Good morning! 

Quite a few things to look at today.




Financial Reporting Council

The FRC has imposed sanctions against Laura Ashley Holdings (LON:ALY) 's accountant in relation to its work on that company's accounts for FY June 2016. Fines were reduced to reflect "an exceptional level of co-operation" by the accountancy practice and its audit partner.

I've been criticising the authorities for taking up to a decade to resolve cases such as this. Bravo to the FRC for the quick turnaround on this investigation.




Distribution Finance Capital Holdings (LON:DFCH)

  • Placing price: 90p
  • No. of shares: 106.6 million
  • Market cap on admission: £96 million

Admission to trading and first day of dealings

The share price has popped higher on the first day of dealings for this brand new financial stock.

Distribution Finance provides working capital for businesses, in partnership with major manufacturers. Its primary customers are the dealerships who sell equipment into business. The types of things it finances include mopeds, motorbikes, RVs, marine craft, industrial and agricultural equipment.

I was interested to check whether pricing might be attractive but the admission document tells me that the company's book value at December 2018 was just £54.6 million. I don't think that any of the IPO proceeds are going to the company.

The IPO is a demerger from TruFin (LON:TRU) that is designed to help DFCH in its application for a banking license, enabling it to offer retail and SME desposit facilities.

Long-term, it is hoping to achieve ROE of 25% with a £1.2 billion receivables book. It wants to develop a wide range of working capital solutions for business - invoice discounting, finished goods financing, etc. And it will accept leverage…

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