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Collins Stewart was demerged from Tullett Prebon in December 2006 and has been busy improving its geographic spread and increasing the range of products on offer. To a large extent, this process is now complete and as well as building on its dominance in primary issuance on Aim, it has also beefed up its client support with the acquisition last year of Hawkpoint, which now forms its corporate advisory division.
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However, trading conditions have been less buoyant than a year ago, and the group did well to increase underlying operating profits by 3 per cent to £40.5m with margins edging up from 30.1 per cent to 31.3 per cent. Comparisons are difficult because the company was still part of Tullett Prebon 12 months ago. But pro forma figures supplied by Collins Stewart show that Hawkpoint put in the strongest performance by pushing operating profits up from £6.8m to £8.5m, with a strong mergers and acquisitions market boosting demand for its financial advisory services.
Meanwhile, attempts to improve its geographical spread have been helped by the acquisition of New York firm C.E.Unterberg Towbin, a boutique investment bank specialising in small technology companies, for $32m (£16m). Analysts expect full-year pre-tax profits of £67.4m and EPS of 19.8p.
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| COLLINS STEWART(CLST) | ||||
|---|---|---|---|---|
| ORD PRICE: | 173p | MARKET VALUE: | £ 431m | |
| TOUCH: | 171-174p | 12-MONTH HIGH: | 270p | LOW: 164p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 102p* | NET CASH: | £98m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Net div per share (p) |
|---|---|---|---|---|
| 2006 | 88 | 31.8 | 9.8 | 2.0** |
| 2007 | 129 | 52.0 | 15.7 | 2.5 |
| % change | +46 | +64 | +60 | +25 |
Ex-div: 14 Nov Payment: 06 Dec *Includes intangible assets of £146m or 59p a share ** proforma |
||||
Hawkpoint is unlikely to repeat its mergers and acquisitions successes of the first half and trading conditions are not getting any easier. However, a forward PE ratio of just 9 more than factors this in. Good value.
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-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
