We took two key messages from the FY’19 results announced on 2 May. First, the core business is now in a reliable, steady state with modest organic volume growth. It should, however, generate profit growth from acquisition opportunities and technology-driven efficiency improvements. As always, the agents remain core to the group but incremental returns can be generated from managing them better. Conservatively managed growth is being driven from the new business lines. Management has indicated it expects FY’22 pre-tax profits of between £3m and £5m from its recent online lending acquisition (consideration was £8.5m). Our absolute valuation range is 181p to 243p.
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