AFH Financial Group has exceeded its own target predictions with profits almost doubling in the last year, following 16 acquisitions and "solid" organic growth.
The wealth management firm published its full year results to October 31 2018 today (January 15), in which it reported a 94 per cent increase in profits after tax from £3.1m in 2017 to £6m last year.
AFH also reported revenues had increased by 51 per cent to £50.7m, from £33.6m in 2017, and an increase in earnings per Share of 43 per cent to 16 pence.
The firm has now implemented a new set of three to five year aspirational targets, hoping to achieve funds under management of £10bn, revenues per annum of £140m and underlying EBITDA margin of 25 per cent on revenue.
Alan Hudson, group chief executive at AFH Financial Group, attributed the growth to a combination of organic growth within the business and the integration of acquired firms.
He said: "We have made a considerable number of acquisitions over the year but have also seen 21 per cent organic growth, so the success is not just from buying other companies."
Mr Hudson said the 16 acquisitions completed over the year had a combined value of £34m and were currently trading above target.
AFH has a "full pipeline" of deals for the year ahead with more acquisitions anticipated, Mr Hudson said.
Mr Hudson said the demand for financial advisers is growing, amidst an ageing IFA population and greater number of advisers retiring, which he sees as a positive opportunity for the industry.
AFH's results showed the fifth consecutive year of growth and improved profitability for the firm since joining the London Stock Exchange’s AIM in 2014.
Mr Hudson said: "These excellent full year results have been driven by the continued increase in our recurring revenue and our underlying earnings before interest, tax, depreciation and amortisation (EBITDA) margin exceeding 20 per cent, the achievement of the first of three medium term financial aspirational targets that we set in 2017.
"As announced on 3 December 2018, the second of these targets, achieving funds under management in excess of £5bn, was met following the year end and the board is confident that the final aspirational target of revenues of £75m per annum will be achieved ahead of our original expectations."
Mr Hudson said whilst the firm plans to continue investing in technology to improve operational efficiency and interaction with clients in a digital format, it does not view robo-advice as an opportunity to be pursued.
He said: "In terms of robo-advice per se, we are not keen on that model at all - it is very difficult to make it work.
"We are already seeing robo-advisers, who came to the market with great intentions, being bought by traditional advice firms."
rachel.addison@ft.com
