Walker Crips is on the acquisition trail as it looks to build up its wealth management division, but chief executive Rodney Fitzgerald admits he is struggling to find value in the market.
‘We have the resources to make a decent-sized acquisition with £8 million of cash on our balance sheet and an £18 million market cap,’ he said. ‘There are plenty [of businesses] for sale, but they all seem to be wanting more than they are worth.’
Walker Crips posted an underlying profit of £500.000 in the 12 months to the end of March 2014, reversing a loss of £1 million in the previous year. Gross profit (net revenues) increased 19.5% to £14.1 million, which Fitzgerald (pictured) attributed to a ‘substantial transformation’ of the business.
This followed a two-year strategy of moving from being a traditional private client stockbroker to a full service investment and wealth management provider. Fitzgerald is also keen to expand the wealth management arm.
‘To complement our business we would probably like a wealth management business, as investment management is flying now,’ he said. ‘To address the balance between investment and wealth management, that would be the desired.’
While discretionary and advisory assets under management (AUM) rose by 29.2% to £1.33 billion over the financial year, he says the business is also focusing on growing its advisory division.
Targeting Chinese investors
The firm has been building its ‘investor immigration programme’, which is initially targeting Chinese investors.
‘We have an introducer operation bringing us funds under management straight from China, representing £30 million today,’ Fitzgerald said.
‘For the moment, [we will] concentrate on that market, because we’ve got a strong Far East connection as our majority shareholders are from Singapore. That’s where the bulk of the business is coming in, and it is rising quite fast.’
Although it is early days, he expects the business to double over the next 12 months.
Meanwhile, chief investment officer Mark Rushton says the next phase of the transformation will involve regional expansion.
‘Looking at the map, there are some opportunities in the South across to the South West, and the North West, which could be interesting,’ he said.
‘Unlike our competitors, which have been forced to close offices, we wanted to have a very controlled steady growth in terms of regional offices because one does need to keep the whole thing in proportion. We’ve already refined our regional presence.’