reports
- Paul Bryant
A rarity in the sector: Revenue +19%, EBITDA +34%
H1-25 (to 30 Sep 24) saw further progress of the Mercia 27 strategy which targets £3bn AUM (FUM + proprietary capital) and c.£10m EBITDA by FY27. AUM was up 26% y-o-y and 1% over H1-25, following a series of large mandate wins in late FY24. Mercia is one of very few London-listed asset managers with positive net flows over recent periods. H1 revenue was up 19% y-o-y and EBITDA +34%, a margin of 20.8%, up from 18.4% in H1-24. This is likely to ratchet up over the longer term as the business sca...
- Paul Bryant
Positive trading, discount-to-NAV being addressed
In its AGM statement of 26 Sep 24, Mercia has confirmed that trading has been positive to date in FY25 (1 Apr 24 – 31 Mar 25), it is encouraged by current deal pipelines, and it is “optimistic for continuing profitable progress” in H2. We remind readers that Mercia is scaling rapidly, with FUM more than doubling over two years to >£1.6bn. This was boosted by record net inflows in FY24 of >£0.5bn, including a string of new mandates from British Business Bank. Mercia has also confirmed a net cash...
- Paul Bryant
A deeply undervalued specialist in private markets
Mercia is one of the largest investors in ‘regional’ (ex-London) UK growth businesses. Its primary focus is managing funds of around £1.6bn for third parties (FUM) in structures such as Venture Capital Trusts, EIS funds and funds for institutional investors. The business is scaling. FUM has more than doubled in two years. Record net flows exceeded £0.5bn in FY24. And growth is by far the highest among a London-listed peer group. FY24 revenue grew 18% y-o-y to £30.4m, EBITDA 7% to £5.5m, a margi...
Mercia Asset Management: 1 director
A director at Mercia Asset Management sold 1,563,813 shares at 33p and the significance rating of the trade was 64/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years cl...
- Richard Williamson
Mercia Asset Management - Termination of coverage
Edison Investment Research is terminating coverage on Mercia Asset Management (MERC), Bloc Ventures (unlisted), YOC (YOC.DE), Genuit Group (GEN), AlzeCure Pharma (ALZCUR), abrdn Latin American Income Fund (ALAI), Magforce (MF6), OPG Power Ventures (OPG) and paragon (PGN). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant.
- Richard Williamson
Mercia Asset Management - A safe haven for investors awaiting the uptu...
As a regionally focused specialist asset manager, Mercia does not expect to experience the same highs and lows in valuations seen in more international growth markets. Mercia offers a defensible UK regional proposition, well aligned to the government’s levelling-up and SME agendas, with its venture portfolio supplemented by private equity and debt funds, investing across the digital media, software, life sciences and engineering sectors. With recurring fee income from FUM of £758m at 31 March 20...
- Richard Williamson
Mercia Asset Management - Excellent results despite the tough market
FY22 was the first year of Mercia’s Vision 20:20 strategy, and a year of real progress for the group. Mercia reported FY22 PBT of £27.4m, with AUM rising marginally to £959m, passing the £1bn mark with £45m of VCT and EIS funds raised post-year-end. Mercia exited Faradion, its second largest holding (4.2x ROI, IRR of 72%) and also completed a major up-round for nDreams, helping to drive net assets up 14% to £200.6m and NAV per share to 45.6p. Mercia trades at 0.65x FY22 NAV/share and at 0.56x ad...
- Richard Williamson
Mercia Asset Management - Another good exit: 4.2x ROI, 72% IRR
Mercia Asset Management has completed the sale of its second largest holding, Faradion (a leading sodium-ion battery technology company), for £100m to Reliance New Energy Solar, a subsidiary of India’s Reliance Industries. Mercia will receive total cash proceeds of £19.4m from the sale, including initial unrestricted cash proceeds of £18.6m, plus a further £0.8m ringfenced for three months. The sale value represents an uplift of approximately 50% over Faradion’s conservative carrying value of £1...
- Richard Williamson
Mercia Asset Management - Another good exit: 4.2x ROI, 72% IRR
Mercia Asset Management has completed the sale of its second largest holding, Faradion (a leading sodium-ion battery technology company), for £100m to Reliance New Energy Solar, a subsidiary of India’s Reliance Industries. Mercia will receive total cash proceeds of £19.4m from the sale, including initial unrestricted cash proceeds of £18.6m, plus a further £0.8m ringfenced for three months. The sale value represents an uplift of approximately 50% over Faradion’s conservative carrying value of £1...
- Richard Williamson
Mercia Asset Management - Sustainable model remains undervalued
After 18% growth in FY21, H122 assets under management (AUM) was up only marginally to c £948m, with nine exits resulting in distributions to investors of £39m. Net assets and NAV per share rose by 6% during the period to £186.4m and 42.4p, respectively. Revenue (excluding £2.6m of performance fees) increased 21% y-o-y to £10.1m (88% contracted and recurring) with EPS rising 35% y-o-y to 2.53p, leaving the group with net cash of £52m. Confidence in the sustainability of Mercia’s hybrid model all...
- Richard Williamson
Mercia Asset Management - Sustainable model remains undervalued
After 18% growth in FY21, H122 assets under management (AUM) was up only marginally to c £948m, with nine exits resulting in distributions to investors of £39m. Net assets and NAV per share rose by 6% during the period to £186.4m and 42.4p, respectively. Revenue (excluding £2.6m of performance fees) increased 21% y-o-y to £10.1m (88% contracted and recurring) with EPS rising 35% y-o-y to 2.53p, leaving the group with net cash of £52m. Confidence in the sustainability of Mercia’s hybrid model all...
- Richard Williamson
Mercia Asset Management - Profits, growth and value
Mercia reported a strong rise in the NAV of its Northern Venture Trust (NVT) subsidiary, reflecting the IPO of musicMagpie and other successful exits, leading to Mercia receiving a net performance fee of £1.6m. As a result, together with Mercia’s substantially recurring management fees, management expects H122 PAT to exceed £10m, with the FY22 adjusted operating profit (excluding the NVT net performance fee) expected to be materially ahead of market forecasts. The shares trade at a larger discou...
- Richard Williamson
Mercia Asset Management - Profits, growth and value
Mercia reported a strong rise in the NAV of its Northern Venture Trust (NVT) subsidiary, reflecting the IPO of musicMagpie and other successful exits, leading to Mercia receiving a net performance fee of £1.6m. As a result, together with Mercia’s substantially recurring management fees, management expects H122 PAT to exceed £10m, with the FY22 adjusted operating profit (excluding the NVT net performance fee) expected to be materially ahead of market forecasts. The shares trade at a larger discou...
- Richard Williamson
Mercia Asset Management - FY21 a breakthrough year, with more to come
FY21 was the year Mercia’s business model as a specialist asset manager matured. The group largely achieved its FY22 strategic goals a year ahead of target (assets under management, AUM, of c £1bn, evergreen balance sheet and sustainable profitability), with NAV per share climbing 24% y-o-y to 40p and AUM rising 18% y-o-y to £940m at year end. Given this progress, a new plan has been set, Mercia 20:20, aiming for average annual growth in AUM of 20% and average PBT of £20m between FY22 and FY24. ...
Edison Investment Research Limited: Mercia Asset Management (MERC): Th...
Edison Investment Research Limited Edison Investment Research Limited: Mercia Asset Management (MERC): The UK's top regional investor 03-March-2021 / 07:00 GMT/BST London, UK, 3 March 2021 Mercia Asset Management (MERC): The UK's top regional investor The £30.7m cash exit from Oxgene underlines management's success in building a sustainably profitable specialist asset manager, delivering high levels of contracted revenue and providing a filtered pipeline of opportunities for Mercia's direct investment portfolio. Based on progress to date, we believe Mercia will achieve its t...
- Richard Williamson
Mercia Asset Management - The UK’s top regional investor
The £30.7m cash exit from Oxgene underlines management’s success in building a sustainably profitable specialist asset manager, delivering high levels of contracted revenue and providing a filtered pipeline of opportunities for Mercia’s direct investment portfolio. Based on progress to date, we believe Mercia will achieve its three-year strategic plan ahead of time (grow operating profitability, expand assets under management (AUM) to £1bn and ‘evergreen’ the balance sheet by end FY22). By the e...
- Richard Williamson
Mercia Asset Management - The hybrid model - halfway home
Mercia has demonstrated real progress on its three-year strategic plan to achieve operating profitability, expand AUM to £1bn and ‘evergreen’ the balance sheet by end FY22. AUM have increased to £872m, with third-party, fee-earning FUM of £722m. The group delivered an operating profit of £8.0m (H120: £2.1m), an adjusted operating profit (ex-realisations, fair value gains, etc) of £1.1m (H120: £0.6m loss) and H121 EPS of 1.87p (H120: 0.69p). Revenues are sustainable, with 87% recurring, allowing ...
- Richard Williamson
Mercia Asset Management - Life sciences helping the COVID-19 fight
Life sciences is one of Mercia’s areas of focus and investment expertise. Seven of Mercia’s top 20 holdings at 31 March 2020 were in life sciences, valued at £29m in aggregate or 33% of total portfolio value (all of which had originated through Mercia’s third-party managed funds), with another c 40 earlier-stage life sciences investments across its third-party managed funds. COVID-19 has accelerated the opportunity for a new generation of novel and recombinant vaccines. This explosion of potenti...
- Richard Williamson
Mercia Asset Management - Scaling, sustainable and evergreen by FY22
Mercia’s FY20 results reflect continued progress, delivering on management’s three-year strategy. AUM climbed 58% to £0.8bn, while FUM rose 73% to £658m. Following the acquisition of the NVM VCT fund management business, the company is operationally profitable on a monthly basis, with annual revenues exceeding operating costs for the first time in FY20. Net assets rose 12% to £141.5m, with the direct investment portfolio stalled at £87.5m reflecting the impact of COVID-19 fair value adju...
- Richard Williamson
Mercia Asset Management - Successful exit of The Native Antigen Compan...
With the sale of The Native Antigen Company (NAC) for up to £18m in cash, Mercia expects to realise £5.2m (1.2p per share) for its 29.4% stake. This exit delivers another significant milestone in management’s strategy to achieve an evergreen funding model. Management has confirmed that the group is profitable on a day-to-day basis following the acquisition of the NVM VCT management contracts (NVM) in December 2019. NVM, together with additional allocations from the British Business Bank (BBB...
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