2 Financial Services Stocks To Watch Out: MERC And SDR

2 Financial Services Stocks To Watch Out: MERC And SDR

Mercia Asset Management PLC

Mercia Asset Management PLC formerly known as Mercia Technologies PLC is an asset management company which has a portfolio of around 400 small and medium enterprises (SMEs) focused on innovative technology and products with huge potential in the United Kingdom. These SMEs are from various sectors such as electronics, manufacturing/technology, life sciences/biosciences, web-based technology. The company provides funding to these companies in the form of debt, private equity and venture capital.

Recent News

Mercia has witnessed a corporate action “Name Change”. The company going forward will be known as Mercia Asset Management PLC. The new name is a hallmark of the Group's core competencies that have evolved over a period, which makes the company even more proactive in asset management. The company will continue trading with the same ticker symbol (MERC) and ISIN (unique identifier). This change will not impact any shareholder, including rights and existing share certificates will be considered valid and will not be replaced by new share certificates. The company trading under the new name of Mercia Asset Management PLC announced its preliminary results for the year ended 31 March 2019, on Monday 8 July 2019.

In other development, Susan Searle, Non-executive Chair in the board, stepped down from the position. Ian Metcalfe, presently serving as the Senior Independent Director for the company replaced Susan.

Financial Highlights for FY19 (£, thousand)

(Source: Company’s filing, LSE)

The company’s total revenue stood at £10,675,000 for FY19 as against £10,197,000 in FY18. This rise in revenue of 4.7 per cent from the previous year can be attributed to fund management fees, fee from new investments, and other miscellaneous fee-based income sources.

The company’s other administrative expenses stood at £12,115,000 this year as against £10,633,000 in FY18. The rise in these expenses can be attributed to fees of professional consultants, marketing costs and other staff/ office related costs.

The company’s Net expenses stood at £1.4 million for FY19 as against £436,000 in FY18. The company’s profit from operations stood at £2.0 million in FY19 as against £1.3 million in FY18. The PAT (profit after tax) of the company stood at £2.6 million in FY19 as against £1.7 million in FY18. The EPS (earnings per share) of the company stood at 0.86 pence in FY19 as against 0.55 pence in FY18. The company’s net assets stood at £126.1million in FY19 as against £123.5million in FY18. The Net assets per share of the company grew to 41.6 pence in FY19 as against 40.7 pence in FY18. The Company’s unrestricted cash and short-term liquidity investments stood at £29.8million in FY19 as against £49.4million in FY18.

The company had a Finance income amounting to £562,000 in FY19 as against £274,000 in FY18. This occurred due to interest income from loans and redemption premiums on repayments by the companies during the period. Besides, interest income was generated from the company's cash and short-term liquidity investments.

The company’s net assets stood at £126,065,000 at the year-end as against £123,470,000 in FY18. The company enjoys good liquidity and looks forward to growing its investment portfolio to create value for its business and shareholders of the company.

Share Price performance

Daily Chart as at July-09-19, before the market close (Source: Thomson Reuters)

At the time of writing (as on July 09, 2019, at 09:45 AM GMT), shares of Mercia Asset Management PLC were quoting at GBX 33.80 per share; down by 2.59 per cent against the yesterday's closing price level. The company’s market capitalisation (outstanding) stood at £105.36 million.

In the last 52-weeks, shares of Mercia Asset Management PLC have registered a high of GBX 40.00 (as on Feb 20, 2019) and a low of GBX 27.00 (as on Aug 23, 2018). At the current trading level, as quoted in the price chart, its shares were trading 15.50 per cent below the 52-week high price level and 25.18 per cent above the 52-week low price level.

The stock’s volume (before the market close, at the time of writing) stood at 116,834. Stock's average traded volume for 5 days was 944,579.60; 30 days- 396,695.07 and 90 days – 190,829.12. The average traded volume for 5 days was up by 138.11 per cent as compared to the 30 days average traded volume. The company’s stock beta was 0.65, reflecting lower volatility as compared to the benchmark index.

The shares of the company (at the time of writing) were trading above the 30-days and 60-days SMA, which shows a positive trend in the stock price movement and could further move up from the current trading levels.

In the past 1 year, shares of Mercia Asset Management PLC have delivered a positive price return of 5.15 per cent. Also, on a year-to-date basis, the stock was up by approximately 15.67 per cent and surged by 2.97 per cent in the past three months.

Share's RSI for the 30-days, 14-days and 9-days stood at 55.96, 65.83 and 73.80 respectively. Also, the stock’s 3-days RSI stood at 94.57. The volatility of the stock for 200 Days, 90 Days, 30 Days stood at 29.65, 27.70 and 40.28 respectively.

 

Schroders PLC

Schroders PLC (SDR) is a Britain-based asset manager, headquartered in London, United Kingdom. The company operates asset management business from 29 countries across Europe, the Americas, Asia & Australia and the Middle East and provides advisory and consultancy services to financial institutions, high net worth clients, large corporate, and other institutions.

Recent News

As per Q1 FY19 update, the AUM (assets under management) of the company stood at £424.2 billion as on March 31, 2019.

Financial Highlights for FY18 (£, million)

(Source: Annual report, Company’s website)

The company’s net income (before exceptional items) surged by 3 per cent to £2,123.9 million in FY18 as against £2,068.9 million in FY17. This surge can be attributed to the rise in net operating revenue to £2,070.7 million in FY18 as against £2,010.2 million in FY17. The company’s revenue from operating activities minus the cost incurred for sales (cost of sales) represent Net operating revenue of the company. The surge was also supported by a rise in average assets under management (AUMs), which rose by nearly 6 per cent this year. The company’s net carried interest was mainly derived from its private equity business, which was £55.0 million this year as against £78.4 million in FY17. This year profits from financial instruments and other fee-based products dipped to £33.3 million as against £35.2 million in FY17. The fee-based income from the Benchmark Capital surged to £7.5 million this year as against £6.0 million in FY17. The company has had its share of profit contribution from JVs (Joint Ventures) such as Bank of Communications (China) and Axis Bank (India) amounting to £19.9 million (before exceptional items) this year as against £23.5 million in FY17. The operating expense of the company, which is the ratio of total costs to net income, surged by 7 per cent to £1,362.7 million (before exceptional items) this year as against £1,268.6 million in FY17.

The group operates with a strong financial position and provides higher returns to its shareholders. Also, recent acquisitions and partnerships made by the group complement the growth opportunity offered by buoyant asset management and banking sector.

Share Price performance

Daily Chart as at July-09-19, before the market close (Source: Thomson Reuters)

At the time of writing (as on July 09, 2019, at 10:25 AM GMT), shares of Schroders PLC were quoting at GBX 3,010 per share; down by 0.33 per cent against the yesterday's closing price level. The company’s market capitalisation (outstanding) stood at £8.27 billion.

In the last 52-weeks, shares of Schroders PLC have registered a high of GBX 3,288.20 (as on Jul 10, 2018) and a low of GBX 2,289.00 (as on Dec 11, 2018). At the current trading level, as quoted in the price chart, its shares were trading 8.46 per cent below the 52-week high price level and 31.49 per cent above the 52-week low price level.

The stock’s volume (before the market close, at the time of writing) stood at 23,989. Stock's average traded volume for 5 days was 342,370.00; 30 days- 445,855.77 and 90 days – 433,411.00.

The average traded volume for 5 days was down by 23.21 per cent as compared to the 30 days average traded volume. The company’s stock beta was 1.26, reflecting higher volatility as compared to the benchmark index.

The shares of the company (at the time of writing) were trading marginally above the 30-days and 200-days SMA, which shows a positive trend in the stock price movement and could further move up from the current trading levels.

In the past 1 year, shares of Schroders PLC have delivered a negative price return of 6.07 per cent. However, on a year-to-date basis, the stock was up by approximately 23.62 per cent and surged by 4.86 per cent in the past three months.

Share's RSI for the 30-days, 14-days and 9-days stood at 51.45, 47.65 and 43.57 respectively. Also, the stock’s 3-days RSI stood at 20.19. The volatility of the stock for 200 Days, 90 Days, 30 Days stood at 25.80, 24.31 and 23.07 respectively.

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