Free share tips posted weekly! This week’s free share tip is Premier Miton Group (PMI).

AIM-listed fund management specialist Premier Miton Group has released final results for the year ended 30 September 2021 and there was plenty to like, both in terms of the numbers and associated commentary.  Funds under management have grown and the level of profits generated suggests that the valuation currently placed on the business is undemanding.  The sector has a history of corporate activity and this could see value unlocked at some point.  Those happy to hold for the longer term should benefit from healthy dividend payments as well as capital growth.

In the last financial year Assets under Management reached £13,931m (2020: £10,608m), representing an increase of 31%.  Average Assets under Management for the year were 26% higher at £12,751m (2020: £10,110m) due to good fund performance, net inflows of £830m (2020: outflows of £619m) and strong market recovery from the lows of March 2020.  Adjusted profit before tax was £28.6m (2020: £22.4m) and adjusted earnings per share came in at 16.46p (2020: 12.46p).

A final dividend of 6.3p per share (2020: 4.5p) takes the total for the year to 10.0p (2020: 7.0p), an increase of 43%.  Subject to approval at the Annual General Meeting on 2 February, the final dividend of 6.3p per share will be paid on 11 February.  The ex-dividend date is 13 January.  It is also pleasing to note that the company aims to grow the dividend over time, reflecting increasing profitability.  Cash balances were £47.7m as at 30 September 2021 (2020: £36.0m) and no debt is held, which means that growing the dividend is likely moving forwards.

The company was formed through the merger of Premier Asset Management and Premier Miton in 2019.  Since then it has invested significantly in investment teams, developed key systems and processes, and built scalable operational and risk management frameworks.  It has a medium-term goal of reaching £20bn of Assets under Management.  

The company has a lot going for it with a very strong balance sheet and significant levels of cash offering support.  Assets under Management are at an all-time high and Premier Miton Group appears to be well positioned to continue to attract new funds.  Even based on historical performance the shares are relatively inexpensive so if the company continues to build shareholder value in the coming years then there could be significant capital growth ahead.  Income seekers should also take a keen interest and the yield on offer should not be overlooked when considering overall returns.  We rate the shares as a BUY.

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