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Fairstone profits increase to £3.2m

Fairstone profits increase to £3.2m

Advice consolidator Fairstone posted increased profits of £3.2m for 2017 as the company continued to grow.

During 2017 Fairstone made five deals through its "downsteam buy-out" model, which sees the company take a stake in an advice firm before integrating it and completing the acquisition.

A further four acquisitions have been made so far in 2018 and another four are expected by the end of the year.

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Fairstone has set itself a target of making between eight and 10 acquisitions through this model every year.

In its results Fairstone stated: "Interest in the proposition remains very high with a pipeline of more than 50 potential deals being managed.

"We have also experienced substantial levels of organic growth within our existing community of partner firms which is partly driven by the support provided in customer acquisition, back-office resource, paraplanning and technology."

Fairstone's turnover increased by £12.9m to £38.4m while cost of sales increased by £10m to £30m.

During 2017 the company also carried out a full review of its indirect tax affairs and found a number of instances where "the approach taken was not appropriate" because certain supplies made to third parties were wrongly treated as being VAT exempt.

This meant Fairstone has set aside £1.7m to remedy the issue.