P2P Global Investments shares jump after a strategy update promising a bigger dividend, better returns and a more aggressive buyback policy.
Investors are looking forward to turnaround in P2P Global Investments (P2P) after its shares jumped 6.5% on a strategy update promising a bigger dividend, better returns and a more aggressive buyback policy.
With P2P’s fund manager MW Eaglewood having merged with Pollen Street Capital in September, the company has laid out how it plans to revive its battered share price, which has fallen 16% in the past three years and trails at a 22% discount to net asset value.
This morning it told investors it was confident it could achieve a covered dividend of 15p per share by the middle of next year, up from the 12p it currently pays.
Having dumped a large part of its underperforming US consumer loans earlier this month, the company is rapidly re-positioning the portfolio away from peer to peer lending to a greater exposure to specialist and secured assets.
Secured European loans now make up just over a quarter of the portfolio with a further 12% expected to be allocated to US secured loans by the end of the second quarter of 2018.
Investors were further cheered to hear that two thirds of its credit assets are now at or exceeding target returns, with the shares gaining 50p to 818p.
Tapping into the broader network that Pollen Street brings, the company now has access to a £400 million pipeline of new loans with which to mop up its 12% of cash following this month’s disposal.
It says it is ‘acutely aware of the dislocation between the current share price and the underlying value of the portfolio’ and has promised to ramp up share buybacks to reduce the wide discount that has disappointed star fund managers Mark Barnett and Neil Woodford, who are its main shareholders.
It also pledges a further curb on its controversial performance fee, saying from January it will only be paid if the company clears a 5% return hurdle first.