Wealth management group targets fresh acquisitions

A 42% rise in both interim revenue and profits will form the platform for continued expansion for a Worcestershire wealth management group.

Bromsgrove-based AFH Group said its strategy continued to be one of national expansion, through both organic and acquisitive growth, in order to drive increased profitability.

The group’s interim results show revenues up 42% to £11.7m (H1 2015: £8.22m), with EBITDA up 43% to £1.43m (H1 2015: £1.0m).

Pre-tax profit was up 42% to £0.86m (H1 2015: £0.6m), with earnings per share up 35% to 2.9 pence (H1 2015: 2.15 pence).

Funds under Management (FUM) topped £1.88bn, up 44% (April 2015: £1.3bn).

It said that in a period of stock market turbulence, its clients’ portfolios demonstrated a strong resilience to market volatility and, as a consequence, the company’s management fees, which are based on the value of its FUM, were similarly cushioned.

Recurring revenue on which the company earns these fees is estimated to rise or fall by approximately 4% for every 10% movement in the FTSE 100 index. The negative impact on current period revenues compared to H1 2015 was approximately £30,000.

Speaking in the group’s interim results statement, Alan Hudson, Group Chief Executive, AFH Group, said: “Our strong first half results demonstrate AFH’s continued successful momentum.  Strong organic growth, complemented by contributions from our acquisitions, drove increased earnings per share by almost a third, compared with the same period last year.  

“Within this, the rise in both recurring fees and revenue per adviser was particularly encouraging as we continue to realise and develop the benefits of a strongly integrated business model under the AFH brand.
 
“Based on the continued client demand for our financial planning led wealth management services, the opportunities following UK pension reform and our proven track record as a successful acquirer and integrator of businesses, we are confident of the Group’s future prospects for the full year and beyond.”

He said directors continued to seek suitably priced acquisition opportunities which could add value to AFH and its shareholders.

“Our aim is to grow our client base through increasing our adviser numbers and greater productivity afforded by the enlarged AFH structure and centralised support functions. The progress made during the first half of the current financial year, combined with the growth dynamics of our market, allow the directors to view the prospects for the full year and beyond with confidence,” he added.