TIDMAFHP TIDMTTM
RNS Number : 9088G
AFH Financial Group Plc
12 November 2018
12 November 2018
AFH FINANCIAL GROUP PLC
("AFH" or the "Company")
TRADING UPDATE
The Board of AFH, a leading financial planning led wealth
management firm, is pleased to provide the following update on
trading for the twelve months ended 31 October 2018.
Financial highlights
-- Another year of strong growth
-- Revenues for the year expected to exceed GBP50m, up 49%
(2017: GBP33.6m), driven by integration of acquisitions made during
the year, continuing progress of previous acquisitions and higher
average levels of revenue generated by existing advisers
-- Continued expansion of EBITDA margin, reflecting operational gearing
-- Funds under Management reached GBP4.5bn in October 2018 (2017: GBP2.8bn)
-- Trading for the full year in line with current market expectations
-- Board remains confident of the Company's prospects and
achieving its stated objectives of revenues of GBP75m, underlying*
EBITDA margin of 20% and GBP5bn Funds under Management.
* Underlying excludes amortisation of intangible assets arising
on business combinations and the non-cash charge/credit for share
based payment costs
Confidence in strategy and outlook
-- 16 acquisitions completed during the year, total anticipated consideration of GBP34m
-- Prior and current year acquisition integrations in line with
expectations and deferred earn outs continue to be paid at over 90%
of target
-- AFH is well positioned to continue to take advantage of ongoing IFA market consolidation
-- Strong pipeline of potential acquisitions currently under negotiation
-- Cash balances at 31 October 2018 of GBP22m, following
successful institutional placings of GBP17.5m in December 2017 and
GBP15m in October 2018
During the last twelve months, the Company has enjoyed strong
organic growth, with a significant increase in its recurring fee
income, and has completed the acquisition of 16 businesses,
extending both the Company's size and geographical footprint. Total
revenues for the full year are expected to reach GBP50m (2017:
GBP33.6m), a 49% increase year on year, of which approximately
GBP4m was generated by acquisitions completed during the year.
The organic business continues to provide the basis for
significant growth. Of the expected total revenue of GBP50m for the
year, GBP20m was generated organically as new business. In addition
to the funds of acquired businesses, over GBP450m of gross funds
was received from new and existing clients, representing year on
year growth of 16%.
The results will confirm the Company's ability to successfully
integrate acquisitions. During the year the Company paid over
GBP3.58m in deferred earn out consideration in respect of
acquisitions from prior years, at an average level above 90% of the
price negotiated for those acquisitions. This reflects the strong
performance of the acquired businesses within AFH and proven track
record of successful acquisitions.
During the year, the Company raised GBP32.5m through two
placings that introduced a number of new institutional investors
and were well supported by existing shareholders. Over 90% of the
funds raised in the December 2017 placing were used to make new
acquisitions during the year which are expected to drive future
earnings per share.
The Board remains confident of the prospects for further
profitable expansion, both from organic growth generated through
AFH's existing advisers, and from further acquisitions.
On 2 November 2018, following the year end, the Company
announced the acquisition of Premier Wealth Management Harrogate
Limited for a maximum consideration of GBP4.5m. Following the
successful GBP15m October placing, the Company is well positioned
to execute on its healthy pipeline of prospective acquisitions.
Commenting, Alan Hudson, Chief Executive of AFH, said:
"I am encouraged by the exceptional progress we have made in
2018 towards the realisation of the revenue, profitability and
Funds under Management targets that we set ourselves. The ability
to grow revenues by 49% whilst continuing to expand our EBITDA
margin reflects the success of the Company's strategy.
During the year we have completed on 16 acquisitions 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 continued
high level of acquisitions meeting earn out targets and the strong
cash flow generated by the business to finance these earn out
payments.
I believe that shared values are critical in creating successful
acquisitions that bind both advisers and clients to the AFH group
and am pleased at the high level of advisers who remain with AFH
many years after their earn out has 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, which now exceed GBP4.5bn.
The support of new and existing institutional shareholders
throughout the year has provided the Company with the funds to
continue to acquire a number of earnings accretive IFA businesses,
whilst expanding our national footprint at a time when the
requirement for financial planning and personal asset management
continues to grow. Our fundraising in October, against the backdrop
of difficult equity markets, has enabled us to continue to evaluate
several attractive future acquisition opportunities.
The Board will continue to execute its strategy of making
selective acquisitions and increasing AFH's national footprint
whilst providing a professional and cost effective service to our
clients. The Board believes that AFH remains well positioned to
take advantage of opportunities as they arise.
I look forward to updating the market further in January 2018,
at the time of our results. We would like to thank our
shareholders, advisers and staff, without whom we would not be
reporting this level of profitable expansion."
Enquiries:
AFH Financial Group PLC 01527 577 775
Alan Hudson, Chief Executive Officer
Paul Wright, Chief Financial Officer
www.afhfinancialgroup.com
Liberum (Nominated Adviser and Broker) 020 3100 2000
John Fishley/Richard Bootle /Euan Brown
This announcement is released by AFH Financial Group plc and
contains inside information for the purposes of Article 7 of the
Market Abuse Regulation (EU) 596/2014 (MAR), and is disclosed in
accordance with the Company's obligations under Article 17 of
MAR.
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055, this announcement is being made on
behalf of the Company by Paul Wright, Chief Financial Officer.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
TSTUKAKRWVAARRA
(END) Dow Jones Newswires
November 12, 2018 02:00 ET (07:00 GMT)
Afh Financial (LSE:AFHP)
Historical Stock Chart
From Apr 2024 to May 2024
Afh Financial (LSE:AFHP)
Historical Stock Chart
From May 2023 to May 2024