AFH Financial Group Plc

June 23, 2011 02:01 ET

Admission to PLUS-quoted

                                                                                               23 June 2011

                                          AFH FINANCIAL GROUP PLC
                   ("AFH" or the "Company"; together with its subsidiaries, the "Group")
                           Admission to PLUS-quoted and commencement of trading
                                Successful subscription raising £1,757,000
The  Directors  of AFH (the "Directors"), a leading Discretionary Wealth Manager and Independent  Financial
Advisory  ("IFA")  firm,  are pleased to announce that the Company's issued ordinary  shares  of  10p  each
("Ordinary Shares") have today been admitted to trading on the PLUS-quoted Market.

Issued share capital on admission                                               13,636,250 Ordinary Shares

Market capitalisation on admission at 80p per share                                            £10,909,000

PLUS Ticker                                                                                           AFHP

ISIN Number                                                                                   GB00B4W5WQ08


The original business of AFH was founded by Chartered Financial Planner, Alan Hudson, in 1990.  Through its
principal  operating subsidiary, AFH Independent Financial Services Limited, AFH is a Discretionary  Wealth
Manager and IFA firm. The Group is based in Bromsgrove, Worcestershire, and currently has approximately  50
financial advisers, making it one of the largest financial advisory practices in the Midlands. Although  it
is based in the Midlands, AFH advises clients across the UK.

Since  its  formation,  AFH  has  grown organically and through a number  of  strategic  acquisitions.  The
Directors  intend to use the Company's existing platform and its status as a company traded  on  the  PLUS-
quoted Market to capitalise on available opportunities and continue its growth.

AFH Independent Financial Services Limited is authorised and regulated by the FSA.

AFH's Business

AFH is a specialist IFA serving the mass affluent and high net worth market, focussed on providing unbiased
advice on a comprehensive range of financial products. AFH's advisory services encompass discretionary  and
advisory investment management, pensions, tax and financial planning, mortgages and life cover.

Since  its  establishment, AFH has grown through the recruitment of individual IFAs and the acquisition  of
smaller IFA practices which complement the Group's offering. In 2009, for example, AFH acquired the IFA-arm
of the West Bromwich Building Society, following which an arrangement has been in place under which clients
of  the Building Society who wish to have independent financial advice are referred by the Building Society
to  AFH.  AFH's  growth  has also been driven by the formation of strategic alliances  with,  for  example,
solicitors and accountancy practices.

AFH  is  authorised  to  carry  out Discretionary Portfolio Management on behalf  of  its  clients  -  only
approximately  2% of the IFA's in the UK have this authorisation.  As a further differentiation  from  many
other IFAs, AFH has developed an in-house stockbroking service, so that it can take advantage of investment
opportunities  and  provide its clients with the widest possible range of investment and wealth  management

AFH  utilises its own technical and investment teams to conduct in-depth research into specific  investment
opportunities and product providers. This independent capacity allows AFH to offer unbiased advice  and  to
select the most appropriate investments for its clients.

AFH  is  represented  on  the Advisers Fund Index (AFI) Panel, which provides the  industry  benchmark  for
advisers to measure their investment performance. AFH is one of only 20 investment specialists on  the  AFI
Panel in the UK and the Directors believe that this is an accolade which reflects the Company's credibility
and status within the IFA community.

Sources of revenue

AFH  derives  its revenue from customer-agreed commissions and fees for financial planning and the  related
management  of  client  funds. Recurring income accounts for approximately 40 per  cent.  of  AFH's  annual

Funds Managed by AFH

AFH  has  its  own  OEIC, the Margetts St Johns Realistic Core Fund, launched in November  2009.  The  fund
invests  in  a combination of active and passive investments and allows AFH, on behalf of its  clients,  to
access investments which might otherwise not be available to retail investors. As at 31 May 2011, the  fund
had assets of over £40 million.

Financial Information on AFH

AFH's  principal operating subsidiary is AFH Independent Financial Services Limited. Set  out  below  is  a
summary  of AFH Independent Financial Services Limited's results for the three years and 9 months ended  31
October 2010.

                                                       Year ended   Year ended    Year ended   9 months ended
                                                       31 January   31 January    31 January     31 October
                                                          2008         2009          2010           2010
                                                            £            £             £              £
Turnover                                                2,436,239    2,447,416     2,867,836      3,601,276
Operating profit                                         233,749      170,058        1,199         528,482
Profit before taxation                                   244,455      171,735        7,162         525,850
In  common  with  many financial services companies, the performance of AFH Independent Financial  Services
Limited in the year ended 31 January 2010 was impacted by the global economic downturn. An increase in  the
number  of advisers and support staff during the year was not matched by increased productivity and profits
were  therefore  below  expectations.  Overheads at the company have  since  been  re-aligned  and  adviser
productivity enhanced.

Future Strategy

The  IFA sector is mainly comprised of small firms, many of which are sole traders or partnerships and  the
Directors believe that the principals at many of these firms are approaching retirement. The IFA sector  is
also  undergoing a wholesale review, instigated by the Financial Services Authority, known  as  the  Retail
Distribution  Review ("RDR") . The RDR will, amongst other things, result in financial advisers  having  to
obtain  further  qualifications and increase the capital base of their businesses.  The  Directors  believe
that many IFAs will not wish to incur the increased costs and regulatory burden and that the IFA sector  is
therefore  ripe  for rationalisation and consolidation, with smaller IFA's being absorbed  or  acquired  by
larger ones.

Following  Admission,  the Group intends to focus on organic growth, through the continued  acquisition  or
recruitment  of  new IFAs, and also to use its position as a quoted vehicle to accelerate  its  acquisition
strategy.  The  Directors believe that this will facilitate earnings enhancement and also deliver  a  rapid
expansion of funds under management.


The  Company has received firm commitments to subscribe for a total of 2,196,250 Ordinary Shares at a price
of  80p  per  share  (the  "Subscription Shares"), being the 1,858,750 Ordinary  Shares  envisaged  in  the
Company's  Admission Document and a further 337,500 Ordinary Shares. Of the Subscription Shares,  1,736,250
have already been issued to subscribers and the remaining 460,000 are expected to be issued by 4 July 2011,
following receipt of cleared funds.

Pending  the allotment of the additional Subscription Shares, the Company's issued share capital  therefore
comprises 13,636,250 Ordinary Shares.

The  proceeds of the subscription and the additional fund raising amount to £1,757,000 (gross of  expenses)
and will be used to provide additional working capital for the Group and to finance acquisitions.

Admission Document

Copies of the Company's Admission Document are available free of charge during usual business hours on  any
weekday  (Saturdays,  Sundays  and  public holidays excepted) at the offices  of  the  Company's  Corporate
Adviser,  St  Helens  Capital Partners LLP, 223a Kensington High Street, London W8 6SG  and  will  also  be
available via AFH's page on the PLUS Stock Exchange website,

Commenting  on  today's flotation, Alan Hudson, Chairman and Chief Executive of AFH  Financial  Group  PLC,

"We  have been delighted with investors' response to the fundraising and believe PLUS will provide us  with
an  excellent platform as we seek to further our position through both organic and acquisitive growth. This
is a major step forward in terms of delivering growth to our shareholders."

The directors of AFH Financial Group PLC are responsible for the content of this announcement.

AFH Financial Group PLC                                                                       01527 577 775
Alan Hudson, Chairman and Chief Executive     
St Helens Capital Partners LLP                                                                020 7368 6959
Mark Anwyl or Duncan Vasey                             
Yellow Jersey PR Limited                                                                      07768 537 739
Dominic Barretto                                                                                           

Contact Information

  • AFH Financial Group Plc