Mattioli Woods sees further growth in profitability in first half

Wealth management and employee benefits provider Mattioli Woods updated the market on its first half of trading on Thursday, reporting the achievement of a “key milestone”, as its total client assets exceeded £10bn at period end.

The AIM-traded firm said it saw further growth in profitability for the six months ended 30 November, with improved margins following the actions it took in response to Covid-19, as well as continued cost management.

Gross discretionary assets under management came in at £2.9bn at the end of the first half, while the board said the company was in a “strong” financial position, with £18m of cash at period end.

During the half-year, Mattioli Woods established a new executive team and governance structure, and completed the acquisition of Hurley Partners in July, which it said was integrating and performing well.

The directors said they continued their “sustained focus” on mergers and acquisitions, describing a “strong pipeline” of opportunities.

It said its profit outlook for the current year remained in line with management expectations, adding that post-period end, some non-executive appointments had further strengthened the board.

“The first six months of this financial year saw a continuation of the economic and political uncertainty that was a feature for most of 2020,” said chief executive officer Ian Mattioli.

“Throughout the period we proactively balanced securing good financial outcomes for our clients with ensuring the long-term sustainability of our business, remaining true to our purpose of putting clients first, which has been consistent throughout our 30 years of trading, and I am pleased to report further progress towards our ambitious medium term goals with total client assets now exceeding £10.6bn.

“As anticipated, revenue was slightly lower than in the equivalent period last year due to the adverse impact of weaker financial markets and the suspension of certain statutory requirements for pension schemes resulting in lower fee-based revenues.”

However, Mattioli said continued cost management and the positive contribution of Hurley Partners for part of the period “more than offset” the impact of reduced revenues on adjusted EBITDA.

He explained that a “significant number” of the company’s clients were still being impacted by challenging economic conditions, and as a result, it would maintain its previously-announced position not to alter any of its fee structures or implement any fee increases for the rest of the financial year.

“With a post-Brexit agreement on trade and other issues, coupled with anticipated changes to the personal tax regime in the first half of the 2021 calendar year, conditions are favourable for an increase in investment activity and demand for advice in the second half of this financial year.

"Our managed funds continue to perform well and represent a combined value of £2.9bn, including more than £700m at the group's associate company, Amati Global Investors.”

Ian Mattioli said the company believed that consolidation across its key markets would continue, as it assessed and progressed opportunities that met its strict criteria.

“The recent appointments of David Kiddie, Edward Knapp and Martin Reason to our board as independent non-executive directors further strengthens our board and brings additional expertise as we continue to execute against our growth strategy.

“Our profit outlook for the year remains in line with management's expectations and we remain well-positioned to deliver sustainable shareholder returns.”

Mattioli Woods said it would announce its interim results for the six months ended 30 November on 9 February.

At 0802 GMT, shares in Mattioli Woods were down 1.25% at 745.55p.