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Good news on increased facility. Trade receivables and trade payables up were also up 10% year on years for Positive and Gener8 from May 18 - May 19 so looks like this growth is continuing. (RNS states 9% increase YOY to Jan 20)
At May 19 the trade payables for Positive and Gener8 (so mainly loan facilities) were already at the £37m, if they continue this organic growth they will need another 5m before long.
Also backed up by today's news re the IF line increase from Natwest:
(Alliance News) - 1PM PLC on Wednesday said it has further increased its back-to-back invoice finance funding facility with NatWest by GBP5.0 million, rising to GBP42.0 million.
The AIM-listed specialist finance provider said it intends to use the facility exclusively for the purpose of lending to UK businesses and providing its two invoice finance businesses, Positive Cashflow Finance and Gener8 Finance, with additional funding to meet demand from their growing number of small and medium-sized clients.
"I am delighted that the group has further strengthened its long-standing relationship with NatWest which continues to thrive and expand in our invoice finance division," said Chief Financial Officer James Roberts.
https://www.business-live.co.uk/professional-services/bibby-financial-services-close-entire-17596362
Just one of the offices losing staff
I couldn't see anything on this. Any links to articles etc?
Not really, they don't have to put a cash flow in the individual stats as long as the group does a consolidated one.
I've looked at it a little but difficult to draw conclusions. I might take another stab at it.
It is worth commenting on competitors of the IF businesses and internal issues they are facing, Bibby IF are losing sales staff at a rapid rate and closing offices. Both IF businesses are direct challengers to Bibby and have seen an upsurge in new clients already. IF business is stable and profitable and will mitigate some of the higher risk book in other areas so the outlook looks solid in this regard.
Just a thought, have you looked at future cash flow in any detail ? Just a thought with the high non-performing debtors in the AF books
I have also calculated Profit after tax/ trade receivables for the businesses:
Positive 2018 = 4.3% (pro-rated to 1 year), 2019 = 5.5%
Gener8 2018= 5.2% (pro-rated to 1 year), 2019 = 4.9%
These are the IF businesses, very low risk of bad debt, so a nice steady percentage
1PM 2018 =4.5%, 2019 = 5.0% -
Academy 2018 = 10.0% 2019 = 7.5%
bradgate (inc bell) 2018 = 3.5%, 2019 = 3.4%
Intelligent 2018 = 10.6%, 2019 = 6.8% - relatively large impairment in 2019
car finance 2 u - not a relevant metric as all business is brokered on
Personally I think the IF businesses are strong and safe. The other businesses are still profitable, just more risk involved. Academy and intelligent have offset this risk with a larger margin in the last couple of years. 1PM and Bradgate's margin could be bigger.
All in all, it looks healthy enough so I think its nicely under valued.
The IF business do lend (Trade receivables of 26.9m & 15.7m) its just considerably lower risk than asset finance resulting in very small provision.
I cant see the split the between invoice factoring and invoice discounting which would be interesting to see. Although, revenue/ trade receivables is 18% of both IF businesses which I think means they have a large amount of invoice factoring (where Gener8 and/or Positive takes ownership of the companies trade receivables rather than just loaning the business money against their trade receivables) - although I might be miss understanding this.
Asset finance is always going to be higher risk, offset by the ratio of sales/trade receivables being higher too.
You can deduce the value of the trade receivables being in the non performing category for the group: 1.467m is the CLP in the may 19 annual report note 30, This is at 20%. so 1.467m/20% = 7.335m.
Of this 1.467 is already recognised in the P&L leaving 7.335-1.467= 5.868m. Of course, this isn't to say there is a hit of 5.868m coming in the future as we assume they will recover the other 80% but does highlight a risk if this should be 40% rather than 20% then it could be another 1.467m hit, although I find this unlikely.
Its also worth noting the shift in the balance sheet in the half year, there are considerably more current receivables/ non current receivables (ratio of 2.0 as at Nov 19, (1.47 at May 19), (1.77 at Nov 18)). This is a shift toward shorter term loans (in part this will be the lower risk invoice finance). This could just be capitalising on the demand for short term loans rather than a conscious shift in strategy.
A very comprehensive breakdown - well done.
Not surprised that the IF businesses in the group have no non performing debt - it’s not their on debt book that they collect.
However, the size of the under (>90 days) and non-performing (90+ days) Asset Finance book appears alarming does it not ?
All,
I have looked at the individual stats and have summarised some findings- apologies for the format... best I can do in this text box
Key:Business sector - A= Asset, L=loan, I= Invoice, V= vehicle, numbers in £'000
Academy- A, V Revenue = 6,619, PAT = 1,333
onePM -A, L, Revenue = 8,013, PAT = 1,600
Bradgate and bell - A, Revenue = 4,316, PAT = 878
Positive - I, Revenue = 4,877, PAT = 1,488
Gener8 - I, Revenue = 2,770, PAT = 778
intelligent - L, 2,536, PAT = 219
Car finance 2u -V, Revenue = 2,683, PAT = 395
NB- PAT unreconciled to group accounts by 500k, additional costs within the group.
ECL analysis- value of CLP split as follows |performing | under performing | non performing| (all stated in £000)
Academy |121|9|229|
onePM |185|66|415
Bradgate (Plus bell) |112|148|719|
positive cash flow |174|0|0|
gener8 |40|0|0|
intelligent |84|3|109|
car finance2u |0|0|0|
(Should agree to the 2414k in the group accounts)
Value of current and non current trade receivables- £'000
Academy 17,789
onePM 31,761
Bradgate (Plus bell) 25,931
positive cash flow 26,975
gener8 15,730
intelligent 3,209
car finance2u 250
Any questions/ thoughts?
Guess not- just me
Are people still watching 1pm?
That’s good news ! Fingers crossed for the SP to rise
"The directors will therefore recommend a final dividend for the year ended 31 May 2018 of 0.65p per share, which is a 30% increase over the previous year. Thereafter, the board will continue to recommend a 30% annual increase in dividends during the three-year period ending 31 May 2021."
Consolidating on market gains made isn't so bad especially if they keep to the previously declared dividend policy which has 2 more accounting years to run. This isn't dependant on growth but we all hope they can achieve that too.
I’m not sure what your point is tbh. But if the business doesn’t now grow with all the increased infrastructure costs, then they can’t blame outside forces that are already apparent to them ie Brexit. If the business does not now deliver the growth, then what’s the point in adding costs to support growth? I get that they stated it was a year of consolidation, but they’ve also increased the running costs to increase performance. Plus, taken on more potential debt. So in short, now they’ve consolidated, it’s time for increased performance. These are their promises and therefore stock holders expectations.
OK so some excuses out the way but the uncertainty is still material.
In or out, 2nd referendum, Lib/Lab/Con leaders, dates etc etc
How are brexit excuses out the way? We haven't left and haven't negotiated a trade arrangement. Brexit is just getting started.
Their future prediction has happened though, and we already know that they won't make a bigger profit this year, so the next few months will be similar to the last few.
Not sure about you Steve, but I’m in this to see a return on my investment. Dividends are ok, but I don’t want to be tied to any one stock, relying on future predictions that don’t happen.
As I stated, if this business doesn’t deliver over the coming months, then this stock will suffer. It’s dropped 50% in 3 years and 30% y-o-y. That’s not growth. This sector is not attractive to a lot of people that’s why it’s cheap, so this business needs to over-perform and exceed expectations to attract investors.
I understand your points, but you can't say they aren't performing, they still made £3 million in 6 months. Even if their profit for the year is £6 million that still makes the current price very cheap.
I also don't see how it can be below expectations when they warned that this year would be one for consolidation. For me if they make £6 million during a year of consolidation, I'll be more than happy with that.
Clearly the price dropped because people bought in who possibly didn't read last years trading update, or were gambling on better results. But to say they were behind expectations is ludicrous, we were told last year that the profit would be down. The drop is a short term reaction of the traders selling.
I would have expected the rise in “brokered on” business to have increased profits, not decreased - It’s instant revenue !
With the very apparent higher costs associated with their management infrastructure and Brexit/Election excuses now out the way, the next few months are critical for this stock. I fear that if they don’t start to perform, the confidence of playing a waiting game will wear thin. Below expectations IMO (and the markets)
Revenues down and both direct and admin costs are higher. I wonder if the trend will continue into the second half
I agree Steve, exactly as signalled and so no great surprise. Positive dividend continues to increase and once restructure is finalised, should be well positioned to grow.