Trading Update and Notice of Final Results

Mattioli Woods PLC

05 July 2023

 

5 July 2023

Mattioli Woods plc

("Mattioli Woods", "the Group" or "the Company")

Trading Update and Notice of Final Results

Mattioli Woods plc (AIM: MTW.L), the specialist wealth and asset management business, today issues the following trading update in advance of its final results for the year ended 31 May 2023, which are expected to be announced on Tuesday 12 September 2023.

Highlights

·     Revenue up 3% on prior year, with organic revenue growth of 4% partially offset by the market impact on ad valorem, placement and performance fees;

·     Profit for the year in line with expectation[1];

·     Continued momentum in new client lead generation driving an increased new business pipeline up 16% versus prior year;

·     Net client assets^[2] totalled £15.3 bn (2022: £14.9 bn) at the year-end, which on a gross[3] basis consist of:

o  £11.4 bn advice and financial planning assets (2022: £10.7 bn);

o  £4.7 bn gross investment related assets (2022: £5.1bn); and

o  £7.1 bn assets under administration (2022: £7.2 bn);

·     Gross discretionary assets under management^[4] of £4.7 bn (2022: £5.1 bn), with over £577m of new inflows during the year, 11.3% of opening assets being offset by negative market movements;

·     Strong financial position, with £45m of cash at 31 May 2023;

·     Announced acquisitions of Doherty Pension & Investment Consultancy Limited ("Doherty") and 50.1% stake in White Mortgages Limited ("White") in the period;

·     Previously acquired businesses including Maven Capital Partners LLP ("Maven"), Ludlow Wealth Management Group Limited ("Ludlow"), Pole Arnold Financial Management Limited ("PA") and Hurley Partners Limited ("Hurley") delivering organic growth, revenue synergies and integrating into the Group's core strategy;

·     Implementation of Xplan CRM and operating system progressing in line with plan; and

·     Appointment of Michael Wright as Deputy Chief Executive Officer.

Ian Mattioli MBE, Chief Executive, comments:

"I am pleased to report further growth in revenue, which was up 3% on the prior year despite the sustained market and economic complexity that has been a feature of the recent global economy and continues to affect the value of clients' assets.

"We enjoyed strong growth within our core pension consultancy and employee benefits business segments, with the changes to pension and tax rules announced in the Spring Budget driving further client demand for advice, which was partially offset by the market impact on ad-valorem fees based on the value of client assets, placement fees and performance fees generated by our Maven private equity business.  

"Integration of acquired businesses and realisation of revenue synergies across the Group remains a key area of focus. During the year we also took the initiative to review the range of investment management options we offer clients and have identified opportunities to realise revenue synergies across the Group whilst reducing clients' costs.

Outlook

"Recent new business development and marketing initiatives, designed to assist clients in understanding the recent changes to pension and tax rules, such as movements in annual and lifetime allowances, have both generated increased levels of new business and resulted in a strong increase of +16% in new business enquiries versus the prior year.

"We expect the current macroeconomic conditions and recent legislative changes to drive continued demand for advice, and we are expanding capacity within our advisor academy, to train greater number of advisors each year as we seek to capitalise on the current advice gap and drive strong organic growth in our financial planning and specialist pension consultancy business. We plan to add 20 new trainee advisors this year and expect this to double in the coming years.

"We saw some improvement in market sentiment during the last quarter of the financial year and expect any positive market movements in the first half of the new financial year to increase the Group's investment-related revenues. However, increasing interest rates can lead to additional saving rather than increased investment inflows, and we are introducing a new pension banking proposition to offer clients better interest rates and the Group an enhanced banking margin. 

"The previously announced roll-out of our new, Group-wide client relationship management system is being delivered as planned, with the first locations having successfully migrated to the new system and others on course for delivery during this new financial year. Project costs of £0.9m incurred in the last financial year are in line with budget and our continued investment in technology will lead to improved operational efficiency and additional business capacity in future periods.

"Inflationary pressures continue to impact wages and other costs across the Group. The Board takes a rigorous and proactive approach to managing costs whilst continuing to invest in our people, to create capacity or improve efficiency to support the long-term growth of the Group. 

"There continues to be a high level of M&A activity in the wealth and asset management sector and we were pleased to complete the acquisition of Doherty's and our holding in White during the year. Previously acquired businesses are integrating well, with synergies being realised and additional cross-sell opportunities targeted for the new financial year. We have a strong pipeline of bolt-on acquisition opportunities to assess, as well as potentially more substantial opportunities in the longer term.

"We are excited by the opportunity the Group has to make meaningful progress towards our ambitious goals. Our trading outlook for the new financial year is focused on securing organic growth complemented by strategic acquisitions, with targeted investment to create capacity, improve operational efficiency and enhance our clients' experience. Whilst inflationary cost pressures and investment in our strategic initiatives may impact margins in the short term, we are confident that we will continue to deliver attractive, long-term sustainable shareholder returns.

Governance changes

"The Board regularly reviews the suitability of the Group's governance structure, and reflecting the expansion of the Mattioli Woods proposition and increased size of the Group, the Board are pleased to announce the appointment of Michael Wright as Deputy Chief Executive Officer. In this new role Michael will lead and support the delivery of certain strategic goals alongside the executive team, whilst retaining his current responsibilities. Michael was previously appointed Group Managing Director in 2019, and has been on the Board since 2021, having joined the Group 19 years ago and holding several senior advisory roles during this time."

Notice of Final Results

Mattioli Woods expects to announce its final results for the year ended 31 May 2023 on Tuesday 12 September 2023. 

Management will hold an analyst presentation at 09:30 hrs on 12 September 2023. Those analysts wishing to attend are asked to contact Camarco on [phone] or at [e-mail]. 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.

- Ends -

For further information please contact:

Mattioli Woods plc
Ian Mattioli MBE, Chief Executive Officer	Tel: [phone]
Ravi Tara, Chief Financial Officer   Michael Wright, Deputy Chief Executive Officer	www.mattioliwoods.com
Canaccord Genuity Limited (Nominated Advisor and Joint Broker)
Emma Gabriel		Tel: [phone]
Tom Diehl		www.canaccordgenuity.com
Singer Capital Markets (Joint Broker)
Tom Salvesen	Tel: [phone]
Justin McKeegan	www.singercm.com
Alaina Wong

Media enquiries:

Camarco
Julia Tilley	Tel: [phone]
Alex Campbell	www.camarco.co.uk

Notes to editors

Mattioli Woods is one of the UK's leading providers of specialist pension, wealth management and employee benefit services. Its core proposition integrates financial planning and asset management to serve 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. 

Mattioli Woods has a focus on holistic planning and providing the highest level of personal service, maintaining close relationships with its clients. The strength of its personal relationships has led to high levels of client satisfaction, retention and referrals. The Groups broader wealth management proposition has grown from its strong pensions advisory and administration expertise, with a client base of c.11,000 self-invested personal pensions ("SIPP") and small self-administered pension schemes ("SSAS") throughout the UK.

The Group's assets under management, administration and advice total over £15.3 billion.  For more information, visit www.mattioliwoods.com. 

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[1] Market consensus forecast for year ended 31 May 2023: Revenue £113.4m; Adjusted EBITDA £33.0m and Adjusted Profit before Tax £30.0m.

[2] Includes £829.2m (31 May 2022: £1,100.5m) of funds under management by the Groups associate, Amati Global Investors Limited, excluding £73.0m (31 May 2022: £93.6m) of Mattioli Woods' client investment and £11.7m (31 May 2022: £14.8m) of cross-holdings between the TB Amati Smaller Companies Fund and the Amati AIM VCT plc. 

[3] Asset values by segment are not mutually exclusive, assets are counted in each revenue generating segment that they impact.

[4] Includes £913.9m (31 May 2022: £1,208.9m) of funds under management by Amati Global Investors Limited, including Mattioli Woods' client investment and cross-holdings between TB Amati Smaller Companies Fund and Amati AIM VCT plc.

 

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