AFH Financial Group Plc Trading update (5852V)
06 Novembre 2017 - 8:00AM
UK Regulatory
TIDMAFHP TIDMTTM
RNS Number : 5852V
AFH Financial Group Plc
06 November 2017
6 November 2017
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 2017.
Financial highlights
-- Another year of strong growth
-- Revenues for the year expected to exceed GBP33m, up 35%
(2016: GBP24.1m), driven by integration of acquisitions made during
the year and higher average levels of revenue generated by
advisers
-- Continued expansion of EBITDA margin, reflecting operational gearing
-- Funds under Management exceeding GBP2.7bn (2016: GBP2bn),
driven by double digit growth in monies invested by existing and
new clients
Confidence in strategy and outlook
-- Prior and current year acquisitions successfully integrated
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 2017 of GBP8m
-- Board remains confident of future prospects
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 13 IFA businesses
together with the protection business carried on by Eunisure. Total
revenues for the full year are expected to exceed GBP33m (2016:
GBP24.1m), a 35% increase year on year. Approximately half of the
increase was generated by acquisitions completed during the
year.
Whilst the acquisitions have expanded the Company's size and
geographical footprint the organic business continues to provide
the basis for significant growth. Revenue from acquisitions was
approximately GBP4.5m whilst a similar level of growth was
generated organically during the period, representing like for like
growth of 20%.
The results will confirm the Company's ability to successfully
integrate acquisitions. During the year the Company paid over
GBP2.8m 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.
During the year the Company raised GBP10m through a placing that
introduced new institutional investors and which was well supported
by existing shareholders. Over 70% of the funds raised have been
allocated to new acquisitions which are expected to drive future
earnings per share.
As previously highlighted, AFH invested in its digital marketing
platform during 2017 whilst continuing to invest in its people and
business infrastructure to ensure that the Company is able to
support significant future growth.
The Board remains confident of the prospects for further
profitable expansion, both from organic growth expected through
AFH's existing advisers and from the healthy pipeline of
prospective acquisitions.
Commenting, Alan Hudson, Chief Executive of AFH, said:
"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. 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.
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.
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 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."
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
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 company news service from the London Stock Exchange
END
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