Acquisitions help lift Tatton through first half

Investment management and independent financial advisor support provider Tatton reported a 15.1% improvement in group revenue in its first half on Tuesday, to £15.9m.

The AIM-traded firm said its adjusted operating profit was also up 15.1% year-on-year in the six months ended 30 September, to £8m, as its adjusted operating profit margin was stable at 50.1%.

Adjusted, fully-diluted earnings per share were 12.9% higher, meanwhile, at 9.89p, as the Tatton board declared a 12.5% uplift in the interim dividend to 4.5p per share.

It said the company was in a “strong” financial liquidity position, with net cash of £21.6m, compared to £14.7m at the end of September last year.

The company’s balance sheet was also strong, with net assets increasing 29.5% to £35.7m by the end of the period.

On the operational front, Tatton reported record organic net inflows of £907m in the period - an increase of 8% of opening assets under management, with an average run rate of £151m per month.

The board said the acquisition of 50% of 8AM Global added £1bn to assets under influence, with assets under management and influence increasing £1bn over the period to £12.3bn, rising further since the period ended to stand at £12.9bn on 18 November.

Tatton said its independent financial advisor firms increased 14.7% to 806 at the end of the half-year, as the number of accounts increased 20.9% to 98,650.

Paradigm mortgage completions were up by 10.6% to £7.3bn, with Paradigm Mortgages member firms increasing 3.6% to 1,706 members.

At the same time, Paradigm Consulting increased its membership by 1.4% to 424.

“We are pleased with our performance and while volatile markets were a drag on assets under management growth, by delivering record net inflows coupled with the acquisition of 8AM we continue to execute our ‘roadmap to growth’ strategy,” said chief executive officer Paul Hogarth.

That strategy includes a three-year target of increasing assets under management to £15bn, from £9bn at the end of March last year, through a combination of organic new net inflows and “strategically-aligned” acquisitions.

“As we look forward, while net inflows were very strong in the first six months as we had a number of significant wins which complemented underlying flows, we anticipate net inflows will return to a more normalised level in line with the second half of the prior year and that the Paradigm business will continue to perform well.

“We look forward to making further progress over the rest of the year while remaining mindful of the continuing macro-economic turbulence and market volatility and we remain confident in the group's longer-term prospects.”

At 0818 GMT, shares in Tatton Asset Management were up 5.19% at 426p.

Reporting by Josh White for Sharecast.com.