AFH increases profits by 43 percent

IFA Magazine

AFH has announced an uplift in profits for the year ending 31 October 2016.
The wealth management and financial advisory business saw pre-tax profits rise 43% to 1.7 million (2015: £1.2 million) on revenues up 15% to £24.1 million (£21.0 million).

EBITDA was up 29% to £3.6 million (£2.8 million) and EPS was up 20% to 7.16 pence (2015: 5.95 pence). Dividend increased by 33%.
Gross margin increased to 55% (2015: 52%) and recurring revenue as a percentage of total revenue increased to 68% (2015: 65%).

Funds under management rose 11% to £2 billion (£1.18 billion).

In a statement to the City, AFH highlighted its significant growth potential coming from an increasing organic demand for financial planning led wealth management services and a strong pipeline of acquisition opportunities supported by cash reserves of £6.7 million (£3.7 million). It also said that over 90% of deferred consideration for those acquisitions reaching a deferred consideration milestone was earned and paid during 2016.

AFH Chairman John Wheatley said: “The Group has again proven its ability to increase revenue with strong organic growth that has generated a double digit increase in funds under management during the period whilst improving gross margins. This year has seen the early realisation of the benefits of scale and the infrastructure investment made in previous periods. Continued investment in technology, enabling a digitalised approach to our clients in the future, is expected to accelerate the benefits of scale and the infrastructure investment made in previous periods.

“In a year in which the Group completed two acquisitions, the significant growth and improving margins are testament to the strategy set out by the Board in 2014 to place financial planning through face to face advice at the forefront of our proposition, supported by a strong infrastructure and professional investment management team.

Neil Martin
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