Listed financial adviser AFH Financial plans to expand its national presence during 2015 by acquiring firms in London and the south east.
In a trading update published today (4 November), the board said that during recent months it had spotted an increase in the size and rate of IFA companies becoming available for purchase, and expects this trend to continue throughout next year.
AFH said while cash balances are in excess of £5m, it is considering additional financing options and may use fixed interest instruments, alongside its equity base, to introduce a modest level of gearing into the company’s balance sheet in the current financial year, to take advantage of this developing trend and to potentially enhance the return to shareholders.
Since AFH’s admission to Aim in June, the number and size of potential acquisition targets has grown, the wealth manager’s board stated.
It has completed seven acquisitions, financed by positive trading cash-flow, over the last 12 months and funds under management recently exceed £900m.
Yesterday, the firm announced it had acquired the assets of Cornwall-based chartered financial planners Knight O’Byrne Limited for a maximum of £1.2m, adding £51m of funds under management.
The acquisition model is based on a capped earn out over a two-year period, with the initial consideration set at about 50 per cent of the anticipated total value.
Final results for the year ended 31 October 2014 are expected for release in March 2015.
Alan Hudson, chief executive of AFH, said: “The company’s results for 2014 will represent another important milestone in AFH’s journey to become one of the UK’s leading IFAs.
“The board continues to execute its strategy of making selective acquisitions and increasing the breadth of AFH’s national footprint.
“I look forward to updating the market in March, a statement which will reflect continued hard work and strong performance during challenging economic times.”
emma.hughes@ft.com
