Numis Corporation — Strong H1 and franchise remains robust

Numis Corporation (LSE: NUM)

Last close As at 27/03/2024

GBP3.43

0.00 (0.00%)

Market capitalisation

GBP402m

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Research: Financials

Numis Corporation — Strong H1 and franchise remains robust

Numis has made good progress in the first half of 2018 with particularly strong revenues in corporate broking and advisory and a resilient result from the equities activity. Investment in people and platforms to support future growth and our expectation of lower portfolio gains restrains our earnings estimates for the moment but healthy deal pipelines, continued growth in the corporate client base and the strong balance sheet are positive indicators for the future, subject to market fluctuations.

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Financials

Numis Corporation

Strong H1 and franchise remains robust

H118 results

Financial services

17 May 2018

Price

440.0p

Market cap

£471m

Net cash (£m) at 31 March 2018

82.5

Shares in issue

107.1m

Free float

89%

Code

NUM

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

17.3

31.3

63.9

Rel (local)

9.6

24.0

58.6

52-week high/low

440.0p

231.2p

Business description

Numis is one of the UK's leading independent corporate advisory and stockbroking groups, offering a full range of research, execution, equity capital markets, corporate broking and advisory services. It employs c 255 staff in offices in London and New York, and at the end of March 2018 had 208 corporate clients.

Next events

Trading update

End July

End FY18 trading update

Early October

Analysts

Andrew Mitchell

+44 (0)20 3681 2500

Martyn King

+44 (0)20 3077 5745

Numis Corporation is a research client of Edison Investment Research Limited

Numis has made good progress in the first half of 2018 with particularly strong revenues in corporate broking and advisory and a resilient result from the equities activity. Investment in people and platforms to support future growth and our expectation of lower portfolio gains restrains our earnings estimates for the moment but healthy deal pipelines, continued growth in the corporate client base and the strong balance sheet are positive indicators for the future, subject to market fluctuations.

Year end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

09/16

112.3

32.5

22.4

12.0

19.6

2.7

09/17

130.1

38.3

25.9

12.0

17.0

2.7

09/18e

144.5

37.8

26.2

12.0

16.8

2.7

09/19e

147.7

38.6

27.3

12.0

16.1

2.7

Note: *PBT and EPS are diluted on a reported basis.

H118 results

Overall revenues were up 42% compared with H117 and just 5% below the particularly strong second half last year. Capital markets showed the strongest advance from the prior year period at +94% closely followed by advisory, +86%. Equities revenues were virtually unchanged, reflecting a moderate reduction in trading profit and a slight increase in institutional income. The implementation of MiFID II in Numis’s second quarter has so far been navigated without obvious adverse impact and the institutional client base is reported as being materially unchanged: an important feature for corporate clients. While costs did increase significantly (+27%) reflecting both variable compensation and investment in new staff, the operating margin increased and pre-tax profits rose 87% to £19.5m.

Outlook: Pipelines strong, M&A promising

Market levels have recovered close to where they started the calendar year and volatility has subsided from the spike seen earlier. If sustained, together with the strong pipeline of transactions Numis itself reports, this could produce positive surprises versus estimates in the remainder of the year (see page 4 for details of estimate changes). The outlook for M&A activity appears particularly promising as Numis indicates that more of its clients are looking to pursue their strategies through corporate deals and have the liquidity to support this. In the first half Numis benefited from higher average deal fees, reflecting both higher average size and increased seniority in syndicates, features that both tend to confirm further strengthening of its franchise. Even if these measures fluctuate in future periods, continuation of a positive trend would contribute to growth through market cycles.

Valuation

The shares have risen by 57% over the last 12 months, but the P/E still does not look particularly stretched in comparison to a broad peer group. The price to book is above average but this is paired with an above-average ROE. On our assumptions a ROE/COE model implies that the market is factoring in a sustainable ROE of c 24%, which does not seem overly aggressive (page 5).

H118 results

The results for H118 (to end March) were characterised by a very strong performance from the corporate broking and advisory activities compared with H117. Equity revenues were virtually unchanged in a period that included the initial implementation of MiFID II. There was evidence of continued strengthening of the Numis franchise in an increase in the corporate client count and a rise in the average fee per corporate transaction. The H118 P&L figures are set out in Exhibit 1 which puts them in the context of the first and second half of last year together with the annual results between FY13 and FY17. Selected points from the results are highlighted below with comparisons against H117 unless stated.

Within equities revenue, institutional was slightly ahead despite the advent of MiFID II in the second quarter, which that has generally intensified pressure on institutional broker lists. Numis reports successful implementation with limited impact on business and in particular no material change in the composition of its institutional client base.

Corporate broking and advisory revenues increased by 75.7%. The transaction volume was little changed from H117 but there was a material increase in the average fee reflecting both larger transactions and more senior roles in syndicates. Transactions included the Catco Reinsurance equity raising ($546m) and Sabre Insurance Group IPO (£575m admission).

Total revenue increased by 41.5%, outpacing both staff and non-staff costs (+32.1% and 13.6% respectively) allowing the operating margin to increase from 17.3% to 26.0%. This was despite continued investment in the business in both selective recruitment to support increased scale and future growth (average headcount +14% - see below for more detail) and spending to strengthen the IT platform and address regulatory change.

Pre-tax profit was 86.6% higher and EPS (diluted) increased by 93.6% helped by an unusually low tax rate in the period, which we believe is unlikely to be repeated.

The corporate client count increased from 201 at end FY17 to 208 and the average and median market cap stands at c £711m and £322m respectively.

The interim dividend was unchanged at 5.5p/share while share buybacks increased from £5.3m to £9.7m.

Exhibit 1: Profit and loss progression

£m unless stated

FY13

FY14

FY15

FY16

FY17

H117

H217

H118

H118/H117

H118/H217

Net trading gains

8.5

7.7

4.1

6.5

9.0

5.0

4.1

4.6

-8.8%

12.5%

Institutional commissions

28.8

31.9

29.3

31.9

35.8

18.4

17.3

18.7

1.5%

8.1%

Equities

37.2

39.6

33.4

38.4

44.8

23.4

21.4

23.3

-0.7%

8.9%

Corporate retainers

6.9

7.8

8.9

9.6

11.6

5.6

6.0

6.1

9.0%

2.7%

Advisory fees

6.0

9.0

17.9

16.3

14.4

6.3

8.0

11.7

84.9%

46.4%

Placing commissions / capital markets

27.5

36.5

37.7

48.0

59.4

17.0

42.4

33.0

94.2%

-22.1%

Corporate broking and advisory

40.4

53.3

64.6

73.9

85.3

29.0

56.3

50.9

75.7%

-9.7%

Total revenue

77.7

92.9

98.0

112.3

130.1

52.4

77.7

74.1

41.5%

-4.6%

Other operating income

3.6

0.0

(2.0)

3.8

3.4

1.4

2.0

0.4

-72.3%

-79.9%

Total income

81.2

92.9

96.0

116.1

133.5

53.8

79.7

74.5

38.5%

-6.5%

Staff costs

(41.2)

(49.1)

(47.4)

(58.9)

(69.0)

(30.3)

(38.7)

(40.0)

32.1%

3.2%

Non-staff costs

(18.0)

(19.9)

(22.7)

(24.7)

(26.4)

(13.1)

(13.3)

(14.9)

13.6%

11.7%

Total administrative expenses

(59.2)

(69.0)

(70.1)

(83.6)

(95.4)

(43.3)

(52.1)

(54.8)

26.5%

5.3%

Operating profit / loss

22.1

23.9

25.9

32.5

38.1

10.5

27.6

19.7

87.9%

-28.7%

Finance income/expense

0.6

0.5

0.2

0.0

0.2

(0.0)

0.2

(0.2)

658.3%

-185.8%

Pre-tax profit

22.6

24.4

26.1

32.5

38.3

10.5

27.9

19.5

86.6%

-29.9%

Tax

(4.6)

(4.3)

(4.5)

(6.1)

(7.9)

(1.6)

(6.3)

(2.7)

66.0%

-56.9%

Effective tax rate

20.1%

17.7%

17.4%

18.8%

20.7%

15.6%

22.6%

13.9%

Attributable profit

18.1

20.1

21.5

26.4

30.4

8.8

21.5

16.8

90.4%

-22.0%

Diluted EPS (p)

15.6

17.1

18.3

22.4

25.9

7.6

18.3

14.6

93.6%

-20.2%

Source: Numis, Edison Investment Research

The company has, as noted , increased headcount over the period, making selected hires of senior staff to enhance capabilities in certain areas of the business (particularly in equities) and at a mid-tier level (corporate broking and advisory). Among those reported as joining are: Ulick Burke, who joins as a director in the equities team having been head of UK institutional sales at Bank of America Merrill Lynch; Richard Paige, an industrials analyst and previously head of Barclays’ UK mid-cap research; and Tintin Stormont, a technology analyst who was a partner at N+1 Singer. The progression of average headcount revenues per head and the number of corporate clients is shown in Exhibit 2 with the split by activity at the end of FY17 given in Exhibit 3.

Exhibit 2: Expanding headcount to service clients

Exhibit 3: Staff by area of activity

Source: Numis, Edison. Note: H118 Rev. per head annualised.

Source: Numis, Edison Investment Research

Exhibit 2: Expanding headcount to service clients

Source: Numis, Edison. Note: H118 Rev. per head annualised.

Exhibit 3: Staff by area of activity

Source: Numis, Edison Investment Research

Numis reported a strong cash position, even after share buybacks, at £82.5m compared with £71.2m at the end of H117 (seasonally lower than the end FY17 level of £95.9m). Since the period end the cash position has been further strengthened because the company has decided to close the Numis Mid Cap Fund and the £12.5m proceeds from its liquidation were received in April. The decision reflected a judgement that the performance had not been sufficiently strong (over three years broadly in line with its benchmark) to justify marketing the fund to third party investors.

At the half-year end, the remainder of the strategic investments were mainly unquoted and these holdings were valued at £13.9m, with limited overall movement since the end of FY17 (£13.5m) including a net movement on acquisitions and disposals of £0.3m and a value uplift of £0.7m. The aim remains to recycle some of the older portfolio investments (for instance the long-term holding in Randall & Quilter has been sold) and to focus on early stage investments, which can benefit from access to Numis business network. The expectation is that the number of strategic investments will not change significantly over the medium term.

Prospects: Looking for M&A activity to pick up

Recent equity market trends are shown in Exhibits 4 and 5. Evident here is the medium-term strength in each of the indices shown, the small cap sector outperformance over this period and the dip and recovery seen in markets in calendar year 2018 to date. The volatility index highlights the period of declining volatility that was interrupted early in 2018 with a market correction. As noted market levels have recovered close to those that prevailed at the beginning of the year and volatility has subsided.

If sustained this would seem likely to create a generally favourable background both for the equities and corporate banking and advisory businesses. Numis has indicated that since the end of H118, the equities business has performed in line with the first half: an encouraging indicator following uncertainty last year over the potential impact of MiFID II implementation.

Exhibit 4: FTSE AIM, All-Share and Small Cap indices

Exhibit 5: FTSE 100 volatility index

Source: Thomson Datastream. Note: Total return series

Source: Thomson Datastream

Exhibit 4: FTSE AIM, All-Share and Small Cap indices

Source: Thomson Datastream. Note: Total return series

Exhibit 5: FTSE 100 volatility index

Source: Thomson Datastream

On the corporate broking and advisory business Numis reports that it has a strong IPO pipeline, reflecting marketing efforts in the first half although, as usual, delivery here will depend on market levels and volatility both remaining at levels that encourage corporate and investor confidence.

Developing and marketing the advisory capability within the division is seen as an important part of the company’s strategy. Here the continued growth in the corporate client base over recent years has been important as it has resulted in an increase in the number, size and diversity of companies already advised by Numis that may be considering transactions. The company reports that although UK activity levels have been comparatively muted (see value and volumes by calendar year in Exhibits 6 and 7) its corporate clients (particularly in the mid-cap area) are putting greater emphasis on M&A activity and have the liquidity and debt capacity to support this.

Exhibit 6: UK M&A transaction value

Exhibit 7: UK M&A number of transactions

Source: ONS. Note: inbound, outbound and domestic. Excludes deals above £10bn that affected 2016/17 data. Calendar years.

Source: ONS. Note: inbound, outbound and domestic. Calendar years.

Exhibit 6: UK M&A transaction value

Source: ONS. Note: inbound, outbound and domestic. Excludes deals above £10bn that affected 2016/17 data. Calendar years.

Exhibit 7: UK M&A number of transactions

Source: ONS. Note: inbound, outbound and domestic. Calendar years.

Financials

We summarise changes in our estimates in Exhibit 8. Our revenue estimates are increased by 9% and 8% for FY18 and FY19 respectively following the strong first half performance but, again, reflecting the pattern in the first half, we have allowed for increased staff and other costs as Numis invests to support future growth. This leaves our operating profit forecasts up by 4% and 2%. The decision to close the Numis Mid Cap Fund means the overall size of the strategic investment portfolio is smaller and the returns we assumed would be generated by the fund will be removed. It is difficult to forecast the incidence of gains from the remaining, mainly unquoted, portfolio but we have reduced our estimates for other income from £2m per annum to £0.5m for FY18 and FY19. This results in modestly lower profit and EPS forecasts, as shown.

Exhibit 8: Estimate revisions

Revenue (£m)

PBT (£m)

EPS (p)

DPS (p)

Old

New

Change

Old

New

Change

Old

New

Change

Old

New

Change

09/18e

132.2

144.5

9.3%

38.0

37.8

-0.7%

27.0

26.2

-3.2%

12.0

12.0

0.0%

09/19e

137.1

147.7

7.7%

39.4

38.6

-2.1%

28.3

27.2

-4.2%

12.0

12.0

0.0%

Source: Edison Investment Research

Cash flow in the first half is seasonally weaker reflecting the incidence of costs (notably bonus payments) and is in any case subject to working capital fluctuations. For H118 net cash flow from operations was positive at £4.3m but was outweighed by share buybacks, dividend payments and other items resulting in a £13.1m outflow in the half compared with £17.6m for H117. As noted earlier, this left cash at £82.5m prior to the receipt of the £12.5m proceeds from liquidating the Numis Mid Cap fund.

The H118 regulatory capital position was still in significant surplus with shareholder funds of £140m (c £134m post interim dividend) covering the regulatory requirement by c 2x, providing the company with considerable resilience and flexibility.

Valuation

We have updated our comparative valuation table below. It includes UK brokers together with a selection of US and European investment banks and advisory firms. The absence of published estimates for the other UK brokers explains the lack of current year P/Es for the comparison. While the businesses have different profiles they do offer a qualified peer group for comparison. In terms of P/Es (calculated on last reported earnings), Numis is below the average across the whole list (25x), while its above average price to book ratio is supported by the above-average return on equity.

Exhibit 9: Peer comparison

Price

(local)

Market cap (£m)

Last reported P/E (x)

Current P/E (x)

Yield
(%)

Price to book (x)

ROE
(%)

UK brokers

Numis

435.5

466

16.8

16.7

2.8

3.5

23.1

Arden

40.5

13

12.3

N/A

0.0

1.1

7.4

Cenkos

110.0

61

8.3

N/A

8.2

2.1

25.3

Shore Capital

285.0

61

21.8

N/A

1.8

1.1

4.8

WH Ireland

110.0

33

loss

N/A

0.0

2.4

-6.4

UK brokers average

14.8

N/A

2.5

2.0

10.9

US, European IB and advisory

Bank of America

31.1

232,694

19.1

12.3

1.3

1.3

7.7

Evercore

109.1

3,283

34.5

14.6

1.3

8.1

25.3

Goldman Sachs

241.0

69,849

26.3

10.5

1.2

1.3

5.8

Greenhill

26.9

505

loss

21.4

5.2

4.0

-8.6

JP Morgan

113.3

285,132

17.8

12.6

1.9

1.7

10.8

Moelis

58.5

2,523

60.9

20.5

9.6

9.3

15.9

Morgan Stanley

55.0

71,901

17.5

11.7

1.6

1.4

9.1

Stifel

59.5

3,143

23.5

11.6

0.0

1.5

7.3

Credit Suisse

16.8

31,662

loss

13.9

1.5

1.0

-2.1

Deutsche Bank

11.0

19,869

loss

21.1

1.0

0.4

-2.4

UBS

16.1

45,795

45.8

11.5

0.0

1.2

2.5

US, European IB and advisory average

30.7

14.7

2.2

2.8

6.5

Source: Bloomberg. Note: Priced at 17 May 2018.

We have used a ROE/COE valuation model to infer the ROE assumption required to match the 435p share price at time of writing: this gives a value of 24% (based on the H118 NAV of 131p and assuming a cost of equity of 10% and growth of 4%). Our current forecasts indicate ROEs of 22% and 21% for FY18 and FY19 but on a medium-term view a combination of deployment or return of some part of the excess capital highlighted earlier and/or better than expected results could put returns of 24% or more well within reach. The sensitivity of the valuation to changing growth and ROE assumptions is illustrated in Exhibit 10.

Exhibit 10: ROE/COE valuation output variations (value per share, p)

Growth rate (right)

Return on equity

2.0%

3.0%

4.0%

5.0%

6.0%

18.0%

261

280

305

340

392

21.0%

310

336

370

418

490

23.0%

343

373

414

471

555

25.0%

376

411

457

523

621

29.0%

441

485

545

627

752

Source: Edison Investment Research

Exhibit 11: Financial summary

£'000s

2015

2016

2017

2018e

2019e

Year end 30 September

PROFIT & LOSS

Revenue

 

 

97,985

112,335

130,095

144,504

147,670

Other operating income

 

 

(1,978)

3,759

3,431

500

500

Total income

 

 

96,007

116,094

133,526

145,004

148,170

Cost of Sales (excl. amortisation and depreciation)

(65,018)

(76,120)

(83,626)

(95,268)

(98,926)

Share based payment

(4,104)

(6,229)

(10,454)

(10,800)

(9,500)

EBITDA

 

 

28,863

29,986

36,015

38,436

39,244

Depreciation

 

 

(882)

(1,126)

(1,226)

(1,200)

(1,200)

Amortisation

(111)

(125)

(89)

(35)

(20)

Operating Profit (before amort. and except).

 

 

27,870

28,735

34,700

37,201

38,024

Net finance income

190

37

188

50

60

Other operating income

(1,978)

3,759

3,431

500

500

Profit before tax

 

 

26,082

32,531

38,319

37,751

38,584

Tax

(4,533)

(6,132)

(7,942)

(7,740)

(7,762)

Profit after tax (FRS 3)

 

 

21,549

26,399

30,377

30,011

30,822

Average diluted number of shares outstanding (m)

117.6

118.0

117.2

114.7

113.0

EPS - basic (p)

19.5

23.5

27.4

28.2

29.4

EPS - diluted (p)

 

 

18.3

22.4

25.9

26.2

27.3

Dividend per share (p)

11.50

12.00

12.00

12.00

12.00

NAV per share (p)

102.0

113.5

125.0

134.5

146.1

ROE (%)

19%

22%

23%

22%

21.0%

EBITDA margin (%)

29.5%

26.7%

27.7%

26.6%

26.6%

Operating margin (before GW and except.) (%)

28.4%

25.6%

26.7%

25.7%

25.7%

BALANCE SHEET

Fixed assets

 

 

6,724

5,522

6,147

7,188

6,658

Current assets

 

 

279,114

312,462

407,850

366,470

376,044

Total assets

 

 

285,838

317,984

413,997

373,658

382,702

Current liabilities

 

 

(170,319)

(188,895)

(280,371)

(231,146)

(231,146)

Long term liabilities

0

(12)

0

(11)

(11)

Net assets

 

 

115,519

129,077

133,626

142,501

151,545

CASH FLOW

Operating cash flow

 

 

6,467

48,735

43,369

36,137

36,232

Net cash from investing activities

(3,632)

84

(198)

(990)

(380)

Net cash from (used in) financing

(17,510)

(19,580)

(36,359)

(33,037)

(31,279)

Net cash flow

 

 

(14,675)

29,239

6,812

2,110

4,574

Opening net (cash)/debt

 

 

(74,518)

(59,591)

(89,002)

(95,852)

(97,770)

FX effect

 

 

(252)

172

38

(192)

0

Closing net (cash)/debt

 

 

(59,591)

(89,002)

(95,852)

(97,770)

(102,344)

Source: Company data, Edison Investment Research


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Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

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Germany

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United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Numis Corporation and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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