AssetCo performs better than forecasts says Zeus

AssetCo plc (LON:ASTO) has just completed its acquisition of River and Mercantile Group “RMG”, which has resulted in an increase in shares in issue from 8.4m to 14.4m.

RMG has an “established and well-respected equities team that manages around £2.7 billion of Assets under Management. Importantly, the acquisition provides the foundation stone to building a private markets business given its infrastructure investment team.” The Chairman says, “actions are being taken both on cost and building new revenue [to enable RMG to return] to profitability by early 2023.”

The RNS also provides details of AssetCo’s interim results to March 2022, trading at its associate, Parmenion, and progress in recent acquisitions (i.e. Saracen and Revera).


¨ £12.2 billion AuM following the completion of RMG

¨ Proposed 13.0p interim DPS expected to be declared in 4Q22

¨ 1H revenues of £1.3m (comparative: nil)

¨ 1H loss before tax of £2.6m (comparative: £22.3m reflecting litigation claim)

¨ 31 March 2022 net assets of £55.6m (31 March 2021: £31.1m)

The announcement confirms the Board’s plans to sub-divide shares on a “basis yet to be determined”. The Board believes this would improve the efficiency of dealings in ASTO shares.

Outlook: “following the acquisition of, and return of capital from, River and Mercantile, the Group will have net cash of more than £45m.

Zeus view: better than forecast
We are pleased to see AssetCo has £2m more net cash than we expected. We expect AssetCo to have £43m net cash, after the RMG acquisition had completed (Exhibit 1, page 2).

We commented on Parmenion’s excellent results to December 2021 in our May 2022 research report. We maintain our forecasts for the enlarged group, which were set out in our April and May research notes.

Valuation: material upside
Based on proforma revenue, we see justification for 1704p a share (Exhibit 1, page 2). We see fully diluted equity value of 2709p per share (Exhibit 2, page 3) in September 2023 based on 2024E revenue and profitability.

Summary financials

Market Cap£100.8m
Shares in Issue14.4m †
12m Trading Range700p – 2100p

† inc 6m new on RMG acquisition

Financial forecasts

Yr end Sept (£’m)2021A2022E2023E2024E
y.o.y growth (%)n.a.1,975354154
Op. profit/(loss)-0.1-
Other income & central costs #
Adj. PBT16.1-
Adj PAT14.8-
EPS (p) basic adj.181-781950
EPS (p) ful dil. adj161-731849
DPS (p)131415
Net cash26.935.332.738
Dividend yield (%)11.11.2

# Includes share of associate PAT & share based charge

Source: Audited Accounts and Zeus estimate

Click to view all articles for the EPIC: ,
Or click to view the full company profile:
    AssetCo plc

    More articles like this

    Fintel plc

    Fintel core revenue growth is higher than Zeus forecast

    Fintel plc (LON:FNTL), the leading provider of Fintech and support services to the UK retail financial services sector, has released a trading update for the six months to 30 June 2022, which reveals: Core revenue grew

    OnTheMarket Plc

    OnTheMarket analyst Zeus confident in forecasts

    Foxtons, one of London’s leading estate agencies with more than 50 interconnected branches across London, has signed an agreement to advertise its UK residential sales and letting properties at OnTheMarket plc (LON:OTMP). Zeus view: Foxtons, the

    SpaceandPeople analyst Zeus restores estimates and valuation

    SpaceandPeople plc (LON:SAL) secures, sells, and manages flexible space for brand experiences, short term promotions and retailing in high footfall venues for its customers, including in shopping centres and travel hubs. The Group has issued a

    Lookers Plc

    Lookers shares are still undervalued says Zeus

    Lookers plc (LON:LOOK) has released an H1 trading update reporting a continuation of strong performance year to date. H1 2022 underlying PBT is expected to be c. £45m and Management anticipate full year PBT will also


    Inchcape performance exceeding expectations says Zeus

    Inchcape plc (LON:INCH) has released another positive trading update, with performance exceeding expectations so far this year. This follows on from a positive Q1 update on 28 April. Through quarterly improvement in Distribution volumes and operating

    boohoo Plc

    Boohoo Group analyst Zeus sees a strong performance in Q1

    ¨ Q1 financial highlights: Boohoo Group plc (LON:BOO) revenue of £445.7m is -8.3% YOY vs. a strong comp (Q1 FY22 revenue +32.1%), in line with Zeus’s forecast and management’s previously stated guidance. Gross sales growth remained