LSE:VMUK

Stock Analysis Report

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Market Cap

UK£2.8b

Last Updated

2021/07/27 21:40 UTC

Data Sources

Company Financials +

Executive Summary

Virgin Money UK PLC provides banking products and services for consumers, and small and medium sized businesses under the Clydesdale Bank, Yorkshire Bank, and B and Virgin Money brands in the United Kingdom. More Details

Rewards

Trading at 3% below our estimate of its fair value

Earnings are forecast to grow 25.85% per year

Risk Analysis

No risks detected for VMUK from our risk checks.


Snowflake Analysis

Excellent balance sheet with moderate growth potential.


Similar Companies

Share Price & News

How has Virgin Money UK's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: VMUK is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: VMUK's weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

10.4%

VMUK

4.6%

GB Banks

2.9%

GB Market


1 Year Return

101.7%

VMUK

37.3%

GB Banks

19.1%

GB Market

Return vs Industry: VMUK exceeded the UK Banks industry which returned 37.3% over the past year.

Return vs Market: VMUK exceeded the UK Market which returned 19.1% over the past year.


Shareholder returns

VMUKIndustryMarket
7 Day10.4%4.6%2.9%
30 Day-3.7%-3.8%-0.8%
90 Day-2.8%-2.7%1.3%
1 Year101.7%101.7%40.2%37.3%24.5%19.1%
3 Year-42.1%-43.1%-24.1%-31.1%12.0%-0.8%
5 Year-23.3%-24.8%9.5%-7.5%41.2%14.0%

Long-Term Price Volatility Vs. Market

How volatile is Virgin Money UK's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Virgin Money UK undervalued compared to its fair value and its price relative to the market?

3.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VMUK (£1.97) is trading below our estimate of fair value (£2.03)

Significantly Below Fair Value: VMUK is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: VMUK is unprofitable, so we can't compare its PE Ratio to the UK Banks industry average.

PE vs Market: VMUK is unprofitable, so we can't compare its PE Ratio to the UK market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate VMUK's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: VMUK's PB Ratio (0.6x) is in line with the GB Banks industry average.


Future Growth

How is Virgin Money UK forecast to perform in the next 1 to 3 years based on estimates from 22 analysts?

25.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VMUK is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (0.9%).

Earnings vs Market: VMUK is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: VMUK's is expected to become profitable in the next 3 years.

Revenue vs Market: VMUK's revenue (4% per year) is forecast to grow slower than the UK market (5.3% per year).

High Growth Revenue: VMUK's revenue (4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: VMUK's Return on Equity is forecast to be low in 3 years time (9.4%).


Past Performance

How has Virgin Money UK performed over the past 5 years?

-6.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VMUK is currently unprofitable.

Growing Profit Margin: VMUK is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: VMUK is unprofitable, and losses have increased over the past 5 years at a rate of 6% per year.

Accelerating Growth: Unable to compare VMUK's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: VMUK is unprofitable, making it difficult to compare its past year earnings growth to the Banks industry (5.2%).


Return on Equity

High ROE: VMUK has a negative Return on Equity (-1.63%), as it is currently unprofitable.


Financial Health

How is Virgin Money UK's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: VMUK's Assets to Equity ratio (17.7x) is moderate.

Allowance for Bad Loans: VMUK has a low allowance for bad loans (72%).

Low Risk Liabilities: 81% of VMUK's liabilities are made up of primarily low risk sources of funding.

Loan Level: VMUK has an appropriate level of Loans to Assets ratio (80%).

Low Risk Deposits: VMUK's Loans to Deposits ratio (105%) is appropriate.

Level of Bad Loans: VMUK has an appropriate level of bad loans (1.4%).


Dividend

What is Virgin Money UK current dividend yield, its reliability and sustainability?

3.09%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate VMUK's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate VMUK's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if VMUK's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if VMUK's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: VMUK is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of VMUK's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

0.5yrs

Average management tenure


CEO

David Duffy (60 yo)

5.75yrs

Tenure

UK£1,351,000

Compensation

Mr. David Joseph Duffy, B.B.S., MA, serves as Executive Director at Virgin Money Plc since October 15, 2018 and serves as its Chief Executive Officer. He joined Virgin Money Plc in June 2015. Mr. Duffy ser...


CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD1.88M) is about average for companies of similar size in the UK market ($USD1.67M).

Compensation vs Earnings: David's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: VMUK's management team is not considered experienced ( 0.5 years average tenure), which suggests a new team.


Board Members

Experienced Board: VMUK's board of directors are considered experienced (3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Virgin Money UK PLC's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Virgin Money UK PLC
  • Ticker: VMUK
  • Exchange: LSE
  • Founded: 1838
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: UK£2.832b
  • Shares outstanding: 1.44b
  • Website: https://www.virginmoneyukplc.com

Number of Employees


Location

  • Virgin Money UK PLC
  • 40 St Vincent Place
  • Glasgow
  • Lanarkshire
  • G1 2HL
  • United Kingdom

Listings


Biography

Virgin Money UK PLC provides banking products and services for consumers, and small and medium sized businesses under the Clydesdale Bank, Yorkshire Bank, and B and Virgin Money brands in the United Kingdo...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/07/27 21:40
End of Day Share Price2021/07/27 00:00
Earnings2021/03/31
Annual Earnings2020/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.