Mattioli Woods sees 17% drop in profits
Sipps specialist sees profits fall despite increase in revenues up as it awaits permission to launch discretionary portfolio management service.
Mattioli Woods saw a 17.4 per cent fall in profits to £2m in the six months to November 2011, as the group was hit by a slowdown in investment activity in the first half of this year.
The self-invested personal pensions provider said today (31 January) in its interim report that adjusted profit before tax had fallen despite a 17 per cent jump in revenue to £8.7m and a 28.7 per cent increase to £2.9bn in its assets under administration and advice.
The group also announced that its interim dividend was up 12.1 per cent to 1.85p in the six months to November 2011.
In a statement issued ahead of the company’s interim results, Mattioli Woods predicted lower-than-expected profits and revenue for the first half of the financial year, due to ‘challenging’ market conditions and the decision to advise clients to defer placing investments during the second quarter of the financial year.
Bob Woods, executive chairman, highlighted that there has been “further development” of the group, with the recent Kudos acquisition “bedding-in well”.
He said: “Although revenues were up during the period, adjusted profit before tax fell. We had anticipated a contraction in margin as we invest in the business to secure continued growth, which was coupled with a slowdown in investment activity in the first half.
“Our response to the eurozone crisis has been to keep clients informed and recommend the maintenance of defensive positions.
“While uncertainties over Europe persist, we expect to see increased activity in the second half of this financial year as we advise on the repositioning of clients’ retirement and investment strategies.”
Mr Woods also pointed out that the group is awaiting permission from the Financial Services Authority to launch its discretionary portfolio management service, which will provide a “lower cost and more efficient investment process for certain clients while enhancing our recurring revenue streams”.
Ian Mattioli, chief executive, added: “ Our updated brand has been well received and we are starting to see our investment in this and other marketing initiatives bear fruit, with the launch of DPM set to significantly enhance our wealth management proposition.
“I anticipate we will see increased activity during the remainder of this financial year. If this proves to be the case, I believe we can maintain our record of revenue and profit growth for the full year.”