Shore Capital's (SGR) core equity capital markets (ECM) business delivered a solid enough performance last year - it pushed pre-tax profit up 2 per cent to £5.1m. However, the investment group increased its stake in Spectrum Investments to a majority holding, which meant that accounting rules required the revenue and costs of loss-making Spectrum to be consolidated in full. Without that, group pre-tax profit would have reached £3.7m.
Despite tough trading conditions at the ECM division, secondary commission from research & sales rose 15 per cent, while revenue generated from corporate finance and broking grew 32 per cent. That was after the division completed seven admissions and 17 share placings, which raised over £120m. On the asset management side, funds under management fell from £1.21bn to £870m, mainly reflecting the closure of the discretionary investment management service to private clients.
Spectrum was formed in 2011 to acquire a 58 per cent controlling interest in German telecoms business DBD - it now owns all of it. And recent share purchases mean that Shore now owns 59.26 per cent of Spectrum. And, with DBD holding spectrum licences in Germany, executive chairman Howard Shore is confident that a deal with one of the existing mobile operators will be secured at some point.
Broker RBC Capital Markets expects adjusted 2013 EPS of 1.09p (from 1.06p in 2012).
| SHORE CAPITAL (SGR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 22p | MARKET VALUE: | £53m | |
| TOUCH: | 21-23p | 12-MONTH HIGH: | 23p | LOW: 14.5p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 27 | |
| NET ASSET VALUE: | 25p | NET CASH: | £19.6m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 19.7 | -1.30 | 0.01 | 0.30 |
| 2009 | 42.4 | 75.7 | 28.0 | 0.88 |
| 2010 | 35.5 | 8.37 | 1.83 | 0.88 |
| 2011 | 29.5 | -0.88 | -0.45 | 0.50 |
| 2012 | 32.8 | 2.53 | 0.82 | 0.50 |
| % change | +11 | - | - | - |
Ex-div: 10 Apr Payment: 25 Apr | ||||
