W.h. Ireland Share Discussion Threads

[peach] 17/4/2007 23:31

Full annual report is on their (revamped) website:


There is some new information that wasn't in the prelims:
- Financial services divison has "significantly moved away from" one-off up-front fees to taking a lower introductory rate and trail commission. This has hit profits in the short term but they believe creates a better business model
- the value of quoted and unquoted investments is actually £2.3m above the figure in the balance sheet
- they have incurred some one-off costs in establishing and improving the infrastructure of their Leeds office
- Manchester property should be worth around £7m when renovations complete (although renovations will cost around £1m this financial year)
- 20% stake in Acceleris (Venture capital group) gives them access to "an excellent pipeline of clients" to IPO
- Like for like income growth of 29% (recent acquisitions have slowed this - but there are signs this is a one off).

I still think this looks ludicrously cheap given the effective multiple the market is assigning to the franchise value of the business:

Tangible net asset value of WHI=£12.36m
+ £2.3m (uplift from revaluation of quoted and non-quoted investments not shown on accounts)
+ £1.8m (uplift from company's expectation of Manchester property market value)
= £16.5m (true tangible net asset value of WHI)

Market cap is around £24m (based on diluted shares in issue) implies a franchise value for the business of £7.5m which as a multiple of underlying profits (of say £2.2m) is around 3.4 times. This is much lower than peers as I have noted above. I managed to miss Numis from my original post. The equivalent multiple for Numis is 8 times (based on normal market cap calcs and no adjustment to profits for one off gains).

[rmillaree] 30/3/2007 14:04

Some good questions there - i would guess the people to ask would be the brokers who did the forecasts.

I would guess they have also some other shares to sell in the current year, as they have made profits on share disposals in the 2 previous years too. I would imagine though any realised gain is likely to be alot lower than the 2006 figure.

Perhaps the new Leeds office and increased Australian holding will generate some additional income.

I would also like to think that if less work is being done then the company should be keeping tight control of costs.If less money is being made is it not likely than bonuses and the like will also be lower too?

Well whatever happens we will have more of an idea when the interims are published in July or August.

[gowermonkey] 30/3/2007 09:11

I think Beevers and Buthead and Co are going to struggle as the city are well aware of their failings.If you were an AIM co would you rush to them to float after Cape?

A number of their clients are also nursing losses from the varrious floats they have off loaded on them and cannot be happy.

Like you say rockoniii they have a few good people there who could be worth poaching but its not an attractive buy except as a complete asset strip and staff disposal !!!!

[rockoniii] 29/3/2007 21:43

But the 2006 number includes an exceptional gain of £1m on sale of shares in LSE so actually this forecast is for an underlying increase. If fix costs go up (which WHI has admitted) and revenues are down (which WHI has also admitted) PTP cannot be anything close to 3.4m.

Assuming even 5% wage inflation + cost of new staff fixed costs this year must be at least £1m up on 06 and if revenues are off by even 5% that is minus £1.5m. By my reckoning that is a FY loss of £100k. Last year WHI did 17 IPOs which will have earned it 1.7m in fee income plus raised £136m which is commission of £7m. This year it has done 3 or 4 IPOs. Maybe a 5% fall in sales is optimistic.

Can you explain how forecasts are plausible?

[rmillaree] 29/3/2007 17:48

Hi reckonii

As these are forecasts the figures are for 2007 and 2008.

The 2006 PTP per the most recent accounts was 3.7 million.
So the forecasts are for a drop of nearly 10% to 3.4 million for the current year.This tallies in with their "lower volumes" statement.
The increase above relates to 2008 when compared to 2007.
Apologies for any confusion as i omitted the 2007 and 2008 bit when i copied the above figures.

[rockoniii] 29/3/2007 14:13

but WHI has already saud that revenues will be lower this year than last and costs higher so why are PTP set to grow?

[rmillaree] 28/3/2007 19:12

Yep
1st March
Broker Date Rec Pre-tax (£) EPS(p) DPS(p) Pre-tax(£) EPS(p) DPS(p)
Oriel Securities 01-03-07 HOLD 3.40 12.70 5.00 3.70 13.80 5.50

[rockoniii] 27/3/2007 21:31

are there any broker forecasts availlable for this company to contradict the assertion that it will be heavily loss making this year?

[eggchipper] 25/3/2007 21:28

Here here scots

[scotswhaehae] 25/3/2007 20:27

...looks from the carping comments that a few people have been wrong footed by the recent rise...lol

either that or they are trying to play a very nasty game...

on balance I wuldn't add but neither would I slag like these newcomers!

[rockoniii] 23/3/2007 08:38

gowermonkey - are you aware of scandal at whi other than cape?

[rockoniii] 23/3/2007 06:43

Why buy WH Ireland? Its Private client business is a mature & shrinking one and its corporate side is tarnished by scandal and, IMHO, will be heavily loss making this year. Poach the odd good person here but why buy the business. As Ireland plunges into heavy losses this year bonuses must be slashed & the good people will walk.

[gowermonkey] 22/3/2007 09:39

No I wouldnt buy them personally.Its a really badly run company whose reputation in the industry leaves a lot to be desired.One day, it will be sold but when will that be ????

[handycam] 21/3/2007 18:16

Would you buy them? Rather this than W de Broe.

[gowermonkey] 20/3/2007 16:16

In my opinion the ONLY reason to hold these shares is that its well known the company are looking for a buyer. I think the main share holders in management want out and want more than the market think this is worth.

The earnings and asset base are not of quality .Too much depends on too few producers in the company,the largest of which have essentially self employed old style "half comm" contracts with them .The market are aware of this and consequently dont attribute as much worth to the quoted asset base as they would to better run companies.

If the markets turn downwards and AIM remains as dead as it is then this is a further nail in the WHI coffin....not to mention the Cape Diamonds fiasco !

[its the oxman] 20/3/2007 16:09

real quality info / post IMHO

[gowermonkey] 20/3/2007 16:08

Loads of potential scandal on the way IMHO .Wouldnt touch with a barge pole

[quepassa] 19/3/2007 15:57

Anyone seen anything to support the +12% this afternoon?

[its the oxman] 19/3/2007 15:43

whoosh ......well it is very cheap

[peach] 15/3/2007 12:49

Thanks Scots - interesting points. I agree the prelims are quite selective.

What was the recent scandal with one of their clients?

[scotswhaehae] 15/3/2007 08:49

Good analysis...similar really to what some of us have been saying for a few years...

You mention some of the downsides but I'd add that there was no mention of the supposedly lumpy corporate deal flow in the recent RNS...just what is the corporate finance bit actually doing at the moment...plus the recent scandal with one of their clients might have an effect on them...plus I've rarely read a more selective RNS re the current situation...

That said, WHI 'looks' very cheap...

[rockoniii] 15/3/2007 08:04

fails to close back above 120p yesterday critical. 120p was key support point. now broken. 60p next support. perhaps breaking news on cape diamonds scandal on way?