RE: Results25 Oct 2019 08:47
Listening to the conference call yesterday you can see that Craig Donaldson wants to re-align the business somewhat and target organic growth. Barclays were part of the conference call and suggested that 5% growth was possible all things considered, which is fine. The costs we have incurred are somewhat skewed due to the cost of opening branches, which stands at 70 with 3 opening during Q3. With an increasing footprint offering better services than its peers and deployment of AI and deposit growth this will re-rate. The bonds are climbing and encouraging commentary from the media and bears bodes well.
I think the point I have repeatedly try to make is the dislocation in the sp/ market cap to the actual business and the results. This was walked lower by the shorters, but they are exiting and I firmly believe the big buyers here are the US funds so the climb up will be significant.
I am not saying the update warrants a £30 sp all I am just saying a re-rating to fair market value of £4-5 is realistic.
There are too many stories flying about regarding a takeover/ takeout. Even Craig Donaldson commented during the conference about the fiduciary duties of the board to consider all options presented. In addition you have Vernon Hill's sign off message which came out on Wed morning stating "the best is yet to come". Am I reading too much into this? Well as a mere investor perhaps, however there are smarter people than me that have been connecting the dot for a while now.
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