Lighthouse Share Discussion Threads

[glasshalfull] 18/7/2017 17:14

Pleased with today's positive trading update.

FinnCap reiterate their BUY recommendation & point out that LGT is considerably undervalued in comparison to peers,

"The P/E of 11.5x and yield of 2.1% for the year to December 17 compares to AFH on 19x for the year to October 17 with a 1.3% yield and Harwood Capital on 31x to October 2017 and yielding 1.9%.

That's a 40% discount to AFH and a 62% discount to Harwood."

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So EPS growth of 7.9% in the current year (to 1.2p EPS) before growth accelerates by 18.5% in 2018 (to 1.5p) for a PER of 10.

Also, lets not forget that they have net cash of £8.1m currently versus a mkt cap of £20m & therefore EV of only c.£12m

Continue to look decent value IMHO & stock - o - pedia agree by classing it as a "super stock" with 92 stock rank rating.

Kind regards,
GHF

[trader2] 18/7/2017 07:24

Perky yesterday - positive trading update today. Some coincidence eh?

"The Board is pleased with trading to date in 2017 and is confident of further progress over the remainder of the year".

[trader2] 17/7/2017 16:29

Perky today!

[graham1ty] 02/5/2017 07:33

Anyone going to the AGM ? I will miss it for the first time for about five years. I had forgotten that they do not issue a trading statement.

[trader2] 10/4/2017 07:11

Always encouraging - on 7(th) April 2017 the Group's Finance Director, Mr Peter Smith, purchased 60,000 ordinary shares of 1p nominal value ("Ordinary shares") at a price of 14.5p per Ordinary Share for his ISA. On market deal as well!

[glasshalfull] 03/3/2017 09:39

Further positive announcement this morning. LGT are certainly gaining momentum.

finnCap have indeed raised their price target

"Lighthouse has announced another contract to add to its 19 affinity contracts providing access to more than 6m individuals who may require financial services in the years ahead.

As it transitions from a network to a growth business with unique market access to Middle Britain, we increase our price target from 17p to 20p. 

Lighthouse has a new contract to be the preferred supplier of financial advice to employees of The Money Advice Service. This is a free and independent advice service set up by government to provide guidance to individuals. It was launched in 2011 ahead of pension freedom occurring in April 2015. 

Results on 21 Feb revealed new business from affinity relationships was up 16%. This is the engine of growth within the business; there are headwinds from the declining network, but this is a business in transition. For now, we maintain our estimates for PBT growth of 14%"

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LGT are in a prospective PER of 12 for this year and offer a 2% yield.

Earnings growth is forecast to accelerate in 2018 by 18.5% to 1.5p, with PER falling to 10.

Kind regards
GHF

[someuwin] 03/3/2017 08:52

finnCap up their price target to 20p

[trader2] 28/2/2017 07:20

LGT expanding their funds - age old dilemma, are LGT offering independent advice or selling captive investment products?

[someuwin] 21/2/2017 13:37

Not much stock available.

[graham1ty] 21/2/2017 09:32

I am surprised this has not gone a bit better this morning ? It was up at 14-15p ten months ago, and they are delivering. Balance sheet is fine, affinity contracts continue, costs are lower.

The big issue is the lack of top line growth......they must start to convert the affinity connections and fund management into decent ( profitable) revenue growth ?

[trader2] 21/2/2017 08:27

Thanks for posting GHF

[glasshalfull] 21/2/2017 08:17

Smashing results. I took a small position on the back of the Affinity renewal news a week ago & delighted to see the company exceeded finnCap's 2017 EBITDA forecast a year early!

finnCap have raised forecasts by +10% for this year & say,

"The Company has achieved our 2017 estimate in 2016 with EBITDA of £2.2m, up 37% on 2015. We upgrade our estimates by 10% at the EBITDA level in 2017.

If the shares traded even at the lower end of comparators, they would trade at 17p. We expect the share price to reach our upgraded 17p price target in the short term.

Few companies enjoy the unique positioning which Lighthouse has to benefit from the assets of Middle Britain. 

EBITDA of £2.2m was up 37% (2015A £1.6m) and 15% ahead of our expectations (£1.9mE): in fact, it was in line with our 2017 estimates.

PBT of £1.9m was up 119% (2015A £0.9m) and 46% ahead of our expectations (£1.3m). This is against a revenue number that was £1m behind last year as the network reduced and £2.1m of platform-based trail income was removed under the FCA's ‘sunset clause' change.

Recurring revenue has now reached 50% of revenue. Fully diluted EPS was 1.97p (2015A 0.68p) although if a full tax rate was applied this would reduce to 1.19p (2015A 0.54p), and the dividend for the year is 0.27p (2015A 0.24p).

Net cash at December 2016 was up £200k to £8.1m (2015A £7.9m).

We upgrade our 2017 EBITDA estimate by 10% to £2.4m (2016A £2.2m), PBT estimate increases by 31% from £1.6m to £2.1m and on a fully taxed EPS basis we estimate 1.2p EPS where previously we estimated 1.1p on a 9% tax basis. In reality, the Company is likely to pay little or no tax in 2017, which would result in stated EPS of 1.6p.

We introduce 2018 and 2019 estimates reflecting 17% EBITDA growth followed by 6%.

The operating margin of 14% will grow as the three drivers in LFA, network and wealth management increase scale and the new investments of Luceo and Workplace Solutions start to generate profits. For now, we use a multiple of 14x fully taxed earnings to derive a price target of 17p; however, we expect to upgrade this as further margin enhancement is delivered.

Conclusion. Lighthouse is gaining momentum and is uniquely positioned to access the assets of Middle Britain, a feat that eludes most Financial Planners and Wealth Managers. Increasing scale and growth in the investment areas of Luceo and Lighthouse Workplace Solutions will improve the margins, which in turn will improve the rating further."

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Kind regards,
GHF

[graham1ty] 21/2/2017 07:26

Cracking results. But, as you say Trader, probably bonuses all round !

[trader2] 21/2/2017 07:18

Still a business that is driving increased profitability through reduced cost - and not increased revenues. A strategy can that only take you so far! But... the increased profitably shows a business in far better shape than it was. Recurring revenues of 50%. 13% increase in divvi. Wonder how this compares to increase in Board remuneration?

[graham1ty] 20/2/2017 19:16

Results tomorrow. Let us hope this evening's strength was a
Leak of good news !

[lanzarote666] 10/2/2017 08:04

The extension of the USDAW contract for three years announced today.
A couple more of these partnership agreements would help...

[trader2] 20/9/2016 13:28

How do they get to 11.8% - what a precise figure?

Also

[trader2] 20/9/2016 09:39

Graham - typo?? Possibly I suppose. Type "O" trade of 10.8m which did not seem to move the price. Has a broker picked this up? Way above NMS. Guess we will see a counter party trade posted shortly.

[graham1ty] 20/9/2016 09:32

I assume that trade is a typo ? There are only two holders of over 10m shares, Alan Rosengren and Helium. Helium I am sure are not sellers.

[trader2] 20/9/2016 07:21

Revenue flat, eps gains due to reduced operating costs - and you can't keep cutting your costs. Need some revenue growth.

Outlook - The Group believes that its individual business units have a positive future and that operating profits should continue to grow.

Is this credible? Not on the basis of these interims.

[dulciemo] 08/9/2016 19:35

Good rise today. People will soon be able to take £500 out of their pension tax free as long as they spend it on financial advice. The search website "unbiased" claims that people who take advice can receive an extra £3,500 per annum from their pension pot....great news for LGT.

[trader2] 31/8/2016 07:18

Half year results for the six-month period ended 30 June 2016, on 20 September 2016