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AFH cash up 40% in 2014

AFH cash up 40% in 2014

Revenues at AFH were up during 2014 as the firm grew both in adviser numbers and funds under management.

The Worcestershire-based advice firm announced as part of its results for the year ending in October 2014 that its FUM now exceeded £1bn and that it had increased its number of advisers to 136 from 122.

In October 2013 FUM stood at £500m but they have since more than doubled while the firm’s total revenue was up 40 per cent from £10.7m to £15m.

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Alan Hudson, chief executive of AFH, said: “The current year has started in line with trading levels experienced during the second half of 2014, with recurring revenue continuing to grow in line with the directors’ expectations.

“The group’s acquisition pipeline remains strong and its cash reserves will allow it to take advantage of the active M&A market in the IFA sector to meet its strategic aims in 2015 and future periods.

“The profitable growth of AFH is due to the hard work and professional approach of our staff and advisers.”

Profits before tax were down from £1.04bn to £861,000 but the firm has attributed this to the one-off cost of listing on the Aim.

When adjusted to take this cost into account, the firm posted increased pre-tax profits of £1.05bn.

AFH listed on Aim in June 2014, joining firms such as Ashcourt Rowan and Lighthouse Group.

During the year AFH bought up seven other firms using funds from EIS-qualifying shares raised over the past two years.

The acquisitions cost the firm an initial £864,000 which could increase to £1.15m depending on trading performance.

As a result of these acquisitions, AFH has expanded into Scotland, Cornwall and East Anglia.

This came as AFH bought Kent-based CIB Wealth Management.

CIB’s five financial advisers, including principal and founder Jonathan Dalby, will be joining AFH. Under the terms of the deal, AFH will pay £973,350 with half of this paid on completion of the sale and the rest over 26 months depending on performance.

Founded in 2010, CIB has £41m under management.

Analyst view

Mark Thomas, an analyst at Edison Investment Research, said: “AFH has shown that being an IFA consolidator can work.

“Last year saw heavy investment in control functions, which should now increase incrementally at a much slower pace, and the completion of acquisitions taking much longer than expected in the FCA review, a market-wide phenomena.

“Despite these drags, profits still grew and in future much more of the revenue growth is expected to drop down to profit.”