Shaw & Partners - 4Q21 result – ABOVE Shaw and Partners’ expectations on every metric, and looking to divestInternational. Minor revisions to our FY21 and FY22 earnings (<3%) and our PT increasesfrom $1.00 to $1.35.
Proposing to DIVEST international ops (brings forward the return of the dividenddiscussion?) – has received “unsolicited, strong interest from potential buyers”. In ourview a positive given since 2007 (on our calculations) PPS has lost close to A$60m inInternational EBIT (with revenues totalling just A$80m). This is on an annual cost base of~A$15m.
Total FUA (Platform FUA + non-custodial VMAAS) achieved a new high of $41.7b, fromrecord levels in all global segments - ABOVE Shaw and Partners’ $40.6b estimate, with:1. Australia platform FUA of $18.4b, up 223% on pcp and up 30% for the consolidatedPraemium and Powerwrap – ABOVE Shaw and Partners’ $17.9b estimate;2. International platform FUA of $5.0b, up 55% on pcp – ABOVE Shaw and Partners’$4.7b estimate; and3. FUA for VMAAS of $18.3b, up 61% on pcp - ABOVE Shaw and Partners’ $18.0bestimate.
Big positive was the record quarterly inflows of $1.2b - ABOVE Shaw and Partners’ $0.9bestimate (ex ANZ transition of $169m),
On the Investment Management side (Smart):1. Managed Funds FUM of $258m was flat on both pcp on pp; and2. Model Portfolios FUA of $372m was +9% on pcp and -3% on pp.
RecommendationRetain BUY on TSR of 22%. Fundamentally PPS is an attractive investment prospect as itcontinues to disrupt financial services in the wealth management sector. An attractive TAM,impressive forecast 5-year EBITDA CAGR of 17%, double-digit EPS and profit growth for eachof the next 3 years, increasing FCF, improving returns (ROIC and ROE) despite a fragmented,highly competitive and intensive industry small debt, robust FUA inflows growth quarteron-quarter (which is also the key risk if it reverses) and increasing market share – withsynergies from the PWL acquisition, opportunity to divest the loss-making Internationalbusiness, potential to re-install dividends and a significant catalyst re: valuation gap re-ratingvs. HUB/NWL. On EV/sales+1, PPS is trading at an attractive 60% discount to HUB/NWLrespectively.
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51.0¢ |
Change
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Mkt cap ! $245.8M |
Open | High | Low | Value | Volume |
50.5¢ | 51.3¢ | 50.5¢ | $29.73K | 58.22K |
Buyers (Bids)
No. | Vol. | Price($) |
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5 | 10750 | 51.0¢ |
Sellers (Offers)
Price($) | Vol. | No. |
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51.5¢ | 77721 | 7 |
View Market Depth
No. | Vol. | Price($) |
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10 | 19325 | 0.510 |
7 | 23170 | 0.505 |
11 | 70083 | 0.500 |
5 | 20882 | 0.495 |
5 | 44861 | 0.490 |
Price($) | Vol. | No. |
---|---|---|
0.515 | 74880 | 6 |
0.520 | 170053 | 11 |
0.525 | 29377 | 6 |
0.530 | 48810 | 5 |
0.535 | 62601 | 4 |
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