Trading Update and Notice of Final Results

RNS Number : 5061T

Mattioli Woods PLC

04 July 2018

 

4 July 2018

Mattioli Woods plc

("Mattioli Woods" or "the Group")

Trading Update and Notice of Final Results

Mattioli Woods plc (AIM: MTW.L), the specialist wealth management and employee benefits business, today issues the following trading update in advance of its final results for the year ended 31 May 2018, which are to be announced on Tuesday, 4 September 2018. 

Highlights

·      Strong organic revenue growth of over 15%

·      Total client assets[1] increased to over £8.7 billion at the year end

·      Gross discretionary assets under management1 of over £2.3 billion

·      Maintaining EBITDA margin ahead of 20% target

·      Recent acquisitions performing well

·      Strong financial position, with net cash[2] of over £20 million

Ian Mattioli, Chief Executive, comments:

"I am delighted to report another year of strong and sustainable growth, primarily driven by the flow of organic new business generated by our maturing consultancy team with over 1,300 new SIPP, SSAS and personal clients choosing Mattioli Woods during the year.  Total client assets under management, administration and advice increased by 10% to over £8.7 billion at the year end. 

"We continue to enjoy strong client retention and have seen sustained demand for advice from clients, driven by lifestyle, increasing longevity, tax and other legislative changes, including the pension freedoms that introduced more flexibility as to how and when people can access their pension savings. 

"Last week the Financial Conduct Authority ("FCA") published proposals in response to the findings of its Retirement Outcomes Review ("ROR"), which are designed to help people think about their drawdown choices earlier, create investment pathways to help them with their choices and make costs and charges easier to understand, including the possible introduction of a charge cap.  Against the backdrop of an evolving market I believe our advice-led model, integrating administration and investment management, is aligned with the regulator's proposals and makes us very well-positioned to reduce client costs and deliver improved client outcomes, while securing further profitable growth for shareholders. 

"The ROR and the latest consultation are part of a wider package of FCA activity covering the pensions and retirement income sectors, including work on defined benefit ("DB") pension transfers.  We previously reported that the Group has ceased providing advice on transfers from DB to defined contribution pension schemes.  Following consideration of the increasing costs of professional indemnity insurance, additional regulatory controls and the resources we would have to dedicate to a relatively small part of our business we have decided to withdraw from this market and look to vary our permissions with the FCA accordingly.  The impact of this decision on the Group's financial performance is not expected to be material, with pension transfer advice to individuals with safeguarded benefits contributing approximately 1.6% of direct revenues for the year, and less to profit given the significant compliance costs associated with this activity. 

"Strong inflows of new money combined with positive investment performance to increase the Group's gross discretionary assets under management to over £2.3 billion at the year end.  The value of assets held within our Discretionary Portfolio Management service increased from £1.1 billion to £1.3 billion, of which 9% is invested within funds managed by the Group and its associates.  As our business grows, I expect the benefits of operating our integrated model to enable us to further improve client outcomes.  We reduced the custody charge for all those clients using our core investment platform with effect from 1 August 2017, which coincided with the launch of our new range of multi asset funds designed to improve investment efficiency, administration and reporting for clients. 

"The Mattioli Woods' Structured Products Fund was named Retail Investment Product of the Year at the Risk Awards 2018, with the fund offering investors the benefits of collateralisation, instant diversification, continuous availability and liquidity.  A combination of new client investment and money from maturing structured product plans increased the fund's value to over £213 million at the year end.

"The total value of property and loans managed by our subsidiary Custodian Capital increased to over £0.6 billion.  In addition to being the manager of Custodian REIT, the UK real estate investment trust, Custodian Capital continues to facilitate direct property ownership on behalf of pension schemes and private clients and also manages our "Private Investors Club", which offers alternative investment opportunities to suitable clients by way of private investor syndicates. 

"Recent acquisitions continue to perform well.  Total revenue growth includes a full year's contribution from the MC Trustees pension administration business acquired in September 2016 and we were delighted when Paul Jourdan of the Group's associate Amati Global Investors ("Amati") was named best UK Smaller Companies Fund Manager at the FE Alpha Manager of the Year Awards in May.  Paul is manager of the TB Amati UK Smaller Companies Fund, which won the UK Smaller Companies category at the Investment Week Fund Manager of the Year Awards last year.  Amati has enjoyed strong growth in the value of its funds under management, which increased from £176 million at the start of the year to over £325 million at the year end. 

"Acquisitions remain a core part of our growth strategy.  We continue to review a diverse pipeline of potential acquisition opportunities and believe further consolidation within our core markets remains likely.  Our strong balance sheet gives us the flexibility to make further value-enhancing acquisitions. 

"Last month we were delighted to announce the appointment of Saira Chambers to lead our employee benefits team as Employee Benefits Director.  Saira brings extensive experience across all aspects of employee benefits, both as a consultant and in senior leadership roles, and this blend of knowledge and experience will enable us to transform this area of our business as part of our long-terms plans.  

"Investment in the Group's infrastructure continues as we progress the implementation of our hosted IT architecture, which offers enhanced data security, business continuity and scalability for future growth.  Our Manchester office moved to a new central city location to accommodate our expanding team in May and the move to our new central Leicester office is scheduled to commence in September 2018.  We have also agreed terms to move into a new Edinburgh office, which will house both Mattioli Woods' consultants and the Amati team. 

"Strong growth in revenue has translated into strong growth in EBITDA, with EBITDA margin for the year remaining slightly ahead of our 20% target.  I am delighted with the performance of our business over the last financial year and I believe we are well-positioned to progress further towards the ambitious longer-term goals we have set." 

Notice of Final Results

Mattioli Woods will be announcing its final results for the year ended 31 May 2018 on Tuesday, 4 September 2018.  An analyst briefing given by Ian Mattioli, Chief Executive and Nathan Imlach, Chief Financial Officer will be held at 09:30 hrs on 4 September 2018 at Canaccord Genuity Limited, 88 Wood Street, London, EC2V 7QR. 

Those analysts wishing to attend are asked to contact Ed Gascoigne-Pees at Camarco on [phone] or at [e-mail]. 

- Ends -

For further information please contact:

Mattioli Woods plc
Ian Mattioli MBE, Chief Executive	Tel: [phone]
[e-mail]	www.mattioliwoods.com
Nathan Imlach, Chief Financial Officer
[e-mail]

Canaccord Genuity Limited
Sunil Duggal, Investment Banking	Tel: [phone]
Andrew Buchanan, Corporate Broking	www.canaccordgenuity.com
Margarita Mitropoulou, Corporate Broking

Media enquiries:

Camarco
Ed Gascoigne-Pees	Tel: [phone]
	www.camarco.com

Notes to editors

Mattioli Woods is one of the UK's leading and fastest growing providers of specialist pension, wealth management and employee benefit services.  Its core pension and wealth management offering serves the higher end of the market including controlling directors and owner-managed businesses, professionals, executives, and affluent retirees.  Its comprehensive range of employee benefit services is particularly suitable for medium-sized to larger corporates. 

The Group's broader wealth management proposition has grown from its strong pensions advisory and administration expertise, with a client base of over 10,000 self-invested personal pensions ("SIPP") and small self-administered pension schemes ("SSAS") throughout the UK.  The Group's total assets under management, administration and advice are in excess of £8.7 billion. 

Mattioli Woods has a focus on holistic planning and providing the highest level of personal service, maintaining very close relationships with all its clients.  The strength of its personal relationships has led to high levels of client satisfaction, retention and referrals. 

For more information, visit www.mattioliwoods.com. 

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[1] Including over £325 million of funds under management by the Group's associate company, Amati Global Investors. 

[2] Excluding £3.5 million of VAT reclaimed on behalf of and to be repaid to clients. 

 

END

 

 

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