Mercia Asset Management Share Discussion Threads

[columbarius] 10/4/2024 08:56

£1.4 billion assets under management at end of FY23, so another £0.5 billion puts them close to £2 billion. They have real momentum now bringing economies of scale. This company has been well managed during a very challenging four years. I'm looking forward to the good times.

[rimau1] 10/4/2024 08:42

Thanks. I am upbeat too, the investment case remains very strong.

[cerrito] 10/4/2024 08:37

Yes thanks Rimau1.
Singers had estimated cash at £42m and Canaccord at £48m.
Both v upbeat this morning but-fair enough-waiting till July 2 to revisit their forecasts.

[robsy2] 10/4/2024 08:13

Thanks Rimau, very efficient!
This deserves to re-rate to a more normal valuation.Nothing generous.How about NAV -35% to give us 42p, with a cash covered and growing dividend of around 2% and scope for capital gains on successful exits.

[rimau1] 10/4/2024 07:54

We already know the reduction in cash since September Cerrito. 3 follow on investments during Q1 per the below.Mercia has completed syndicated funding rounds totalling £22.4m into three of its existing investments. Nearly 80% of the investment funding has come from outside of its balance sheet.The regional asset manager has bolstered its stake in Warwick Acoustics to 36.5% after investing £2m as part of a £6.9m syndicated funding round. The designer of high-end audio systems is set to use the funds to support R&D and scale its production capacity after securing its first OEM commercial contract.It's invested £2.5m in a £8.4m round into Locate Bio, a Nottingham-based orthobiologics company. The oversubscribed funding round will help progress the firm's ongoing clinical study of LDGraft, which is being developed for use in patients who require surgery for chronic lower back pain. Mercia's stake now becomes 20.1%.Mercia completes the three investments by upping its stake to 11.5% in biotechnology firm MIP Discovery. £1.2m has been invested as part of a £7.1m round and will be used to drive further commercialisation of the company's technology, which aims to develop life-changing cell and gene therapies.

[jimbox1] 10/4/2024 07:54

Some of the cash used in share buy-backs.

[cerrito] 10/4/2024 07:48

Note the cash position of £47m which is v satisfactory but below the £60m it got to after the Ndreams sale in calender q4 last year.
All will be revealed on July 2.
Good to see upbeat tone.

[solarno lopez] 08/4/2024 07:53

Moving at a steady pace

[spectoacc] 03/4/2024 09:53

33/35, but currently a touch over 34p to sell.

[columbarius] 23/3/2024 16:03

A facile comment. Presumably you invest in the UK where many companies get taken over by predators who see value where the market doesn’t. That’s what will happen here imo.

[redartbmud] 22/3/2024 17:40

It never gets near the NAV.
Why. Is it fictional?

red

[columbarius] 22/3/2024 17:01

Valuing this on pe ratio isn’t sensible as profit is lumpy depending on when they cash in portfolio companies. As pointed out NAV is more important. They’re building a very interesting business that will have strategic value to someone at some stage.

[weatherman] 22/3/2024 09:10

RED - look at the NAV.

[spectoacc] 22/3/2024 08:42

Or read the RNS/this thread, and see how much business they've been winning, and what a fwd p/e might be, & what future realisations might look like, and what the NAV currently is.

[redartbmud] 22/3/2024 08:26

H-L has a PE of 51.65 and a yield of 2.065%

Can't see where it is going above 33p
But at 29p and sell at 33p?

red

[spectoacc] 22/3/2024 08:17

Seems a little disingenuous:

" Forward Nominees Limited, an entity closely associated with Ray Chamberlain, a Non‐executive Director of the Company, has sold 1,563,813 Ordinary shares. The Shares were sold on 21 March 2024 at 32.50p per share by non‐Chamberlain family shareholders. None of the shares sold were held personally by Ray Chamberlain."

[robsy2] 21/3/2024 18:56

Like i said just a few short weeks ago, “…the sharebuy back seems to be working a treat , so far. There is just so much value here that even going from bombed out ( 25p) to lacklustre (40p ish ?) will be transformational for me and others and then you have the divis which look sustainable and growing . If , excessive pay aside, investors warm to the virtues of the business model , it might even get towards 50p. If they keep adding FUM as they have been doing and get a few more winners, it could go a lot higher still , say 60p. It is not impossible.”

[robsy2] 21/3/2024 18:53

Yep. This is really perking up now and none of this is to do with exits.It pays a pretty reasonable dividend as well.

[spectoacc] 21/3/2024 09:16

Pretty comfortable with their buy-back here. There's clearly still a seller/sellers, but eg 277k bought yesterday at 32.02p, and I bet that 185k at 32.6p today could be them, soaking up a series of smaller sells.

[cerrito] 21/3/2024 07:46

This £4m net revenue p.a. contrasts with the £15m of revenue in H1 of the current FY.

[spectoacc] 21/3/2024 07:27

Agreed, glad they put the amount in this time, and seemingly to be managed with existing resources so hopefully a fair bit of that £4m falls to the bottom line.

[rimau1] 21/3/2024 07:20

2 new mandates won with BBB and importantly they disclose that the NIM on the awards with BBB are 110bps which is good to know, 4m incremental revenue on ytd awards of 360m. Merc is flying!

[rimau1] 14/3/2024 11:38

That note from Singer reads well daveb. This should be the low point in the cycle, i remain bullish

[davebowler] 14/3/2024 09:39

Singer -
Successful VCT fundraise and syndicated investments In the last 24 hours, Mercia has announced a successful £60m fund raise into its Northern VCTs alongside participation into three syndicated investment rounds for on-balance sheet investees. Both validate the potential value creation from existing portfolio investments and Mercia’s ability to originate and support attractive new opportunities; made all the more impressive given these transactions have been completed against a more challenging backdrop for fundraising. Following success in the recent British Business Bank MEIF bid process, we expect to hear the outcome of the Northern Powerhouse process in the coming weeks. Event Mercia has announced positive developments both yesterday and today: Today: participation in three syndicated investment rounds using balance sheet capital MIP Discovery (Mercia’s fully diluted stake is now 11.5%) - £1.2m (£7.1m total round) invested to drive commercialisation;  Locate Bio (20.1%) - £2.5m (£8.4m total round, oversubscribed) invested to progress the ongoing clinical study of its LDGraft product, and; Warwick Acoustics (36.5%) - £2.0m (£6.9m total round) invested to scale production capacity following its maiden OEM contract win and to support R&D. Although investments in new balance sheet holdings remains paused, Mercia’s considerable liquidity (~£50m pf cash) can be used to support the growth aspirations of existing investments and catalyse value creation, alongside external investors (c.80% participation). Attracting 3rd party capital is a positive validation for the prospects of these three investees given the more challenging funding backdrop. Yesterday: successful £60m VCT fund raise  In line with the usually fundraising cycle into the tax year end, Mercia’s Northern VCT range has successfully raised £60m new capital – adding to the organic growth from the recent British Business Bank (“BBB”) Midlands Engine Investment Fund (“MEIF”) win. We expect news on the BBB’s Northern Powerhouse Investment Fund (“NPIF”) bid process, which is due to come to a conclusion around the end of this month. We hope for further positive news. Impact on earnings & valuation We make no change to our forecasts, although note that the recent MEIF mandate win will have a positive impact on our outer year estimates. We will review this following Mercia’s FY update. We again reiterate considerable embedded value in Mercia shares with a SOTP approach taking into account the balance sheet value of the investment portfolio and cash alongside long-dated recurring fund management fee-related income. We reiterate BUY alongside our 66p 12m TP.

[spectoacc] 13/3/2024 16:23

31.5/32.5 on 100k, does feel like we may finally be ready for sustained breakout.