Mattioli Woods reports rise in revenue, earnings

The AIM-traded firm said organic growth contributed significantly, showing a 4% increase, driven by a surge in new business, partially offset by market influences on ad valorem fees due to a 0.4% reduction in total client assets to £15.2bn.

Recurring revenues represented a substantial portion of the revenue, accounting for 90.8% of the total, reinforcing the company's financial stability through long-term client relationships.

Adjusted EBITDA rose 10% to £16.5m, which was attributed to organic growth, revenue mix, the positive impact of recent acquisitions, and effective cost management.

The adjusted EBITDA margin for the period stood at 27.9%, up from 27.3% in the first six months of the 2023 financial year.

Basic earnings per share rocketed 73% to 10.2p from 5.9p in the same period a year earlier.

The board hiked the interim dividend by 2.3% to 9p, adding that the company maintained a strong financial position, with cash reserves of £32.7m as of 30 November.

Operationally, the company reported increased demand for wealth management and financial planning advice, driven by proposed pension and investment reforms and prevailing market conditions.

Mattioli Woods also expanded its 'MTW Adviser Academy’, resulting in growth of its adviser base to 148 revenue-generating consultants, up from 132 a year earlier.

The company further enhanced its investment proposition through internal changes and a strategic partnership with T Rowe Price.

A diversified revenue mix, with 37% of revenues fixed, initial, or time-based and uncorrelated to market performance, contributed to its stability.

Mattioli Woods reported gross discretionary assets under management of £4.6bn, with gross inflows of £326.4m, compared to £314.1m in the first half of the 2023 financial year.

The company also revealed a promising pipeline of potential acquisition opportunities and continued growth of Maven, with assets under management reaching £0.9bn as of 31 May 2023.

Recent acquisitions had integrated well, the board said, and were delivering revenue synergies through expanded product offerings.

Operational improvements and enhanced client service were achieved through the implementation of Xplan CRM, which it said was progressing as planned.

Looking ahead, Mattioli Woods said it was trading in line with expectations for the current year.

The firm said its integrated model provided multiple client engagement points to facilitate further growth.

Mattioli Woods said it would maintain its focus on new business generation, advance key strategic initiatives, and actively manage costs to deliver intra-group synergies and improve profit margins in line with stated medium-term goals.

“The first six months of this financial year saw the Group deliver improved organic growth despite the complex macroeconomic backdrop that persisted throughout the period,” said chief executive officer Ian Mattioli.

“Our priority remains the delivery of profitable organic growth and we are pleased to report further progress towards our medium-term strategic goals, with revenue of £59.1m up 8% on the equivalent period last year driven by positive performance across our pensions advice and administration, employee benefits and investment management operating segments.”

Mattioli said the first half saw the group deliver a resilient trading performance against a “complex” macroeconomic backdrop.

“We plan to build on this position, advancing our key strategic initiatives - new business generation, investing in our adviser academy training programmes, developing our investment proposition, developing new products and services, reviewing our processes, and investing in technology to deliver operational efficiencies and growth through the integration of strategic acquisitions.

“Our trading outlook for the year remains in line with management's expectations and we believe the group remains well-positioned to take advantage of the growth opportunities in the UK wealth market and deliver sustainable returns for our stakeholders.”

At 1210 GMT, shares in Mattioli Woods were down 1.33% at 582.15p.

Reporting by Josh White for Sharecast.com.