Frenkel Topping hikes dividend and wins FCA investment clearance

After posting solid results and lifting the total dividend by a quarter Frenkel Topping has received regulatory clearance to proceed with a transformational new investment management service.

As indicated in recent trading update, the specialist independent financial adviser's revenue rose 11% to £6.3m in 2015 but adjusted pre-tax profit slipped 10% to £1.42m due to investment in regional expansion.

The final dividend was increased by 29% to give a full year dividend up 25% at 0.8875p.

Later in the day, the Financial Conduct Authority (FCA) granted its application to become a discretionary investment manager with full retail permissions, following the £4.4m acquisition last August of FC Fund Managers Ltd, whose Jason Granite has greatly strengthened the management team.

As a result, 2016 can proceed as a year of migration, with existing clients given the opportunity to reduce their annual costs by moving to the company's new investment management service.

Granite has secured strong terms with an existing third party platform and a third party discretionary fund manager - Canaccord Genuity Wealth Management - that house broker Shore Capital said will "materially enhance" Frenkel Topping's profitability.

"Having recruited carefully and managed the expansion of our regional representation we are extremely well placed to increase operating profitability," said chairman David Southworth.

"Receipt of FCA approval will enable us to put our new strategy in place and to migrate our assets to the new model and to target a larger addressable market looking for a capital-preserving investment strategy. We are extremely excited by the prospects for the business and look forward to updating the market with further developments in due course."

ShoreCap forecast a continued high level of dividend growth in future years, with the hefty dividend increase showing management were confident in the growth outlook.

Shares in Frenkel were up almost 4% to 55.5p by mid afternoon on Monday, having earlier probed levels not far from January's 60p all-time high.