Frenkel Topping well placed after revenue and AUM growth

Frenkel Topping on Wednesday reported that full-year revenues expanded on the back of new business, while assets under management also increased.

For 2018, the specialist independent financial advisor and asset manager achieved revenue of £7.7m, an increase of 5% compared to the year before, as recurring revenue increased from £5.9m to £6.0m and new business increased from £1.4m to £1.7m.

However, profit before tax dropped by 40% to £1.1m as total administrative costs increased by 10% to £3.6m and direct staff costs climbed 15% to £2.9m, offsetting the revenue increase.

The drop in profits also reflected a planned investment into the business of £0.7m, which enabled assets under management (AUM) to increase by 4% to £779m following a 43% rise in new investment mandates and a 33% increase in expert witness instructions, which the AIM traded company said was "a key pipeline" for future AUM growth.

Richard Fraser, chief executive of Frenkel Topping, said: "The board is pleased to report a year of progress, underpinned by significant investment across the business. Last year we identified a number of risks to Frenkel Topping's development and embarked on an investment strategy to help grow and protect the business in a challenging market environment and mitigate these risks."

Cash and cash equivalents stood at £0.8m at the end of the year, down from £1.8m from the same point the year before, while paid and proposed dividends were are up 6% to 1.29p per share.

"The company is in a good position as we scale up for our next period of growth. We remain focused on delivering outstanding service to our clients and sustaining our very high client retention rate, as well as consolidating our position as the UK's leading asset manager for personal injury and clinical negligence awards. Current trading is encouraging and we have had a solid start to the new financial year, underpinned by recent investment and our conservative investment approach," said Fraser.

Frenkel Topping's shares were up 3.57% at 29.00p at 1020 BST.