Wealth management group outlines growth plans aided by war-chest

Worcestershire wealth management group, AFH, has implemented the next phase of its growth plan for this year and beyond.

The move comes as the Bromsgrove-based group announced a 15% increase in full-year revenues and a war-chest ready to fund new acquisitions.

Looking ahead to this year and beyond, the group used its full year results statement to outline its plan.

It said: “The board believes that it has put in place the necessary infrastructure to support its growth plans for 2017 and beyond. Continued investment in technology, enabling a digitalised approach to our clients in the future, is expected to accelerate the benefits of scale and the infrastructure investment made in previous periods.”

For the year ending October 31, 2016, group revenues grew by 15% to £24.1m (2015: £21m), which it said was driven by a strong performance in its investment portfolios in volatile markets and by increased adviser productivity.

Recurring revenues, which are derived from the value of the portfolios on which its provides investment services, increased by 20% to £16.4m. During the year, new business generated by advisers increased to £7.7m (2015: £7.3m) in spite of the current uncertainty and turbulence in the financial markets.

EBITDA was up 29% to £3.6m (2015: £2.8m), with post-tax profit up 43% to £1.7m. Earnings per share was up 20% to 7.16p (2015: 5.95p).

Funds under Management rose 11% to £2bn (2015: £1.8bn).

Growth potential comes from increasing organic demand for financial planning-led wealth management services, and it added that there was a strong pipeline of acquisition opportunities supported by cash reserves of £6.7m (2015: £3.7m).

In a joint statement, John Wheatley, chairman, and Alan Hudson, group chief executive, said: “The group has again proven its ability to increase revenue with strong organic growth that has generated a double digit increase in funds under management during the period whilst improving gross margins.

“In a year in which the group completed two acquisitions, the significant growth and improving margins are testament to the strategy set out by the board in 2014 to place financial planning through face to face advice at the forefront of our proposition, supported by a strong infrastructure and professional investment management team.”

They added that the group continued to be cash generative, and maintained a strong balance sheet given the current size of its business.

“The company will continue to actively seek appropriately priced opportunities during 2017 to expand its captive distribution throughout the financial sector, generate additional revenue and drive increased profitability,” they said.

“Given the progress made in 2016 and the early months of the 2017 financial year, the directors view the coming period as providing excellent prospects and look forward to extending AFH’s brand, reach and reputation.”