Consolidator  

Acquisition spree drives Harwood asset growth

Acquisition spree drives Harwood asset growth

A spree of nine acquisitions in six months powered a 30 per cent rise in assets under influence at Harwood Wealth Management.

In its latest results covering the six months to 30 April the company said 37 per cent of its asset growth was the direct result of acquistions.

Total assets under influence were £4.3bn at the end of April.

Revenue rose by 44 per cent to £15.1m, and profits up 39 per cent to £6.8m.

Peter Mann, Harwood's chairman, said he expected the wave of acquisitions to continue for the rest of the year.

He said: "It is our business model to be a consolidator, and we have a strong pipeline so I would more acquisitions will happen."

Mr Mann said: "When we started to do this we were quite geographically concentrated on the south coast area, and a lot of our acquisitions were done via introducing agents. But as we have become better known, we have become front of mind for a lot of firms that want to sell, and we get more direct referrals."

The Aim-listed company spent £10.9m on those six acqusitions, and currently has a cash pot of £3.6m, but can also raise more cash if needed.  

Mr Mann said: "Of course integrating a business is never easy, but we use an outsourced back office system called True Potential, and that is relatively platform agnostic. We tend to do any training needed after we have exchanged contracts but before we complete, so by the time we have completed it should be quite a smooth process."

One feature of the results was the slight decline in margin, to 45 per cent from the previous 47 per cent. Mr Mann said this was because of the acquisition of Network Direct, which is a lower margin business than is a typical advice practice.

He said he expected the margin level to grow or stabilise as more acquisitions of advice firms are made.

david.thorpe@ft.com