AFH Financial Group Plc

July 31, 2012 02:00 ET

Interim Results

                                                                                               31 July 2012
                                          AFH FINANCIAL GROUP PLC
                                         ("AFH" or the "Company")
                                              INTERIM RESULTS
The  Directors  of AFH, a leading Independent Financial Advisory ("IFA") firm and PLUS-SX Newcomer  of  the
Year  2012, are pleased to report on the Company's Interim Results ended 30 April 2012, a period which  has
seen significant growth achieved by all operations throughout AFH.

 Group highlights:

    *       Increased like-for-like revenues up 20% to GBP3,098,183 (2011:GBP2,582,051)
    *       Recurring income increased by 29%
    *       EBITDA GBP262,248
    *       Strong balance sheet with net assets of GBP11,500,000 and cash of GBP1,100,000 with no bank debt
    *       Adviser numbers up 66% from 53 at flotation to 88 today
    *       5 acquisitions completed during the period and 8 completed since flotation
    *       AFH voted as PLUS-SX Newcomer of the Year 2012 at the PLUS Awards

Main operating business (AFH Independent Financial Services Ltd) highlights

    *       EBITDA GBP443,874, up 13% (2011: GBP391,620)
    *       Profit before tax GBP437,641, up 14% (2011: GBP384,987)
    *       Recurring income at 50% of revenue

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

"We  are pleased with our first half performance. Operationally, the Group has grown significantly  in  the
period since flotation on 23 June 2011.

"We  have strengthened our management team considerably with the appointments of a Sales Director, Business
Development  Director, Compliance Director, Finance Director, Technical Director and HR  Manager.  We  have
also increased our administrative support to ensure that we could integrate pending acquisitions.

"Despite  increased costs, market volatility and a reduction in adviser productivity due to  taking  exams,
the group remains profitable, cash generative and extremely well placed to take advantage of changes in the
sector  as  a  result  of the Retail Distribution Review which comes into effect on 31 December  2012.  Our
growth  is  such  that  historic  figures are not reflective of the  business  and  its  current  financial

"We  expect  to  report stronger second half performance and improving results as new advisers  and  recent
acquisitions  start to contribute. We will continue to develop the business in line with the  strategy  set
out  at the time of our listing through both organic and acquisitive growth. 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 or Harry Fielder                                                                          

Chairman and CEO Statement
I  am  delighted  to  report on the Company's Interim Results, 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 88 financial advisers and has extended its  geographical  reach,
which is in line with our strategy to become a national IFA, headquartered in Bromsgrove. We are moving  to
new  offices  in  September 2012, also in Bromsgrove, taking 14,000sqft, up from  our  current  offices  of
6,000sqft to accommodate our growth, which is accelerating.

In the period under review, like-for-like revenues rose by 20% to GBP3,098,183 (2011: GBP2,582,051).  Like-
for-like PBT for our principal operating subsidiary, AFH Independent Financial Services Ltd was GBP437,641,
up  14%  (2011:  GBP384,987).  Recurring income, which is not reliant upon new  business,  was  up  29%  to
GBP1,545,748, and represents 50% of our total revenue.

Gross  margins have been maintained at 50% however we have increased overheads in advance of  new  advisers
being recruited and the integration of acquisitions. This has proved to be the right course of action given
the  5  acquisitions made during the period and the significant increase in adviser numbers. Administration
overheads rose from 34% to 42% of turnover and recruitment and IT costs are up 180% and 28% respectively.

Adviser  numbers increased by 31% during the period and 66% from flotation until now. Recruitment  activity
is  gathering pace, albeit that the Directors remain only interested in selecting quality and complementary
advisers. Funds under management continue to grow and amount currently to GBP480,000,000.

The Retail Distribution Review (RDR)
The  Group  will  be  RDR  ready, with all but 3 of our advisers on schedule to be  a  minimum  of  Diploma
qualified by the end of the year. In all other respects we are ready for its implementation.

The  sector's  rationalisation and consolidation continues to gather pace and  we  expect  to  be  a  major
beneficiary of industry change.




                                                                           Period                        Period
                                                                            ended                         ended
                                                                         30 April                      30 April
                                                                             2012                          2011
                                                                              GBP                           GBP
Turnover                                                                3,098,183                     2,582,051
Cost of sales                                                         (1,533,570)                   (1,288,416)
                                                                          -------                       -------
Gross profit                                                            1,564,613                     1,293,635
Administrative expenses                                               (1,375,971)                     (957,078)
                                                                          -------                       -------
Operating profit                                                          188,642                       336,557
Other interest receivable and similar                                      10,380                             9

Interest payable and similar charges                                      (5,625)                       (6,753)
                                                                          -------                       -------
Profit on ordinary activities before                                      193,397                       329,813
Tax on profit on ordinary activities                                     (53,383)                      (99,059)
                                                                          -------                       -------
Profit on ordinary activities after                                       140,014                       230,754

                                                                          -------                       -------
EBITDA                                                                    262,248                       416,094
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.



AS AT 30 APRIL 2012

                                                                Group                         Company
                                                             2012            2011           2012            2011
                                                              GBP             GBP            GBP             GBP
Fixed assets

Intangible assets                                      11,517,224         851,629              -               -
Tangible assets                                            69,047          55,405              -               -
Investments                                                   514         828,340      9,620,464               -
                                                          -------         -------        -------         -------
                                                       11,586,785       1,735,374      9,620,464               -
                                                          -------         -------        -------         -------
Current assets

Debtors                                                 1,426,914         974,146        783,133               -
Cash at bank and in hand                                1,075,719         574,297        776,139               -
                                                          -------         -------        -------         -------
                                                        2,502,633       1,548,443      1,559,272               -
Creditors: amounts falling due within                 (2,007,999)     (1,634,914)      (247,569)               -
one year                                                                                                        

                                                          -------         -------        -------         -------
Net current assets                                        494,634        (86,471)      1,311,703               -
                                                          -------         -------        -------         -------
Total assets less current liabilities                  12,081,419       1,648,903     10,932,167               -
Creditors: amounts falling due after                    (540,410)       (310,843)              -               -
more than one year                                                                                              

Provisions for liabilities                               (13,045)        (10,116)              -               -
                                                          -------         -------        -------         -------
                                                       11,527,964       1,327,944     10,932,167               -
                                                          -------         -------        -------         -------
Capital and reserves

Called up share capital                                 1,412,187             438      1,412,187               -
Share premium account                                   9,890,312         649,922      9,890,312               -
Other reserves                                                 10               -              -               -
Profit and loss account                                   225,455         677,584      (370,332)               -
                                                          -------         -------        -------         -------
Shareholders' funds                                    11,527,964       1,327,944     10,932,167               -
                                                          -------         -------        -------         -------

The information above has not been reviewed by the Company's auditor.


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  • AFH Financial Group Plc