACM Shipping Group Plc
Albemarle & Bond Holdings Plc
Alternative Networks Plc
Amino Technologies Plc
Asian Citrus Holdings Ltd
Avesco Group Plc
Begbies Traynor Group Plc
Belvoir Lettings Plc
Camkids Group Plc
Catalyst Media Group Plc
Cello Group Plc
Cenkos Securities Plc
Central Asia Metals Ltd
Character Group Plc
Churchill China Plc
Densitron Technologies Plc
Dillistone Group Plc
Fairpoint Group Plc
First Property Group Plc
Fletcher King Plc
Goldplat Plc
Greenwich Loan Income Fund Ltd
Hasgrove Plc
Highland Hold Mining Ltd
Holders Technology Plc
Hydrogen Group Plc
Interior Services Group Plc
InterQuest Group Plc
James Cropper Plc
Japan Residential Investment Company Ltd
Jarvis Securities Plc
Juridica Investments Ltd
M Winkworth Plc
Maintel Holdings Plc
Matchtech Group Plc
May Gurney Integrated Services Plc
MCB Finance Group Plc
Motivcom Plc
MTI Wireless Edge Ltd
Murgitroyd Group Plc
Naibu Global International Plc
Nationwide Accident Repair Services Plc
New River Retail Ltd
Numis Securities Plc
Pennant International Group Plc
Powerflute Oyj
Printing.com Plc
Randall & Quilter Investment Holdings Plc
Slingsby (HC) Plc
Stadium Group Plc
Swallowfield Plc
Tristel Plc
Vianet Group Plc
William Sinclair Holdings Plc
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
Disclaimer
73
Page 2 of 74
Dividends on AIM
Overview
Whilst the AIM market is well known as a home to many early stage growth
companies, what is often missed is that many of AIM’s constituents have reached
a sufficient level of maturity to be able to distribute healthy dividends. We
estimate that around 250 of AIM’s 1,100 constituents will pay a dividend in 2013
and that around 50 of these offer a yield of over 4.2%.1 We profile this ‘Top 50’
and in particular we highlight a ‘Super 12’ which are those we believe offer the
most attractive investment opportunity – a healthy dividend yield and upside
share price potential.
Paying a dividend is generally a sign that a company has reached a level of maturity,
has its balance sheet in order and has confidence in its future trading performance to
be able to release excess cash to shareholders. A high yield can therefore indicate a
quality company which the market currently undervalues. However, a high yield can
also be a sign of distress with the yield inflated by a collapsing share price. Our
research aims to identify the undervalued high yielders offering both a secure dividend
yield and a chance for further dividend growth.
Our Top 50 portfolio of high yielders outperformed both AIM and the FTSE100 in
2012. Whilst AIM and the FTSE100 returned 2.0% and 5.8% respectively in 2012, the
average return on the Top 50 was 12.2%, increasing to 18.3% had the dividends been
reinvested. An increased appetite for risk may reverse this trend in 2013 but we see
this as unlikely and expect further outperformance from this portfolio of high dividend
payers.
Of the Top 50, our analysis has identified twelve companies (our Super 12) which we
feel offer the most interesting investment opportunity (see Exhibit 1 below). We
believe all twelve offer a secure and high dividend yield and the potential for upside to
the share price. We also highlight two lower yielding companies, Avesco Group Plc
and Murgitroyd Group Plc, which although not amongst the top dividend yielders on
AIM, are interesting dividend plays worth examining.
Exhibit 1: AIM’s ‘Super 12’ dividend payers (listed alphabetically)
Company name
Market Cap (£m)
2013e Dividend
2013e Dividend yield
2013e EPS
2013 PE Ratio (Price/EPS)
Dividend Yield / PE Ratio
2013 Dividend Cover (EPS/DPS)
2013e Cash/Mkt EV/EBITDA Cap.
1
ACM Shipping Group Plc
33.3
10.2
5.9%
13.2
13.1
0.45
1.29
8.28
14.1%
2
Asian Citrus Holdings Ltd
396
1.88
5.8%
4.72
6.84
0.85
2.51
2.26
59.4%
3
Camkids Group Plc*
75.8
5.40
5.4%
30.0
3.35
1.60
5.56
1.89
24.0%
4
Catalyst Media Group Plc
27.9
7.00
6.9%
12.0
8.42
0.82
1.71
na
5.38%
5
Fairpoint Group Plc
43.8
5.50
5.3%
13.4
7.80
0.67
2.44
na
3.65%
6
Highland Gold Mining Ltd
333
5.00
4.9%
24.7
4.16
1.17
4.93
2.25
10.3%
7
Interior Services Group Plc
46.0
9.23
6.7%
20.1
6.84
0.98
2.18
1.72
55.2%
8
Juridica Investments Ltd
95.4
13.2
14.5%
19.1
4.77
3.04
1.45
na
16.4%
9
94.8%
Mti Wireless Edge Ltd*
3.48
0.38
5.6%
0.30
22.5
0.25
0.79
0.35
10
Naibu Global International Plc
57.6
6.00
5.7%
55.6
1.89
3.03
9.27
0.58
58.3%
11
Nationwide Accident Repair Services Plc
30.0
5.50
7.9%
10.1
6.88
1.15
1.84
2.9
26.7%
12
NewRiver Retail Ltd
67.2
16.2
8.2%
17.2
11.5
0.71
1.06
15.9
na
Source: London Stock Exchange, Allenby Capital, Thomson Reuters. * Denotes Allenby Capital corporate client
1
Unless otherwise stated, share prices in this document refer to close of business on 1 March 2013 Page 3 of 74
Dividends on AIM
AIM’s dividend payers
Whilst 97 of the FTSE100 constituents pay a dividend, a much smaller
percentage of AIM companies return cash to shareholders on a regular basis.
This shouldn't be surprising given that AIM is a small cap growth market hence
its constituents are often at an early stage of their life cycle. Furthermore, AIM
companies are generally run by management teams that believe any excess cash
is better reinvested for growth. In fact, we were surprised that as many as c.250
AIM companies are forecast to pay a dividend in 2013. Our report aims to
identify and analyse the Top 50 dividend yielders on AIM, all of which we
calculate have a forecast 2013 dividend yield of over 4.2%. We also share some
views on some lower yielding AIM stocks which come up regularly in
conversations with investors and we feel have an interesting story.
AIM’s typical dividend payers
The average market capitalisation of the c.250 dividend payers on AIM is £86m
against £58m for the wider AIM market. This backs up the theory that it is the more
mature and well established companies that are in a position to distribute cash.
Exhibit 2: Distribution of market caps for AIM’s 250 dividend payers
Exhibit 3: Distribution of market caps for all of AIM’s 1,100 constituents
250
59
60
52
211
200
49
50
30
15
20
10
8
10
178
169
148
38
40
10
7
1
0
Number of companies
Number of dividend paying companies
70
150
96
100
50
27
9
6
0
Ma rket Ca p (£m)
Source: London Stock Exchange
134
118
M arket Cap (£m)
Source: London Stock Exchange
Despite around 37% of AIM’s 1,100 companies having a Natural Resource focus (Oil
& Gas, Mining, Basic Materials) this grouping accounts for less than 6% of the
dividend paying stocks on AIM. Instead, sectors such as Industrials (includes Support
Services, Engineering etc.) and Financials make a far larger contribution in terms of
dividend payers.
Exhibit 4: High % of Natural Resource (“NR”) focused stocks on AIM
Technology, 9%
Oil & Gas, 24%
Financials, 19%
Exhibit 5: But dividend payers predominantly from non NR sectors
Technology, 14%
Mining, 2%
Oil & Gas, 2%
Financials, 19%
Industrials, 33%
Utilities, 1%
Telecommuni
cations, 2%
Basic Materials, 2%
Utilities, 0%
Mining, 11%
Consumer Services, 10%
Health Care, 5%
Basic Materials, 2%
Consumer Goods, 6%
Source: London Stock Exchange
Industrials, 11%
Telecommunic
ations, 1%
Consumer Services, 14%
Health Care, 4%
Consumer Goods, 9%
Source: London Stock Exchange, Allenby Capital, Thomson Reuters
Page 4 of 74
Dividends on AIM
Outperformance by dividend payers
At the point where a company decides to pay a dividend it will most likely have
reached a certain level of maturity, have its balance sheet in order and
confidence in its future trading performance. As such, dividend yielding stocks
tend to outperform when markets are particularly risk averse. This was the case
in both 2011 and 2012 when, faced with global economic uncertainty, the average
return from our Top 50 outperformed both AIM and the FTSE100. We expect a
similar performance in 2013.
In 2011 the AIM market lost over 25% of its value, however, our Top 50 group only
fell marginally. When adjusting for the reinvestment of dividends the ‘Top 50’
outperformed the FTSE100.
In 2012 whilst AIM and the FTSE100 returned 2.0% and 5.8% respectively, the
average return on the ‘Top 50’ was 12.0%. With dividends reinvested, AIM and the
FTSE100 returned 2.9% and 10.0% respectively where as the average return from the
Top 50 was 18.1%.
Exhibit 6: 2011 market returns
FTSEAIM
FTSE100
Exhibit 7: 2012 market returns
Top 50
20.0%
10.0%
5.0%
18.1%
15.0%
12.0%
0.0%
‐5.0%
‐2.2%
‐5.6%
‐10.0%
‐1.5%
‐5.8%
5.8%
5.0%
‐15.0%
‐20.0%
2.0% 2.9%
0.0%
‐25.0%
‐30.0%
10.0%
10.0%
‐25.8% ‐25.2%
Capital gain
Capital gain with dividends re‐invested
Source: Allenby Capital, London Stock Exchange
FTSEAIM
Capital gain
FTSE100
Top 50
Capital gain with dividends re‐invested
Source: Allenby Capital, London Stock Exchange
Although markets have recently been showing signs of optimism and investors
showing an increased appetite for risk, we do not yet feel we are out of the woods.
With concerns still surrounding the health of the global economy we expect the
markets to continue to rally in 2013 but to maintain a degree of risk aversion. As such,
we would expect further outperformance in 2013 from our high dividend paying Top
50 portfolio.
Page 5 of 74
Dividends on AIM
Analysis of the Top 50
Out of the c.250 dividend paying companies on AIM we selected the 50 highest
yielding stocks for further analysis and we provide an overview of each in the
appendix to this report. We then selected from this Top 50 our Super 12 which,
based on our analysis, we feel have potential to deliver superior returns (capital
gains and dividend yield) in 2013. Whilst the forecast 2013 yield was important in
our selection of the Super 12 it was not the sole criteria. Key to our selection was
the evaluation of the ability of the company to continue to pay such dividends
(earnings generation and balance sheet strength). Furthermore, we searched for
companies which we thought were undervalued and hence had upside potential
to the share price as the stock is re-rated by the market.
There are no doubt some companies that may well yield over 4.2% in 2013 (and thus
should be in the Top 50) that are not in our list due to consensus dividend forecasts
not being available. Such companies include: Prosperity Minerals Holdings Ltd
(PMHL.L), Personal Group Holdings Plc (PGH.L), Charlemagne Capital Ltd
(GCAP.L) and Argo Group Ltd (ARGO.L). Other prior year high yielders where
restructuring or pending acquisitions have placed uncertainty on the 2013 yield
include Quayle Munro Holdings Plc (QYM.L) and GVC Holdings Plc (GVC.L).
Finally we have omitted some 2012 high yielders where we feel the dividend is
unlikely to be as high in 2013 due to a recent change in fortunes for the company such
as CSF Group Plc (CSFG.L).
Exhibit 8 on the following page lists all constituents of the Top 50. In addition to
profiling the 50 highest yielders for 2013 we have also profiled, in the appendix to this
report, 5 dividend payers that failed to make the Top 50 but frequently come up in
discussions with clients and/or caught our eye during our analysis.
These additional companies are:
i)
Avesco Group Plc (AVS.L)
ii)
Cropper (James) Plc (CRPR.L)
iii)
Murgitroyd Group Plc (MUR.L)
iv)
Sinclair (William) Holdings Plc (SNLR.L)
v)
Tristel Plc (TSTL.L)
Page 6 of 74
Dividends on AIM
Exhibit 8: AIM’s ‘Top 50’ 2013 forecast dividend yielders (ranked by yield)
Company name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
Juridica Investments Ltd
EPIC
Market Cap (£m)
Price 2013e Dividend
2013e Dividend yield
2013e EPS
2013 PE Ratio (Price/EPS)
Dividend Yield / PE Ratio
2013 Dividend Cover (EPS/DPS)
2013e Cash/Mkt EV/EBITDA Cap.
JIL
95.4
91.10
13.20
14.5%
19.10
4.77
3.04
1.45
na
Densitron Technologies Plc
DENS
5.10
7.38
0.80
10.8%
1.70
4.34
2.50
2.13
2.75
na
Printing.com Plc
PDC
12.6
26.50
2.55
9.6%
1.60
16.56
0.58
0.63
3.83
8.7%
Greenwich Loan Income Fund Ltd
GLIF
71.4
54.50
4.70
8.6%
6.60
8.26
1.04
1.40
18.27
na
NewRiver Retail Ltd
NRR
67.2
197.5
16.17
8.2%
17.20
11.48
0.71
1.06
15.9
na
Nationwide Accident Repair Services Plc
NARS
30.0
69.50
5.50
7.9%
10.10
6.88
1.15
1.84
2.9
26.7%
Swallowfield Plc
SWL
10.0
88.50
6.30
7.1%
5.30
16.70
0.43
0.84
7.06
na
Japan Residential Investment Company Ltd
JRIC
102.7
54.80
3.80
6.9%
4.54
12.06
0.57
1.19
16.97
na
Catalyst Media Group Plc
CMX
27.9
101.0
7.00
6.9%
12.00
8.42
0.82
1.71
na
5.4%
Randall & Quilter Investment Holdings Plc
RQIH
65.9
131.5
8.90
6.8%
20.40
6.45
1.05
2.29
3.54
34.0%
Stadium Group Plc
SDM
13.5
46.00
3.10
6.7%
7.70
5.97
1.13
2.48
2.97
11.1%
55.2%
Interior Services Group Plc
16.4%
ISG
46.0
137.5
9.23
6.7%
20.10
6.84
0.98
2.18
1.72
Cenkos Securities Plc
CNKS
50.9
80.0
5.00
6.3%
5.58
14.34
0.44
1.12
4.71
45.0%
Central Asia Metals Plc
CAML
98.6
116.3
7.09
6.1%
19.13
6.08
1.00
2.70
2.97
24.8%
Hasgrove Plc
HGV
13.5
57.50
3.50
6.1%
5.80
9.91
0.61
1.66
4.69
na
ACM Shipping Group Plc
ACMG
33.3
173.5
10.20
5.9%
13.20
13.14
0.45
1.29
8.28
14.1%
M Winkworth Plc
WINK
11.2
88.50
5.20
5.9%
8.70
10.17
0.58
1.67
6.15
12.5%
Vianet Group Plc
VNET
27.1
97.50
5.70
5.8%
11.90
8.19
0.71
2.09
8.19
na
Asian Citrus Holdings Ltd
ACHL
395.9
32.30
1.88
5.8%
4.72
6.84
0.85
2.51
2.26
59.4%
Begbies Traynor Group Plc
BEG
34.2
38.00
2.20
5.8%
5.65
6.73
0.86
2.57
5.25
na
Naibu Global International Plc
NBU
57.6
105.0
6.00
5.7%
55.60
1.89
3.03
9.27
0.58
58.3%
MTI Wireless Edge Ltd
MWE
3.48
6.75
0.38
5.6%
0.30
22.50
0.25
0.79
0.35
94.8%
Matchtech Group Plc
MTEC
65.46
279.8
15.60
5.6%
27.52
10.17
0.55
1.76
6.64
na
Albemarle & Bond Holdings Plc
ABM
127.7
230.0
12.66
5.5%
21.55
10.67
0.52
1.70
8.28
na
First Property Group Plc
FPO
22.4
20.10
1.10
5.5%
2.30
8.74
0.63
2.09
8.66
na
Powerflute Oyj
POWR
64.3
22.60
1.23
5.4%
3.00
7.53
0.72
2.44
3.07
20.7%
Camkids Group Plc
CAMK
75.8
100.5
5.40
5.4%
30.00
3.35
1.60
5.56
1.89
24.0%
InterQuest Group Plc
ITQ
17.1
51.50
2.75
5.3%
6.05
8.51
0.63
2.20
7.18
na
Goldplat Plc
GDP
18.9
11.25
0.60
5.3%
2.05
5.49
0.97
3.42
2.56
10.6%
Fairpoint Group Plc
FRP
43.8
104.5
5.50
5.3%
13.40
7.80
0.67
2.44
na
3.7%
Numis Corporation Plc
NUM
175.5
153.0
8.00
5.2%
6.60
23.18
0.23
0.83
16.16
20.4%
Hydrogen Group Plc
na
HYDG
20.8
88.50
4.50
5.1%
10.43
8.49
0.60
2.32
5.75
Fletcher King Plc
FLK
2.80
30.00
1.50
5.0%
3.10
9.68
0.52
2.07
10.73
na
Jarvis Securities Plc
JIM
26.5
250.0
12.50
5.0%
18.10
13.81
0.36
1.45
8.18
13.6%
Character Group (The) Plc
CCT
30.2
134.0
6.60
4.9%
‐0.34
‐394.12
‐0.01
‐0.05
15.68
na
Belvoir Lettings Plc
BLV
28.7
139.0
6.80
4.9%
8.90
15.62
0.31
1.31
10.8
5.9%
Highland Gold Mining Ltd
HGM
333.4
102.5
5.00
4.9%
24.65
4.16
1.17
4.93
2.25
10.3%
Slingsby (H C) Plc
SLNG
5.00
500.0
24.00
4.8%
25.90
19.31
0.25
1.08
2.89
60.0%
Cello Group Plc
CLL
35.4
43.00
2.05
4.8%
6.45
6.67
0.72
3.15
na
na
Abbey Protection Plc
ABB
114.0
114.0
5.38
4.7%
8.60
13.26
0.36
1.60
11.51
17.9%
‐2.4%
May Gurney Integrated Services Plc
MAYG
125
178.0
8.40
4.7%
24.22
7.35
0.64
2.88
2.56
MCB Finance Group Plc
MCRB
14.1
80.00
3.73
4.7%
16.60
4.82
0.97
4.45
4.32
na
DSG
14.6
80.0
3.70
4.6%
7.27
11.00
0.42
1.96
6.32
11.0%
MCM
32.7
108.5
5.00
4.6%
11.80
9.19
0.50
2.36
na
15.9%
HDT
2.36
60.0
2.70
4.5%
3.20
18.75
0.24
1.19
5.48
30.5%
Dillistone Group Plc
Motivcom Plc
Holders Technology Plc
Pennant International Group Plc
PEN
11.8
44.80
2.00
4.5%
4.96
9.03
0.49
2.48
na
17.8%
Churchill China Plc
CHH
36.6
335.0
14.60
4.4%
20.60
16.26
0.27
1.41
8.07
11.7%
Amino Technologies Plc
AMO
45.4
82.50
3.50
4.2%
6.13
13.46
0.32
1.75
4.03
37.7%
Alternative Networks Plc
AN.
140.9
303.3
12.70
4.2%
20.45
14.83
0.28
1.61
7.68
14.6%
Maintel Holdings Plc
MAI
36.8
345.0
14.40
4.2%
36.80
9.38
0.45
2.56
6.42
5.7%
Source: Allenby Capital, Thomson Reuters. Prices as of 1 March 2013.
Page 7 of 74
Dividends on AIM
Methodology for selecting the ‘Super 12’
Essentially we set out to uncover high yielding stocks that we thought were
capable of continuing to pay high dividends and that also had an attractive
valuation angle. In assessing the ability of the company to continue to pay
dividends we examined the company’s earnings potential and its general balance
sheet strength. With regards to valuation we used simple Price Earnings Ratios
(“PER”) backed up by EV/EBITDA ratios and compared these relative to the
dividend yields.
Ability to continue to pay dividends
We used two relatively straight forward calculations to gauge a company’s ability to
continue to pay dividends. Primarily we focused on the dividend cover calculation
(Earnings per Share / Dividend per Share) - the higher the resulting figure the greater
the ability of the company to service its dividend. As a sense check we also looked at
the last reported cash position of the company and divided this by the anticipated 2013
dividend cash requirement. Between these two calculations we feel we were able to
determine a company’s ability to pay its dividend.
Potential for upside to the share price
Whilst a healthy dividend yield is attractive, the ideal scenario is to find a high
yielding stock which is also undervalued and hence has the chance for a re-rating to
give further upside through capital appreciation. For this, we used a simple Price
Earnings Ratio as part of our filtering process. Clearly a company can have a low PER
because the ‘E’ is expected to decline over time. As such, we took a view on the
individual company’s business model to assure ourselves there were no ‘value traps’.
We found that many of the dividend payers on AIM also had substantial cash balances
which, given low interest rates, were sitting on balance sheets earning minimal
returns. We therefore found it of interest to look at EV/EBITDA multiples and also to
compare the cash balances to the market caps of the companies.
Exhibits 9 through to 14 rank the Top 50 companies based on the various screening
criteria mentioned above such as: Yield, 2013 PE Ratio, net cash as a % of Market
Capitalisation etc.
In Exhibit 15 we have plotted each of the Top 50 with PE Ratio (reversed) on the Xaxis and Dividend Cover on the Y-axis. The size of circles relates to dividend yield of
the stock. The ideal scenario is for a company to be represented by a large circle and
located towards the top right hand corner of the chart.
Exhibit 16 is another variation of this analysis. The Y-axis remains the same
(Dividend Cover) but on the X-axis we have plotted Dividend Yield/PE Ratio. We
take the higher the figure returned for the Yield/PE Ratio, the greater the
undervaluation of the stock – again assuming that both the yield and the company’s
earnings are sustainable.
Page 8 of 74
Dividends on AIM
Exhibit 9: AIM’s Top 2013 dividend yielders
Company name
1
2
3
4
5
6
7
8
9
10
Exhibit 10: High yielders ranked by Dividend Cover
Market Cap 2013e (£m)
Dividend yield
Juridica Investments Ltd
95.4
14.5%
Densitron Technologies Plc
5.10
10.8%
Printing.com Plc
12.6
9.6%
Greenwich Loan Income Fund Ltd
71.4
8.6%
NewRiver Retail Ltd
67.2
8.2%
Nationwide Accident Repair Services Plc
30.0
7.9%
Swallowfield Plc
10.0
7.1%
102.7
6.9%
Catalyst Media Group Plc
27.9
6.9%
Randall & Quilter Investment Holdings Plc
65.9
6.8%
Japan Residential Investment Company Ltd
Company name
1
2
3
4
5
6
7
8
9
10
Exhibit 11: High yielders ranked by 2013 PE Ratio
1
2
3
4
5
6
7
8
9
10
2013 Dividend Cover (EPS/DPS)
Naibu Global International Plc
57.6
9.27
5.7%
Camkids Group Plc
75.8
5.56
5.4%
Highland Gold Mining Ltd
333
4.93
4.9%
MCB Finance Group Plc
14.1
4.45
4.7%
Goldplat Plc
18.9
3.42
5.3%
Cello Group Plc
35.4
3.15
4.8%
May Gurney Integrated Services Plc
125
2.88
4.7%
Central Asia Metals Plc
98.6
2.70
6.1%
Begbies Traynor Group Plc
34.2
2.57
5.8%
Maintel Holdings Plc
36.8
2.56
4.2%
Exhibit 12: High yielders ranked by 2013 EV/EBITDA multiple
Market Cap 2013 PE Ratio (£m)
(Price/EPS)
2013e Dividend yield
Naibu Global International Plc
57.6
1.89
5.7%
Camkids Group Plc
75.8
3.35
5.4%
Highland Gold Mining Ltd
333
4.16
4.9%
Densitron Technologies Plc
5.10
4.34
10.8%
Juridica Investments Ltd
95.4
4.77
14.5%
MCB Finance Group Plc
14.1
4.82
4.7%
Goldplat Plc
18.9
5.49
5.3%
Stadium Group Plc
13.5
5.97
6.7%
Central Asia Metals Plc
98.6
6.08
6.1%
Randall & Quilter Investment Holdings Plc
65.9
6.45
6.8%
Company name
1
2
3
4
5
6
7
8
9
10
Market Cap 2013e 2013e (£m)
EV/EBITDA Dividend yield
MTI Wireless Edge Ltd
3.48
0.35
5.6%
Naibu Global International Plc
57.6
0.58
5.7%
Interior Services Group Plc
46.0
1.72
6.7%
Camkids Group Plc
75.8
1.89
5.4%
Highland Gold Mining Ltd
113.9
2.25
4.9%
Asian Citrus Holdings Ltd
395.9
2.26
5.8%
Goldplat Plc
18.9
2.56
5.3%
May Gurney Integrated Services Plc
125
2.56
4.7%
Densitron Technologies Plc
5.10
2.75
10.8%
Slingsby (H C) Plc
5.00
2.89
4.8%
Source: Allenby Capital, Thomson Reuters
Source: Allenby Capital, Thomson Reuters
Exhibit 13: High yielders ranked by Yield/PE Ratio
Exhibit 14: High yielders ranked by net cash as a % of Mkt. Cap.
Company name
1
2
3
4
5
6
7
8
9
10
2013e Dividend yield
Source: Allenby Capital, Thomson Reuters
Source: Allenby Capital, Thomson Reuters
Company name
Market Cap (£m)
Market Cap Dividend Yield / 2013e (£m)
PE Ratio
Dividend yield
Juridica Investments Ltd
95.4
3.04
14.5%
Naibu Global International Plc
57.6
3.03
5.7%
Densitron Technologies Plc
5.10
2.50
10.8%
Camkids Group Plc
75.8
1.60
5.4%
Highland Gold Mining Ltd
333
1.17
4.9%
Nationwide Accident Repair Services Plc
30.0
1.15
7.9%
Stadium Group Plc
13.5
1.13
6.7%
Randall & Quilter Investment Holdings Plc
65.9
1.05
6.8%
Greenwich Loan Income Fund Ltd
71.4
1.04
8.6%
Central Asia Metals Plc
98.6
1.00
6.1%
Source: Allenby Capital, Thomson Reuters
Company name
1
2
3
4
5
6
7
8
9
10
Market Cap Cash/Mkt 2013e (£m)
Cap.
Dividend yield
MTI Wireless Edge Ltd
3.48
94.8%
Slingsby (H C) Plc
5.00
60.0%
4.8%
395.9
59.4%
5.8%
Naibu Global International Plc
57.6
58.3%
5.7%
Interior Services Group Plc
46.0
55.2%
6.7%
Cenkos Securities Plc
50.9
45.0%
6.3%
Amino Technologies Plc
45.4
37.7%
4.2%
Randall & Quilter Investment Holdings Plc
65.9
34.0%
6.8%
Holders Technology Plc
2.36
30.5%
4.5%
Nationwide Accident Repair Services Plc
30.0
26.7%
7.9%
Asian Citrus Holdings Ltd
5.6%
Source: Allenby Capital, Thomson Reuters
Page 9 of 74
Dividends on AIM
Exhibit 15: Top right quartile highlights undervalued companies with a balance sheet capable of continued dividend payments
7.00
Balance sheet strength
NBU
6.00
CAMK
5.00
MCRB
4.00
GDP
CLL
MAYG
MAI
MCM
DSG
FLK
MTEC
AMO
AN.
CHH
JIM
ABM
ABB
HDT
NUM
BLV
SWFD
MWE
CNKS
3.00
BEG
CAML
HYDG
ACHL
SDM
FRP
ITQ POWR
ISG
FPO
RQIH
VNET
CMX
HGV WINK
JRIC
SLNG
PEN
Dividend Cover (EPS/DPS)
HGM
DENS
2.00
JIL
NARS
GLIF
ACMG
1.00
NRR
PDC
Value
0.00
25.00
20.00
15.00
10.00
5.00
0.00
PE Ratio (Price/EPS) Figures reversed
Source: Allenby Capital, Thomson Reuters
Exhibit 16: Top right quartile highlights companies with a high yield relative to its PE Ratio backed by an ability to continue to pay dividends
7.0
NBU
6.0
CAMK
Balance sheet strength
HGM
Dividend Cover (EPS/DPS)
5.0
MCRB
4.0
GDP
CLL
MAYG
3.0
MAI
PEN
CAML
BEG
POWR
FRP
ACHL
MCM
HYDG
ITQ
FPO
FLK
DSG
ISG
AMO
VNET
MTEC
AN.
ABB ABM
CMX
HGV
WINK
CHH
JIM
ACMG
JRIC
SLNG BLV
NRR
CNKS
HDT
NUM
PDC
MWE SWFD
2.0
1.0
SDM
DENS
RQIH
NARS
JIL
GLIF
Value
0.0
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Yield/PE Ratio
Source: Allenby Capital, Thomson Reuters
Page 10 of 74
Dividends on AIM
RESULTS – The Super 12
Our analysis has identified twelve companies (our Super 12) which we feel offer a
secure and high dividend yield and the potential for upside to the share price. We
also identify two companies that although are paying a lower yield we still think
offer an interesting investment opportunity. We summarise each company below
and in further detail in appendix I.
1) ACM Shipping Group Plc – Profitable even at the cycle trough
ACM is a London based international shipbroker predominantly focused on broking
wet cargos (crude oil). The shipping industry is highly cyclical and freight rates are
currently at a low. ACM’s management has seen all this before and in addition to
currently trading profitably, ACM has been profitable on an underlying basis every
year since its inception in 1982 - a period in which it has experienced many industry
downturns. The company is diversifying its revenue streams, growing the number of
fixtures it books, has a healthy balance sheet and we forecast a c.6% dividend yield in
2013. Despite the recent share price rally we still view ACM as undervalued given
where we are in the cycle. We see huge upside potential to earnings when once again
the industry recovers and we consider ACM as perfectly placed to take advantage of
this.
2) Asian Citrus Holdings Ltd –Making oranges while the sun shines
Asian Citrus is one of three Chinese companies that have made the Super 12. Many
investors have shunned Chinese stocks given some very high profile frauds associated
with NASDAQ listed Chinese companies and general concerns surrounding corporate
governance. Whilst these points cannot be ignored we think it has driven down
valuations of many Chinese stocks to levels which warrant attention.
Asian Citrus is a Chinese orange plantation owner with 3 plantations (4.1m trees)
which are located at similar latitudes to that of Florida. The company is cash rich and
in addition to paying a healthy dividend is currently executing a share buy back
programme. Only two of the company’s plantations are operating at full maturity or
approaching full maturity. The third plantation only commenced in 2007 with the first
harvest expected in 2014. As this third plantation matures, yields should increase
accordingly. 2012 was also negatively impacted by freak levels of heavy rainfall
(heavy rain washes away fertiliser and pesticides requiring further applications) which
should hopefully not reoccur. At end December 2012, the company had a net cash
position of RMB2.4bn (c.£240m or c.60% of its mkt. cap.).
3) Camkids Group Plc – Beneficiary of China’s generation of little emperors
Camkids is the second of our Super 12 from China. The company manufactures and
distributes Camkids branded outdoor clothing, footwear and equipment (think
Timberland/Blacks Leisure type products). The products are sold in around 1,100
Camkids branded outlets across China. The products target the mid to high end
consumers and are western branded (all writing etc. in English) to take advantage of
Chinese consumers desire for western brands. Targeting only the children’s market,
the company is a beneficiary of China’s one child policy which has led to 4-2-1 family
structures where increasing amounts of money are lavished on the only child. We
appreciate the ‘China factor’ but we feel this is more than compensated by Camkids’
valuation (3.4x 2013 EPS), profitable track record and strong balance sheet (forecast
net cash position of c.£17.4m at end 2012). The company is highly cash generative
and intends to pay c.20% of net earnings as a dividend which should lead to a high
and rising dividend stream.
Page 11 of 74
Dividends on AIM
4) Catalyst Media Group Plc – Benefits from London 2012 still to come
Catalyst Media Group (“CMX”) is a holding group with one asset – a 20.54% stake in
Satellite Information Services (Holdings) Ltd (“SIS”), a frontrunner in sports
television broadcasting. Other shareholders of SIS include bookmaker customers
William Hill, Ladbroke and the Tote. Since CMX acquired the stake, the revenues of
SIS have increased 103.6%, from £117.7m for the financial year ended 2005, to
£239.6m in 2012. The dividend policy of SIS is to distribute at least 50% of net
profits, subject to cash flow considerations. SIS pays a dividend to CMX which in turn
(with a lagged effect) distributes this to its own shareholders. CMX paid a 7p dividend
in the year to 30 June 2012 and has already announced an interim dividend of 7p in
the current year (6.9% yield). A final dividend is more than a possibility and the year
to 30 June 2014 should be boosted by the lagged benefit of the London 2012
Olympics.
5) Fairpoint Group Plc – 5.3% yield and turnaround story benefitting earnings
Fairpoint Group Plc (“FRP”) is a consumer financial services business providing
services to financially stressed customers. Despite the downturn, the number of
personal insolvencies and Individual Voluntary Arrangements (“IVAs”) is actually
declining. The average value of new IVAs has also dropped, as creditors are accepting
proposals from less indebted customers. As such FRP has been adapting its strategy,
diversifying its revenue stream and adjusting its cost base. This was borne out in solid
H1 2012 figures showing a strong turnaround from a weak 2011. Management is
confident of being able to sustain the good progress made in H1 2012. With a net cash
position, an enlarged £13.0m banking facility and the results on an upward trend we
are confident that FRP will be able to maintain its progressive dividend policy, whilst
also preserving its historically robust dividend cover.
6) Highland Gold Mining Ltd – Recent large seller created buying opportunity
Highland Gold Mining (“HGM”) was established in 2002, and has since developed a
valuable portfolio of gold mining projects in Russia and Central Asia. The company
currently has two operating mines and with numerous development and exploration
projects being actively progressed, HGM looks set to increase production output in the
coming years. The share price has almost halved in value over the last year on the
back of a retracement in the gold price but also as a 20% shareholder sold its entire
holding. We think this has presented a buying opportunity. The company’s balance
sheet remains strong with a net cash position at 31 December 2012 of $52.6m.
Furthermore, in 2012 there was a 20.4% increase yoy in total JORC compliant
resources to 13.0m oz., as a result of exploration and acquisitions. Barring a collapse
in the gold price we expect the company to continue to pay healthy dividends for the
foreseeable future.
7) Interior Services Group Plc – 6.7% yield and half the mkt cap in cash
ISG is an international construction group catering to a diverse range of clients. ISG
listed on AIM in June 1998, and in the 14 full financial years to date, has increased its
revenues 542.3%, to £1.28bn. It has posted a loss only once in that period, and that
was due to a write down of goodwill and exceptional costs. For the first time in the
company’s history, total dividends in FY 2012 were down on the previous period as a
result of the fall in group net profits. The company has, however, indicated that its
performance in FY 2013 will see modest growth, in line with expectations. With an
estimated net cash position of £23m as at December 2012, which currently equates to
c.50% of its market capitalisation, the company can easily afford to increase its
dividend. However, the Board intends to resume its policy of preserving a dividend
cover of at least 2.0. An increase in dividends will therefore only likely come to pass
once operating margins have been improved. Nevertheless, given its cash reserves,
low valuation and stellar track record we think ISG looks extremely attractive.
Page 12 of 74
Dividends on AIM
8) Juridica Investments Ltd – Highest forecast yield on AIM
At 14.5% Juridica has the highest forecast 2013 dividend yield of all AIM
constituents. The company invests in a diversified portfolio of corporate claims in
litigation and arbitration. The group has a stringent vetting process in place, only
taking on claims that possess significant potential economic value, a large chance of
gaining a successful outcome in court, and that have already been undertaken by
world class lawyers. The group currently has a total of 18 investments representing 23
separate legal cases, with a combined $157.1m committed to them. The majority of
these are now reaching their concluding phases. With the seven investments that have
reached completion so far providing a gross IRR of c.85%, further substantial
potential returns should be expected over the next 18 months. The Board is unwilling
to determine dividend pay outs without income being confirmed first, which of course
may well result in future yield inconsistency. However, in light of the maturing
portfolio and the outstanding historic IRR, we are confident that superlative yields
will be maintained in the mid term.
9) MTI Wireless Edge Ltd – Sitting on a large cash pile
MTI develops and manufactures complex antennas and antenna systems used
predominantly for the transmission and reception of wireless broadband. Recently
reported FY 2012 results were, on the face of it, disappointing given the reported pre
tax loss of $268k. However, the results were obscured by a $300k one off charge. On
an underlying basis, after a tough couple of years, the company is now profitable. We
estimate the NAV of MTI to be around 13p (against a current share price of 6.75p).
Furthermore, the majority of this NAV (8.9p) comprises of cash or liquid securities.
The company appreciates the importance of dividends to shareholders and the 0.58c
(0.3p) that will be payable in April represents a yield of 5.6%. Earnings are currently
depressed but given the strong balance sheet we remain confident that a similar
dividend will be declared in 2013 and the 50% discount to NAV provides upside for
the share price.
10) Naibu Global International Plc – undervalued on every measure
Naibu is the third of our Chinese members of the Super 12. Like Camkids, the
company is a retailer focused on the Chinese domestic market. Unlike Camkids,
Naibu targets the mass market and its products are sports orientated such as running
shoes, general (basketball, football) sports clothing and sporting accessories. Naibu is
China's 10th largest sportswear brand and has a distribution network of around 3,000
branded outlets. Whilst we are cautious on the Chinese sportswear market given the
recent profit warnings from the likes of Li Ning (2331.HK) and 361Degrees
(1361.HK) we feel Naibu warrants inclusion in the Super 12 given that it looks
exceptionally undervalued on every measure (1.9x 2013 PER, 0.6x 2013
EV/EBITDA) and is forecast to pay a c.5.7% dividend yield in 2013. At 30th June
2012 the company had c.£33m of cash on the balance sheet, equivalent 58% of its
market cap. Liquidity has historically been poor but this has improved since the
December 2012 Camkids (CAMK.L) IPO which brought the sector into focus.
Page 13 of 74
Dividends on AIM
11) Nationwide Accident Repair Services Plc – Successful restructuring
Nationwide is a UK provider of automotive repair and support services. The group’s
largest business, Nationwide Crash Repair Centres (“NCRC”), operates a network of
63 repair centres across the UK, servicing over 175,000 vehicles each year. In 2011
the business was hit by the uncertain economic conditions - specifically, drivers were
making fewer claims for smaller repairs. A cost cutting programme and a revised
strategy appear to be paying off and in H1 2012 the interim dividend of 1.9p was
maintained. Given the healthy net cash position and the Board’s confidence in
continued growth in non insurance markets, we conclude that the current dividend
level will be maintained which equates to a yield of c.7.9%. On just 6.9x 2013 EPS we
also see upside from a re-rating of the stock.
12) NewRiver Retail Ltd – Paying out the majority of recurring profits
NewRiver is a Retail Estate Investment Trust focused on the UK food and value retail
sector. The company has AUM of c.£400 million, totalling 2.8 million square feet of
property. NewRiver’s investment philosophy comprises strict criteria that create a
high income producing business model. Its chosen niche, the food and value sectors,
are traditionally resilient in economic downturns. As a result, the group has managed
to maintain a high occupancy rate of c.96%. The interim dividend for H1 2013 was
maintained at 6p. The recent JV portfolio acquisition will be significantly earnings
accretive in the short term, and we envision EPS to build steadily for the foreseeable
future. With a preferred policy of paying out the majority of recurring profits to
shareholders we are therefore confident that the strong dividend pay out will continue.
Moreover, we also feel that there is a potential upside to the share price at present,
owing to the c.20% discount to NAV.
The following two companies were not amongst the highest dividend yielders on
AIM, however, we feel both are of interest – one as a steady grower and one offering
a bit more excitement.
Murgitroyd (MURG.L, £45m) – Nice steady performer with a rising dividend
Murgitroyd is an International Patent and Trade Mark Attorney with offices
throughout the UK, Europe and the US. Although at 2.5% its dividend yield is
relatively low compared to others in our analysis, the company has a successful track
record of organic and acquisitive growth which has led to steadily increasing
dividends (the dividend has increased by over 250% since 2005). Murgitroyd operates
in a very stable industry thus we see minimal volatility in earnings. At a c.35%
discount to its closest peer we feel there also remains the opportunity for further share
price upside.
Avesco (AVS.L, £52m) – Potential for large bonus dividend
Avesco operates in the broadcasting and entertainment space and had a strong 2012 on
the back of the London Olympics. It currently yields c.2.4%. Of particular interest the
company has a financial interest in the outcome of a long standing court case between
Walt Disney and Celador, which owns the global rights to Who Wants To Be A
Millionaire? The case concerns Disney not fairly sharing profits from hosting the
show on its television network. AVS formerly part owned Celador, and with the court
awarding a total sum of $320m, the company’s share is c.$60m net. That would
equate to c.154p per share against the current share price of 202p. Disney’s
application for a rehearing has been declined, and there is now a substantial
probability that shareholders will receive a significant pay out.
Page 14 of 74
Dividends on AIM
Appendix I – Company profiles
Page 15 of 74
Dividends on AIM
Abbey Protection Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Property & Casualty Insurance
114.0
99.99
GBP
ABB.L
114.0
-20.4
93.6
Share price performance
(K)
(p)
120
5,000
300.0
140.0
4,500
100
4,000
120.0
250.0
3,500
80
100.0
200.0
3,000
60
2,500
80.0
150.0
2,000
40
1,500
100.0
40.0
60.0
1,000
20
50.0
20.0
500
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
0.0
0.0
Abbey Protection is an integrated specialist insurance and
consulting group that caters to a core client base of UK SMEs.
Listing on AIM in 2007, the company operates through four
subsidiaries. The core businesses, Abbey Protection Group
Ltd and Abbey Tax & Consultancy Services Ltd, offer a
broad range of insurance services including the provision of
commercial legal expenses insurance, commercial After The
Event insurance, and tax consultancy services. IBEX
Reinsurance Company Ltd (“IBEX”) is the company’s
reinsurer. The fourth and newest subsidiary, Abbey Property
Facilities Ltd, is 60% owned by ABB and provides services to
owners of vacant commercial properties.
Since listing in 2007, the company has consistently increased
revenues and net profits yoy, with EPS growth averaging 6.7%
over the 4 fully reported periods. Market difficulties were
anticipated in 2012, owing to the wider economic downturn,
and more specifically to the threat of reduced revenue streams
from clients having less taxable income, facing employment
cuts, and in some cases the risk of administration.
Nevertheless, H1 2012 proved to be a robust period for the
company. Group revenues were up 4.9% yoy to £19.2m, with
PBT increasing 3.2% to £5.2m. 62.3% of PBT was
attributable to the group’s two core subsidiaries. IBEX posted
a PBT figure of £2.0m, down 4.8% as a result of low
investment yields and a hike in the aggregate claims ratio. The
new property subsidiary recorded a loss of £0.1m.
Source: T homson Reuters
Key data (Y/E Dec) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
36.3
10.68
10.05
10.05
7.56
7.5
4.4
-17.6
2012E
38.1
7.50
10.70
10.30
7.80
7.9
4.9
na
2013E
40.5
8.13
11.50
11.30
8.50
8.6
5.4
na
2014E
na
na
na
na
na
na
na
na
2011
3.9%
15.14
1.71
4.00
8.76
27.7%
20.8%
4.1%
9.6%
2012
4.3%
14.43
1.62
na
12.48
28.1%
20.5%
4.9%
4.9%
2013
4.7%
13.26
1.60
na
11.51
28.4%
21.0%
6.3%
8.9%
2014
na
na
na
na
na
na
na
na
na
The Board anticipates continued growth both in revenues and
in EPS for the group, and to stress this recommended an
interim dividend of 2.1p, an increase of 10.5% yoy. We are
confident that the group’s reliable income stream, soon to be
augmented by Abbey Protection Group (through its recent
acquisition of an Alternative Business Structure Licence which
will enable it to offer more services to clients) and profits from
Abbey Property Facilities, will continue to drive earnings
growth and secure an increasing dividend stream.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Colin Davison (CEO)
Christopher Ward (MD)
Elizabeth Grace (Dir.)
Mawer Investment Management Ltd
Murray Fairclough (Dir.)
Henderson Global Investors Ltd
Liontrust Asset Management Plc
Richard Candy (Dir.)
15.73%
15.73%
10.61%
9.99%
6.73%
4.94%
3.95%
3.51%
Page 16 of 74
Dividends on AIM
ACM Shipping Group Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Transportation
173.5
19.20
GBP
ACMG.L
33.3
-4.7
28.6
Share price performance
(K)
(p)
120
300.0
100
250.0
80
200.0
60
150.0
40
100.0
20
50.0
0
Mar-11
0.0
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Volume
Sep-12
Dec-12
Price
Source: T homson Reuters
Key data (Y/E Mar) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
ACM is an international shipbroker which predominantly
generates revenues by matching ship owners/ship operators
with the owners of cargos requiring shipment. The business
was built on an expertise in wet cargos (mainly crude oil) which
now accounts for 75% of revenues. ACM also generates 15%
of revenues from the broking of dry cargos (e.g. iron ore,
coal). Additionally, ACM is expanding into the shipping of
LPG product, and is involved in the Sale & Purchase of
second hand ships and in new ship builds and demolitions.
Impressively, the company has been profitable (excluding oneoffs) every year since its inception in 1982 and is trading
profitably in this current industry trough. Despite the recent
share price rally the dividend yield is still c.6% and we expect
strong earnings upside when the industry recovers.
Key revenue drivers include the quantum of contracts (fixtures)
and the value of these contracts. Whilst the quantum has been
increasing (+7.7% yoy in H1 2013), values have been in
decline as freight rates have hit a cyclical low. However, the
shipping industry is cyclical. With freight rates and ship values
low there is a corresponding reduction in new ship builds and
we expect the market to rebalance. Furthermore, demand for
shipments will eventually rebound with the wider economy.
For the 6m period ending 30 September 2012 the company
reported revenues of £12.2m and underlying pre tax profits of
£1.8m, down 8% and 16% respectively yoy. ACM ended the
period with net cash of £4.7m but we note the pension liability
of £2.6m. The interim dividend of 3.15p was maintained and
we expect the same for the final 7p dividend.
2011A
29.3
6.20
5.16
6.10
4.31
24.7
10.0
-5.0
2012A
26.6
4.40
4.04
4.30
3.04
17.3
10.2
-3.1
2013E
24.0
3.46
3.08
3.30
2.28
13.2
10.2
-3.2
2014E
26.0
3.86
3.48
3.70
2.58
14.3
10.2
-3.5
The current cyclical low is nothing new to ACM which has
traded profitably through several cycles. In challenging markets
the company continues to grow the number of fixtures,
diversify its revenue base and expand geographically. We see
ACM as perfectly positioned to capitalise on the cyclical
recovery in the shipping sector when it occurs.
2011
5.8%
7.02
2.47
2.58
4.62
17.6%
14.7%
13.3%
-5.4%
2012
5.9%
10.03
1.70
1.59
6.51
15.2%
11.4%
-9.2%
-30.0%
2013
5.9%
13.14
1.30
1.62
8.28
12.8%
9.5%
-9.8%
-23.7%
2014
5.9%
12.13
1.41
1.79
7.42
13.4%
9.9%
8.3%
8.3%
Key Shareholders
GFI Holdings Ltd
James Gundy (CEO)
William Middleton
Michael Rudd (COO)
Axa Investment Managers UK Ltd
Benjamin Peck
Johnny Plumbe (Chairman)
Andrew Wakely
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Edison Investment Research, Allenby Capital
Share price as of 01/03/2013. Earnings are on an underlying basis.
7.26%
6.27%
6.27%
6.27%
5.59%
5.09%
4.91%
3.18%
Page 17 of 74
Dividends on AIM
Albemarle & Bond Holdings Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Consumer Finance
230.0
55.50
GBP
ABM.L
127.7
50.3
178.0
Share price performance
(K)
(p)
120
1,800
300.0
450.0
1,600
100
1,400
400.0
250.0
350.0
80
1,200
200.0
300.0
1,000
60
800
250.0
150.0
200.0
40
600
100.0
150.0
400
20
200
100.0
50.0
50.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Jun) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
101.9
24.35
21.66
21.01
15.29
30.9
12.5
32.2
2012A
117.7
26.42
22.60
21.37
15.68
28.2
12.8
38.4
2013E
115.6
21.48
18.02
16.00
11.98
21.6
12.7
48.1
2014E
118.8
23.12
19.49
17.10
12.81
23.0
12.6
48.6
2011
5.4%
7.45
2.47
-4.64
7.31
21.3%
15.0%
24.2%
19.3%
2012
5.5%
8.16
2.21
-5.43
6.74
19.2%
13.3%
15.6%
-8.7%
2013
5.5%
10.67
1.70
-6.84
8.28
15.6%
10.4%
-1.8%
-23.6%
2014
5.5%
10.00
1.82
-6.94
7.70
16.4%
10.8%
2.8%
6.7%
0.0
0.0
Albemarle & Bond is one of the UK’s leading pawnbrokers,
operating out of 233 stores and providing a wide range of
financial services to cash and credit constrained consumers. In
recent years, the combination of the economic downturn and
rising gold prices enabled it to make exceptional gains from a
gold buying service. However, greater competition and a
decline in the price of gold has seen profitability from these
operations fall since last April, leading management to put
greater emphasis on the company’s more traditional services.
Recent first half results to 31 December reflected the
challenges ahead, with the 33% decline in pre tax profit to
£8.1m almost entirely attributable to the gold buying
operations. At the gross profit level, pawnbroking profits, at
£17.6m, were marginally up on the corresponding period last
year on a virtually unchanged pledge book of some £38.1m,
whilst retail sales grew an impressive 16.7% to £10.5m. Other
services offered by the group include third party cheque
cashing and, following its acquisition last September, a small
but profitable payday loans operation. Management believes
that the company is well placed to benefit from the tighter
regulation anticipated within this industry in the year ahead.
The strategy is now to develop the offering provided by its
pawnbroking stores, enabling customers to lend on a much
broader range of items whilst extending the retail operation.
Investment into ex-pledge jewellery stocks meant that net debt
rose to a little more than £50m at end December, yet some
£16m of headroom remains within facilities that remain in place
until 2017.
Albemarle & Bond has an impressive record of increasing
dividends over the past decade and will be keen to achieve
another year of growth in the year to end June. However,
earnings are expected to decline some 23%, implying cover of
1.7x if it is assumed that last year’s payment is maintained.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Ezcorp International Inc
Schroder Investment Management Ltd
Fidelity Management & Research Company
Montanaro Asset Management Ltd
Norges Bank Investment Management
Octopus Investments Ltd
29.97%
7.82%
3.33%
3.13%
3.03%
2.05%
Page 18 of 74
Dividends on AIM
Alternative Networks Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Telecommunications
303.3
46.47
GBP
AN..L
140.9
-20.6
120.3
Share price performance
(K)
(p)
120
2,500
300.0
350.0
100
2,000
300.0
250.0
250.0
200.0
80
1,500
200.0
150.0
60
Alternative’s principle product and a key revenue driver is its
unique customer portal, recently rebranded as “Synapse”. The
portal combines all of the group’s service offerings, with further
development plans scheduled in, including linking clients
directly to suppliers’ systems and launching a “Live Chat”
programme. Customer usage of Synapse doubled in 2012. The
group does however employ a twin strategy of organic and
acquisitive growth, and with £20m cash, management has
stated that bolt-on acquisitions that would prove immediately
earnings enhancing are being considered.
150.0
1,000
40
100.0
100.0
500
20
50.0
50.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
0.0
0.0
Although revenues decreased by 2.1% in FY 2012, margins
improved substantially, with PBT and net profits up 35.6% and
48.2% respectively. The group has purposefully targeted
further improving on these figures, as revenues are already
under pressure (specifically in the Fixed Line division) due to
the migration to internet protocol telephony.
Price
Price
Source: T homson Reuters
Key data (Y/E Sept) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
Founded in 1994 and listed on AIM in 2005, the company is
today a UK leading independent telecommunications service
provider, catering to over 5,000 businesses, predominantly
SMEs. Its range of service offerings includes mobility, IT,
systems & applications, and networks solutions. Bar one year,
the company has managed to increase both gross profits and
PBT year on year since 2002, with group revenues having
increased 147.5% in the period.
2011A
117.3
15.38
14.55
9.36
6.61
13.3
10.0
-10.9
2012A
114.9
16.10
15.28
12.69
9.79
19.5
11.5
-20.6
2013E
115.4
15.67
13.25
12.80
9.30
20.5
12.7
-18.2
2014E
118.4
16.65
14.35
14.50
10.80
22.6
13.9
-24.3
2011
3.3%
22.80
1.33
2.35
7.82
12.4%
5.6%
21.9%
-8.3%
2012
3.8%
15.55
1.70
3.85
7.47
13.3%
8.5%
-2.1%
46.6%
2013
4.2%
14.83
1.61
3.08
7.68
11.5%
8.1%
0.5%
4.9%
2014
4.6%
13.42
1.63
3.76
7.23
12.1%
9.1%
2.5%
10.5%
In October 2012, the company returned cash to shareholders
by announcing a £5.0m tender offer. Since then, the share
price has risen by more than 30%. A total dividend of 11.5p
was also paid out in FY 2012, an increase of 15% yoy. It is
the Board’s intention to maintain a progressive dividend policy,
and it has stipulated a minimum increase of 10% in 2013 and
2014. With a reassuring track record, a highly cash generative
model, and a robust net cash balance, we are confident that the
stated policy will be met. At the current share price, a 10%
dividend increase in 2013 would yield a solid 4.2%.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
James Murray (Chairman)
Christopher Wilson
BlackRock Investment Management (UK) Ltd
Alternative Networks Employee Benefit Trust
F&C Asset Management Plc
Edward Spurrier (CEO)
Herald Investment Management Ltd
31.33%
9.49%
8.76%
8.43%
5.51%
5.36%
4.59%
Page 19 of 74
Dividends on AIM
Amino Technologies Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Telecommincations Equipment
82.5
55.05
GBP
AMO.L
45.4
-17.1
28.3
Share price performance
(K)
(p)
120
7,000
300.0
90.0
6,000
100
80.0
250.0
70.0
5,000
80
200.0
60.0
4,000
60
50.0
150.0
40.0
3,000
100.0
30.0
40
2,000
20.0
50.0
10.0
20
1,000
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
0.0
0.0
Amino Technologies is an international provider of digital
entertainment solutions, specifically for Internet Protocol
Television (“IPTV”), Over The Top services (“OTT”), and inhome media distribution. The company was founded in 1994
and listed on AIM in 2004. Based in Cambridge, its products
are sold to a base of customers spanning 85 countries,
including global corporations such as Ericsson and Intel. At the
end of FY 2011 Amino was in a position to pay a maiden
dividend.
The company’s recent shift in focus to operational
improvements and taking on only higher margin business has
paid off handsomely. Although revenues declined by 19.5%
yoy in FY 2012, gross profits increased by 20.6% to £17.5m,
with gross margins significantly higher at 42.0% (2011:
32.7%). The decline in sales was almost wholly due to the
dearth of orders in Italy, subsequent to the initial two roll out
orders placed by Telecom Italia. Although revenues elsewhere
declined in general as large volume, low margin business was
axed, the Netherlands’ expanding customer base did drive
sales up by 47.8% yoy to £11.5m, making it the group’s
largest market after the US. In a bid to further improve
efficiency came the closure of the Swedish office in early 2013.
The company continues to focus on innovation, as
demonstrated at the 2012 Consumer Electronics Show, where
it unveiled its latest product – the Freedom Live media
gateway, an original concept in the world of OTT services. The
company secured a major contract for the product in
December with a leading European telecoms operator.
Key data (Y/E Nov) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
51.8
2.09
-0.61
-0.62
-0.21
3.8
2.0
-14.1
2012A
41.7
6.25
2.83
2.89
2.84
5.5
3.0
-17.1
2013E
43.7
7.03
3.13
3.17
3.15
6.1
3.5
-17.2
2014E
45.0
7.00
3.73
3.77
3.77
9.9
4.0
-18.8
A final dividend of 3p was announced for FY 2012, an
increase of 50% yoy. Even so, this allowed for a dividend
cover of 1.82x, owing to a record EPS of 5.45. With a healthy
cash balance of over £17m, we are confident that the updated
policy going forward, of beginning interim dividends in FY
2013 and furthermore of increasing the total dividend by at
least 15% for the next two years, will comfortably be met.
2011
2.4%
21.48
1.92
12.83
13.55
-1.2%
-0.4%
17.8%
51.2%
2012
3.6%
15.14
1.82
10.35
4.53
6.8%
6.8%
-19.5%
41.9%
2013
4.2%
13.46
1.75
8.93
4.03
7.2%
7.2%
4.7%
12.5%
2014
4.8%
8.31
2.48
8.54
4.05
8.3%
8.4%
3.0%
62.0%
Key Shareholders
Azini Capital Partners LLP
Schroder Investment Management Ltd
Kestrel Partners LLP
BlackRock Investment Management (UK) Ltd
AMO Employee Benefit Trust
Ari Charles Zaphiriou-Zarifi
Herald Investment Management Ltd
Henderson Global Investors Ltd
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
14.33%
9.23%
9.12%
7.95%
5.29%
5.22%
4.42%
3.61%
Page 20 of 74
Dividends on AIM
Asian Citrus Holdings Ltd
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Food Producers
32.3
1227.72
RMB
ACHL.L
395.9
-235.1
160.9
Share price performance
(K)
(p)
18,000
80.0
16,000
70.0
14,000
60.0
12,000
50.0
10,000
40.0
8,000
30.0
6,000
20.0
4,000
Plantations take time to mature. In year 4 an orange tree yields
only 8 kgs of oranges which increases to an average of 130
kgs at maturity in year 10 and for the next 15 years. The yield
then declines slightly for the remainder of its 35-year lifespan.
Two of the company’s plantations (Hepu & Xinfeng) are in
operation. Hepu, with approximately 1.3m orange trees, is
operating at full maturity and the Xinfeng Plantation, with 1.6m
orange trees, is approaching full maturity. In 2007, the Group
commenced the Hunan Plantation where approx. 1.2m trees
have been planted so far with the first harvest expected in
2014. Planting of an additional 600,000 trees is scheduled for
completion pre end 2013. In 2010, the company diversified its
interest by acquiring BPG, a producer and wholesaler of
tropical fruit juice concentrates.
10.0
2,000
0
Apr-11
Asian Citrus, the Chinese orange plantation owner, is listed on
both AIM and the HKSE. It owns 3 plantations (4.1m trees)
which are located at similar latitudes to that of Florida. The
Group sells its oranges to supermarket chains, corporate
customers, wholesalers and sole proprietors in the PRC. The
company is cash rich and in addition to paying a healthy
dividend is currently executing a share buy back programme.
0.0
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Volume
Oct-12
Jan-13
Share Price
Source: T homson Reuters
Key data (Y/E June) - (RMBm)
2011A
Revenue
1,413
EBITDA
675
EBIT
590
Pre Tax Profit
590
Net Profit
579
EPS (p)
5.45
DPS (p)
1.49
Net Debt/(Cash)
-2,232
2012A
1,776
756
645
645
629
5.15
1.78
-2,388
2013E
1,998
720
614
614
580
4.72
1.88
-2,351
2014E
1,989
733
625
630
590
4.81
1.98
-2,500
2012
5.53%
6.26
2.89
10.81
2.15
36.3%
35.4%
25.7%
-5.5%
2013
5.83%
6.83
2.51
10.08
2.26
30.7%
29.0%
12.5%
-8.2%
2014
6.14%
6.71
2.43
10.18
2.22
31.4%
29.7%
-0.5%
1.7%
Results for the half year ending December 2012 showed a year
on year decrease in production of 6%, a revenue fall of 14.5%
and core net profit fall of 22.7%. Results have been hit by
wage inflation and poor weather (heavy rain washed away
fertiliser and pesticides). More normal weather is expected in
2013 and juice prices have started to increase.
The company is cash rich and at end December 2012 had a
net cash position of RMB2.4bn (c.£240m or c.60% of its mkt.
cap.). As such, the Board is committed to maintaining a
dividend pay out ratio of at least 30% of core net profit and
has instigated a share buy back programme with authority to
purchase 10% of the issued share capital. We see scope for
both programmes to be increased and expect the dip in 2012
earnings to be temporary.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
2011
4.61%
5.92
3.67
12.12
2.41
41.8%
41.0%
73.9%
-25.2%
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Market Ahead Investments Ltd
Xuefeng Xu
Wellington Management Company LLP
Value Partners Ltd
Chaoda Modern Agriculture (Holdings) Ltd
Royce & Associates LLC
Henderson Global Investors Ltd
Investec Asset Management Ltd
18.92%
9.50%
5.95%
5.92%
5.36%
4.46%
2.25%
2.02%
Page 21 of 74
Dividends on AIM
Avesco Group Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Broadcasting & Entertainment
202.0
25.95
GBP
AVS.L
52.4
24.8
77.2
Share price performance
(K)
(p)
120
900
300.0
250.0
800
100
700
250.0
200.0
80
600
200.0
150.0
500
60
400
150.0
100.0
100.0
40
300
200
20
100
50.0
50.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
2012 was a bumper year for the company, predominantly due
to the London Olympics. For the CT division alone, the Games
generated revenues of £6.5m. That aside, underlying growth
excluding the exceptional events increased considerably with
total group sales up by 14.3%. The nature of the market is
however cyclical, with global spectacles providing AVS with
important custom. With margins historically tight, an economic
downturn and resultant cuts in corporate spending can damage
the company’s figures significantly, as witnessed in FY 2009
(net loss of £13.2m). Nevertheless, the company invested
heavily in 2012 (£30.3m net). Although net debt has thus
doubled yoy, AVS is already reaping the rewards, with
adjusted EPS up 734.6% in the same period and the total
dividend, up 33% to 4p. The Board intends to continue to pay
out biannually. We are confident that given the recent
investment, and the showcasing AVS received at globally
watched events during 2012, management will have little
trouble exercising this policy.
Price
Price
Source: T homson Reuters
Key data (Y/E Sept) - (£m)
2011A
125.5
19.46
1.52
0.10
-0.13
2.6
3.0
12.1
2012A
143.5
27.15
7.38
2.96
1.86
21.7
4.0
24.8
2013E
138.7
26.00
5.85
3.75
2.79
10.3
4.8
23.5
2014E
145.0
27.17
7.00
5.30
4.00
14.3
5.7
18.6
2011
Dividend Yield
1.5%
P/E Ratio
77.69
Dividend Cover (EPS/DPS)
0.87
Net Cash/Dividend
-15.59
EV/EBITDA
3.97
EBIT Margin
1.2%
Net Profit Margin
-0.1%
Revenue Growth
7.1%
EPS Growth
-316.7%
2012
2.0%
9.31
5.43
-23.86
2.84
5.1%
1.3%
14.3%
734.6%
2013
2.4%
19.55
2.14
-18.73
2.97
4.2%
2.0%
-3.3%
-52.4%
2014
2.8%
14.18
2.51
-12.64
2.84
4.8%
2.8%
4.6%
37.9%
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
0.0
0.0
Avesco is an international provider of services to the corporate
presentation, entertainment and broadcast markets. The group
operates in three divisions, Creative Technology (“CT”), Full
Service and Broadcast Services. Between them, they offer
audio visual (“AV”) rental services, television studio facilities,
and technical support and expertise for a wide range of
broadcast shows and live events.
On a final note, the company has a financial interest in the
outcome of a long standing court case between Walt Disney
and Celador, which owns the global rights to Who Wants To
Be A Millionaire? The case concerns Disney not fairly sharing
profits from hosting the show on its television network. AVS
formerly part owned Celador, and with the court awarding a
total sum of $320m, the company’s share is c.$60m net. That
would equate to c.154p per share. Disney’s application for a
rehearing has been declined, and there is now a substantial
probability that shareholders will receive a substantial pay out.
Margins/Ratios
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Taya Investment Conmpany Ltd
Richard Alan Murray (Chairman)
Herald Investment Management Ltd
Charles Stanley & Co Ltd
Gerald Vivian Libert Oury
29.32%
20.40%
8.22%
3.25%
3.18%
Page 22 of 74
Dividends on AIM
Begbies Traynor Group Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Business Support Services
38.0
89.96
GBP
BEG.L
34.2
18.3
52.5
Share price performance
(K)
(p)
120
5,000
300.0
70.0
4,500
100
4,000
60.0
250.0
3,500
80
50.0
200.0
3,000
60
2,500
40.0
150.0
2,000
40
1,500
100.0
20.0
30.0
1,000
20
50.0
10.0
500
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
A strategic review in FY 2012 resulted in management
determining to focus on its core businesses of UK insolvency
and restructuring, and its complementary BTG Global Risk
Partners business. BEG thus disposed of its underperforming,
non core subsidiaries, including its tax division for an initial cash
consideration of £2.9m, its overseas businesses, and its
controlling interest in the Red Flag Alert business.
Since Q2 2010, corporate insolvencies have decreased
considerably, despite the economic downturn. We believe this
is due to the government coalition’s attempts at reducing the
nation’s deficit while simultaneously stimulating economic
recovery, through utilising strategies such as quantitative easing
and suppressing interest rates. As a key revenue driver for the
company (the insolvency division accounts for c.85% of group
revenues), turnover and net profits from continuing operations
in the two years to 30 April 2012 have consequently dropped
8.0% and 41.1%, respectively.
Price
Price
2011A
61.5
8.07
6.12
5.17
0.20
6.4
2.2
22.5
2012A
57.7
8.92
6.59
5.45
-5.72
6.0
2.2
20.1
2013E
53.8
10.00
8.15
7.25
na
5.7
2.2
20.8
2014E
56.4
10.40
8.46
7.55
na
5.9
2.2
17.6
However, we are of the opinion that the ‘zombie’ firms – weak
SMEs that are only surviving due to the government initiatives
– will inevitably fold under bad debts, exceptional costs, or
simply when the support measures come to an end. Having
maintained its industry leading position in the slump, BEG is
well positioned to capitalise on that inevitability when it does
arrive. In the near term, however, earnings are under pressure,
with EPS from continuing operations in H1 2012 down 40%
yoy. As such there is a genuine possibility of the final dividend
being cut.
2011
5.8%
5.94
2.91
-11.37
6.50
10.0%
0.3%
-2.1%
-24.7%
2012
5.8%
6.33
2.73
-10.16
5.88
11.4%
-9.9%
-6.1%
-6.3%
2013
5.8%
6.73
2.57
-10.51
5.25
15.1%
na
-6.8%
-5.8%
2014
5.8%
6.50
2.66
-8.89
5.05
15.0%
na
4.7%
3.5%
Key Shareholders
Richard William Traynor (Chairman)
Fortelus Capital Management LLP
Theodoor Gilissen Bankiers N.V.
Royal Bank of Canada Investment Management (UK) Ltd
Heronbridge Investment Management LLP
ISIS Equity Partners LLP
Royce & Associates LLP
Baillie Gifford & Co.
Source: T homson Reuters
Key data (Y/E Apr) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
0.0
0.0
Begbies (“BEG”) is a provider of financial solutions and advice
primarily to commercial businesses. Services range from
corporate finance to risk management, insolvency,
investigations and recovery. Founded in 1989, BEG listed on
AIM in October 2004 and has established itself as a market
leader in the UK. Apart from FY 2012, the company has
remained profitable each year.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Edison Investment Research, Allenby Capital
Share price as of 01/03/2013
28.52%
8.13%
5.31%
3.87%
3.82%
3.51%
3.25%
3.06%
Page 23 of 74
Dividends on AIM
Belvoir Lettings Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Real Estate Services
139.0
20.67
GBP
BLV.L
28.7
-1.7
27.0
Share price performance
(K)
(p)
120
1,000
300.0
160.0
900
100
800
140.0
250.0
120.0
700
80
200.0
100.0
600
60
500
150.0
80.0
400
40
300
60.0
100.0
40.0
200
20
50.0
20.0
100
00
Feb-11
Aug-11
Feb-12 May-11 May-12
Nov-11 Aug-12
Feb-12 May-12 Nov-12
Aug-12
Volume
Volume
Nov-12 Feb-13
Price
Price
Source: T homson Reuters
Key data (Y/E Dec) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
na
na
na
na
na
na
na
na
2012E
4.1
2.20
2.10
1.60
1.20
6.3
5.8
na
2013E
5.1
2.50
2.40
2.40
1.80
8.9
6.8
na
2014E
6.2
3.30
3.10
3.20
2.40
11.8
7.7
na
2011
na
na
na
na
na
na
na
na
na
2012
4.2%
22.06
1.09
na
12.27
51.2%
29.3%
na
na
2013
4.9%
15.62
1.31
na
10.80
47.1%
35.3%
24.4%
41.3%
2014
5.5%
11.78
1.53
na
8.18
50.0%
38.7%
21.6%
32.6%
0.0
0.0
Belvoir is a leading UK letting franchise, having been awarded
the Best Lettings Agency Franchise Gold Award by the Times
and Sunday Times in two of the past three years. Founded in
1995, the group listed on AIM in February 2012, raising
£6.3m net. As at 30 June 2012, Belvoir possessed 144
franchise outlets, with plans to have reached 150 by the end of
2012. Being in a position to pay an interim dividend in 2012
(equating to 3.9% of the February flotation price), the group’s
share price has already gained 86% since listing.
Belvoir’s business model is focused specifically on servicing
tenants and private landlords owning small portfolios. Over
23,000 privately rent properties are now managed by the
franchise network. There is a national trend towards renting
rather than buying at present, with the total nationwide annual
rental bill expected to rise c.46% to £70 billion by 2016. As
such, Belvoir intends to continue on its acquisition path, having
highlighted the significant expansion opportunities available at
present. Net cash of £1.7m will help enable this.
Trading in H1 2012 proved successful, with revenues up
16.7% yoy to £1.83m. However PAT was 28.2% lower than
in H1 2011, at £0.44m, largely owing to an exceptional charge
relating to listing costs. Adjusted operating profit increased
marginally yoy.
The interim dividend of 2.9p was surprising, considering the
EPS from continuing operations of 2.4p, and a resultant
dividend cover of 0.83x. However, the business has proved
immediately profitable on AIM, despite the flotation costs, and
intends to pursue a progressive dividend policy, paying out
biannually. Its highly cash generative model and history of
paying out significant dividends (prior to listing) leads us to
conclude that both dividends and earnings will increase in the
mid term. However, on 16x 2013 earnings we feel this is
currently factored into the share price.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Michael John Stephen Goddard (Chairman)
L&G Investment Management (UK) Ltd
Amati Global Investors Ltd
Investec Wealth & Investment Ltd
Milton Capital Partners Ltd
Artemis Investment Management LLP
Octopus Investments Ltd
44.54%
7.06%
5.81%
4.46%
3.90%
3.87%
3.56%
Page 24 of 74
Dividends on AIM
Camkids Group Plc*
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Retail (China)
100.5
75.43
RMB
CAMK.L
75.8
-18.2
57.6
Share price performance
(K)
(p)
180
110.0
160
105.0
140
120
100.0
100
95.0
80
60
90.0
40
85.0
20
0
24/Dec/12
Camkids joined AIM in December 2012 raising £6.4m. The
company manufactures and distributes outdoor clothing,
footwear and equipment targeting Chinese children. Originally
established in 1994 as an OEM and ODM shoe manufacturer
for the export market, in 2008 the company refocused its
growth towards the domestic market and began producing
Camkids branded products. At 30 June 2012, the company
had 15 distributors supplying a total of 1,054 Camkids
branded outlets across China. Camkids came to market with a
track record of profitability, low valuation, healthy balance
sheet and an intention to pay an attractive dividend.
80.0
07/Jan/13
21/Jan/13
04/Feb/13
Volume
18/Feb/13
Price
The company does not compete in the crowded general
sportswear market (football, athletics etc.) but instead targets
the children’s outdoor sportswear market and sells products
such as hiking boots, backpacks and all-weather jackets.
Targeting children, the company is a beneficiary of China’s one
child policy which has led to 4-2-1 family structures where
increasing amounts of money are lavished on the only child.
Since the launch of Camkids in 2008 the Group has
experienced rapid growth in revenues. In 2011 the company
sold more teenage outdoor footwear than any other brand in
the PRC domestic market including Nike Kids and Adidas
Kids. In 2011, in the wider Children’s outdoor and sportswear
market (footwear and apparel), the company had an 11.1%
market share in China, second only to Nike Kids.
Source: T homson Reuters
Key data (Y/E Dec) - (RMBm)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
742
218
214
214
160
21.5
0.0
-74
2012E
895
265
261
261
196
26.3
0.0
-174
2013E
1,055
308
299
299
224
30.0
5.4
-307
2014E
1,242
355
347
347
260
34.7
6.7
-379
2011
0.0%
4.67
na
na
2.67
28.9%
21.6%
37.8%
46.9%
2012
0.0%
3.83
na
na
2.19
29.2%
21.9%
20.7%
22.1%
2013
5.3%
3.35
5.60
7.50
1.89
28.4%
21.3%
17.8%
14.2%
2014
6.6%
2.89
5.21
7.42
1.64
27.9%
20.9%
17.8%
15.8%
Scepticism remains around Chinese stocks but we feel this is
more than compensated by Camkids’ valuation (3.4x 2013
EPS against a sector on > 6x), profitable track record and
strong balance sheet (forecast net cash position of c.£17.4m at
end 2012). The company is highly cash generative and intends
to pay c.20% of net earnings as a dividend which should lead
to a high and rising dividend stream.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013 *Allenby Capital corporate client
Key Shareholders
Zhang Congming (Chairman)
Universe Glory Enterprises Ltd
Fortune United Capital Ltd
Kang Yu Investments Ltd
Charalane Ltd
Kai Xing Ltd
Speedy Achieve Global Industrial Ltd
66.29%
4.99%
4.90%
4.80%
4.31%
4.00%
3.01%
Page 25 of 74
Dividends on AIM
Catalyst Media Group Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Broadcasting & Entertainment
101.0
27.65
GBP
CMX.L
27.9
-1.5
26.4
Share price performance
(K)
(p)
120
900
300.0
120.0
800
100
700
250.0
100.0
80
600
200.0
80.0
500
60
400
150.0
60.0
40
300
100.0
40.0
200
20
100
50.0
20.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Jun) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
0.0
-0.18
-0.18
-0.22
1.91
6.8
0.0
0.6
2012A
0.0
-0.14
-0.14
-0.17
4.34
15.4
7.0
-1.5
2013E
na
na
na
na
na
12.0
7.0
na
2014E
na
na
na
na
na
na
na
na
2011
0.0%
14.90
na
na
na
na
na
-37.5%
-52.6%
2012
6.9%
6.55
2.20
0.76
na
na
na
0.0%
127.6%
2013
6.9%
8.42
1.71
na
na
na
na
na
-22.2%
2014
na
na
na
na
na
na
na
na
na
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
0.0
0.0
Catalyst Media Group (“CMX”) is a holding group with one
asset – a 20.54% stake in Satellite Information Services
(Holdings) Ltd (“SIS”), a frontrunner in sports television
broadcasting. The company obtained its shareholding in SIS in
2005 when it acquired the entire issued share capital of
Alternateport Ltd for a cash consideration of £23m. Other
shareholders of SIS include bookmaker customers William
Hill, Ladbroke and the Tote.
Through its market leading division, SIS LIVE, SIS primarily
provides satellite news-gathering and associated transmission
services. It also provides outside broadcast television
production units and television production services. SIS caters
to bookmakers based in the UK, offering its services –
predominantly visual and audio coverage and betting
information on horseracing and greyhound racing – both to
shop interiors and online platforms.
Since CMX acquired the stake, the revenues of SIS have
increased 103.6%, from £117.7m for the financial year ending
2005, to £239.6m in 2012. Apart from 2012 (a bumper year
due to the 2010 Commonwealth Games), the eight years have
witnessed a smooth, continual increase in turnover for the
group. The same period has also witnessed net profits for the
group increasing 57.6%, to £18.6m.
The dividend policy of SIS is to distribute at least 50% of net
profits, subject to cash flow considerations. To date, CMX has
received c.£15.8m in dividends, and by FY 2011 had paid off
all its debt. In its final results to 30 June 2012, Catalyst was
therefore able to pay a maiden dividend to shareholders, at 7p
a share. On 1 March 2013, a further SIS dividend receipt
resulted in CMX announcing its own interim dividend of 7p.
Taking into account the strong historic growth of SIS and its
market leading position, we are confident that the company will
at the very minimum be able to maintain this dividend going
forward. FY 2014 should prove especially lucrative for CMX,
with dividends from SIS’ FY 2013 due (in which the Olympic
Games will have boosted performance significantly).
Key Shareholders
Henderson Global Investors Ltd
Melvin Anthony Lawson (NED)
Harwood Private Equity
Clive Richard Mishon
Universities Superannuation Scheme Ltd
Mark Barrie Hawtin (NED)
Investec Wealth & Investment Ltd
26.06%
13.08%
12.66%
8.67%
8.44%
7.27%
5.29%
Page 26 of 74
Dividends on AIM
Cello Group Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Media Agencies
43.0
82.36
GBP
CLL.L
35.4
9.0
44.4
Cello is a global insight and strategic marketing group. It
specialises in bringing products to market and maximising
brand exposure and performance. The group operates in two
divisions. The core business, Cello Health, is fast becoming a
market leader in the pharmaceutical and health sector. Its
principal activities include strategy consulting, market research
and medical communications. The second business, Cello
Consumer, provides three primary services, namely
communications execution, communications logistics support,
and insight delivery.
Share price performance
(K)
(p)
120
6,000
300.0
70.0
100
5,000
60.0
250.0
80
4,000
50.0
200.0
60
3,000
40.0
150.0
30.0
40
2,000
100.0
20.0
20
1,000
50.0
10.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Dec) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
133.5
4.48
2.25
1.36
-0.59
6.7
1.7
7.7
2012E
na
na
na
na
na
6.0
1.8
9.0
2013E
na
na
na
na
na
6.5
2.1
na
2014E
na
na
na
na
na
na
na
na
2011
4.0%
6.41
3.90
-5.44
9.91
1.7%
-0.4%
6.2%
-15.1%
2012
4.2%
7.17
3.33
-6.07
na
na
na
na
-10.6%
2013
4.8%
6.67
3.15
na
na
na
na
na
7.5%
2014
na
na
na
na
na
na
na
na
na
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013. Earnings are on an underlying basis.
0.0
0.0
After posting a net loss in FY 2011, the group has bounced
back strongly in 2012, with net profits in H1 of £0.8m. Group
revenues were £63.3m, marginally up yoy. While Cello
Consumer could only break even as a result of a significant
industry wide decline in clients participating in market research,
Cello Health’s performance improved substantially. Gross
profits for the division increased 24.2% yoy to £16.4m.
Impressively, its operating margin for the period was 25.0%
(2011: 20.7%), resulting in a headline operating profit for the
division of £4.1m.
The company’s revised strategy is to focus on driving growth
through Cello Health. Organically, it is expanding its
geographic footprint and broadening its range of client
offerings, investing a sum of £0.8m in FY 2012 in doing so.
The division is also developing through bolt-on acquisitions, as
demonstrated by the purchase in January of Mash Health, a
specialist consultant to pharmaceutical and health clients, for
c.£1.5m.
The interim dividend increase of 5.5% to 0.58p was highly
encouraging. With Cello Consumer also on course to profit
recovery, we feel that the group is in a strong position to
continue with its progressive dividend policy. Furthermore, the
forecast moderate decline in EPS for FY 2012 will place no
undue strain on the balance sheet, considering the group's
historically strong dividend cover (average of 7.65x to adjusted
EPS over the last 5 years).
Key Shareholders
Octopus Investments Ltd
Ennismore Fund Management Ltd
DVC Worldwide LLC
Henderson Global Investors Ltd
Vincent Hugh Nolan
Universities Superannuation Scheme Ltd
Richard Gilmore
8.08%
6.82%
6.34%
6.30%
4.95%
4.60%
3.69%
Page 27 of 74
Dividends on AIM
Cenkos Securities Plc
Summary Data
Sector
Share Price (p)
Shares in issue (m)
Reporting currency
Ticker
Market Cap (£m)
Last reported Net debt/(cash) (£m)
Enterprise value (£m)
Financial Services
80.0
63.63
GBP
CNKS
50.9
-22.9
28.0
Share price performance
(K)
(p)
120
3,000
300.0
120.0
100
2,500
250.0
100.0
80
2,000
200.0
80.0
60
1,500
150.0
60.0
40
1,000
100.0
40.0
50.0
20.0
20
500
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
The company has two main divisions: Corporate Broking and
Advisory and secondly Institutional Equities. Following a
strategic review, the company sold its controlling interest in an
offshore fund and wealth management business, Cenkos
Channel Islands Limited (“CCIL”), in April 2012 and in
February 2012 sold its onshore fund management business,
Cenkos Fund Managers Limited.
The Corporate Broking and Advisory business, which includes
the results of Cenkos’ market making capability, generates
revenues from placing commission on fund raisings, corporate
finance fees and retainer income, and commissions on
secondary market transactions. In H1 2012 the division
recorded a yoy drop in revenue of 20% to £19.0m. The
Institutional Equities business (research driven investment
recommendations to institutional clients) had a more stable H1
2012 with revenues falling just 1% yoy to £1.3m.
Price
Price
2011A
43.7
6.00
5.70
6.00
4.68
5.6
5.0
-14.0
2012E
40.0
5.40
5.13
5.40
4.21
5.1
4.5
-18.0
2013E
44.0
5.94
5.64
5.94
4.63
5.6
5.0
-20.0
2014E
48.4
6.53
6.21
6.53
5.10
6.1
6.0
-22.0
In a similar vein to Numis Corporation, Cenkos has a good
reputation, solid client base and a flexible remuneration policy
that is allowing it to come through what is proving to be an
extremely tough period for small cap brokers. Whilst there are
no consensus forecasts available in the market, based on our
own numbers, which allow for a small improvement going into
2013, we feel comfortable that Cenkos will be able to continue
to pay a healthy dividend stream. With cash on the balance
sheet accounting for close to half of the company’s mkt. cap.,
Cenkos is our preferred pick amongst the listed brokers.
2011
6.3%
14.18
1.13
4.40
4.67
13.0%
10.7%
-25.3%
13.7%
2012
5.6%
15.76
1.13
6.29
5.19
12.8%
10.5%
-8.5%
-10.0%
2013
6.3%
14.33
1.12
6.29
4.71
12.8%
10.5%
10.0%
10.0%
2014
7.5%
13.03
1.02
5.76
4.29
12.8%
10.5%
10.0%
10.0%
Key Shareholders
Invesco Asset Management Ltd
Paul Hodges
James Durkin
Cenkos Securities (Trustees) Ltd
JP Morgan Asset Management (UK) Ltd
Hargreave Hale Ltd
Andrew Stewart
Cenkos Securities Employee Benefit Trust
Source: T homson Reuters
Key data (Y/E Dec) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
0.0
0.0
Cenkos was founded in 2005 and has been profitable in each
year since. The company has delivered a strong dividend
stream to investors and in total has so far, since its IPO,
returned a total of 65p. The company is one of the largest
broking and advisory firms serving small to mid cap companies
listed on London’s AIM and Main Market. As at 30 June
2012 Cenkos was Nomad or Corporate Broker/Financial
Adviser to 118 clients, up from 106 in June 2011.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
17.45%
9.20%
8.99%
7.37%
7.33%
5.29%
4.71%
4.32%
Page 28 of 74
Dividends on AIM
Central Asia Metals Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Base & Precious Metals
116.3
84.85
USD
CAML.L
98.6
-24.5
74.1
Share price performance
(K)
(p)
120
4,500
300.0
160.0
4,000
100
3,500
140.0
250.0
80
3,000
200.0
100.0
2,500
60
2,000
150.0
80.0
40
1,500
60.0
100.0
1,000
20
500
50.0
20.0
120.0
40.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
0.0
0.0
Central Asia Metals is a copper producer and explorer in
Central Asia. In April 2012, nineteen months after the
company’s IPO on AIM that raised US$60m, the Kounrad
open pit copper mine in Kazakhstan became operational,
creating an immediate revenue stream. As a result, the Board
was able to announce both a maiden and a special dividend
totalling 7p in December 2012, with an expectation of
announcing a final dividend in the 2012 annual results.
Revenue in H1 2012 was $6.8m, generated in an operational
period of a little over two months. Profit from continued
operations was $0.53m. At year end, total copper produced
was 6,586 tonnes, an impressive 31.7% ahead of the initial
2012 target. In the period, the Board also determined to
dispose of its non core assets, namely the molybdenum and
gold exploration projects in Mongolia.
The copper price is clearly key to the company’s revenue
stream. Due to the much reported Chinese economic
slowdown, coupled with the recent upsurge in the global
supply – and consequently surplus – of the commodity, 2013
may well witness a significant decrease in the copper price. It is
therefore vital that CAML expands operations to increase
volume as quickly as possible. In H1 2013, it will likely acquire
the remaining 40% of the Kounrad mine from its state owned
Kazakh partner, Saryarka. It should subsequently come to a
decision on whether to construct a second solvent
extraction–electrowinning (“SX-EW”) plant at the site, with
both resource estimate and plant layout studies being finalised.
Key data (Y/E Dec) - ($m)
2011A
1.1
-5.89
-6.13
-5.94
-11.19
-8.6
0.0
-16.0
2012E
29.6
15.85
15.26
15.60
12.52
9.9
9.1
-37.5
2013E
47.5
31.47
30.11
30.48
24.45
19.1
7.1
-16.5
2014E
60.0
40.00
35.80
36.10
28.05
22.4
7.3
-26.0
The Board’s stated dividend policy going forward is to pay out
a minimum 20% of revenues generated by the Kounrad mine,
provided that a dividend cover of at least 3 exists. In light of its
performance to date, and notwithstanding the downside risk to
the copper price, we are confident that the company will be in
a position to execute this policy accordingly, offering an
attractive yield to the current share price.
2011
Dividend Yield
0.0%
P/E Ratio
-13.55
Dividend Cover (EPS/DPS)
na
Net Cash/Dividend
na
EV/EBITDA
-19.26
EBIT Margin
-547.3%
Net Profit Margin
-999.1%
Revenue Growth
-22.2%
EPS Growth
-22.0%
2012
7.8%
11.74
1.09
3.18
7.16
51.5%
42.3%
2545.5%
-215.4%
2013
6.1%
6.08
2.70
1.79
3.60
63.4%
51.5%
60.2%
93.2%
2014
6.2%
5.18
3.09
2.76
2.84
59.7%
46.8%
26.4%
17.3%
Key Shareholders
Lansdowne Partners Ltd
Alexander Abraham Capelson
Morgan Stanley Investment Management (UK) Ltd
Montoya Investments Ltd
L&G Investment Management (UK) Ltd
Capital World Investors
Robert Maitland Cathery (NED)
Majedie Asset Management Ltd
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
Margins/Ratios
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
13.43%
8.88%
8.80%
6.03%
5.14%
4.70%
4.28%
4.25%
Page 29 of 74
Dividends on AIM
Character Group Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Leisure Goods (Toys)
134.0
22.55
GBP
CCT.L
30.2
7.9
38.1
Share price performance
(K)
(p)
120
1,000
300.0
250.0
900
100
800
250.0
200.0
700
80
200.0
600
150.0
60
500
150.0
400
40
300
100.0
100.0
200
20
50.0
50.0
100
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Aug) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
95.0
12.43
9.21
9.05
6.84
28.5
6.0
4.9
2012A
75.0
11.03
7.28
7.08
5.75
25.6
6.6
7.9
2013E
66.9
2.43
0.33
-0.08
-0.08
-0.3
6.6
8.0
2014E
72.0
6.34
4.13
3.76
2.91
21.6
6.6
7.0
2011
4.5%
4.71
4.75
-3.60
3.07
9.7%
7.2%
11.4%
41.5%
2012
4.9%
5.24
3.88
-5.31
3.45
9.7%
7.7%
-21.1%
-10.2%
2013
4.9%
-394.12
-0.05
-5.34
15.68
0.5%
-0.1%
-10.8%
-101.3%
2014
4.9%
6.21
3.27
-4.72
6.01
5.7%
4.0%
7.6%
-6450.0%
0.0
0.0
The Character Group is a designer, developer and distributor
of games and toys. Founded in 1991, the company moved to
AIM in 2005. Of its marketed product range, over 75% is
designed in-house. Products include brands such as Bob the
Builder, Peppa Pig and Spiderman, which are sold in over 35
countries worldwide.
Trading in FY 2012 underperformed market expectations, an
almost universal situation for retail traders in the economic
downturn. Performance was further adversely affected by
several major events including the Olympics and the Jubilee
celebrations. However, sales in overseas markets were
significantly stronger than domestically, owing to both
improved international television coverage for the company’s
products, and to the development of new products not focused
solely on the UK consumer.
Despite the 15.9% decline in net profits yoy, underlying
margins improved as a result of a total saving in sales,
distribution and administration costs of c.£5.87m. To
emphasise the temporary nature of the decline in trading, the
Board declared a final dividend of 3.3p, resulting in a total
dividend of 6.6p, a 10% increase yoy and the highest dividend
to date.
Investors should take comfort in the executive management
team (including the three founding members) holding just under
half of the issued share capital between them. Shareholders will
also continue to see attempted enhancement of value through
the share buyback programme (as at 11 January 2013, the
Board had bought back for cancellation 17.8% of the share
issue). In the long term, the company will benefit from the
group’s increased range of products, expanding client base and
experienced management. However, in the near term we
envisage limited upside to the dividend, in light of the gloomy
outlook for the retail sector and the resultant pressure on
earnings.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Kirankumar Premchand Shah (FD / MD)
Richard Ashton King (Chairman)
Sweet Briar Investments Ltd
Vanshap Capital LLC
Jonathan James Diver (MD)
Tops Pension Scheme
24.48%
16.54%
5.65%
5.16%
4.55%
3.87%
Page 30 of 74
Dividends on AIM
Churchill China Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Durable Household Products
335.0
10.92
GBP
CHH.L
36.6
-4.3
32.3
Share price performance
(K)
(p)
120
450
300.0
400.0
400
100
350
350.0
250.0
80
300
200.0
250.0
250
60
200
150.0
200.0
40
150
150.0
100.0
100
20
50
50.0
50.0
300.0
Churchill operates in two divisions. The core Hospitality
business is the key revenue driver for the group, accounting for
72.4% of total sales in the 6 months to 30 June 2012.
Although UK sales for the division were flat in the period,
management believes that this was caused somewhat by
adverse weather conditions (rain having impacted on pubs’
performances). Revenues generated by the division in overseas
markets rose by c.25%, as a result of significant investment in
product development and sales and marketing. Churchill has
been scaling down its second division, Retail, over the past 3
years by cutting low margin and higher risk business.
100.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
0.0
0.0
Price
Price
Source: T homson Reuters
Key data (Y/E Dec) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
Churchill manufactures and distributes ceramic, glass, wood
and cutlery products to the hospitality and retail industry.
Founded in 1795, the company listed on AIM in 2003 and
now employs over 400 staff. Its clients include pubs, hotels,
cruise lines, restaurants and other hospitality establishments, as
well as independent retailers, in over 70 countries worldwide.
Impressively, Churchill has remained profitable every year
since listing, and has furthermore maintained or increased its
dividend year on year in that period.
2011A
42.3
4.69
2.74
2.74
2.10
19.2
14.0
-6.9
2012E
40.2
4.00
2.90
2.90
2.00
20.4
14.2
-7.0
2013E
41.6
4.00
3.10
3.10
2.00
20.6
14.6
-6.0
2014E
43.0
4.00
3.00
3.00
2.00
22.3
15.1
-7.0
2011
4.2%
17.45
1.37
4.51
6.88
6.5%
5.0%
-3.3%
21.5%
2012
4.2%
16.42
1.44
4.51
8.07
7.2%
5.0%
-5.0%
6.3%
2013
4.4%
16.26
1.41
3.76
8.07
7.5%
4.8%
3.5%
1.0%
2014
4.5%
15.02
1.48
4.25
8.07
7.0%
4.7%
3.4%
8.3%
Despite continued global economic uncertainty, Churchill
booked improved underlying figures in H1 2012. PBT was up
22.1% yoy to £0.8m, despite revenue remaining unchanged at
£19.2m. Specifically, Hospitality posted revenues of £13.9m
and an operating profit of £1.8m; and Retail, £5.2m and
£168k.
A maintained interim dividend of 4.8p was paid out for H1
2012. In light of the continually improving operating margins in
the Retail business and the increasing revenues in the core
Hospitality business, coupled with a robust cash balance, we
are confident that Churchill will have little trouble in sustaining
its progressive dividend policy. At the current price, the 4.4%
yield is attractive but on 16x earnings we think the valuation is
on the high side.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Edison Investment Research, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Landfinance Ltd
James Andrew Roper
Seán Baker
Edward Stephen Roper
Andrew David Roper (CEO)
Michael John Roper
Investec Wealth & Investment Ltd
Henderson Global Investors Ltd
22.06%
10.09%
10.07%
7.66%
6.06%
5.13%
5.01%
4.03%
Page 31 of 74
Dividends on AIM
Densitron Technologies Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Electrical Components
7.38
69.67
GBP
DSN.L
5.1
-0.2
5.0
Share price performance
(K)
(p)
120
1,600
300.0
18.0
1,400
100
16.0
250.0
14.0
1,200
80
1,000
200.0
12.0
60
800
10.0
150.0
8.0
600
40
100.0
6.0
400
4.0
50.0
2.0
20
200
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Dec) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
23.1
1.15
1.09
1.06
0.82
1.18
0.60
-1.8
2012E
21.0
0.15
0.12
0.08
-0.05
-0.07
0.60
-1.8
2013E
26.3
1.80
1.70
1.60
1.18
1.70
0.80
na
2014E
na
na
na
na
na
na
na
na
2011
8.1%
6.25
1.97
4.27
4.31
4.7%
3.5%
11.4%
63.9%
2012
8.1%
-105.36
-0.12
4.31
33.06
0.6%
-0.2%
-9.2%
-105.9%
2013
10.8%
4.34
2.13
na
2.76
6.5%
4.5%
25.2%
-2528.6%
2014
na
na
na
na
na
na
na
na
na
0.0
0.0
Densitron Technologies is a designer and developer of
electronic displays. It operates in 32 countries worldwide,
catering to major organizations in need of display solutions.
The company’s products include thin film transistor displays,
liquid crystal displays (“LCDs”), graphic displays, LCD
backlights, and touchscreens.
Due to lower bookings in H2 2011 and several significant
orders delayed to H2 2012, revenue for the 6m period to 30
June 2012 decreased 6.2% to £10.6m. Coupled with an
increase in overheads, this reduction resulted in a fall in
operating profit from £0.54m achieved in HY 2011 to £0.06m
in HY 2012. The company has admitted that, owing to further
delays in orders, it expects its results for the year to 31
December 2012 to be behind market expectations.
Despite challenging economic conditions in the past two years,
exacerbated by the Tsunami that hit Japan in March 2011,
adversely affecting the company’s operations in the region, the
company believes that it is in a strong position to continue with
its strategy of organic growth. Further specified business
objectives have also been highlighted including geographical
expansion, and introduction of new products, which should
prove to be earnings accretive for FY 2013 and beyond. As a
result of this revised strategy, kicked into action by the opening
of an office in India in early 2012 and an optical binding facility
in Taiwan in November, management is optimistic for the
medium and long term future of the business.
In the nearer term however, despite a maintained interim
dividend of 0.2p and a reassuring order book (as at 30 June
2012 being over 10% higher yoy), we fear that the
aforementioned significant pressure on earnings may result in a
cut to the final dividend. Nevertheless, we would consider this
to be no more than a blip, and that the progressive dividend
policy would swiftly be readopted.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Mr Peter Gyllenhammar
Sterling Property Trust Ltd
Nordea Bank S.A.
T W Campbell
Close Brothers Asset Management
D M Ingram
29.78%
16.52%
6.32%
4.02%
3.36%
3.22%
Page 32 of 74
Dividends on AIM
Dillistone Group Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Software
80.0
18.21
GBP
DSG.L
14.6
-1.6
13.0
Share price performance
(K)
(p)
120
400
300.0
100.0
350
100
90.0
250.0
80.0
300
70.0
200.0
80
250
60.0
60
200
150.0
50.0
150
40
40.0
100.0
30.0
Dillistone Systems (“DS”) offers software specifically designed
for the executive search market and the in-house recruitment
departments of large corporates, while recent acquisition
Voyager Software provides recruitment software for
permanent and temporary staffing agencies. Together, these
businesses serve over 1,800 active global clients. For the six
months to June 2012, in a soft UK recruitment market, DS
reported modest growth and probably market share gains
while Voyager, in for a full six months, contributed to group
growth in revenue, EBITDA and EPS of 58%, 63% and 43%,
respectively. The group has strong management, is cautiously
ambitious and enjoys a strong balance sheet with no debt and
net cash of £1.6m as at June 2012.
One KPI worthy of note is the continuing improvement in
recurring revenue as a percentage of total revenue. In H1 2012
recurring revenue represented 63% (H1 2011: 61%) of the
total and was equivalent to 100% of administration expenses
(excluding the amortisation of development costs). This
provides a degree of comfort in revenue visibility and is also
indicative of management’s tight control of costs.
100
20.0
50.0
20
50
10.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Dec) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
5.5
1.70
1.39
1.41
0.93
6.2
3.5
-1.6
2012E
7.5
1.92
1.62
1.60
1.13
6.7
3.6
-1.6
2013E
7.9
2.05
1.77
1.75
1.33
7.3
3.7
-1.7
2014E
na
na
na
na
na
na
na
na
2011
4.4%
12.84
1.78
2.54
7.62
25.5%
17.1%
28.2%
25.4%
2012
4.5%
12.03
1.85
2.39
6.75
21.6%
15.1%
37.6%
6.7%
2013
4.6%
11.00
1.96
2.49
6.32
22.5%
16.9%
4.7%
9.3%
2014
na
na
na
na
na
na
na
na
na
0.0
0.0
In the second half of 2012, DS’ revenue and earnings should
benefit from the implementation of the large contracts referred
to above, together with continuing growth in its overseas sales
which in the first half improved by c.23%. In addition, Voyager
will be included for a full six months, against just three in 2011,
and will be marketing the first phase of its new “Infinity”
platform to permanent and longer term contract agencies.
Phase 2, targeted at the short term temp market will be
released at a date still to be determined. Assuming an adjusted
PBT of £1.6m (FY 2011: £1.4m) and EPS of 6.65p the
shares are selling on a 2012 PER of 12.0x and offering a
prospective safe yield of 4.5%.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Jason Starr (CEO)
Rory Howard (Dir.)
J McLaughlin
Herald Investment Management Ltd
Giles Fearnley (NED)
Unicorn Asset Management Ltd
CFS Independent Ltd
Robert Howells
19.52%
18.13%
14.13%
9.71%
5.46%
4.94%
4.78%
4.12%
Page 33 of 74
Dividends on AIM
Fairpoint Group Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Speciality Finance
104.5
41.94
GBP
FRP.L
43.8
-1.6
42.2
Share price performance
(K)
(p)
120
7,000
300.0
120.0
6,000
100
250.0
100.0
5,000
80
200.0
80.0
4,000
60
150.0
60.0
Fairpoint (“FRP”) is a consumer financial services business
providing services to financially stressed customers. It currently
has three principle operations: Individual Voluntary
Arrangements (“IVA”), Debt Management Plans (“DMP”),
and Financial Services (“FS”) – specifically, Claims
Management and short-term Lending. The company aims to
become the UK market leader in money management
solutions.
In May 2011, the Office of National Statistics stated that
unemployment was on a downward trend. A consequence of
this trend was that FRP’s target market was thrown into
upheaval, with the number of personal insolvencies and IVAs
declining markedly. The average value of new IVAs also
dropped, as creditors accepted proposals from less indebted
customers. FRP swiftly adapted its strategy, diversifying its
revenue stream by driving growth in its DMP and FS divisions.
Simultaneously, it reduced its cost base and streamlined its
core IVA business.
3,000
40
2,000
100.0
40.0
20
1,000
50.0
20.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
0.0
0.0
The H1 2012 interim results serve as evidence of the success
of the measures. PBT stood at £2.1m, (2011: £2.1m loss).
Group revenues increased by 19.5% to £14.1m, with IVA
revenues contributing £8.7m, or 61.7% (2011: 73.7%). The
nascent DMP business improved its revenues by 11.5%, while
the FS division impressively grew its revenues 338.1% yoy, to
£2.6m. At the same time, group gross profit margins for the
period were 47.9% (2011: 28.0%), and administrative costs
were likewise decreased by 14.2%.
Key data (Y/E Dec) - (£m)
2011A
25.9
0.89
-0.81
-1.04
-0.96
-2.2
4.5
6.4
2012E
29.7
na
na
6.82
5.05
11.8
5.0
-1.6
2013E
31.8
na
na
7.61
5.63
13.4
5.5
na
2014E
na
na
na
na
na
na
na
na
2011
Dividend Yield
4.3%
P/E Ratio
-47.50
Dividend Cover (EPS/DPS)
-0.49
Net Cash/Dividend
-3.39
EV/EBITDA
47.45
EBIT Margin
-3.1%
Net Profit Margin
-3.7%
Revenue Growth
-11.9%
EPS Growth
-124.0%
2012
4.8%
8.86
2.36
0.76
na
na
17.0%
14.7%
-636.4%
2013
5.3%
7.80
2.44
na
na
na
17.7%
6.9%
13.6%
2014
na
na
na
na
na
na
na
na
na
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
Despite the adverse market conditions, FRP is confident of
being able to sustain the good progress made in H1 2012. An
exceptional income of £3.0m from a VAT refund has largely
contributed to a net cash position of £1.6m, even after an
interim dividend pay out of 1.95p (up 11.4% yoy). With the
enlarged £13.0m banking facility, we are confident that FRP
will be able to maintain its progressive dividend policy, whilst
also preserving its historically robust dividend cover.
Margins/Ratios
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Hanover Investors Inc
Henderson Global Investors Ltd
BSI Generali UK Ltd
Fortelus Capital Management LLP
Andrew Redmond
John Anthony Reynard
Paul Alan Latham
Midas Capital Partners Ltd
23.80%
15.93%
6.79%
6.76%
6.67%
6.49%
6.32%
5.31%
Page 34 of 74
Dividends on AIM
First Property Group Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Real Estate Services
20.1
111.15
GBP
FPO.L
22.4
12.3
34.7
Share price performance
(K)
(p)
120
7,000
300.0
30.0
6,000
100
250.0
25.0
5,000
80
200.0
20.0
4,000
60
150.0
15.0
3,000
40
2,000
100.0
10.0
20
1,000
50.0
5.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
0.0
0.0
First Property is a commercial property fund management
group with operations in the UK and Central Europe that listed
on AIM in 2000. As well as its core First Property Asset
Management (“FPAM”) division, the company also performs
fund raising exercises and share dealing on behalf of FPAM,
through its subsidiary FJB Capital Advisers. As at 30
September 2012, assets under management were valued at
£347m. FPAM currently manages six funds, with the
establishment of additional funds underway.
The group’s investment approach is to primarily seek return on
equity through income, with capital growth not a dominant
focus. In executing this, the company engages in a strategy of
active management from identifying properties that fall within its
exacting specifications, all the way through to management of
the properties and forming strong relationships with landlords
and tenants.
Growth continued in H1 2013, with group revenue up 42.9%
yoy, to £6.6m. Although PBT decreased by 13.1%, this was
due to both a weaker Euro in the period, and furthermore from
the H1 2012 accounts benefitting from a one-off foreign
exchange gain. Adjusted for currency fluctuations, PBT would
have increased 7.6% yoy. FPAM contributed 30.6% to group
revenues (£2.0m), with the remainder being generated through
the group’s properties – an office block located in Warsaw,
and shareholdings in four of its six managed funds.
Source: T homson Reuters
Key data (Y/E Mar) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
7.1
3.36
3.33
2.73
2.16
1.9
1.1
16.7
2012A
9.3
4.67
4.62
3.79
3.20
2.7
1.1
14.3
2013E
12.0
4.00
4.00
4.00
na
2.3
1.1
10.0
2014E
9.0
4.00
4.00
4.00
na
2.3
1.1
9.0
2011
5.3%
10.82
1.75
-14.21
10.32
46.8%
30.4%
10.1%
-5.6%
2012
5.4%
7.37
2.53
-11.95
7.42
49.5%
34.3%
31.4%
46.8%
2013
5.5%
8.75
2.09
-8.18
8.66
33.3%
na
28.5%
-15.8%
2014
5.5%
8.75
2.09
-7.36
8.66
44.4%
na
-25.0%
0.0%
Management is confident of continued earnings growth, as it
carries on expanding its property portfolio. Although the
economic outlook for the Eurozone is far from certain,
mechanisms such as Quantitative Easing and Outright
Monetary Transactions have assisted in stabilising the markets
in which the group operates. The interim dividend in H1 2013
was maintained at 0.33p, and with a continually reducing net
debt position and furthermore a strong historical dividend
cover (averaging 2.82x over 5 years), we expect the final
dividend to be at least sustained.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Benyamin Naeem Habib (CEO)
John Charles Kottler
Universities Superannuation Scheme Ltd
Alasdair James Dougall Locke (Chairman)
Whitehall Consolidated Ltd
15.02%
13.50%
8.59%
7.71%
4.36%
Page 35 of 74
Dividends on AIM
Fletcher King Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Real Estate Services
30.0
9.21
GBP
FLK.L
2.8
2.1
4.8
Share price performance
(K)
(p)
120
300.0
35.0
100
30.0
250.0
80
25.0
200.0
60
20.0
150.0
Based in the UK, Fletcher King is a property service provider
operating across the country. It deals in asset management,
fund and investment management, broking, valuation and
ratings, and acquisitions and disposals. The group moved from
the Official List to AIM in 2008.
In recent years, FLK has quite predictably struggled to
maintain the performance that it reached in the 2000s. In the
period 2002 – 2007, the group improved PAT and total
dividends every year. From the financial crisis onwards,
however, revenues have not once exceeded even half of the
2007 figure. The property market continues to struggle, with
lack of economic growth, and in tandem lack of debt finance,
weighing especially heavily on areas outside London and the
South East. Investors are now focusing on relatively ‘risk free’
properties, notably Central London. As a result, values
elsewhere are in decline whilst yields are rising. Volume in both
sales and lettings is likewise down, although the group has
witnessed an unexpected pick up in the valuation business.
15.0
40
100.0
10.0
20
20
50.0
5.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Apr) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
0.0
0.0
Notwithstanding these difficulties, FLK did well to maintain
performance for H1 2013. Turnover and PBT both remained
flat at £1.43m and £0.14m respectively. EPS increased
marginally to 1.15p. The Management business is performing
well, bringing in steady income streams, yet the significant
transaction fees are far below the 2006 – 2007 levels.
2011A
3.18
0.47
0.41
0.41
0.33
3.59
1.50
-2.1
2012A
3.11
0.44
0.40
0.40
0.28
3.04
1.50
-2.2
2013E
3.15
0.45
0.40
0.40
0.29
3.12
1.50
-1.8
2014E
na
na
na
na
na
na
na
na
2011
5.0%
8.36
2.39
15.46
10.27
12.9%
10.4%
12.4%
36.5%
2012
5.0%
9.87
2.03
16.19
10.97
12.9%
9.0%
-2.2%
-15.3%
2013
5.0%
9.62
2.08
13.03
10.73
12.7%
9.2%
1.3%
2.6%
2014
na
na
na
na
na
na
na
na
na
Although a small firm in terms of market capitalisation, history
demonstrates that FLK has proved consistently well operated
and resilient. Only twice in the past 24 years has the group
failed to turn a profit; in that same period it has impressively
paid out a dividend every year. The interim dividend for H1
2013 was 0.75p, equal to H1 2012. With a reduced net debt
position and an interim dividend cover up on the previous year,
we are confident that the final dividend will be at the least
maintained. Because of its wealth of experience and reliable
past performance, we feel that FLK is in a position to
capitalise on the eventual market upturn.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
District & Urban Group Plc
David Fletcher (Chairman)
Lowerland Ltd
Duncan Investment Pension Fund
Simon Miles De'Zoete
20.50%
14.60%
9.04%
4.34%
3.97%
Page 36 of 74
Dividends on AIM
Goldplat Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Gold Mining
11.25
168.37
GBP
GDP.L
18.9
-2.0
17.0
Goldplat (“GDP”) is an African gold producer and explorer
with five operations spanning four countries: a producing mine
in Kenya; two profitably operating gold recovery businesses in
South Africa and Ghana; and two exploration and
development programmes, in Burkina Faso and Ghana. Having
listed on AIM in 2006, the recovery businesses have ensured a
steady cash flow that has assisted in developing other assets.
The Kilimapesa mine in Kenya commenced production in
January 2012, and by June 2012, GDP was in a position to
pay out a maiden dividend.
Share price performance
(K)
(p)
120
4,500
300.0
18.0
4,000
100
3,500
16.0
250.0
14.0
80
3,000
200.0
12.0
2,500
60
2,000
10.0
150.0
8.0
40
1,500
100.0
6.0
1,000
20
500
4.0
50.0
2.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Jun) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
19.6
3.74
3.45
3.43
2.96
1.85
0.00
-3.1
2012A
26.2
5.78
5.27
5.24
4.47
2.53
0.60
-4.6
2013E
33.6
5.47
4.42
4.65
3.90
2.05
0.60
-5.2
2014E
38.3
7.15
5.70
6.21
3.36
1.60
0.60
-9.0
2011
0.0%
6.08
na
na
4.54
17.6%
15.1%
84.1%
92.7%
2012
5.3%
4.45
4.22
4.52
2.94
20.1%
17.0%
33.7%
36.8%
2013
5.3%
5.49
3.42
5.14
3.11
13.1%
11.6%
28.2%
-19.0%
2014
5.3%
7.03
2.67
8.89
2.38
14.9%
8.8%
13.9%
-22.0%
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
0.0
0.0
It has recently come to light that the Kenyan government is
mandated to possess equity stakes of at least 35% in the
country’s mining licences. This has caused a delay in the
expansion plans at the Kilimapesa mine, as GDP clarifies its
position with the government. Compounded by separate
operational issues, this resulted in the mine posting a loss of
£415k in H1 2013. Further to this, exploration results in
Burkina Faso and Ghana have proved disappointing.
In the 6m to December 2012, GDP posted revenues of
£15.5m, up 38.4% yoy. However, PBT decreased 34.2%, to
£1.6m. This was due to a c.£0.7m negative swing in finance
costs (owing to FX movements) and increased administrative
costs. Following the decision to scale down the production rate
by 50% to 5,000 oz p.a., an impairment charge was made
against Kilimapesa for £2.38m. Consequently group net losses
were £1.63m for the period.
Fortunately, GDP’s core recovery businesses have improved
yoy, and it is the Board’s plan to primarily develop this model,
only targeting new recovery projects that would yield 30,000+
oz p.a. We are of the opinion that this refocus on the higher
volume and margin part of the business, in which management
has expertise, is of great benefit to shareholders, and will be
reflected in improved earnings and dividends in the near term.
The Board has also just announced a share buyback
programme. This should further help to improve EPS and
ultimately DPS.
Key Shareholders
Perseus Settlement
Kilo Trust
Slater Investments Ltd
Hargreave Hale Ltd
Brian Michael Moritz (Chairman)
18.71%
7.11%
2.97%
1.39%
1.07%
Page 37 of 74
Dividends on AIM
Greenwich Loan Income Fund Ltd
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Equity Investment Instruments
54.5
131.07
GBP
GLIF.L
71.4
120.4
191.8
Share price performance
(K)
(p)
120
2,000
300.0
60.0
1,800
100
1,600
250.0
50.0
1,400
80
200.0
40.0
1,200
60
1,000
150.0
30.0
800
40
600
100.0
20.0
400
20
50.0
10.0
200
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
0.0
0.0
Price
Price
Source: T homson Reuters
GLIF is a closed-end investment company that seeks to
provide a predictable and sustainable high dividend yield, while
maintaining its capital value. The company invests in, originates,
and provides, corporate loans to US and UK based SMEs.
Having listed on AIM in 2005, total investments as at 30 June
2012 were valued at £190.1m, with a cash balance of £17.4m.
The majority of GLIF’s portfolio is held through a
collateralised loan obligation vehicle, whose management is
based in Greenwich, Connecticut. The vehicle offers cheap
funding, as well as limited covenants through to 2019. GLIF
acquired BMS, a UK Special Debt Fund, in November 2012
to diversify both geographically and in its asset holdings. In
January 2013, it raised a further £6m. This is expected to fund
the establishment of new vehicles in the US.
The company delivered a sound performance during H1 2012.
While NAV remained stable at 47.9p (48.3p as at 31
December 2011), revenues increased 23.3% to £7.4m. At the
same time both operating expenses and financing costs
decreased 29.6% and 7.7% respectively, to a combined total
of £4.4m. Owing to movements in FX and in the unrealised
value of its assets and liabilities, the group posted a net loss for
the period of £2.2m (equating to an EPS loss of 11.29p).
Nevertheless, we feel that as GLIF holds its financial assets
predominantly for receipt of yields, and therefore often to
maturity, and furthermore will not be looking to trade its debt,
this underlying figure is thus meaningless. The net profit of
c.£3.0m from existing operations should be focused upon by
investors.
Key data (Y/E Dec) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
11.4
4.70
na
3.22
3.22
2.4
4.0
111.6
2013E
16.1
10.50
na
8.02
8.02
6.6
4.7
na
2014E
na
na
na
na
na
na
na
na
2012
8.8%
8.38
1.35
na
21.56
na
43.6%
27.8%
175.4%
2013
8.6%
8.26
1.40
na
18.27
na
49.8%
10.3%
1.5%
2014
na
na
na
na
na
na
na
na
na
GLIF has maintained an impressive yield almost continually
since listing. In FY 2012, it paid out 4.8p over four quarterly
instalments. With a sustainable model that does not rely upon
capital appreciation, we are confident that both the yield and
GLIF’s NAV will be preserved going forward. We do
however note the primary threat to this existing model: that of
governments ceasing support initiatives, such as QE, that have
been propping up weak SMEs, or ‘zombie firms’.
`
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
2012E
14.6
8.90
na
6.37
6.37
6.5
4.8
na
2011
7.3%
23.09
0.59
-21.29
40.82
na
28.2%
17.0%
15.1%
Sources: Thomson Reuters, Edison Investment Research, Allenby Capital
Share price as of 01/03/2013. Earnings are on an underlying basis.
Key Shareholders
Artemis Investment Management LLP
AXA Investment Managers (UK) Ltd
Henderson Global Investors Ltd
JO Hambro Investment Management Ltd
Philip J Milton & Company Plc
Reliance Mutual Insurance Society Ltd
13.51%
11.68%
10.98%
9.41%
6.72%
3.33%
Page 38 of 74
Dividends on AIM
Hasgrove Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Media Agencies
57.5
23.46
GBP
HGV.L
13.5
0.10
13.6
Share price performance
(K)
(p)
120
450
300.0
80.0
400
100
350
70.0
250.0
80
300
200.0
50.0
250
60
200
150.0
40.0
40
150
30.0
100.0
100
20
50
50.0
10.0
60.0
20.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Dec) - (£m)
2011A
22.8
1.80
0.93
-3.00
-9.76
-40.9
1.00
1.4
2012E
24.1
2.40
1.50
1.40
0.90
3.90
2.50
0.1
2013E
25.4
2.90
2.10
2.00
1.40
5.80
3.50
-0.5
2014E
26.9
3.40
2.60
2.70
1.90
7.90
3.90
-1.8
2011
Dividend Yield
1.7%
P/E Ratio
-1.41
Dividend Cover (EPS/DPS) -40.90
Net Cash/Dividend
-5.75
EV/EBITDA
7.55
EBIT Margin
4.1%
Net Profit Margin
-42.9%
Revenue Growth
-35.6%
EPS Growth
-781.7%
2012
4.3%
14.74
1.56
-0.17
5.66
6.2%
3.7%
5.9%
-109.5%
2013
6.1%
9.91
1.66
0.61
4.69
8.3%
5.5%
5.4%
48.7%
2014
6.8%
7.28
2.03
1.97
4.00
9.7%
7.1%
5.9%
36.2%
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
0.0
0.0
Hasgrove is an international digital and communication services
group operating through 4 subsidiaries: Amaze, The Chase,
Interact, and Landmarks Amaze. Together, they provide
solutions for digital marketing and strategy, graphic and web
design, communications and intranet, as well as offering brand
consulting and printing services. In 2011, the group disposed
of its public affairs and strategic communications division,
Interel, for €9.5m, so as to focus predominantly on digital
communications.
Following on from a challenging FY 2011 in which major
restructuring within the group occurred, H1 2012 results
proved the wisdom of such an overhaul, with group revenues
up 15.8% yoy to £12.2m. PBT from continuing operations
jumped 316.8% to £0.65m, and no exceptional costs resulted
in a headline net profit of £0.47m, in contrast to a loss of
£5.02m in H1 2011. Management also confirmed that trading
in FY 2012 will be in line with market expectations. Amaze,
the integrated marketing and technology division that accounts
for over three quarters of group revenue, encouragingly
secured noteworthy international accounts during the year. This
has assisted in enhancing its global presence and will
consequently drive future growth for Hasgrove.
The significance of the Board doubling the dividend pay out in
FY 2011, despite it being the group’s worst performing year
since becoming public, should not be understated. Adjusted
EPS had been in decline since 2008 and, excluding FY 2011,
dividend cover had not dropped below 12x. In FY 2011
however, despite the incurrence of substantial exceptional
costs, dividend cover dropped to 1.7 (using adjusted EPS).
Management’s confidence in the newly structured business
model, now focused on the digital communications aspects,
leads us to believe that there is substantial upside to the
dividend in the near term as profit margins continue to improve.
At the current share price, maintaining the adjusted FY 2011
dividend cover for 2012 would result in a reasonable yield of
c.4.0%, increasing to an appetizing 6.1% in FY 2013.
Margins/Ratios
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Octopus Investment Ltd
Godfrey Lionel Fozard Taylor (Chairman)
Robert Bernard Casey
Stephen Rodgers
Vikki Suzanne Ashton
Unicorn Asset Management Ltd
Interel Holdings SA
Jean Baptiste Marie Leopold Schuybroek (NED)
13.41%
11.21%
6.62%
6.39%
5.68%
5.33%
4.96%
4.39%
Page 39 of 74
Dividends on AIM
Highland Gold Mining Ltd
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Gold Mining
102.5
325.22
USD
HGM.L
333.4
-34.4
299.0
Share price performance
(K)
(p)
120
45,000
300.0
250.0
40,000
100
35,000
250.0
200.0
80
30,000
200.0
150.0
25,000
60
20,000
150.0
100.0
100.0
40
15,000
10,000
20
5,000
50.0
50.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Dec) - ($m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
300.2
161.3
134.5
132.1
103.8
21.0
5.28
-79.1
2012E
351.4
162.8
128.4
129.6
108.1
21.3
5.17
-52.6
2013E
422.3
203.5
155.0
155.1
125.9
24.7
5.00
-49.1
2014E
467.7
220.7
174.1
174.4
132.3
26.9
5.00
-181.3
2011
5.2%
4.89
3.97
3.01
2.84
44.8%
34.6%
23.2%
-15.0%
2012
5.0%
4.81
4.12
2.04
2.81
36.5%
30.8%
17.1%
1.5%
2013
4.9%
4.16
4.93
1.97
2.25
36.7%
29.8%
20.2%
15.8%
2014
4.9%
3.81
5.38
7.29
2.07
37.2%
28.3%
10.7%
9.0%
0.0
0.0
Highland Gold Mining (“HGM”) was established in 2002, and
has since developed a valuable portfolio of gold mining
projects in Russia and Central Asia. The company currently
has two operating mines. In FY 2011, it produced a combined
184,102 gold and gold equivalent ounces. With numerous
development and exploration projects being actively
progressed, HGM looks set to continue ramping up production
output in the coming years.
2012 proved to be a mixed year for the company. Gold
production was up 18% yoy to 216,885 oz, putting it on track
to produce 225,000 – 240,000 oz in 2013. But while revenue
in H1 rose 2.1% to $161.5m, net profits for the period stood
at $45.0m, down 35.9% yoy. This was predominantly due to
the significant increase in cash costs per oz of gold, which
surged 51.4% to US$804 per oz. These figures largely
reflected higher waste stripping volumes and a decrease in the
average gold grade delivered for processing. The divestiture by
Barrick Gold Corporation of its entire holding (20.4%) at the
beginning of the year has also clearly weighed heavily on the
share price.
Nevertheless, the company’s balance sheet remains strong. A
recent trading statement reported a net cash position of
$52.6m as at 31 December 2012. There was also a 20.4%
increase yoy in total JORC compliant resources to 13.0m oz,
as a result of exploration and acquisitions. The company was
thus able to pay an interim special dividend of 4.8p, a
marginally lower figure than the total dividends paid in 2011.
HGM intends to continue paying special dividends as regularly
as possible, subject to cash flows, capital requirements and the
gold price. The upsurge in the latter over the past year, caused
by investors seeking its safe haven status, bodes well for
HGM’s near term future. Coupled with its debt free position,
we expect the company to have no difficultly in paying out
special dividends for the foreseeable future.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Millhouse LLC
Prosperity Capital Management (RF) Ltd
Eugene Shvidler (Chairman)
Ivan Eugene Koulakov
JP Morgan Asset Management UK Ltd
Peter Elam Hakansson
Van Eck Associates Corporation
32.00%
9.70%
8.63%
5.40%
4.98%
3.41%
3.31%
Page 40 of 74
Dividends on AIM
Holders Technology Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Electrical Components
60.0
3.94
GBP
HDT.L
2.36
-0.72
1.65
Share price performance
(K)
(p)
120
45
300.0
140.0
40
100
35
120.0
250.0
100.0
200.0
80
30
25
60
20
80.0
150.0
40
15
100.0
40.0
60.0
10
20
5
50.0
20.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
0.0
0.0
Holders Technology is an international distributor of materials,
tools and services to the Printed Circuit Board (“PCB”)
industry. The company is also gaining market share as a lightemitting diode (“LED”) solutions provider to the UK and
European lighting and industrial markets. Holders has been in
business since 1972, moving to AIM from the Official List of
the UK Listing Authority in October 2001.
In the past 18 months, the company’s primary business of
supplying the PCB industry has suffered, particularly in
mainland Europe where economic uncertainty continues to
prevail. As a result, its PCB activities only managed to break
even in H1 2012 (net profit of £3k as opposed to £564k in H1
2011). The company is also conducting a review of its PCB
operations in mainland China, and expects the outcome to
result in a non cash impairment charge in respect of its Chinese
PCB asset values. Nevertheless, management feels that due to
its wealth of experience, it is in a position to weather the
cyclical downturn without losing ground to competitors in the
PCB market.
In contrast, the company’s LED business continues to
improve. Revenue in the first half of the year surged by 45.2%
to £2.05m, with gross profits up 138.5%. Net losses
decreased to £72k (£282k in H1 2011). The company is
seeking to further widen its customer base and the range of
solutions it is able to offer in both Europe and the UK.
Source: T homson Reuters
Key data (Y/E Nov) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
19.6
0.52
0.38
0.36
0.26
6.70
5.35
-0.04
2012E
16.5
0.10
0.00
na
-0.02
-0.51
2.70
-0.10
2013E
18.8
0.30
0.20
na
0.10
3.20
2.70
-0.20
2014E
na
na
na
na
na
na
na
na
2011
8.9%
8.96
1.25
0.19
3.16
1.9%
1.3%
20.4%
-47.9%
2012
4.5%
-117.65
-0.19
0.94
16.45
0.0%
-0.1%
-16.0%
-107.6%
2013
4.5%
18.75
1.19
1.88
5.48
1.1%
0.5%
13.9%
-727.5%
2014
na
na
na
na
na
na
na
na
na
Due to the loss posted in H1 2012, the company cut its interim
dividend by 52.4% to 1p per share. It anticipates reporting a
break even result or a small loss for the year. It has, however,
managed to consistently pay a dividend of 5.35p for the past 5
years, and with cash of £0.74m as at 31 May 2012, the
company may yet opt to maintain its track record. However,
until the company returns to healthier levels of profitability we
see the dividend as vulnerable.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Rudolph Walter Weinreich (Chairman)
Andre Marcou
Armstrong Investments Ltd
Rath Dhu Ltd
Stockinvest Ltd
46.99%
11.35%
6.98%
6.92%
4.35%
Page 41 of 74
Dividends on AIM
Hydrogen Group Plc
Summary Data
Sector
Business Training & Employment Agencies
Share price (p)
88.5
Shares in issue (m)
23.55
Reporting currency
GBP
Ticker
HYDG.L
Market cap (£m)
20.8
Last reported net debt/(cash) (£m)
3.3
Enterprise value (£m)
24.1
Hydrogen has achieved success in identifying and developing
new industry verticals, prime examples being Oil & Gas and
Life Sciences. These two recently established verticals
accounted for 37% of group net fee income (“NFI”) in H1
2012, albeit flattered somewhat by a 13% drop in NFI from
Hydrogen’s more traditional markets in Professional Support
Services. Group management has steered the operations safely
and profitably through the challenging markets of the past two
years while maintaining a prudent cost base.
Share price performance
Following a steady first six months of 2012 which saw modest
NFI growth of 3.5% and a maintained adjusted PBT of £2m,
we had anticipated an improved performance in H2 as the
investment in new sectors and geographies began to pay off.
We were therefore disappointed to learn that trading had
actually been adversely affected by slower NFI progress in
these areas than had been anticipated and which had been
exacerbated by the weak economic environment. As a result,
management stated that NFI would be limited to low single
digit growth for FY 2012 and profit was expected to be
“significantly below current market expectations”.
(K)
(p)
120
1,000
300.0
140.0
900
100
800
120.0
250.0
700
80
100.0
200.0
600
60
500
80.0
150.0
400
40
300
100.0
40.0
60.0
200
20
50.0
20.0
100
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Dec) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
156.2
4.41
3.87
3.71
2.40
10.2
4.3
1.4
2012E
166.0
3.95
3.40
3.20
2.24
9.5
4.4
2.8
2013E
175.0
4.20
3.65
3.50
2.45
10.4
4.5
3.5
2014E
na
na
na
na
na
na
na
na
2011
4.9%
8.64
2.38
-1.33
5.47
2.5%
1.5%
26.6%
35.6%
2012
5.0%
9.29
2.17
-2.69
6.11
2.0%
1.3%
6.3%
-6.9%
2013
5.1%
8.49
2.32
-3.26
5.75
2.1%
1.4%
5.4%
9.4%
2014
na
na
na
na
na
na
na
na
na
0.0
0.0
Most recently management has confirmed that it expects to
report a 5% increase in group NFI to £31.4m (FY 2011:
£29.8m) and that in Q4 its business had returned to more
typical levels of activity. The interim dividend was increased by
7% to 1.5p (1.4p) and assuming that trading levels remain
robust when the prelims are announced in March, we would
anticipate the final dividend at least being held at last year’s
level of 2.9p giving a total dividend for the year of 4.4p.
In our opinion Hydrogen remains one of the more attractive
smaller cap staffing companies. Dividends have been consistent
over the past five years, even in periods of troubled trading
(notably FY 2009, when basic EPS plunged to -22.25 and the
total dividend was nevertheless maintained at 4.1p). In light of
this, we envisage only a limited threat to the dividend in the mid
term, provided that the recovery in NFI is sustained.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Ian Temple (Chairman)
Chris Cole
Timothy Smeaton (CEO)
AXA Investment Management (UK) Ltd
Charles Marshall
Majedie Asset Management Ltd
Daniel Church
Hydrogen Group Employee Benefit Trust
17.60%
12.46%
11.99%
9.67%
7.88%
6.48%
5.68%
5.03%
Page 42 of 74
Dividends on AIM
Interior Services Group Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Business Support Services
137.5
33.44
GBP
ISG.L
46.0
-25.4
20.6
Share price performance
(K)
(p)
120
900
300.0
250.0
800
100
700
250.0
200.0
80
600
200.0
150.0
500
60
400
150.0
100.0
100.0
40
300
200
20
100
50.0
50.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
0.0
0.0
ISG is an international construction group catering to a diverse
range of clients. In addition to construction and fit out services
provided in the UK, the company offers fit out services in
Europe, the Middle East and Asia, and special services, such
as project management and facilities management, in the latter
two regions. ISG listed on AIM in June 1998, and in the 14 full
financial years to date, has increased its revenues 542.3%, to
£1.28bn. It has posted a loss only once in that period, and that
was due to a write down of goodwill and exceptional costs.
Due to the economic downturn and continued uncertainty in the
Eurozone, the company has primarily focused on retaining
repeat clients in its UK operations. Although revenue was
maintained in the region’s fit out business, operating profit
decreased 19.5% to £6.5m in the year to 30 June 2012, as a
result of tighter margins. Margins, and consequently profits,
were likewise down in both the food retail and construction
businesses. However, overseas markets fared better in the
period, especially Continental Europe and Asia. Revenues
were up in those fit out divisions 39% and 22%, respectively.
The company has thus determined to seek organic growth and
bolt-on acquisitions principally in the overseas markets.
For the first time in the company’s history, total dividends in
FY 2012 were down on the previous period as a result of the
fall in net profits. The company has, however, indicated that
FY 2013 will see modest growth, in line with expectations.
Source: T homson Reuters
2011A
1,173.8
14.65
10.55
10.20
7.03
24.9
15.1
-36.1
2012A
1,281.5
8.65
3.16
2.88
0.76
7.4
9.0
-25.4
2013E
1,337.5
12.00
9.00
8.50
6.72
20.1
9.2
-23.2
2014E
1,367.5
13.00
11.00
10.30
8.01
24.0
9.5
-24.7
With an estimated net cash position of £23m as at December
2012, which currently equates to c.50% of its market
capitalisation, the company is easily able to afford to increase
its dividend. However, the Board intends to resume its policy
of preserving a dividend cover of at least 2.0. An increase in
dividends will therefore only likely come to pass once
operating margins have been improved. However, given its
cash reserves, low valuation and stellar track record we think
ISG looks extremely attractive.
2011
11.0%
5.53
1.65
7.17
1.40
0.9%
0.6%
20.7%
16.9%
2012
6.5%
18.48
0.83
8.44
2.38
0.2%
0.1%
9.2%
-70.1%
2013
6.7%
6.84
2.18
7.52
1.72
0.7%
0.5%
4.4%
170.2%
2014
6.9%
5.74
2.51
7.73
1.58
0.8%
0.6%
2.2%
19.2%
Key Shareholders
Cathexis Capital LLC
Octopus Investments Ltd
ISG Employee Share Trust
River and Mercantile Asset Management LLP
Threadneedle Asset Management Ltd
Investec Wealth & Investment Ltd
Hathaway Investment Management Ltd
Brown, Shipley & Company Ltd
Key data (Y/E Jun) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
9.78%
9.10%
5.72%
5.19%
4.79%
4.04%
3.46%
3.16%
Page 43 of 74
Dividends on AIM
InterQuest Group Plc
Summary Data
Sector
Business Training & Employment Agencies
Share price (p)
51.5
Shares in issue (m)
33.16
Reporting currency
GBP
Ticker
ITQ.L
Market cap (£m)
17.1
Last reported net debt/(cash) (£m)
6.4
Enterprise value (£m)
23.5
Share price performance
(K)
(p)
120
1,800
300.0
80.0
1,600
100
1,400
70.0
250.0
80
1,200
200.0
50.0
1,000
60
800
150.0
40.0
40
600
30.0
100.0
400
20
200
50.0
10.0
60.0
20.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Dec) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
120.9
4.03
2.96
3.49
-1.07
7.83
2.50
5.51
2012E
114.5
2.15
1.82
1.60
1.00
3.63
2.50
5.50
2013E
128.0
3.27
3.19
2.70
2.20
6.05
2.75
4.98
2014E
na
na
na
na
na
na
na
na
2011
4.9%
6.58
3.13
-6.65
5.83
2.4%
-0.9%
7.8%
-6.1%
2012
4.9%
14.19
1.45
-6.63
10.92
1.6%
0.9%
-5.3%
-53.6%
2013
5.3%
8.51
2.20
-5.46
7.18
2.5%
1.7%
11.8%
66.7%
2014
na
na
na
na
na
na
na
na
na
0.0
0.0
Apart from the obvious recession induced downturn in 2009,
InterQuest had built up a solid earnings record since its
foundation in 2001. Strong organic growth has been supported
by targeted acquisitions resulting in a multi-branded IT
recruitment business focused on niche markets and skills for
both the pubic and private sectors. In 2011 the group
embarked upon a new chapter in its development beginning
with the appointment in April of Mark Braund as CEO.
Throughout 2011 the group increased investment in the
business – in the UK, consultant headcount was increased
from 144 to 169 and in H1 2012 to 194. Contract placement
is now increasingly focused on delivering candidates with niche
skills that can attract higher margins, while there has also been
a concerted effort to boost the level of permanent placements
undertaken.
H1 results showed a 20% rise in perm fees representing 36%
of net fee income (“NFI”) against 30% a year earlier.
Unfortunately, the group’s exposure to the depressed Financial
Services sector adversely impacted H1 results with NFI in this
business falling 17%. Together with a higher cost base, this
resulted in group adjusted PBT falling by 44% to £0.9m and a
reduction in expectations for the years ending December 2012
and 2013.
A recent trading update confirmed that the group was still
feeling the impact of a lower level of demand for permanent
hires, hence we are now forecasting an adjusted PBT of
around £1.6m (FY 2011: £3.5m) rising to £2.7m in 2013,
although with limited visibility this latter figure is only a
projection at this early stage and based upon an improvement
in demand for perm. Net debt should be similar to, or slightly
below, the level of last year which gives us some confidence
that the dividend will be maintained at last year’s level.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Gary Ashworth (Chairman)
ISIS Equity Partners LLP
James Mellon
AXA Investment Managers UK Ltd
Investec Wealth & Investment Ltd
Martin Barrow
Newton Investment Management Ltd
Octopus Investments Ltd
38.64%
6.82%
5.51%
5.15%
4.82%
3.28%
3.03%
2.69%
Page 44 of 74
Dividends on AIM
James Cropper Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
James Cropper is a specialist paper manufacturing group.
Founded in 1845, the company listed on AIM in 2007 and
now operates in three separate divisions: Speciality Papers
provides an array of high quality, custom paper; Technical
Fibre Products (“TFP”) manufactures nonwoven mats and
veils for specialist purposes; and the Converting division
produces laminated and coated paper and film, and a selection
of display boards.
Paper
208.0
8.86
GBP
CRPR.L
18.4
8.5
26.9
Share price performance
(K)
(p)
120
250
300.0
100
200
250.0
80
200.0
150
60
150.0
100
40
100.0
50
20
50.0
50.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Mar) - (£m)
2011A
83.3
15.90
12.90
12.80
8.50
-19.7
7.9
1.7
2012A
78.2
4.00
1.30
1.00
0.80
9.9
7.9
6.5
2013E
79.9
7.00
2.46
1.96
1.57
18.3
8.0
8.8
2014E
84.6
8.90
3.64
3.24
2.43
28.4
9.0
7.7
2011
Dividend Yield
3.8%
P/E Ratio
-10.56
Dividend Cover (EPS/DPS)
-2.49
Net Cash/Dividend
-2.44
EV/EBITDA
1.69
EBIT Margin
15.5%
Net Profit Margin
10.2%
Revenue Growth
17.8%
EPS Growth
-192.5%
2012
3.8%
21.01
1.25
-9.30
6.72
1.7%
1.0%
-6.1%
-150.3%
2013
3.8%
11.37
2.29
-12.42
3.84
3.1%
2.0%
2.2%
84.8%
2014
4.3%
7.32
3.16
-9.66
3.02
4.3%
2.9%
5.9%
55.2%
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
0.0
0.0
H1 2013 was largely in line with market expectations. Revenue
was unchanged at £39.0m, although margins slightly improved,
with trading profit after interest up 9.1% yoy to £1.2m. Total
revenues for TFP and Converting increased 12% and 21%
respectively, but the core Speciality Papers business saw its
sales decrease 7%. This was again due to a decline in value of
export sales. We also note the increase in the combined deficit
of the group’s two defined benefit pension schemes, by
c.£3.2m to c.£9.0m, as a result of the fall in bond yields in
2012.
The past year has witnessed a streamlining of operations by the
group. The TFP division consolidated geographically, with the
Cincinnati business closed and relocated to a new facility in
April. UK staff numbers were also cut by 8% in the period. On
a similar note, the company is seeking to secure a grant of up
to £3.1m from the Regional Growth Fund (“RGF”), which
would constitute over 44% of the total capex of £7m that the
steam raising plant in Kendal is expected to cost. The plant, if
constructed, would be in operation by late 2014, and would
save the group approximately £1m p.a. in energy costs.
Despite the decline in adjusted EPS by 23.3%, the company
nevertheless maintained an interim dividend of 2.2p in H1
2013. Owing to the improved output in the company’s newer
divisions and coupled with the Board’s confidence in future
performance the final dividend for 2013 may well be sustained.
However, given the low margins and geared balance sheet we
see the dividend stream as vulnerable.
Margins/Ratios
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Mark Alexander James Cropper (Chairman)
J A Cropper 1974 Settlement
Sanlam Private Investments (UK) Ltd
Sir James Anthony Cropper (NED)
CGA Trustee and Executor Company Ltd
13.62%
12.00%
6.58%
6.42%
3.18%
Page 45 of 74
Dividends on AIM
Japan Residential Investment Company Ltd
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Equity Investment Instruments
54.8
187.58
GBP
JRIC.L
102.7
126.4
229.1
JRIC is a closed ended investment company that manages a
diversified portfolio of residential properties predominantly in
Japan’s three largest cities – Tokyo, Osaka and Nagoya. As at
30 November 2012, the portfolio consisted of 52 properties
(equating to over 2,200 rentable residential apartments) valued
at £249m. JRIC aims to realise value for shareholders primarily
via a steady income stream rather than through capital gains.
The company listed on AIM in 2006, raising £100m,
unfortunately on the eve of the credit crunch. As such it only
managed to book its first yearly profit in FY 2011.
Share price performance
(K)
(p)
120
2,000
300.0
70.0
1,800
100
1,600
60.0
250.0
1,400
80
50.0
200.0
1,200
60
1,000
40.0
150.0
800
40
600
100.0
20.0
30.0
400
20
50.0
10.0
200
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Nov) - (£m)
2011A
19.3
11.10
11.10
7.79
7.56
4.0
3.3
124.7
2012E
19.8
12.50
12.50
9.00
8.50
4.3
3.6
na
2013E
20.2
13.50
13.50
10.00
9.40
4.5
3.8
na
2014E
na
na
na
na
na
na
na
na
2011
Dividend Yield
6.0%
P/E Ratio
13.69
Dividend Cover (EPS/DPS)
1.21
Net Cash/Dividend
-20.14
EV/EBITDA
20.64
EBIT Margin
57.7%
Net Profit Margin
39.3%
Revenue Growth
6.4%
EPS Growth
-147.1%
2012
6.6%
12.73
1.19
na
18.33
63.2%
43.0%
2.8%
7.5%
2013
6.9%
12.06
1.19
na
16.97
66.8%
46.5%
2.1%
5.6%
2014
na
na
na
na
na
na
na
na
na
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
0.0
0.0
Performance has however been maintained in H1 2012. Gross
rental income increased 4.8% yoy to £9.9m, and PBT
improved marginally, to £4.4m. Importantly, net assets were
up 12.3% to £135.6m, with property value gains totalling £6m
in the year to 30 November 2012. Occupancy rate as at 31
January was at 95.6%, up 1.0% on the previous year.
Furthermore, the balance sheet has been improved by
deleveraging activities, and the refinancing of debt with
extended maturities.
Encouragingly for JRIC it appears as though there is, at this
point in time, relatively limited downside to Japanese property
prices. The credit crunch of 2008, followed by the tsunami of
2011 and the on going European sovereign debt crisis, have
made sure that property values are at their lowest in two
decades. Now, with property yields on a downward trend,
management is confident that capital value, eroded in 2008 –
2010, will continue to be recovered in the coming years.
An interim dividend of 1.8p was paid out in H1 2012, up 20%
yoy. Maintaining the dividend cover adopted in FY 2011 and
applying our forecast EPS, total FY 2012 dividend would yield
an attractive 6.6%. The potential for capital gains is of equal
importance, with two unsolicited approaches for the group’s
portfolio having already been turned down. However, we note
the threat to the company's balance sheet of the recent
devaluation of the yen against the pound, and have tempered
our outlook accordingly.
Margins/Ratios
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Ruffer LLP
Aviva Investors Global Services Ltd
Miton Capital Partners Ltd
Baillie Gifford & Co.
Apollo Multi Asset management LLP
CG Asset Management Ltd
Rathbone Investment Management Ltd
27.97%
27.35%
16.15%
5.84%
3.35%
3.02%
2.76%
Page 46 of 74
Dividends on AIM
Jarvis Securities Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Speciality Finance
250.0
10.60
GBP
JIM.L
26.5
-3.6
22.9
Jarvis Securities is a Kent based financial services business
which provides execution only services to retail customers and
third party broking and administration services to commercial
clients. Recent full year results showed that the retail business
grew market share, increased active client numbers by more
than 20% yet suffered a decline in revenue due to lower daily
average trading volumes. Revenue from both retail and
commercial clients declined 9% as a whole, though cash under
administration rose strongly throughout the second half of the
year, closing the period at a little under £90m.
Share price performance
(K)
(p)
300.0
140
250.0
120
200.0
100
80
150.0
60
100.0
40
50.0
20
0
Mar-11
An impressive 38% increase in interest earned on cash held
either directly or on behalf of clients enabled Jarvis to raise
group revenue by almost 8% for the year. With the cost base
largely unchanged and an operating profit margin of a little over
40%, Jarvis reported a healthy 22% rise in profit before tax to
£2.35m. Andrew Grant, Jarvis’ chairman and chief executive,
stated that he is confident that the company can continue to
deliver similar growth rates in forthcoming years. In addition to
rising interest rates, the company is clearly well placed to
benefit from any revival in trading volumes and volatility that
may arise out of the recent rally in the UK equity market.
0.0
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Volume
Sep-12
Dec-12
Price
Source: T homson Reuters
Key data (Y/E Dec) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
5.68
2.13
1.94
1.94
1.46
13.8
10.0
-2.1
2012A
6.12
2.53
2.37
2.35
1.76
16.6
11.3
-3.6
2013E
6.30
2.80
2.60
2.60
1.95
18.1
12.5
-4.0
2014E
6.50
3.10
2.90
2.90
2.18
19.8
13.9
-4.5
2011
4.0%
18.06
1.38
1.99
10.74
34.2%
25.8%
4.9%
0.5%
2012
4.5%
15.02
1.48
3.02
9.07
38.8%
28.8%
7.7%
20.2%
2013
5.0%
13.81
1.45
3.02
8.18
41.3%
31.0%
3.0%
8.8%
2014
5.6%
12.63
1.42
3.05
7.39
44.6%
33.5%
3.2%
9.4%
Jarvis has a stated policy of paying out two thirds of its profit
after tax as dividends. Somewhat unconventionally, this is paid
to shareholders on a quarterly basis. As little or no capital
expenditure is required to maintain its operations, it is able to
adopt this policy and still enhance its cash balances. Its annual
dividend, which rose 12.5% last year, can therefore be
expected to rise again in the current year. Despite the share
price rising sharply on the back of its results, the shares still
yield 5.0% based on this year’s forecasts.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Andrew Grant (Chairman / CEO)
Unicorn Asset Management Ltd
Hargreave Hale Ltd
Chelverton Asset Management Ltd
60.45%
4.27%
3.19%
2.44%
Page 47 of 74
Dividends on AIM
Juridica Investments Ltd
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Equity Investment Instruments
91.1
104.70
USD
JIL.L
95.4
-15.6
79.8
Share price performance
(K)
(p)
120
7,000
300.0
120.0
6,000
100
250.0
100.0
5,000
80
200.0
80.0
4,000
60
150.0
60.0
3,000
40
2,000
100.0
40.0
20
1,000
50.0
20.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Dec) - ($m)
2011A
16.4
8.94
8.94
7.19
32.92
19.6
7.0
-43.0
2012E
49.1
na
na
49.07
na
31.7
21.1
na
2013E
39.3
na
na
29.44
na
19.1
13.2
na
2014E
39.3
na
na
29.44
na
19.1
13.2
na
2011
Dividend Yield
7.7%
P/E Ratio
4.64
Dividend Cover (EPS/DPS)
2.80
Net Cash/Dividend
3.84
EV/EBITDA
13.65
EBIT Margin
54.6%
Net Profit Margin
201.1%
Revenue Growth
14.6%
EPS Growth
-380.4%
2012
23.2%
2.88
1.50
na
na
na
na
199.8%
61.3%
2013
14.5%
4.76
1.45
na
na
na
na
-20.0%
-39.6%
2014
14.5%
4.76
1.45
na
na
na
na
0.0%
0.0%
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
0.0
0.0
Juridica provides strategic capital to the US and UK legal
markets. Specifically, it invests in a diversified portfolio of
corporate claims in litigation and arbitration. The group has a
stringent vetting process in place, only taking on claims that
possess significant potential economic value, a large chance of
gaining a successful outcome in court, and that have already
been undertaken by world class lawyers. In essence, by
treating cases as corporate assets Juridica monetises these
claims, thus making them transferable and ultimately allowing
reduction in client risk. Juridica listed on AIM in 2007 as a
close ended investment company and as at 30 June 2012 had
total assets of over $225m.
FY 2012 has witnessed the maturing of the group’s portfolio,
and with it significant returns for shareholders. Although
Juridica posted a net loss of $1.6m in H1, this included
provisions for a decrease in fair value of debt securities of
$13.6m. Revenues for the period were $13.7m, with EBITDA
at $10.0m. In H2, the group announced that four separate
cases arriving at partial settlement agreements were generating
a combined $35.2m, which takes Juridica’s lifetime gross
proceeds to $85m. The group currently has a total of 18
investments representing 23 separate legal cases, with a
combined $157.1m committed to them. The majority of these
are now reaching their concluding phases. With the seven
investments that have reached completion so far providing a
gross IRR of c.85%, further substantial potential returns should
be expected over the next 18 months.
Juridica announced an interim dividend of 19.9c (13p) for H1
2012, owing to the post period settlements. Since fund
inception, the group has returned a total of $49m ($10m
through a share buyback programme). The Board is unwilling
to determine dividend pay outs without income being
confirmed first, which of course may well result in future yield
inconsistency. However, in light of the maturing portfolio and
the outstanding historic IRR, we are confident that superlative
yields will be maintained in the mid term.
Margins/Ratios
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Invesco Asset Management Ltd
Baillie Gifford & Co.
Jupiter Asset Management Ltd
AXA Investment Managers (UK) Ltd
Artemis Investment Management LLP
Reliance Mutual Insurance Society Ltd
Moore Capital Management LP
Henderson Global Investors Ltd
31.61%
16.83%
11.86%
8.45%
4.65%
4.06%
2.70%
2.64%
Page 48 of 74
Dividends on AIM
M Winkworth Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Real Estate Services
88.5
12.68
GBP
WINK.L
11.2
-1.4
9.8
Share price performance
(K)
(p)
120
250
300.0
94.0
100
200
92.0
250.0
90.0
80
88.0
200.0
150
86.0
60
150.0
84.0
100
40
82.0
100.0
80.0
50
20
78.0
50.0
76.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
0.0
74.0
Winkworth is a UK franchisor of estate agencies. It provides
its franchisees with a well respected branded platform that
serves to increase recognition and that offers a more
competitive position in the marketplace. In return, Winkworth
benefits from the comprehensive local knowledge and
customer familiarity of its franchisees. Founded in 1835 and
listing on AIM in 2009, the company now operates through
over 90 offices in the UK, Portugal and France.
Conditions have proved challenging over the past 18 months.
In addition to a constriction of available mortgage funding
brought about by the general economic downturn, specific
governmental policies have negatively effected Winkworth’s
market, with the 2012 Budget including stamp duty hikes at
both ends of the spectrum. Rising overhead costs have also
been a strain on the sector. Even so, Winkworth has
impressively sustained its growth. H1 2012 revenues increased
5.8% yoy, to £1.9m. Although PBT was £0.4m (a decrease of
25.4% yoy), that was after accounting for £90k in exceptional
costs. Disruption to trading, especially in London, brought
about by the Jubilee and London Olympic Games, likewise
impacted upon the figure. The group continues to pursue its
strategy of diversifying its revenue stream by building its
network outside of the capital. The number of transactions
across the country offices increased by 45% yoy in H1 2012,
contributing to approximately 1/3 of the group total. Looking
abroad, a franchise agreement in Asia is also under discussion.
Source: T homson Reuters
Key data (Y/E Dec- (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
4.0
1.33
na
1.20
0.88
7.1
4.6
-1.8
2012E
4.3
1.50
na
1.30
na
7.9
4.9
na
2013E
4.5
1.60
na
1.40
na
8.7
5.2
na
2014E
na
na
na
na
na
na
na
na
2011
5.2%
12.45
1.55
3.09
7.40
na
22.1%
7.3%
1.1%
2012
5.5%
11.20
1.61
na
6.56
na
na
8.0%
11.1%
2013
5.9%
10.17
1.67
na
6.15
na
na
4.7%
10.1%
2014
na
na
na
na
na
na
na
na
na
Having announced a final quarter dividend of 1.3p, the total
dividend for FY 2012 is thus in line with forecasts, despite the
£0.29m of exceptional costs accrued in the year. Given the
group’s aforementioned push for growth, its comfortable cash
position and its continually improving results, we see no reason
why the FY 2013 dividend will not increase by a similar
amount. For FY 2012, dividend cover should be in line with
the 1.6x average of the past 2 years. In our view, this serves as
a helpful indicator that future performance, and ultimately
growth in DPS, will not be slowing anytime soon.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Simon Peter Agace (Chairman)
Investec Wealth & Investment Ltd
Anthony John Snarey
Bujang Zaidi
Dominic Agace (CEO)
Mohad Shukri Abdul Yajid
46.39%
9.80%
9.71%
7.10%
4.25%
3.75%
Page 49 of 74
Dividends on AIM
Maintel Holdings Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Business Support Services
345.0
10.67
GBP
MAI.L
36.8
-2.1
34.7
Share price performance
(K)
(p)
120
250
300.0
500.0
100
200
450.0
250.0
400.0
80
350.0
200.0
150
300.0
60
150.0
250.0
100
40
200.0
100.0
150.0
50
20
100.0
50.0
50.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
0.0
0.0
Maintel (“MAI”) is a UK market leading provider of
telecommunications solutions. The company operates in three
divisions, namely Maintenance and Equipment, Network
Services, and the recently established Mobile business. Since
listing on AIM in December 2004, MAI has increased its
annual revenues by 126%, and its net profits by 164%. Total
dividends have likewise not failed to increase yoy in the period.
The prevailing economic downturn has barely affected the
performance of the group. In an era of consolidation for the
telecommunications industry, MAI has held its own and made
bolt-on acquisitions to diversify revenue streams. Totality, a
specialist UK mobile telecoms provider, was acquired in
October 2011 for a total consideration of £7m. In its first six
months of trading (to 30 June 2012), the division contributed
£0.86m (16.7%) to group gross profits. Management has
stated that it will continue to look out for further potential
acquisitions, especially in the near term whilst market
uncertainty reigns for the smaller, independent firms in the
industry.
Performance improved in H1 2012 with group revenues of
£13.5m and adjusted pre tax profits of £2.35m, up 6.4% and
37.4% respectively. Despite a basic PBT of £0.19m being
realised, this was predominantly due to acquisition costs
(£1.8m). Indeed, adjusted EPS for the period increased 39%
to 16.6p.
Source: T homson Reuters
Key data (Y/E Dec) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
25.8
3.70
3.10
3.10
2.10
27.5
10.6
-3.0
2012E
28.6
5.20
4.42
5.00
3.50
35.3
13.8
na
2013E
30.1
5.40
4.59
5.30
3.71
36.8
14.4
na
2014E
na
na
na
na
na
na
na
na
2011
3.1%
12.55
2.59
2.61
9.38
12.0%
8.1%
17.3%
35.5%
2012
4.0%
9.77
2.56
na
6.67
15.5%
12.2%
10.9%
28.4%
2013
4.2%
9.38
2.56
na
6.42
15.2%
12.3%
5.2%
4.2%
2014
na
na
na
na
na
na
na
na
na
The interim dividend of 6.3p was an increase of 37.0% yoy.
Although we note the consideration of £3.1m that has been
paid in respect of the Totality acquisition after the reporting
period and the effect that it will have on the end of year
balance sheet, we are nonetheless optimistic of the continued
growth in earnings in the mid and long term. A healthy net cash
balance, free of debt and fortified by a £1.5m revolving credit
facility, should accommodate the outstanding payments for
Totality. With an effective cash generative model, we believe
there is still a strong potential upside to the dividend.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
John David Sebastian Booth (Chairman)
Angus McCaffery (Dir.)
John Alexander Spens
Herald Investment Management Ltd
Octopus Investments Ltd
Hargreave Hale Ltd
25.84%
19.24%
14.74%
7.12%
5.92%
4.99%
Page 50 of 74
Dividends on AIM
Matchtech Group Plc
Summary Data
Sector
Business Training & Employment Agencies
Share price (p)
279.8
Shares in issue (m)
23.45
Reporting currency
GBP
Ticker
MTEC.L
Market cap (£m)
65.6
Last reported net debt/(cash) (£m)
7.1
Enterprise value (£m)
72.7
Share price performance
(K)
(p)
120
300.0
350.0
100
300.0
250.0
80
250.0
200.0
60
200.0
150.0
150.0
40
100.0
100.0
20
20
50.0
50.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Jul) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
301.8
7.62
7.11
6.39
4.73
19.7
15.6
16.0
2012A
371.4
9.85
9.15
7.97
5.70
23.5
15.6
14.5
2013E
400.0
10.95
10.30
9.25
6.66
27.5
15.6
12.5
2014E
425.0
12.93
12.28
11.23
8.08
32.3
15.6
11.0
2011
5.6%
14.17
1.27
-4.36
9.54
2.4%
1.6%
14.1%
-22.9%
2012
5.6%
11.91
1.51
-3.95
7.38
2.5%
1.5%
23.0%
19.0%
2013
5.6%
10.17
1.76
-3.43
6.64
2.6%
1.7%
7.7%
17.2%
2014
5.6%
8.65
2.07
-3.01
5.62
2.9%
1.9%
6.3%
17.5%
0.0
0.0
Matchtech is a broad based recruitment company with its roots
in the provision of staff into the engineering and construction
environment. In recent years it has successfully diversified its
range of verticals and now segments its business into three
main divisions: i) Matchtech Division - representing its
traditional technical specialisations in Engineering and Built
Environment sectors with the addition of Information Systems
and Technology and Science and Medical; ii) Professional
Services Division - trading under the Barclay Meade and
Alderwood Education brands; and iii) Elemense Division representing the group’s recruitment process outsourcing
services.
This diversification has fundamentally strengthened the business
which in the past was influenced by the group’s exposure to a
number of long term major Defence contracts and was brought
into sharp focus by the government’s Defence Spending
Review in 2010. Although being largely unaffected by the
spending cuts it prompted management to instigate a major
diversification programme that has met with success following
significant investment which took over a year to begin to pay
back. However over this period the group maintained its
dividend. The position now sees a company that grew earnings
by 19% in FY 2011/12 in market conditions that for other
recruitment companies were very testing. Contractors on
assignment grew 12% yoy and represented 68% of net fee
income with permanent placement income representing the
balance.
The most recent trading update from management was issued
in November 2012 and stated that the group continued to
perform in line with the Board’s expectations. Furthermore, it
related that skill shortages were driving unprecedented demand
for contract staff in the group’s markets with the diversification
strategy broadening the client base and enabling the group to
take market share. With earnings growing and dividend cover
increasing the dividend yield is looking increasingly secure.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
George Douglas Peter Materna (Chairman)
Octopus Investments Ltd
AXA Investment Managers (UK) Ltd
Paul John Raine
Andrew Francis White (Deputy Chairman)
British Steel Pension Scheme
33.60%
10.98%
8.85%
7.74%
4.66%
4.11%
Page 51 of 74
Dividends on AIM
May Gurney Integrated Services Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Business Support Services
178.0
70.24
GBP
MAYG.L
125.0
3.0
128.0
Share price performance
(K)
(p)
120
4,500
300.0
350.0
4,000
100
3,500
300.0
250.0
250.0
200.0
80
3,000
2,500
60
2,000
200.0
150.0
40
1,500
100.0
100.0
150.0
1,000
20
500
50.0
50.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Mar) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
571.4
33.90
25.10
18.80
13.30
24.8
6.6
-10.9
2012A
695.3
46.50
30.10
19.30
13.80
29.5
8.4
-11.0
2013E
651.0
49.95
26.51
12.30
6.65
24.2
8.4
na
2014E
654.4
54.69
28.23
19.57
18.45
25.9
8.6
na
2011
3.7%
7.19
3.75
2.35
3.78
4.4%
2.3%
18.3%
13.0%
2012
4.7%
6.04
3.50
1.86
2.75
4.3%
2.0%
21.7%
19.0%
2013
4.7%
7.35
2.88
na
2.56
4.1%
1.0%
-6.4%
-17.8%
2014
4.9%
6.87
3.00
na
2.34
4.3%
2.8%
0.5%
7.0%
0.0
0.0
May Gurney (“MAYG”) is a UK based infrastructure support
services group, operating in two units. The Public Sector
Services division (which currently accounts for 58% of
revenues) provides highway, environmental, and fleet and
passenger services, whilst the Regulated Sector Services
division (42% of revenues) offers utility, rail and waterways
services. Having listed on AIM in 2006, MAYG has since then
increased turnover and net profits by 71.1% and 29.0%,
respectively.
During the 6m period ending 30 September 2012, however,
MAYG reported a trio of significant operational issues. Two
long term environmental services contracts and the Scottish
Utilities businesses have underperformed, and the planned
closure of the Facility Services division cost significantly more
than anticipated. The £10m final closure provision set aside by
management for the latter, coupled with the contract issues,
resulted in a net loss for the period of £3.6m. In September,
when the trading update was released and the then CEO
announced his resignation, the share price fell as much as 56%.
Nonetheless, having ring fenced the issues, management
believes that MAYG will recover swiftly. As at 30 September,
it possessed an order book of c.£1.5bn, and potential contract
extensions offered a further c.£1.7bn. Confidence in future
performance was highlighted by the maintained interim dividend
of 2.79p. But having diminished its cash buffer to pay out, the
company is unlikely to be forced into repeating this, if under
performance continues. The Board has stressed that
improvements in operating margins are the group’s priority for
the foreseeable future. With the share price having bounced
c.90% from its September lows, and heavyweight investment
funds taking stakes, the market clearly envisages a turnaround.
Even so, until a solution to the environmental services contracts
is arrived at, and confirmation of improvements in performance
is given, we conclude that the final dividend is vulnerable to
being cut, and the upside potential to the share price is limited.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
David William Edmund Sterry
Artemis Investment Management LLP
Polar Capital LLP
Fidelity Management and Research Company
Robert Ian Findlater
Aviva Investors Global Services Ltd
Octopus Investments Ltd
Majedie Asset Management Ltd
9.62%
7.11%
5.47%
5.01%
4.20%
4.00%
3.97%
3.63%
Page 52 of 74
Dividends on AIM
MCB Finance Group Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Consumer Finance
80.0
17.67
EUR
MCRB.L
14.1
20.4
34.6
Share price performance
(K)
(p)
120
400
300.0
100.0
350
100
90.0
250.0
80.0
300
70.0
200.0
80
250
60.0
60
200
150.0
50.0
150
40
40.0
100.0
30.0
100
20.0
50.0
20
50
10.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Dec) - (€m)
2011A
18.2
4.84
4.78
3.58
2.87
14.9
3.50
11.5
2012A
27.3
6.45
6.18
1.50
0.68
3.3
0.00
na
2013E
29.1
9.12
9.69
4.36
3.27
16.6
3.73
na
2014E
36.3
12.58
12.05
7.36
5.52
28.0
5.00
na
2011
Dividend Yield
4.4%
P/E Ratio
5.37
Dividend Cover (EPS/DPS)
4.26
Net Cash/Dividend
-16.35
EV/EBITDA
8.14
EBIT Margin
26.3%
Net Profit Margin
15.8%
Revenue Growth
54.3%
EPS Growth
1453.1%
2012
na
24.32
na
na
6.11
22.7%
2.5%
50.0%
-77.9%
2013
4.7%
4.83
4.44
na
4.32
33.4%
11.3%
6.6%
403.3%
2014
6.3%
2.86
5.59
na
3.13
33.2%
15.2%
25.0%
68.8%
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
Margins/Ratios
Sources: Thomson Reuters, Edison Investment Research, Allenby Capital
Share price as of 01/03/2013.
0.0
0.0
Operating under its Credit24 brand, MCB provides flexible
credit solutions to retail consumers in Finland, Estonia, Latvia
and Lithuania. The company targets the non bank, unsecured
loan market, advancing loans of up to €2,000 for a maximum
of 2 years. MCB distinguishes itself by only serving high quality
customers with strong credit histories. Having listed on AIM in
2007, the company made a breakthrough in FY 2011 in terms
of growth in revenue and PBT, and was consequently in a
position to pay out a maiden dividend.
In FY 2012, MCB continued to expand its business rapidly.
Revenues were €27.3m, up 50.0% yoy. To drive growth,
MCB raised €29.4m gross through 2 bond issues offered to
Nordic investors. This enabled total issuance of loans to surge
45% yoy to €86.7m. There is plenty of scope for further
growth, despite a slowing rate in established markets. In July
2012, MCB launched a new consumer lending business in
Australia, which has almost trebled the group’s current target
market population to 34 million. A proprietary online sales
platform has also recently been launched in Lithuania.
Furthermore, MCB is continuing to develop and expand its
range of consumer finance products and services, including
loan packages with longer maturities.
The total dividend in FY 2011 was 3.5p (4c). Owing to new
business costs, the ramp up in borrowing and unrealised FX
differences, MCB posted a net profit in FY 2012 of €0.68m,
down 76.4% yoy. On a pro forma basis PBT looks somewhat
healthier at €2.52m (FY 2011: €3.67m), yet even so, finance
costs have increased materially, owing to the strategy of
aggressive growth. Although all bank loans and overdrafts
were consolidated into bonds, the annual interest due on these
securities as at year end was €3.79m, up over 215% yoy. As a
result, until geographical expansion and product development
has settled, we see minimal upside in the dividend in the near
term, as earnings are eaten up by growth. In the mid – long
term, however, the business model does look attractive in light
of its continued core growth, and we forecast more consistent
and healthier dividend potential beyond 2013.
Key Shareholders
Kai Karttunen
Dermot F Desmond
Richard Parkinson
Henry Nilert (Dir.)
Peter Lorange
Philippe Duleyrie (NED)
Europanel AB
Conils Ltd
43.34%
14.61%
12.05%
6.95%
4.78%
4.55%
4.19%
3.86%
Page 53 of 74
Dividends on AIM
Motivcom Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Media Agencies
108.5
30.10
GBP
MCM.L
32.7
-5.2
27.5
Motivcom provides marketing communications, events and
conferences, and motivation and incentive expertise to UK and
European blue chip corporate clients. Its service offering,
provided through three divisions (Motivation, Events and
Promotions), is designed to positively influence the behaviour
of clients’ employees which in itself is intended to support
company growth. Based in the UK, the group listed on AIM in
2004 and has notably remained profitable in the eight full years
to date, having also not failed to increase its dividend every
year in that period.
Share price performance
(K)
(p)
120
1,600
300.0
160.0
1,400
100
140.0
250.0
1,200
120.0
80
1,000
200.0
100.0
60
800
150.0
80.0
600
40
60.0
100.0
400
40.0
20
200
50.0
20.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Dec) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
106.0
4.56
3.41
3.28
2.37
7.8
4.0
-5.6
2012E
na
na
na
3.00
2.20
7.5
4.5
na
2013E
na
na
na
4.80
3.70
11.8
5.0
na
2014E
na
na
na
na
na
na
na
na
2011
3.7%
13.95
1.95
4.68
6.03
3.2%
2.2%
-8.3%
-24.4%
2012
4.1%
14.47
1.67
na
na
na
na
na
-3.6%
2013
4.6%
9.19
2.36
na
na
na
na
na
57.3%
2014
na
na
na
na
na
na
na
na
na
0.0
0.0
The marketing industry has been struck especially hard by the
tough economic conditions of late as clients have cut significant
expenditure in the area. In FY 2011, Motivcom’s operations
witnessed a decrease in business intake with group revenues
and PBT dropping 8.3% and 25.2% respectively. PBT was
down by another 30.2% yoy in H1 2012 to £0.9m. Although
the Motivation division increased its operating profit in the 6
month period by almost 150%, with significant client wins from
the Royal Mail, the Post Office and Lloyds Banking Group,
operating profits for both the Events and Promotions segments
plummeted by over 50%.
Despite the decline in figures, management is nevertheless
optimistic that the group can weather the current economic
lethargy, as was stressed by an increase in the interim dividend
by 30.4% to 1.5p. We feel that Motivcom’s diversity of
revenue streams places it in a good position to benefit from the
eventual upturn in customer expenditure on marketing, and in
the meantime to maintain its market leading position. Bolt-on
acquisitions are also a possibility at present, although
management has stressed that it will not overpay. However,
given the current decline in earnings and relatively small net
cash balance we see the dividend under threat unless earnings
make a swifty recovery.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
John Murray Sylvester (Dir.)
Nigel William Wray
BlackRock Investment Management (UK) Ltd
Colin Thomas Lloyd (Chairman)
22.01%
10.73%
5.78%
4.13%
Page 54 of 74
Dividends on AIM
MTI Wireless Edge Ltd*
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Tech Hardware & Equipment
6.75
51.57
USD
MWE.L
3.48
-3.33
0.16
Share price performance
(K)
(p)
14.0
500
450
12.0
400
10.0
350
300
8.0
250
6.0
200
150
4.0
100
2.0
50
0
May-11
0.0
Aug-11
Nov-11
Feb-12
May-12
Volume
Aug-12
Nov-12
Feb-13
Recently reported FY 2012 results were, on the face of it,
disappointing given the reported pre tax loss of $268k.
However, the results were obscured by a $300k one off
charge incurred in Q1 2012 and, on an underlying basis, the
second half of the year showed an upturn in profitability. The
company declared a dividend of 0.58c per share to be paid in
April. With healthy cash reserves and an overall strong balance
sheet we expect a similar dividend level for 2013.
The military side of the business continues to struggle.
Revenues fell 42% in the year and the business now accounts
for only 16% of group sales. Reassuringly, management
expects growth in the military segment in 2013 given the
current backlog and order pipe line. The commercial business
is proving more stable. Although revenues in this business fell
5% year on year, EBIT improved to $399k from $128k in
2011, helped by products such as the 60-80 Ghz range where
revenues tripled year on year.
Share Price
Source: T homson Reuters
Key data (Y/E Dec) - ($m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
MTI develops and manufactures complex antennas and
antenna systems used predominantly for the transmission and
reception of wireless broadband. The company has an
international customer base and sells products into both military
(16% of 2012 revenues) and commercial applications (84%).
MTI is headquartered in Israel, has a production facility in
India and at the end of December 2012 had 76 employees.
2011A
14.7
0.78
0.25
-0.04
0.04
0.00
1.26
-5.0
2012A
12.7
0.22
-0.31
-0.27
-0.19
-0.40
0.38
-5.1
2013E
13.3
0.69
0.19
0.24
0.26
0.30
0.38
-5.4
2014E
na
na
na
na
na
na
na
na
2011
18.7%
na
na
4.99
0.30
1.7%
0.3%
9.1%
na
2012
5.6%
na
-1.04
17.01
1.11
-2.4%
-1.5%
-13.5%
na
2013
5.6%
22.21
0.80
17.94
0.35
1.4%
2.0%
4.2%
na
2014
na
na
na
na
na
na
na
na
na
The company appreciates the importance of dividends to
shareholders and the 0.58c that will be payable in April
represents a yield of over 5%. Although earnings are currently
depressed, given the strong balance sheet we remain confident
that a similar dividend will be paid in 2013. In addition to the
attractive yield, we calculate a Net Asset Value of around 13p
(predominantly cash or liquid securities) hence MTI is clearly
undervalued at the current price.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013 *Allenby Capital corporate client
Key Shareholders
MTI Computers & Software Services
MTI Directors
Herald Investment Management Ltd
Employees
52.40%
7.40%
5.40%
3.20%
Page 55 of 74
Dividends on AIM
Murgitroyd Group Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Murgitroyd is a Glasgow headquartered, International Patent
and Trade Mark Attorney with offices throughout the UK,
Europe and the US. Although its dividend yield is relatively low
compared to others in our analysis, the company has a
successful track record of organic and acquisitive growth
which has led to steadily increasing dividends (the dividend has
increased by over 250% since 2005). Murgitroyd operates in
a very stable industry thus we see minimal volatility in earnings.
At a c.35% discount to its closest peer we feel there remains
the opportunity for further share price upside.
Business Support Services
512.5
8.79
GBP
MUR.L
45.0
2.8
47.9
Share price performance
(K)
(p)
600.0
350
300
500.0
250
400.0
200
300.0
150
200.0
100
100.0
50
0
Apr-11
0.0
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Volume
Oct-12
Jan-13
Share Price
Murgitroyd is the only UK listed patent Attorney and provides
Intellectual Property (“IP”) services including filing, due
diligence, litigation and translation of Patents and Trade Marks
to clients from a range of industries. Ian Murgitroyd (current
largest shareholder with 28%) started the business as a sole
practitioner in Glasgow in 1975, converting to a partnership in
1978. In 2001 the company listed on AIM and has since
acquired and integrated five smaller practices.
One of Murgitroyd’s advantages over competitors (who tend
to be small practices in this fragmented industry) is its
technology platform. This has allowed the flow of work to be
separated and managed more efficiently between the fee
earning Attorneys. The benefits of this are higher margins and
the opportunity for post acquisition synergy gains when target
companies are migrated into the new work flow system.
Source: T homson Reuters
Key data (Y/E May) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
33.2
4.40
4.20
4.04
2.65
30.0
10.8
-4.6
2012A
35.7
4.76
4.54
4.30
3.14
36.0
12.0
-3.2
2013E
36.6
4.95
4.70
4.60
3.80
38.9
13.0
-1.3
2014E
38.3
5.20
5.00
4.90
3.90
41.1
14.0
0.7
2011
2.1%
17.08
2.78
4.85
10.89
12.6%
8.0%
12.9%
-3.2%
2012
2.3%
14.24
3.00
3.03
10.06
12.7%
8.8%
7.5%
20.0%
2013
2.5%
13.17
2.99
1.14
9.68
12.8%
10.4%
2.5%
8.1%
2014
2.7%
12.47
2.94
-0.57
9.21
13.1%
10.2%
4.6%
5.7%
The patent cycle is a lengthy process and includes renewal
work thus creating an element of revenue which is largely
known at the beginning of the year for Murgitroyd (c.15%).
This further de-risks the business model and provides a level of
stability of revenues. With no other listed patent Attorneys,
AIM listed Patent translator RWS Holdings Plc is
Murgitroyd’s closest peer. Murgitroyd trades on around a
35% discount to RWS, which suggests further upside potential.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Hardman & Co, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Ian Murgitroyd (Chairman)
Liontrust Asset Management Plc
Schroder Investment Management Ltd
George Edward Murgitroyd (Deputy Chairman)
Elizabeth-Anne Thomson
Close Brothers Asset Management
Investec Wealth & Investment Ltd
Mawer Investment Management Ltd
28.01%
9.62%
6.99%
4.41%
4.41%
3.50%
3.21%
2.84%
Page 56 of 74
Dividends on AIM
Naibu Global International Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Retail (China)
105.0
54.84
RMB
NBU.L
57.6
-33.6
24.0
Share price performance
(K)
(p)
160.0
300
140.0
250
Naibu designs, manufacturers and retails sports shoes, sports
clothing and sporting accessories under the Naibu brand. The
company targets the mass market – specifically young adults
and young business travellers. Naibu is China's 10th largest
sportswear brand with a wide distribution network and close
to 3,000 branded outlets. Revenue is generated entirely in the
PRC and is split into 3 segments: shoes (c.52% of revenues in
H1 2012), apparel (46%) and accessories (2%). Naibu listed
on AIM in April 2012 raising approximately £6m.
The company reported solid earnings in H1 2012 with sales
increasing by 16.6% yoy and net profit by 28.3% to RMB
135.6 (c.£14m). However, cash flow generation disappointed.
Excluding the IPO proceeds cash actually decreased mainly
due to adverse swings in working capital.
120.0
200
100.0
80.0
150
60.0
100
40.0
50
20.0
0
Apr-12
0.0
Jun-12
Aug-12
Oct-12
Volume
Dec-12
Feb-13
Share Price
Source: T homson Reuters
Key data (Y/E Dec) - (RMBm)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
The Chinese sportswear market has had a tough 18 months
with many of Naibu’s HK listed peers such as Li Ning
(2331.HK) and 361Degrees(1361.HK) reducing earnings
expectations - possibly dragging Naibu down with this
sentiment. However, we feel the sector is slowly resolving its
issues - predominantly excess inventory in the retail chain.
Furthermore, economic data out from China since the
beginning of 2013 has been strong and the government
continues to promote urbanisation thus strengthening the case
for increasing consumer expenditure.
2011A
1,492
348
345
345
283
53.7
na
-287.0
2012E
1,670
380
379
380
285
50.4
3.00
na
2013E
1,870
420
421
420
316
55.6
6.00
na
2014E
2,057
462
463
462
348
61.2
6.00
na
2011
na
1.96
na
na
0.70
23.1%
19.0%
19.8%
24.7%
2012
2.9%
2.08
16.80
na
0.64
22.7%
17.1%
11.9%
-6.1%
2013
5.7%
1.89
9.27
na
0.58
22.5%
16.9%
12.0%
10.4%
2014
5.7%
1.72
10.20
na
0.53
22.5%
16.9%
10.0%
10.0%
Naibu looks exceptionally undervalued on every measure and
is forecast to pay a c.5.7% dividend yield in 2013. At 30th
June 2012 the company had c.£33m of cash on the balance
sheet so there should be no concerns about the sustainability of
the dividend given the forecast dividend for 2013 will only
consume c.£3.3m of cash. Liquidity has historically been poor
but has improved since the December 2012 Camkids
(CAMK.L) IPO which highlighted the value in the Chinese
retail sector. Sector woes and the ‘China factor’ will likely
weigh on the stock for some time but we expect a steady rerating.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Huoyan Lin (Chairman)
Allied Property Capital Ltd
Easy Capital International Ltd
Riemann investment Holdings Ltd
Win Zone Ltd
46.8%
23.7%
8.42%
5.47%
4.01%
Page 57 of 74
Dividends on AIM
Nationwide Accident Repair Services Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Business Support Services
69.5
43.20
GBP
NARS.L
30.0
-8.0
22.1
Share price performance
(K)
(p)
120
3,500
300.0
120.0
3,000
100
250.0
100.0
2,500
80
200.0
80.0
2,000
60
150.0
60.0
1,500
100.0
40.0
40
1,000
In H2 2011, the group highlighted the adverse impact that
uncertain economic conditions were causing on its core
insurance market. Specifically, drivers were making fewer
claims for smaller repairs. A cost cutting programme of £8.1m
resulted in the group posting its first loss since listing. However,
with expected annualised cost savings of £1.9m, and a revised
strategy adopted of driving growth in the emerging fleet and
retail markets, Nationwide is optimistic that it is in a position to
leverage its network and brand to grow its market share in
both the insurance and emerging markets.
50.0
20.0
20
500
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Dec) - (£m)
2011A
172.9
7.60
-2.88
-2.59
-2.38
-5.5
5.5
-8.0
2012E
163.1
7.60
4.80
2.10
1.70
8.9
5.5
-5.4
2013E
165.6
7.60
5.50
5.68
4.37
10.1
5.5
-5.9
2014E
na
na
na
na
na
na
na
na
2011
Dividend Yield
7.9%
P/E Ratio
-12.64
Dividend Cover (EPS/DPS)
-1.00
Net Cash/Dividend
3.37
EV/EBITDA
2.90
EBIT Margin
-1.7%
Net Profit Margin
-1.4%
Revenue Growth
0.4%
EPS Growth
-152.9%
2012
7.9%
7.81
1.62
2.27
2.90
2.9%
1.0%
-5.7%
-261.8%
2013
7.9%
6.88
1.84
2.48
2.90
3.3%
2.6%
1.5%
13.5%
2014
na
na
na
na
na
na
na
na
na
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
Nationwide is the UK market leading provider of automotive
repair and support services. The group’s largest business,
Nationwide Crash Repair Centres (“NCRC”), operates a
network of 63 repair centres across the UK, servicing over
175,000 vehicles each year. Network Services (“NNC”)
provides accident administration services to insurance
companies, predominantly deploying the claims (over 40,000
of which were made in H1 2012) into NCRC. The group also
operates a fleet of mobile units through its Mobile Repairs
division (incorporated in NCRC) and a glass services business,
Motorglass.
0.0
0.0
H1 2012 revenues decreased 12.9% to £80.7m as a result of
the slimming of operations in 2011 and the downward trend in
the insurance market (with insurance related revenues down
12.7% yoy). Group PBT declined by 28.4%, to £2.1m. But
the attempted push into the emerging sectors appears to be
paying off, with revenues generated by Mobile Repairs of
£11.8m, up 28% yoy. Revenues from NCRC retail sales and
Motorglass, although modest, increased 75% and 20%
respectively.
From the maintained interim dividend of 1.9p we conclude
that, given the healthy net cash position and the Board’s
confidence in continued growth in non insurance markets, the
total dividend will be in line with the previous period. At the
current share price, that would equate to a yield of c.7.9%.
Margins/Ratios
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Harwood Private Equity
Octopus Investments Ltd
AXA Investment Managers (UK) Ltd
Close Brothers Asset Management
Investec Wealth & Investment Ltd
MAM Funds Plc
31.88%
9.76%
6.48%
5.88%
5.05%
4.86%
Page 58 of 74
Dividends on AIM
NewRiver Retail Ltd
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Retail REITs
197.5
34.03
GBP
NRR.L
67.2
102.9
170.1
Share price performance
(K)
(p)
120
2,500
300.0
100
2,000
250.0
80
200.0
1,500
60
150.0
1,000
40
100.0
500
20
50.0
50.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Mar) - (£m)
2011A
4.4
2.50
2.50
4.91
3.19
6.3
5.5
74.1
2012A
12.8
9.82
9.81
3.97
3.85
15.2
15.0
99.3
2013E
15.4
10.68
10.67
5.61
4.60
17.2
16.2
141.5
2014E
16.9
11.18
11.62
7.67
7.73
22.1
16.7
142.5
2011
Dividend Yield
2.8%
P/E Ratio
31.35
Dividend Cover (EPS/DPS)
1.15
Net Cash/Dividend
-39.58
EV/EBITDA
68.03
EBIT Margin
56.4%
Net Profit Margin
72.0%
Revenue Growth
1242.4%
EPS Growth
-70.2%
2012
7.6%
12.99
1.01
-19.45
17.32
76.7%
30.1%
188.7%
141.3%
2013
8.2%
11.48
1.06
-25.71
15.93
69.2%
29.8%
20.6%
13.2%
2014
8.4%
8.94
1.33
-25.12
15.21
68.9%
45.8%
9.3%
28.5%
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
NewRiver is a Retail Estate Investment Trust focused on the
UK food and value retail sector. Having raised a total of £25m
through listing on AIM and CISX in 2009, the company today
has assets under management of c.£400 million, totalling 2.8
million square feet of property. NewRiver’s investment
philosophy comprises strict criteria that creates a high income
producing business model. Its chosen niche, the food and value
sectors, are traditionally resilient in economic downturns. As a
result, the group has managed to maintain a high occupancy
rate of c.96%. NewRiver’s core holdings are its 23 shopping
centres, which offer initial yields of c.8% – 9%.
0.0
0.0
Astute acquisitions of portfolios, coupled with a proactive
management approach, combining risk control development
and marketing strategies, resulted in H1 2013 revenues
increasing by 37.1% yoy to £8.7m. While PBT was down
83.2% in the period, this was due to a revaluation deficit in the
period of £1.4m, after a similar gain in the prior period of
£1.4m. PBT on income generated by yields was up 34.0%.
Furthermore, the fall in portfolio valuation of 0.5%
outperformed the wider index (which saw a fall of 2% over the
period). An £85m shopping centre portfolio joint venture
announced in December with a PIMCO subsidiary highlights
the group’s ambition to become the UK’s leading specialist
REIT. The deal leverages NewRiver’s management expertise
as the company has been given the responsibility of managing
the portfolio for a projected £0.4m annual fee, in addition to its
10% share of rental income.
The interim dividend for H1 2013 was maintained at 6p. The
JV portfolio acquisition will be significantly earnings accretive in
the short term, and we envision EPS to build steadily for the
foreseeable future. With a policy of paying out the majority of
recurring profits to shareholders (subject to investment needs),
we are therefore confident that the strong dividend growth will
continue. Moreover, we also feel that there is a potential
upside to the share price at present, owing to the c.20%
discount to NAV (246p per share as at 30 September 2012).
Margins/Ratios
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Asset Value Investors Ltd
Pacific Investment Management Company LLC
Spearpoint Ltd
AXA Investment Managers (UK) Ltd
Cheviot Asset Management Ltd
David Lockhart (CEO)
Artemis Investment Management LLP
Schroder Investment Management Ltd
9.40%
8.67%
6.36%
5.47%
5.07%
4.77%
4.55%
4.42%
Page 59 of 74
Dividends on AIM
Numis Corporation Plc
Summary Data
Sector
Share Price (p)
Shares in issue (m)
Reporting currency
Ticker
Market Cap (£m)
Last reported Net debt/(cash) (£m )
Enterprise value (£m)
Financial Services
153.0
114.73
GBP
NUM.L
175.5
-35.8
139.7
Share price performance
(K)
(p)
120
3,500
300.0
180.0
3,000
100
160.0
250.0
140.0
2,500
80
200.0
120.0
2,000
60
100.0
150.0
80.0
1,500
100.0
60.0
40
1,000
40.0
50.0
20.0
20
500
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
In 2012 the total funds raised on AIM and the Main Market
was down c.40% on the prior year. As such, we views Numis’
performance in the year to end September 2012 as admirable
given that it reported a decrease in revenues and underlying pre
tax profits of just 8% and 14% respectively. During 2012 the
company further diversified its revenues streams by increasing
its position in the retail bond market which adds to its existing
strong positions in more mainstream equity finance, secondary
trading activity and corporate advisory work.
In 2012 the company increased its number of corporate clients
from 140 to 144 (1 FTSE100, 28 FTSE250, 59 Small
Cap/Fledgling, 52 AIM and 4 other Main Market companies).
The average mkt. cap. of Numis’ clients has doubled over the
last 5 years to the current level of £332m.
2011A
54.2
8.73
8.30
8.90
7.40
6.8
8.0
-41.8
2012A
50.1
7.86
7.40
7.70
6.70
6.0
8.0
-35.9
2013E
55.1
8.65
8.14
8.47
7.37
6.6
8.0
-35.9
2014E
60.6
9.51
8.95
9.32
8.11
7.3
8.0
-40.0
Whilst no publically available forecasts are available, given the
recent pick up in stock markets and the exit from the market of
a few industry participants we forecast a steady increase in
earnings for Numis in 2013 and 2014. We forecast the
dividend to be maintained at 8p. Numis has a good brand and
we take comfort that c.43% of shares are effectively held by
staff and directors. On a PE ratio the business looks expensive
but we think a comparison to NAV is more appropriate given
the cash balance (£36m) and portfolio of trading investments
(£39m). With an NAV of £97m the company is trading on
1.8x NAV. Whilst not overly expensive, we see this as fair
value at present and see limited near term upside.
2011
5.2%
22.50
0.85
4.55
16.01
15.3%
13.7%
4.4%
9.7%
2012
5.2%
25.50
0.75
3.91
17.78
14.8%
13.4%
-7.6%
-11.8%
2013
5.2%
23.18
0.83
3.91
16.16
14.8%
13.4%
10.0%
10.0%
2014
5.2%
21.07
0.91
4.36
14.69
14.8%
13.4%
10.0%
10.0%
Key Shareholders
Numis Corporation Plc Employee Benefit Trust No.2
Oliver A Hemsley (CEO)
BlackRock Investment Management (UK) Ltd
Edward Farquhar
Aviva Investors Global Services Ltd
David Poutney
Kabouter Management LLC
Majedie Asset Management Ltd
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Sept) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
0.0
0.0
Numis is a banking and stockbroking group focused on UK
companies in the small to mid cap range. The company offers a
full range of services to corporate clients including research,
execution, corporate broking and corporate finance advice.
Numis is coping well in a tough market environment particularly so for those players operating at the smaller end of
the market which is suffering from both an excess of capacity
and a dearth of attractive IPOs.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
13.81%
10.72%
9.59%
6.43%
6.20%
5.83%
5.10%
4.77%
Page 60 of 74
Dividends on AIM
Pennant International Group Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Software
44.8
26.36
GBP
PEN.L
11.8
-2.1
9.7
Share price performance
(K)
(p)
120
900
300.0
60.0
800
100
700
250.0
50.0
80
600
200.0
40.0
500
60
400
150.0
30.0
40
300
100.0
20.0
200
20
100
50.0
10.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
0.0
0.0
Pennant is a provider of software products and services
predominantly to governments and the defence, rail, aerospace
and naval sectors. The group operates through three
subsidiaries. The Training Systems division (accounting for
53% of group revenue in FY 2011) provides services that
specialise in Software Emulation and Hardware Simulation,
and Computer Based Training and e-Learning. Data Services
(17% of group revenue) covers Technical Documentation,
including IPC Compiling, Authoring and Illustration, and
Graphic Design and Media services. The third division,
Software Services (31%), owns market leading software suites
which support long life engineering assets.
FY 2008 witnessed an alarming slip in revenues for Pennant,
when customers cut costs drastically in the depths of the credit
crunch. Since then, however, revenues and PBT have both
improved year on year, and H1 2012 continued the trend.
Group revenues increased 43.1% yoy to £7.1m, with PBT
leaping 177.8% to £0.76m. Notable activities in the period
included extensive work on the Maintenance Training
Equipment contract for the Lynx Wildcat helicopter with
AgustaWestland; and the preparation of a tender for a JV
project with BAE Systems Australia and the Royal Melbourne
Institute of Technology. The contract would last for up to 20
years, supplying the Australian Defence Force with aviation
technical training. Besides these major long term contracts, and
multiple similar ones in the pipeline, the group is also benefitting
from established revenue streams from consultancy and
support contracts.
Key data (Y/E Dec) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
10.4
0.89
0.71
0.70
0.55
2.0
1.5
-2.3
2012E
14.2
na
na
1.51
1.17
4.4
1.8
na
2013E
14.9
na
na
1.70
1.33
5.0
2.0
na
2014E
na
na
na
na
na
na
na
na
2011
3.4%
22.72
1.31
5.92
10.93
6.9%
5.3%
8.2%
0.5%
2012
4.0%
10.17
2.44
na
na
na
8.2%
37.2%
123.4%
2013
4.5%
9.02
2.48
na
na
na
8.9%
5.0%
12.7%
2014
na
na
na
na
na
na
na
na
na
The 2012 interim dividend was increased by 20% to 0.60p.
With basic EPS at 2.21, this equates to a dividend cover of
3.68, which is significantly higher than in recent years.
Therefore although we have been cautious in forecasting an
equal 20% rise in total dividends, there is a strong possibility of
a steeper gain. This applies even more so for the forecast FY
2013 yield, especially given the increasing net cash position.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Christopher Charles Powell (Chairman)
John Mark Waller (FD)
Christopher Snook (CEO)
David James Seal
Rathbone Investment Management Ltd
39.07%
5.94%
5.64%
5.12%
4.98%
Page 61 of 74
Dividends on AIM
Powerflute Oyj
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Paper
22.6
284.12
EUR
POWR.L
64.3
-13.3
51.0
Share price performance
(K)
(p)
120
9,000
300.0
30.0
8,000
100
7,000
250.0
25.0
80
6,000
200.0
20.0
5,000
60
4,000
150.0
15.0
40
3,000
100.0
10.0
2,000
20
1,000
50.0
5.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Dec) - (€m)
2011A
121.5
18.29
13.75
12.39
10.06
3.5
1.1
-19.1
2012E
115.4
12.84
10.50
7.00
5.20
1.6
1.0
-16.9
2013E
126.6
18.95
13.65
13.29
9.87
3.0
1.2
-21.3
2014E
129.7
19.59
13.95
13.87
10.26
3.0
1.3
-26.0
2011
Dividend Yield
5.0%
P/E Ratio
6.45
Dividend Cover (EPS/DPS)
3.11
Net Cash/Dividend
5.21
EV/EBITDA
3.18
EBIT Margin
11.3%
Net Profit Margin
8.3%
Revenue Growth
15.2%
EPS Growth
-130.8%
2012
4.3%
14.50
1.61
5.38
4.53
9.1%
4.5%
-5.0%
-55.6%
2013
5.4%
7.47
2.46
5.34
3.07
10.8%
7.8%
9.7%
94.2%
2014
5.6%
7.47
2.40
6.38
2.97
10.8%
7.9%
2.5%
0.0%
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
0.0
0.0
Powerflute (“POWR”) is a holding company focused on
investing in the international paper and packaging sector.
Having listed on AIM in 2005, the company holds one wholly
owned subsidiary, Savon Sellu Oy, a paper mill operator
based in Kuopio, Finland. Specifically, the mill manufactures
Nordic semi-chemical fluting, a material made from Finnish and
Russian birch, and used in the production of corrugated boxes
(which are predominantly utilised for the transportation of fruit
and vegetables). In June 2012, the company made a second
investment, taking a 10% stake in Kotkamills Oy, a Finnish
integrated forest products company that manufactures a range
of laminating papers.
The economic downturn in the Eurozone, keenly felt in the
Southern member states that account for significant markets for
the company’s products, has forced down selling prices.
Financial results for the half year to 30 June 2012 were thus
below expectations. Exacerbating the figures was the loss in
production of c.12,000 tonnes (10% of expected total) caused
by machinery malfunction and maintenance work at the Savon
Sellu mill. This curbed profits by c.€2m, resulting in a net profit
for H1 of €1.6m, down 66.7% yoy. Factory issues struck
again in September, triggering approximately the same volume
of lost production as in H1.
Although profits for FY 2012 will accordingly be considerably
down on FY 2011, the Board is nevertheless optimistic in its
outlook. The paper mill has been upgraded sufficiently and
should ensure consistent performance going forward.
Furthermore, market conditions in H2 have improved, and a
prices increase announcement for the company’s products has
been accepted by all major markets. With a healthy net cash
position, we expect POWR to maintain its final dividend.
Going into FY 2013, we see considerable upside potential in
earnings as the mill upgrades come to fruition, leading to EPS
and DPS growth.
Margins/Ratios
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Michael Smurfit
Dermot Smurfit (Chairman)
Henderson Global Investors Ltd
Bestinver Gestión S.G.I.I.C. S.A.
L&G Investment Management (UK) Ltd
21.68%
15.58%
10.99%
10.08%
5.94%
Page 62 of 74
Dividends on AIM
Printing.com Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Business Support Services
26.5
47.52
GBP
PDC.L
12.6
-1.1
11.5
Share price performance
(K)
Printing.com (“PDC”) provides an online printing service to
clients which tend to be small and medium sized businesses.
The majority of revenues are derived from the UK but it has
presence in Ireland and mainland Europe – mainly Holland and
Belgium post the 2010 acquisition of MFG BV. Products
available include leaflets, booklets, postcards, invitations and
business cards. In addition to the online service, PDC has 3
other routes to market: Company-Owned Stores, Franchise
Stores and Bolt-On Franchises (where an existing business
adds on the PDC capabilities to its existing offering). PDC is
also about to launch a white label offering (“W3P”).
(p)
1,000
45.0
900
40.0
800
35.0
700
30.0
600
25.0
500
20.0
The model was established to challenge the accepted norms of
high street printing. Instead of a traditional outlet with limited
print capability on site, PDC has an industrial sized production
hub in Manchester enabling a higher standard of printing. The
100+ outlets and online offering use proprietary software to
link to the hub enabling the group to benefit from economies of
scale. Delivery to the customer is usually within three days.
400
15.0
300
200
10.0
100
5.0
0
Mar-11
0.0
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Volume
Sep-12
Dec-12
Price
On 20 February the company announced that it will be
materially behind market expectations in the current year (Y/E
March 2013). However, management is optimistic about the
future and, combined with the debt free balance sheet, has
recommended a final dividend at the same level as the previous
year (1.5p), taking the 2013 DPS to 2.55p. At 30 September
2012 the group had net cash of £1.1m.
Source: T homson Reuters
Key data (Y/E Mar) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
17.0
2.86
1.46
1.31
0.93
2.02
3.15
-1.2
2012A
21.8
3.43
1.30
1.26
1.10
2.32
2.55
-1.8
2013E
21.0
3.00
na
1.00
0.75
1.60
2.55
-1.0
2014E
22.0
3.00
na
1.00
0.75
1.60
1.50
-1.3
2011
11.9%
13.12
0.64
0.81
4.02
8.6%
5.4%
17.7%
-29.4%
2012
9.6%
11.42
0.91
1.46
3.35
6.0%
5.1%
27.9%
14.9%
2013
9.6%
16.56
0.63
0.83
3.83
na
3.6%
-3.5%
-31.0%
2014
5.7%
16.56
1.07
1.75
3.83
na
3.4%
4.8%
0.0%
The company has an admirable desire to maintain the fullest
dividend possible and 2014 Reuters consensus forecast is
currently 2.7p. However, the 2013 dividend will absorb
c.£1.2m of cash. Given that the company is trading behind the
prior year levels and that it operates in a low growth/low
margin industry, we feel with just £1.1m of cash on the balance
sheet there is a strong likelihood that the high level of dividend
pay out will soon be reduced hence our forecast of 1.5p.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Anthony Rafferty (CEO)
Investmentaktiengesellschaft fur Langfristige Investoren
3G Capital Management LLC
Investec Wealth & Investment Limited
Hans Scheffer
Reginald George Hardie
Van Dijk Participates & Advies BV
Peter R Gunning (Dir.)
18.21%
17.18%
5.76%
4.42%
3.99%
3.52%
2.69%
1.44%
Page 63 of 74
Dividends on AIM
Randall & Quilter Investment Holdings Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Non-Life Insurance
131.5
50.13
GBP
RQIH.L
65.9
-22.4
43.6
Share price performance
(K)
(p)
1,000
160.0
900
140.0
When an insurance company no longer accepts any new
business but continues to settle claims, the insurance company
is referred to as being in ‘run-off’. The assets of the company
in run-off are used to pay out the cost of claims on policies as
they fall due and the costs of managing the process. At the end
of the process, when all claims have been settled, the fund is
said to have reached finality (or closure) and any excess capital
can be distributed to the shareholders. Additionally, before
reaching finality, capital can be released from the company,
subject to regulatory approval. Randall & Quilter Investment
Holdings (“R&Q”) is a leading player in the non life run-off
insurance sector. The company is run by a management team
that has been operating successfully in this market space since
the early 1980s.
800
120.0
700
100.0
600
500
80.0
400
60.0
300
40.0
200
20.0
100
0
Mar-11
0.0
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Volume
Sep-12
Dec-12
Price
Source: T homson Reuters
Key data (Y/E Dec) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
36.8
9.99
9.39
8.80
12.97
18.1
8.1
-10.1
2012E
47.2
11.50
10.95
10.50
9.10
18.2
8.5
-50.0
2013E
57.7
12.30
11.70
11.20
10.20
20.4
8.9
na
2014E
na
na
na
na
na
na
na
na
2011
6.2%
7.27
2.23
2.49
4.36
25.5%
35.3%
12.2%
na
2012
6.5%
7.25
2.14
11.73
3.79
23.2%
19.3%
28.3%
0.3%
2013
6.8%
6.45
2.29
na
3.54
20.3%
17.7%
22.3%
12.4%
2014
na
na
na
na
na
na
na
na
na
The run-off process can be lengthy and unprofitable if there has
been a miscalculation of liabilities or if the company does not
have the necessary skill base in order to manage the run-off
process efficiently. As such, insurance companies engage with
R&Q’s ‘Insurance Services’ business in order to gain
assistance in taking their portfolios to finality. Additionally, runoff portfolios are often seen as a distraction or inefficient use of
management time and can unnecessarily tie up capital on a
company’s balance sheet. Hence, R&Q is also an acquirer of
portfolios in run-off (through its ‘Insurance Investments’
business). It acquires them at discounts to NAV and then takes
the risk (of taking the portfolio to finality) onto its own balance
sheet.
R&Q has a policy of dividend growth of at least 5% per
annum from the base level of 7.4p per share in 2009. We see
no reason why this should not be achieved near term given the
recent profitable performance and that at 30 June 2012 the
company had a net cash position of £22.4m. Furthermore, the
valuation is supported at the same date by a NAV of 106.7p
per share.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Equity Development, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Kenneth Randall (Chairman)
Alan Quilter (COO)
Henderson Global Investors Ltd
Miton Group Plc
Mark Randall
L&G Investment Management (UK) Ltd
RQIH Employee Benefit Trust
B.P. Marsh & Partners Plc
34.98%
8.07%
5.73%
5.34%
3.22%
2.61%
1.42%
1.33%
Page 64 of 74
Dividends on AIM
Slingsby (HC) Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Industrial Machinery
500.0
1.00
GBP
SLNG.L
5.00
-2.99
2.01
Share price performance
(K)
(p)
120
30
300.0
900.0
100
25
800.0
250.0
700.0
80
20
200.0
600.0
60
15
500.0
150.0
400.0
40
10
100.0
300.0
205
200.0
50.0
100.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Dec) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
15.2
0.86
0.42
0.42
0.32
32.0
32.0
-2.4
2012E
13.7
0.77
0.38
0.38
0.29
28.8
24.0
-2.5
2013E
12.3
0.70
0.34
0.34
0.26
25.9
24.0
-2.5
2014E
na
na
na
na
na
na
na
na
2011
6.4%
15.63
1.00
7.62
2.34
2.8%
2.1%
-8.6%
-55.4%
2012
4.8%
17.36
1.20
10.42
2.60
2.8%
2.1%
-10.0%
-10.0%
2013
4.8%
19.29
1.08
10.42
2.89
2.8%
2.1%
-10.0%
-10.0%
2014
na
na
na
na
na
na
na
na
na
0.0
0.0
Slingsby is a manufacturer and distributor of industrial and
commercial equipment, specifically through distance selling. Its
list of products currently consists of over 35,000 items, ranging
from office furniture and equipment, to flooring treatments and
matting, to storage and shelving. The company has been in
existence since 1893, becoming a Plc in 1961 and joining AIM
in May 2005. As such, it has managed to cement its position as
one of the UK’s market leaders in the industry.
From Q2 2011, the company’s trading has suffered
significantly due to depressed economic conditions. For the
year ending 31 December 2011, revenue slipped 9.0% yoy
and net profits, 55.4%. The market downturn continued into
2012, with H1 revenue and net profits down 3.3% and 20.4%
yoy, respectively. Net assets likewise decreased in value by
39.7% in the six month period.
Nevertheless, the company has been proactive in attempting to
maintain margins, with a tightening of control on costs, further
investment in I.T., and an increased sourcing of products from
the Far East. Add in the company’s diverse customer base, its
extensive product range and a robust balance sheet, and one
can understand the Board’s confidence that it can weather the
downturn and take advantage of any recovery in the economy.
Slingsby is consistent in paying dividends, having failed only 4
times not to maintain or increase it yoy in 25 years. The
company tends to pay c.12% – 17% of its total dividend in the
interim instalment. 4p per share has already been distributed
subsequent to the 2012 interims: we therefore expect a
minimum final dividend of 20p in FY 2012. With cash in the
bank of £3.0m (as at 30 June 2012) and the total cost of such
a dividend to be £0.2.m, this should not be a stretch for the
company. The dividend cover in 2011 was only 1.0x, perhaps
further evidence of the Board’s bullish outlook for future
growth.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Michael Chadwick
Thomas Edward Jones
John Henry Ridley
Christian James Slingsby (Dir.)
Dominic Stanley Slingsby (MD)
8.10%
5.49%
5.43%
5.39%
5.12%
Page 65 of 74
Dividends on AIM
Stadium Group Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Electrical Components
46.0
29.41
GBP
SDM.L
13.5
-1.5
12.0
Share price performance
(K)
(p)
120
4,500
300.0
100.0
4,000
100
3,500
90.0
250.0
80.0
80
3,000
70.0
200.0
60.0
2,500
60
2,000
150.0
50.0
40
1,500
40.0
100.0
30.0
1,000
20
500
20.0
50.0
10.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Dec) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
44.9
4.62
4.00
3.96
2.62
9.0
2.8
-2.9
2012E
40.6
2.50
2.30
1.80
1.30
4.5
2.8
-3.9
2013E
46.5
4.05
3.40
3.00
2.30
7.7
3.1
-7.3
2014E
na
na
na
na
na
na
na
na
2011
6.1%
5.11
3.21
3.57
2.60
8.9%
5.8%
0.3%
32.4%
2012
6.1%
10.22
1.61
4.74
4.81
5.7%
3.2%
-9.7%
-50.0%
2013
6.7%
5.97
2.48
8.01
2.97
7.3%
5.0%
14.4%
71.1%
2014
na
na
na
na
na
na
na
na
na
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
0.0
0.0
Stadium Group provides power supplies and electronic
manufacturing services (“EMS”) to the professional electronics
market. Stadium has evolved from a pioneer of early plastic
injection moulding processes into an integrated electronic
technologies group that operates in the UK, China and Hong
Kong, employing over 1,100 people. In 2012, the company
also ventured into the intelligent displays market by acquiring
IGT Industries Ltd (“IGT”) for a maximum cash consideration
of £4.5m.
Operations in 2012 were hit hard by the continued slowdown
in the EMS marketplace. In the first half of the year, revenues
generated by the company’s core Electronics division were
£18.16m, a 12% decline yoy. Trading in Asia was responsible
for much of this reduction (a slump in turnover of 18% in the
period), where steps were taken to address the poor
profitability of some legacy contracts. Overall, operating profit
for the Electronics division was down by 90% to £0.12m. The
company has reported that operations in H2 2012 were again
below market expectations, and has begun evaluating its
options with regard to the division’s activities.
Conversely, the newer Power division posted an operating
profit in H1 of £0.62m on revenues of £2.77m, up 18% and
12%, respectively. The acquisition of IGT, which recorded an
annual operating profit of £0.58m in its most recent accounts,
should also make a significant contribution to group profits
from 2013.
The company’s policy is to pay a dividend that is covered 3
times by earnings. The interim remained unchanged at 1.05p.
While full year results are expected to be below market
expectations, and a £3.45m cash consideration was paid for
IGT, the company did however book a £2.3m exceptional
profit on the disposal of its Hong Kong property, and
furthermore increased its debt facility with HSBC to £11.5m.
A maintained final dividend is therefore feasible, although
management would be forced to temporarily bend their policy
on cover in order to achieve this.
Key Shareholders
AXA Investment Managers UK Ltd
Henderson Global Investors UK Ltd
Midas Capital Partners Ltd
Georgina Deborah Fry
Chelverton Asset Management Ltd
13.89%
7.10%
5.03%
4.87%
3.99%
Page 66 of 74
Dividends on AIM
Swallowfield Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Consumer Products
88.5
11.31
GBP
SWL.L
10.0
4.1
14.1
Share price performance
(K)
(p)
120
160.0
140.0
100
120.0
80
100.0
80.0
60
60.0
40
40.0
20
20.0
0
Mar-11
0.0
Jun-11
Sep-11
Dec-11 Mar-12
Jun-12
Volume
Sep-12
Dec-12
Faced with weakening global economies at the end of the last
decade, Swallowfield set about increasing its geographical
spread, widening its product range and focusing on its cost
base. The company made significant progress and in the two
years to June 2012 revenue and profit before tax grew 10%
and 32% respectively. Net debt was reduced in the year to
June 2012 from £4.7m to £4.1m and the dividend payment
was maintained at 6.3p. All was progressing well and the
company noticed trends such as the diminishing cost advantage
of manufacturing and shipping from China compared to
European production and hence some customers were wishing
to increase the proportion of local production from domestic
markets.
Price
Source: T homson Reuters
Key data (Y/E Jun) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
Swallowfield designs, develops and manufactures cosmetics,
toiletries and related household goods such as bodycare,
skincare, haircare and fragrances and colour cosmetics. Clients
include global brands and leading retailers. The company is
headquartered in the UK but also has a production facility in
the Czech Republic, a sourcing office and a manufacturing joint
venture in China and sales operations in France and the US.
Current key markets are the UK, US, Europe and Japan. The
company had been performing admirably over the last few
years and consistently paid a dividend of 6.3p. However, a
recent profits warning leads us to expect a cut to the 2013 pay
out.
2011A
57.5
2.62
1.41
1.33
1.08
9.6
6.3
4.7
2012A
57.9
2.84
1.57
1.56
1.26
11.2
6.3
4.1
2013E
54.0
2.00
1.00
1.00
1.00
5.3
6.3
5.0
2014E
56.0
3.00
2.00
2.00
2.00
13.2
7.1
4.0
2011
7.1%
9.22
1.52
-6.58
5.39
2.5%
1.9%
9.5%
17.1%
2012
7.1%
7.90
1.78
-5.77
4.97
2.7%
2.2%
0.7%
16.7%
2013
7.1%
16.70
0.84
-7.02
7.06
1.9%
1.9%
-6.7%
-52.7%
2014
8.0%
6.70
1.86
-4.98
4.71
3.6%
3.6%
3.7%
149.1%
The good news came to an end on 15 November when the
company warned that due to difficult trading conditions
turnover in the 6 month period to 31 December 2012 would
be significantly lower than the prior year and that full year
earnings would be significantly below current market
expectations. Consenus earnings forecasts have come down
with 2013 EPS forecasts now 5.3p, although the Reuters
consensus dividend forecast remains 6.3p. Given the
company’s policy to have a dividend cover of around 2.0x, we
expect the 2013 dividend to more likely be around the 2.65p
level.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Peter Gyllenhammar
Western Selection
R&A Persey
J&L Wardell
A&T Dowsett
M A Wardell
29.56%
16.53%
9.67%
5.59%
3.53%
3.06%
Page 67 of 74
Dividends on AIM
Tristel Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Health Care Providers
22.5
39.98
GBP
TSTL.L
9.00
-0.54
8.46
Share price performance
(K)
(p)
120
1,400
300.0
70.0
1,200
100
60.0
250.0
1,000
80
50.0
200.0
800
60
40.0
150.0
600
30.0
40
400
100.0
20.0
20
200
50.0
10.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Jun) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
9.3
1.20
0.53
0.51
0.48
1.21
0.56
-0.33
2012A
10.9
1.64
0.59
0.58
0.71
1.77
0.62
-0.54
2013E
10.2
1.20
0.20
-1.80
-0.80
-2.00
0.21
0.40
2014E
11.9
1.80
0.90
0.90
0.70
2.60
0.80
0.70
2011
2.5%
18.60
2.16
1.47
7.05
5.7%
5.2%
6.1%
-67.0%
2012
2.8%
12.71
2.85
2.18
5.16
5.4%
6.5%
17.8%
46.3%
2013
0.9%
-11.25
-9.68
-4.84
7.05
2.0%
-7.8%
-6.8%
-213.0%
2014
3.6%
8.65
3.25
-2.19
4.70
7.6%
5.9%
16.7%
-230.0%
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Tristel operates under three principle brands: the core brand,
Tristel, provides proprietary infection prevention products to
the Human Healthcare market. The Crystel brand sells its
products to the Contamination Control market, with clients
ranging from pharmacies to manufacturing plants. Anistel, the
final brand, was created in March 2012 after the termination of
the supply arrangement with the distributor Medichem
International. Its products are sold directly to the Animal
Healthcare market. Since listing on AIM in 2005, the group
has impressively increased its revenue yoy, and has remained
profitable throughout.
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
0.0
0.0
The 6m period to 30 December 2012 witnessed Tristel post its
first interim loss in its history. Revenues dropped 13.0% yoy to
£4.4m, with a pre tax loss of £0.64m. This was largely due to
the stuttering sales of the legacy endoscopy disinfectant
business, which is in the process of being wound up. Revenues
from the division fell by £0.73m, or 52.7%. Final restructuring
and legacy asset write offs also contributed to a non cash
exceptional charge of £2 million.
Nevertheless, the long restructuring process which focused on
boosting production capacity, expanding the product range,
and broadening the geographical footprint, is almost complete.
The novel Tristel Wipes System, which management believes is
now the ‘gold standard’ for the decontamination of ultrasound
probes and ENT endoscopes, has become the key revenue
driver. Sales for the Wipes System increased by 56.6% yoy in
FY 2012, to £3.4m, and in January 2013 gained regulatory
approval to be sold in China. In tandem, continued
international expansion is a second key revenue driver. In FY
2012, group export sales increased by 107.6% to £2.1m.
A token interim dividend of 0.08p was announced in the 2013
interims. Although this does not bode well for the total FY
2013 dividend, we are confident that there is a significant
upside to both earnings and dividend in the long term, owing
almost entirely to the unique and highly sought after Wipes
System. Crucially, its patent has a further ten years to run.
Key Shareholders
Francisco Soler (NED)
Downing LLP
Amati Global Investors Ltd
ISIS Equity Partners LLP
Unicorn Asset Management Ltd
Williams de Broë Ltd
Investec Wealth & Investemnt Ltd
21.76%
8.12%
6.29%
5.44%
4.09%
4.03%
3.47%
Page 68 of 74
Dividends on AIM
Vianet Group Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Business Support Services
97.5
27.81
GBP
VNET.L
27.1
2.4
29.5
Vianet (formerly Brulines Group Plc) is the UK leading
provider of real time monitoring systems and data management
services, both to the leisure and petrol forecourt sectors.
Having diversified considerably over the past two years via
multiple acquisitions and product innovation, it now operates in
two segments: Vianet Ltd (Leisure, Vending and Technology)
and Vianet Fuel Solutions Ltd (Fuel). Since listing on AIM in
2006, the company has impressively increased its dividend
year on year, with the 2012 total dividend up 89% in the 6
years to date.
Share price performance
(K)
(p)
120
900
300.0
140.0
800
100
700
120.0
250.0
100.0
200.0
80
600
500
60
400
80.0
150.0
40
300
100.0
40.0
60.0
200
20
100
50.0
20.0
00
Feb-11 May-11
Mar-11
Jun-11 Aug-11
Sep-11 Nov-11
Dec-11
Feb-12 May-12
Mar-12
Jun-12 Aug-12
Sep-12 Nov-12
Dec-12
Volume
Volume
Price
Price
Source: T homson Reuters
Key data (Y/E Mar) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
24.3
4.27
3.09
3.03
2.43
8.6
5.7
1.2
2012A
23.0
4.34
3.90
2.34
2.26
8.0
5.7
3.4
2013E
21.8
3.60
3.00
2.90
2.90
11.9
5.7
1.5
2014E
22.7
4.80
5.10
4.40
4.10
15.2
5.9
-1.4
2011
5.8%
11.32
1.52
-0.78
6.90
12.7%
10.0%
22.4%
-20.9%
2012
5.8%
12.19
1.41
-2.16
6.79
17.0%
9.8%
-5.4%
-7.1%
2013
5.8%
8.19
2.09
-0.95
8.19
13.8%
13.3%
-5.1%
48.8%
2014
6.1%
6.41
2.58
0.85
6.14
22.5%
18.1%
4.1%
27.7%
0.0
0.0
The core Leisure Solutions division (accounting for 70.4% of
group revenue in H1 2013), that provides beer monitoring
solutions to pubs and bars, re-launched its higher value
iDraught product in 2010. As an improved product on the
company’s principal Dispense Monitoring Solutions (“DMS”),
it is capable of measuring volume, flow rate, etc. – and
consequently offers an accurate measurement of yields on
particular products for customers. As such, it is fast becoming
a key revenue driver for the group. 669 of the 716 new
installations in the half year to 30 September 2012 were for
iDraught, many of them due to existing customers upgrading
their DMS product. Management believes there are strong
growth prospects for the product internationally, and will be
launching iDraught in the USA in Q4 2013.
Importantly, the nascent Fuel Solutions division became
profitable for the first time in September 2012, and there are
likewise significant sales opportunities for the Vending and
Technology businesses. Net profits for the group in the six
months to 30 September 2012 increased by 5.3%, and the
interim dividend by 1.8%, to 1.7p. A profits warning update in
February 2013 shook investor confidence in the company, yet
management’s buoyant outlook for its prospects in the medium
and long term is emphasised by its decision to maintain the final
dividend at 4p. With a still comfortable dividend cover, we do
not believe the cost of conserving the final dividend will place
any undue strain on the balance sheet.
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
James William Dickson (Chairman)
Axa Investment Managers UK Ltd
ISIS Equity Partners LLP
Octopus Investments Ltd
Downing LLP
Is Partners Helium Special Situations Fund
15.19%
13.04%
9.61%
4.62%
3.81%
3.60%
Page 69 of 74
Dividends on AIM
William Sinclair Holdings Plc
Summary Data
Sector
Share price (p)
Shares in issue (m)
Reporting currency
Ticker
Market cap (£m)
Last reported net debt/(cash) (£m)
Enterprise value (£m)
Durable Household Products
141.5
17.06
GBP
SNCL.L
24.1
6.2
30.3
Share price performance
(K)
(p)
1,000
250.0
900
800
200.0
700
600
150.0
500
400
100.0
300
200
50.0
100
0
May-11
William Sinclair Holdings (“WSH”) is a leading UK producer
of commercial horticulture and branded garden products.
Customers include Sainsburys, Homebase and B&Q in
addition to a range of independent garden centres. Profitability
in the year to 30 September 2012 fell sharply (underlying PBT
of £0.26m vs. £3.18m in 2011) as the wettest year in the UK
for 100 years impacted the company’s sales.
The poor weather also impacted the peat volumes harvested
by the company and other producers. To maintain supplies to
its customers in 2013 the company has committed to buying
peat from 3rd parties, much of which is being sourced from
Canada. It has also accelerated its investment in peat drying
capacity. The UK government continues to try to eliminate the
usage of peat. Whilst this constrains WSH’s production it is,
combined with the weather induced supply shortage, leading to
a rising peat price thus increasing the value of WSH’s peat
reserves. A rising peat price likewise means an increase in the
price of alternatives to peat for compost, such as SupaFyba, a
leading peat substitute made from household garden waste.
WSH now produces this substitute, having opened a new
SupaFyba production and packaging site in September 2012
in Cheshire.
0.0
Aug-11
Nov-11
Feb-12
May-12
Aug-12
Volume
Nov-12
Feb-13
Share Price
Source: T homson Reuters
Key data (Y/E Sept) - (£m)
Revenue
EBITDA
EBIT
Pre Tax Profit
Net Profit
EPS (p)
DPS (p)
Net Debt/(Cash)
2011A
54.3
5.43
3.37
3.18
2.35
13.4
6.2
-2.7
2012A
48.2
2.64
0.54
0.26
0.11
0.7
4.5
6.2
2013E
55.0
4.70
2.20
2.00
1.42
8.3
4.8
5.7
2014E
60.1
6.00
3.80
3.40
2.50
14.7
5.5
5.4
2011
4.4%
10.6
2.16
2.51
5.58
6.2%
4.3%
12.0%
38.1%
2012
3.2%
217.7
0.14
-8.01
11.47
1.1%
0.2%
-11.1%
-95.1%
2013
3.4%
17.0
1.73
-6.96
6.44
4.0%
2.6%
14.0%
1176.9%
2014
3.9%
9.7
2.66
-5.76
5.05
6.3%
4.2%
9.2%
76.5%
WSH ended September 2012 with a net debt position of
£6.2m, £5m of which is a 5 year bank loan for the purchase of
the Cheshire site. Furthermore, the company has a £13.2m
pension deficit. A conclusion in 2013 to the company’s claim
for compensation for the cessation of peat harvesting at its
Bolton Fell site could provide a boost to cash balances.
Given the debt and the pension deficit we see the WSH
balance sheet as stretched. Additionally, wet weather
unfortunately seems to be a more common occurrence in the
UK. As such we feel consensus forecasts for such a strong
profits rebound and dividend increase are on the optimistic
side. We hope the sun shines and we are proven wrong!
Margins/Ratios
Dividend Yield
P/E Ratio
Dividend Cover (EPS/DPS)
Net Cash/Dividend
EV/EBITDA
EBIT Margin
Net Profit Margin
Revenue Growth
EPS Growth
Sources: Thomson Reuters, Allenby Capital
Share price as of 01/03/2013
Key Shareholders
Noquer Investments Sa
Midas Capital Partners Ltd
Slater Investments Ltd
J.M. Finn & Co.
Henderson Global Investors Ltd
Investec Wealth & Investment Ltd
8.85%
7.17%
7.06%
4.96%
4.81%
3.99%
Page 70 of 74
Dividends on AIM
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Page 71 of 74
Dividends on AIM
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Page 72 of 74
Dividends on AIM
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Page 73 of 74
Dividends on AIM
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