Mattioli Woods reaches record client assets in first half

(Sharecast News) - Wealth and asset manager Mattioli Woods said on Tuesday that it achieved a "key milestone" in its first half on Tuesday, with total client assets of the group and its associate increasing £1.3bn to £10.6bn.

The AIM-traded firm said revenue fell 2.6% as expected in the six months ended 30 November to £29.5m, which it put down to reduced special consultancy and administration and reduced statutory requirements for pension schemes.

Recurring revenues increased to 94.3% of total revenue from 91.5%.

Operating profit before financing was down 1% year-on-year at £5.4m, while adjusted EBITDA rose 7.2% to £8.9m.

The company's adjusted EBITDA margin improved to 30.2% from 27.4% a year earlier, while adjusted profit before tax was up 4.5% to £7m.

Basic earnings per share came in at 16.3p, down 3.6%, while adjusted earnings per share improved 1.0% to 20.4p.

The board declared an interim dividend of 7.5p, up 2.7%, with the board reporting that the company was in a "strong" financial position, with cash standing at £18.2m as at 30 November.

On the operational front, Mattioli Woods said its revenue mix remained "strong" with 54% fee-based revenues, while its gross discretionary assets under management rose 28.5% to £3.3bn.

It said its recent acquisitions were performing and integrating well, with Hurley Partners, acquired in July, contributing £0.7m EBITDA.

Further strategic acquisitions of Montagu and the exempt property unit trust administration business of BDO Northern Ireland were made post-period end.

Mattioli Woods said it had made a continued investment in technology, compliance and training, including a strategic investment in Tiller Group as part of a new strategic relationship to develop a digital, self-investment application.

The board said the trading outlook for the current year remained in line with management expectations.

"The first six months of this financial year saw a continuation of the market and economic uncertainty that was a feature for most of 2020," said chief executive officer Ian Mattioli.

"We are pleased to report further progress towards our goals with total client assets up 13.7% to a record £10.6bn for the group.

"Revenue was 2.6% lower than the equivalent period last year as anticipated, due to weaker markets reducing the level of special consultancy and administration activity and the suspension of certain statutory requirements for pension schemes resulting in lower fee-based revenues."

Mattioli said that was offset by positive EBITDA contributions from the Turris Partnership and Hurley Partners, which were acquired in the prior and current financial year, with both continuing to perform and integrate well.

"The positive margin contributions from these recent acquisitions and continued cost management in the period more than offset the impact of reduced revenues.

"We believe the benefits of operating a responsibly integrated business allows us to secure great client outcomes including controlling clients' costs whilst delivering strong, sustainable shareholder returns over the long term.

"The board remains committed to growing the dividend, while maintaining an appropriate level of dividend cover."

Mattioli said that in addition to the positive contribution from recent acquisitions, the group generated an increased share of profit from Amati of £0.4m, whose total funds under management had increased to £761.5m from £581.4m at period end.

"We are pleased by our performance in the first half of the financial year and plan to build on this momentum, advancing our key strategic initiatives: new business generation, growth through strategic acquisitions, developing new products and services including developing our own technology solutions and delivering improved operational efficiencies.

"Our trading outlook for the year remains in line with management's expectations and we believe the Group is 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 future and continues to deliver sustainable shareholder returns."