Tue 5 Feb 2019 07:11 by ukcitymedia.co.uk about : trading updates - 0 Comments - 2573 words
Mattioli Woods plc (AIM: MTW.L), the specialist wealth management and employee benefits business, today reports its interim results for the six months ended 30 November 2018.
· Revenue up 2.8% to £29.2m (1H18: £28.4m)
· Recurring revenues1 represent 89.7% (1H18: 84.5%)
· Profit before tax up 3.7% to £5.6m (1H18: £5.4m)
· Adjusted profit before tax2 up 8.3% to £6.5m (1H18: £6.0m)
· Operating profit before financing of £5.4m (1H18: £5.4m):
- £0.1m (1H18: £0.4m) gain on revaluation of Amati option
· Adjusted EBITDA3 up 18.5% to £7.7m (1H18: £6.5m):
- Adjusted EBITDA margin4 of 26.4% (1H18: 22.9%)
· Basic EPS up 0.6% to 17.0p (1H18: 16.9p)
· Adjusted EPS5 up 9.2% to 20.1p (1H18: 18.4p)
· Interim dividend up 15.1% to 6.33p (1H18: 5.5p)
Operational highlights and recent developments
· Revenue mix remains primarily fee based
· Lowered clients' costs while improving margin through operational efficiencies
· Total client assets6 up 0.7% to £8.79bn (31 May 2018: £8.73bn)
· Gross discretionary AuM7 up 0.9% to £2.36bn (31 May 2018: £2.34bn)
· Recent acquisitions performing and integrating well
· New £15.3m freehold Leicester office now fully operational
· Strong financial position, with net cash of £16.4m8 (1H18: £14.8m)
· Profit outlook for year in line with management's expectations
1Annual pension consultancy and administration fees; ongoing adviser charges; level and renewal commissions; banking income; property, discretionary portfolio and other annual management charges.
2 Before acquisition-related costs, amortisation and impairment of acquired intangibles, changes in valuation of derivative financial instruments and notional finance income and charges.
3 Earnings before interest, taxation, depreciation, amortisation, impairment, changes in valuation of derivative financial instruments and acquisition-related costs, including share of profit from associates (net of tax).
4 Adjusted EBITDA divided by revenue.
5 Adjusted profit after tax used to derive adjusted EPS is calculated as adjusted profit before tax less income tax at the standard rate of 19.0% (1H18: 19.0%).
6 Includes £308.7m (31 May 2018: £286.0m) of funds under management by the Group's associate, Amati Global Investors Limited, excluding £28.6m (31 May 2018: £27.0m) of Mattioli Woods' client investment and £10.9m (31 May 2018: £12.1m) of cross-holdings between TB Amati Smaller Companies Fund and Amati AIM VCT plc.
7 Includes £348.1m (31 May 2018: £325.1m) of funds under management by Amati Global Investors Limited, including Mattioli Woods' client investment and cross-holdings between TB Amati Smaller Companies Fund and Amati AIM VCT plc.
8 Cash and short-term deposits less £0.4m of VAT reclaimed on behalf of, and to be repaid to, clients.
Commenting on the results, Ian Mattioli MBE, Chief Executive Officer, said:
"I am pleased to report another period of sustainable profit growth, achieved against the backdrop of a complex market. As highlighted in our January trading update, revenue growth in the period was slightly lower than expected due to a combination of the Group reducing clients' costs and general market conditions. The financial impact of this was more than offset by the realisation of operational efficiencies and other administrative cost savings, resulting in Adjusted EPS increasing 9.2% to 20.1p (1H18: 18.4p).
"We believe the benefits of operating an integrated business allows us to secure great client outcomes while reducing clients' costs and delivering strong, sustainable shareholder returns. Accordingly, the Board is pleased to recommend the payment of an increased interim dividend, up 15.1% to 6.33p per share (1H18: 5.5p). The Board remains committed to growing the dividend, while maintaining an appropriate level of dividend cover.
"The Broughtons Financial Planning business brought into the Group during the first half has integrated well and contributed positively to our trading results since acquisition, increasing earnings and enhancing value. In addition, the Group generated an increased share of profit from Amati, whose total funds under management had increased to £337.3m (31 May 2018: £313.0m) at 30 November 2018.
"While there remains uncertainty around Brexit it will continue to impact markets and consumer confidence. Our integrated model means we are well-positioned to proactively advise our clients and we anticipate we may see an increased demand for advice once the shape of Brexit becomes clearer.
"Unlike many wealth managers, the majority of the Group's revenues are fee-based, rather than being linked to the value of assets under management, administration or advice, giving our business a revenue profile that is less sensitive to market performance.
"Although there is some caution around markets, we believe the Group is well placed to secure further growth, both organically and by acquisition, and further consolidation within our core markets remains likely. We continue to manage our clients' assets and the Group's cost base with care. Our profit outlook for the year remains in line with management's expectations and I am confident we can secure further progress towards the ambitious longer-term goals we have set."
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