AFH Independent Fin Services  

AFH explains lack of adviser takeover deals

AFH explains lack of adviser takeover deals

The lack of acquisitions by AFH has been due to its focus on “shareholder value”, the company has said.

Last month AFH bought East Anglia-based CRS Financial Planning in a deal worth more than £663,000 in what was its first acquisition of the financial year.

In a trading update the company said there is a “strong pipeline” of potential acquisitions currently being negotiated.

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Alan Hudson, chief executive of AFH, said: “AFH continues to be active in the market to acquire good quality IFAs but remains focussed on ensuring shareholder value.

“The success and robustness of this policy is reflected in the high level of acquisitions meeting or approaching earn-out targets and the strong cash flow generated by the business to finance these earn-out liabilities.

“The board will continue to execute its strategy of making selective acquisitions and increasing the breadth of AFH’s national footprint whilst providing a professional and cost effective service to our clients, and believes that AFH remains well positioned to take advantage of opportunities as they arise.

“I am pleased to note the continued increase in our recurring revenue and our gross margin, and we look forward to updating the market further in January 2016, at the time of our results.”

AFH expects the higher average levels of revenue generated by its advisers to result in more growth for the year ending in October.

The company expects its year-on-year increase in turnover to be more than 15 per cent, while funds under management exceed £2bn.

Over the past 12 months AFH saw a significant increase in its recurring fee income, with total revenues expected to exceed £24m.

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 Aim-listed company has made only one purchase.