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Lighthouse Group (LGT)

Business description

Lighthouse comprises a diverse group of UK financial advice firms serving individuals and businesses. The main focus is on Middle Britain and contracts with 21 affinity groups are an important revenue and profit contributor.

Stock data

Market cap.£32.4m
Last close25.40p
High / Low (52 weeks)38.7p / 21.2p
Stock market listingLN
Forecast net debt (£m)9.2
Forecast gearing ratio (%)666
TeamFinancials
SectorFinancials

Price performance

%1m3m12m
Actual1.6(6.3)3.7
Relative *(2.8)(8)4.5

* % Relative to local index

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Investment summary

In its FY18 trading update in January, LGT confirmed that it expects to report EBITDA and PBT in line with board expectations. Revenue production per adviser and recurring revenue (over 50% of customer-derived revenue) have continued to increase. Also in January, LGT indicated that it would not continue with its auto-enrolment activity. Our forecasts are unchanged with 2018 EPS expected to increase by 8% y-o-y. In October LGT announced an affinity contract with the National Education Union, formed through the amalgamation of the NUT and ATL (existing partner), adding 336,000 members to LGT's coverage. In November a strategic agreement with Tavistock Investments was reached, which will broaden the Luceo Asset Management product offering and help increase its scale. Our DCF valuation is unchanged at 44p.

Last updated on 01/02/2019

Y/E Dec Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2016A 47.9 2.3 1.9 1.13 22.5 N/A
2017A 54.1 3.2 2.5 1.49 17.0 N/A
2018E 55.7 3.5 2.8 1.61 15.8 N/A
2019E 57.5 3.8 3.1 1.81 14.0 N/A

Last updated on 29/01/2019

Latest video

Executive interview – Lighthouse Group

Industry outlook

A more volatile market background could have some effect on individuals’ propensity to seek financial advice (both positive and negative), but the key longer-term drivers of demand growth remain in place: an ageing population, and increased choices and responsibility for pension accumulation and decumulation. Lighthouse appears well-placed to address this opportunity with a particular focus on developing its affinity relationships.

Last updated on 01/02/2019

Key management

Richard Last, Chairman
Malcolm Streatfield, CEO
Peter Smith, CFO

Company address

26 Throgmorton Street,
London
EC2N 2AN
United Kingdom
020 7065 5640
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