Solid results see AFH shares surge

Shares in financial planning-led wealth management firm AFH Financial were surging on Monday morning, after it announced its consolidated audited results for the period to 31 October.

The AIM-traded company said the results reflected continued growth, with an increase in earnings per share of 57% and a 33% improvement in the dividend per share.

It said strong organic growth was delivered through its “captive distribution model”,with revenues up 39% to £33.6m and underlying EBITDA up 57% to £5.7m.

The firm’s underlying EBITDA margin increased to 17% from 15%, while profit after tax was up 83% to £3.1m.

Earnings per share rose 57% to 11.22p, with underlying earnings per share up 46% to 17.0p.

The board confirmed the dividend per share was up 33% to 4.0p, with funds under management rising 39% to £2.79bn.

On the operational front, the AFH board said it was seeing increasing organic demand for financial planning-led wealth management services.

It noted its proven track record of acquisitions, with the average deferred pay-out for those acquisitions reaching a performance milestone exceeding 90% of the target deferred consideration during 2017.

AFH said it was well-positioned to continue to take advantage of ongoing IFA market consolidation.

It also said it had a strong balance sheet following its successful £17.5m placing, completed in December.

“The year under review produced our fourth consecutive year of growth and improved profitability since joining AIM in 2014,” said group chief executive Alan Hudson.

“Increased revenues and improved margins have resulted in a 57% increase in earnings per share to 11.22p after taking into account the dilutive impact of our successful fundraising in April 2017.”

Hudson said new business and continued demand for financial advice from existing clients, together with a series of earnings-accretive acquisitions during the year, enabled the group to grow its funds under management to £2.8bn and increase revenues to £33.6m.

“The efficiencies and economies of scale that we have worked towards generated a further improvement to our EBITDA margin and continues our progress to our three to five year aspirational target.”

As at 0959 GMT, shares in AFH Financial Group were up 12.48% at 344.2p.