EPS figures calculated from Net Profit / 220,000,000 shares outstanding.
FH share price at close on 09 Jul 2008 was 15.00 dhs, so 2008 estimated PE is about 15.00 / 1.80 = 8.3, based on Q2 earnings, which is around half the market average PE of about 17. 2008 PE estimate based on H1 earnings is 15.00 / 2.05 = 7.3, which is a little lower, and one of the lowest UAE bank PEs, as FH have happily pointed out in their press release. Bear in mind that FH derive most of their income from investments, not core banking operations. At least that's how it has looked in previous financial statements. The press release doesn't say for this period.
Here's the FH press release. No sign of a disclosure on the ADX website though...
Press Release 09 July 2008:
Finance House records 182% increase in Net Profit to AED 226 Million for First Half of 2008
Finance House PJSC (FH) has announced a record net profit of AED 226 million for the first half representing an increase of 182% over the same period last year (AED 80 million). The full-year net profit figure for 2007 was AED 202.8 million.
Mr. Mohammed Alqubaisi, Chairman of Finance House said, "These results once again demonstrate the effectiveness of our strategy and the strength of our belief in delivering value to our clients through a differentiated service, and in operating discipline as a means to strong financial performance to our shareholders. As at 30th June 2008, our Shareholders' Equity rose to AED 1.02 billion, and this is after distributing a dividend of AED 150 million to shareholders during this half-year. Year on year, our net worth has grown by a spectacular 50% supported by this performance."
Total assets grew to AED 2.66 billion, a rise of 23% over the 31 December 2007 figure. This is reflected in the growth in loan portfolios which rose by 64% over the previous year-end, and is contributed by both commercial and retail portfolios. Deposits grew 18% as compared to the previous year-end. The Company's investments performed very well in capital markets that were devoid of direction for much of the half-year.
Keeping operating costs under control remained a challenging task in the current inflationary environment. However, through investments in infrastructure and the resulting synergies, the Company has improved its cost-to-income ratio from 23% (2007) to 13% in the current half-year.
Finance House's share price has risen by 43% since the beginning of the year as compared to the 9% appreciation of the Abu Dhabi Securities Exchange index. Despite this, the Company's Price/Earning ratio and Dividend yield remain among the best in the financial sector.
Mr. Alqubaisi added, "Our strategy remains unchanged - to deliver better value to our Shareholders by constantly identifying profitable segments and by directing our resources towards those areas that we believe offer us the best risk-adjusted returns".
Finance House released their financial statements and directors report to the ADX this morning (or last night but ADX didn't put them up until this morning). The SW summaries have been updated (same links as first post). FH directors report is almost the same as the press release so I won't bother repeating it.
As expected, the bulk of FH income came from investment gains which quadrupled compared to the same period last year. The Income Statement says "Net Realised Gain on Disposal of Investments Available For Sale" but details of what the investments are, are not disclosed. What I don't really follow is where that income ends up (AED 131m for Q2 and AED 258m for H1). It's not in the Assets as cash or equivalents, I think it has been reinvested in the purchase of more investments so I'm not sure calling it "realised gains" is entirely clear.
At least it helps explain why the FH PE is lower than other banks, and more in line with investment companies - most of which have single figure PEs.
ADX 10 July 2008:
(FH) Finance House: Discloses its financial statements for the six months ended 30th June 2008
(FH) Finance House: Discloses its Chairman’s Report for the six months ended 30th June 2008
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot vote in polls in this forum
Disclaimer: Investing in stocks is risky, you can lose some or all of your money and/or other assets. Anything you read on this site should be regarded as the opinion of the author only and is not to be taken as advice to buy, sell, or hold stocks and/or any other investments. Seek professional advice and do your due diligence before making investment decisions. In particular, do not assume anything you read on this site is correct or accurate. You should accept that only you can be responsible for any investing decisions you make.
2008 FY
FAQ
Search
Print-friendly
Profile
Private messages
Register
Log in
