Self-invested personal pension (Sipp) provider Curtis Banks (CBP) weathered a tough period in the six months to June, posting a small increase in revenue per Sipp despite a marginal decline in the number of pensions administered. As such, the group is therefore at something of an inflection point.
There are some reasons for shareholder optimism. As well as the big rise in the half-year dividend, plans for a simplified infrastructure and more efficient operating model are expected to save the group £1.2m a year. But that feels like a thin trade-off for a £4m, five-year investment, while there was little detail on an employee consultation – despite absolute staff costs rising by more than the increase in fee income in the period.
These are perhaps minor questions compared with Curtis Bank’s growth strategy, which faces several stumbling blocks. Third-party books of Sipps are either too expensive or of limited quality, scaling operations across the UK has been a challenge, and the pension transfer and retail investment markets are both characterised as “muted”. As such, management hopes are trained upon the promise to “benefit from [a] market upturn”.
House broker Peel Hunt forecasts adjusted earnings of 19.1p a share this year, rising to 21.3p in 2020.
| CURTIS BANKS (CBP) | ||||
| ORD PRICE: | 304p | MARKET VALUE: | £164m | |
| TOUCH: | 300-320p | 12-MONTH HIGH: | 339p | LOW: 251p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 95.8p* | NET CASH: | £333m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 138 | 4.78 | 7.46 | 2.0 |
| 2019 | 257 | 5.45 | 8.39 | 2.5 |
| % change | +86 | +14 | +12 | +25 |
| Ex-div: | 10 Oct | |||
| Payment: | 14 Nov | |||
| *Includes intangible assets of £43.9m, or 81.7p a share | ||||
