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 | ||
| TOUCH: | 181-198p | 12-MONTH HIGH: | 254p | LOW: | 96.1p |
| 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) |
| 2016 | 26.5 | 5.7 | 0.00 | nil |
| 2017 | 42.2 | -3.3 | -4.73 | nil |
| 2018 | 66.0 | 1.5 | -0.49 | 5.17 |
| 2019 | 76.0 | 12.5 | 9.05 | 6.00 |
| 2020 | 88.9 | 9.3 | 6.11 | 2.10 |
| % change | +17 | -26 | -33 | -65 |
| Ex Div: | n/a | |||
| Payment: | n/a | |||
| *Includes intangible assets of £90m, or 89.6p a share | ||||
| **Includes lease liabilities of £2.7m | ||||
