Wealth manager unveils fourth year of consectutive growth

AFH chief executive Alan Hudson

Wealth manager AFH has revealed its fourth consecutive year of growth since joining the Alternative Investment Market.

The Bromsgrove-based group said that for the year to October 31, it had seen an increase in earnings per share of 57% and a 33% increase in dividend per share.

It defined the group’s year as “strong organic growth delivered through captive distribution model”.

Revenues were up 39% to £33.6m (2016: £24.1m), with underlying EBITDA up 57% to £5.7m (2016: £3.6m). Underlying EBITDA margin increased to 17% from 15%.

Profit after tax was up 83% to £3.1m (2016: £1.7m), with earnings per share up 57% to 11.22p (2016: 7.16p). Underlying EPS was up 46% to 17.0p (2016: 11.6p). Dividend per share rose 33% to 4.0p (2016: 3.0p).

Funds under management were up 39% to £2.79bn (2016: £2.0bn), aided by a further programme of acquisitions.

The group said it also saw significant growth potential for the business.

This involves increasing organic demand for financial planning-led wealth management services with further acquisitions.

The group said its acquisitions record was strong, with the average deferred pay-out for those acquisitions exceeding 90% of the target deferred consideration during 2017.

The group’s balance sheet remains strong, with a successful £17.5m placing completed in December 2017.

Alan Hudson, Group Chief Executive, said: “The year under review produced our fourth consecutive year of growth and improved profitability since joining AIM in 2014. Increased revenues and improved margins have resulted in a 57% increase in EPS after taking into account the dilutive impact of our successful fundraising in April 2017.

“New business and continued demand for financial advice from existing clients, together with a series of earnings accretive acquisitions during the year, enabled the group to grow its funds under management to £2.8bn and increase revenues to £33.6m whilst the efficiencies and economies of scale that we have worked towards generated a further improvement to our EBITDA margin and continues our progress to our three to five year aspirational target.”

The group said the current year had started in line with expectations as the buoyant activity levels of 2017 continued into the new year.

It said it had seen further organic growth in new business which in turn had added to FUM.

“Since the year end we have announced three acquisitions which are expected to be fully integrated during the first half of the year. The successful fund-raising in December has provided a strong cash position that will allow AFH to take advantage of the continuing rate of consolidation within the IFA market during the current year and finance larger acquisition opportunities as they arise,” it said.

Close