Mattioli Woods reports 'resilient' first half of trading

Wealth and asset management specialist Mattioli Woods said in an update on Thursday that it was expecting first-half revenue to have risen 10% to £54.9m.

The AIM-traded company described a “resilient” trading performance in the six months ended 30 November, against a “complex” macroeconomic and geopolitical backdrop.

Organic revenue growth topped 2%, alongside an increased new business pipeline, despite a 2% fall in total client assets by the end of the period.

Mattioli Woods said that looking ahead, it would increase its ad valorem fees in the second half in alignment with its market value improvement, while revenue in the second half was “historically higher” than in the first half due to end-of-tax-year advice, existing and new product manufacture, and second-half weighting of client year-ends.

Gross discretionary assets under management totalled £4.9bn at the end of the first half, making for a 4% decrease in the period, with gross inflows slipping to £314.1m from £384.8m year-on-year, and net inflows at 0.8% of opening assets under management.

The company said it progressed its digital client experience with the launch of its ‘MWise’ online investment platform.

Its recent acquisitions continued to perform in-line or ahead of budget and were integrating well, with an “exciting” and value-accretive pipeline of new acquisition opportunities also noted.

The board said it would maintain its focus on managing costs, achieving intra-group synergies and maintaining its profit margin.

Mattioli Woods said it was in a “strong” financial position, in-line with expectation at £38.3m of cash held at period end, down from £53.9m at the end of May last year.

Maximum contingent consideration of £9.8m was paid on recent acquisitions, while the company’s sash outflow was £9.1m on the payment of an increased 2022 financial year final dividend.

The board said the company’s outlook for the current year remained in line with management expectations.

“The group delivered creditable revenue and profit before tax growth in the first six months of this financial year, despite the difficult economic and political complexities that persisted throughout the period,” said chief executive officer Ian Mattioli.

“Our revenue model balances fee-based revenues for specialist advice and administration with revenues linked to the value of clients' assets on an ad valorem basis, which has allowed the group to continue to grow and experience less sensitivity to movements from challenging investment markets.

“We continue to focus on securing good financial outcomes for our clients and putting them first in everything we do, whilst at the same time achieving both organic and acquisition based growth, and I am pleased to report further progress towards our medium-term goals. In the reporting period.”

Mattioli said the group had maintained profit margins through “prudent” cost management, and in realising further operational efficiencies.

"We remain committed to our culture of putting clients first and to delivering on our ambitious growth plans for the business.

“We launched our online investment platform, MWise, which is now live and provides an additional distribution channel for new and existing clients.

“We are progressing our other strategic initiatives, including the development of our proprietary MWeb pension administration platform and the implementation of new third-party financial planning and wealth management software, which will deliver improved operational efficiency in future years.”

Those initiatives, Ian Mattioli said, were in line with the company’s historic guidance for expenditure of around £2m per year.

“Our trading outlook for the remainder of the financial year is in line with management's expectations, and the group remains well-positioned to deliver long-term sustainable shareholder returns.”

At 1425 GMT, shares in Mattioli Woods were up 0.79% at 635p.

Reporting by Josh White for Sharecast.com.