Mj Hudson Share Discussion Threads

[simon gordon] 23/5/2022 07:00

New vacancy in Amsterdam that looks to have just closed:

Venture Lead ESG Advantage

MJ Hudson Amsterdam, North Holland, Netherlands On-site

About the job

Are you an exceptional individual who wants to use your career to change the world? Have you been waiting for the opportunity to work for a purpose-driven tech startup but with the backing of a successful corporate company?

MJ Hudson launched ESG Advantage in November 2021 and we are now looking for a Venture Lead to scale and grow the SaaS B2B product into a market leading proposition. This opportunity is huge and backed by a team of industry leading ESG consultants, we have the Advantage.

We know first-hand that the increasing demand for ESG data in the financial sector, and complexity around standards, frameworks and regulations creates a challenge for firms. We want ESG data collection and reporting to be straightforward and simple, and used as an Advantage. Our mission is to simplify and streamline ESG assessments and repointing for investors, fund managers and companies, so that we can free up time and resources to focus on what’s really important – generating insight and taking action!

[simon gordon] 22/5/2022 20:12

From the AFM interim statement - 24/11/21:

ESG assets are expected to represent half of global AUM by 2025, and there is significant uncertainty over how the asset management industry will make the transition. This, therefore, represents an exciting growth driver for the Alpha business in the years to come. With many types of firms now offering ESG services, our clients tell us that it is the assurance that our projects are staffed by asset and wealth management specialists, combined with our relentless focus on practical implementation and realistic recommendations, that make us stand out from our competitors.

[davidosh] 21/5/2022 09:52

Mello2022, our annual flagship two day smaller growth company event will be returning to the popular Clayton Conference Centre in Chiswick, London W4 on Wednesday 25th May and Thursday 26th May.

Just to let shareholders and prospective investors know that MJ Hudson have presented on our virtual show but are not among the 60+ LSE Small Cap and AIM listed companies attending. However they may be analysed in the BASH session at the end of each day. There will also be keynote speakers such as Lord John Lee, Andy Brough, Leon Boros, Clarke Carlisle and Gervais Williams.

1 day tickets are £115 and 2 day tickets are £189. However they are available at half price to shareholders so to obtain 50% off just use code MMTADVFN50.

For more information, please visit the event webpage:

[simon gordon] 21/5/2022 09:43

MJH was up for two awards at the Private Equity Awards 2022 on 28th April:



-Specialist Advisor of the Year

"This award recognises the overall achievement of specialist advisers in the calendar year of 2021. The award will be given to the adviser that can demonstrate how it has created a bespoke service that creates value for clients by providing unmatched insight into specific business issues or industry trends. Growth of market share, deals advised on and overall evolution of team and strategy will also be taken into account."

-Fund Administrator of the Year.

"This award recognises the overall achievement of fund administrators in the calendar year of 2021. The award will be given to the fund administrator that can evidence how it has provided clients with fast, accurate reporting and analysis and demonstrate an in-depth understanding of the rapidly changing regulatory environment. The award will also recognise fund administrators that have been able to use technology, AI and process automation to bring down costs for clients and speed up service delivery."

Big beast IQ-EQ won Fund Administrator.



HQ'd in Luxembourg with 3,600+ employees they're owned by PE house Astorg:



These were the finalists:

Fund Administrator of the Year
-Alter Domus
-Apex Group
-Aztec Group
-IQ-EQ
-JTC
-Mainspring Fund Services
-MJ Hudson
-Sanne Group


MJH won Specialist Advisor of the Year

So, in the last 12 months they've won five high profile industry awards, which is not bad for a plucky little upstart:

The Drawdown Awards - 24/9/21
-Advisory and Consultancy ESG
-Advisory and Consultancy Marketing and Communications
-Technology ESG

Private Equity Wire - 24/3/22
-Best ManCo Solution

Private Equity Awards - 28/4/22
-Specialist Advisor of the Year


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How the shareholder base has changed since the IPO:

-Matthew Hudson - 22.7%
-Canaccord - 10.29% (16.7%)
-Somers - 9.58% (9.9%)
-Danske Bank - 7.34% (5.1%)
-AXA - 6.31% (0%)
-Katherine Hudson - 4.93%
-Polygon Group - 4.02%
-Capital - 0% (4.8%)
-Emily Devlin - 3.1% (4.58%)

Capital have exited. Canaccord cut straight after the IPO. Axa are a new holder. Danske Bank has increased. Emily Devlin looks to be on the out and maybe the current seller in the market.

MJH could really do with finding a Small Cap growth fundie like Chelverton, Premier Miton, Slater, Liontrust, et al.

Maybe if they can continue to hit an earnings upgrade cycle they will show up in some stock screeners.

[simon gordon] 19/5/2022 18:05

Last October JTC bought SALI for $236m. It's a sort of American ManCo.

From the RNS dated, 6/10/21:

"SALI adds value to all IDF market participants and provides services relating to the structuring and administration of IDFs, ensuring compliance with regulations and providing oversight services by acting as General Partner (akin to a Management Company ("ManCo") in Europe). SALI has established significant entry barriers and provides its services on its own scalable, proprietary tech platform called SCOPE, which provides connectivity between insurance companies and investment managers, including Ares, Partners Group, Blackstone, and Neuberger Berman. SALI currently partners with over 20 of the world's leading insurance companies to facilitate the availability of alternative investment options within Private Placement Life Insurance Policies."

In the RNS release JTC mention cross selling from the ManCo to Fund Admin:

"As general partner to the IDFs, SALI has the ability to appoint the fund administrator for their IDFs which provides an attractive opportunity to generate incremental revenue by transferring existing fund administration work and potentially new IDF fund administration work to JTC. SALI's blue chip client base also provides references that can be leveraged across the Group to drive new business. The Group also has the opportunity to leverage SALI's expertise in creating and administering tax-efficient structured products into other JTC jurisdictions."

Here's what SALI did financially and the EBITDA multiple JTC paid:

"SALI has an exceptional financial profile. For the year ending 31 December 2020, SALI delivered revenue of £7.9m1 ($10.8m) and adjusted EBITDA of £4.0m ($5.4m), with SALI management expectations for the year ending 31 December 2021 of £11.0m ($15.0m) annualised net revenue, translating to £6.6m ($9.0m) EBITDA on a run rate basis. The business continues to grow strongly and there are opportunities for further growth to the strong revenues and high margins of SALI as a result of leveraging JTC's scale, both in the US and internationally. JTC expects that SALI will continue to deliver strong double digit growth in EBITDA in the year ending 31 December 2022. The gross assets the subject of the transaction are £3.1m ($4.2m) as at 31 December 2020. Based on delivering the earn out at existing margins, the consideration payable represents 18.5x proforma on run rate EBITDA."

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MJH paid 24x EBITDA for Bridge Consulting.

The Luxembourg operation is also a ManCo and maybe has the opportunity to cross sell Fund Admin into the group.

[simon gordon] 19/5/2022 13:17

Looks like MJH's ESG offering is helping the Irish ManCo's sales pitch:

Hedgeweek - 1/11/21

Regulation pushes Irish ManCo adoption

...Robinson believes that, when the current regulatory change in Ireland settles somewhat, service will become the key differentiator between third-party ManCo offerings, with areas such as ESG a particular area for expansion.

“We’re looking at assisting our managers with the real implementation of ESG into their investment processes, investment due diligence and how investment managers are assessing the underlying companies they are investing in for ESG. Our specialist ESG consultancy business at MJ Hudson has been providing ESG services to asset managers for over 15 years and has been a huge benefit to a number of our clients in developing real ESG into their investment strategies and policies,” he says.

“The next stages of growth and opportunity in management companies will be about breadth of service and that one-stop shop outsource model,” Robinson concludes.




Bridge mentioned how important the ESG service offering was when they sold to MJH:

David Dillon, Director, Bridge Group, commented:

"This is a very exciting transaction from Bridge Group's perspective. We had been looking for a partner rather than an investor to strengthen our footprint internationally. Joining MJ Hudson hits a number of sweet spots. It strengthens our ability to provide clients with access to a regulated management company and governance services in Ireland , the UK , Luxembourg and Guernsey. It also gives clients access to a broader range of resources and international consultancies such as MJ Hudson´s specialist ESG Consultancy and its provider of Operational Benchmarking services."



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Once they get all these billions of AUM in Dublin and Luxembourg they can cross sell ESG, Data & Analytics and Fund Admin. It's a beautiful flywheel of high margin recurring revenue.

[simon gordon] 19/5/2022 12:26

Interesting to see that Link Group state on their website:

"Our Irish management company is authorised by the Central Bank of Ireland (CBI) to act as a management company (ManCo) to Irish domiciled UCITS, assisting fund boards with the regulatory and operational burdens associated with these funds.

We may act as the management company on a standalone basis or, alternatively, can provide fund administration (accounting and transfer agency services) through our Irish administration company. We are a well-capitalised Super ManCo, with robust and scalable systems, processes and procedures and the largest ManCo in Europe with over £50bn AUM."



According to MJH they are at E70bn AUM for their Irish Super ManCo with probably more to come.

In March, they won the Private Equity Wire award for Best ManCo Solution which is voted for by market participants.

It will be interesting to find out at the next IM whether MJH can do fund administration for their Super ManCo clients. Their recently scaled up Guernsey fund admin business is multi-jurisdictional.

Cenkos mention the cross selling potential in their April note:

"Management Companies (Manco) solutions, which provide a range of portfolio management services (eg regulatory capital, oversight of governance, operational substance, Board of Directors etc). Furthermore, in the hierarchy, Mancos appoint fund administrators, and hence MJH’s Manco solutions give the company the opportunity to cross-sell the company’s fund administration services (‘back office’; eg processing investor drawdowns and investments; fee collection and expense payment; NAV calculation; tax reporting etc). Manco fee structures also tend to be based on a percentage of AUM, and hence should continue to benefit from the growth in alternative asset AUM discussed above."

[c3479z] 18/5/2022 22:26

any prospect of statutory profit or is it all ebitda?

[dr biotech] 18/5/2022 15:57

I had that note this morning too. Some good points, I'm not sure the Q&A is the right way to deliver their points but its concise enough. Didn't see a price target but decent to get the positive coverage either way.

[simon gordon] 18/5/2022 07:59

Morning se81,

Cheers!

I came onboard after Thursday's stunning update.

Like this bit from the Prog note:

We regard this update as more than just encouraging trading news; we regard it as a
significant ‘proof point’ on the stock’s journey, which we hope will be followed by
opportunities for further forecast upgrades and increasing valuation multiples.

Statement answers the questions the market is asking

With a strategy based on addressing a range of existing and evolving needs across the private equity space, MJ Hudson is dependent on a number of capabilities. We are particularly impressed by this trading update as we believe it answers the questions about those capabilities that may have been hampering the share price.

Q: Can MJH spot the right businesses to be in within the space?

A: ESG, Ireland and Luxembourg clearly answer this, in our view. The company’s ‘three transformative growth areas’ are driving the outperformance, with the ESG offering in particular gaining traction.

Q: Can MJH act quickly and buy opportunities at the right price?

A: Ireland demonstrates this. With its purchase of Bridge Consulting in Dublin, MJH took a business faced with a challenging change in regulations and provided it with capital support, enabling rapid growth. It was acquired in early FY21 with €6bn AUM. By the end of H1 FY22 the AUM were €50bn, and it would appear to have maintained the strong growth trajectory since then. An initial fixed consideration of €2m was paid in cash, with deferred and additional earn-out consideration of up to €10m, payable over a two-year period, with previous year’s revenues and EBIDTA having been approximately €4m and €0.5m, respectively. It is evidently generating revenues, and almost certainly profits, at several times that level.

Q: Can MJH scale businesses?

A: Yes, yes and yes across these ‘three transformative growth areas’. And we suspect across other areas too. The ESG operations were acquired in 2019 with only 12 staff, but now there are over 60. Also, as noted above, Ireland is now several times its scale upon acquisition, and Luxembourg has grown to be a material business contributor having only been started from scratch soon after the Brexit result.

Q: Where there is nothing to buy or prices being demanded are too high, does MJH still have the skills and culture to start a business and build it?

A: Luxembourg was an incubated business within MJH’s ‘Organic Investments’ business
segment until not too long ago, so yes again.

Q: Can MJH really step beyond its senior management’s origins, answer its customers’ needs and build a valuable data business?

A: We believe so. The progress being made by ESG Advantage is very encouraging, albeit as yet unquantified. We believe that MJH’s ability to use technology to leverage its accumulated data and experience to generate high-margin recurring software and services income should prove highly valuable.

Q: Progress with fair winds is fine, but can MJH stabilize and revitalise businesses that hit holes in the road?

A: We would suggest that the encouraging news on Advisory shows that it can, as
demonstrated by the reported sustained recovery in legal services following a difficult first half of the year and the reported progress of the newly hired partners.

[se81] 18/5/2022 07:38

Progressive Equity update today

MJ Hudson’s Q3 FY22 trading update, issued on Thursday 12 May, revealed
that the company’s results for the full year are expected to be significantly
ahead of our, and the market’s, expectations. Adjusted EBITDA for the year
is expected to be at least £8.3m, against our estimate of £7.5m and a prioryear figure of £5.6m. We have adjusted our forecasts for both FY22 and
FY23 following this statement (see table overleaf), with our FY23 Adjusted
EBITDA estimate going from £9.0m to £10.5m. The key drivers to the strong
performance are the company’s ‘three transformative growth areas’: ESG &
Sustainability, the Irish Super ManCo and Luxembourg fund services

▪ Strong trading set to continue. Trading in the three months to 31 March
2022 has been strong and, importantly given events on a wider stage, with
signs that this strength is going to continue. The fact that this
performance is being driven by recurring and long-term business means
that much of this improvement in winning business will be seen in FY23
and beyond. We have updated our FY23 revenue and profit estimates.
▪ Improved mix helping margins. Importantly, the particular areas of
strength are in higher-margin services and products, meaning that group
margins are increasing as a result of this improvement in mix.
▪ ESG services gaining traction. The ESG services are building their activities
with leading private equity clients and there has been good interest in ESG
Advantage – ahead of management’s expectations.
▪ Outsourcing ahead of budget. The continuing strength and growth of the
Irish and Luxembourg businesses has helped drive Outsourcing revenues.
▪ Advisory recovering. The Advisory business had a difficult first half but is
now recovering, with growth in client activity and the expectation that
recent new partner hires will soon impact the top and bottom lines.

We don’t just regard this update as encouraging trading news; we regard it
as a significant ‘proof point’ on the stock’s journey. MJ Hudson is clearly
delivering on its strategy, and delivering across a range of client bases,
services and products – answering the questions that the market has been
asking. We expect that the ‘three transformative growth areas’ will
continue to drive growth. However, we note that the Advisory business is
showing signs of improvement and, given’s MJ Hudson’s ability to execute,
it would be short-sighted to ignore the potential elsewhere within the
group, particularly in light of the rating and earnings growth

[se81] 16/5/2022 09:45

Bottom in? Could do with getting through this 39/40 area

[se81] 12/5/2022 15:31

Yes looks like its starting to come together for MJH- hopefully the start of a longer term earnings upgrade cycle- the issue we have is the wider market!

[chrisdgb] 12/5/2022 11:46

Tremendous update, shame they put it out today............!

[its the oxman] 19/4/2022 13:16

Nice double bottom, not sure why this share ever deserved to sink quite so low. Think we should see 60p and above if management continue to deliver.

[se81] 18/4/2022 07:59

MJH presenting their interim results on Investor Meet Company on Tuesday 19th April at 5pm
hxxps://www.investormeetcompany.com

[chrisdgb] 12/4/2022 11:30

Agreed, very disappointing reaction.......

[its the oxman] 12/4/2022 09:04

Seem a good set of results with attractive growth ahead but market not interested in driving up small cap valuations. Surely got to recover strongly at some point though.

[tole] 12/4/2022 07:29

https://progressive-research.com/company-coverage/mj-hudson-group-plc/Revenue and margin progressMJ Hudson has today released its interim results for the six months ended 31 December 2021. The results confirm that the group continues to make strong progress, with particularly impressive performance in the software-driven Data & Analytics division and in the long-term recurring contract-based Outsourcing division. The outlook statement reaffirms the growth message of the January update and discloses that full-year results are expected to be at the upper end of market expectations. For now, we are maintaining our estimates, but note the upside risk to our forecasts.

[se81] 12/4/2022 07:18

Pleased with those interims. Cenkos' (NOMAD) update this morning:

"MJ Hudson (MJH) has reported a solid set of H1/22E results, with underlying revenue up 50% YoY to £17.0m, boosted by strong organic growth in both Data & Analytics (+34% YoY) and Outsourcing (+21% YoY), and contributions from recent acquisitions. Adj EBITDA margins improved (+410bp YoY to 20.0%) despite the significant investments made to support future growth opportunities. Industry drivers remain highly favourable for MJH (eg increasing investment into alternatives, heightened focus on regulation and governance etc), which should support strong growth over the coming years (mid-teens organic revenue CAGR expected). Management is guiding towards Adj EBITDA at the upper end of a £7.5-7.8m consensus range – we leave our £7.6m forecast unchanged today, a figure we have upgraded twice this year. Trading on a FY23E EV/Adj EBITDA of 9.0x, MJH is valued at a substantial discount to both our peer group (16.6x) and private take-out multiples of similar companies (c20x). We believe such a discount to be unwarranted and reaffirm our Buy rating."

[mattcg] 11/4/2022 17:31

Matthew Hudson is slated to appear on Ian King Live (Sky News)at around 10:30am, tomorrow, for those interested.

[dr biotech] 09/4/2022 11:17

Well at least we have a proper date now. Hopefully that was double bottom an we are on the upward march though this has struggled to hold its gains.

[se81] 04/4/2022 16:24

And more large trades @33.....overhang has to clear soon (preferably before results)

[se81] 04/4/2022 09:48

Or the delays don't reflect well on the recently appointed E&Y....