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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.
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?