AFH Financial Group Plc

LSE : AFHP


March 26, 2013 03:00 ET

Audited Results for the year ended 31 October 2012

                                                                                              26 March 2013
                                                                                               GB00B4W5WQ08

                                          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.

Financial highlights:

    *       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
October 2011


Operational highlights:

    *       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.

Enquiries:                                             
                                                       
AFH Financial Group PLC                                                                       01527 577 775
Alan Hudson, Chairman and Chief Executive              
www.afhifs.co.uk
                                                       
Peterhouse Corporate Finance Limited                                                          020 7220 9796
Mark Anwyl and Duncan Vasey                            
                                                       
Yellow Jersey PR Limited                                                                      020 3664 4087
Dominic Barretto or Anna Legge                                                                             



Chairman's Statement

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.

Operational Growth

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.



RDR

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
economic difficulties.

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
the Company.

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%.

Maiden dividend

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.

Outlook

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

                                                                              2012                           2011
                                                                               GBP                            GBP

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
taxation

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

                                                                   Group                         Company

                                                                2012            2011            2012           2011
                                                                 GBP             GBP             GBP            GBP

Fixed assets
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

                                                                                                            

Current assets                             
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)
year

                                                                                                            

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.

END

Contact Information

  • AFH Financial Group Plc