Chesnara (CSN): Good 2023 results set platform for future progress

Chesnara has announced its 2023 results. Positive returns from equity markets and gains from acquisitions in the first half were somewhat offset by adverse changes to operating assumptions in the second. Economic Value profit of £59.1m marked a good turnaround from a loss of £85.1m in 2022. Economic Value of £524.7m was 2% higher than a year ago, reflecting the dividend payment and forex effects. The final dividend of 15.61p brought the full year up to 23.97p, a 3% increase over the previous yea...

Hardman & Co Research: Tissue Regenix (TRX) - Six consecutive periods ...

TRX is focused on the development and commercialisation of two proprietary processing technologies for the repair of soft tissue (dCELL®) and bone (BioRinse®). It has a broad portfolio of products used in biosurgery, orthopaedics and dental markets. Investment in tissue processing, manufacturing capacity and strong commercial partners, together with its “4S” strategy, has generated six consecutive reporting periods of strong growth, with TRX turning EBITDA-positive in 2023. Further growth in 202...

Arbuthnot Banking Group (ARBB): 2023 - delivering strategy with strong...

The saying goes, the proof of the pudding is in the eating. ABG’s 2023 results proved that the strategic positioning of the group, as a relationship bank, has created enormous value. Key highlights were i) PBT £47.1m (2022: £20.0m), ii) operating income £178.9m (2022: £137.4m), iii) average net margin 5.7% (2022: 5.1%), iv) EPS +103% to 222.8p, v) total dividend for the year of 46p (2022: 42p), vi) net assets of £252.4m (2022: £212.0m), NAV per share of 1,547p (2022: 1,411p), vii) CET1 ratio of ...

H&T Group (HAT): Core franchise build, short-term retail noise

In our 15 March 2023 initiation, 'Pawnbroking royalty, with strong, profitable growth', and subsequent notes, we have highlighted the strong market for pawnbroking and why H&T, as the market leader, is uniquely placed to take advantage of these opportunities. These results reconfirmed both, with the pledge book up 28% and net pawnbroking revenue up 36%. Like many in the retail space, H&T faced the challenge of customers focusing on lower-value, lower-margin items in the key run-up to Christmas 2...

The International Stock Exchange (TISE): Very strong full-year perform...

The International Stock Exchange (TISE) had a very good year in 2023, with revenue up 9% to £10.8m and fully diluted EPS +18% to 170p, against a continued backdrop of subdued financial markets. Both figures were marginally ahead of our expectations. The performance, once again, demonstrates the resilience of the business with the strength of the repeating annual listing fees; since 2020, it has now paid out more in dividends than its then share price (650p). Our forecasts are largely unchanged, ...

The Hardman & Co Monthly: April 2024

Feature article: Steady as she goes, but could be better: A review of investment company liquidity since 2016 Liquidity is the lifeblood of equity markets. The measurement of liquid asset availability to a market or company is a way of gauging a market’s health. This article builds on our previous work, which analysed the liquidity data for non-financial trading companies, by applying the same analytical techniques to the investment companies (IC) space. We analyse liquidity for ICs as a whol...

Hardman & Co Insight: Investment company liquidity – steady as she goe...

Summary ► Liquidity is the lifeblood of equity markets. ► Following the events at the Woodford Equity Income Fund (WEIF), in 2019, professional investors, increasingly, focus on liquidity when making investment decisions. ► Hardman & Co is employed to analyse liquidity by Authorised Corporate Directors, Depositaries, stock exchanges and for court cases. We have published a number of publicly available reports on liquidity data. ► This report builds on our previous work, which analysed the liquid...

NB Private Equity Partners (NBPE): Value creation in a higher-rate env...

In this note, we explore how the sources of value creation have evolved and how NBPE’s GP partners are expected to organically and inorganically generate incremental EBITDA growth to offset higher interest costs. Long-term target returns for new deals on the NB platform are unchanged, despite the short-term interest rate noise. This note builds on the drivers of historical superior EBITDA (see 2023 CMD: value creation from growing companies). Investors should note that interest rates are just on...

City of London Investment Group (CLIG): First-half results going in th...

City of London has announced its interim results for 1H’24. With the main headline figures having being announced in January’s trading statement, the principal interest was in some of the details. FUM of $9.58bn is 2% ahead of the level at 30 June 2023 and 5% ahead of the end of 2022. Gross revenues increased YoY by 2%, whereas, expenses grew 6%, resulting in a slightly lower operating profit of $10.0m. On an underlying basis, profit before tax of $13.3m was a 2% decline over the 1H’23 figure. U...

The Hardman & Co Monthly: March 2024

Feature article: Streamed content takes over…after the Great Correction of 2022 Streaming is a disruptive, content-led, subscription-based technology. Challenging all video distribution business models, it opens up global opportunities for a growing variety of content, including gaming and sport. The Great Correction of 2022 saw the share prices of streamers plunge after market leader Netflix reported slowing subscriber growth. The slowdown in growth of subscribers led investors to refocus on ...

Real Estate Credit Investments (RECI) - French and German exposures in...

We last reviewed RECI’s operations in France, 25% of the latest portfolio, in our note, Vive la difference, published 15 February 2022. The core approach is unchanged, but, following the December 2023 factsheet report of an unrealised hit of 1.6p to the NAV from a prime Grade A Paris office exposure, we thought we would review them again. Also, with the November Factsheet reporting a 1.1p NAV hit from a legacy mezzanine position exposed to a Berlin asset, we have considered the de minimis German...

The Praetura Growth VCT is a generalist VCT that will invest in unquoted B2B technology growth companies. The aim is to produce an annual dividend yield of 4%-6% from 2027, with special dividends for large exits when possible. The VCT is evergreen. The report goes into details of how the investment process works, sourcing and decision-making, exit strategies, post-investment governance and monitoring, fees and more. It also includes Hardman & Co’s unique fee calculation table, allowing advisors ...

Hardman & Co Insight: Streamed content takes over

The Great Correction of 2022 saw the share prices of streamers plunge after market leader Netflix reported a slowdown/fall in subscriber growth. Having formerly been seduced by hectic subscriber growth rates, investors quickly refocused, this time on fundamental metrics such as revenue, margins, profits and cashflow. Since then, streamers have continued to take a steadily greater share of viewing while linear TV continues to decline. But growth in streaming subscribers in the US and UK is now a ...

BR Review: Rockpool Inheritance Tax Service - Rockpool Investments LLP

Rockpool Inheritance Tax Service is a non-AIM/unquoted BR product. It will invest in ordinary shares in Novus Lending Limited, which lends on a secured basis to UK SMEs. Rockpool targets a capital return of 4% p.a., with an income option available from the regular sale of shares. The report goes into details of how the investment process works, sourcing and decision-making, exit strategies, post-investment governance and monitoring, fees and more. It also includes Hardman & Co’s unique fee cal...

Praetura EIS Growth Fund - Praetura Ventures Limited

The Praetura EIS Growth Fund mostly invests in B2B technology businesses across a range of sectors. While it invests across a range of stages, its sweet spot is post seed or early Series A and the majority of investments will be based in northern England. It has a structured approach, using its "6M" framework. There is a strong emphasis on post-investment support, with the internal team complemented by Operational Partners. It has been investing since 2011 and has had EIS funds since 2019. So fa...

The Hardman & Co Monthly: February 2024

Feature article: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy - Consolidation is the new mantra. The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and t...

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infra...

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no...

City of London Investment Group (CLIG): Bounce back in FUM after stron...

City of London has announced its trading statement for 2Q’24. Both developed and emerging markets bounced back from a weak 1Q’24 and posted gains for the six-month period. Over 1H’24, the MSCI Emerging Markets TR Index increased 4.7% while the MSCI All World ex US Index increased by 5.6%. These led to a strong increase in FUM, which was $9.58bn at 31 December 2023. This is a 2% increase over the 30 June figure, but 8% over the total at the end of 1Q’24. Across the strategies there was some outpe...

Volta Finance Limited (VTAS): Insights from the Report and Accounts

In this note, we review the key information and messages investors should take from the recent Report and Accounts. In particular, we note the detailed explanations as to how Volta is delivering strong returns. This performance reflects the sound fundamentals of the CLO investment market and the value specifically added by the manager (reaffirming the issues we identified in our note, The benefits of having AXA IM as the manager). In terms of outlook, the expected relative resilience of the port...

H&T Group - Growing pawnbroking core will drive other services

In our 15 March 2023 initiation, Pawnbroking royalty, with strong, profitable growth, and later notes, we have highlighted the strong market for pawnbroking and why H&T, as the market leader, is uniquely placed to take advantage of these opportunities. Subsequent to the initiation, we had raised our pledge book forecast twice, and we do so again with the latest trading statement. In this note, we explore how pawnbroking growth is a key driver to the retail offering, pawnbroking scrap and gold pu...