The most significant detail in full-year financials from boutique investment bank Shore Capital (SGR) wasn't the 55 per cent growth in operating profit or even the string of transactional mandates it secured. It was the revelation that Spectrum Investments, in which Shore holds a 59 per cent stake, will this year book a profit of €12.5m (£9.1m) from the sale of national and regional radio spectrum licences to Deutsche Telekom.
The deal, which is set to close this quarter, is important not only for its likely impact on this year's results, but because Spectrum Investments holds a further 32 regional licenses in the lucrative 4G frequency range. These are currently held at €2.5m on the company's balance sheet, even though Shore chairman Howard Shore says equivalent licences have been valued at between 250 and 300 times that carrying value.
Elsewhere, the equity capital markets division had an exceptional year, growing pre-tax profits by more than three-fifths to £9.8m. The corporate finance team landed a series of advisory roles on deals including seven IPOs, two takeovers and 10 secondary fundraisings. This year has started at a slower pace, though Shore expects a strong pipeline of deals after the general election.
House broker RBC Capital Markets is currently upgrading its forecasts, but reiterated a 450p price target for the shares.
| SHORE CAPITAL (SGR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 430p | MARKET VALUE: | £104m | |
| TOUCH: | 425-435p | 12-MONTH HIGH: | 430p | LOW: 400p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 265p | NET CASH: | £21.2m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 35.5 | 8.4 | 18.3 | 8.8 |
| 2011 | 29.5 | -0.9 | -4.5 | 5 |
| 2012 | 32.8 | 2.5 | 8.2 | 5 |
| 2013 | 35.8 | 5.4 | 14.1 | 8 |
| 2014 | 40.6 | 8.3 | 21.6 | 10 |
| % change | +13 | +54 | +53 | +25 |
Ex-div: 09 Apr Payment: 23 Apr | ||||
