EPS figures calculated from Net Profit / 200,000,000 shares outstanding.
FH share price at close on 10 Oct 2007 was 6.67 dhs, so 2007 estimated PE is about 6.67 / 0.75 = 8.9 which is somewhat lower than the average market PE of about 14. PE based on annualising just Q3 profit is a bit higher at 11.1 but still lower than market average so FH shares look cheap but most of their income is from gain on investments.
The report from the Chairman of Finance House (FH) doesn't make a comment on the fall in Net Profit from 2006 M9 to 2007 M9 which is a shame since it is more detailed and "user-friendly" than what we usually see from companies listed in the UAE.
Finance House 10 October 2007:
Chairman's Report for the 9 months ended 20th September 2007
On behalf of the Board of Directors, I am pleased to present the financial statements of Finance House PJSC as at 30th September 2007. We have achieved a net profit of AED 111.1 million for the first 9 months of 2007, as compared to AED 160.6 million for the full year 2006. Total assets grew to AED 1.56 billion, recording an increase of 19% over the 31st December 2006 level.
Finance House is truly committed to its objective of maximizing Shareholder value. As at 30th September 2007, after distributing our maiden dividend of AED 100 million, our Shareholders' Equity stands at AED 731.7 million. This strong capital base serves as a solid foundation for future growth, to meet and exceed the expectations of our highly valued customers.
Our loan book has recorded an impressive growth of 67% during the first 9 months of the year, with increases in commercial as well as the retail portfolios. Over the same period, customer deposits grew by 49%. Our investments have generated very good returns while the region's capital markets have made a modest recovery. Thanks to our conservative approach to risk, we have no exposure to any investments impacted by the sub-prime crisis and its aftermath.
During the first 9 months of this year we arranged a US$37.2 million financing for a private equity fund to acquire a stake in one of the largest construction companies in the region. We acted in our capacity as the exclusive mandated lead arranger, facility agent and security agent for the transaction, which was executed in conjunction with Qatar National Bank.
Earlier in the year we opened our second branch, a large facility at a prominent location in Dubai. This Branch offers our full range of products and services and enables us to enhance the level of our reach and service to our customers.
We continue to focus on our strategy of identifying profitable niches and on concentrating our efforts in those areas that we believe offer us the best sustainable returns in the medium to long term. Our 2007 product launches - FlexiDeposit for corporate clients, home mortgage loans, and executive finance to individuals - exemplify our untiring efforts to create value differentiation for our customers, as we endeavour to continue delivering strong financial performance to our Shareholders.
On behalf of the Board of Directors
Mohammed Alqubaisi
Chairman
Abu Dhabi, 10th October 2007
ADSM 10 October 2007:
(FH) Finance House discloses board of directors' report on the 3rd quarter, 2007 operating results
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