Afh Financial Share Discussion Threads

[davydoo] 25/9/2019 16:56

very good point

its easier to justify higher payments to buy advisory firms if you know you can not only pick up the advisory fees from clients, but also move clients into your own funds where you can collect further fees

[topriser] 25/9/2019 16:06

idiotsinthedarkRIZandLINTARD is IMPOTENT

hahahahahahahahah

[ronwilkes123] 25/9/2019 15:52

Target low 2 pounds to enter jrrYou need a margin of safety with ones like this that see relentless drops

[jrr1] 25/9/2019 09:03

yes i agree, i think the next update will be key.
normally early November

[ronwilkes123] 25/9/2019 08:42

Looks like down trend may be resuming based on that merian news imo

[jrr1] 24/9/2019 14:06

and merian reduced....

not sure what is going on here!

[jrr1] 24/9/2019 11:48

good to see mark chambers has increased his stake again...

[rivaldo] 18/9/2019 11:23

"Looking like an opportunity"....



"AFH Financial (LSE:AFHP) offers independent financial advice and investment management to individuals and businesses across the UK.

Acquisition –Broadleaf Financial, based on the Wirral is acquired for £3.2 million. The only disclosure is £140 million FUM. 2.3% FUM appears in the face of it a reasonable price. Since the £15 million convertible issue the company has committed £10.4 million to acquisitions.

Valuation – PE is 9.5X October 2019. Harwood Capital trades at 14X October 2019.

Conclusion –The convertible issue has triggered a strong derating perhaps on the perception that equity appetite has exhausted. This is looking like an opportunity"

[davebowler] 18/9/2019 10:27

Liberum say 'AFH organic net inflows continue at at least 8% p.a.'

[jrr1] 18/9/2019 10:13

added this in this time though...

"in this period of economic and political uncertainty"

[quepassa] 18/9/2019 08:30

Liberum issue broker note this morning and yet again REITERATE their steadfast BUY RECOMMENDATION with an unchanged Target Price of 568p.

Liberum see a significant c. 95% UPSIDE to current share price.

ALL IMO. DYOR.
QP

[rivaldo] 18/9/2019 07:54

Another acquisition for cash, this time £1.7m initially with the £1.5m balance again dependent on performance:



""This acquisition follows the recent acquisitions of Mulberry Independent Financial Advisers and AE Garment, bringing the total committed spend to GBP10.4 million since the Convertible Loan Stock placing in July 2019. The acquisition has been completed on a similar attractive multiple to previous transactions and extends the AFH footprint in the North West of the UK."

[rivaldo] 16/9/2019 09:52

Phillip Mobberley has been buying more - he's now up to 7.5% and 3.19m shares:

[davydoo] 15/9/2019 19:46

We know that there's £45m, so either it stays or goes. It's £1.9m is if it stays, less if some goes

[davydoo] 15/9/2019 18:18

Why would a financial adviser charge more to recommend an equity fund than a property fund? thats a massive conflict of interest

[rimau1] 15/9/2019 17:49

Few observations from me. We can’t conclude that double digit inflows less 2% outflows equates to at least 8% AUM growth because you are missing market movement which is likely to have been negative. Secondly nobody can conclude that they are overpaying for £45m of FUM because we don’t know what type of AUM is in that number (high margin equity portfolios vs low margin property portfolios for example) nor can we deduce how sticky the clients are. Management would have gone line by line in great detail. Need to just trust management that they won’t overpay to simply grow FUM. Good business and I am a buyer under £3 a share.

[davebowler] 13/9/2019 11:18

I agree the price paid for the two, are at diiferent multiples of assets under management;
I wonder if there were physical (property ) assets involved in the A E Garment buy??

Completion of acquisitions

AFH Financial Group plc (AIM: AFHP), a leading financial planning led wealth management firm, announces it has completed two acquisitions of IFA businesses with a maximum consideration of GBP7.2 million, subject to performance criteria. The two deals will bring a combined GBP215 million of Funds Under Management ("FUM"), raising AFH's total FUM above GBP5.6 billion.

Under the terms of the acquisition of Mulberry Independent Financial Advisers Limited ("Mulberry") based in Twickenham, four advisers, including the founders and current directors, will join AFH together with their support staff bringing their clients and GBP170 million of FUM. The maximum purchase price is GBP5.3 million, dependent on the performance of Mulberry during the earn out period. The initial consideration for the acquisition of GBP2.3 million was paid from existing cash reserves with the balance payable in cash over a 26-month period.

AFH has also completed the acquisition of AE Garment Independent Financial Services Limited ("AE Garment") based in Hemel Hempstead, bringing in an additional GBP45 million of FUM. The maximum purchase price is GBP1.9 million of which an initial consideration of GBP1 million was paid in cash on completion. Further deferred consideration will be payable in cash over the next 26 months, subject to agreed performance criteria of the business being achieved. Following the acquisition, Tony Garment retired from the business with his clients allocated to existing AFH advisers.

Commenting, Alan Hudson, Chief Executive of AFH, said:

[dexdringle] 13/9/2019 11:15

AE Garment (the company with £45m under management) is a Limited Company. As at May 2019 it has £750,000 'current assets' in the balance sheet (not intangibles - but proper current assets). So AFH paid £1.9M and they got the clients plus and £750k cash type thing. Netted out this means they paid just over £1M which is around 3 x trail if trail is 0.5% ish...…

There must have been some tax benefit to him selling the current assets rather than drawing that out, and being taxed on it, before selling the clients. Hence AFH paying him £1M cash up front ?

Scroll down to Micro Accounts (May 2019):

[davydoo] 13/9/2019 11:06

That's just payment terms Rivaldo

They're right to protect their interests in case the retiring advisers clients go elsewhere instead

I always find it curious, that the last piece of advice an adviser may ever give their client (transferring to the business they have agreed to sell to) is the one that is in their own self interest, but that's by the by

Managing £45m of assets needs 1 adviser, and generates say £450,000 of revenue.

£1.9m is punchy

[rivaldo] 13/9/2019 10:55

Actually it's only half that initially at £1m payable - the other £0.9m is payable over the next 2 years dependent on performance. Plus the owner is retiring, so that will no doubt aid profitability greatly, with his clients going to existing AFHP advisers.

[quepassa] 13/9/2019 10:55

This is a link to the AFH list of Significant/Director Shareholders updated to yesterday 12th. September:-

hXXps://www.afhwm.co.uk/investor-relations/shareholders/


The ONLY change to this list compared to the same list a month ago as at 9/8/19 is that Polar Capital have gone from 7.1% to 5.52%.

Slater still shown holding 9.99% and Merian still shown holding 5.60%

Zero Director selling.


ALL IMO. DYOR.
QP

[davydoo] 13/9/2019 10:46

They're overpaying.

Not saying it wont work, they're doing what they set out do to reach £10b, and they've been able to raise at much higher multiples than they're buying for

But £1.9m for clients with £45m invested?

That's punchy

[aishah] 13/9/2019 09:19

Nice update clearing concerns. NED bought £50k @320p early last month. The 30th June 2024 CULS conversion price was set at 420p which was at a premium of 16.67% to the closing middle market price of 360p on 27 June 2019. So price battered down considerably since.

FUM growth:
£2.0b 2016
£2.8b 2017
£4.4b 2018
£5.6b now
Target of £10b in 3 to 5 years. Looks like it'll be nearer 3 than 5 imo.

Hopefully on its way back up to previous highs.

[davebowler] 13/9/2019 08:28

hTTps://masterinvestor.co.uk/financial-news/brooks-macdonald-posts-positive-annual-results/?utm_source=Daily+Bulletin&utm_campaign=0a5654dc0e-Daily_Bulletin_20190911_COPY_01&utm_medium=email&utm_term=0_25eff0bb7f-0a5654dc0e-34956193

[quepassa] 13/9/2019 08:18

On the back of this strong news from AFHP today, we see Liberum this morning issue a broker update and REITERATE their BUY recommendation with an unchanged Target Price of 568p.

Liberum continue to see a potential doubling of share price and UPSIDE of c. 105% for AFHP.


ALL IMO. DYOR.
QP