moved back into the black over the six months to the end of March with a pre-tax profit of £0.5 million, as the company’s turnaround continues apace.
Over the full-year losses narrowed £0.5 million to £2 million, while underlying earnings before interest, taxes, depreciation, and amortisation (Ebitda) rose 37% on the year to £3.8 million. The underlying Ebitda margin was 12% over the 12-month period, up from 8% last year.
Total funds under management and influence stood at £4 billion, of which £1.9 billion is discretionary, representing 18% year-on-year growth, which was buoyed by the acquisition of the Generali Portfolio Management. When the assets brought over from Ashcourt’s buy of UKWM, which completed after the company’s year end, are factored in March 2014 pro-forma assets under management and influence stand higher at £5.2 billion. Of this figure £2.2 billion is discretionary.
The firm’s investment management business manages or advises on £2.1 billion of the total £4 billion under management or influence, a figure which increases to £2.4 billion when the UKWM assets are factored in, which means 48% of assets are run on a discretionary basis.
Over three years since taking the helm of the business chief executive Jonathan Polin commented: ‘We have delivered on the objectives to grow underlying profitability, increase assets under management and deliver acquisitions. We have a clear and well defined strategy from which I am confident we can grow the business and create value.’
He acknowledged that after a ‘slow start to the first half as reported in our interims’, revenue growth had proved stronger in the second half of the company’s reporting year, with revenues in the second half at £16.3 million, up £1.1 million on the first half.
‘Notwithstanding the above, revenues on a year-on-year basis declined by around £1 million, reflecting the planned changes we made in late 2012 and early 2013,’ Polin noted.
‘We had hoped to mitigate this decline with faster revenue growth but as a result of the reorganisation of the financial planning business, and the Figaro Platform migration, this took longer to come through than expected. We expect to be back on track this year as we concentrate on growing assets and recurring revenues, which is evidenced by our two acquisitions.’
Ashcourt’s full-year results were also buoyed by a 7% reduction in the company’s cost-base.
During the year the company also introduced a new management team to its financial planning business and made a continued effort to convert clients to a new service agreement, as part of a move away trail commission. This, the group said, is interwoven with a strategy to 're-platform' clients - an initiative which saw £77 million of assets 're-platformed' and a transfer of £39 million into discretionary services, either as new Ashcourt Rowan Asset Management clients joined, or more money from existing clients moved over.
A further £38 million was converted to an ongoing service agreement, delivering an average yield of 74 basis points per annum. Ashcourt noted this was a material uplift.