Afh Financial Share Discussion Threads

[dexdringle] 07/2/2020 08:57

"The group has some 42.8m shares in issue, of which 13.2m are held by boss Alan Hudson and his board"

I think they accidentally just used the word "board" rather than the word "mates"

[jrr1] 07/2/2020 08:32

good write up, but alan does not hold 13.2miilion shares he holds just under 6 million shares.
Figures still look positive though.
55% of shares held by alan / institutions.

[rivaldo] 07/2/2020 07:27

Tipped overnight on Master Investor....



"AFH Financial is going for growth
By Mark Watson-Mitchell
06 February 2020

Now with over £6.2bn assets under management, this group is aiming for £10bn, writes Mark Watson-Mitchell.

Established way back in 1990, this company, which joined AIM in 2014, has grown significantly, especially over the last few years as it tucked more companies into its fold.

The company announced its end-October 2019 final results a couple of weeks ago, they reported the sixth consecutive year of strong revenue and earnings growth since it came to the market.

Today the Bromsgrove, West Midlands based group AFH Financial (LON:AFHP) has 12 offices across the UK and counts over 200 independent financial advisers amongst its ranks. It has over £6.2bn of assets under management, having grown 40% in the last financial year alone.

The group has three main operating subsidiaries: AFH Wealth Management; AFH Private Wealth; and Eunisure.

AFH Wealth Management’s IFAs provide financial planning-led wealth management advice and a variety of services to the UK’s high net worth private client market. They also act for a number of corporates. It is this division that handles the £6.2bn AuM.

AFH Private Wealth is possibly more exclusive in its services, in so much as it appoints personal dedicated client executives to handle special wealth management support and advice for the group’s more discerning investor clients.

Eunisure has a network of more than 300 protection advisers across the UK. Health, lifestyle and income – this company provides its clients with affordable insurance solutions to cover what they need to value and protect.

The group has some 42.8m shares in issue, of which 13.2m are held by boss Alan Hudson and his board.

Large holders include Slater Investments (10.65%), Lombard Odier (6.34%), Northern Trust (5.09%), Merian Global Investors (4.99%), BMO Global (3.96%), Polar Capital (3.83%), and Rorema Beheer (3.70%).

The policy of growth by both organic expansion and strategic acquisition is very evident when you look at the group’s revenue and profit record over the last three years. From sales of £33.6m in 2017, to £50.6m in 2018 and up to £74.3m for the year to end-October 2019.

Operating profits in that period rose from £3.73m in 2017 to £7.94m in 2018 and up to £14.0m last year.

The profit after tax was up 82% to £10.8m in 2019, pushing earnings up from 16.0p to 25.4p per share. Conservatively the dividend rose just 33% to 8p per share.

Trading in the current year remains strong and the group has plenty of cash to meet requirements. Estimates for net income this year suggest £12.1m and then up to £14.6m next year. The growth continues.

The group’s three to five-year strategy is very clear: it aims to have AuM of £10bn producing some £140m of revenues and operating on a 25% underlying EBITDA margin on revenue (last year it was up from 20.6% to 23.2%).

Based on its previous record I do believe that all of those targets look totally achievable.

Liberum Capital and Shore Capital, joint brokers to the company, both rate the shares as a ‘buy’ and, after the recent results, Liberum has actually raised its sights from 484p to 569p.

The whole of the financial sector, especially those companies with funds under management, is seeking strong growth and as such I do feel that AFH could become a predator’s target. And it is valued at only £165m.

With its shares currently trading at around the 388p level, they look like a cheap growth stock to me.

Cautiously, I now set my end-2020 target price at 480p."

[saucepan] 06/2/2020 15:38

Lovely chart set up.

[jrr1] 06/2/2020 15:23

yes but en route....

[rivaldo] 06/2/2020 15:10

Breaking upwards again today. Still a long way to go to Liberum's 569p target.

[rivaldo] 05/2/2020 07:37

Good to see further institutional demand boosting the company's coffers, with one buyer taking £240,000 of stock from AFHP's treasury shares at 390p each:

[rivaldo] 30/1/2020 14:35

RNS - for the record the AGM is on Friday 6th March.

[rivaldo] 28/1/2020 13:22

Liberum use their own calculation of fully diluted EPS, going for 32.7p EPS to this October and 36.8p EPS next year.

So the core adjusted EPS (not fully diluted) forecasts are probably around 35p-36p EPS for this year and 40p EPS for next year (though Liberum don't show these in their note).

[johndoe23] 28/1/2020 11:22

Anyone know forecast EPS for this year please?

[rivaldo] 28/1/2020 11:10

Pushing up again to new recent highs following the news of Mark Slater's buying.

[rivaldo] 27/1/2020 15:09

Indeed, it was only 10% of his holding and he won't be selling more for a while.

Slater's buying is more significant.

[maiken] 27/1/2020 14:48

RNS slipped out at 5pm on Friday.founder and chief exec Alan Hudson sold 600,000 at 383p.Looks like those were bought by Slater.

[rivaldo] 27/1/2020 13:35

Great to see Mark Slater buying more AFHP - Slater Investments are now up to 12.2% with 5.2m shares:



So they've bought another 645,000 shares in the last couple of months.

[mobtheplod] 24/1/2020 10:22

A nice write up in the IC this morning with a buy recommendation.

[rivaldo] 23/1/2020 13:56

Here's the IC's Buy tip:

"Tip Update: Buy at 385p
By Alex Newman

AFH Financial (AFHP) reported “steady progress” towards its long-term goals this week, as the financial planning-led wealth manager unveiled stable margins, a 40 per cent rise in funds under management, and another leap in revenues in its October year-end financial statement.

Earnings also strengthened, thanks to a switch in the revenue model within the group’s protection broking division. Here, underlying cash profits doubled to £5.4m, while the gross margin ticked up from 44 to 54 per cent.

That has also boosted cash generation, which should provide further evidence to investors that AFH’s historically acquisition-dominated strategy can be self-funded. On this front, discernment has been the watchword, as management concentrates on technology investments and organic revenue growth.

Should an attractive takeover target appear, then the post-period signing of a £12m loan facility with HSBC has given the group flexibility to move quickly and avoid the need to tap the equity market. Chief executive Alan Hudson reports a strong pipeline of potential deals, but has relaxed his valuation criteria from four to five times’ cash profits for larger high-quality candidates.

Broker Liberum expects adjusted earnings of 32.7p per share for the year to October 2020, and 36.8p in FY2021.

IC View

Though AFH shares have rebounded strongly since their autumn lows, they continue to trade at just two times’ broker Liberum’s sales forecast for the current financial year. Leverage is under control, target valuations are not rising, and the demand for local independent financial advice remains under-supplied. This is a strong growth story: buy."

[rivaldo] 21/1/2020 11:45

The IC have just reiterated their Buy for AFHP in a Tip Update (subscriber-only though):



"AFH Financial’s steady progress

The wealth manager is on track to hit its “three to five year aspirational targets”"

[rivaldo] 21/1/2020 06:48

Good coverage on Citywire of Liberum's Buy note and increased 569p target:



"AFH Financial offers more upside, says Liberum.

AIM-listed national advice group AFH Financial (AFHP) is still offering ‘significant value’ despite share price gains in recent months, says Liberum.

Analyst Jamie Donald retained his ‘buy’ recommendation and increased the target price from 484p to 569p after the company reported 8% organic net flows and revenue increases of 47% in 2019. The shares rose 1.3% to 390p yesterday.

‘The full-year results show operational improvements are being delivered as acquisitions are integrated,’ he said.

‘The share price has recovered in recent months but we believe AFH continues to offer significant value. Improved outlook for the sector has helped a sector re-rating and we increase our target price…implying 48% upside.’"

[dexdringle] 20/1/2020 14:59

Ahhh. Okay. Understood.