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Mattioli Woods reports “further sustainable profit growth” as it eyes more cuts in clients’ costs

Mattioli Woods reports “further sustainable profit growth” as it eyes more cuts in clients’ costs

Wealth management specialist Mattioli Woods today renewed its vow to drive down clients’ costs.

The company’s pledge came in a trading update in which it revealed “further sustainable profit growth in a complex market”.

It acknowledged a lower level of client activity for the six months ending November 30, attributable to “generally poor investment sentiment” and continuing uncertainty over Brexit.

But in an upbeat message, chief executive officer Ian Mattioli MBE reported that profit outlook for the year remained in line with management’s expectations.

He revealed the firm’s EBITDA margin – earnings before interest, taxations, depreciation and amortisation – was “substantially ahead” of its 20 per cent target.

And he pointed to Mattioli Woods’ strong financial position, with cash reserves of more than £16 million and total client assets of £8.8 billion.

Mr Mattioli said: “I have previously indicated that I believe fees for financial services in the UK are too expensive and have set out our aim to lower client costs while building a long-term sustainable business.

“Securing operational efficiencies and economies of scale – particularly through the integration of acquired businesses and clients – are key elements of our aim to reduce clients’ total expense ratios and ensure sustainable returns for our shareholders.”

He confirmed that “slightly lower than expected revenue growth” – due to reducing clients’ costs and general market conditions – had been “more than offset” by operational efficiencies and administrative cost savings.

Mr Mattioli said highlights of the six-month period included recent acquisitions integrating and performing well, the “seamless” move to new offices in the heart of Leicester, the implementation of cloud-based IT architecture and the introduction of an integrated human resource management and payroll system.

He added: “I believe our focus on client service and the inherent flex within our business model will allow us to continue to adapt to the changing wealth and asset management marketplace.

“Although there is some caution around markets, we believe the group is well placed to secure further growth, both organically and by acquisition, and further consolidation within our core markets remains likely.

“Our outlook for the year remains in line with management’s expectations and I am confident we can secure further progress towards the ambitious longer-term goals we have set”.

Today’s trading update precedes the official release of the company’s interim results on February 5.

The trading update is available to view here.