Non-standard Finance Share Discussion Threads

[parob] 20/1/2020 15:28

Very strong indeed. Are we going to see 30p paid before the day is out?

[andyview] 20/1/2020 14:58

Looking strong today and I’ve added a few more this morning

Gla

[galaxy enforcer] 20/1/2020 12:46

Hope everyone had a nice weekend. Lovely and warm here in the Caribbean. I expect people have been digesting the recent news over the weekend and can see the value of the shares at this price. I will be looking to add further here at 30p and also will start building a stake in MAI.

[parob] 20/1/2020 12:16

29.3325p paid. Highest price of the day and looks good for a further rise this pm.

[moormoney] 20/1/2020 11:38

Very good investment summary. I hope to keep adding while the share price is down here and look forward to 85p and the divi!

[parob] 20/1/2020 08:43

Just a matter of time until we see the next TR1. Great to see both this and EML moving higher today.

[cheshire man] 20/1/2020 08:35

Hardman&Co

bit.ly/30DoZOL

Non-Standard Finance Sunshine after the rain
Posted by: Amilia Stone 20th January 2020

“The focus for the next few years is on relatively modest investment and on driving return on assets towards our medium-term target of 20% for each division”. So said Non-Standard Finance (LON:NSF) John van Kuffeler at the 16 January 2020 capital markets day. After an eventful 2019, 2020 (and beyond) is now all about operational delivery, the “boring” grinding out of profit from a franchise that has seen heavy investment over many years. We welcome this focus and think it will help deliver the 84% EPS growth (2021 on 2018) in current consensus estimates. The accompanying trading statement indicated 2019 results would be in line with market expectations. The shares rose 15% on the day.

Trading update: The branch-based lending business’ (ELL) net loan book grew 17% and the guarantor loan division (GLD) book by 29% vs. end-2018. Home Collected Credit (HCC) saw a small fall. Impairments were 22.4% of revenue in ELL, 22.6% in GLD and 27% in HCC. Progress has been made on a cheaper, six-year, securitisation line that is expected to be £150m-£200m in size.
Capital Markets Day: The presentation focused on the good current trading conditions and how the group will operationally deliver profit growth. NSF emphasised that the franchise build was largely complete and now the focus can be on delivering profit growth. The company’s focus on developing the right culture to underpin long-term success was also underlined

Valuation: Our absolute approaches now indicate a range of 79p-85p. At the current price, the 2020 prospective P/E is 4.4x for a business whose impairment provisioning already reflects a significant downside scenario and where earnings could nearly double over three years. The yield is also double-digit.
Risks: Credit risk is the biggest threat to profitability. NSF’s model accepts more credit risk, where a higher yield justifies it. NSF is innovative, and may incur losses piloting products, distribution and customers. Regulation is a market issue; management is acting to mitigate this risk.

Investment summary: Substantial value should be created, as: i) competitors have withdrawn; ii) Non-Standard Finance is well-funded, with committed debt funding to 2023; iii) macro drivers are positive; and iv) NSF’s experienced management delivers operational efficiency without compromising the key face-to-face model. Management targets of strong loan book growth and 20% EBIT RoA appears credible. Plus, investors are paying 6.6x 2019E P/E and getting a 11.1% yield.

[tongostl] 20/1/2020 08:17

30p+ today. Onwards and upwards, 50p+ within months.

[wardy333] 18/1/2020 08:27

Thnx parob will take a look.

[parob] 18/1/2020 08:17

I will be looking out for more TR1s next week. Volume yesterday suggests Neil Utley, Basswood or others institutions were buying more. O/T It's definitely worth researching EML over the weekend too. Think that has got legs to move quickly over the next few weeks, but also potentially a good long term hold.

[wardy333] 18/1/2020 08:01

Looks like this has a bit more legs to it for sure.

[parob] 18/1/2020 07:22

Hardman:We note from recent RNS announcements that there has been significant director buying, with the CFO designate more than trebling his holding from 40k shares to 140k. The current CFO also increased his holding. The role will hand over post the March results. On 3 January, an NED bought a further 38k shares. We also note the Invesco overhang has cleared, Alchemy has materially increased its holding and a number of other holders have now declared holdings of more than 3% (Basswood, a NY-based hedge fund and Neil Utley, a private investor).

[parob] 17/1/2020 17:29

LIBERUM: Non-Standard Finance - CMD: Business as usual, but with less expensive fundingIn December, NSF reduced its loan book growth targets for all three divisions. We believe that anyone who attended the Capital Markets Day will now be certain that this was a discretionary choice taken in order to allow profitability and returns to rise, and so, logically, to correct a very low valuation.

[cokehookerscars] 17/1/2020 15:44

NSF. Looking to double my stake at under 30p following the updates. Still not talking big numbers like some of you guys but every little helps !

[knowing] 17/1/2020 15:44

Welcome P but if you read you will see they are delayed

[cokehookerscars] 17/1/2020 15:42

Took a very quick look at MAI (at first I was looking at ASX:MAI - whoops !)

Near a third off the price following the profit warning and cut to the dividend. I will take more of a look but not instantly jumping.

I want to understand why Maintel Holdings are not hitting their targets before I think about buying in :-) Thx for the pointer, Knowing. Will investigate.

[tongostl] 17/1/2020 15:29

Looks like we will sail past 30p next week, onward towards 40p pre-results.

[galaxy enforcer] 17/1/2020 15:09

Well now that just shows how undervalued she is. Thank you for the post Parob. Knowing I have been looking at MAI as well as it does look similar to NSF in terms of a very hard hit making it look extremely undervalued.

[parob] 17/1/2020 15:08

Capital Markets Day: The presentation focused on the good current trading conditions and how the group will operationally deliver profit growth. NSF emphasised that the franchise build was largely complete and now the focus can be on delivering profit growth. The company's focus on developing the right culture to underpin long-term success was also underlined.

[parob] 17/1/2020 15:05

Hardman & Co new 11 page research note out today:Valuation: Our absolute approaches now indicate a range of 79p-85p. At the current price, the 2020 prospective P/E is 4.4x for a business whose impairment provisioning already reflects a significant downside scenario and where earnings could nearly double over three years. The yield is also double-digit.https://www.hardmanandco.com/wp-content/uploads/2020/01/NSF-Sunshine-after-the-rain-17-January-2020.pdf

[knowing] 17/1/2020 14:54

Couldn't even get the ticker right MAI is the one

[parob] 17/1/2020 14:38

Update on new debt facility The Group is continuing to make good progress on finalising a new GBP150-200m, six-year securitisation facility to help fund future loan book growth. We have signed an agreed term sheet and expect to complete the final documentation SHORTLY.

[parob] 17/1/2020 13:35

EML - mentioned on here yesterday and up again today. Hugely undervalued IMO currently. Chart looks tasty too. Some very informative tweets on twitter.