Mattioli Woods has seen revenue climb 10% on the first six months of the year driven by a “strong” performance from its employee benefits business, according to a trading update from the intermediary firm.
The firm said it was also continuing to “assess a strong pipeline” of potential acquisitions as it continued pursuing opportunities to buy other advice firms.
The update released ahead of interim results for the six months ended 30 November 2022, showed revenue for the wealth management and asset management business for the period increase to £54.9m from £49.9m in the first half of the year.
However, the group did point out that revenue in the second half of its financial year is historically higher than in the first half due to end of tax year advice, existing and new product manufacture and second half weighting of client year-ends.
Employee benefits business performance
Mattioli Woods chief executive Ian Mattioli pointed out that the group’s employee benefits business, along with its pension, consultancy and private equity operating segments, “performed strongly” during the period.
“Clients’ demand for advice and proactive communications by advisers with our clients in such uncertain times resulted in an increase in advisory time, with the value of new clients on-boarded in the first half over 10% higher than the equivalent period last year,” Mattioli continued.
“The success of our new business initiatives and the strength of existing client referrals resulted in organic revenue growth of over 2%, despite a 2% fall in the value of total client assets.”
‘Strong pipeline’ of acquisition opportunities
Elaborating on the performance of the nine acquisitions the group has made since July 2020, Mattioli revealed that during the second half of the year, the group has continued to successfully integrate the acquired businesses and clients into the group.
He added the nine acquisitions were all trading in-line or ahead of budget and have delivered earnings to support full payment of any contingent consideration.
“Consolidation within the wealth management, pensions administration, asset management and financial planning sectors continues apace,” Mattioli added.
“We continue to assess a strong pipeline of potential acquisition opportunities, with a disciplined approach, where all transactions are required to meet our strict investment criteria.”
Creditable revenue growth
Turning to the group’s overall performance, Mattioli said the group delivered “creditable” revenue and profit before tax growth in the first six months of this financial year, despite the difficult economic and political complexities that persisted throughout the period.
“Our revenue model balances fee-based revenues for specialist advice and administration with revenues linked to the value of clients’ assets on an ad valorem basis, which has allowed the group to continue to grow and experience less sensitivity to movements from challenging investment markets,” he said.
“We continue to focus on securing good financial outcomes for our clients and putting them first in everything we do, while at the same time achieving both organic and acquisition based growth, and I am pleased to report further progress towards our medium-term goals.
“Our trading outlook for the remainder of the financial year is in line with management’s expectations and the group remains well-positioned to deliver long-term sustainable shareholder returns,” Mattioli concluded.