Specialist adviser Frenkel Topping has seen its gross profit fall by just over 11 per cent in a year, but its chief executive is confident the company will double last year’s profits by 2017.
The Aim-listed company saw its gross profit hit £1.6m in the first half of the year, down from the £1.8m reported in the first half of 2015.
According to Frenkel Topping’s interim results for the six months ending 30 June, the firm also saw its operating profit halve, hitting £0.3m from 2015’s figures of £0.6m.
But the company has spent the past six months focusing on its push into the discretionary fund management space after it was given the green-light to launch Frenkel Topping Investment Management in March.
The new business is geared up to manage increasing assets in the coming years, and Frenkel has started moving £90m of client funds to FTIM.
Jason Granite, executive chairman of Frenkel Topping, said the company’s “developmental” strategy in the first half of the year means it is “well placed” to expand its operations and client base.
“Having laid the foundations for growth during the period the company remains on track to double 2015’s operating profitability by 2017.”
He also said the company is “on track” to migrate £350m by the end of this year.
The firm’s revenue has remained flat at £2.9m for the first six months of the year, which is the same figure reported for the period last year.
Assets under management have nudged up slightly to £687m, from £640m on 30 June 2015, and its interim dividend has gone up to 0.2375p per share from 0.19p.
Mr Granite said: “We expect the benefits of our new strategy to feed through more rapidly during the second half now the migration of funds has commenced.
“We have a wider potential customer base, a highly competitive pricing structure and are also benefiting from savings generated by renegotiated terms.”
Duncan Hall, analyst at broker firm FinCapp, said: “I believe Frenkel Topping is at the beginning of an exciting growth phase.”
He said 2016 represents a “period of transition” for the group as it develops its sales resource and investment management offering, adding however the direction of travel is clear.
“As the effect of new business growth and the conversion of assets under management to DFM services is time-weighted, the financial impact will become clearer in following years.”
katherine.denham@ft.com
