Shares in Intermediate Capital jumped 12 per cent after the specialist financial group delivered another year of strong growth, despite tough trading conditions. Yet the shares are still on a lowly five times historic earnings, and the more than twice covered dividend yields over 7 per cent, which – given the robust performance – leaves the shares looking cheap.
Profits were boosted by the release of £45m relating to the closure of legacy remuneration schemes, but profits on the investment side and from fund management showed an improvement without this. Funds invested in mezzanine finance rose by 7 per cent to £3.1bn, and as well as realised gains of £74m – the group also booked unrealised gains of £44m on its existing portfolio. Total fee income rose by 11 per cent to £91.2m, and ICG expects to benefit from further demand as mainstream lenders turn away from extending maturing buyout debt in Europe.
On the fund management side, total assets under management fell 3 per cent to €11.4bn, as capital returned to investors on maturing investments was not met completely by new fund-raising, given the tough climate.
Numis Securities is forecasting pre-tax profits for the current year of £207.3m and EPS of 35.9p.
| INTERMEDIATE CAPITAL (ICP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 255p | MARKET VALUE: | £1.0bn | |
| TOUCH: | 254-255p | 12-MONTH HIGH: | 352p | LOW: 194p |
| DIVIDEND YIELD: | 7.5% | PE RATIO: | 5 | |
| NET ASSET VALUE: | 362p | NET DEBT: | 66% | |
| Year to 31 Mar | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2008 | 230 | 87.3 | 26.6 |
| 2009 | -66.7 | -35.1 | 17.0 |
| 2010 | 106 | 25.0 | 17.0 |
| 2011 | 186 | 32.6 | 18.0 |
| 2012 | 244 | 47.7 | 19.0 |
| % change | +31 | +46 | +6 |
Ex-div: 30 May Payment: 13 Jul | |||
