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Curtis dials down acquisitions

Following a series of acquisitions, the Sipp provider is focusing on streamlining its estate
September 5, 2017

After a spate of acquisitions during the past three years, self-invested personal pension (Sipp) scheme provider Curtis Banks (CBP) has spent time consolidating its business. Management closed the Chilmark office and is about to enter a staff consultation at its Market Harborough site, both of which were taken on through previous deals. It's also introduced single, group-wide branding for the first time and plans to implement a new operating system to administer its Sipps, which it hopes will improve efficiency and thus margins.

IC TIP: Buy at 278p

A full six-month contribution from Suffolk Life helped boost the number of Sipps under administration to 74,900, although the group managed to add 2,825 Sipps organically after taking into account scheme attrition. This meant assets under administration increased 29 per cent to £23.1bn. The Financial Conduct Authority’s (FCA) decision to increase capital requirements for Sipp providers caused a wave of consolidation within the industry. However, chief executive Rupert Curtis says the group will now focus on underlying growth.

While most revenue is earned via management fees, the group is trying to diversify its revenue stream. As part of this it plans to extend its property management services by offering conveyancing and tenant relations services to clients who have a commercial property as part of their Sipp .

Analysts at Peel Hunt expect adjusted pre-tax profit of £10.5m during the 12 months to December 2017, giving EPS of 15.6p (from £7.1m and 11p in 2016).

CURTIS BANKS (CBP)   
ORD PRICE:278pMARKET VALUE:£149m
TOUCH:275-280p12-MONTH HIGH:325pLOW: 176p
DIVIDEND YIELD:1.6%PE RATIO:25
NET ASSET VALUE:80p*NET CASH:£4m
Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2016 (restated)571.2421
20172014.086.11.5
% change+254+230+211+50
Ex-div:12 Oct   
Payment:15 Nov   
*Includes intangible assets of £47m, or 88p a share