SUNDAY NEWSPAPER SHARE TIPS: Everyman Media and Premier Asset Management
We round up the Sunday newspaper share tips. This week, Midas looks at boutique cinema chain Everyman and the Sunday Times assesses the prospects of Premier Asset Manager amid the fallout from the Woodford scandal.
MAIL ON SUNDAY
The remake of The Lion King is eagerly anticipated by film buffs but also by companies in the movie business, including Everyman Media Group, which runs a chain of boutique cinemas.
Everyman is growing fast, doing well and should more than double in size over the next few years.
Yet the shares have been held back, falling from more than £2.30 last autumn to £1.71 today. At the current price, they are a bargain.
Everyman theatres house about 250 customers, have four screens at most and focus on turning a night at the cinema into an event.
The business was founded in 1999 when a group of investors acquired the original Everyman cinema in Hampstead, North London. They expanded steadily and floated on the London Stock Exchange’s junior AIM market in 2013.
Today there are 28 theatres in big cities such as London, Bristol, Leeds and Newcastle, as well as smaller towns such as Chelmsford, Essex, and Reigate, Surrey.
Results for the year to January 3, 2019 showed a 28 per cent increase in turnover to £52 million and a 69 per cent increase in pre-tax profit to £2.7 million.
In the current year, brokers expect turnover to rise by 28 per cent to £67 million, with profits up 33 per cent to £3.6 million.
Everyman has just a 2.5 per cent share of UK cinemas, but the number is growing and the wider UK market is expanding too. Last year, total UK cinema admissions hit 177 million, the highest figure since 1970.
Midas verdict: Everyman shares have fallen in recent months, reflecting fears about the impact of an economic slowdown on audience figures, as well as competition from Netflix and its like.
Time and again, however, history shows that, when conditions worsen, cinema attendance rises – and that people continue to enjoy the social experience of going to the flicks.
Lilly is optimistic, the group is expanding and long-term shareholders include blue-chip investors Killik, Schroders and Hargreave Hale. At £1.71, the shares are a buy.
THE SUNDAY TIMES
Neil Woodford’s fall from grace has sent shockwaves through the investment industry, and last week the Bank of England warned of a clampdown on open-ended funds, writes Emma Dunkley in the Sunday Times.
‘Premier Asset Management is not immune. The fund management group, which listed on AIM in October 2016 at 132p a share, giving it a valuation of £140m, reported a drop in assets under management in its quarterly results last week, blaming record-low inflows,’ she says.
Dunkley notes that Mike O’Shea, Premier’s chief executive, said last week that conditions would remain ‘challenging’.
‘Fees are under intense scrutiny. The Premier Optimum Income fund, for example, has an annual charge of more than 1% and trading costs of almost 2.5% on top — hardly palatable when passive funds cost as little as 0.1% a year.
‘Premier’s shares are wallowing at 189p, valuing it at £200m, down almost a third in a year. Analysts say inflows should recover, especially when there is more clarity on Brexit. However, with active managers out of favour and regulators preparing a crackdown, it is hard to see light at the end of the tunnel. Sell.’
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