Afh Financial Share Discussion Threads

[quepassa] 01/7/2019 08:25

The Woodford affair continues to impact others by association.

Fascinating article in today's FT (page 11) about the connections with Hargreaves Lansdown.

It seems to me that some of the major wealth managers caught in the Woodford wake will suffer some reputational loss and are receiving some unflattering media coverage.

This may indirectly be good news however for burgeoning AFHP in terms of fund flows and new client flows.


ALL IMO. DYOR.
QP

[christo9her] 28/6/2019 17:40

Not only the initial planning fees throwing out your calculations, also the growing protection business that has nothing to do with AUM.

Setting these two items to one side, the annual charge comes to a shade over 0.8%. With no platform fee either (a differentiator vs most peers)

[jrr1] 28/6/2019 15:15

-- Placing of CULS to raise up to GBP20 million for the Company, subject to Shareholder approval at a general meeting of the Company to be held on 29 July 2019 (the "General Meeting").

-- The Placing will be conducted by way of a Bookbuild and is expected to close at 12.00 p.m. (London time) on 11 July 2019, but may be closed earlier or later at the discretion of the Company, Liberum and Shore Capital.

????

[rivaldo] 28/6/2019 08:19

Note that there are "five potential acquisitions currently at various stages of the due diligence process".

So the good news flow should continue pretty quickly.

[rivaldo] 28/6/2019 07:35

Excellent news this morning - the issue of CULS reduces dilution, with the conversion price set at 420p, and settles any doubts regarding likely further funding of acquisitions.

There's also a nice little statement that the confident trading in the last results outlook has continued with no change:



EDIT - apologies QuePassa, our posts crossed.

[quepassa] 28/6/2019 07:30

FOR ANYONE WHO DOUBTS AFH'S DETERMINATION ABOUT GROWTH PLANS AND STRATEGY, READ THIS FROM TODAY'S CULS ANNOUNCEMENT:-

Alongside its strategy to drive organic growth, the Board intends to continue to execute its strategy of making selective acquisitions within the Financial Planning and Wealth Management sector whilst providing a professional and cost-effective service to its clients. The Board believes that the Company remains well positioned to take advantage of consolidation opportunities in the sector and currently has a strong near-term pipeline, with five potential acquisitions currently at various stages of the due diligence process. The Company is undertaking the Placing to provide it with a strong platform to finance such acquisition opportunities as well as providing funds for general corporate purposes. The Company is also currently exploring options to access additional capital, including the use of bank debt, to enhance its ability to undertake value-adding acquisitions and for general corporate purpose.


They have successfully been grouse-shooting for some years now.

Sounds to me that they firmly intend to go Elephant hunting now. The question is who is in their sights?

As their determined and well-funded growth strategy continues, this growth share may reward patient shareholders very handsomely in times to come as it further gains in size, weight, AUM and sector importance.


ALL IMO. DYOR.
QP

[davydoo] 27/6/2019 22:53

Gross inflows last year were £440m, they then lost £160m in outflows

Even if they charged 3% upfront fees on all inflows, which would be very high by industry standards, that's £13.2m

leaving the remaining £126.8m of revenue to imply annual management charges of 1.27%, still high

[riverman77] 27/6/2019 21:06

The revenue won't all come from annual management charges. Advisers also charge an upfront fee which makes up a decent portion of the revenues.

[davydoo] 27/6/2019 20:58

£140m revenue on £10bn of assets?

Charging 1.4% per annum seems high

[jrr1] 27/6/2019 08:30

come on afh, lets have some news !

[jrr1] 18/6/2019 12:25

no
but nice to see it regaining a bit of ground

[gargleblaster] 18/6/2019 12:17

Nice move so far today - anyone the wiser?

[rivaldo] 12/6/2019 09:19

Edmond Jackson likes AFHP and has tipped them as a Buy on the dips (that would be now then!):



Conclusion:

"Company broker projects 55% median upside

In the next three-to-five years AFH aims to increase funds under management from £5.4 billion last April to £10 billion and earn £140 million revenue with an operating margin of 25%. That implies EBITDA operating profit of around £35 million. That's fine so long as quality doesn't start to get diluted buying companies, and there's no wider crisis of investor confidence.

Shore Capital (joint broker to AFH with Liberum which is also Nominated Adviser) posits that if AFH achieves such targets then compound annual EPS growth of 25% is possible. It estimates a fair value range for the share price of 490p to 650p (mid-price 570p) on a 12-month forward view, assuming EPS of 32.7p to 2020 and multiples of 15x to 20x.

Shore reckons that as contingent liabilities for acquisitions are paid down with cash flow over 2-3 years, the earnings multiple will drop into single figures. However, this assumes no further share issuance, with future acquisitions relying on cash generation once deferred considerations have been paid.

Buy the dips, mindful of long-term risks

Market jitters anytime are liable to hit AFH just like they would any relatively small financial stock. But, all-considered, I suggest buying such dips. Financial planning looks a relatively dependable sector with good margins, and clients may prove stickier to their funds than is my fear in a downturn, although do remember that asset manager revenues link to a fund’s underlying value. Add."

[quepassa] 10/6/2019 10:01

Several mentions of SJP in the excellent FT feature today about Woodford in the Ftfm supplement , headed " Just how far can a star fall?".

Pages 6+7.

Not good news for SJP, whose reputation, in my opinion, will be dented by association.



These events may likely have the impact of driving more customers towards other like AFHP.

Link to AFH's non-nonsense but excellent website

hXXps://www.afhwm.co.uk/



ALL IMO. DYOR.
QP

[melody9999] 07/6/2019 23:10

I have a bond with SJP but no exposure to Woodford, his SJP mandate or funds. I checked!

[dexdringle] 07/6/2019 19:41

QP has anyone ever told you that you are an unpleasant, aggressive, individual ? I'm betting they have.

[quepassa] 07/6/2019 17:39

Yawn.

You had a similar discussion about SJP charges at the back end of last year on the SJP bulletin board.

The other poster's responses are excellent (p j fozzie). Especially 167 and 171. As well as post 160 by lomax. But you have subsequently deleted nearly all your posts .

One can but draw one's own conclusions as to why you subsequently deleted your posts.

However, the words of pj fozzie in his post no. 165 are highly pertinent " I love the STJ business model as an investor - but I'd never touch them with a bargepole as a customer :-) "


He is right AS LONG AS THEIR BUSINESS MODEL continues.


In my view , the high-fee BUSINESS MODEL currently used by the likes of SJP is on the cusp of falling apart as the new breed of wealth manager like AFHP takes increasing market share.

ALL IMO. DYOR.
QP

[dexdringle] 07/6/2019 16:35

I'd be surprised if more than 10% of SJP clients had a portfolio or holding which included the funds managed by Woodford.

You really do seem to have some sort of issue with SJP. If people like it they like it. That's up to them.

So what does AFH charge for, say, a £100,000 pension in a managed portfolio ?

[quepassa] 07/6/2019 14:25

I think you ought to apologise to pension holders whom you boldly and coldly claim are UNAFFECTED by the 17% DROP in value with the SJP mandated to Woodford.

Watch this SJP video and read what SJP's Chief Investment Officer says "We adopt a radical and effective solution to the risk of investing, offering our clients access to fund managers of outstanding ability...."

hXXps://www.sjp.co.uk/investment-management-approach

All their highfalutin, pompous and pretentious guff sits very awkwardly in my view alongside the mandate they left with Woodford for an extended period.

You couldn't make it up if you tried.


Seems to me that the days of the old school, high charge wealth managers are numbered as the new low-cost pension managers like burgeoning AFHP come to the fore.

ALL IMO. DYOR.
QP

[dexdringle] 07/6/2019 13:25

No one is stupid enough to have their whole pension balance invested in a single fund (SJP or otherwise).

SJP have 37 or so external managers making decisions on investments within the SJP funds. Woodford is 1 of 37. They selected badly when they chose him. Proving that past performance is no guide to future success.

Yes, SJP are not cheap - but their charges are not THAT high.

I do have a holding in AFH (in case you wondered why I was here).

[quepassa] 07/6/2019 11:53

keep on digging.....

this from the man who thinks that a 17% LOSS IN A FUND equates to being UNAFFECTED.

I pity those investors in the fund who were perhaps expecting better investment fund-picking expertise from a house such as SJP.

You see, the johnnies round at SJP are meant to be able to sniff out what are good and not so good investments, good and not so good money managers...

seems to me that the HIGH CHARGES which SJP levy should equate to better things than this sorry set of circumstances.


...but as you point out, any SJP investor losing 17% of his pension pot which had been parked in the SJP High Income Fund is UNAFFECTED.


This story is not over yet and it seems to me that SJP will be in for further flack.

The SJP business model is unsustainable in the long-run with such high charges compared to the new breed of low-cost provider like AFHP.

This is bad press in my view for SJP at a time when it doesn't need it.

ALL IMO. DYOR.
QP

[dexdringle] 07/6/2019 11:26

Okay. Two things.

1. you said they have 'parked several £ billion with Woodford'. This is incorrect. You are implying that they handed the actual monies to Woodford. They did not. In the context of the Woodford liquidity issues, it is very important to differentiate between the physical monies and the decision making regarding investment selection.

2. the funds overseen by Woodford account for something like £2 billion out of a total of £105 billion. You are correct in saying that the funds he oversaw have performed poorly. But this has to be viewed in the context of the whole piece and kept in proportion accordingly.

Whether we like it or not, none of this is a reason for SJP clients to 'jump ship' to AFH or anyone else.

The story is, if anything, "Woodford advised on the underlying investments of 2 of SJP's 38 funds, representing around 2% of all monies invested with SJP, and which have performed less well than hoped". Hardly the end of the world.

[quepassa] 07/6/2019 10:39

All nonsense. You are clueless.

Suggest you read Today's FT.

Seems to me that SJP need carefully and actively to review the suitability or otherwise of their staff members who were behind the SJP invesment mandates with Woodford.

For example, and I quote from The FT, Page 1 today's Cover story:-

"One of its investments, the SJP UK High Income Fund, has shed 17% in 12 months compared to an 18% drop for Mr. Woodford's flagship equity Income fund, LAGGING the 3.3% fall for the FTSE All-Share Index"

So much for your pathetic comment that the "fund continues unaffected". If you think a 17% drop is UNAFFECTED, near mirroring the Woodford fall, you are stupid.

You try telling that to the SJP investors in that fund, whether they think a 17% drop in a fund is unaffected.

All reflects extremely poorly on SJP in my opinion. As well as Woodford.

However SJP's pain ,bad press, share price tumble and reputational loss will enure to the benefit of other pension providers/advisers.

ALL IMO. DYOR.
QP