Mercia Asset Management Share Discussion Threads

[ivyhedge] 27/11/2024 13:03

Noted some of the past comments and management wages not really that high in comparison to others, taking some in shares is a good move for the future.
Labour is making life hard for investing in anything but if you look at the basics of this company.
companies invested in £120m
cash £43
Income at 5% about £8m per year on other ventures (shoud be a safe estimate across £1.8bn .
That puts you well above the companies estimate of about £130m.
Assume they carry on as they are adding about 0.4p per share per year and you get thier worth at double todays share price.
Would suggest the shares are well worth investing at this price.
Liked the product so bought another 5000 shares this morning.

[pavey ark] 27/11/2024 09:27

I would like to thank the recent posters....as MERC is only just over 4% of my total portfolio and I consider it to be safe, sound and growing I have been rather lax and haven't kept up with the fine detail.....until this morning.

1. Yield for the year very likely to be over 3%
2. Obviously cash (£46m) produces income but can hardly generate enough to support a much higher dividend
3. The share price is supported by the very considerable direct investment portfolio (£120m) but this is not income producing.
4. Rather bizarre to quote a PE based on non income producing assets and then ignore the fact that these assets and cash are worth more than the market cap.
5. Subject to certain (not onerous) caveats shareholders are getting the valuable ,income generating, growing fund business for free.
6. Quick random check of three of my share doing buy-backs ....all are putting the bought shares into treasury.
7. Some of the extra admin money spent on launching new funds ....kinda what they are supposed to do!!

Well that was easy and helpful.....very happy to hold and considering buying more..
"you pays your money you takes your chance"

[columbarius] 27/11/2024 07:41

Since they lost their bottle on making new direct investments this has become a boring director lifestyle company. They take out fat cat bonuses despite failing profit targets, but with only 2.4% of shares in issue their skin in tbe game doesn't match their greed. Accordingly shareholders receive a risible 2.8% dividend which is easily beaten by instant access cash accounts paying over 4.6%. They bought back shares ostensibly to boost pe but the shares weren't cancelled and are already coming back onto the register. Profits are pedestrian due to high admin costs and don't justify a racy pe ratio of 31. You can look at the discount to NAV but the latter figure is mainly supported by the valuation of the direct investment portfolio. This consists of numerous dogs that have been on their books for years and they haven't been able to sell. Furthermore potential buyers know they're winding down their portfolio so the negotiating position isn't strong.

[pavey ark] 26/11/2024 15:41

Hmmm ?? moving swiftly on !!

When the election results were announced I eventually got round to looking at my share portfolio and any possible impaction on particular shares.

UK property shares, renewables , financials etc but I was certainly prepared for MERC to benefit from a Labour government.

Labour has rightly long favoured investment outside London and the SE and MERC is certainly in a position to benefit from any injection of capital to the regions.

Cash pile is certainly substantial but this will grow to rather silly levels if/when the direct investments are sold off.

I thought the dividend could have been increased further but perhaps will be in the full year results.

EDIT: end of a positive write-up in IC today:-
"Research house Equity Development values Mercia at a sum of parts of 52p and sees no reason to discount its direct investment portfolio given that the company continues to complete successful exits. We stick with out recommendation. Buy."

[p1nkfish] 26/11/2024 13:12

You really are peculiar.
It's not all about you.

Go talk to someone or sit quietly and have a think.

[pavey ark] 26/11/2024 12:34

A rather disturbing post but not that surprising.

Tell us again how well you have done with MERC.
Tell us again that the smart thing is to trade.......perhaps even try to imply that you are smarter than the rest of us who are foolish enough to hold shares in MERC and don't have your insight.

But I depart with my very favourite Mark Twain quotation (attributed)

"Never argue with idiots. They drag you down to their level and beat you with experience!"

[pavey ark] 26/11/2024 09:05

Good set of figures .....happy to hold but then I actually hold share and certainly don't spend my time obsessing about a company I once held shares in.

The pearl clutching drivel continues here.

[p1nkfish] 26/11/2024 08:03

They have also never prioritised private investors.
A distasteful attitude towards the masses but themselves very comfortable.

"I get the impression the directors here are self-satisfied posers on the take. Just the type to do well during a Keir Starmer government."

[edmonda] 26/11/2024 07:33

Mercia Asset Management (LON:MERC) - A rarity in the sector: Revenue +19%, EBITDA +34% - new detailed research report available here: 

H1-25 (to 30 Sep 24) saw further progress of the Mercia 27 strategy which targets £3bn AUM (FUM + proprietary capital) and c.£10m EBITDA by FY27.

AUM was up 26% y-o-y and 1% over H1-25, following a series of large mandate wins in late FY24. Mercia is one of very few London-listed asset managers with positive net flows over recent periods.

H1 revenue was up 19% y-o-y and EBITDA +34%, a margin of 20.8%, up from 18.4% in H1-24. This is likely to ratchet up over the longer term as the business scales. PBT increased 75% and basic EPS increased 37%.

Our valuation is sum-of-the-parts based coming out at 52p, and we see no reason to discount the direct portfolio NAV given Mercia’s record of exits at a premium to holding NAV.

[sphere25] 31/10/2024 11:52

In for a little trade here.

It is teasing a bounce back post the budget sell down. Better than expected on the IHT front for AIM, but clearly there will be some fund redemption's with a new tax and a garbage/dying exchange.

Why bother with AIM if the returns are pants with no proper re-rating's and now a new tax?

Still, okay for some traders to look for bounces out there now.

There was some mopping up in size yesterday and someone has paid through the offer to buy at 30p as well today.

Just wondering if it can sneak its head above 30p and push for a little return.

Next update here 26th November.

I'll be long gone before that.

All imo
DYOR

[mr macgregor] 17/10/2024 13:19

I get the impression the directors here are self-satisfied posers on the take. Just the type to do well during a Keir Starmer government.

[edmonda] 30/9/2024 06:30

"Positive trading, discount-to-NAV being addressed"



In its AGM statement of 26 Sep 24, Mercia has confirmed that trading has been positive to date in FY25 (1 Apr 24 – 31 Mar 25), it is encouraged by current deal pipelines, and it is “optimistic for continuing profitable progress” in H2.

We remind readers that Mercia is scaling rapidly, with FUM more than doubling over two years to >£1.6bn. This was boosted by record net inflows in FY24 of >£0.5bn, including a string of new mandates from British Business Bank.

Mercia has also confirmed a net cash position of over £43m (30% of its market cap), a few days before the end of H1-25. With no debt, its balance sheet remains exceptionally strong. With our fair value of 51p, we maintain our position that there is potential for a significant share-price rerating.

[cordwainer] 13/8/2024 15:24

.. Not particularly ambitious / challenging exercise prices either.

[columbarius] 05/8/2024 13:02

Another chunk of options dished out today. Ostensibly the share buyback was for the benefit of shareholders and that’s true for a while. However, the shares bought back weren’t cancelled, they were carefully hoarded in treasury and you’ll see them come back onto the market via options. The usual smoke and mirrors.

[robsy2] 31/7/2024 08:21

Greed aside for the moment and picking up on Cordwinders post , I saw this on the PHNX thread.

Phoenix Group and Schroders to launch new private markets investment manager with £1bn initial commitment; up to £2.5bn over three years



There will be a lot of money sloshing around looking for a home. MERC is changing tack to capture this and looks well placed.

[columbarius] 29/7/2024 12:03

I mentioned before that I'd be interested to see their bonuses this year.
Last year they got 55% of salary in bonuses.
This year is 80%.

Consider that their 3 year strategic target was for £60m total profit before tax.
They achieved £21.6m

They missed their target by miles but get a big increase in their bonus.

That's why I think they've got their noses in the trough and the non-execs, especially the chair of the remuneration committee, are the usual stooges.

[cordwainer] 23/7/2024 15:33

Mercia Ventures / British Business Bank article published today:



Also, useful article published yesterday. Concluding with a summary by Cannacord Genuity.

[robsy2] 09/7/2024 17:49

A lot of stock changing hands today. I agree about Payton but think this should all come good at some point.

[reabank] 08/7/2024 19:17

Interesting to read the posts. I've lost quite a bit my by standards on Mercia but maybe there is value in the stock. Valuing the asset management part on a multiple of free cash flow and adding in cash and investments at book gets me to 50p or so. But I'm staying out for now as I worry we haven't see the last of write downs in the direct investment portfolio.

What might tempt me back would be a change at CEO - I'm all all for giving management time but Mark Payton has been there since the company was floated and overseen a decline in value. Good luck to those remaining invested.

[riverman77] 02/7/2024 19:33

Yes ED are paid for research (ie it's a marketing communication).