Trading Update

RNS Number : 8795S

Mattioli Woods PLC

14 July 2020

 

14 July 2020

Mattioli Woods plc

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

Trading Update, Directorate Changes 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 for the year ended 31 May 2020.  The final results for the year will be announced on Tuesday, 2 September 2020. 

Highlights

· Growth in revenue and strong growth in adjusted EBITDA1 and adjusted PBT2

· Improved margins following operational restructure pre COVID-19 · Mitigating actions taken to protect financial position in light of the COVID-19 pandemic

· Continued to deliver an uninterrupted service to clients · Building capacity to do more for existing clients and future growth

· Total client assets of the Group and its associate3 of £9.3 billion at the year end

· Gross discretionary assets under management4 of £2.6 billion, with net inflows of over £200 million during the year

· Recent acquisitions integrating well

· Strong financial position, with £26.0 million of cash at year end

¹ Earnings before interest, taxation, depreciation, amortisation, impairment, changes in valuation of derivative financial instruments and acquisition-related costs, including share of profit from associates (net of tax). 

² Profit before tax, adding back amortisation and impairment of acquired intangibles, changes in valuation of derivative financial instruments and acquisition-related costs. 

³ Includes £515.8m (2019: £409.0m) of funds under management by the Group’s associate, Amati Global Investors Limited, excluding £54.1m (2019: £31.9m) of Mattioli Woods’ client investment and £11.5m (2019: £11.9m) of cross-holdings between the TB Amati Smaller Companies Fund and the Amati AIM VCT. 

⁴ Includes £581.4m (2019: £452.7m) of funds under management by the Group’s associate, Amati Global Investors Limited, Mattioli Woods’ client investment and cross-holdings between the TB Amati Smaller Companies Fund and Amati AIM VCT plc. 

Ian Mattioli, Chief Executive, comments:

"I am pleased to report revenue and profit growth in the year ended 31 May 2020, despite the political and economic uncertainties that persisted throughout the period.  Even in these unprecedented times we are continuing to grow and develop the business, both organically and by strategic acquisition. 

"The Group's financial performance in the first nine months of the year was in line with the Board's expectations but, as anticipated, in the final quarter the impact of the COVID-19 pandemic on financial markets resulted in a reduction in the Group's income streams linked to the value of clients' assets and its banking revenue. 

"In light of the trading conditions created by the pandemic we pre-emptively implemented a number of mitigating actions to protect our strong financial position, realising £0.15m of cost savings through all plc Board directors reducing their basic remuneration plus a further £2.7m on confirmation that remaining staff bonuses and all directors' bonuses in respect of the financial year will not be paid. 

"Executive directors' salaries have been temporarily rebased from 1 July 2020 to create an annual saving of over £0.4m, with close management of our fixed and discretionary spend expected to achieve further cost savings of £0.4m over the next 12 months.  

"As previously announced, these material actions resulted in profits being significantly ahead of our expectations at the start of the year.  This has increased the number of options expected to vest under the Company's long-term incentive plans and the associated non-cash share-based payments cost recognised in the year.  Following a review of our option valuation model, the correction of historic calculations has increased the share-based payments costs recognised in respect of the three years ended 31 May 2019 by approximately £0.8m in aggregate.  

"The Group's profit for the year ended 31 May 2020 remains in line with the revised expectations set out in our last trading update issued on 1 June 2020.  We are continuing to progress our strategic initiatives, including the further development of our own IT solutions where possible.  In December 2019, we were pleased to announce the acquisition of The Turris Partnership, which followed the acquisitions of SSAS Solutions (UK) and Broughtons Financial Planning in the prior year, which are all integrating well and have contributed positively to our trading results since acquisition. 

"Within the next few weeks, we expect to receive FCA approval to complete our acquisition of Hurley Partners, where current trading is in line with our pre-COVID-19 expectations." 

Directorate changes

Nathan Imlach has decided to stand down from the Board at the Company's next Annual General Meeting on 19 October 2020, after 15 years as Chief Financial Officer.  Nathan remains with the business, where his focus will be on acquisitions and contributing to its strategic direction as Chief Strategic Adviser to the Group. 

He will be succeeded by Ravi Tara, currently Group Finance Director, who joined the Company a year ago as part of its succession planning.  The Group will benefit from Ravi's experience of improving operational delivery and cost efficiency in previous roles with Capita plc, Weetabix Food Company, JP Morgan, Barclays Capital and PwC, which will add real value to our proposition as we position the Group for further growth. 

The Board is committed to developing the corporate governance and management structures of the Group to ensure they continue to meet the changing needs of the business, and believes it is the right time to strengthen the executive team through the further appointments of Michael Wright and Iain McKenzie to the Board as Group Managing Director and Group Operating Officer respectively. 

Michael joined Mattioli Woods in 2004 after graduating with a Law degree from the University of Leicester.  After completing Mattioli Woods' consultancy training programme, he went on to become a senior client adviser and then head of our wealth management business, where Michael led the development of the graduate training programme, training and competence scheme, and client service delivery strategy.  In October 2019, he was appointed Group Managing Director and his focus is on the strategic development of the Group's wealth management and employee benefits propositions.  In this role Michael also leads the Group's consultancy and administration teams, whilst continuing to advise clients. 

Iain joined the Company in August 2018 as Executive Risk Consultant and was instrumental in developing the Group Risk and Internal Audit functions.  He adds skills and experience gained across a variety of sectors in roles where he has established a deep understanding of change management, playing a leading role in the planned restructure of our client-facing operations during the year.  Having taken on the role of Group Operating Officer, Iain now oversees the day-to-day operations of the Group, including people, information technology, marketing, projects, facilities and support services.  He continues to provide support to the Technical, Risk and Compliance teams where appropriate and has played a key role in ensuring the Group has remained fully operational throughout the current COVID-19 pandemic. 

Ravi, Michael and Iain will join the Board immediately following regulatory approval of their appointments.  We anticipate that after Nathan steps down as a director the Company will have, for a period of time, a Board comprising four executive and three non-executive directors.  The Board intends to appoint another independent non-executive director and the Group is in discussion with potential candidates.  Following this appointment, the Company will have a balanced board, which we believe represents the right governance structure for the business. 

Joanne Lake, Chairman, commented:

"I look forward to welcoming Ravi, Michael and Iain to the Board.  They are outstanding individuals with extensive experience as part of the Group's senior leadership team, which will allow us to capitalise on the significant market opportunities we anticipate going forward."

Ian Mattioli, Chief Executive, added:

"The Group is in a strong financial position and following the completion of the acquisition of Hurley Partners it will continue to have significant cash balances and headroom on its regulatory capital requirements.  I would like personally to thank Nathan for his contribution to the success of the Group, including our admission to AIM in 2005, the launch of Custodian REIT as a main-market listed property investment company in 2014 and the completion of 23 successful acquisitions to date.  As Nathan continues his career with Mattioli Woods, we look forward to continuing to benefit from his experience and insight, at a time when we are seeing a greater number of strategic acquisition opportunities than we have ever seen before. 

"The Board is positive about the Group's prospects given all the actions we have taken to reinforce its financial position, ensuring we remain a business that is sustainable and here for the long term.  Creating and preserving wealth, our focus remains on ensuring our trusted advice gives clients the understanding to achieve their objectives."

The following information is disclosed in accordance with Rule 17 and paragraph (g) of Schedule 2 of the AIM Rules for Companies in connection with the appointment of Ravi Tara, Michael Wright and Iain McKenzie to the Board of the Company:

Full name:	Ravi Singh Tara	Michael David Wright	Iain Andrew McKenzie
Age:	38 years	38 years	45 years
Current directorships:	None	SSAS Solutions (UK) Ltd	Iain McKenzie Limited
Former directorships (previous 5 years):	None	None	None
Ordinary shares held in the Company	562	5,971	529
Interest in options with an exercise price of 1 pence over ordinary shares in the Company	7,500	43,546	17,500

There is no further information required to be disclosed under Rule 17 or paragraph (g) of Schedule 2 of the AIM Rules for Companies.

Notice of Final Results

Mattioli Woods will be announcing its final results for the year ended 31 May 2020 on Wednesday, 2 September 2020.  Ian Mattioli, Chief Executive, Nathan Imlach, Chief Financial Officer and Ravi Tara, Group Finance Director will host an online analyst presentation at 09:30 hrs on 2 September 2020.  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 Officer	Tel: [phone]
Nathan Imlach, Chief Financial Officer	www.mattioliwoods.com
Ravi Tara, Group Finance Director
Canaccord Genuity Limited (Nominated Adviser and Joint Broker)
Sunil Duggal		Tel: [phone]
David Tyrrell		www.canaccordgenuity.com
Tom Diehl
N+1 Singer (Joint Broker)
Justin McKeegan, Corporate Finance		Tel: [phone]
Pete Steel, Corporate Finance		www.n1singer.com
Tom Salvesen, 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 offerings 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. 

The Group's broader wealth management proposition has grown from its strong pensions advisory and administration expertise, with a client base of circa 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 £9.3 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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