|
Key Data
|
|
EPIC
|
AMBR
|
|
Share Price
|
22.25p
|
|
Spread
|
21.50p-23.00p
|
|
Total no of Shares
|
106.92 million
|
|
Market Cap
|
£24.1 million
|
|
Net Cash
|
£23.9 million
|
|
12 Month Range
|
21.50p - 36.00p
|
|
Market
|
AIM
|
|
Website
|
www.ambrian.com
|
|
Sector
|
General Financial
|
|
Contact
|
Tom Gaffney,
CEO
0207 634 4700
|
|
|
This
morning Ambrian Capital has further strengthened
the product range of its physical commodities
supply business, through the acquisition of
Masefield Bio-Fuels, which will henceforth trade
as Ambrian Energy GmbH. This is the latest
addition to the commodities franchise, following
the formation of Ambrian Energy in July 2010. The
acquisition brings on board a team with excellent
experience in the energy market. Ambrian Capital
intends to inject $5 million into the business
for working capital purposes. The business
intends to lease 12,200 cubic metres of fuel
storage space in Belgium, a central location from
which to supply its client base.
Last year Masefield Bio-Fuels supplied
approximately $100 million, or 100,000 tonnes of
bio-diesel to European clients. The company's
main focus is fuel derived from palm oil, but
also trades derivatives of rapeseed and soybeans.
The bio-fuels market has excellent growth
potential driven by environmental concerns and
regulatory pressure. For example, in 2007 the EU
set a target, that by 2020 bio-fuels should make
up at least 10% of vehicle fuel. Bio-fuel use in
the EU should reach 15 million tonnes of oil
equivalent this year, or 4.8% of all transport
fuels, according to the latest barometer
published by alternative energy group
Eurobserver. This is below a non-binding 5.75%
target for 2010.
There have been some well voiced concerns about
the sustainability of bio-fuels. However
Masefield Bio-Fuels is a member of the Roundtable
on Sustainable Palm Oil, which adds weight to the
business's ecological credentials.
Ambrian Capital has a unique investment profile
amongst AIM companies in that it is a one stop
physical commodities supplier, Broker-Dealer of
LME (London Metals Exchange) Futures and Options,
and Corporate Finance and Equities advisor, all
within the natural resources and energy sectors.
This is a core differentiator when comparing to
other listed boutique investment banks, many of
whom have struggled to replace revenues lost due
to a weak primary equity market.
Commodities now account for the majority of
revenues and profits, and as per the Pre-Close
trading statement issued on 6 July for the first
six months of 2010, a weak performance (loss) in
equities and corporate finance, was offset by
profits in the commodities business. Cost cutting
measures taken early in the second half of the
financial year in the loss making division,
should help it back towards break even and we
expect that the group as a whole will be back in
profit for the full year.
Ambrian
Capital has a good track record of delivering
organic growth and today has shown its ability to
make complementary acquisitions. It is very well
regarded as an expert within its specialist
sectors. The shares are trading at a 19% discount
to tangible NAV, a price which we believe
incorporates no value at all for the company's
revenues and profits. We therefore maintain our
previous target price of
44p. Whilst the Corporate Finance
and Equities business is highly geared to a
possible pick up in natural resources deals on the
equity markets, the Commodities part of the
business has the opportunity to grow through the
recent diversification into Crude Oil and Biofuels.
In addition the company has plans to increase its
trading capacity on the LME by obtaining a 3rd
party liquidity provider, and has increased its
ability to provide physical commodities to China by
establishing a subsidiary in Shanghai. We will be
producing a more comprehensive note on Ambrian
Capital, with detailed forecasts and a valuation,
shortly after its interim results whose publication
we anticipate in September.
Historic Financial Results.
|
Year to 31st December
|
Sales
(£million)
|
Pre-tax Profit
(£million)
|
Earnings per share (p)
|
Price Earning Ratio (x)
|
Dividend (p)
|
Yield (%)
|
|
2008A
|
8.0
|
(2.4)
|
(1.8)
|
NA
|
1.5
|
6.7
|
|
2009A
|
17.5
|
2.6
|
2.7
|
8.2
|
1.5
|
6.7
|
Source:
Growth Equities & Company Research
* Ambrian Capital owns shares in Rivington
Street Holdings, the ultimate owner of
GE&CR.
|
