National advice consolidator AFH Financial Group has reinstated staff pay after it scrambled to cut costs from the business at the beginning of the pandemic this year.
But despite returning employees to full remuneration this month the advice firm warned the impact of coronavirus restrictions and "the challenges of remotely interacting with prospective clients" had hit new business in its wealth management arm.
In a statement to the market today (September 30) AFH said the inflow of new funds had been "slower than anticipated" and had remained below pre-pandemic levels since May.
The company's board will maintain its salary reduction which has been in place since March as part of a £3m cost cutting exercise which included placing "non-critical" projects on hold in the face of coronavirus uncertainty.
The listed wealth manager also revealed it had been paying off debt, reassuring investors cash "remained the primary focus" for the board.
AFH said: "We have also taken steps to reduce the outstanding deferred consideration and other unsecured debt, repaying £752,000 of 8 per cent loan notes in early September and over £3m in deferred consideration since April.
"The group expects to have reduced outstanding deferred consideration by the financial year end to approximately £20m, further strengthening its balance sheet."
In June the company confirmed it had suspended its acquisition drive for the second time in ten months in response to the coronavirus outbreak.
The consolidator has completed roughly 50 acquisitions since it listed on the Alternative Investment Market (AIM) in 2014, but in September last year the company pointed to prevailing economic and political uncertainty as cause for pausing its buying spree.
But before the global pandemic hit earlier this year AFH went back on the acquisition trail, revealing it had a cash pot of £17.25m to spend on deals.
In today's update AFH said: "As previously reported, AFH remains focussed on generating strong organic growth based on digital and traditional marketing methods augmented by selective acquisitions.
"Digital campaigns started during the summer have generated a level of meetings with prospective clients above the previous estimates and are expected to generate strong business inflows into the future."
On the back of this initial success AFH said it would "intensify its digital marketing activities" as it approached the new financial year.
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