The 12 months to March marked a heady period of expansion for Alpha FMC (AFM), most clearly reflected in an 18.3 per cent uptick in gross profits to £34.4m. During the period, the asset management consultancy acquired and integrated two smaller peers, increased its bench of consultants by a fifth, client numbers by almost two-fifths and a global office network to a dozen.
Since then, the business appears to have coped admirably with the logistics of lockdown and any financial shocks to clients. The project pipeline remains well-supplied by new mandates and extensions; chief executive Euan Fraser says fee pressure “has been isolated to a handful of clients”, and the transition to home-working has been so seamless that part of the lease on a three-floor London office has already been given up.
Still, management isn’t taking any chances. Despite entering June with a £23m net cash position, the group has cancelled its final dividend and drawn down £5m of a recently-extended £20m credit facility with Lloyds. In theory, this provides some protection from a fresh market correction or a second spike in Covid-19 infection rates. But the extra liquidity and flexibility could help the group act on its acquisition strategy once deal-making is once again possible.
Panmure Gordon expects adjusted earnings of 15.6p per share for the year to March 2021, and 16.3p in FY2022.
|Alpha Financial Markets Consulting (AFM)|
|ORD PRICE:||190p||MARKET VALUE:||£191m|
|DIVIDEND YIELD:||1.1%||PE RATIO:||29|
|NET ASSET VALUE:||90.6p*||NET CASH:||£18.3m**|
|Year to 31 Mar||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
|*Includes intangible assets of £90m, or 89.6p a share|
|**Includes lease liabilities of £2.7m|