Listed adviser AFH Financial has raised £750,000 through the placing of new ordinary shares, which it says will be used to continue its acquisition-led growth strategy.
AFH will place 535,716 new ordinary shares of 10 pence each at 140 pence per share, a discount of approximately 3.4 per cent. The shares will represent approximately 2.7 per cent of the company’s enlarged ordinary share capital immediately following admission.
The placing follows on from the acquisition of Independent Financial Services, which completed on 30 April. Following the deal, AFH’s total funds under management are approximately £1.7bn.
As a result of the size of the acquisition and regulatory requirements, IFS is not being immediately integrated into AFH’s existing infrastructure and will be operated as a separate entity for the remainder of the financial year ending 31 October, the company confirmed.
AFH will therefore incur the existing cost base of IFS during the remainder of the current financial year. The board is also expecting, as announced on 1 May, to incur in the current financial year one-off restructuring and integration costs of circa £500,000 in relation to the deal.
The firm remains cash generative at the operating level and will have £4.75m of cash following the placing.
AFH is currently undertaking due diligence on several acquisitions which it expects to conclude in the coming months.
An official statement read that the remainder of the current financial year it will be focusing on core business, integrating IFS and other acquisitions, and implementing operational improvements to ensure that the business can accommodate future growth.
Alan Hudson, chief executive of AFH, added: “Our cost base has increased in the current financial year as a result of the IFS acquisition but our shareholders will see the rewards of our investment in acquisitions in the following financial years.”
peter.walker@ft.com
