Intelligent Investing

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Intelligent Investing

Contents

Equities

Equity Screen

European Equities

Investment Trusts

Profit Takers

low levels. Additionally, by extending the period of uncertainty further – speculation about an interest rate rise has plagued investors for months – the volatility that has characterised markets since the early summer is more likely to continue. The atmosphere was made more feverish still when it emerged that Volkswagen had deliberately hidden the true emissions track record of its diesel vehicles in the US, thereby plunging the entire European autos sector into the mire. VW shares had fallen by 33% from their end of August level at one stage. With the US$5.5bn cost of recalling 11 million cars worldwide and replacing the offending software added to potential fines of US$18bn, this is likely to prompt the largest corporate loss and civil penalty since BP’s Gulf of Mexico Deepwater Horizon disaster. For days the news dominated headlines and has already cost VW’s chief executive his job.

As always, however, volatility throws up some interesting opportunities. In this issue we highlight some of the companies we feel are high quality and where share prices have fallen back recently, providing what we think of as good entry points. In more general terms, we think valuations are becoming more reasonable, interest rates outside the US and UK are likely to stay low and supported by vigorous Quantitative Easing in Japan and Europe, equities are likely to remain attractive.

Richard Champion

Deputy Chief Investment Officer

Market Review

In last month’s Intelligent Investing, we highlighted that we felt a period of skittish market action was likely, and so it has proven. Equity markets have moved sideways over September, but they have done so in a volatile fashion. After the dramas of August, when falls of 10% were widespread across the world, there would have been little surprise had we seen a bounce in the ensuing weeks. In the event, however, rallies have been febrile and more recently indices have been busy trying to test their short-term lows.

In addition to concerns over Chinese growth markets we have looked more widely at emerging economies and have not liked what we have seen. Whether it is Russian exposure to a weak oil price, possible impeachment of the Brazilian president, collapsing commodity prices, a strong US dollar or capital flight; the news flow has not been good. Emerging markets now produce approaching 40% of global growth and their health has been key to keeping activity levels moving forward. Into this vortex, at its 17 September meeting, the US Federal Reserve decided not to raise interest rates after nearly seven years of holding them close to zero. The decision was more controversial than many expected; the accompanying statement cited weakness in overseas markets, which is a factor outside of the Fed’s remit and by the standards of previous cycles a move upwards is long overdue. The inactivity was widely interpreted as indicating that the Fed was getting “behind the curve” – in other words, taking risks with inflation, despite today’s

History of profitability throughout cycle with ROE consistently above 10%

Source: Quest®

Source: Quest®

2014A 2015F 2016F

Price Earnings Ratio 12.4 12.8 12.1 Earnings per share (p) 104.8 117.1 124.1 Dividend per share (p) 49.0 54.2 58.2 Bad Debt Ratio 0.90% 1.20% 1.10% Return on Equity 16.9% 17.2% 16.8% Loans & advances (£bn) 5.4 5.7 6.1

Close Brothers Market cap: £2.23bn Share price: 1505p Source: Quest® 2015A 2016F 2017F Revenue (£m) 1,315 2,238 2,264 Earnings per Share (p) 61.2 65.3 71.8 Dividend per Share (p) 29.8 31.4 34.1 Dividend Yield 3.7% 3.9% 4.3% Free Cash Flow Yield 7.6% 4.7% 5.4% Price Earnings Ratio 13.3 12.2 11.1 Return on Capital Employed 10.6% 7.5% 8.2% Greene King Market cap: £2.46bn Share price: 798p

Equities

Close management chose instead to reduce their market share. However, the subsequent retrenchment of these banks to their domestic markets provided the springboard for Close to grow its loan book from £2.5bn in 2008 to £5.7bn today. Although challenger banks such as Aldermore and Shawbrook have entered the UK market they only compete with 20% of Close’s loan book. Impressively, all of this has been achieved without hurting returns with Return on Equity (ROE) up from 10.5% in 2011 to 17.1% in 2015. Trading on 12.1x this year’s earnings and with EPS growth of 11% last year and 6% expected this year the shares look attractive. The 12 month forward dividend yield of 3.9% also looks inviting and is likely to grow given that management aim to pay around half of earnings as dividends.

Simon McGarry Senior Equity Analyst

Worth getting CLOSER to!

Close Brothers (“Close”) employ 2,800 people, mostly in the UK, across their three core businesses of Banking, Securities and Asset Management. The banking division which specialises in motor, invoice, property and premium finance is by far the largest division making up 83% of profits. Their loan book is conservative with low Loan To Values (50%-90%), small loans (<£1m) and short durations (average maturity 14 months). Indeed their strategy has been to focus on returns instead of growth which has enabled management, like some of their peers, to deliver profitable growth throughout the cycle including the financial crisis.

The banking business is in good health with the bad debt ratio at an all time low of just 0.8% and net interest margin, which is the difference between the rate they lend and borrow at, of 8.8% compared to under 3% for high street banks. Asset Management (7% of profits) is also performing well with 2015 operating profit up 80% on 2014.

In the run up to 2008 banks from Iceland (e.g. Landsbanki, Kaupthing) and Ireland (Bank of Ireland, AIB, Anglo Irish) flooded the UK market with easy credit but

impact of the new drink-driving regulations in Scotland growth was better at 1.8% and 2.4% respectively. They also reiterated their estimate of £30m of cost synergies from the Spirit acquisition which we still feel looks conservative given that this makes up less than 2% of the combined 2014 group overhead.

Admittedly, on 11.7x this year’s earnings GK trades at higher multiples than competitors such as Punch, Enterprise Inns and Mitchells & Butlers. However, we feel that this is more than justified given the scope for earnings growth provided by the integration of Spirit. Their dividend looks attractive having grown by an average of 10% over the last six years. Simon McGarry

Senior Equity Analyst

In good spirits

Greene King (GK) run over 3,000 pubs, restaurants and hotels across the UK under brands such as Hungry Horse, Flame Grill and Loch Fyne. They also have a brewing operation which traces its origins back to 1799. While brewing and tenanted/leased pubs account for 15% and 9% of revenues respectively, the lion’s share (76%) comes from their managed estate which is 94% freehold and thus lower risk and more flexible. The management team, which is led by industry veteran Rooney Anand have been busy selling underperforming assets and shifting their focus to the more lucrative South East and East regions which now accounts for 57% of the estate. In November 2014 they announced the acquisition of Spirit for £774m bringing their total portfolio to over 3,000 pubs. This deal is a game changer and provides a unique opportunity for GK to turnaround the woefully underinvested Spirit

franchise that had struggled to cope with a mounting debt burden.

GK’s recent performance seems to be improving after reporting like for like revenue growth of +1.3% in the 18 weeks to early September and +1.9% in the previous 10 weeks. By excluding the

0 5 10 15 20 Close Brothers 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002

Past performance and future forecast figures are not a reliable indicator of future results.

12 month forward

Company name Industry name

Market capitalisation

(£m) Share price Dividend yield

Dividend cover (P&L) P/E QRR Percentile Score 1 = low risk 100 = high risk

Royal Dutch A Oil Gas and Consumable Fuels 100,057 1587 7.6% 1.2 12.0 44

Premier Farnell Electronic Equipment

Instruments and Components 381 104 7.3% 1.5 8.3 76

Aberdeen Asset Mgmt Capital Markets 3,783 297 6.9% 1.4 10.3 96

Carillion Construction and Engineering 1,298 302 6.2% 1.8 8.6 28

SSE Electric Utilities 15,016 1496 6.2% 1.3 13.0 32

AMEC Energy Equipment and Services 2,843 729 5.9% 1.7 10.0 26

Petrofac Energy Equipment and Services 2,581 757 5.7% 1.9 9.1 43

Jupiter Fund Mgmt Capital Markets 1,968 437 5.6% 1.2 14.6 91

Brewin Dolphin Capital Markets 690 255 5.5% 1.6 12.8 26

Intermediate Capital Capital Markets 1,492 521 5.4% 1.7 11.7 27

Taylor Wimpey Household Durables 6,375 197 5.4% 1.5 12.0 46

Galliford Try Construction and Engineering 1,306 1598 5.2% 1.6 12.0 27

Persimmon Household Durables 6,243 2037 5.2% 1.6 12.3 97

UK Equity Screen

High Yielders

Despite it being nearly three years since Mark Carney became Governor of the Bank of England, UK interest rates have remained at their historical lows of 0.5% since 2009.

At first glance this may look strange given the robust underlying UK economy with UK GDP growth of 2.6%, unemployment down to 5.5% and wage growth which has proven elusive since the financial crisis at a six year high of nearly 3%. However, with zero inflation proving to be less of a temporary phenomenon than had been previously expected and with the US Federal Reserve deciding against their own rate rise in mid-September we feel that investors should not hold their breath on a rate rise anytime soon. Indeed, Andy Haldane, Bank of England chief economist has actually suggested that negative rates may be required as we have recently seen implemented in Sweden, Switzerland and Denmark. As a consequence it is not surprising that the market has now pushed back expectations of a rate rise to September 2016. Therefore, we feel that in this low interest rate environment investors will continue to be attracted to stocks that can be relied upon as a source of income. With this in mind we have run an

Source: Quest®

equity screen using Quest®_{, Canaccord Genuity’s proprietary} stock picking tool, in search of stocks that pay a dividend of at least 5%, where the dividend is covered by consensus earnings expectations and whose balance sheets do not appear to be excessively risky. It is worth noting that the recent bout of market weakness has resulted in a number of new names satisfying all the criteria than if we had ran it a few months ago.

Search Criteria

1. 12 month forward dividend yield more than 5.0% 2. 12 month forward dividend cover more than 1x 3. The Quest® _{measure of financial health (Q-score)}

ranks in the top 75%

Source: Quest®

Quality Defensive

Not only has the recent turbulence in financial markets underlined the continued attraction of solid high quality companies, supported by attractive dividend yields but the volatility has also provided investors with an opportunity to buy these great names at more attractive valuations. Our Quality Defensive screen looks for blue chip European companies (market capitalisation greater than €5bn) with strong balance sheets and a track record of above average Return on Capital Employed (ROCE). Furthermore we look for valuation support from above average free cash flow and dividend yields. Whilst some of the names will be less familiar to UK based investors, most are household names including, BMW, KONE, Michelin, Siemens, Roche, Unilever and Volvo (Volvo no longer makes the cars which carry its name, but concentrates on trucks and heavy machinery). The list also includes Syngenta (it features as a separate equity article in this publication), which has recently rebuffed a bid approach from Monsanto. As a group not only have the companies that feature in the screen recorded an average ROCE of 27% over the last 10 years (nearly twice the average level of our European universe on Quest®_{), but they} have significantly less debt to capital employed whilst enjoying higher free cash flow and dividend yields.

European Equity Screen

Past performance and future forecast figures are not a reliable indicator of future results.

Search Criteria

1. Market capitalisation greater than €5bn 2. Prior year debt/capital employed less than 40% 3. Prior year fixed charge cover greater than 6x

4. 10 year average Return on Capital Employed (ROCE) greater than 15%

5. 12 month forward free cash flow yield greater than 4.5% 6. 12 month forward dividend yield greater than 3.3% 7. 12 month forward dividend cover greater than 1.2x

Company name Country Industry name Market cap (€bn)

Gearing debt/capital employed Fixed Charge Cover ROCE 10 year

average Free cash flow yield Dividend yield Dividend cover

Atlas Copco Sweden Machinery 25.8 14.5% 15.2 35.7% 6.1% 3.5% 1.8

BASF Germany Chemicals 61.3 33.1% 11.5 24.7% 4.7% 4.5% 1.9

BMW Germany Automobiles 51.6 0.0% 31.5 30.5% 6.3% 4.3% 2.8

Givaudan Switzerland Chemicals 13.1 12.5% 18 16.1% 4.9% 3.6% 1.4

KONE Corp Finland Machinery 17.1 0.0% 13 69.1% 5.9% 4.3% 1.3

Michelin France Auto Components 15.2 2.5% 6.6 17.3% 6.1% 3.7% 2.8

Roche Switzerland Pharmaceuticals 201.0 32.3% 21.2 48.5% 5.4% 3.4% 1.8

Sanofi France Pharmaceuticals 110.9 10.0% 18.9 19.5% 6.5% 3.7% 1.8

Schneider France Electrical Equipment 28.4 16.6% 10.8 16.7% 7.7% 4.2% 2.0

Siemens AG Germany Industrial Conglomerates 66.2 21.7% 6.4 15.3% 8.3% 4.6% 1.9

SKF Sweden Machinery 7.6 32.0% 7.5 25.9% 8.8% 4.1% 2.2

Syngenta Switzerland Chemicals 26.3 18.7% 23.4 21.3% 5.5% 3.9% 1.6

Telenor Norway

Diversified Telecommunication Services

24.8 34.7% 6.2 18.7% 5.5% 5.3% 1.4

Unilever NV Netherlands Food Products 101.8 35.9% 10.9 31.5% 4.6% 3.4% 1.6

Volvo Sweden Machinery 17.2 5.9% 9.8 17.0% 9.3% 4.3% 2.2

Wartsila Finland Machinery 7.0 0.0% 6.4 25.3% 6.4% 3.7% 1.9

Prior year 12 month forward

The figures below are shown in euros.

These returns may differ significantly when converted to other currencies at the prevailing exchange rates.

Source: Bloomberg

Source: Company factsheet Source: Quest® Source: Quest® Syngenta Market cap: CHF 28.9bn Share price: CHF 313.1 INPP Market cap: £1.11bn Share price: 130.5p

Latest NAV per share: 123p

Premium/(Discount): 6.3%

Dividend yield: 4.8%

Past performance is not a reliable indicator of future returns.

2014A 2015F 2016F

Revenue (CHFm) 15,034 13,757 14,417 Earnings per Share (CHF) 20.4 18.0 20.1 Dividend per Share (CHF) 11.0 11.8 12.4 Dividend Yield 3.4% 3.8% 4.0% Free Cash Flow Yield 6.4% 5.0% 5.6% Price Earnings Ratio 15.9 17.4 15.6 Return on Capital

Employed 20.5% 17.6% 17.9%

Investment Trust

European Equities

attractive opportunities exist where firms have expertise in origination and developing new assets. INPP is particularly well positioned amongst the competition as they have first right of refusal on any projects developed by Amber Fund Management who have an excellent record of introducing new infrastructure opportunities. In a market where existing portfolios are increasingly fully priced, the ability to bring to the market a steady flow of new projects should help INPP retain its position as one of our favoured names in this space.

INPP is primarily a UK focused fund with only 25% of projects outside of the UK. However, attractive opportunities are increasingly being found in Europe, Australia and the US. The broadening geographic distribution and the sector diversification of this fund may justify an associated higher risk profile than some of the other infrastructure names. However, we believe that the Thames Tideaway news and the lower price premium over NAV make this name attractive to clients who are looking for a combination of growth and income. Adrian Francis

Investment Director

An Inviting Infrastructure

Investment

International Public Partnership (INPP) is a large British investment company dedicated to PFI investments. The search for yield has been a strong driver of securities performance over the last few years and the infrastructure space is amongst the top performing sectors as a result. INPP has been one of the better names and has provided a good balance of growth and yield, investors have achieved a double digit annualised total return over the last five years. INPPs current yield is 4.86%. Recent market corrections have reduced the premiums (price over NAV) that these securities were attracting and consequently they now look better value INPP’s premium is down from a low double digit number to 6.5%. INPP has recently reported another good set of numbers, but more significantly has secured the Thames Tideway Tunnel contract which is the giant sewer running under the Thames. This £210m investment for a 16% stake is very positive news and significantly extends the overall portfolio life.

We maintain that the overall picture for infrastructure remains positive as governments continue to commit even greater resources to new projects. The more

16.1% respectively over the period. As the only company in the sector with both a credible global seeds business and world class crop-protection offering, we believe that Syngenta is ideally placed to benefit from both the relentless growth in the global population and increasing emerging market living standards.

Since the Monsanto bid approach the company has announced its intention to divest its global vegetable seeds business, whilst at a recent investor day Syngenta highlighted the fact that they have 15 new products in their crop-protection pipeline with a combined annual peak sales potential of over US$6bn. In the meantime however, investors can draw comfort from a 3.9% dividend yield (in Swiss francs) and a US$2bn share buyback programme. Marc Pullen

Senior Equity Analyst

Life after Monsanto

With the collapse of the Monsanto takeover bid, Syngenta’s shares have come back down to the level that they were trading at before the bid approach. In many ways we believe that the shares are even more attractive now than they were before, as management, now under considerable pressure, realise the company’s considerable value potential. The largest part of Syngenta’s business (75% sales) is crop-protection (herbicides, insecticides, etc.), where the company is the global number one with Bayer and BASF in second and third place respectively. The remainder of the business is in seeds where Syngenta has significantly consolidated its number three spot behind Monsanto and DuPont. The company has a superb value creation track record which has seen both its Quest® _{value per share and share price} more than treble over the last 10 years on the back of sales growth and an EBIT margin that have averaged 6% pa and

Track record of strong margins

Portfolio breakdown by sector

The figures are shown in Swiss France (CHF).

These returns may differ significantly when converted to other currencies at the prevailing exchange rates.

Operating Margin 2005 2004 200620072008200920102011201220132014 0 5% 10% 15% 20% 27% 20% 18% 16% 7% 6% 6% Energy Transmission Waste Water Education Health Transport Courts Other

Company name Market cap (£m) Share price (p) Prior FY dividend per share (p) Current FY dividend per share (p) Prior FY Price Earnings Ratio Current FY Price Earnings Ratio

Performance over previous

1 month 3 month 6 month

JD Sports Fashion 1,881 967 7.0 7.9 10.9 19.7 11% 37% 99% Betfair Group 3,113 3360 34.0 35.5 18.6 41.3 6% 35% 50% SuperGroup PLC 1,129 1390 0.0 19.2 12.5 21.2 -4% 10% 49% Rank 1,051 269 5.6 6.4 11.7 17.2 4% 23% 45% AVEVA 1,322 2068 30.5 30.4 25.3 27.4 0% 10% 43% bwin.party 934 113 3.8 3.0 17.8 30.0 -2% 14% 40% Regus 2,872 309 4.0 4.5 25.8 28.0 7% 18% 39% Dairy Crest 835 607 21.7 21.7 16.2 15.9 3% 14% 38% Crest Nicholson 1,442 573 14.3 20.0 9.0 12.0 8% 3% 33% Ted Baker 1,443 3285 40.3 49.1 24.1 33.8 9% 12% 32% Bellway 3,094 2526 52.0 71.3 9.5 8.8 3% 5% 30% Booker Group 3,236 184 3.7 4.4 21.1 25.6 10% 8% 29% Berkeley 4,608 3378 180 150 7.1 13.7 3% 0% 29% Redrow 1,713 462 6.0 8.9 7.1 9.4 -2% 1% 29% Taylor Wimpey 6,375 197 1.6 9.7 10.8 13.3 0% 4% 28% Alent 1,292 485 9.0 9.5 15.5 18.4 2% 30% 28% Dignity 1,178 2384 20.1 21.4 17.1 23.5 -1% 9% 28% Telecom Plus 888 1114 40.0 46.0 25.5 19.5 3% 14% 25% Moneysupermarket.com 1,826 334 8.0 8.8 15.2 23.9 3% 15% 25% Barratt Developments 6,403 646 15.1 29.4 9.9 11.9 4% 2% 24% Cranswick 838 1689 34.0 36.5 14.6 17.3 1% 5% 24% Persimmon 6,243 2037 95.0 98.9 11.0 13.0 0% 1% 24% WH Smith 1,806 1566 35.0 39.3 13.6 15.7 5% 0% 22% Sports Direct 4,472 755 0.0 0.0 17.2 17.8 -4% 4% 22% QinetiQ 1,332 229 5.4 5.9 13.2 14.8 0% 0% 22% Rightmove 3,476 3639 35.0 40.0 24.1 31.6 -2% 10% 20% AB Foods 26,378 3353 34.0 34.5 24.2 30.1 7% 15% 19% Cineworld 1,479 558 13.5 15.3 12.8 19.8 -4% 18% 17%

Dominos Pizza Group 1,497 900 17.5 20.5 21.5 28.9 5% 14% 14%

Savills 1,212 916 23.0 24.3 10.8 17.9 3% -4% 14%

Past performance is not a reliable indicator of future results.

Profit Takers

In addition to providing insight and analysis of particular investment opportunities each month, we also review stocks that have shown strong performance in recent months and as a result investors might consider taking profits. These stocks are not sell recommendations however, you may feel now is a good time to take profits and allocate your capital elsewhere. Please do contact your portfolio manager to discuss any of these ideas or any other aspect of your portfolio held at Canaccord Genuity Wealth Management.

The information provided is not to be treated as investment advice. It has no regard for the specific investment objectives, financial situation or needs of any specific person or entity.

The information contained herein is based on materials and sources that we believe to be reliable, however, Canaccord Genuity Wealth Management makes no representation or warranty, either expressed or implied, in relation to the accuracy, completeness or reliability of the information contained herein. All opinions and estimates included in this document are subject to change without notice and Canaccord Genuity Wealth Management is under no obligation to update the information contained herein.

Canaccord Genuity Wealth Management and/or connected persons may, from time to time, have positions in, make a market in and/or effect transactions in any investment or

related investment mentioned herein and may provide financial services to the issuers of such investments. Details of these interests can be found on our website at http://www. canaccordgenuity.com/en-GB/wm/wealth-management-uk/Conflicts-Disclosure/ or if this document has been provided to you in hard copy, in the attached covering letter.

Quest® _{is used under licence and with permission of Canaccord Genuity Ltd. Accounts, Share Prices & Global Consensus Estimates data provided in conjunction with S&P Capital IQ ©}

2015; Benchmark Sector comparatives are based on the Global Industry Classification Standard (GICS®_{) and provided in conjunction with S&P Capital IQ © 2015 (and its affiliates, as}

applicable). see restrictions. Share prices are relative to the MSCI USA IMI (see restrictions) Quest® _{is at this stage registered in the UK and in the USA, and common law trade mark rights}

are asserted in other jurisdictions. CFROC, CITN and triAngle are trademarks of Canaccord Genuity Limited. Quest® _{is at this stage registered in the UK and in the US, and common law}

trade mark rights are asserted in other jurisdictions.

Canaccord Genuity Wealth Management is a trading name of Canaccord Genuity Wealth Limited (CGWL) and Canaccord Genuity Financial Planning Limited (CGFPL), both of which

are authorised and regulated by the Financial Conduct Authority. Both are wholly owned subsidiaries of Canaccord Genuity Group Inc. and have their registered office at 41 Lothbury,

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Glossary

Prices are as at market close 01.10.2015

Investments discussed in this document may not be suitable for all investors. Investors should make their own investment decisions based upon their own financial objectives and resources, and if in any doubt, seek specific advice from an investment adviser.

Intelligent Investing is a marketing communication under FCA rules; it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and we are not therefore subject to any prohibition on dealing ahead of its dissemination. Bad Debt Ratio: Specific bad debts charge as a percentage of average loans and advances.

Book Value per Share: Book value per share compares the total shareholder equity, as stated in the company’s balance sheet, to the total number of shares outstanding.

Current ratio: A measure of whether or not a firm has enough resources to pay its debts over the next 12 month. Calculated by dividing current assets by current liabilities.

Dividend Yield: Dividend per share divided by the share price, often expressed as a percentage. For historic periods the average share price for the year is used, for forecasts the current share price is used.

Earnings per

Share (EPS): An indicator of a company’s profitability, it is the portion of profit after tax allocated to each outstanding share in issue. EBITDA: Earnings before Interest, Tax, Depreciation and Amortisation: enables better comparison between companies as it is not

affected by the way that the company is financed or by subjective accounting charges for depreciation and amortisation. Fixed Charge Cover: Income before net interest and operating lease payments divided by all fixed (financial) charges, i.e. interest, preference. Free Cash

Flow Yield: Free cash flow represents the cash that a company is able to generate after laying out the money required to maintain or expand its asset base. Free cash flow yield is the annual free cash flow of the company divided by the market capitalisation of the company.

Net Interest Margin (NIM): Net interest margin is a measure of the difference between the interest income generated by banks and the amount of interest paid out to their lenders (for example, deposits) relative to the amount of their interest-earning assets. Price/Book Ratio:

(Price/book): Equity market capitalisation divided by the balance sheet net assets (equity). This ratio also gives some idea of whether you’re paying too much for what would be left if the company went bankrupt immediately. Price/book ratios are often used to compare banks, because most assets and liabilities of banks are constantly valued at market values.

Price Earnings

Ratio (P/E): Share price divided by EPS. For historic periods the average share price for the year is used, for forecast years, the current share price is used. It shows how much investors are willing to pay per pound of earnings. QRR: Percentile Score: A broad measure of financial strength and health. It is calculated annually using a blend of fourteen

different metrics (four quantitative and 10 qualitative). A score of 100 indicates being indicates companies with the lowest risk whereas a score of 1 indicates those companies with the highest risk.

Quest®: Canaccord Genuity’s proprietary online valuation and analytical tool which combines consensus market figures with the Quest® _{Discounted Cash Flow (DCF) Valuation Model.}

Return on

Capital Employed (ROCE): A measure of a company’s profitability and the efficiency with which it uses its capital. It is calculated as operating profit divided by capital employed. Return on Equity (RoE): Net income (before exceptional items and goodwill amortisation) divided by book value of equity. RoE reveals how much

profit a company earned in comparison to the total amount of shareholder equity found on the balance sheet. Tables: F – Forecast results, figures based on the combined estimates of analysts covering the company.

A – Actual results, company’s published results.

Tier 1 ratio: Tier 1 capital (common stock and retained earnings) divided by Risk Weighted Assets (RWA).

Tier 1: Tier 1 capital is the core measure of a bank’s financial strength. It is composed of common stock and retained earnings but may also include non-redeemable non-cumulative preferred stock.

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