Aggressive acquisition strategy pays off for financial services firm

AFH chief executive Alan Hudson

Bromsgrove financial services group AFH is reaping the rewards of its aggressive acquisition strategy, reporting a fifth consecutive year of profitable growth.

The group, which completed 16 acquisitions with a combined value of £34m, saw revenues rise 51% to £50.7m in the year to the end of October, up from £33.6m the year before.

Profit before tax rose to £7.8m, up from £3.5m, while funds under management were up 58% to £4.4bn and exceeded £5bn following the year-end.

The group said it is well positioned to continue to take advantage of ongoing IFA market consolidation and with a strong balance sheet following a £15m placing completed in October, it has “solid foundations” in place to deliver on its strategy to become the “number one financial planning-led investment manager in the UK”.

AFH has set itself new three to five year targets for funds under management of £10bn and revenues of £140m.

Chief executive Alan Hudson said: “I am encouraged by the strong progress we made in 2018 as we continue to deliver on our strategy of harnessing solid organic growth with value adding acquisitions, with the aim of becoming the leading financial planning-led investment manager in the UK.

“These excellent full year results have been driven by the continued increase in our recurring revenue and our underlying EBITDA margin exceeding 20%, the achievement of the first of three medium term financial aspirational targets that we set in 2017. As announced on 3 December 2018, the second of these targets, achieving funds under management in excess of £5bn, was met following the year end and the board is confident that the final aspirational target of revenues of £75m per annum will be achieved ahead of our original expectations.

“The company strategy to increase shareholder value through the expansion of the AFH community remains at the heart of our growth. This strategy continues to be driven by a combination of organic growth through greater productivity of our advisers and by value accretive acquisitions.

“Looking to the year ahead, we strive to continue to deliver on this year’s exceptional progress through continued organic growth and the integration of further acquisitions and look forward to updating shareholders on our developments and milestones as the year progresses.”

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