Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
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Couple of big trades today
The IC have just reiterated their Buy for AFHP in a Tip Update (subscriber-only though):
Https://www.investorschronicle.co.uk/tips-ideas/2020/01/21/afh-financial-s-steady-progress/
"AFH Financial’s steady progress
The wealth manager is on track to hit its “three to five year aspirational targets”"
Good coverage on Citywire this morning of Liberum's Buy note and increased 569p target:
Https://citywire.co.uk/funds-insider/news/the-expert-view-fever-tree-dominos-and-henry-boot/a1314850?ref=citywire-money-latest-news-list#i=5
"AFH Financial offers more upside, says Liberum.
AIM-listed national advice group AFH Financial (AFHP) is still offering ‘significant value’ despite share price gains in recent months, says Liberum.
Analyst Jamie Donald retained his ‘buy’ recommendation and increased the target price from 484p to 569p after the company reported 8% organic net flows and revenue increases of 47% in 2019. The shares rose 1.3% to 390p yesterday.
‘The full-year results show operational improvements are being delivered as acquisitions are integrated,’ he said.
‘The share price has recovered in recent months but we believe AFH continues to offer significant value. Improved outlook for the sector has helped a sector re-rating and we increase our target price…implying 48% upside.’"
Just to note that Liberum use their own calculation of fully diluted EPS, which they say for last year was 29.1p EPS compared to the underlying 32.8p EPS. The Liberum forecasts in my last post are in fully diluted terms.
So the core adjusted EPS forecasts are probably around 35p-36p EPS for this year and 40p EPS for next year (though Liberum don't show these in their note).
It's also worth putting Liberum's latest forecasts on the thread:
to 31/10/20 : 32.7p EPS, 10p dividend
to 31/10/21 : 36.8p EPS, 11p dividend
to 31/10/22 : 40.5p EPS, 13p dividend
A couple of extracts from Liberum's update this morning:
"In FY19 AFH delivered 8% organic net flows and revenues are up 47% yoy. The revenue model change in Protection responds to investor concerns and leads to significantly increased cash conversion. In addition, the FY results also show operational improvements are being delivered as acquisitions are integrated. The share price has recovered in recent months but we believe AFH continues to offer significant value.
Improved outlook for the sector has helped a sector re-rating and we increase our TP to 569p from 484p, implying 48% upside. BUY."
"3-5 year targets on track
The 3-5 year targets of £10bn FUM, £140m of revenue and an underlying EBITDA margin of 25%, announced in Jan 2019, have been reaffirmed and we believe these are on track to be met in 5 years.
Remains undervalued
Despite the share price recovery in recent months we believe AFH will continue to re-rate as it focusses on improving FCF. Our TP increases by 18%, driven by the sector re-rating reflecting an improved outlook."
up seems to be the new word
After today's terrific results, Liberum have raised their target price to 569p (from 484p) - that's not far off 50% upside from the current share price.
They've also increased their PBT forecast for this year slightly to £19.4m (from £19.3m), with resulting 32.7p EPS forecast - a P/E of only 11.9.
Excellent results - 32.8p EPS (and 30.4p EPS fully diluted) is nicely ahead of expectations.
It's up 45% on last year, with a 33% rise in the 8p dividend.
The ambition is to double revenues and EBITDA in the next 3 years.
Recurring income is up to £46m out of the £74m total revenues, i.e almost two-thirds.
Despite all this the current year P/E is only 11 or 12.
Plus the outlook is very strong:
"Trading remains strong and in line with the Board's expectations and the current levels of activity underpins the Directors' confidence for the continued progress of the Group in the current year and thereafter in line with its aspirational targets."
Hi Sting69, nice entry price for AFHP! Well done. I've learnt my lesson with O&G - had some big winners (GKP, Salamnder, Coastal) and big losers. Now I'm only invested in SQZ (very healthy Balance Sheet and great prospects) and AEX (a complete punt!).
Rivaldo
I am invested here £20,000 in eis when £1.00
I am very intrested in your posting history seems you know your stuff
I have a lot in union Jack oil and ukog would love your opinion on them and O&G generally
Sincerely
Adrian
...and yet again. Passing the June'19 high now. Hopefully back through 400p soon.
..and again today.
Looking good for another big step up.
but still a long way to go to Liberum's 484p target price.
Rising nicely once again, but even now the current year P/E is still only 10.4.
It's worth noting the still very low valuation here given the forecasts, which are:
this year to 31/10/20 : 32.7p EPS, 10p dividend
next year to 31/10/21 : 36.6p EPS, 11p dividend
Still loads of upside on a single-digit P/E, with 32.7p EPS forecast this year.
So many buys are the last few weeks but it has been mostly backwards. Strange. Top hold for me. Patience required
Buying coming in at almost 302p. Looking good chart-wise in breaking above prior peaks - perhaps back up to 360p soon if this continues.
...and another RNS - Jupiter Asset Management have also just turned up with over 5%, or 2.18m shares:
Https://www.investegate.co.uk/afh-fin-group-plc--afhp-/rns/holding-s--in-company/201911181153447674T/
Great to see Slater increasing to 10.65% and 4.55m shares:
Https://www.investegate.co.uk/afh-fin-group-plc--afhp-/rns/holding-s--in-company/201911180935457312T/
Reads well - continues to be very cheap imho:
Https://www.ftadviser.com/your-industry/2019/11/11/afh-boss-frustrated-at-valuation-drop/
Extract:
"Companies November 11 2019
AFH boss 'frustrated' at valuation drop"
"According to broker Liberum AFH is currently "significantly undervalued" and trading at a historically low rating of 8.2x the price to earnings ratio, despite showing strong organic growth.
Liberum said this was partly due to investor concerns around cash conversion, which it said had now improved, and predicted a re-rating to 14.5x was "likely".
Mr Hudson said: "Given the strong performance over the year it has been frustrating that the valuation multiple of the group has fallen significantly below that of the sector average in spite of our continued growth and increased shareholder return.
"We continue to focus on delivering shareholder value through the profitable growth of the business."
Funds under management at the wealth manager hit £6bn this year, up from £4.4bn in October 2018, of which its acquisition spree contributed £1bn in assets."
Lovely move up - overhang cleared after huge volumes yesterday perhaps.
At Mello this week I saw a presentation by SimplyBiz, and as part of a discussion on the changing nature of their sector, which is rapidly consolidating, their CEO specifically mentioned AFHP as a very well-run company carrying out a particularly effective strategy.
Which was encouraging to hear!
Great to see a new holder turning up with 1.6m shares - the Fund Manager of Gran Fondo Capital:
Https://www.investegate.co.uk/afh-fin-group-plc--afhp-/rns/holding-s--in-company/201911121523431649T/
To clarify, Liberum's new forecasts are:
year to 31/10/20: 32.7p EPS, 10p dividend
year to 31/10/21: 36.6p EPS, 11p dividend
Sorros, these new forecasts incorporate the latest shares in issue and are accurate.
dont forget more shares now in issue pe could be inaccurate.