Like much larger peer Sanne (SNN), Alpha Financial Markets Consulting (AFM) hopes to take advantage of the rising compliance burden and fee pressure weighing on the asset management industry. The company, which joined Aim in October, offers four categories of services: strategy and advisory; evaluation of service providers; project implementation; and fee benchmarking. After stripping out IPO-related costs, underlying cash profit was up almost 71 per cent to £5.8m during the first half.
Growing headcount and expanding geographically are an important part of Alpha’s strategy. The UK accounted for 62 per cent of revenue during the first half, increasing by more than a third to £18m. In Europe, a new office was opened in Geneva and larger spaces secured in Paris and Luxembourg. Consultant numbers on the continent increased from 47 to 70. It also acquired German-based consultancy TrackTwo, which management expects to contribute €0.7m (£0.6m) to adjusted cash profit for the full year.
However, the US is where the biggest opportunity growth lies. The consulting market is around 10 times bigger than the UK, according to chief executive Euan Fraser. Revenue there doubled after the US leadership team was restructured and some UK employees seconded to the business to give added scale. The group also opened an office in Singapore – its first in Asia.
Analysts at house broker Berenberg expect adjusted operating profit of £11.3m this year, giving EPS of 8.9p (from £8.3m and 6.5p in FY2017).
| ALPHA FINANCIAL MARKETS CONSULTING (AFM) | ||||
| ORD PRICE: | 166.5p | MARKET VALUE: | £170m | |
| TOUCH: | 165-168p | 12-MONTH HIGH: | 177p | LOW: 165p |
| DIVIDEND YIELD: | 0.9% | PE RATIO: | na | |
| NET ASSET VALUE: | * | NET DEBT: | £85m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016** | 19.1 | -1.5 | -24.2 | na |
| 2017 | 28.7 | -0.9 | -15.2 | 1.48 |
| % change | +51 | - | - | - |
| Ex-div: | 07 Dec | |||
| Payment: | 22 Dec | |||
| *Negative shareholders' equity **Pre-IPO | ||||
