Specialist wealth management and employee benefits company Mattioli Woods (MTW:AIM) saw operational efficiencies and cost savings offset lower revenues that expected.
No revenue details were given in a trading up-date for the year to 13 May 2019, although consensus estimates were pitched at £60.4m. But more important is the fact that this will not impact profits, with the company confirming better than anticipated EBITDA margins (earnings before interest, depreciation and amortisation) that are said to be tracking ‘substantially ahead’ of the company’s 20% target.
The shares gave up 2.5% in early trading to 772.5p.
‘Over the last few months we have seen some positive momentum starting to build, with greater client activity and increasing inflows into the bespoke investment services the group has developed’, said chief executive Ian Mattioli.
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Mattioli Woods’ joint venture with fund manager Amati has seen good growth since the initial tie-up with assets under management up to £452m from £120m. As a result of Amati’s strong performance the group’s share of its profits has increased year-on-year.
Given the success of the venture Mattioli Woods has decided not to exercise its option to take full control of the group, believing that a minority interest is in the best interest of all stakeholders.
NEW HIRES STRENGTHEN OPERATIONS
James Wilson has been appointed as chief compliance and risk officer, while Ravi Tara has been given the new role of group finance director, reporting to the chief financial officer.
Both men have strong credentials, James has been in financial services for over 30 years including stints at The Law Society of Scotland and the Financial Services Authority, while Ravi has previously demonstrated his ability to improve operational efficiency at Capita and Weetabix Food Company.
The company has continued to make acquisitions in line with its strategic objectives and in March announced the purchase of SSAS Solutions, which acts as a small self-administered pension scheme practitioner for 350 schemes with around £380m in assets under administration.
According to broker Shore capital, Mattioli Woods’ vertically integrated model and ‘lower sensitivity to market movements’ is serving shareholders well.
Analyst Paul McGinnis went on to say that he expects more bolt-on acquisitions to bolster growth, having established a ‘strong track of value creation over a long period’.
