Trading Update

Mattioli Woods PLC

09 January 2024

 

9 January 2024

Mattioli Woods plc

("Mattioli Woods", "the Group" or "the Company")

Trading Update and Notice of Interim Results

Mattioli Woods plc (AIM: MTW.L), the specialist wealth and asset management business, today issues the following trading update in advance of its interim results for the six months ended 30 November 2023, which are to be announced on Tuesday, 6 February 2024.

Highlights

The business has performed well in complex markets.

·     Revenue up 8% to £59.1m (1H23: £54.9m):

- Resilient trading performance, against a challenging macroeconomic backdrop;

- Organic revenue growth of 4%, with robust new business pipeline;

- 374 new client wins with an asset value of £82.2m;

- Total client assets of the Group[1] remained stable at £15.2bn (2023: £15.3bn) with reduction in assets driven by £155m downward market movements;

- Revenue in the second half historically higher than in first half due to fiscal year end and weighting of pension fund client year ends;

·     Implementation of new Group-wide CRM system progressing in line with plan;

·    Continued focus on improving operational efficiency, managing costs and delivering intra-Group synergies to grow profit margin;

·   Recent acquisitions performing and integrating well, with robust pipeline of potential bolt-on acquisition opportunities;

·     Strong financial position, with £32.7m of cash at period end; and

·     Outlook for current year remains in line with management's expectations.

Ian Mattioli MBE, Chief Executive, comments:

"I am pleased to report revenue growth in the first six months of this financial year, despite the challenging macroeconomic backdrop that continues to affect client sentiment and market value of clients' assets. Revenues were 8% higher and the Group delivered organic revenue growth of 4%, reflecting the resilient nature of our revenue model combining fee-based revenues for specialist advice and administration with ad-valorem investment management revenues linked to the value of clients' assets, despite a slight fall in the value of client assets under advice and administration during the period."

"We enjoyed particularly strong growth within our core pension consultancy and employee benefits business segments, with the proposed changes to pension and tax rules announced in the Chancellor's recent Autumn Statement driving strong demand for advice."

"We continue to focus on the integration of recently acquired businesses, with realisation of revenue synergies across the Group remaining a priority. We also completed a detailed review of our current investment offering for clients during the period which has identified opportunities for enhancing Group revenues whilst reducing clients' costs. Our focus will now shift to implementing these strategic changes for the benefit of both our clients and shareholders."

Outlook

"Client demand for our specialist consultancy services, to help them better understand the proposed changes to pension and tax rules, has generated a strong 22% increase in the value of new business enquiries versus the prior year. We expect these recent legislative changes and the current macroeconomic conditions to drive continued demand for trusted specialist advice."

"In line with our strategy, we plan to address the 'advice gap' the regulator has highlighted and deliver further organic growth in our financial planning and specialist pension consultancy business by expanding the training capacity within our Adviser Academy and more than double our intake of new trainee advisors in the coming years."

"Our investment and asset management business, like many others in the sector, continued to experience pressure on asset values in the first half; however there are some signs of improving market conditions and any positive market movements in the second half would increase the Group's investment-related revenues."

"We continue to focus on the FCA's Consumer Duty principles which we welcome given clients have been at the heart of our business since we were established over 30 years ago. We are also working on the roll-out of our new pension banking proposition, which will offer multiple benefits including higher client interest rates, competitive pricing, and an enhanced Group banking margin."

"As part of our continued investment in technology, the Group-wide implementation of our new client relationship management system is being delivered as planned, with the migration of all our regional offices onto the new system on course for delivery by the end of this financial year. Project costs of £0.7m incurred in the first half are in line with budget and our continued investment in technology will lead to improved operational efficiency and additional business capacity in future periods."

"Inflationary pressures continue to impact wages and administrative costs across the Group. The Board takes a proactive approach to managing costs and intends to implement a number of cost-saving initiatives in the second half, whilst continuing to invest to create capacity or improve efficiency as appropriate."

"Consolidation in the wealth and asset management sector continues and we have a robust pipeline of bolt-on acquisition opportunities to review. Previously acquired businesses are integrating well, with synergies being realised and new cross-selling opportunities identified." 

"Our strategic plan remains focused on driving further organic growth, complemented by strategic acquisitions which meet our investment criteria, with targeted investment to create capacity, improve operational efficiency and enhance client experience. Supported by a strong financial position, we look to the future with confidence."

Governance changes

The Board regularly reviews the suitability of the Group's governance structure and was pleased to appoint Alison McKinna as an Independent Non-Executive Director in December 2023.  Alison brings new skills to the Board and a track record of delivering successful, customer focused business transformations with expertise in digital innovation across several sectors.

Notice of Interim Results

Mattioli Woods will be announcing its interim results for the six months ended 30 November 2023 on Tuesday, 6 February 2024.

Management will host an analyst presentation at 09:30 GMT on 6 February 2024. Those analysts wishing to attend are asked to contact Julia Tilley at Camarco on [phone] or at [e-mail].

- Ends -

For further information please contact:

Mattioli Woods plc
Ian Mattioli MBE, Chief Executive Officer	Tel: [phone]
Ravi Tara, Chief Financial Officer Michael Wright, Deputy Chief Executive Officer	www.mattioliwoods.com
Canaccord Genuity Limited (Nominated Advisor and Joint Broker)
Emma Gabriel		Tel: [phone]
Harry Pardoe		www.canaccordgenuity.com
Singer Capital Markets (Joint Broker)
Tom Salvesen	Tel: [phone]
Alaina Wong	www.singercm.com

Media enquiries:

Camarco
Julia Tilley	Tel: [phone]
Alex Campbell	www.camarco.co.uk

Notes to editors

Mattioli Woods is one of the UK's leading full-service wealth and asset management groups, providing specialist pension, wealth management and employee benefit services. Its core proposition integrates financial planning and asset management to serve a market predominantly consisting of mass affluent individuals, controlling directors and owner-managed businesses, professionals, executives, families and retirees. Its comprehensive range of employee benefit services is particularly suitable for medium-sized to larger corporates.

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. The Groups broader wealth management proposition has grown from its strong pensions advisory and administration expertise, with a client base of 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 £15.2 billion. For more information, visit www.mattioliwoods.com.

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[1] Includes £672.2m (31 May 2023: £829.2m) of funds under management by the Groups associate, Amati Global Investors Limited, excluding £65.5m (31 May 2023: £73.0m) of Mattioli Woods' client investment and £10.7m (31 May 2023: £11.7m) of cross-holdings between the TB Amati Smaller Companies Fund and the Amati AIM VCT plc.

 

END