Canaccord Genuity keeps Mercia Asset Management at 'buy'

(Sharecast News) - Mercia Asset Management has secured a new three‑year debt facility with Metro Bank worth up to £38m, a move Canaccord Genuity said gives the group greater flexibility to pursue inorganic growth. The package includes a £13m term loan with a margin of 3.99% over SONIA and a £25m revolving credit facility opening at 3.50%, with the margin stepping down to 3.00% depending on leverage.

Canaccord said the additional firepower strengthens Mercia's ability to execute selective, earnings‑accretive M&A aligned with its Mercia FY27 strategy, aimed at lifting AUM above £3bn and doubling EBITDA to around £10m by FY27.

The Canadian bank noted Mercia's established track record of acquisitions that enhance scale and recurring fee income, and said the new facility helps bridge timing on deals while preserving balance‑sheet strength.

It assumes the term loan will be drawn within 60 days, with the revolving facility remaining undrawn initially, resulting in a modest 3% to 6% cut to FY27-28 fully diluted adjusted earnings per share due to negative carry. Even so, Canaccord argued the certainty of funding supports both organic expansion and selective M&A as fundraising pipelines convert.

Canaccord reiterated that Mercia entered FY27 with "pragmatic confidence" in building a scalable, predictable, fee‑driven business, supported by structural demand for UK regional private capital. The broker kept its 67p target price and 'buy' rating unchanged, implying 154% upside.









Reporting by Iain Gilbert at Sharecast.com