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AFH assets hit £4.5bn after year of IFA acquisitions

AIM-listed advice consolidator AFH has increased funds under management to £4.5 billion after a string of acquisitions this year.

AFH assets hit £4.5bn after year of IFA acquisitions

AIM-listed advice consolidator AFH has increased funds under management to £4.5 billion after a string of acquisitions this year.

In a trading update this morning AFH said revenues for the year are expected to exceed £50 million. Up 49% from £33.6 million in 2017.

Funds under management grew from £2.8 billion to £4.5 billion.

Over the year 16 new acquisitions were made. AFH said the ‘total anticipated consideration’ for these purchases is £34 million. AFH’s payments for the firms it acquires are split between upfront and deferred payments, which are contingent on performance targets being met.  

AFH paid £3.6 million in deferred earn outs.  It said these payments averaged ‘above 90% of the price negotiated for those acquisitions’.

The consolidators is hungry to buy more businesses in the coming 12 months. It has a £22 million cash balance after institutional placings of £17.5 million in December 2017 and £15 million in October 2018. In its statement to the market AFH said it is ‘well positioned to continue to take advantage of ongoing IFA market consolidation’ and claimed to have a ‘strong pipeline of potential acquisitions currently under negotiation’.

The consolidator was also keen to point out ‘strong organic growth’ with ‘a significant increase in its recurring fee income’.

Of the expected £50 million of total revenue this AFH said £20 million was generated organically as new business. Over £450 million of gross funds was received from new and existing clients. It said this represented year on year growth of 16%.

Chief executive Alan Hudson said: ‘I believe that shared values are critical in creating successful acquisitions that bind both advisers and clients to the AFH group and am pleased at the high level of advisers who remain with AFH many years after their earn out has been completed.’

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