- New interest income sharing framework in place
- Annual dividend held steady at 9p a share
Given the Bank of England shows no sign of raising interest rates any time soon, it is unsurprising that Curtis Banks (CBP) has sought to reduce the impact base rate movements have on revenue. The self-invested personal pensions (Sipp) administrator has increased the annual fee charged on its mid and full Sipps and developed a framework to share interest income in line with rises in rates.
Of the fee revenue attached to its Sipp products, 86 per cent was recurring last year, which should increase under the new arrangement. Operating revenue increased by 10 per cent, after increasing the number of Sipps under administration via organic growth and the bolt-on acquisition of Talbot and Muir. The deal was part of efforts to consolidate the market further. Consensus forecasts are for EPS of 18.3p this year, rising to 19.4p in 2022. A price-to-forward earnings multiple of 15 seems an undemanding valuation considering reliability of the revenue stream. Buy.
Last IC View: Buy, 219p, 4 Sep 2020
| CURTIS BANKS (CBP) | ||||
| ORD PRICE: | 275p | MARKET VALUE: | £ 183m | |
| TOUCH: | 260-276p | 12-MONTH HIGH: | 292p | LOW: 192p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 121p* | NET CASH: | £372m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 29.7 | 4.5 | 7.2 | 4.0 |
| 2017 | 43.6 | 5.9 | 9.8 | 6.3 |
| 2018 | 46.1 | 10.1 | 15.3 | 8.0 |
| 2019 | 48.9 | 10.9 | 16.2 | 9.0 |
| 2020 | 53.9 | 7.4 | 9.7 | 9.0 |
| % change | +10 | -32 | -40 | - |
| Ex-div: | 06 May | |||
| Payment: | 04 Jun | |||
| *Includes intangible assets of £91.1m, or 137p a share | ||||
