AFH, the Bromsgrove head-quartered national consolidator, has released half year growth results strongly influenced by their acquisition strategy.
Both profit before tax and turnover have been boosted by 42% over the last six months, fuelled by a growth in funds under management of 44%, from £1.3 million to £1.88 million. Recurring income as a percentage of total income remained flat at 66%, highlighting the additional strength of their new business strategy.
In 2015 AFH completed 11 acquisitions, and earlier this year we reported that the business had raised £6.1 million to fund further acquisitions – cementing its commitment to this growth strategy.
AFH has 2 acquisition offerings: a straight buy-out proposition best suited for retirees and those looking to leave the industry, and a ‘buy and keep’ option for those looking to crystalise the value of their business and work on in a bigger organisation. Alan Hudson, CEO, tends to meet all potential vendors face-to-face to assess the fit.
Going forward, with increased competition in the M&A market, and pressure to complete deals coming both from other national consolidators but also large regional and small local players, AFH set out their position, including counselling shareholders that volumes of completed deals will likely decrease.
It said: ‘The last 12 months have seen a number of large merger and acquisition transactions in the wealth management sector completed at multiples well in excess of historic valuations, as wealth managers seek greater distribution and economies of scale.
‘Whilst AFH has developed a strong pipeline of targets it remains the policy of the Board only to acquire businesses that: will be value enhancing for shareholders; reflect the culture of the company; and can be integrated seamlessly into the AFH business.
Whilst the number of acquisitions in the current year is unlikely to match the 11 transactions in 2015 this selective policy is believed by the board to be in the long term interest of all shareholders.’
Commenting on today’s announcement, Hudson said: “‘Our strong first half results demonstrate AFH’s continued successful momentum. Strong organic growth, complemented by contributions from our acquisitions, drove increased earnings per share by almost a third, compared with the same period last year.”
If you are interested in understanding further the opportunities of selling your business to AFH, contact Gunner & Co.: Louise.Jeffreys@gunnerandco.com
Read the full results release here.
