Virgin Money UK PLC VMUK

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GBX 215.20 +0.60 (0.28%)

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As of May 3, 2024 3:35pm Delayed Price Closed

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Company Report

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Virgin Money: Corporate Action - Vote in Favor of Acquisition by Nationwide

Nathan Zaia Apr 30, 2024

We recommend shareholders of no-moat Virgin Money vote in favor of Nationwide Building Society’s takeover proposal at the general meeting on May 22, 2024. Nationwide’s offer of GBX 220, or about AUD 4.21 per Virgin Money share, comprises a GBX 218 cash consideration plus a GBX 2 unfranked dividend, which values Virgin Money at GBP 2.9 billion, or approximately AUD 5.6 billion. Payment of the dividend is part of Virgin Money’s ordinary dividend distribution schedule for fiscal 2024 and is not conditional on the scheme becoming effective.

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Price vs Fair Value

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VMUK is trading at a 2% discount.

Price

GBX 215.20

May 3, 2024

Fair Value

GBX 569.00

Mar 7, 2024

Uncertainty

High

1-Star Price: GBX 391.00
5-Star Price: GBX 998.00
Economic Moat: Yhrck
Capital Allocation: Qlwlflfrc

Bulls Say, Bears Say

Bulls

The combination of two midtier banks should deliver material operating cost savings.

Bears

Customers placing less emphasis on local branches could make it more difficult for Virgin to raise deposits in regional markets, putting pressure on funding costs.

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Trading Information

Previous Close Price: GBX 214.60
Day Range: GBX 214.00–216.00
52-Week Range: GBX 136.10–218.80
Bid/Ask: GBX 214.60 / GBX 217.00
Market Cap: GBX 279.00 Bil
Volume/Avg: 1.6 Mil / 7.3 Mil

Key Statistics

Price/Earnings (Normalized): 7.29
Price/Sales: 1.62
Dividend Yield (Trailing): 2.46%
Dividend Yield (Forward): 2.46%
Total Yield: 6.51%

Company Profile

Virgin Money UK was formed through the merger between CYBG PLC and Virgin Money. After being divested by National Australia Bank in 2016, CYBG went through a restructuring and recapitalization process, with mortgages accounting for around 75% of its loan book. Following CYBG's merger with Virgin Money, the loan book has been reshaped again, with mortgages now accounting for 79% of total loans, personal loans around 9%, and SME and business loans around 12%.

Sector: Financial Services
Industry: Banks - Regional
Stock Style Box: Mid Value
Total Number of Employees: 8,110
Website: https://www.virginmoneyukplc.com

Competitors

Valuation

Metric	VMUK	LYG	BCS
Price/Earnings (Normalized)	7.29	6.92	5.65
Price/Book Value	0.58	0.69	0.52
Price/Sales	1.62	1.77	1.28
Price/Cash Flow	6.29	3.11	1.56

Price/Earnings

VMUK

LYG

BCS

Financial Strength

Metric	VMUK	LYG	BCS
Quick Ratio	—	—	—
Current Ratio	—	—	—
Interest Coverage	—	—	—

Quick Ratio

No chart available

Profitability

Metric	VMUK	LYG	BCS
Return on Assets (Normalized)	0.41%	0.87%	0.42%
Return on Equity (Normalized)	7.17%	16.66%	11.47%
Return on Invested Capital (Normalized)	—	—	—

Return on Assets

VMUK

LYG

BCS

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