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Maiden results from Tatton Asset Management

Tatton Asset Management

Tatton Asset Management, the AIM listed on-platform discretionary fund management (DFM) and support services business for independent financial advisers, today released its maiden interim results for the six-month period ended 30 September 2017.

The firm joined the AIM market in July.

In a statement management said that the results were in-line with expectations, supported by a strong period of organic growth.

Financial Highlights

  • Discretionary assets under management within Tatton Capital up 15% since March 2017 to £4.44bn at 30 September 2017 and up 33% over 12 months (March 2017: £3.85bn; 1H16: £3.33bn), with the run rate averaging over £80m per month
  • Group Revenue increased 31% to £7.3m (1H16: £5.6m)
  • Adjusted EBIT up 56% to £3.1m (1H16: £2.0m)
  • Reported Profit Before Tax decreased to £0.54m (1H16: £1.86m), after charging exceptional initial public offering (IPO) costs of £1.6m and share option costs of £0.9m, the latter arising from the group structuring that took place in order to deliver the IPO
  • Net cash of £10.5m (1H16: £0.1m) and regulatory capital resources in significant surplus to requirements
  • Inaugural interim dividend  of 2.2p per share.

Business Highlights

  • Successful IPO on AIM completed on 6 July 2017 raising £51.6m, including £10m new money
  • The Group has three operating subsidiaries:  Tatton Capital Limited (“TCL”), Paradigm Partners Limited (“PPL”) and Paradigm Mortgage Services LLP (“PMS”)
  • TCL delivered organic growth in AUM and also an increase in the number of advisory firms utilising the on-platform discretionary portfolio service for their clients. The number of firms has increased to 286 as at 30 September 2017 (1H16: 207)
  • TCL also took over the previously outsourced investment management of the Tatton Oak fund range from August 2017 onwards
  • TCL won the prestigious ILP Moneyfacts award for “Best Discretionary Fund Manager” in period in September 2017, beating well known wealth managers
  • PPL, the Group’s compliance services business, continued to expand with member numbers increasing to 356 (1H16: 347) and revenues up 23% to £3.48m (1H16: £2.82m), driven by increases in Paradigm Wrap income
  • PMS, the Group’s mortgage and protection distribution business, reported gross lending via its channels during the period of £2.99bn (1H16: £2.35bn), an increase of 27%. PMS now has 1,143 mortgage firms using its services (1H16: 1,016), a significant increase of 13% year-on-year.

As regards outlook and current trading, the statement said: “Since 30 September 2017 the group continues to perform in line with management expectations, building upon the growth trends reported for the interim period

Chairman Roger Cornick reported: “I am pleased to report our maiden interim results following the successful IPO in July 2017, and to comment on the progress made by the Group in the months that have followed.

“All three divisions have delivered growth in revenues, as a result of which Adjusted EBIT, at £3.1 million for the six months ended 30 September 2017, have increased by 56% in comparison to the first half of the previous year.

“Discretionary funds under management, the number of advisory firms utilising the Group’s compliance services, and gross lending through our mortgage and protection division, have all increased over the last six months.

Looking ahead, the encouraging level of engagement of our intermediary clients indicates a positive outlook, providing confidence for the next trading period and for our results for the year to March 2018.”

Chief Executive Officer Paul Hogarth added: “The Group’s IPO in July 2017 has been very well received by client firms supported by the Group.  A key metric for our growth is discretionary funds under management, which I am delighted to report has risen by 33% over the last twelve months to £4.44 billion. We are seeing unprecedented demand for a low-cost DFM service to the mass affluent market place served by the IFA sector, which the Group is ideally placed to capitalise on. Our unparalleled offer is challenging the existing off-platform, traditional incumbents, by providing the mass-affluent with the kind of investment portfolio management usually the preserve of the very wealthy. This is a game changer and has set us on a firm path of growth.”