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Dividends could be attractive over the next year or two. The IPO prospectus states that dividends are planned to be 70% of net profits and that the company is moving to quarterly payments in 2021. Smaller company income funds may well look closely at the opportunity.
The overall risk/return profile does look good at the moment IMO.
Really looking forward to the results.
Rokerpark - thanks for your post, it's good to speak with a fellow investor here, and yes totally agree! It's weird this share haven't attracted more attention but I believe that will change, and this Thursday's Final Results could well be the catalyst to send this flying!
Will look to make another top up to bring my average closer to 130p in the next couple of days : )
More business wins
Debenhams’s Parent Company appoints FRP Advisory for its own administation
https://www.retailgazette.co.uk/blog/2020/08/debenhams-owner-on-brink-of-administration/
Also FRP have been appointed to advise on the 'London Capital and Finance' administration
https://www.moneymarketing.co.uk/news/mini-bond-collapses-administration-fees-face-questions/
They seem to be making the news with more and more business every week or two. So much must not be making the news.
And, sadly, the worst is yet to come!
Libero - I agree that there is some good value here even after the decent rise post IPO. The company is in a sweet spot just now and they must have tremendous momentum in terms of new business wins. The SP is surely heading north over the coming months. I have bought twice over the last few months at around 125p. I am very surprised the stock hasn't attracted more attention.
Less than a week until the results come out!
Feeling very excited here. Feel there's an easy ~25% to be made in the next few weeks. And 50%-100% to be made over the next year.
DYOR & GLA : )
Looking through the recent news articles that mention the company, it's incredible how much work they're picking up.
In July alone, they were appointed to work with the following companies.
- The Govt's Pension Protection Fund called FRP Advisory to scrutinise the job PwC had done previously before Laura Ashley's collapse.
- Appointed to help Debenhams restructure their business ('light-touch administation' they called it)
- Appointed as the administratiors for Prezzo.
- Appointed as administrators for:
a Balfour-owned waste JV company in Essex,
Rileys Snooker (chain of clubs),
a sports bar company with 20+ sites,
a wire manufacturing company,
2 companies who sold car parking spaces near airports,
'Heritage Cashmere' who sold luxury cashmere products.
Additionally they have been appointed for Carluccio's restaurant chain and the gym chain called Energie Fitness.
Previously they've worked for BHS, Maplin, Monsoon, Comet, Bonmarche, etc.
Investors Chronicle rate the shares as a buy @ 12p in June, because they know it's a great hedge against an economic downturn, and they're impressed by the 15% YOY revenue growth the company has enjoyed from 2010-2019. Nothing will have changed their view since then.
If anything, with the number of insolvencies now increasing, and due to increase much more over the next 6-12 months, they would be even more bullish.
Short term target = 160p+
12 month target = 200p+
Interesting that its PBT pretty much equals its PAT. With a dividend policy of paying out 70% of net profits in dividends, it suggests we could be looking at a healthy 6-7% yield at this price level, which the market doesn't seem to have cottoned onto due to a lack of research!
Presumably this is something they will announce alongside their Results which are being published on 27 August.
So, to summarise, this appears to be:
1. A profitable company which is seeing their revenues & profits grow by double digit %s year-on-year.
2. Has great prospects because it will thrive off the economic downturn that's slowly becoming more and more apparent.
3. Looks good value on P/E and EV/EBIT ratio metrics...
4. ... especially if this was to be considered a growth stock given the above.
AND
5. It will soon declare a healthy dividend that should get the market excited after all the cuts/suspensions of dividends elsewhere.
On this basis, I reckon we could see the share price re-rate to 160p+ very soon after they announce their results on 27 August. So I've decided to buy a few shares @ 117.6p with a view to adding more if there's any dips in share price.
Looks as though this is trading on roughly PE of 10 - based on 2019/20 figures due to be announced later this month.
Looking further ahead to the 2020/21 Year
March & April 2020 Revenue was £11.5m - a clear increase presumably as they picked up more business due to covid-related insolvencies. All things being equal this suggests revenues of £69m and profits of £30-31m.
However I expect there to be a sharp increase in the number of businesses in financial distress. So I reckon we could realistically expect 2020/21 figures to be approx £80m in revenue and £36m in profits. This is represent a further 27% increase vs the 2019/20 revenue and my crude profit calculation.
This makes it look undervalued.
Why do I think it's undervalued? because no one knows of FRP yet I suspect since the timing of its IPO was unfortunately a week or so before the world turned upside down.
Need to do more research here but honestly feel there might be a v exciting opportunity here. Especially having seen how much banks are setting aside for bad loans and what the Bank of England are now saying.
https://www.thisismoney.co.uk/money/news/article-8601307/Britain-faces-tsunami-insolvencies-amid-50bn-cash-flow-crisis.html