ConsolidatorJun 27 2019

Harwood sees profits jump 74% despite "turbulent" markets

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Harwood sees profits jump 74% despite "turbulent" markets
ByRachel Mortimer

Harwood Wealth Management saw its pre-tax profits grow by 74 per cent in the first half of the financial year, despite "turbulent" equity markets. 

The company published its interim results for the six months ended April 2019 this morning (June 27) in which Harwood reported it had completed, or was in the final stages or completing, seven acquisitions at an estimated cost of £4.3m. 

The wealth management company saw its assets under management increase by 13 per cent to £1.8bn in the first half of 2019, up from £1.6bn in the first half of the previous year, as revenues grew by 6 per cent to £16.12m over the same period. 

Pre-tax profits at the company jumped by 74 per cent over the year to £1.63m in the first six months of 2019, compared with £930,000 in the first half of 2018. 

Chief executive Alan Durrant said the results had been delivered against a backdrop of "well publicised turbulent equity markets", particularly at the beginning of the financial year, which "inevitably had a dampening effect on asset valuations upon which we [the company] earn our revenue".

Mr Durrant said the company now had a "strong" pipeline of future potential acquisitions, with heads of terms signed with a further three potential deals, with a bank facility of £7m secured to fund the purchases.  

He said: "Whilst we face competition from other acquirers of IFA businesses, we do not believe the level of competition is very different from our experience over the last decade.

"The factors driving the supply of IFA businesses remain very similar and include the growing regulatory burden facing IFAs and the simple fact that many IFAs are considering retirement." 

Mr Durrant said there would "doubtless be further political twists and turns" in the coming months but felt confident Harwood's business model was built to withstand servicing clients in periods of uncertainty. 

He added: "Indeed, it is during periods of change when our clients value our services most highly. Whilst our revenues are to some extent dependent on the performance of asset markets, our diversified approach has insulated both our clients' and our own revenues from much of the volatility." 

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