AFH Financial remains on course for AIM move in Q2

WORCESTERSHIRE IFA AFH Financial has said it remains on course to fulfil its ambition of graduating to the Alternative Investment Market.

The Bromsgrove-based business told shareholder at its annual general meeting that timetable for the move remained on target for the second quarter of the current financial year.

In an update on trading, the firm said business in the first five months of the current financial year had been in line with the directors’ expectations, with the full contribution of acquisitions made in 2013 reflected in increased revenue for the period.

The directors said they were pleased to report that recurring revenue remained at the 50% level reported in the 2013 financial statements and gross margins remained above 50%.

Alan Hudson, chief executive of AFH, said: “The current year has started strongly, in line with expectations. The disruption caused by the structural changes in early 2013 was not repeated and proposed legislation will create new opportunities for the group and the sector in the medium term. The directors remain confident that the group is well positioned to take advantage of market opportunities as they arise.”

He said that since the group’s year-end, it had continued to strengthen its operating management team, in addition to the board appointments announced in February 2014.

“The cost of continuing to build an infrastructure to support the current and anticipated growth of the group has been achieved to date without impacting margins and further investment is expected throughout the current financial year,” added Hudson.

He added that the pipeline of prospective acquisitions remained strong and further acquisitions were anticipated during the current financial year.

A successful £1.6m equity subscription is being used to provide additional working capital for AFH and to finance potential future acquisitions.  Following the subscription the group had cash reserves of £4.8m with no secured debt.