ASX:SVR
Solvar Ltd
Investment Summary
The fund managers believe that Solvar Ltd (SVR) is navigating a challenging regulatory environment, with allegations impacting market sentiment and limiting multiple expansion in the near term. Despite these issues, in their opinion, the underlying business performance is strong, evidenced by a current FY24e fully-franked dividend yield of 9% and a 9x P/E. The managers noted a significant 20% share price increase in June following a buyback program, which indicated management confidence in the stock's valuation. As of August, SVR offered an 11% fully-franked dividend yield and traded at 8x FY25e P/E, with positive indicators showing a potential recovery in loan book and profit growth amidst improved macroeconomic conditions. Recent performance remains stable with a projected 9.2% yield and 8x FY26e earnings, suggesting attractive pricing for potential investors.
Commentary From The Managers
Endeavor Asset Management
31 Mar 2025
$1.44
- Endeavor Asset Management notes that shares in car financier Solvar (SVR) have remained stable despite market softness.
- The company has continued its on-market buyback program, which has positively impacted the share price.
- Solvar is currently trading at just 8x FY26e earnings.
- The stock offers a fully franked yield of 9.2%, indicating attractive pricing.
- Recent strength in the stock led Endeavor Asset Management to trim their position.
Thorney
20 Feb 2025
$1.37
- Thorney continues to hold its investment in Solvar Limited (ASX:SVR) given the recovery in earnings in FY2024.
- SVR delivered earnings consistent with historical levels, leading to improved market sentiment.
- The positive share price performance in H1 FY2025 was supported by an active on-market share buyback.
- Despite recent gains, market caution persists regarding future earnings outlook.
- As the largest shareholder, TOP and associates intend to remain active in Board and management engagement to drive a value-adding strategy.
Endeavor Asset Management
31 Dec 2024
$1.49
- Endeavor Asset Management observes that Solvar (SVR) experienced an 8.8% share price increase in December.
- The rise is likely attributed to the company’s share buyback program.
- Endeavor Asset Management capitalized on this movement by locking in some profits.
- SVR is currently trading at a 9.5x FY25 P/E.
- The company is forecasted to provide an 8% dividend yield to shareholders.
Endeavor Asset Management
31 Aug 2024
$1.26
- Solvar Ltd (SVR) delivered positive full-year results that were well received by the market.
- Prior to the announcement, market sentiment was poor, with challenges anticipated in FY24.
- The outlook indicates signs of improvement, with better macroeconomic conditions expected.
- Loan book and profit growth is anticipated in FY25, signaling potential for recovery.
- Solvar is set to provide updates at their AGM in November.
- The current trading valuation is 8x FY25e P/E with a 9.6% dividend yield.
- Endeavor Asset Management continues to hold its position based on these developments.
Endeavor Asset Management
31 Aug 2024
$1.26
- Solvar Ltd (SVR) reported its full-year results, which were positively received by the market.
- Prior market sentiment was negative, anticipating a challenging FY24.
- The outlook indicates potential improvement in macroeconomic conditions.
- Loan book and profit growth is projected for FY25.
- Solvar will provide an update during their AGM in November, which Endeavor Asset Management plans to attend.
- Currently, Solvar trades at an 8x FY25e P/E ratio with a dividend yield of 9.6%.
- Endeavor Asset Management continues to hold its position in Solvar due to these encouraging indicators.
Endeavor Asset Management
30 June 2024
$1.08
- Endeavor Asset Management notes a 20% rise in Solvar's stock price in June, indicative of positive market trends.
- Management's decision to ramp up share buy-backs suggests they see value in the current share price.
- Confidence in trading conditions has been strengthened for investors.
- Solvar continues to trade at a significant discount to its book value.
- The company offers an 11% fully-franked dividend yield for FY25e.
Endeavor Asset Management
31 Jan 2024
$1.16
- Endeavor Asset Management updates their investment thesis on Solvar Ltd.
- Solvar (SVR) is facing challenges due to weak sentiment linked to regulatory enquiries.
- The ASIC claim from last May has been compounded by allegations from the New Zealand Commerce Commission regarding breaches of the Credit Contracts and Consumer Finance Act.
- Solvar maintains it has complied with lender responsibility obligations, viewing the situation as frustrating.
- Despite challenges, the underlying business is performing well.
- The regulatory environment is likely to limit multiple expansion in the near term.
- SVR is currently trading at a FY24e fully-franked dividend yield of 9% and a 9x P/E ratio.
- Endeavor Asset Management continues to hold this position while awaiting further developments.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.