Report
Paul Bryant

Fund management pivot bears fruit: EBITDA +37%

A year ago, the Mercia 27 strategy was announced, which prioritised scaling the highly profitable fund management business and targeted EBITDA of c£10m by FY27 (£5.5m in FY24). Mercia is flying along. FY25 (to 31 Mar 25) has seen FUM (funds managed for 3rd parties) increase 10% y-o-y to £1.80bn (+46% over 2 years) and EBITDA jump 37% from £5.5m to £7.6m. Its net inflow rate has been the highest among London-listed peers for two years.

Much of that FUM growth came from c. £250m of inflows in Q425 (existing mandate increases, new fund management contracts, and successful VCT and EIS fund raises), so the revenue benefit is still to come. Mercia is also finding further cost efficiencies. Our FY26 EBITDA forecast rises from £6.2m to £7.2m.

Our fundamental value rises from 52p to 56p.
Underlying
Mercia Asset Management

Mercia Technologies is an investment group focused on the creation/identification, funding and scaling of technology businesses from the U.K. regions. Co. directly invests across four sectors: Software & the Internet, which consists of cyber security, software as a service analytical tool, Adtech and artificial intelligence; Digital & Digital Entertainment, which consists of virtual reality, augmented reality, mixed reality and serious games; Electronics, Materials & Manufacturing/Engineering, which consists of energy and communications, value electronics, and manufacturing applications; and Life Sciences & Biosciences, which consists of diagnostics, digital health and medical devices.

Provider
Equity Development
Equity Development

​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.

Analysts
Paul Bryant

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