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Summary
- The net loan book of Amigo Holdings decreased by 9.1 per cent to £643.1 million, compared to the previous year
- Globalworth Estate undertook healthy leasing activity in H1-2020, with 115.5k square metres of commercial space taken-up
- MJ Hudson group saw an increase in the underlying revenue by 24 per cent to approximately £20.8 million in the year to June 2020
While the long-term impact of the Covid-19 pandemic is yet to be known, people and businesses are worried about their ongoing ability to cope with the crisis financially, in the face of potentially prolonged economic uncertainty. The banking and finance industry is working hard to support their customers to minimise the impact of Covid-19 for households and businesses across the United Kingdom.
Banks and financial service providers have already admitted that the coronavirus has caused disruptions in the cashflow of businesses, especially the small and medium-sized. The situation is changing daily, and many small businesses are adapting to it rapidly. Access to finance and maintaining cashflow are some of the primary issues that the companies are working through. The finance industry is playing a vital role in supporting these businesses to continue with their trade.
We have discussed below three listed stocks of the financial service providers.
Amigo Holdings PLC
Established in 2005, Amigo is a guarantor loan providing company of the United Kingdom. The company offers loans to those who are unable to borrow from traditional lenders because of their credit history, allowing them to rebuild their credit scores.
Financial Highlights
On 20 July 2020, the company released its final result for the financial year ending 31 March 2020. An overall reduction in the net loan book of 9.1 per cent to £643.1 million, compared to last year (2019: £707.6 million) is evident in the results, because of the lower originations and repeat lending resulting from the adjustment to risks, and an increase in the forward-looking impairment provision. Covid-19 had a negligible impact on the full-year performance of the company. Continued demand for a guarantor loan product and an increase in the average gross loan book over the year was echoed by the number of customers and revenue in the year increasing by 10.4 per cent and 8.7 per cent respectively. The revenue generated by the company was £294.2 million (2019: £270.7 million). However, a loss of £27.2 million (2019: profit of £88.6 million) was reported due to increase in provisions for both impairment (38.5 per cent) and complaints (£117.5 million). The impact of the uncertain economic outlook related to the Covid-19 pandemic on forward-looking assumptions and expected credit losses under IFRS 9 have led to an increase in the impairment provision. The basic loss per share was recorded at 5.7 pence. The cash position of the company stood at £64.3 million (2019: £15.2 million).
Stock Performance
Amigo Holdings PLC (LON:AMGO) stock was trading at GBX 7.35 on 20 July 2020, at 3:11 PM, down by 24.23 per cent from its previous close of GBX 9.70. The 52-week low/high price was GBX 5.16/169.40. It was having a market capitalisation (Mcap) of £46.11 million. The volume traded at the time of reporting was 40,644,898. The company recorded a negative return on price, which was 86.28 per cent on a YTD (Year to Date) basis.
Globalworth Real Estate Investments Limited
Globalworth is a real estate investment company, founded in 2013. The company operates in the regions of Romania and South-East Europe, through a diversified range of portfolio of approximately ten companies, including segments like office, residential and others.
Financial Highlights
On 20 July 2020, the company released its trading update for the half-year ending 30 June 2020. The company undertook healthy leasing activity in H1-2020, with 115.5k square metres of commercial space taken-up or extended at an average WALL of 3.2 years. The leases which were renewed accounted for 74 per cent of the company's leasing activities, resulting in WALL remaining substantially the same over 4.5 years (H2 2019: 4.6 years). The average standing occupancy of the company's commercial portfolio decreased to 93.3 per cent (FY 2019: 94.7 per cent). The standing portfolio footprint increased by 34.8k square metre, primarily because of the addition of Globalworth Campus T3 in Bucharest, to 1,248.5k square metre of GLA. The contracted rent comprising mainly from office and industrial properties have remained unaffected form the impact of the Covid-19 pandemic because of the measures adopted by the concerned authorities. Impact of the disease can be seen in the claims received principally by occupiers of space, recording 2.4 per cent of the annualised contracted rent received and settled with tenants and 2.3 per cent of it was rejected or is under negotiations. Rate of collections for rents invoiced and due for H1-2020 remained high at 92.7 per cent. The cash position of the company stood at approximately €565 million, indicating a robust liquidity position.
Stock Performance
Globalworth Real Estate Investments Limited (LON:GWI) stock was trading at GBX 5.80 on 20 July 2020, at 3:18 PM, up by 1.75 per cent from its previous close of GBX 5.70. The 52-week low/high price was GBX 5.50/10.10. It was having a market capitalisation (Mcap) of £1,151.65 million. The volume traded at the time of reporting was 61,129. The company recorded a negative return on price, which was 38.87 per cent on a YTD (Year to Date) basis.
MJ Hudson Group PLC
MJ Hudson is an asset management consultancy based in Jersey. It provides expertise and infrastructure support to fund managers, investors and other specialists belonging to the asset management industry. The services provided by the firm include law, fund management solutions, international administration, investment advisory, data & analytics and IR & Marketing.
Financial Highlights
On 20 July 2020, the company released its full-year trading update for the financial year ending 30 June 2020. The group saw an increase in the underlying revenue by 24 per cent to approximately £20.8 million in the year to June 2020 (FY2019: £16.7 million), out of which over 92 per cent was recurring in nature. The revenue growth includes contributions from acquisitions of Spring, AST and Meyler. The management of the company is expecting the profits for FY 2020 to be in line with market expectations. The underlying revenue grew by 7.4 per cent year on year, on an organic basis (FY2019: 12.5 per cent). The cash position of the company remained strong with £10.1 million at the end of the period, including €1 million of payment received for the Group's ESG acquisition which took place last year.
Stock Performance
MJ Hudson Group PLC (LON:MJH) stock was trading at GBX 49.50 on 20 July 2020, at 3:21 PM, up by 1.75 per cent from its previous close of GBX 49.00. The 52-week low/high price was GBX 41.00/60.50. It was having a market capitalisation (Mcap) of £83.94 million. The volume traded at the time of reporting was 135,854. The company recorded a negative return on price, which was 16.95 per cent on a YTD (Year to Date) basis.
To conclude, the strength of GWI and MJH has contributed to achieving reliable operating performance, demonstrating the steadfast resilience of their business amidst this unprecedented crisis. Though the revenue and number of customers increased for AMO, it saw an overall reduction in the overall net loan book.
