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Mercia Technologies (MERC)

Business description

Mercia Technologies is a leading player in the funding and scaling of high growth businesses. Through its subsidiary managed funds (MFM) and its own balance sheet, Mercia provides a ‘complete capital solution’ to UK SMEs, with a focus on the Midlands and North UK.

Stock data

Market cap.£91.9m
Last close30.30p
High / Low (52 weeks)43.5p / 27.5p
Stock market listingLN
Forecast net debt (m)N/A
Forecast gearing ratio (%)N/A
TeamTechnology
SectorTechnology

Price performance

%1m3m12m
Actual1.07.1(10.9)
Relative *2.115.7(5.9)

* % Relative to local index

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Y/E Mar Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2017A 6.7 (2.4) 2.8 1.26 24.0 N/A
2018A 10.2 (0.4) 3.5 1.17 25.9 N/A
2019E N/A N/A N/A N/A N/A N/A
2020E N/A N/A N/A N/A N/A N/A

Last updated on 23/10/2018

Latest research

Realising value

Initiation | Technology | 18/10/2018

Investment summary

Mercia Technologies (Mercia) is a leading player in the funding and scaling of high growth companies from the UK regions, with a business model that is significantly de-risked vs peers. £400m of managed funds (Mercia Fund Managers, MFM) are used to predominately support all early-stage activity, whilst also providing meaningful revenue to offset group operating costs. As a result, the balance sheet investment is reserved for only the most promising companies or ‘Emerging Stars’ sourced from MFM. The group has a strong cash position and an experienced management, as well as a good track record, with three successful full cash exits to date.

Last updated on 26/10/2018

Industry outlook

Over the past decade, the IP commercialisation (IPC) sector has become significantly more established and until 2016, it generally traded at a significant premium to NAV. Similar to many of its peers, Mercia’s premium to NAV peaked in 2015, with investors clearly anticipating healthy IRRs across the sector. From 2017, however, sector sentiment has turned more negative and, similar to many of its peers, Mercia’s share price has fallen by c 40% since 2017. The stock currently trades at 0.73x NAV, which is below the peer group average of 0.99x.

Last updated on 26/10/2018

Key management

Dr Mark Payton, CEO
Martin Glanfield, CFO
Julian Viggars, CIO

Company address

Forward House
17 High Street
Henley-in-Arden
B95 5AA
United Kingdom
0330 223 1430
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