Leicester-headquartered Mattioli Woods, the specialist wealth management business, has seen profits grow during the first half of the financial year. The firm also saw a slightly lower than anticipated revenue growth in “a complex market” with low levels of client activity.
Ian Mattioli, Chief Executive, said: “I am pleased to report the first half of this financial year represented a period of further sustainable profit growth in a complex market, notwithstanding a lower level of client activity over the last six months due to generally poor investment sentiment and prolonged uncertainty over Brexit.
“Slightly lower than expected revenue growth is a combination of the Group reducing our clients’ costs and general market conditions. The impact of this has been more than offset by a continued focus on operational efficiencies and other administrative cost savings, resulting in strong profit growth and our EBITDA margin for the period tracking substantially ahead of our 20% target.
“We completed a seamless move to our new Leicester office in October, incurring significantly lower downtime and relocation costs than anticipated. This more flexible working environment allows us to continue growing the business and realise further operational efficiencies, whilst ensuring our client services remain first class. In addition, we will benefit from future rental savings of approximately £0.85 million per annum.
“We also completed a number of other projects during the period, including the implementation of a cloud hosted IT architecture across the Group, the introduction of an integrated human resource management and payroll system and the launch of a refreshed Mattioli Woods brand, with the one-off costs associated with these projects and the reorganisation of certain elements of our operations more than offset by cost savings recognised during the period.
“We intend to continue managing the cost base against the backdrop of an uncertain market outlook. I have previously indicated that I believe fees for financial services in the UK are too expensive and have set out our aim to lower client costs, whilst building a long-term sustainable business. Securing operational efficiencies and economies of scale, particularly through the integration of acquired businesses and clients, are key elements of our aim to reduce clients’ total expense ratios and ensure sustainable returns for our shareholders.
“Growth in profit for the period includes a positive contribution from the Broughtons Financial Planning business we acquired in August 2018 and an increased share of profit from the Group’s associate company, Amati Global Investors, with the value of its gross funds under management5increasing to over £348 million at the period end.
Mattioli added: “With many geopolitical uncertainties in the world at present, this is the time to engage with our clients and ensure we address their changing needs and requirements for advice, administration and review. I believe our focus on client service and the inherent flex within our business model will allow us to continue to adapt to the changing wealth and asset management marketplace.
“Although there is some caution around markets, we believe the Group is well placed to secure further growth, both organically and by acquisition, and further consolidation within our core markets remains likely. Our profit outlook for the year remains in line with management’s expectations and I am confident we can secure further progress towards the ambitious longer-term goals we have set.”