Revenue and pre-tax profits are on the rise at Mattioli Woods, the specialist wealth and asset management business, as demand increases for wealth management and financial planning advice driven by proposed pension and investment reforms, and market conditions. According to interim results for the six months ended 30 November 2023, revenue was up 8% to £59.1m, in comparison to £54.9m in the same period of the year prior. Meanwhile profit before tax grew 60% to £7.6m, up from £4.8m.

Ian Mattioli MBE, Chief Executive Officer, said: “The first six months of this financial year saw the Group deliver improved organic growth despite the complex macroeconomic backdrop that persisted throughout the period.

“Our priority remains the delivery of profitable organic growth and we are pleased to report further progress towards our medium-term strategic goals, with revenue of £59.1m up 8% on the equivalent period last year (1H23: £54.9m) driven by positive performance across our pensions advice and administration, employee benefits and investment management operating segments. 

“The success of our new business initiatives, combined with our expanding product range and the strength of existing client referrals resulted in organic revenue growth of 4% despite a 0.4% reduction in the value of total client assets to £15.2bn.

“The Group’s improved organic growth resulted from a combination of clients’ demand for advice and proactive communication by advisers, with a 13% increase in the value of new clients on boarded in the first half versus the equivalent period last year.

“The Group’s strong, integrated business model facilitates multiple engagement points in providing a holistic service to our clients and to generate multiple revenue streams to facilitate future revenue growth.

“The combination of improved organic growth, positive contributions from recent acquisitions and continued cost management delivered 10% growth in adjusted EBITDA to £16.5m (1H23: £15.0m).

“Profit before tax was up 60% to £7.6m (1H23: £4.8m), in part due to reduced deferred consideration payments recognised as remuneration expense under IFRS 3 of £2.5m (1H23: £3.9m) and lower acquisition-related costs of £0.3m (1H23: £0.5m), while adjusted profit before tax was up 15% to £15.6m (1H23: £13.5m) after adding back acquisition-related costs, platform project costs, deferred consideration recognised as an expense and amortisation of acquired intangible assets of £4.2m (1H23: £3.9m).          

“We believe the benefits of operating a responsibly integrated business allows us to secure great client outcomes while delivering strong, sustainable shareholder returns over the long term. The Board remains committed to a progressive dividend, while maintaining an appropriate level of dividend cover. Accordingly, the Board is pleased to announce an interim dividend of 9.0p per share (1H23: 8.8p) up 2.3%, demonstrating our desire to deliver value to shareholders.

“The first half of the financial year has seen the Group deliver a resilient trading performance against a complex macroeconomic backdrop. We plan to build on this position, advancing our key strategic initiatives: new business generation, investing in our adviser academy training programmes, developing our investment proposition, developing new products and services, reviewing our processes, and investing in technology to deliver operational efficiencies and growth through the integration of strategic acquisitions.

“Our trading outlook for the year remains in line with management’s expectations and we believe the Group remains well-positioned to take advantage of the growth opportunities in the UK wealth market and deliver sustainable returns for our stakeholders.”

A Leicester businessman who was last year found guilty of selling fraudulent franchise licences to victims across the UK and who went on the run before the trial, has been sentenced to four years in prison and banned from being a company director for 15 years. Nazir Abdul Rashid Daud, formerly of Landseer Road, Leicester, was previously found guilty on three counts under the Fraud Act 2006 in relation to false representations made between 2015 and 2018 and a further charge of fraudulent trading under the Companies Act 2006, and was convicted in his absence at Leicester Crown Court on 2 December 2022. He had gone on the run before the trial, and was arrested on 25 October 2023 and remanded to prison to await sentencing. He appeared at Leicester Crown Court on Wednesday 31 January, where Judge Ebrahim Mooncey imposed the four-year prison sentence as well as ordering Mr Daud to pay prosecution costs of £30,046. His company, Payrolls Direct Ltd, was fined £973,000. The prosecution was brought following an investigation by Leicestershire County Council Trading Standards Service, which received statements from 18 victims. The court heard that Mr Daud was the sole director of Payrolls Direct Limited, which he set up in 2014. Mr Daud had advertised franchise licences for a new cloud-based payrolls system, which he was selling for between £5,995 and £9,995. Franchisees would sign up clients, process payroll for each employee of the company they signed up, and Payrolls Direct would take 20 per cent of the fee, with the franchisee keeping the rest. Mr Daud claimed that buying a franchise licence would allow people to earn between £250 and £2,000 per month, depending on how much time they put into the business and how many clients they signed up. Advertising for Payrolls Direct also promised franchisees initial training, ongoing unlimited support, marketing materials and networking opportunities with successful franchisees. But the court heard that statements from 18 franchisees who spoke to Trading Standards during the investigation revealed that only one was able to sign up any clients, and as the promised unlimited help, support and training was never provided, the franchisees were unable to use the payrolls system, leading to the contract with the clients being terminated. In all, the cash value of the fraud was put at more than £320,000, with witnesses describing further ‘out of pocket’ losses, including thousands of pounds spent on advertising and months of work spent fruitlessly working to gain clients. Harpreet Giani, representing Mr Daud, said that Payrolls Direct was originally conceived as a legitimate company, but it spiralled out of control. He said: “Mr Daud wants to come clean now. He understands he’s probably going to receive a long prison sentence.” Passing sentence, the judge said: “A lot of people had dreams of making it work. They invested a lot of time and made decisions that affected their families. It wasn’t just a monetary value.” Mr Daud’s co-defendant Anthony Raybould was previously sentenced to 22 months imprisonment, suspended for two years, after he pleaded guilty to the offences when he appeared at Leicester Crown Court in December 2022. Gary Connors, head of Leicestershire Trading Standards, said: “This form of fraud provides a quick financial return for the perpetrators, leaving the victims in financial and emotional turmoil. “The franchise sector is heavily reliant on trust rather than regulatory controls and by nature potential new entrepreneurs must be persuaded to make a significant ‘down payment’ for the promise of financial success. “These are often complex and resource intensive investigations, but the legitimate UK franchise industry is a major contributor to the UK economy and must not be undermined by this form of fraud operating within the sector.”