Panmure Gordon (AIM: PMR), a leading independent stockbroker and investment bank, announces that further to the announcement released on 6 May 2015, the Company, through its wholly owned subsidiary Panmure Gordon (UK) Limited, (together the ?Group?), has now exchanged contracts to acquire Charles Stanley Securities ("CSS"), the investment banking division of Charles Stanley Group Plc (?Charles Stanley?). Completion is expected to occur within approximately four weeks of exchange.
CSS is the equity capital markets business of Charles Stanley and is primarily focused on providing advisory, broking and research services to the small and mid-cap sector in the UK. CSS has a portfolio of corporate clients which, subject to due diligence and the completion of transfer formalities, will transfer to Panmure Gordon. It is anticipated that the acquisition will result in a significant increase in the overall size of the Company?s portfolio of corporate clients.
Those aspects of CSS which will be acquired by the Company are estimated to have accounted for approximately �1 million of Charles Stanley's profit before tax for the 12 months to 31 March 2014.
The consideration for the acquisition will comprise a�payment on completion of up to �1.5 million in cash and deferred consideration comprising an equal split between the Group and Charles Stanley of retainer and corporate transaction fees which emanate from the transferred business and are earned in the 12 month period following completion up to a maximum of �5m.
Phillip Wale, Chief Executive of Panmure Gordon said ?We are excited about the addition of the Charles Stanley Securities business which will continue our strategy of growing the Company, to focus firmly on serving our corporate and institutional clients and to improve value for our shareholders.?
Looks an excellent buy to me and the market seems to think so to. Well undervalued will PAN now start to re-rate to a sensible value ?
The Board is recommending a dividend of 2.5p per ordinary share (2013: nil). The dividend will be payable on 29 May 2015 to all shareholders on the register at 4 May 2015, subject to shareholder approval.
The earnings per share is reported at 9.64p for the full year 2014. This is a much improved figure when compared with 2013. However, in the report published at the end of September 2014, PMR reported a six monthly EPS at 10p. The Company have stated that the second half of the year was challenging but has it resulted in a negative EPS? It's either that or I am missing something? That would maybe justify an almost 6% drop in sp today.
Even today with several deals going through the spread is horrible 125.3 - 129.75 ! If you buy you are straight away losing a few percent. I put a limit order at 128p because i am not prepared to pay stupid spreads.
PMR's EPS for the first half of this financial year was 10p If there are no more earnings this year, that gives a PER of 11.5. However, if the second half earnings are just as good, the PER drops to 5.75! There is no debt and the balance sheet is strong. The only item missing is a dividend imo. Come on people, what can go wrong? Yes I know, plenty but buying any share is risky so DYOR.
Ramping is not my game but this share is unloved and looking very cheap.
Thanks, coldascheese. Just the two trades today, my buy and one sell for 120. I guess we will have to sit and wait until the world outside recognises value when they see it. Looking back at previous posts shows that PMR has a bad background history so there will be some resentment in the market that will take time to overcome. One thing PMR could do is re-establish the dividend as soon as possible.
I totally agree, coldascheese. I have checked on PMR occasionally over the past few months and was quite surprised to see how far the sp had dropped. It fits the profile of growth at a reasonable price perfectly. In fact, let's face it , it's cheap. With a strong balance sheet and improved earnings, what can go wrong? However, there will be less IPO's so it will be interesting to see if the current EPS levels can be maintained.
This share is way oversold with a probable profit of 20p a share this year and more than likely a dividend. The p/e is 6
Ridiculous in my view for the company voted the best last year and small sells sending the price down.
In any other market price should be nearer twice this.
Improved deal flow offers prospect of much-needed earnings recovery
Brokers chart Following several lean years a recovery in Londons primary market could play well to those advisory brokers who managed to survive the fundraising dearth. We flag lowly valued small cap and Aim specialists Panmure Gordon (PMR:AIM) and Daniel Stewart Securities (DAN:AIM) as potential rerating plays ahead of a likely improvement in industry newsflow.
The next major catalyst for an industry reappraisal could be Decembers finals from sector leader Numis (NUM:AIM), a good example of a well-capitalised broker that is consolidating its position as its peers struggle or even go out business.
"Panmure Gordon and Daniel Stewart appear to be the prime picks in the event primary business really gathers momentum."
Strong numbers from the £273 million cap could prompt the market to ask which of its smaller rivals are also doing well , especially as some trade at more attractive valuations, at least on the basis of book value (see table below).
Table: Brokers ranked by book value discount (won't paste!)
All the main players, bar Canaccord Genuity (CF.), now have net-cash balance sheets following restructurings and those focused on Aim have the most catching up to do, valuation-wise. Panmure and Daniel Stewart (see Director Deals, Shares, 10 Aug) trade on respective discounts to book value of 42% and 31%. The former is among the four names with a client list of more than 100 so it should be well placed were Aim to really turn the corner.
Profit and loss accounts may still be battered but they are moving in the right direction. Panmure reported a £0.1 million first-half profit at last months interims (24 Sept) versus a £0.8 million loss in 2012 when it disposed of a poorly performing US business. Shore Capital (SGR:AIM) even reinitiated a dividend payment at last months interims (16 Sept) when it declared a 0.4p half-year payout.
In what is a highly operationally geared industry the survivors have the potential to do doubly well as they see business activity pick up and simultaneously take market share from weaker competitors.
High-profile Main Market admissions, including Tuesdays (15 Oct) Royal Mail (RMG) float , have only served to draw the spotlight away from Aims recovery which remains overlooked. No less than 42 of this years 60 initial public offerings (IPOs) have been on Aim. The junior platform saw 20 new admissions between July and September against 16 delistings for the first quarter of net additions in six years according to UHY Hacker Young.
Even if the year-to-date IPO count stands miles below the peak figure of 425 seen across Aim and the Main Market in 2005, a lot of broking capacity has exited the market. Examples of names to leave the industry include Arbuthnot Banking (ARBB:AIM), which sold its investment banking operations in 2001, and Seymour Pierce whose own advisory business was bought out of administration by Cantor Fitzgerald in March this year.
Panmure Gordon and Daniel Stewart
Just sent them an email regarding the consolidation and an effective 30% hit on my shares.( value Â£ 200 before is now about Â£140 ) Originally it was Â£5000. What an insult to injury !
Wonder if I will get a response ...
Now they are consolidating further.....stealing more shares from the punters....anyone who holds less that a 1000 (remember these were reduced before from the previous consolidation)..have now lost everything.
And this is a company that provide financial servers............pls beware...stay away from these spivs.,
Poor trading update....all they seem to be concerned to paying bonuses to themselves...even when the company has performed terribly.....the Quatari are being d*uped here......similar to the old sharholders who lost their holding many years ago - SELL
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