Mattioli Woods revenue rises despite challenging market

Wealth and asset management specialist Mattioli Woods reported a 3% increase in revenue year-on-year in a trading update on Wednesday, driven by a 4% organic revenue growth.

The AIM-traded firm said market impacts on ad valorem, placement, and performance fees partially offset that growth, however.

It said its profit for the year was in line with expectations, as it experienced continued momentum in generating new client leads, resulting in a 16% increase in the new business pipeline compared to the prior year.

At the end of the period, Mattioli Woods said its net client assets totalled £15.3bn - a slight increase from £14.9bn a year earlier.

That figure included advice and financial planning assets worth £11.4bn, gross investment-related assets of £4.7bn, and assets under administration amounting to £7.1bn.

Gross discretionary assets under management amounted to £4.7bn, making for a decrease from £5.1bn in the previous year.

The company said it attracted over £577m in new inflows during the year, although negative market movements partially offset that growth.

Mattioli Woods said it maintained a strong financial position, with £45m in cash as at 31 May.

The company announced two acquisitions during the period - Doherty Pension & Investment Consultancy, and a 50.1% stake in White Mortgages.

Additionally, the board said previously-acquired businesses including Maven Capital Partners, Ludlow Wealth Management Group, Pole Arnold Financial Management, and Hurley Partners, were contributing to organic growth, revenue synergies, and integration into the company's core strategy.

The implementation of the ‘Xplan’ CRM and operating system was meanwhile progressing as planned.

Mattioli Woods said the technology was expected to enhance its customer relationship management capabilities and overall operational efficiency.

In addition to the trading update, the company announced the appointment of Michael Wright as its deputy chief executive officer, further strengthening its leadership team.

“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,” said chief executive officer Ian Mattioli.

“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.”

Mattioli noted that during the year, the firm also took the initiative to review the range of investment management options it offered clients, and identified opportunities to realise revenue synergies across the group while reducing client costs.

Looking ahead, Mattioli said 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, had both generated increased levels of new business and resulted in a strong increase of 16% in new business enquiries versus the prior year.

“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 merger and acquisition 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.

“We are excited by the opportunity the group has to make meaningful progress towards our ambitious goals.”

Mattioli Woods said it would announce its final results for the year ended 31 May on 12 September.

At 1326 BST, shares in Mattioli Woods were up 0.8% at 624.99p.

Reporting by Josh White for Sharecast.com.