Trading Update and Notice of Final Results
7 July 2022
Mattioli Woods plc
("Mattioli Woods", "the Group" or "the Company")
Trading Update and Notice of Final Results
Mattioli Woods plc (AIM: MTW.L), the specialist wealth and asset management business, today issues the following trading update in advance of its final results for the year ended 31 May 2022, which are expected to be announced on Tuesday 13 September 2022.
· Revenues up over 70% on prior year, reflecting the impact of recent acquisitions plus strong organic revenue growth of 10%;
· Profit in line with management's expectations;
· Improved new client lead generation resulting in increased new business pipeline versus prior year;
· Client assets of the Group and its associate totalled over £14.9 billion (2021: £12.1 billion) at the year-end;
· Gross discretionary assets under management up 25% to £5.1 billion, with over £340 million of net inflows during the year;
· Strong financial position, with £54 million of cash at 31 May 2022 (1H22: £44 million);
· Recent acquisitions performing ahead of budget and integrating well; and
· Acquisition of Ferguson Financial Management completed in May 2022, with a strong pipeline of further acquisition opportunities.
· Whilst early in this financial year, current trading reflects further growth ahead of management's current expectations and the resilience of our revenue model. However, we expect inflationary pressures, partially offset by management actions, to impact profit margin over the near term.
Ian Mattioli MBE, Chief Executive, comments:
"The last financial year was another period of economic and market uncertainty, throughout which we remained true to our purpose of putting clients first. I am pleased to report this focus has delivered strong revenue and profit growth, representing meaningful progress towards our ambitious strategic goals.
"Revenue was up over 70% on the prior year, reflecting the contribution of recent acquisitions and double-digit organic growth, with the increased levels of new business written and a strong pipeline of new business enquiries offsetting the impact of negative market movements on the value of client assets.
"Acquisitions completed during the year, together with those completed in the prior year continue to trade ahead of our initial expectations, including the Group's two largest acquisitions to date of Maven Capital Partners and Ludlow Wealth Management. Maven generated a number of significant performance fees as a result of successful fund, VCT and investor partner exits, highlighting the quality of its investment proposition and further supporting the acquisition rationale. Maven continues to realise cross-selling revenue synergies within the Group, with further new investment opportunities in development. The Ludlow team continues to engage with our discretionary portfolio management and other investment services, with opportunities to realise additional synergies being progressed across the Group.
"We expect the challenging macroeconomic conditions to drive an increasing demand for advice from clients, which will underpin growth in pensions and advice business. Like the rest of the UK wealth management sector, we expect market movements in the first half of this calendar year to negatively impact the Group's investment-related revenues relative to our expectations prior to Russia's invasion of Ukraine, partially mitigating some of the anticipated revenue gains in our pensions and advisory business.
"However, the spectre of rising inflation typically creates an opportunity for further investment inflows as existing and prospective clients consider appropriately investing surplus cash to avoid suffering an erosion in value of savings in real terms.
"Despite ongoing management actions to mitigate costs, we expect Inflationary pressures to continue to impact employment costs, professional costs and occupancy costs across our office network. The Board will continue to take a rigorous and proactive approach to the management of costs.
"We expect further consolidation within the wealth and asset management sector, and continue to see many new acquisition opportunities coming to market. We will continue to assess and progress bolt-on opportunities as well as potentially more substantial opportunities in the longer term, with all potential transactions required to meet our strict investment criteria and due diligence procedures.
"We continue to progress our strategic initiatives, including the development of our bespoke MWeb platform, digital client interface and a common wealth management platform, as well as our commitment to continue investing in our people and their training and development. As previously announced, the decision to accelerate investment in technology and infrastructure in the current year will drive operational efficiency improvements and create additional capacity in future periods.
"We have confidence in our resilient business model, combining time-costed revenues and ad valorem fees, complemented by other investment management fees. The Group's trading outlook for the new financial year remains positive, with revenues slightly ahead of management expectations, notwithstanding the challenging macroeconomic conditions that we, our clients and the industry face. Inflationary pressures are therefore expected to impact on our margins in the short term. We remain confident in our ability to deliver double-digit revenue growth and long-term sustainable shareholder returns".
Notice of Final Results
Mattioli Woods expects to announce its final results for the year ended 31 May 2022 on Tuesday 13 September 2022.
Ian Mattioli MBE, Chief Executive, Ravi Tara, Chief Financial Officer and Michael Wright, Group Managing Director will hold an analyst presentation at 09:30 hrs on 13 September 2022. Those analysts wishing to attend are asked to contact Camarco on +44 (0) 20 3757 4998 or at [email protected].
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.
- Ends -
For further information please contact:
Mattioli Woods plc
Ian Mattioli MBE, Chief Executive Officer
Tel: +44 (0) 116 240 8700
Ravi Tara, Chief Financial Officer
Michael Wright, Group Managing Director
Canaccord Genuity Limited (Nominated Advisor and Joint Broker)
Tel: +44 (0) 20 7523 8000
Singer Capital Markets (Joint Broker)
Tel: +44 (0) 20 7496 3000
Tel: +44 (0) 20 3757 4998
Notes to editors
Mattioli Woods is one of the UK's leading providers of specialist pension, wealth management and employee benefit services. Its core proposition integrates asset management and financial planning to serve the higher end of the market including controlling directors and owner-managed businesses, professionals, executives, and affluent retirees. Its comprehensive range of employee benefit services is particularly suitable for medium-sized to larger corporates.
The Group's broader wealth management proposition has grown from its strong pensions advisory and administration expertise, with a client base of over 11,000 self-invested personal pensions ("SIPP") and small self-administered pension schemes ("SSAS") throughout the UK. The Group's assets under management, administration and advice total over £14.9 billion.
Mattioli Woods has a focus on holistic planning and providing the highest level of personal service, maintaining close relationships with its clients. The strength of its personal relationships has led to high levels of client satisfaction, retention and referrals. For more information, visit www.mattioliwoods.com.
 Market consensus forecast for year ended 31 May 2022: Revenue £107.4m; Adjusted EBITDA £32.8m and Adjusted Profit before Tax £29.8m.
 Includes £1,100.5m (31 May 2021: £1,196.0m) of funds under management by the Group's associate, Amati Global Investors Limited, excluding £93.6m (31 May 2021: £94.8m) of Mattioli Woods' client investment and £14.8m (31 May 2021: £17.2m) of cross-holdings between the TB Amati Smaller Companies Fund and the Amati AIM VCT plc.
 Includes £1,208.9m (31 May 2021: £1,308.1m) of funds under management by Amati Global Investors Limited, including Mattioli Woods' client investment and cross-holdings between TB Amati Smaller Companies Fund and Amati AIM VCT plc.