AFH Financial Group Plc

July 28, 2011 02:00 ET


                                                                                               28 July 2011
                                          AFH FINANCIAL GROUP PLC
                                         ("AFH" or the "Company")
                          INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 APRIL 2011
                               PBT and Revenues up 97% and 27% respectively
The  Directors  of  AFH, a leading Discretionary Wealth Manager and Independent Financial Advisory  ("IFA")
firm, are pleased to report on the Company's first set of Interim Results since its shares were admitted to
trading on the PLUS-quoted Market on 23 June 2011. As AFH Financial Group PLC was not formed until  18  May
2011,  these  results  comprise the consolidated unaudited results of the Company's subsidiary,  AFH  Group
Limited, the previous group holding company.

 Financial highlights:

    *       Increased like-for-like revenues up 27% to £2,582,051 (2010: £2,031,683)
    *       Increased like-for-like EBITDA up 103% to £416,094 (2010: £205,313)
    *       Increased like-for-like PBT up 97% to £329,813 (2010: £167,072)
    *       Recurring income increased by 68%
    *       EPS up from £0.28p p to £0.53p

Operational highlights:

    *       Successful flotation onto PLUS-quoted Market in June 2011
    *       Successful fundraising of £1,757,000 to finance acquisitions
    *       IFA (adviser) numbers increased by 18%
    *       With over 50 financial advisers, AFH is one of the largest financial advisory practices in the
    *       Cash in bank and no bank debt
    *       Focus on key acquisitions over the second-half of the financial year

Commenting on the Interim Results, Alan Hudson, Chairman and CEO of AFH said:

"We  are pleased with the strong first half performance, which has seen the Company grow across all aspects
of its business. It is a testament to the high regard in which the business is held that we were successful
in  raising capital in a tough economic climate and in having our shares admitted to trading on  the  PLUS-
quoted Market.  The considerable uplift in profit before tax, revenues and EBITDA are supported by an  even
more  encouraging  increase in recurring income - reaffirming our focus on client service propositions  and
their delivery.

"We  are  extremely well placed to grow our business and, in line with the strategy set out at the time  of
our  listing, we continue to seek to further our position through both organic and acquisitive growth.  Our
impressive figures today are representative of sustained hard work and I would like to thank the  team  and
of course shareholders for their continued effort and support".

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                                                                                           

Chairman and CEO Statement
I  am pleased to report on the Company's first set of Interim Results since it joined PLUS-quoted, a period
which has seen significant growth achieved by all operations throughout AFH.

The  Company 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
protection  products.  The  Company now has over 50 financial advisers,  making  AFH  one  of  the  largest
financial advisory practices in the Midlands, servicing clients across the UK.

In the period under review, like-for-like revenues rose by 27% to £2,582,051 (2010: £2,031,683).  Like-for-
like  PBT  was up 97% to £329,813 (2010: £167,072). EBITDA increased 103% to £416,094 (2010: £205,313)  and
earnings per share rose 89% to 0.53p (0.28p). The quality of our earnings is robust, with recurring  income
representing 47% of our turnover.

Gross  margins increased from 45% to 50% on a like-for-like basis, as a result of both the success  of  the
Company's  in-house  lead generation (which in turn drives higher margin work) and a number  of  small  IFA
acquisitions  made,  where  the  recurring income acquired enhances our  margins.  Operating  costs,  as  a
percentage of turnover were lower, falling from 35% to 34%, a drop of 1%.

Cash balances currently stand at more than £2,000,000 following the successful private placing on admission
to PLUS-quoted in June this year. Your company has no bank debt.

Adviser  numbers increased by 18% over the period. Recruitment activity is gathering pace, albeit that  the
Directors are only interested in selecting quality and complementary advisers.

Listing and successful fundraising
As  announced  at  the time of the Company's admission to PLUS-quoted, AFH successfully  raised  £1,757,000
(gross of expenses) to provide additional working capital for the Group and to finance acquisitions.  As  a
newly  quoted public company, AFH 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.

Management team enhanced
At  an  operating level, AFH has strengthened its management team with the appointment of Barry  Willis  as
Sales  Director. Barry was previously Head of Financial Services at the West Bromwich Building Society  and
we  are  pleased to have attracted someone of Barry's expertise and experience. We are seeking  to  further
strengthen  the  management team to ensure our systems can keep pace with our accelerating growth  strategy
and the Directors look forward to updating shareholders on progress in this respect moving forward.

Acquisition strategy and outlook
The  Retail Distribution Review (RDR), currently timetabled to take effect from 1 January 2013, will 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.

The  Directors intend to exploit this opportunity and to make acquisitions on a select and opportune  basis
that  enhance  the  balance sheet and shareholder value; they look forward to updating the  market  in  due
course regarding this acquisitive growth strategy.

AFH is the only cash generative, profitable and growing IFA Wealth Management specialist on the PLUS-quoted
Market. In the first half, the Company embarked on a number of initiatives across its businesses which  the
Directors  expect  will  contribute  to future profitability. The Directors  are  also  encouraged  by  the
prospects  for the Company arising from the RDR and the ongoing fall-out from the peak of the recession  in
2009 and 2010. The Directors therefore view the Company's prospects with confidence.

Consolidated Profit and Loss Account
                                                      6 Months ended             6 Months ended         
                                                       30 April 2011              30 April 2010
                                                               (GBP)                      (GBP)         
Turnover                                                   2,582,051                  2,031,683
Cost of sales                                                                                           
                                                           1,288,416                  1,118,025
Gross profit                                               1,293,636                    913,658
Administrative expenses (excl Dep & Int)                     877,541                    708,346
EBITDA                                                       416,094                    205,313
Interest Receivable                                                9                         40
                                                                   9                         40
Amounts written off investments                               73,304                     25,167
Deprecation                                                    6,233                      6,233
Interest Payable and similar charges                           6,753                      6,881
Profit on ordinary activities before tax                     329,813                    167,072
Tax on profit on ordinary activities                          99,059                     45,114
Profit for the period                                        230,753                    121,959         
                                                                 GBP                        GBP         
Earning per share                                                  £                          £         
                                                                0.53                       0.28

Consolidated Balance Sheet
                                                                      Balance  Sheet                         
                                                                          as at                             
                                                                      30 April 2011                         
Fixed Assets                                                                                            
Tangible assets                                                            55,405                       
Intangible assets                                                         851,629                       
Investments                                                               828,340                       

Current Assets                                                                                          
Debtors                                                                   974,146                       
Cash at bank and in hand                                                  574,297                       
Creditors: amounts falling due within one year                          1,634,914                       
Net current (liabilities)/assets                                           86,471                       
Total assets less current liabilities                                   1,648,904                       
Creditors: amounts falling due after more than one year                                                 
Capital and Reserves                                                                                    
Called up share capital                                                       438                       
Share Premium Account                                                     649,922                       
Profit and loss account                                                   677,585                       
Shareholders' funds                                                     1,327,945                       
The financial information set out above has not been reviewed by the Company's auditors.

Contact Information

  • AFH Financial Group Plc