LSE:CBG

Stock Analysis Report

Executive Summary

Close Brothers Group plc, a merchant banking company, provides financial services to small businesses and individuals in the United Kingdom.

Snowflake

Fundamentals

Established dividend payer and fair value.


Similar Companies

Share Price & News

How has Close Brothers Group's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

3.4%

CBG

-1.3%

GB Capital Markets

-0.3%

GB Market


1 Year Return

-7.0%

CBG

19.8%

GB Capital Markets

3.0%

GB Market

Return vs Industry: CBG underperformed the UK Capital Markets industry which returned 19.8% over the past year.

Return vs Market: CBG underperformed the UK Market which returned 3% over the past year.


Shareholder returns

CBGIndustryMarket
7 Day3.4%-1.3%-0.3%
30 Day1.9%-2.3%-0.9%
90 Day1.2%2.8%-2.0%
1 Year-2.2%-7.0%22.7%19.8%8.0%3.0%
3 Year20.1%5.3%77.2%64.6%18.0%3.6%
5 Year25.6%1.7%148.0%118.6%35.8%6.4%

Price Volatility Vs. Market

How volatile is Close Brothers Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Close Brothers Group undervalued compared to its fair value and its price relative to the market?

24.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: CBG (£14.17) is trading below our estimate of fair value (£18.69)

Significantly Undervalued: CBG is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: CBG is good value based on its PE Ratio (10.6x) compared to the Capital Markets industry average (18.9x).

PE vs Market: CBG is good value based on its PE Ratio (10.6x) compared to the UK market (16.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: CBG is poor value based on its PEG Ratio (3.7x)


Price to Book Ratio

PB vs Industry: CBG is overvalued based on its PB Ratio (1.5x) compared to the GB Capital Markets industry average (1.4x).


Next Steps

Future Growth

How is Close Brothers Group forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

2.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CBG's forecast earnings growth (2.8% per year) is above the savings rate (1.2%).

Earnings vs Market: CBG's earnings (2.8% per year) are forecast to grow slower than the UK market (12.6% per year).

High Growth Earnings: CBG's earnings are forecast to grow, but not significantly.

Revenue vs Market: CBG's revenue (4.5% per year) is forecast to grow faster than the UK market (3.9% per year).

High Growth Revenue: CBG's revenue (4.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: CBG's Return on Equity is forecast to be low in 3 years time (13.4%).


Next Steps

Past Performance

How has Close Brothers Group performed over the past 5 years?

5.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: CBG's earnings have grown by 5.7% per year over the past 5 years.

Accelerating Growth: CBG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CBG had negative earnings growth (-2%) over the past year, making it difficult to compare to the Capital Markets industry average (4.6%).


Return on Equity

High ROE: CBG's Return on Equity (14.2%) is considered low.


Return on Assets

ROA vs Industry: CBG's Return on Assets is below or equal to the Capital Markets industry average last year.


Return on Capital Employed

ROCE Improving: Insufficient data to calculate CBG's Return on Capital Employed to determine if it has improved over the past 3 years.


Next Steps

Financial Health

How is Close Brothers Group'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

Inventory Level: CBG has a low level of unsold assets or inventory.

Debt Coverage by Assets: CBG's debt is not covered by short term assets (assets are 0.7x debt).


Financial Institutions Analysis

Asset Level: CBG's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if CBG has a sufficient allowance for bad loans.

Low Risk Liabilities: CBG reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if CBG has an acceptable proportion of non-loan assets held.

Low Risk Deposits: CBG has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if CBG has an appropriate level of bad loans.


Next Steps

Dividend

What is Close Brothers Group's current dividend yield, its reliability and sustainability?

4.66%

Current Dividend Yield


Dividend Yield vs Market

company4.7%marketbottom25%2.0%markettop25%5.4%industryaverage2.1%forecastin3Years5.0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: CBG's dividend (4.66%) is higher than the bottom 25% of dividend payers in the UK market (2.01%).

High Dividend: CBG's dividend (4.66%) is low compared to the top 25% of dividend payers in the UK market (5.36%).

Stable Dividend: CBG's dividends per share have been stable in the past 10 years.

Growing Dividend: CBG's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (49.4%), CBG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CBG's dividends in 3 years are forecast to be covered by earnings (51% payout ratio).


Next Steps

Management

What is the CEO of Close Brothers Group's salary, the management and board of directors tenure and is there insider trading?

6.7yrs

Average management tenure


CEO

Per Prebensen (62yo)

10.5yrs

Tenure

UK£2,808,000

Compensation

Mr. Preben Prebensen has been the Chief Executive Officer of Close Brothers Group PLC at Winterflood Securities Limited since April 1, 2009. Mr. Prebensen has been the Chief Executive Officer of Close Brot ...


CEO Compensation Analysis

Compensation vs. Market: Per's total compensation ($USD3.61M) is about average for companies of similar size in the UK market ($USD2.31M).

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


Management Age and Tenure

6.7yrs

Average Tenure

61yo

Average Age

Experienced Management: CBG's management team is seasoned and experienced (6.7 years average tenure).


Board Age and Tenure

5.1yrs

Average Tenure

63.5yo

Average Age

Experienced Board: CBG's board of directors are considered experienced (5.1 years average tenure).


Insider Trading

Insider Buying: CBG insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUK£3,124,86911 Oct 19
Per Prebensen
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares250,000
Max PriceUK£13.09
SellUK£290,62522 Oct 18
Elizabeth Anne Lee
EntityIndividual
Shares19,000
Max PriceUK£15.37

Ownership Breakdown


Management Team

  • Nancy Curtin (61yo)

    Chief Investment Officer and Head of Bespoke

    • Tenure: 0yrs
  • Per Prebensen (62yo)

    CEO & Director

    • Tenure: 10.5yrs
    • Compensation: UK£2.81m
  • Sophie A. Gillingham

    Director of Investor Relations

    • Tenure: 0yrs
  • Andreas Reinert

    Managing Director of Food & Consumer Goods - Germany

    • Tenure: 13yrs
  • Nigel Mottershead

    Head of Credit

    • Tenure: 8.9yrs
  • Rebekah Etherington

    Group Head of Human Resources

    • Tenure: 10yrs
  • Robert Sack

    Group Chief Risk Officer

    • Tenure: 4.5yrs
  • Martyn Atkinson

    Group Chief Operating Officer

    • Tenure: 0.7yrs
  • Mike Morgan (54yo)

    Group Finance Director & Director

    • Tenure: 0.9yrs
    • Compensation: UK£1.12m
  • Angela Yotov

    Group General Counsel

    • Tenure: 0.2yrs

Board Members

  • Bridget Macaskill (71yo)

    Independent Non-Executive Director

    • Tenure: 5.9yrs
    • Compensation: UK£118.00k
  • Mike Biggs (67yo)

    Chairman of the Board

    • Tenure: 2.4yrs
    • Compensation: UK£305.00k
  • Geoffrey M. Howe (70yo)

    Senior Independent Director

    • Tenure: 4.9yrs
    • Compensation: UK£102.00k
  • Oliver Roebling Corbett (54yo)

    Independent Non-Executive Director

    • Tenure: 5.3yrs
    • Compensation: UK£107.00k
  • Per Prebensen (62yo)

    CEO & Director

    • Tenure: 10.5yrs
    • Compensation: UK£2.81m
  • Peter Duffy (53yo)

    Independent Non-Executive Director

    • Tenure: 0.8yrs
    • Compensation: UK£42.00k
  • Lesley Jones (65yo)

    Independent Non-Executive Director

    • Tenure: 5.8yrs
    • Compensation: UK£110.00k
  • Mike Morgan (54yo)

    Group Finance Director & Director

    • Tenure: 0.9yrs
    • Compensation: UK£1.12m

Company Information

Close Brothers Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Close Brothers Group plc
  • Ticker: CBG
  • Exchange: LSE
  • Founded: 1878
  • Industry: Diversified Capital Markets
  • Sector: Diversified Financials
  • Market Cap: UK£2.116b
  • Shares outstanding: 149.16m
  • Website: https://www.closebrothers.com

Number of Employees


Location

  • Close Brothers Group plc
  • 10 Crown Place
  • London
  • Greater London
  • EC2A 4FT
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CBGP.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
CBGLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
CS3DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
CBGLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
CBGP.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDFeb 2009

Biography

Close Brothers Group plc, a merchant banking company, provides financial services to small businesses and individuals in the United Kingdom. It operates through five segments: Commercial, Retail, Property, ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/18 20:34
End of Day Share Price2019/10/18 00:00
Earnings2019/07/31
Annual Earnings2019/07/31


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.