AFH Financial Group reports another year of 'profitable' expansion
AFH Financial Group
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16:04 17/06/21
Financial planning and wealth management firm AFH Financial Group updated the marker on its trading for the 12 months to 31 October on Monday, reporting another year of “strong growth”.
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The AIM-traded company said revenues for the year were expected to exceed £33m - up 35% - driven by the integration of acquisitions made during the year, and higher average levels of revenue generated by advisers.
It reported continued expansion of its EBITDA margin, which the board claimed reflected its operational gearing.
Funds under management now exceeded £2.7bn, up from £2bn at the end of 2016, which was said to have been driven by double digit growth in monies invested by existing and new clients.
Prior and current year acquisitions were successfully integrated, it added, and deferred earn outs continued to be paid at over 90% of target.
AFH said it was “well positioned” to continue to take advantage of ongoing IFA market consolidation, with a “strong” pipeline of potential acquisitions currently under negotiation.
Cash balances at 31 October stood at £8m, with the board remains confident of future prospects.
“I am encouraged by the strong progress we have made in 2017 and the continued realisation of the revenue and profitability targets that we have set ourselves,” said chief executive Alan Hudson.
“AFH continues to be active in the market to acquire good quality IFAs whilst remaining focussed on ensuring shareholder value by executing acquisitions that are earnings accretive.
“The success and robustness of our acquisition model is reflected in the high level of acquisitions meeting earn out targets and the strong cash flow generated by the business to finance these earn out payments.”
Hudson said he believes that shared values were “critical” in creating successful acquisitions that bind both advisers and clients to the AFH group, adding that he was “pleased” at the high level of advisers who remained with AFH “many years” after their earn out had been completed.
“AFH has continued to attract new funds throughout the year and I am pleased to report double digit organic growth in our Funds under management.”
The board would continue to execute its strategy of making selective acquisitions and increasing AFH's national footprint, Hudson explained, while providing a “professional and cost effective” service to clients.
“The board believes that AFH remains well positioned to take advantage of opportunities as they arise.
“I am pleased to note the continued increase in our recurring revenue and our EBITDA margin, and we look forward to updating the market further in January 2018 at the time of our full year results.
“We would like to thank our shareholders and staff, without whom we would not be reporting this level of profitable expansion.”