Just four weeks ago Midas recommended pawnbroker H&T. At £3.82, the shares seemed too cheap, given recent trading, future prospects and market conditions.
Midas was not alone in spotting H&T’s potential. Last Wednesday, Texas-based pawn giant FirstCash unveiled a £297 million bid for the company, valuing each share at £6.50. Recommended by H&T’s board, the move means investors will have made a 70 per cent return in less than a month.
A welcome windfall, the bid highlights one stark fact. UK shares are under-appreciated. Over the past decade, investors have taken more than £45 billion out of the London market and poured it into US stocks.
For investors in search of value, this trend provides rich pickings. Value investors look for businesses whose shares materially fail to reflect their long-term prospects.
While sentiment towards UK plc remains shaky, there are signs that value investing is coming back into fashion. These four businesses should reap the benefits.
Animalcare specialises in drugs for horses, pets and farm animals and is valued on the stock market at £170 million
Christie Group
There are more than 5.5 million companies in the UK, the vast majority of which employ fewer than 50 people. Some are growing, some are struggling, all of them want to make the most of what they have. Christie Group helps them along the way. Founded 90 years ago this month, Christie acts as a corporate estate agent, matching buyers and sellers in areas ranging from care homes, dentistry and children’s daycare to pubs, garden centres, hotels and caravan parks.
The group has built a reputation for reliability, trust and expertise, acting as the go-to agent in its sectors, with about 200,000 firms signed up to its database and hundreds of businesses up for sale at any one time. Last year, a record 1,187 sales were completed, up nearly 40 per cent from 2023, and chief executive Dan Prickett is confident of handling at least 1,000 deals this year too.
The group offers complementary services to customers as well. Christie Finance helps firms to source cash for mortgages, expansion or just paying the bills. Christie Insurance offers commercial and life assurance for business owners. Pinders and Venners offer valuation and stock-taking services, both with pedigrees stretching back decades.
Prickett joined the group in 2007, becoming chief executive in 2023. A youthful 49, he is driven, focused and ambitious. Loss-making subsidiaries have been sold off and Prickett is keen to build on Christie’s heritage, expanding both here and in Continental Europe.
Results for 2024 showed a 15 per cent rise in recurring revenues to £60 million and a profit of just over £1 million, compared with a loss in 2023. Further progress is expected this year and beyond.
Christie Group has traditionally kept a low stock market profile and the shares have suffered for years. At £1.30, the shares are valued at less than £32million, little more than half last year’s revenue figure. That should change, as the business expands and engages more with investors. Buy now and reap the benefits.
Traded on: Aim
Ticker: CTG
Contact: christiegroup.com or 0207 227 0707
Aberdeen Group
In 2021, fund management firm Aberdeen Standard Life changed its name – to Abrdn. Greeted with derision, the move coincided with a tumbling share price and this spring, new chief executive Jason Windsor added back the vowels. Aberdeen Group is not just easier to pronounce than before, it is also more profitable and better focused, with clear plans for further improvement.
Yet the shares remain unloved, at £1.68, down from £4.80 a decade ago. Supporters believe the price fails to recognise Aberdeen’s true value. The company is best known as an investment house, managing stocks, shares and other assets for customers. However, Aberdeen also owns interactive investor (ii), the second-largest consumer investment platform in the UK, and Adviser, a platform specially for financial advisers.
While the main business has underperformed in recent years, interactive investor has gone from strength to strength and Adviser is the second-largest business of its kind in the UK.
Windsor is determined to turn the entire group round, targeting an 18 per cent increase in profits to £300 million for 2026, by attracting more customers to ii, luring more money into Adviser and driving growth across the investments business.
If Windsor succeeds, Aberdeen shares should go far. Today Aberdeen is worth just over £3billion. Specialist value fund Temple Bar believes the group could be worth double that figure. In the meantime, a 14.6p dividend puts the shares on a generous yield of almost 9 per cent. Buy and hold.
Traded on: main market
Ticker: ABDN
Contact: aberdeenplc.com or 0371 384 2464
Animalcare
Horses typically live to at least 25 but more than half will spend their latter years with arthritis. Joints become inflamed and the pain can be acute but many painkillers are hard to administer. Animalcare’s Danilon is sprinkled over food and even thoroughbreds are happy to chomp their way through it.
Animalcare specialises in drugs for horses, pets and farm animals, focusing on treatments that are easier to administer or more effective than alternatives. Daxocox, for example, is an anti-inflammatory drug for dogs with arthritis. Given once a week, rather than once a day, demand is soaring, with sales up 40 per cent last year alone.
Imperial Leather owner PZ Cussons is worth a punt as its current price could offer real upside
Toothpaste for cats and dogs is another fast-growing category. Gum disease is one of the most common pet afflictions but administering treatment can be a hazardous exercise. Plaqtiv, which prevents the build-up of plaque, is added to pets’ drinking water and sales were up 27 per cent in 2024.
Animalcare is run by Jennie Winter, who earned her spurs at drugs giants AstraZeneca and GSK. Winter inherited a business in trouble but she has streamlined the portfolio and focused on drugs where Animalcare can make a difference. Chairman Ed Torr provides further heft. A sector specialist, he spent years on the board at Dechra Pharmaceuticals, the pet drugs giant that was sold for £4.5 billion in 2023.
Animalcare is valued on the stock market at £170 million but Torr and Winter are ambitious and the business could go far. The group recently bought an equine specialist in Australia, fuelling overseas expansion and driving profits growth.
Closer to home, pet ownership soared during the pandemic and those animals will need increasing care as they age. Animalcare has just what they need. At £2.48, the shares are a buy.
Traded on: Aim
Ticker: ANCR
Contact: animalcaregroup.com or 0330 818 9717
PZ Cussons
Just one whiff of Imperial Leather soap and I’m back in my grandparents’ flat, washing my hands before lunch. With a decades-long pedigree, the bars are still used by about 10 million people today and the brand is owned by PZ Cussons, a firm whose history dates back to Victorian times.
Founded as an African commodities trader, the group evolved into a consumer firm whose product range includes Carex, Original Source, Sanctuary Spa, St Tropez and Childs Farm. But PZ also retains substantial business interests in Nigeria and these have been a huge drag, as tough economic conditions have sent the local currency tumbling by more than 70 per cent against the pound.
In April 2024, boss Jonathan Myers announced a strategic review focused on Nigeria and designed to reduce risk and maximise value. There has been no material news since and the shares have been battered, falling more than 20 per cent over the past year to 84p and sinking from £3.50 a decade ago.
The current price could offer real upside. PZ shares should rebound when news finally emerges on Nigeria and the group’s other brands are household names. A punt for adventurous investors.
Traded on: main market
Ticker: PZC
Contact: pzcussons.com or 0370 707 1221
