Last checked at 3 Mar 2021 07:00
Edison Investment Research Limited Edison Investment Research Limited: Mercia Asset Management (MERC): The UK's top regional investor 03-March-2021 / 07:00 GMT/BST
London, UK, 3 March 2021
Mercia Asset Management (MERC): The UK's top regional investor The £30.7m cash exit from Oxgene underlines management's success in building a sustainably profitable specialist asset manager, delivering high levels of contracted revenue and providing a filtered pipeline of opportunities for Mercia's direct investment portfolio. Based on progress to date, we believe Mercia will achieve its three-year strategic plan ahead of time (grow operating profitability, expand assets under management (AUM) to £1bn and 'evergreen' the balance sheet by end FY22). By the end of H121, AUM had risen to £872m (15% from FY22 target), with fee-earning funds under management (FUM) of £722m. Despite progress, Mercia's shares continue to trade at a material 21% discount to net assets (0.79x) or a 30-35% discount when we include the third-party funds business (worth 4.9p at 3% of FUM). This is a substantial discount to its peers.
Although profitable and dividend paying, with a mature, evergreen balance sheet, and scaling AUM, Mercia still trades at a 21% discount to its H121 NAV (34.1p per share) and a significant discount to its peers. Together with its fund management arm (5-8p per share), the overall valuation rises to 39-42p per share, implying a discount of closer to 31-36%. Catalysts for a re-rating include further scaling of the business, continuing revenue/earnings growth, commercialisation of the direct investment portfolio and/or successful exits. Click here to view the full report or here to sign up to receive research as it is published.
All reports published by Edison are available to download free of charge from its website www.edisongroup.com About Edison: Edison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By focusing on the volume and quality of investors reached - across institutions, family offices, wealth managers and retail investors - Edison can create and gauge intent to purchase, even in the darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings. Having been the first in-market 17 years ago, Edison now has more than 100 analysts covering every economic sector. Headquartered in London, Edison also has offices in New York, Frankfurt, Amsterdam and Tel Aviv and a presence in Athens, Johannesburg and Sydney. Edison is authorised and regulated by the Financial Conduct Authority. Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities. For more information, please contact Edison: Richard Williamson +44 (0)20 3077 5700 tech@edisongroup.com Rob Murphy +44 (0)20 3077 5700 tech@edisongroup.com Learn more at www.edisongroup.com and connect with Edison on: LinkedIn https://www.linkedin.com/company/edison-group-/ Twitter www.twitter.com/Edison_Inv_Res YouTube www.youtube.com/edisonitv Dissemination of a CORPORATE NEWS, transmitted by EQS Group.The issuer is solely responsible for the content of this announcement. |
1172526 03-March-2021
corporate announcement transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement.