AFH Financial Group PLC (AIM: AFHP), a leading financial planning led wealth management firm, today announces the Group's consolidated audited results for the period ending 31 October 2018 reflecting continued growth, an increase in Earnings per Share of 43% and a 50% increase in dividend per share.
Exceptional organic growth delivered through captive distribution model
- Revenues up 51% to £50.7 million (2017: £33.6 million)
- Underlying* EBITDA up 85% to £10.4 million (2017: £5.7 million)
- Underlying* EBITDA margin increased to 21% from 17%
- Profit after tax up 94% to £6.0 million (2017: £3.1 million)
- Earnings per share up 43% to 16.0 pence (2017: 11.2 pence)
- Underlying* Earnings per share up 34% to 22.7 pence (2017: 17.0 pence)
- Dividend per share up 50% to 6.0 pence (2017: 4.0 pence)
- Funds under Management up 58% to £4.4 billion (2017: £2.79 billion)
*Underlying excludes amortisation of intangible assets arising on business combinations and the non-cash charge for share based payment costs.
Significant growth potential
- Increasing organic demand for financial planning led wealth management services
- Proven track record of successful acquisitions and integration - the average deferred pay-out for acquisitions reaching a performance milestone exceeded 90% of the target deferred consideration during 2018
- Well positioned to continue to take advantage of ongoing IFA market consolidation
- Delivering operational efficiencies and improved experience to clients by investment in technology and infrastructure and reducing investment costs by leveraging the increased scale of AFH
- New three to five year aspirational targets set: Funds under Management of £10 billion; revenues per annum of £140 million; and Underlying EBITDA margin of 25% on revenue
- Strong balance sheet following successful £15 million placing completed in October 2018
- Solid foundations in place to deliver on strategy to become the number one financial planning-led investment manager in the UK
Alan Hudson, Group Chief Executive, commented:
"I am encouraged by the strong progress we made in 2018 as we continue to deliver on our strategy of harnessing solid organic growth with value adding acquisitions, with the aim of becoming the leading financial planning-led investment manager in the UK. These excellent full year results have been driven by the continued increase in our recurring revenue and our underlying EBITDA margin exceeding 20%, the achievement of the first of three medium term financial aspirational targets that we set in 2017. As announced on 3 December 2018, the second of these targets, achieving Funds under Management in excess of £5 billion, was met following the year end and the Board is confident that the final aspirational target of revenues of £75 million per annum will be achieved ahead of our original expectations.
"Notably, the year under review produced our fifth consecutive year of growth and improved profitability since joining AIM in 2014. Increased revenues and improved margins resulted in a 43% increase in Earnings per share to 16.0p after considering the dilutive impact of our successful fundraisings in December 2017 and October 2018. Underlying Earnings per share, excluding amortisation of our acquired client portfolios increased by 34% to 22.7p.
"The Company strategy to increase shareholder value through the expansion of the AFH community remains at the heart of our growth. This strategy continues to be driven by a combination of organic growth through greater productivity of our advisers and by value accretive acquisitions.
"To this end and in light of the strong financial performance seen in 2018 and first three months of the new financial year, we have set three new three to five year aspirational targets, which if achieved will further cement our position as one of the leading financial planning led-investment management companies in the UK. These aspirational targets include achieving Funds under management of £10 billion, revenues per annum of £140 million and Underlying EBITDA margin of 25% on revenue.
"Looking to the year ahead, we strive to continue to deliver on this year's exceptional progress through continued organic growth and the integration of further acquisitions and look forward to updating shareholders on our developments and milestones as the year progresses."