City round-up: Science in Sport; AJ Bell; Tatton Asset Management; GB Group; Rathbone Group; McBride
Stephen Moon has stepped down with immediate effect as CEO of sports nutrition firm, Science in Sport.
He will remain employed and be placed on gardening leave during his notice period, the company said this morning. In the meantime, chairman Dan Wright has been appointed as executive chairman.
Mr Wright said: “We would like to thank Stephen for the role he has played with the company for over a decade. He has been instrumental in Science in Sport and PhD becoming leading sports nutrition brands, culminating in the completion of the world class supply chain facility in Blackburn that is pivotal for the next phase of profitable growth.”
Stephen Moon said: “It has been a privilege to serve as chief executive for over the last ten years.
“Over my tenure, the business has grown from humble beginnings to a world class manufacturing facility, with a global omni-channel presence underpinned by two market-leading brands.
“This could not have been delivered without the hard work and dedication of a talented workforce that I have had the pleasure to lead over this period. The business is set up to leverage the investment made in the Blackburn facility, which I believe will deliver continued high levels of growth and profitability over the long term.”
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Michael Summersgill
Manchester-based investment platform, AJ Bell, reported record assets under administration (AUA) of £70.9 bn for the year to September 30, 2023, in a full year trading update today.
AUA were up 11% in the year driven by the net inflows across the platform and favourable market movements of four per cent, it said.
Customer numbers in the platform business increased by 50,880 to close at 476,532, up 12% in the year, as AJ Bell’s dual-channel platform continued to deliver strong organic growth in both advised and D2C customers.
Gross inflows in the year were £9.3bn (FY22: £10.1bn), and net inflows in the year were £4.2bn (FY22: £5.8bn).
For AJ Bell Investments, net inflows in the year were £1.65bn, up 57% versus the prior year (FY22: £1.05bn underlying net inflows), while AUM stood at £4.7bn, up 68% in the year (FY22: £2.8bn).
Chief executive, Michael Summersgill, said: “I am pleased to report another year of continued organic growth for AJ Bell, with the number of customers using our platform increasing by over 50,000 thanks to our quality of service, exceptional value and easy-to-use products. Our dual-channel model, which serves the needs of both advised and DIY investors, once again demonstrated its strength as we delivered over £4bn of net inflows onto our investment platform. This contributed to an 11% increase in platform assets under administration which ended the year at a record £70.9bn.
“Our investments business enjoyed another year of significant growth, fuelled by strong demand from advisers and customers for our straightforward and low cost investment range.
“At an industry level, we continue to engage with government on potential ISA reforms, with our focus being on simplifying the existing ISA landscape to make it easier for retail investors to navigate. We believe this will encourage a greater number of people to invest via ISAs which would benefit UK listed firms given the natural home bias exhibited by retail investors.
“The long-term growth drivers of the investment platform market remain strong, and we look forward to announcing the annual results for what has been another successful year for AJ Bell in December.”
Rae Maile and Ross Luckman, analysts with investment bank, Panmure Gordon, issued a Buy recommendation on AJ Bell’s stock following today’s announcement, saying: “Such is the state of markets that we have not been able to report much positive news.
“AJ Bell, however, has delivered closing AUA for the year ahead of expectations as the company continued its sector leading growth. The increased marketing focus continues to pay dividends as both the Advised and D2C platforms maintained a consistent level of flows compared to prior quarters, with new customer growth of 10% during the year.
“Despite the cyclical headwinds, AJ Bell continues to grow at a leading rate within a structurally growing sector, and performance shows no sign of that changing. BUY.”
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Paul Hogarth
Tatton Asset Management, the Wilmslow-based investment management and IFA support services group, reported total net inflows in the six months to September 30, 2023, of £0.910bn, marginally ahead of both the final six months of the prior financial year (H2 23: £0.887bn) and the same period last year (H1 23: £0.907bn).
The group said it is performing well and results are in line with the board’s expectations for the period, with continued growth in both revenue and profits driven by strong net inflows.
Tatton has continued to maintain consistent high levels of organic net inflows averaging £152m per month in the period (FY23: £150m per month).
Its strong organic net inflows were supported by a positive market performance of £0.100bn. The total AUM at the end of the period was £13.720bn (30 September 2022: £11.343bn), an annual increase of 21% or £2.377bn. The increase in this six month period was 7.7% or £0.985bn (AUM at 31 March 2023: £12.735bn).
Including 8AM Global Limited (8AM) assets of £1.064bn, AUM/AUI increased over the past 12 months by 19.8% or £2.441bn to £14.784bn (30 September 2022: £12.343bn).
The increase in this six month period was 6.6% or £0.913bn (AUM at March 31, 2023: £13.871bn). Tatton anticipates that AUM/AUI will exceed its three year strategic “Road Map to Growth” target of £15.0bn by March 2024.
Paradigm, the group’s IFA support services business, has delivered a resilient performance in the period. Paradigm Mortgages participated in mortgage completions totaling £6.9bn (H1 23: £7.3bn).
Mortgage member firms in the period increased to 1,798 (March 31, 2023: 1,751) and Consulting member firms were 437 at the end of the period (March 31, 2023: 431).
Paul Hogarth, founder and CEO of Tatton Asset Management, said: “The group continues to make good progress amidst the continuing backdrop of persistently volatile economic and market conditions.
“It has been very pleasing to see Tatton’s sustained strong organic net inflows in an environment where in general, asset managers have been suffering redemptions. In fact, over the past 18 months, we have consistently achieved an average of £150m in net inflows per month, reaffirming our progress and we now expect to exceed our £15bn ‘Road Map to Growth’ strategy by March 2024.
“Our Paradigm Mortgage business participated in £6.9bn of mortgage completions in a period which saw increasing interest rates and uncertainty in the housing market. As expected, the mix of completions shifted to lower margin products, but overall we are pleased with the resilient performance in H1 23. Paradigm Consulting continues to perform in line with our expectations.”
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GB Group
Today, Chester-based ID verification business, GB Group, said the board is pleased with the first half performance, to September 30, 2023, with excellent progress to drive simplification that will increase the effectiveness of the business.
This ongoing group-wide focus has resulted in cost efficiencies which underpin the board’s confidence that GBG will deliver its FY24 profit expectations, it said.
AIM-listed GBG said first-half revenue was approximately £132.4m (1H23: £133.8m), which represents constant currency growth of 1.8%. Excluding the impact of the year-on-year decline in cryptocurrency customer revenues, first-half growth was 3.3%.
Location delivered high single-digit constant currency revenue growth through new customer and partner wins alongside upsell activity, despite continued weakness in e-commerce volumes, while Fraud achieved low double-digit revenue growth driven by important contract renewals and new business wins.
In line with expectations, Identity revenues declined by approximately three per cent on a constant currency basis. Excluding the year-on-year decline in cryptocurrency customer revenue, Identity was broadly flat, with strong growth in APAC offsetting a tough prior-year comparator in the Americas.
GB said it is also encouraging that, as expected, monthly transaction volumes in Identity have stabilised and it still expects some year-on-year revenue growth in the latter part of the year.
Gross margin was approximately 69.2% (1H23: 71.1%) reflecting the revenue mix in the period. As previously indicated, GBG has continued to focus on group-wide efficiencies while maintaining disciplined investment to capitalise on the long term opportunity in its markets. This has led to a £6m fall in first half operating expenses, despite inflationary pressure.
Overall, GB expects first half adjusted operating profit of approximately £23.7m.
The group’s financial position remains strong. Its year-to-date cash conversion has improved to approximately 100% (1H23: 57.5%) due to a reduction in one-off items. Net debt as at September 30, 2023, was approximately £104.8m (March 31, 2023: £105.9m) after the £10.1m payment of the FY23 final dividend.
GBG intends to release its half-year results on Tuesday, November 28, 2023.
Alasdair Young, analyst with investment bank Panmure Gordon, retained his Buy recommendation on GBG’s stock saying: “We asked for GB Group to ‘be boring for a while’ and that is what has been delivered with the H1 trading update.
“Profit expectations have been reiterated, though a cynic might infer that revenues are a touch light. We also point to a stabilisation of transaction volumes in the all important Identity division. Overall, it feels like things have stopped getting worse.”
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Paul Stockton
Rathbone Group, the private wealth management group with a key base in the Port of Liverpool Building, issued a third quarter update today for the period ending September 30, 2023.
Total funds under management and administration (FUMA), including IW&I, were £100.7bn at September 30, (June 30, 2023: £60.5bn, December 31, 2022: £60.2bn).
Chief executive, Paul Stockton, said: “In September we were delighted to announce the completion of our combination with Investec Wealth and Investment UK (IW&I), welcoming new clients and colleagues into the Rathbones group. There is already a strong level of collaboration across the enlarged group and an ongoing dedication to keeping clients’ interests at the forefront of everything we do.
“We delivered net inflows in wealth management in the quarter in spite of a market backdrop that remains challenging and higher outflows as clients use funds to repay debt or prefer to hold assets in cash for the short term.
“We continue to engage meaningfully with our clients, tailoring our propositions to support their needs. In accordance with consumer duty, both Rathbones and IW&I are committed to acting in the best interests of clients and we remain priced competitively in the market.”
He added: “The scale that Rathbones now has positions us strongly to navigate current conditions successfully. We are confident in delivering the synergies associated with the IW&I transaction, together with our 2023 and 2024 operating margin guidance for the enlarged Rathbones group.”
Rae Maile and Ross Luckman, analysts with invetment bank Panmure Gordon, retained their Hold call for Rathbone stock, saying: “FUM was below our estimates for the core Rathbones business, and Investec has brought a lower starting point of FUM than we had anticipated.
“Although revenues in Q3 matched expectations it was due to interest income, while in future periods our assumptions with respect to FUM bring modest downgrades.
“We are yet to be convinced that the enlarged group will be any better at generating organic growth. There are more attractive ways of playing the secular growth opportunity in the UK Wealth industry, notably Brooks Macdonald, AJ Bell or Quilter.”
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McBride PLC
Manchester-based cleaning products manufacturer, McBride, said it has traded ahead of forecasts in the first three months of the current financial year, despite difficult trading conditions.
it said a volatile inflationary environment has continued to persist. While raw material and packaging material costs remain relatively stable, albeit at significantly higher levels than in previous financial years, other costs such as labour, energy and indirect cost inflation continue to be a source of upward cost pressure.
The group also notes that world events could lead to macro-economic instability which may result in an increased risk of volatility in commodity markets and, ultimately, into further input cost pressures.
However, the continued effect of increases in the cost of living on consumers has meant that demand levels continue to be driven by a shift towards private label products across all markets and as a result, the favourable trading environment and momentum of the second half of fiscal year 2023 has continued into the first quarter of financial year 2024.
The group has continued its focus as a value adding partner with its customers as they increasingly grow their own label proposition. First quarter volumes were eight per cent higher overall compared with the first quarter of fiscal year 2023, with private label growth of 10.8%.
Consequently, for the first three months of the current financial year, McBride said it has traded approximately £8m ahead of internal forecasts at an EBITA level.
