The company has acquired Classic Funding Group for $11m. The business provides invoice discounting and equipment finance. Morgans observes the acquisition provides significant scale for emerging divisions and is attractive from a strategic and valuation perspective.
Whilst any finance book comes with risk, the broker suggests CML Group has the management in place to lower execution risk. Add maintained. Target is raised to $0.60 from $0.52.
Sector: Commercial & Professional Services.
Target price is $0.60.Current Price is $0.53. Difference: $0.07 – (brackets indicate current price is over target). If CGR meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges – negative figures indicate an expected loss).