Mattioli Woods is “well placed” to continue to expand despite caution around markets and the continuing uncertainty over Brexit, its chairman said today.
Joanne Lake told shareholders she expected both factors – and likely changes to pension legislation in next week’s Budget – to “drive a sustained demand for advice”.
She was speaking at the company’s annual general meeting where she revealed Mattioli Woods had made a strong start to the new financial year.
Mrs Lake said: “We have secured further revenue growth and operational efficiencies in the first four months and I believe the benefits of operating our integrated model will allow us to further reduce clients' total expense ratios ("TERs"), whilst realising new operational efficiencies and synergies.
“As reported by many participants in the UK wealth management sector, we have seen a lower level of client activity over the summer months, attributed primarily to poor investor sentiment and prolonged uncertainty over Brexit. However, the impact on revenue of this and reducing clients' TERs has been more than offset by resource and other administrative cost savings, resulting in EBITDA margin for the year to date tracking substantially ahead of target”.
She added: “Although there is some caution around markets, we believe the Group is well placed to continue to grow, both organically and by acquisition. Many commentators predict that next week's Budget will include changes to pension tax relief and we expect further changes in pension legislation, fresh speculation around the shape of Brexit and any further volatility in markets to drive a sustained demand for advice.
"The inherent flex within our business model will allow us to adapt to meet the needs of our clients in what remains a changing marketplace, with a key part of our strategy being to lower the cost of the services we provide while growing a long-term sustainable business”.
Mrs Lake said the wealth management and employee benefits specialist’s recent move to new offices in the heart of Leicester city centre had created a more flexible working environment which “will allow us to continue to grow the business and realise further operational efficiencies, whilst ensuring our client services continue to be first class”.
She also revealed Mattioli Woods stood to benefit from rental savings of £850,000 per year as a result of the switch from its former premises in Grove Park, Enderby.
"The bespoke investment services the Group has developed enjoyed aggregate net inflows of over £100 million, in line with the strong results reported for the equivalent period last year. Unlike many wealth managers, the majority of our revenues are fee-based, rather than being linked to the value of assets under management, administration or advice,” she told today’s meeting.
She confirmed -as previously announced - that the board proposed a 20.6% increase in the total dividend for the year.
Last month, Mattioli Woods posted a 27 per cent leap in pre-tax profits to almost £10 million.
Revenues were up 16.2 per cent to £58.7 million for the year ending May 31, underpinned by strong organic growth of 15.6 per cent compared to 11.6 per cent in 2017.