AFH Financial Group Plc Trading Update (5130A)
30 September 2020 - 4:00PM
UK Regulatory
TIDMAFHP TIDMAFHB
RNS Number : 5130A
AFH Financial Group Plc
30 September 2020
30 September 2020
AFH FINANCIAL GROUP PLC
("AFH" or "Group" or the "Company")
TRADING UPDATE
Profitable and cash generative throughout the summer period
The Board of AFH, a leading financial planning led wealth
management firm, provides the market today with the following
update regarding trading .
In the interim results, released on 1 June 2020, it was reported
that through the half-year period gross inflows of funds continued
at a similar level to that of the second half of 2019, whilst
annualised outflows continued at below 2% of opening funds. It was
also reported that, following the introduction of COVID-19
restrictions in March, new business in the Company's wealth
management division fell below expectations as uncertainty gripped
the markets and AFH's advisers came to terms with new ways of
virtual interaction with clients.
AFH staff and advisers have continued to support clients
throughout the period and, despite the majority working from home,
have ensured that the business has continued efficiently. The
investment made by the Group in technology since 2015 has proven
invaluable during this period and revised working practices are
expected to create greater efficiencies in the future, while
enabling AFH to provide greater working flexibility to staff and
reduce the environmental impact of the traditional business
model.
Cash remains the primary focus of the Board and it is therefore
pleasing to report that the Company has continued to be profitable
and cash generative throughout the summer period. We have also
taken steps to reduce the outstanding deferred consideration and
other unsecured debt, repaying GBP752,000 of 8% Loan Notes in early
September and over GBP3m in deferred consideration since April. In
September, while the Board has maintained its stated salary
reduction, the Company was able to return staff back to their full
remuneration as confidence in the business model and the resilience
of the existing business in this new era has increased.
Since the release of the Company's interim results, the Board
has been pleased that ongoing management fees returned to
anticipated levels during the summer period and the Group has not
experienced significant outflows of clients' funds. However, due to
ongoing COVID-19 restrictions and challenges of remotely
interacting with prospective clients, the recovery in new business
written by the wealth management division and the associated inflow
of new funds has been slower than anticipated and, since May, has
remained below pre-COVID-19 levels. The Company's Protection
business has continued to trade in line with the Board's
expectations throughout the period. As a result of these factors,
whilst the Board is pleased that revenue and EBITDA for the full
year are anticipated to be ahead of 2019, it expects the full year
EBITDA to be slightly below its previous expectations.
The Group expects to have reduced outstanding deferred
consideration by the financial year end to approximately GBP20
million, further strengthening its balance sheet. As previously
reported, AFH remains focussed on generating strong organic growth
based on digital and traditional marketing methods augmented by
selective acquisitions. Digital campaigns started during the summer
have generated a level of meetings with prospective clients above
the previous estimates and are expected to generate strong business
inflows into the future. Based on this initial success, the Board
will intensify its digital marketing activities as the Group
approaches the new financial year.
Enquiries:
AFH Financial Group PLC 01527 577 775
Alan Hudson, Chief Executive Officer
Paul Wright, Chief Financial Officer
www.afhfinancialgroup.com
Liberum (Nominated Adviser and Broker) 020 3100 2222
Richard Bootle / Euan Brown / Kane Collings
Shore Capital (Joint Broker) 020 7408 4090
Hugh Morgan / Daniel Bush / Sarah Mather
Yellow Jersey PR Limited (Financial PR) 077 4884 3871
Joe Burgess / Annabel Atkins / Dom Barretto
This announcement is released by AFH Financial Group plc and
contains inside information for the purposes of Article 7 of the
Market Abuse Regulation (EU) 596/2014 (MAR), and is disclosed in
accordance with the Company's obligations under Article 17 of
MAR.
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055, this announcement is being made on
behalf of the Company by Paul Wright, Chief Financial Officer.
Notes to Editors
AFH Financial Group (AIM: AFHP) is a leading UK financial
planning-led wealth management firm based in the Midlands. Founded
in 1990 by CEO Alan Hudson, the Company provides wealth management
and financial advisory services to over 20,000 clients in the UK.
These services are delivered by over 450 professional advisers and
400 support staff.
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END
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