Chris Heminway, Exec-Chair at Time To ACT, explains why now is the right time for the Group to IPO. Watch the video here.
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........and all the way back to Sep23
Net Interest Margin is obviously the Massive Negative. 2023 underlying NIM would have been 3.14% without the EIR adj - however with it, it has reduced to 2.51%. Therefore am shocked that OSB is forecasting 2.51% for 2024 - would have expected it to be back to approx 3.14% again
British lender OSB Group OSBO.L down 24% at 353.6p - top loser across London stocks
** If losses hold, stock set to for biggest one-day drop since July 2023
** For year ended Dec. 31, underlying pretax profit down 28% at 426 million pounds ($545.49 million)
** Results impacted by the adverse effective interest rate adjustment
** In FY underlying net loan book increased by 9% to 25.7 billion pounds
** New share repurchase programme of 50 mln pounds over the next six months
** As of last close, stock down ~6% in the last 12 months
All looks really positive and happy with the yield. The market can be a cruel mistress
I looked at these results before the market opened and thought we might see a 20% rise. We knew about the adverse EIR adjustment already and apart from that they look very strong with EPS excluding the EIR rising almost 10% and a similar rise in the loan book. I can't quite believe the market reaction. Plus the divi is maintained and there's a buyback. Have I missed something?
From just a superficial look at the RN, and it has to be because I don't fully understand some of it, the profits are higher than I'd read were estimated (tho' maybe by those who know little more than me), a large buyback programme and increased (total) divi even if the imminent divi is only maintained at 21.8.p, all seems ok to me but I'm happy to read comments by anyone more versed in company accounts than me.
On the rise again. Hope it lasts and buy to let market remains healthy.
558k buy this afternoon
Everything seems excellent about this share - divi, performance, management, recommendations - except the SP. It's just the economic climate isn't it? I can hear whistling.
Not really., this dipped to £2.70 ish
Almost back to square one.
Up 2.4% today. Almost gave up waiting.
Up 2.4% today. Almost gave up waiting.
Huge number of settled trades well after hours - looks good for the morning...
Looks like they have dropped below the reportable short threshold. Hopefully this can now actually have a nice run up and push past the £4 it tested a couple of weeks ago.
OSB reported that in the first nine months of the year it had achieved 7pc loan growth. This was previously the target for the whole of 2023 and guidance for the year has now been raised to 9pc.
Its ability to win market share thanks to its specialist focus is a key long-term attraction. It is also a reason to think it could weather tougher markets better than most as the specialist focus is reflected in the bank’s strong reputation for risk management.
On this front, there’s reassurance from low levels of problem loans and average rent-to-interest cover of 178pc on OSB loans and 154pc for its Charter Court Financial brand, which accounts for about 45pc of gross lending. Meanwhile, a scarcity of rental properties makes landlords well placed to pass rising interest costs on to tenants.
OSB’s resilience should also be helped by its bias to professional landlords who use corporate structures to secure tax and property management advantages.
This buy-to-let specialism keeps costs down compared with mainstream banks. OSB expects its costs to amount to around a third of its income this year, compared with more than half for many larger rivals.
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The branchless bank’s low-cost model underpins its attractive levels of return on tangible equity. Even after the profit hit in the first half of this year, analysts expect the metric to reach 15.2pc in 2023 before rebounding to the high teens from next year.
It is not hard to see why, following the slump in the shares this year, top fund managers are betting that OSB’s valuation offers protection from further share price falls and the potential for significant gains should the third-quarter results prove to be a taste of things to come.
Questor says: buy
Ticker: OSB
Share price at close: 347.2p
We sold this bank, then the shares lost 25pc – now we’ll buy again
Questor share tip: buy-to-let specialist does not deserve to be lumped in with lowly valued high street giants
By
Algy Hall
13 November 2023 • 6:00am
In March, Questor advised readers to sell OSB and was right to do so – shares in the specialist buy-to-let mortgage lender have lost a quarter of their value since.
This column is relieved to have sold before a profits warning in July that sent OSB shares tumbling. The lender disclosed a £180m hit because mortgage borrowers were refinancing more quickly. Broader investor unease about the banking sector, which prompted our advice to sell, has meanwhile persisted.
Now, however, we’re recommending the shares again, guided by the investment decisions of some of the world’s best-performing fund managers.
Ten of these professional investors – each among the top-performing 3pc of the 10,000 equity fund managers tracked by the financial publisher Citywire – own shares in OSB. As a result the stock is rated AA – just below a top AAA rating – by Citywire Elite Companies, which rates companies on the basis of their backing by the best-performing fund managers.
OSB’s share price
Line chart with 268 data points.
View as data table, OSB’s share price
The chart has 1 X axis displaying Time. Data ranges from 2022-10-21 00:00:00 to 2023-11-13 00:00:00.
The chart has 1 Y axis displaying Pence per share. Data ranges from 280.8 to 568.5.
End of interactive chart.
What’s more, many of those investors have been adding to their stakes over the past few months. They include Matthew Tillett, who bought more shares for his Premier Miton UK Value Opportunities fund in July. Tillett took over the fund in November last year after delivering four times the market return over three years on the fund he ran before.
He told his investors that shares in specialist lenders such as OSB were trading on valuations as low as those of Britain’s biggest banks, yet they were “less dependent on the interest rate environment to sustain high levels of profitability”.
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Trading at just 0.6 times forecast book value, shares in OSB are close to the cheapest they have ever been on that measure and 30pc cheaper than when we advised readers to sell in March. A forecast dividend yield over the next 12 months that stood at 7.1pc when we sold has meanwhile climbed to 9.9pc – a level that suggests the market expects a cut.
But a trading update earlier this month indicates that the bank may be putting its problems behind it. There was no worsening of the situation that caused that big hit to profits from earlier in the year, when OSB was burned by borrowers spending less time between fixed-rate mortgages on stop-gap “reversion” rates that are lucrative for the bank.
....
Solid post by @baroninvestment on X
As he says should be trading above 400p. Way too cheap right now but probably for not much longer
Strong performance
Yep -- silly me -- didn't notice the UT
That’s the uncrossing trade
I note someone has bought £1m of shares after the market closed . Wowee !!
I’ve been thinking this for ages, but doesn’t seem there are too many people in agreement. My extra funds are becoming free soon though so should be able to add.