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AFH gives update on acquisition plans

AFH gives update on acquisition plans

Alan Hudson, chief executive of AFH, has said the consolidator hasn’t snapped up any more financial advice businesses this year because he is looking for the right opportunities.

At the end of last year, the firm raised £6.37m through a placing of new shares on the London Stock Exchange to help it fund new acquisitions.

But since then the company has not made any purchases.

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Mr Hudson said: “You have got private equity companies entering the sector in a big way, but for us it is not a short term plan.

“I founded the business and hope to be here in 10 years’ time. We care about the business we are building.

“We will only buy businesses if they fit with us from a cultural perspective. The short answer is that we will not be drawn into buying the wrong companies.

“We have a strong pipeline, but we are extremely careful to buy the right thing.”

Earlier this year AFH tried to buy rival Lighthouse Group for £17.4m, but the bid was rejected by the latter company’s board.

At the time, Mr Hudson issued a statement to the stock exchange saying the bid was a generous one given Lighthouse’s “limited growth prospects” and regulatory costs.

But speaking to FTAdviser this week, he said it would not be appropriate to comment further on the aborted deal.

Earlier this week, the company reported profit before tax was up 42 per cent for the six months ended 30 April to £0.86m, compared with £0.6m for the first half of 2015.

Funds under management hit £1.88bn for the period, up 44 per cent compared with £1.3bn on 30 April 2015.

Mr Hudson said the company is also investigating its options for using robo-advice.

He said: “We are going through a digital transformation exercise and we have brought in some external consultants.

“Robo-advice will have a large part to play in the future but we believe that it will not replace face-to-face advice, it will supplement it,” he argued.

“We have recognised the direction of travel and we are not fighting against it, we are embracing it.”