AFH tells market to expect better than forecast results after strong H2

WORCESTERSHIRE IFA AFH Financial has told the market it expects its full year results to be above market expectations following a strong second half.

The Bromsgrove-based business it expected a year on year increase in turnover of more than 30%.

After the strong H2 it said revenues for the year to October 31, 2015 were expected to exceed £20m (H1 2015: £8.22m). Cash balances at year-end were in excess of £3m – good news for the group as it looks to continue its strategy of growth through acquisition.

On this point, the group made 11 acquisitions during the course of the year and the group now has Funds Under Management approaching £2bn.

While consolidating in its core region of the Midlands, the focus of acquisitions during 2015 has been in other key regions including the South West, the South East, the Thames Valley and the North, which the group said reflected its intention of establishing a national footprint.

Not surprisingly, it said it was well positioned to continue taking advantage of ongoing consolidation within the IFA sector.

“There has been a continued increase in the size and rate of IFA companies becoming available for purchase, and in the potential acquirers entering the market. As a consequence, the board is considering additional financing options, including further share issues, to take advantage of the pipeline of opportunities and to potentially enhance the return to shareholders,” it said in the trading update.

Alan Hudson, chief executive of AFH, said the group’s results were particularly encouraging and represented another important milestone in AFH’s journey to become one of the UK’s leading IFAs.

“The board continues to execute its strategy of making selective acquisitions, increasing the breadth of AFH’s national footprint whilst providing a professional and cost effective service to our clients. The Board believes that having proved both the acquisition and integration models AFH is well positioned to take advantage of opportunities as they are presented,” he said.

“It is pleasing to note the increase in our recurring revenue growth, and we look forward to updating the market in February 2016 at the time of our results. We would like to thank our shareholders and staff without whom we would not be reporting this level of profitable expansion.”