Delivering growth, with more to come
Fairpoint has produced profits before exceptionals of £9.25m, 15% higher than in 2013 and modestly better than our forecast of £9.12m, leading to adjusted earnings per share of 17.17p (up 14% and again modestly better than forecast) and dividends of 6.4p for the year. More significantly in the long run, 2014 saw its expansion into legal services with the major acquisition of Simpson Millar in June, followed by the add-on acquisition of the much smaller Fosters in July. The group also took advantage of its better systems and economies of scale to acquire three Debt Management companies and/or back books boosting its portfolio to over 25,000 DMPs. Fairpoint is still the leading company in the shrinking IVA sector, but it is growing despite the decline in its core market because: it now has four major divisions, diversifications generate 65% of revenue, legal services now generating more revenue than IVAs, immediate synergy from acquisition of Fosters, further legal services acquisitions in prospect, and scope for both organic growth and more purchases: £12m headroom on debt facility and strong cash generation. There should be a discount for smaller companies, but we feel that one greater than 25% - 50% on a PER or yield basis is excessive. Fair value per share is somewhat above 150p.
Equity Development enables companies to become better understood and supported by investors. Since our launch in 1996 we have consistently focused on helping our clients improve their communication and relationships with both existing and potential shareholders. Our clients have come from a wide variety of sectors and domiciles, are both private and quoted and range in size from micro-cap to $multi-billions. We offer free access to company research notes written by experienced analysts. These notes include detailed forecasts, financial models and a fair value. We host regular Private Investor Forums at which investors have the opportunity to hear company directors present, and to ask questions. These are free to attend. We broadcast live Webinars with company management that include active Q&A. We also make the recordings available online. We arrange face to face meetings between private investors and company management. We are active users of Twitter, commenting daily on company news, share price moves, Directors’ Dealings, Equity Development Research Notes & Events.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.