This morning’s surprise update guides to trading ahead of expectations for FY 23, driven by inflation linkage and buoyant client demand. We increase our FY 23 EPS by 6% with similar upgrades to FY 24 as further inflation linkage benefits annualise next year. We also reduce our covenant net debt estimate from £65m to £62m (excluding leases) given the better-than-expected trading. BUY, TP increased from 210p to 215p, a P/E of 13.5x presents good value given the chance of further upgrades, the resi...
The UK economic outlook has improved, and energy prices have been much responsible for that. Despite some uncertainty left on this front for winter 23/24, prices are not expected to rise as rapidly as in 2022, thus views on inflation and economic growth have become less pessimistic (ours included) over the last two months. Why? A better energy outlook benefits consumption, business sentiment (thus investment) and eases the burden of fiscal support in 2023.
The UK economic outlook has improved, and energy prices have been much responsible for that. Despite some uncertainty left on this front for winter 23/24, prices are not expected to rise as rapidly as in 2022, thus views on inflation and economic growth have become less pessimistic (ours included) over the last two months. Why? A better energy outlook benefits consumption, business sentiment (thus investment) and eases the burden of fiscal support in 2023.
As the macroeconomic backdrop worsens, we favour quality names with strong balance sheets that can easily withstand a deterioration in trading. Our simple scorecard system highlights Keystone and Gateley as the high-quality stocks to own. Both generate cash and have strong balance sheets and few exceptionals, but they trade 38% and 9% below their historic multiples, respectively. Our scorecard also indicates that DWF and Knights are the stocks to avoid, and this is supported by our balance sheet...
XPS PENSIONS GROUP PLC. (GB), a company active in the Asset Managers industry, loses a star(s) at the fundamental level and sees its general evaluation downgraded. The independent financial analyst theScreener just removed a fundamental star(s) for a 3 over 4-star rating. As such, market behaviour remains unchanged and is evaluated as moderately risky. theScreener believes that the loss of a star(s) merits downgrade to the general evaluation of the title, which passes to Neutral. As of the analy...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
XPS Pensions Group (“XPSâ€) interim results to 30 September 2018 are the maiden results for the combined group (Xafinity acquired businesses from Punter Southall Group in January 2018). In summary these results reveal: ï‚§ Revenue rise by 113% to £47.5m, driven by the acquisition of the Punter Southall businesses: pro-form growth was 3.3%; ï‚§ Adj operating profit increased 63% to £11.4m, as the EBIT margin on the Punter Southall Administration businesses is half that of Xafinity’s busin...
Using reported results for XPS Pensions Group (“XPSâ€) published in June, we have calculated proforma revenues, profit and adj EPS assuming Punter Southall had been included for the full year to March 2018. Key points are: ï‚§ Total proforma revenue for the year of £106.0m includes a £51.5m contribution from Xafinity (excluding HR Trustees which was sold) and £54.5m contribution from Punter Southall (post acquisition actual reported: £12.8m); ï‚§ Proforma EBIT margin of 24.2% reflects a ...
What’s new On Tuesday 18 September 2018, XPS Pensions Group (â€XPSâ€) announced two contingent deals: ï‚§ The proposed acquisition of Kier Pensions Unit (“KPUâ€) from Kier Group for total max consideration of £3.5m in cash conditional, inter alia, on a threshold percentage of KPU’s existing clients agreeing to transfer their contract to XPS. The acquisition is expected to add approximately 4% to XPS’s revenues. ï‚§ The proposed disposal of Healthcare Consulting Business (“HCBâ€) t...
XPS’s full year results which include the acquisition of Punter Southall in January, are in line with our expectations. The merger of Xafinity and the pensions administration business of Punter Southall, has created the largest “pure-play†pensions consultancy in UK based on proforma revenues. These results set out the platform on which XPS are building.
Xafinity’s year-end trading update reveals: ï‚§ New business activity in H2 has resulted in “good momentumâ€; ï‚§ The integration of Punter Southall's actuarial consulting, pensions administration and investment consulting businesses has “advanced well†and the response from both clients and employees has been “positiveâ€; ï‚§ Full year results to be “in line with its expectationsâ€; ï‚§ “Xafinity is well positioned for further growthâ€.
The combination of Xafinity and the pensions actuarial, investment and administration business of Punter Southall, creates the largest “pure-play†pensions consultancy in UK. Xafinity is a market leader in providing pension compliance and advisory services to trustees and sponsors of UK corporate pension schemes. We see its earnings as high quality and dividend paying capability as outstanding given the cash generative nature of its business. This acquisition doubles Xafinity’s market sha...
​Xafinity provides a range of services to pension trustees and sponsors, including derisking, valuation, and administration services. In recent years the company has delivered steady EBITDA margins of above 30%, with a 90% cash conversion ratio, and more than 80% of revenues coming from recurring streams. All characteristics one would hope to see in a pension advisory business. But where’s the excitement? In this report we examine two of the growth opportunities which we believe will allow Xaf...
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