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Oberon Investments Group PLC Trading Update & Acquisition of Smythe House

28/05/2021 7:00am

UK Regulatory (RNS & others)


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Oberon Investments Group PLC

28 May 2021

Oberon Investments Group plc

('Oberon', or 'the Company')

Trading Update

Acquisition of Smythe House

Total Voting Rights

Organic and acquisitive growth delivers transformational results and platform for the future

Oberon Investments Group plc ('Oberon'), the boutique wealth management and corporate broking group, announces a trading update for the year ended 31 March 2021 and the completion of the acquisition of Smythe House Limited ('Smythe House').

Highlights

   --    Organic and acquisitive growth: 

o c.240% revenue growth year on year to over GBP3.75m

o Over 300% growth in Assets under Administration ('AUA') year on year to over GBP550m (31/03/2021) from GBP126m (31/03/2020)

o Strong growth since launch in June 2020 of Oberon Capital, driven by new retained clients (such as finnCap) and fundraisings. Revenues from June 2020 to 30 April 2021 exceed GBP1m

o Q1 2021 revenues of over GBP1.6m, with momentum continuing into Q2

   --    Acquisition of Smythe House: 

o Extends the Company's alternative service offerings to our growing client base

o Increases AUA by GBP40m

o Is part of a broader, selective acquisition strategy attracting new teams to Oberon's bespoke portfolio management platform

Trading Update

Following the admission to trading on the Aquis Stock Exchange in February 2021 via a reverse take-over, Oberon expects to announce revenues for the financial year ended 31 March 2021 in its underlying operations of in excess of GBP3.75m (2020: GBP1.1m), an increase of circa 240% on the comparative period.

The current financial year has started positively with growth rates and prospects for all divisions in line with management's expectations.

Oberon Investment Management

The Company's wealth management division has continued to grow at pace, organically and acquisitively. AUA, a key performance indicator for the Company, has grown exponentially, rising by over 60% from GBP375m announced in February 2021 to over GBP600m in May 2021. Importantly, the focus on personalised management, with fund managers actively advising on bespoke portfolios, has underpinned this growth of AUA.

By creating a welcoming environment, a professional approach, backed by a strong focus on customer service, Oberon is attracting new clients and new teams, and, as a result, is experiencing strong organic growth. This is demonstrated by the success of the Hanson Investment Management acquisition: having joined in June 2020 with declining AUA of c. GBP95m, the team has, in a short period of time, grown its business by over 50% to c. GBP150m AUA, as of April 2021. Oberon expects to continue to attract other new teams of quality fund managers, along with clients, through word of mouth and client recommendations.

Oberon Capital

Oberon Capital, the newly launched Corporate Broking & Advisory division of the Company, has made a strong start since its inception in May 2020. It has completed numerous fundraises and placings raising a total of over GBP40m since inception, and won various brokerages, including that of finnCap Group plc and MyHealthChecked Plc. A number of new fundraises and pitches for further brokerages are being actively pursued. Given the growth achieved to date, this division is on target to provide a strong financial contribution to the Company.

Acquisition of Smythe House

As previously announced, the Company agreed to acquire the entire issued share capital of Smythe House. Established in 2009, Smythe House provides bespoke relationship-driven services and financial planning to high net-worth clients in the wealth management, capital markets and real estate sectors.

Smythe House and Oberon's client-focused businesses are entirely complementary, further broadening Oberon's reach into the bespoke wealth management sector. Smythe House will be integrated into Oberon's Wealth Management Division and is expected to add c. GBP40m in AUA while also expanding its client base. Oberon intends to offer Smythe House's services to its existing client base in the future.

The initial consideration for Smythe House is to be satisfied by the payment of GBP217,000 in cash and the issue to the vendors of 2,454,710 new Ordinary shares (which at the current share price of 3.4p has a value of GBP83,460).. In addition, and dependent on the performance of the acquired business over the next two years, deferred consideration could be payable to the vendors. This could consist, as a maximum, of up to 4,909,420 shares (which at the current share price has a value of GBP199,920) plus GBP33,000 in cash. The exact mix of cash and shares used to satisfy the payment of any deferred consideration will be agreed between the two parties when it becomes due.

Outlook

The Board remains firmly committed to growing the Company by adding complementary businesses and teams that are attracted by its entrepreneurial culture. Additionally, the Company is focused on launching new funds and wealth management solutions to further enhance organic growth rates and by adding services whereby the Company can take advantage of experienced practitioners.

Issue of Equity

As described above, the Company has issued a total of 2,454,710 new Ordinary shares and application will be made for them to be admitted to trading on AQSE, which is expected to be on or around 4 June 2021.

Total Voting Rights

The new ordinary shares will rank pari passu with the existing ordinary shares of the Company. Following the issue of the new ordinary shares, the Company's issued share capital will comprise 412,244,485 Ordinary shares of 0.5p.

The above figure of 412,244,485 should be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority's Disclosure and Transparency Rules.

Notice of Results

Oberon expects to announce its results for the 12 months to 31 March 2021 by the end of July 2021.

Simon McGivern, CEO of Oberon Investments Group, commented: "Our strong revenue growth, driven by the organic and acquisitive growth of our AUA and the very strong start to trading of Oberon Capital, illustrates the potential of the Oberon platform.

Smythe House, with whom we share the same ethos of client service, illustrates the strategic approach to acquisitions we are taking. Their portfolio of services will be rolled out over time to Oberon's existing client base. We continue to evaluate further acquisition opportunities as Oberon's AUA and platform continue to rapidly develop and grow.

Our growing team of investment professionals and new product offerings are benefiting our clients and portfolio performance. We are delighted with the returns we have provided for our clients this year, which is matched by our absolute focus on service..

We have only just started the Oberon journey, and I look forward to keeping shareholders advised of future developments as soon as I can."

This announcement contains information which, prior to its disclosure, was inside information as stipulated under Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310 (as amended).

The directors of Oberon accept responsibility for this announcement.

For further information, please contact:

 
 Oberon Investments Group plc 
 Simon McGivern / John Beaumont                via Walbrook PR 
 AQSE Corporate Adviser and Broker 
 Novum Securities Limited 
 Richard Potts / Daphne Zhang / Lucy 
  Bowden                                         020 7399 9400 
 
 Walbrook PR Ltd                         Tel: 020 7933 8780 or 
  Tom Cooper / Nick Rome / Nicholas      Oberon@walbrookpr.com 
  Johnson 
 

Notes to Editors

Oberon Investments Ltd was established in April 2017. In November 2017, it made its first acquisition, a small stockbroking firm with AUA of c. GBP100m. This initial acquisition gave Oberon a suite of FCA permissions and a platform for future growth.

Oberon group's AUA have grown from c. GBP100 million in 2018 to in excess of GBP600 million in May 2021. This has been achieved organically by adding new clients and new fund managers, attracted by the emerging brand and by a number of small, selective and accretive acquisitions .

In May 2020, Oberon set up its corporate broking division, Oberon Capital, and announced its first client in July 2020. Oberon Capital takes advantage of the skill sets employed in its business in giving advice and providing access to capital. The business provides advice and raises capital for companies from seed and early-stage funding through to IPO and beyond.

The Enlarged Group will operate in the UK wealth and fund management sector and in the corporate broking and financial advisory sectors. The UK fund management industry is estimated to have c.GBP8.9 trillion in assets under management ('AUM') in 2020-21. The industry includes assets of independently managed funds, as well as those owned by banks, insurance companies and pension funds. Conservative estimates of AUM for the UK financial advisory and wealth management sectors stand at approximately GBP272 billion and GBP942 billion respectively. The corporate broking and fundraising sector is very fragmented, ranging from the large integrated investment banks to niche corporate advisory firms.

www.oberoninvestments.com

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