Shore Capital (SGR) recovered strongly in the first half from losses sustained in the second half of last year, but profits were still down from a year ago. Much of this resulted from lower income in the core equity capital markets division (ECM) which was up against some stiff comparatives, while the group's foray into German telecoms recorded a £0.73m loss.
Shore Capital owns 51 per cent of Spectrum Investments, formed in 2011 to acquire a 58 per cent controlling interest in DBD, a German telecoms business, which recently secured one of the three licences granted to cover regional wireless and broadband services across Germany. This means that DBD will be able to provide 3G and 4G data services to the German population or provide wholesale services for German mobile operators. "It's like owning real estate in the sky" said executive chairman Howard Shore and analysts at RBC Markets believe that Shore will be looking to realise value from the stake should an acquirer emerge.
In the core operation, profits at ECM slipped from £4.44m to £2.84m, reflecting a decline in primary commission, although the business did see a 9 per cent rise in secondary commission generated from sales and research services provided to institutional investors.
RBC is forecasting 2012 pre-tax profits of £2.8m and EPS of 0.72p, rising to £4.4m and 1.13p, respectively, in 2013.
| SHORE CAPITAL (SGR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 16p | MARKET VALUE: | £39m | |
| TOUCH: | 15-17p | 12-MONTH HIGH: | 20.5p | LOW: 14.5p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | na | |
| NET ASSET VALUE: | 24p | NET CASH: | £13.8m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 20.4 | 3.86 | 0.93 | 0.25 |
| 2012 | 17.8 | 1.48 | 0.48 | nil |
| % change | -13 | -62 | -48 | -100 |
