MJ Hudson reports 'marked improvement' in trading

(Sharecast News) - Asset management services company MJ Hudson updated the market on its financial year just ended on Thursday, reporting a "marked improvement" in trading in the second half, as the general recovery in activity in private markets accelerated and existing business momentum continued in outsourced regulation, ESG, data and analytics.
The AIM-traded firm said that as a result, and despite the disruption from the Covid-19 pandemic that impacted the first half ended December, it was expecting to deliver results for the 12 months ended 30 June "broadly in line" with market expectations.

It said group underlying revenue grew over 25% in the year, compared with 14.4% in the first half ended December, including maiden contributions from recent acquisitions PERACS and Bridge.

As in prior years, June was the strongest month in the period.

Organic growth was undergoing an improving trend, with organic revenue growth excluding acquisitions in the second half also over 25%, compared with 3.6% in the first half.

That, the board said, highlighted the impact of the return of new fund launch activity in the advisory division, the annuity aspects of the outsourcing division, and the strength of the more secular growth drivers in the data and analytics division, particularly in environmental, social and governance (ESG) where revenues were close to doubling compared with 2020.

In addition, organic investments were EBITDA positive in total in the second half.

The board also confirmed that dividend payments were set to commence, with the company expecting to announce its maiden dividend with its preliminary results.

Looking at its current trading, MJ Hudson said it had made a "strong start" to the 2022 financial year, underpinned by the momentum generated in the second half of 2021 from improved organic revenue growth, new client wins and recent mergers and acquisitions.

The group said it was continuing to explore further merger and acquisition opportunities in discussions with growth-oriented management teams with business models that it believed could be accelerated with the support of the group's brand, capital and international client base.

"Having seen signs of recovery among our clients in our interim results to end December 2020, I am delighted to see this translate into our financial results for the second half," said chief executive officer Matthew Hudson.

"Organic revenue growth has returned to double digits with new client wins across the group.

"We announced two new acquisitions in recent months, Clarus and SCFL, which add to the outsourcing, and data and analytics divisions."

Hudson said the business "took off" in the second half, which had continued into the new financial year.

"Our three major growth trends of increased assets under management in private markets, increased regulation - especially within ESG - and the growth of outsourcing in asset management operations are all accelerating out of the pandemic dip.

"Meanwhile, we are embracing a range of pressing growth opportunities and investing in new digital products and technology.

"The current financial year has started well and will benefit from a well-established recovery trend, a full contribution from deals done in 2021 and further investment."

MJ Hudson said it would release its preliminary financial results for the year ended 30 June in late October.

At 1338 BST, shares in MJ Hudson were down 2.21% at 52.56p.