Mattioli Woods set for more acquisitions

Wealth manager and SIPP provider Mattioli Woods is hunting for more acquisitions despite reporting a drop in profits . The firm said revenues for the year ending 31 May rose 7% to £62.6m Total client assets rose a third (30.4%) to £12.1bn but EBITDA (a measure of profitability) fell 8% to £17.3m. However, EBITDA was still higher than the £14.1m recorded in 2019 before the Coronavirus pandemic hit. Profit before tax was down 60% to £5.1m (2020: £12.7m) driven by the firm’s IFRS 3 accounting policy. Adjusted profit before tax was down 11% to £14.2m (2020: £16m). Operating profit before financing fell considerably by 65% to £4.2m due to discretionary staff bonuses and acquisition related expenses. The firm reduced discretionary staff bonuses paid in the prior year due to the Coronavirus pandemic. The firm also recorded acquisition-related expenses of £2.6m (2020: £0.3m) due to eight acquisitions completed in or shortly after the year. Cost cutting boosted pre-tax profits at the wealth manager and SIPP provider in 2020 with a 36.7% rise in reported profit before tax to £13.4m for the year ended 31 May 2020. Overall cost-cutting measures during the first Coronavirus pandemic lockdown saved the company £2.6m. The firm now appears to be more confident about the future with profit falls “primarily as a result of the decision to reinstate discretionary staff bonuses, and increased contribution from our associate company, Amati.” Three of the firm’s eight acquisitions for the year completed after the end of the firm’s financial year. These three acquisitions were Maven Capital Partners, Ludlow Wealth Management and Richings Financial Management. Ian Mattioli, CEO at Mattioli Woods, said the five businesses whose acquisitions were completed during the year are “all performing and integrating well”. It has been a record year of acquisitions for the group and the firm said there are more acquisitions to come this financial year. In June the firm completed a £112m equity fundraise to facilitate the earnings enhancing acquisitions of Maven, Ludlow, Richings, a pipeline of smaller bolt-on acquisitions and to provide regulatory capital headroom. Mr Mattioli said: “We will continue to seek to build on our track record of successful acquisitions by continuing to assess and progress opportunities that meet our strict criteria. Consolidation within both wealth management and SIPP administration is expected to continue for the foreseeable future with many more opportunities coming to market.” The wealth manager and SIPP provider completed its delayed takeover of £.16bn AUM Ludlow Wealth Management earlier this month. Ludlow was launched in 1993 and has itself acquired several firms in recent years. It is one of the largest Financial Planning firms in the North West and operates from 5 locations, Fylde, Preston, Burnley, Liverpool and Southport. Its 60 staff managed assets totalling over £1.6bn. Mattioli said the takeover of Ludlow will add advisory capacity to the firm via Ludlow’s team of 22 advisers. Mr Mattioli said the majority of the Mattioli Woods team continues to work remotely: “The uncertainty that we have all experienced over the last year has served to enhance our commitment to maintaining our culture of putting clients first, developing our service offering and building a business that is sustainable over the long-term. "Our continued investment in technology has allowed the majority of our team to continue working remotely, and for us to work in a new operating environment with an increased number of new clients and also generate an increased pipeline of new business opportunities. “The essence of what we do is looking after our clients' money and there is an expectation that we should apply the same diligence in looking after that of our business and our shareholders. Current trading is in line with our expectations and the momentum that we saw in the second half of last year continues in the current year.” The wealth manager and SIPP provider has proposed a final dividend of 13.5p (2020: 12.7p), giving a total dividend of 21.0p up 5% from last year (2020: 20.0p).

Mattioli Woods set for more acquisitions

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