Findel PLC Edison issues research review on Findel
August 03 2016 - 5:28AM
RNS Non-Regulatory
TIDMFDL
Findel PLC
03 August 2016
London, UK, 3 August 2016
Edison issues research review on Findel (FDL)
The investment case for Findel is that its largest business,
Express Gifts, has substantial growth potential that should yield
operational leverage benefits as it progressively reaps the rewards
from investments in distribution, systems and financial services
made in recent years. Given that, the strong trading performance
reported at last week's AGM is very encouraging. Despite short-term
profit offsets from currency moves and continued weakness in
Education, the longer-term potential appears under-appreciated.
Our sum-of-the-parts valuation of 240p per share is barely
changed from the previous 238p. At 240p the FY17e and FY18e P/Es
would be 9.6x and 8.0x, respectively. The group's high absolute
level of debt reflects funding for its consumer credit book. Core
net bank debt, excluding credit book funding, was around 0.8x FY16
EBITDA and manageable. Nevertheless, even if one included Findel's
total debt in its EV, the FY17e and FY18e EV/EBITDA ratios of 8.3x
and 7.4x do not appear especially stretched.
Click here to view the full report.
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