“In the early phase of the pandemic, a lot of our clients were really quite scared,” says Ian Mattioli, eponymous chief executive of wealth manager Mattioli Woods (MTW). It’s a reminder that for many investors, a guiding hand in times of crisis is invaluable – and that financial services companies are, at their core, built on personal relationships.
As management tells it, this provided fresh impetus to engage with customers, and a chance to shift to new forms of engagement. Within weeks, managing director Michael Wright was admonished by a long-standing and previously computer-averse 79-year-old customer for calling him by telephone rather than FaceTime; the thousands of miles Mattioli’s consultants previously travelled each year are now likely a thing of the past.
Results for the 12 months to May sketch out some of the financial benefits. Recurring revenues picked up from 90 to 92.1 per cent, suggesting that client assets are becoming stickier. A beady eye on fixed and discretionary spending, rebased executive salaries and a suspension of bonuses – all in response to Covid-19's initial threat and effects – explain the sharp improvement in earnings in the table below.
Analysts at Canaccord Genuity upgraded their forecasts following these results, and now expect earnings of 45.5p per share for the 12 months to June 2021 and 51.5p in FY2022.
| MATTIOLI WOODS (MTW) | ||||
| ORD PRICE: | 705p | MARKET VALUE: | £196m | |
| TOUCH: | 690-720p | 12-MONTH HIGH: | 865p | LOW: 520p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 329p | NET CASH: | £17.1m^ | |
| Year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 43.0 | 6.3 | 20.9 | 12.5 |
| 2017 | 50.5 | 7.6 | 24.5 | 14.1 |
| 2018 | 58.7 | 9.8 | 30.8 | 17.0 |
| 2019 | 57.5 | 9.8 | 29.3 | 20.0 |
| 2020 | 58.4 | 13.4 | 37.8 | 20.0 |
| % change | +2 | +37 | +29 | - |
| Ex-div: | 10 Sep | |||
| Payment: | 23 Oct | |||
| *Includes intangible assets of £48.1m, or 173p a share. ^Includes lease liabilities of £2.9m. | ||||
