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Tatton reports 25% increase in operating profit

Tatton reports 25% increase in operating profit

Tatton Asset Management has reported a 25 per cent increase in operating profit for the year to March 31, as it said activity was approaching pre-pandemic levels.

The firm posted £11.3m in profit, up from £9.1m in 2020, however pre-tax profit dropped from £10.3m to £7.3m due to the increase in share-based payment charges in the period.

Group revenue rose 9.3 per cent to £23.4m, from £21.4m in 2020, and the firm will pay a final dividend of 7.5p, increasing the full-year dividend to 11p, up from 9.6p last year. Tatton currently has cash reserves of £16.9m.

The group increased the number of IFA firms it works with by 12.3 per cent to 668, from 595 last year.

In April, the firm reported it saw net inflows of £755m for the year to March 31, an increase of 11.3 per cent.

Assets under management increased 35 per cent to £9bn, and on June 15 AUM was £9.5bn.

The firm is looking to increase its AUM to £15bn in three years, via an annual organic growth of £1bn and a £30m acquisition war chest it secured last year. The group already has £1.6bn in its M&A pipeline.

Paul Hogarth, chief executive, told FTAdviser he was seeing activity levels approaching pre-pandemic levels.

“Organic flows are back to pre-Covid levels now which is pretty exciting news,” he said.

“IFAs are back trading properly, maybe not fully, [but] they have obviously managed to look after all of their clients remotely - getting new clients is a lot more difficult than looking after your existing clients when you can’t get in front of them, but it does appear that IFAs have now worked their way around that and are now successfully adding new clients.”

Investment in the firm’s ethical portfolios increased by 141 per cent to £441m, from £121m in 2020.

The firm’s consulting arm, Paradigm Consulting, increased its members by 3.3 per cent to 407, and its mortgage arm, Paradigm Mortgages, increased its lending by 15 per cent to £11.34bn.

In a statement to the stock exchange, Hogarth said he was optimistic about the future.

“As we enter the new financial year we do so with a degree of optimism. The industry is tuned into the new environment and while we look to return to more face-to-face interaction, there is no doubt we will continue to utilise the alternative solutions of online interaction and home working and essentially adopt a hybrid model to best leverage the use of time and resources. 

“Our ambition remains focused on continuing to deliver organic growth in AUM, supported by acquisition opportunities and strategic partnerships. We remain confident the group will continue to make progress and we look forward to reporting on this as the year unfolds.”