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from Citywire this moring, looks a bit conservative but look at the last line. Aldermore benefiting from bulk Challenger bank Aldermore (ALD) is increasing in scale, which is expected to reflect positively in its first-half results. RBC Capital Markets analyst Peter Leonardos retained his ‘sector perform’ recommendation but reduced the target price from 310p to 300p. The shares rose 2p to 267.1p yesterday. ‘We expect H1 2015 results to demonstrate the benefit of Aldermore’s increased scale, but we only increase our 2015 earnings per share forecast by 2%,’ he said. ‘The implied upside to our price target is 5% and we do not expect a dividend until 2017.’ He added: ‘We forecast a c.50% increase in net interest income in H1 2015 year-on-year and a more than doubling of adjusted profit before tax year-on-year, since strong net new lending volumes are delivering high operating leverage. We expect management to reiterate the guidance communicated with the initial public offering and give a positive outlook statement, despite the implications of the summer Budget. In light of this and strong growth year-on-year, we believe results should support the shares at the current level and could even push them temporarily above our price target.’ 300p.
Sold up late this afternoon to go all in at Shawbrook which I hope will be the next of the challenger banks to recoup lost SP since the budget. Any views on the timing of the Clydesdale Bank IPO?
I've been a holder here since listing and am therefore happy with the progress so far. The Budget move was one of the strangest I've seen for a while. It flies in the face of everything that this Government has been trying to do with the banks and small business lending. I just wonder if they actually thought about it or whether they were subjected to lobbying by the bigger banks. Either way, if the Government is serious about creating genuine competition in the sector, it should remove the tax on banks until they reach a certain size (although I can see no justification for taxing any banks in this way)
I know nothing about what he might do. However, his profit tax will hit them to the tune of about £30m (only 10x what Cameron gave to KIDS last week) so the money hardly matters. It does however hit them in terms of capital structure and so restricts their ability to lend which they seem to be able to do very much more effectively than the big boys. I remember seeing the £30m number somewhere (Economist??) so don't shoot me on the detail. Osborne is very practical though and he has the best nose in British politics for silly policies. So I would not be surprised if he took another look at this. Especially as the CEO's of the challenger banks are just the sort of people he likes talking to. For me there are three maybe that look like good investments even if the tax stays (obviously ALD is one). And if it goes, then they fly. So I ought to end up either happy or very happy.... GL GS
GS you think Osborne will back track and protect challenger banks from the profit tax?
Good to have you here Techni Quiet is good. I am quietly hoping the Chancellor works out that at least one of his budget measures is counter productive. Osborne is pragmatic so that is perfectly possible. If so, we may see a bounce similar to the drop (which was overdone anyway imho). GLA GS
I bought some of these today... its a bit of a lonely BB. .. sometimes that's a good sign....
ALD looks way too cheap for a bank sector wise and relatively. Going forward a P/E of just 9.7, when in 2014 it was trading on a P/E multiple of 18.1.....................excellent opportunity to get on board. Cheap as chips. INVESTMENT RATIOS 2014 (A) 2015 (E) 2016 (E) Dividend Yield 0.00% % % Dividend Cover x x x <b>PER 18.17x 11.76x 9.72x</> PEG 0.23f 0.22f 0.47f Net Asset Value PS 105.08p 130.30p 150.70p
Since the budget we have had 2 brokers out of the 7 brokers covering, updating. Aldermore Group broker views Date Broker Recommendation Price Old target price New target price Notes 15 Jul Exane BNP Paribas Neutral 260.65 - 280.00 Reiterates 10 Jul Deutsche Bank Buy 260.65 - - Reiterates I suppose the other Brokers are awaiting the next update and will then make comment. After further research I have found another 3 Brokers who have made comment AFTER the Budget. The stock certainly looks very cheap going into 2016 with a under demanding P/E of just 9.7 and just look at the growth in EPS!!!!! Aldermore Group PLC FORECASTS 2015 2016 Date Rec Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p) Exane BNP Paribas 16-07-15 HOLD 90.00 21.51 111.00 21.64 Shore Capital 10-07-15 HOLD 91.80 20.50 120.30 25.60 Numis Securities Ltd 09-07-15 HOLD 25.20 2015 2016 Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p) Consensus 90.89 21.01 115.58 25.40 1 Month Change -7.61 0.91 -18.61 -3.00 3 Month Change -4.61 0.91 -18.61 -3.00 GROWTH 2014 (A) 2015 (E) 2016 (E) Norm. EPS 79.34% 54.57% 20.89% DPS % % % INVESTMENT RATIOS 2014 (A) 2015 (E) 2016 (E) Dividend Yield 0.00% % % Dividend Cover x x x PER 18.17x 11.76x 9.72x PEG 0.23f 0.22f 0.47f Net Asset Value PS 105.08p 130.30p 150.70p Definitions Disclaimer
Interesting comment from Ardalan (who imo knows what he is talking about) about what would happen if the new tax got in the way for challenger banks. Imo ALD was oversold giving a nice top up opp. Too well run and too light on its feet to suffer in this environment. GLA GS
OakNorth lands another big hitter: A challenger bank that will lend to entrepreneurs has hired a former senior banker from Barclays as its new Chairman.
I've set a buy limit for £2 - let's see if it gets there
£2.35 looking correct now! Long term this is still a great looking business and getting back down to £2 would be near to its original float price might buy back at that level! Will be interesting to see if the price drops to that kind of level and similar with the other challenger banks
Soon as the chancellor announced the 8% tax on profits I was out - managed to get 288! Don't see value here until around £2 now
ALD has had a great run recently so some profit taking is to be expected. No problem long term though,this share will only go up
Exane BNP initiates the lender with a Neutral rating and 325.00 pence price target.
Credit Suisse (CS) putting a price target of £2.35? That's some way below the current market price and am guessing the main reason behind a near 4% drop in sp today interesting rating by CS!
Phone bank Atom aiming to raise £75 million to fund its launch: Atom, which was awarded a license by the Bank of England last week, has already raised £25 million from the likes of private equity tycoon Jon Moulton and legendary fund manager Neil Woodford to build its operations and infrastructure.
Digital-only challenger bank Atom wins licence: Atom Bank has received its full licence from the Bank of England, moving the digital-only lender one step closer to opening to customers.
Now one of nine new entrants
Mobile banking has eclipsed branches and even the rest of the internet: Britons are now checking their bank balance on their mobile phones more than anywhere else, leaving more traditional services like a visit to the high street branch in decline.
Irrelevant to Aldermore, being only 5 years old!
Banks’ post-crisis legal costs hit $300 billion: The total cost of litigation aimed at a group of the biggest global banks since 2010 has broken the £200 billion ($306 billion) barrier, according to a new study that challenges assumptions that banks are through the worst of post-crisis reparations.
Aldermore will be promoted to the 250 later this month. I guess this explains the recent rise. All good news.
proving to be a very good investment...so far. Personally, I can't see it remaining as an independent business and feel sure that someone will make a bid. In the meantime, sit back and enjoy the ride.