Mattioli Woods reaches asset 'milestone' as acquisitions perform well

(Sharecast News) - Wealth and asset manager Mattioli Woods achieved a "key milestone" in its first half, it announced on Tuesday, with total client assets increasing £4.5bn, or 43%, to £15.1bn.
The AIM-traded firm said that was driven by its largest acquisitions to-date, adding that revenue increased 69.1% to £49.9m for the six months ended 30 November.

It said that was driven by a contribution from acquisitions of £19.4m, the return of strong organic growth of 11.1% adding £3.1m revenue, and increased new client wins, as 515 were added in the period.

Mattioli Woods said recurring revenue represented 87.7% of total revenue, down from 94.3%.

Operating profit before financing totalled £2.8m, falling 26.7% from a restated £3.9m due to acquisition-related costs, while adjusted EBITDA improved 76.9% to £15.8m.

Its adjusted EBITDA margin expanded to 31.6% from a restated 30.2%, and the company's adjusted profit before tax was ahead 95.9% at £14.1m.

Basic earnings per share fell 69.3% to 3.5p, while adjusted earnings were 13.3% firmer at 23.8p per share.

The board declared a 10.7% hike in the interim dividend to 8.3p per share.

Mattioli Woods said it was in a "strong" financial position, with cash totalling £44.3m as at 30 November, up from £18.2m.

The company said its outlook for the current year remained in line with management expectations, adding that it would continue its focus on organic growth, complemented by strategic acquisitions with a "strong" pipeline of opportunities.

"We are pleased by our performance in the first half of the financial year, which has seen the group thrive," said chief executive officer Ian Mattioli.

"We plan to build on this positive momentum, advancing our key strategic initiatives - new business generation, growth through the integration of strategic acquisitions, developing new products and services, reviewing our processes and investing in technology to deliver an improved digital client interface and further operational efficiencies."

Mattioli said the board believed the group was "well-positioned" to grow both organically and by acquisition.

"We are committed to delivering our ambitious growth strategy and in doing so create a business that remains responsibly integrated for the benefit of our clients and well-positioned to deliver sustainable shareholder returns."

Analysts at Canaccord Genuity noted that Mattioli Woods' recent acquisitions were indeed integrating and performing well, with both Maven and Ludlow trading ahead of budget.

"Maven has delivered performance fees ahead of expectations following profitable exits and is delivering revenue synergies having completed its first co-investment with qualifying MTW clients," they noted.

"Ludlow has experienced stronger new client wins than anticipated, particularly HNWs."

Canaccord lifted its revenue forecasts by 4% for the 2022 financial year, and by 2% for 2023.

"This is principally driven by the strong trading of Maven - performance fees greater than originally expected," the analysts said.

"There is no change to adjusted EBITDA or earnings per share in 2022, as increased variable compensation negates the impact.

"An increase to costs in 2023 and 2024 results in a 3% and 6% cut respectively to earnings per share," they added, highlighting IT and staff costs.

At 1007 GMT, shares in Mattioli Woods were up 1.24% at 815p.