Mattioli Woods plc (AIM: MTW.L), the specialist wealth and asset management business, is pleased to report its final results for the year ended 31 May 2023.
Mattioli Woods is creating a responsibly integrated, full-service wealth management group, growing organically through its distribution network of 138 core consultants and investment management offering, and through the acquisition and integration of complementary businesses, with the aim of enhancing the Group's client proposition while delivering strong shareholder returns.
· Total client assets of the Group and its associate rose 2.7% to £15.3bn (2022: £14.9bn);
· Revenue increased 2.8% to £111.2m (2022: £108.2m) driven by combination of:
- Continued organic revenue growth of 3.7% to £75.7m (2022: £72.9m) partially offset by the market impact on ad valorem, placement and performance fees;
- Positive contribution from acquisitions up 0.7% to £35.5m (2022: £35.3m);
- Increased total value of new client wins up 14.6% reflecting business development initiatives;
- Improved new client lead generation with increased new business pipeline up 16.2% versus prior year;
· Adjusted EBITDA increased 1.8% to £33.2m (2022: £32.6m);
· Adjusted EBITDA margin of 29.8% (2022: 30.1%);
· Adjusted EPS3, of 47.8p (2022: 48.3p) with organic growth offset by impact of new shares issuances for acquisitions in 4Q23;
· Proposed final dividend of 18.0p (2022: 17.8p), giving a total dividend up 2.7% to 26.8p (2022: 26.1p), keeping in-line with the Board's commitment to a progressive dividend policy;
· Strong cash position, with £45.1m of cash at 31 May 2023.
Operational highlights and recent developments
· Diversified revenue mix with 37% (2022: 35% restated) fixed, initial or time-based fees uncorrelated to market performance;
· Gross discretionary AuM of £4.8bn (2022: £5.1bn), with net inflows of over £68.1m in the year;
· Increased number of core consultants in the year to 138 (2022:133);
· Acquisition of Doherty Pension & Investment Consultancy Limited ("Doherty") and 50.1% stake in White Mortgages Limited ("White");
· Recently acquired businesses including Maven Capital Partners LLP ("Maven"), Ludlow Wealth Management Group Limited ("Ludlow"), Richings Financial Management Limited, Doherty and White delivering organic growth, revenue synergies, product diversification and integrating well;
· Implementation of Xplan CRM and operating system progressing in line with plan to deliver improved operational efficiency and enhanced client service.
· Outlook for the current year remains in line with management's expectations;
· Group remains well positioned for the year ahead with a strong platform and integrated model enabling multiple client engagement points to facilitate growth; and
· Continued focus on new business generation including synergies with acquired businesses, advancing key strategic initiatives and improved operational efficiency complemented by strategic acquisitions.
· Appointment of Michael Wright as Deputy Chief Executive Officer to lead and support the delivery of certain strategic goals alongside the Executive team while retaining his current responsibilities; and
· As part of our long-term strategic planning, David Kiddie stepping down as Non-Executive Chair at the next Annual General Meeting ("AGM") to take on a consultancy role with the Group given his extensive career in investment management to support the continued development and structure of the Group's investment proposition required for the next phase of growth.
· Anne Gunther currently our experienced senior independent, non-executive director becomes Group Non-Executive Chair, subject to regulatory approvals.
1 Includes £829.2m (2022: £1,100.5m) of funds under management by the Group's associate, Amati Global Investors Limited, excluding £73.0m (2022: £93.6m) of Mattioli Woods' client investment and £11.7m (2022: £14.8m) of crossholdings between the TB Amati Smaller Companies Fund, TB Amati Strategic Metals Fund and the Amati AIM VCT plc.
2 Annual pension consultancy and administration fees; ongoing adviser charges; level and renewal commissions; banking income; property, discretionary portfolio and other annual management charges adjusted for Private Investor Club initial fees.
3 This is an alternative performance measure ("APM") the Group reports to assist stakeholders in assessing performance alongside the Group's results on a statutory basis. APMs may not be directly comparable with other companies' adjusted measures and are not intended to be a substitute for, or superior to, any IFRS measures of performance. Supporting calculations for APMs and reconciliations between APMs and their IFRS equivalents are set out in the alternative performance measure workings section of the Annual Report. See 'Alternative Performance Measures' section for further details of APMs.
4 Calculated as earnings before interest, taxation, depreciation, amortisation, acquisition-related costs, platform project costs, contingent consideration treated as remuneration and including share of profit from associates (net of tax).
5 Adjusted EBITDA divided by revenue.
6 Adjusted profit after tax used to derive adjusted EPS is calculated as adjusted profit before tax as defined above less income tax at the blended standard rate of 20% (2022: 19%).
7 Includes £913.9m (31 May 2022: £1,208.9m) of funds under management by Amati Global Investors Limited, including Mattioli Woods' client investment and crossholdings between TB Amati Smaller Companies Fund, TB Amati Strategic Metals Fund and Amati AIM VCT plc.
Commenting on the results, Ian Mattioli MBE, Chief Executive Officer, said:
"The last few years have been complex for our clients. This has reinforced our commitment to putting clients first and developing our service offering. We are building a business that is sustainable and ethical, but resilient over the long term, and I am pleased to report this approach has delivered revenue growth of 2.8% to £111.2m, reflecting the combined impact of organic growth of 3.7% and the revenue contribution of recent acquisitions being partially offset by the market impact on ad valorem, placement and performance fees. Adjusted EBITDA was up 1.8% to £33.2m and adjusted EBITDA margin was 29.8% with the positive impact of the change in revenue mix following the acquisitions made during the current and prior year being partially offset by inflationary increases in administrative expenditure.
"Basic EPS was up 79.9% to 14.9p and adjusted EPS of 47.8p was down (0.9%). The Board is pleased to propose a final dividend of 18.0p per share. This makes a proposed total dividend for the year of 26.8p a year-on-year increase of 2.7%, demonstrating our desire to deliver value to shareholders and confidence in the outlook for our business.
"We expect the current macroeconomic conditions and recent legislative changes to drive continued demand for high quality advice as we expand capacity within our adviser training academy to train a greater number of advisers each year, seeking to capitalise on the current 'advice gap' and drive strong organic growth in our financial planning and specialist pension consultancy businesses.
"We are progressing our other strategic initiatives, including the roll-out of our new, Group-wide client relationship management system Xplan. We are confident in the resilience of our business model and excited by the opportunity to accelerate growth and make meaningful progress towards our strategic goals. While inflationary cost pressures and investment in our strategic initiatives may impact margins in the short term, we are confident that we will continue to deliver attractive, long-term sustainable shareholder returns.
"Our focus remains on delivering great client outcomes. We have continued to develop our client proposition, reviewing the range of investment management options we offer and identifying opportunities to enhance the proposition and realise revenue synergies across the Group. The implementation of Consumer Duty regulations brings a welcome focus to the value that clients derive from the various services we offer and accords with our principles of integrity and professionalism.
"Previously acquired businesses are integrating well, with synergies being realised and additional cross-sell opportunities targeted for the new financial year.
"There continues to be a high level of M&A activity in the wealth and asset management sector and we were pleased to complete the acquisition of Doherty and our investment in White during the year. We have a strong pipeline of bolt-on acquisition opportunities to assess, as well as potentially more substantial opportunities in the longer term. We plan to build on our track record of successful acquisitions by continuing to assess and progress opportunities that meet our strict criteria.
"Our Executive team continues to bring new ideas to drive further growth and generate sustainable shareholder returns. We were pleased to announce the appointment of Michael Wright as Deputy Chief Executive Officer to lead and support the delivery of certain strategic goals alongside his current responsibilities. I wish to thank David Kiddie for serving a 3-year term as Non-Executive Director and more recently as Non-Executive Chair as he steps down from this role at the next AGM as part of our long-term strategic planning. We are pleased to retain David's services in a consultancy role with the Group given his expertise and extensive career background in investment management. His insight will be invaluable to support the continued development and structure of the Group's investment proposition required to deliver our next phase of growth.
"Over 31 years since founding the Company, I continue to be thankful and humbled by the enduring culture of professionalism, positive mindset and commitment that our entire team continues to show when managing our clients' affairs throughout another complex year. I look forward to the future with confidence".