26 March 2013
AFH Financial Group PLC
("AFH", the "Company" or, together with its subsidiaries, the "Group")
Audited Results for the year ended 31 October 2012
Maiden Dividend, Strong Balance Sheet, No Debt
The Directors of AFH, a leading Independent Financial Advisory ("IFA") firm, today announce the Group's
consolidated audited results for the year ended 31 October 2012 (the first full 12 month period since the
Company's 2011 flotation), including the declaration of a maiden dividend of 1p per ordinary share.
* Gross revenues of GBP7.2 million (2011*: GBP2.1 million);
* Strong performance from the Group's principal operating business, AFH Independent Financial
Services Limited, increasing its gross revenue by 34% and generating EBITDA of GBP1.2 million (before
non-recurring costs) up 45 per cent. on the previous year;
* Group EBITDA of GBP0.8 million (2011*: GBP0.2 million) before costs of share options and non-
recurring office move;
* Profit before taxation of GBP0.34 million (2011*: GBP0.1 million);
* Recurring income represents 50% of Group revenue;
* Strong balance sheet with net assets of GBP12.4 million and no borrowings; and
* Proposed maiden dividend of 1p per ordinary share.
*2011 comparisons are for the 131 day period from 22 June 2011 (the date of the Company's flotation) to 31
* Adviser numbers increased by 60% to a total of 94 at the year end;
* Eleven acquisitions made during the year, with a further three completed since the year end; and
* Successful move to new 14,000 sq ft. offices to accommodate significant anticipated growth.
Commenting, Alan Hudson, Chairman and Chief Executive of AFH Financial Group PLC, said:
"The Board views the prospects for the remainder of 2013 and beyond with confidence. Our strategy is to
continue driving forward in our traditional areas of strength whilst further enhancing our offerings to
drive increased profitability. The Board continues to monitor the external market place for appropriately
priced acquisition opportunities which will generate incremental opportunities for the Group. Our long term
aim is to grow adviser numbers and build an outstanding IFA firm.
The strong performance over the last 12 months is another important step in this direction and our proposed
maiden dividend underlines our confidence in the Group's future."
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
Peterhouse Corporate Finance Limited 020 7220 9796
Mark Anwyl and Duncan Vasey
Yellow Jersey PR Limited 020 3664 4087
Dominic Barretto or Anna Legge
I am pleased to report the results for our first full financial year since the Company's June 2011
flotation, a period which has seen strong organic and strategic growth across the Group.
The Group's principal operating subsidiary, accounting for 100 per cent. of the Group's revenue, is AFH
Independent Financial Services Limited ("AFH IFS"). In the year ended 31 October 2012, AFH IFS delivered an
outstanding performance, increasing revenues by 34 per cent. and generating EBITDA of GBP1.2 million
(before non-recurring costs), up 45 per cent. on the previous year.
Although a direct year-on-year comparison at Group level is not possible due to the corporate restructuring
undertaken ahead of the Company's flotation, the Directors are pleased to report that the achievements of
AFH IFS were reflected in similar levels of improved performance across the Group.
The Directors are particularly pleased with these results in light of the disruption caused by our advisers
having to achieve further qualifications ahead of the Retail Distribution Review ("RDR") deadline of 31
December 2012. The delivery of such strong results in that context, whilst also seamlessly integrating a
number of acquisitions, some of which were substantial, demonstrates the robustness of the Group, its
advisers and its systems.
Recurring income, which is not reliant upon new business, represents half of the Group's revenue, providing
the Group with a stable platform from which further growth can be delivered.
The RDR came into force on 1 January 2013 and has already changed the retail financial services landscape
considerably. As anticipated, AFH is exceptionally well placed to benefit from these changes and the
Directors remain confident that AFH will continue to prosper as the IFA sector contracts.
Eleven acquisitions integrated
During the period, the Group successfully completed eleven acquisitions of complementary IFA practices. The
most important of these acquisitions fell in the second half of our year and have therefore not yet had a
material impact on the Group's performance. A further three acquisitions were completed in December 2012.
The acquisitions completed to date have contributed significant numbers of a new advisers and clients to
the Group, as well as broadening its geographic presence. AFH intends to make additional acquisitions in
due course as it continues to take advantages of the opportunities arising from the RDR and ongoing
During the period we have also moved to new offices of some 14,000 sq ft. The Directors believe that these
new premises are more than sufficient to accommodate the significant further growth still anticipated by
Adviser numbers up 60%
Organic growth, through the recruitment of new quality IFAs, has resulted in a 60% increase to 94 advisers
in the period. Since flotation I am pleased to report that adviser numbers has increased by 77%.
In light of the Group's robust operating performance and reflecting the Directors' confidence in the
future, I am pleased to announce the declaration of a maiden dividend of 1p per ordinary share in respect
of the year ended 31 October 2012. Subject to shareholders' approval at the forthcoming Annual General
Meeting, the dividend will be paid on 10 May 2013 to shareholders on the register of members at the close
of business on 12 April 2013.
Having commenced dividend payments, it is the Directors' intention that the Company will maintain a
progressive dividend policy going forward.
Launch of tax efficient property fund
Shortly after the year end, in November 2012, the Group launched a first to market open-ended high yield
fund, The St. John's High Yield Property Fund (the "Fund"), to invest up to GBP50 million in industrial,
office and retail properties throughout England and Wales. The Fund is believed to be the first Property
Authorised Investment Fund to be available to retail investors in the UK and is being offered to AFH
clients seeking to diversify their investment portfolios and gain exposure to a low volatility asset
class with yields of between 6 and 9%. The Fund has evaluated a number of opportunities since its launch
and expects to complete the acquisition of the first properties for its portfolio shortly.
For many companies, the challenges posed by the state of the economy, the demands of the RDR and the need
to assimilate multiple acquisitions would have proved insurmountable. The fact that AFH has delivered
excellent growth despite these challenges is testament to the strength and quality of staff across the
Group and the Directors would like to thank them all for their contribution.
AFH is profitable and cash generative with a strong balance sheet. The Board views the prospects for the
remainder of 2013 and beyond with confidence. Our strategy is to continue driving forward in our
traditional areas of strength whilst further enhancing our offerings to drive increased profitability. The
Board continues to monitor the external market place for appropriately priced acquisition opportunities
which will generate incremental opportunities for the Group.
Our long term aim is to grow adviser numbers and build an outstanding IFA firm. The strong performance
over the last 12 months is another important step in this direction and our proposed maiden dividend
underlines our confidence in the Group's future.
AFH FINANCIAL GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 OCTOBER 2012
Turnover 7,200,950 2,107,966
Cost of sales (3,471,201) (1,053,835)
Gross profit 3,729,749 1,054,131
Administrative expenses (3,391,735) (950,386)
Operating profit 338,014 103,745
Other interest receivable and similar income 13,494 54
Interest payable and similar charges (12,631) (4,945)
Profit on ordinary activities before 338,877 98,854
Tax on profit on ordinary activities (137,144) (55,538)
Profit on ordinary activities after taxation 201,733 43,316
Earnings per share (pence)
Basic 1. 413 0. 311
Diluted 1. 365 0. 304
The profit and loss account has been prepared on the basis that all operations are continuing operations.
There are no recognised gains and losses other than those passing through the profit and loss account.
BALANCE SHEETS AS AT 31 OCTOBER 2012
2012 2011 2012 2011
GBP GBP GBP GBP
Intangible assets 12,725,235 10,441,638 - -
Tangible assets 144,312 60,402 - -
Investments 598 514 9,620,566 9,620,464
12,870,145 10,502,554 9,620,566 9,620,464
Debtors 1,990,259 938,143 2,116,153 3,000
Cash at bank and in hand 922,957 1,722,273 651,925 1,502,162
2,913,216 2,660,416 2,768,078 1,505,162
Creditors: amounts falling due within one (2,479,190) (1,544,603) (247,930) (24,966)
Net current assets 434,026 1,115,814 2,520,148 1,480,196
Total assets less current liabilities 13,304,171 11,618,367 12,140,714 11,100,660
Creditors: amounts falling due after more (852,877) (242,372) - -
than one year
Provisions for liabilities (15,681) (13,045) - -
12,435,613 11,362,950 12,140,714 11,100,660
Capital and reserves
Called up share capital 1,478,037 1,409,687 1,478,037 1,409,687
Share premium account 10,482,962 9,867,812 10,482,962 9,867,812
Profit and loss account 474,614 85,451 179,715 (176,839)
Shareholders' funds 12,435,613 11,362,950 12,140,714 11,100,660
The Chairman's statement and figures above are extracted from the Group's audited accounts for the year
ended 31 October 2012.