CompaniesNov 9 2015

Consolidator raising cash to fund more IFA purchases

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Consolidator raising cash to fund more IFA purchases

Alan Hudson, chief executive of AFH, has revealed while the financial planning business has enough cash to fund previously announced acquisitions it wants to bolster reserves and buy more.

As at 31 October 2015, the company had cash balances in excess of £3m and remains fully funded to satisfy the deferred consideration liabilities of announced acquisitions as they fall due.

But Mr Hudson said there has been a continued increase in the size and rate of IFA companies becoming available for purchase, and in the potential acquirers entering the market.

As a consequence, he said the board was considering additional financing options, including further share issues, to take advantage of the pipeline of opportunities and to potentially enhance the return to shareholders.

Mr Hudson made the comments while reporting strong second half performance, with a year-on-year increase in turnover expected to be up over 30 per cent.

In a trading update issued today (9 November), Mr Hudson highlighted strong revenues for the second half of 2015 with revenues for the full year expected to exceed £20m, against a figure of £8.22m for the first half of the year.

At 31 October cash balances were in excess of £3m and 11 acquisitions have been integrated into the company over the last 12 months.

AFH said it is well positioned to continue to take advantage of ongoing IFA market consolidation and funds under management are approaching £2bn at 31 October 2015

Final results for the year ended 31 October 2015 are expected to be announced in February 2016.

Additionally, the board remains confident of future prospects.

Alan Hudson, chief executive of AFH, said: “The company’s results for 2015 are particularly encouraging and represent another important milestone in AFH’s journey to become one of the UK’s leading IFAs.”