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Alpha FMC is coping well

Despite management cautious of its balance sheet, the consultancy's top-line looks well protected
Alpha FMC is coping well

The 12 months to March marked a heady period of expansion for Alpha FMC (AFM), most clearly reflected in an 18.3 per cent uptick in gross profits to £34.4m. During the period, the asset management consultancy acquired and integrated two smaller peers, increased its bench of consultants by a fifth, client numbers by almost two-fifths and a global office network to a dozen.

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Since then, the business appears to have coped admirably with the logistics of lockdown and any financial shocks to clients. The project pipeline remains well-supplied by new mandates and extensions; chief executive Euan Fraser says fee pressure “has been isolated to a handful of clients”, and the transition to home-working has been so seamless that part of the lease on a three-floor London office has already been given up.

Still, management isn’t taking any chances. Despite entering June with a £23m net cash position, the group has cancelled its final dividend and drawn down £5m of a recently-extended £20m credit facility with Lloyds. In theory, this provides some protection from a fresh market correction or a second spike in Covid-19 infection rates. But the extra liquidity and flexibility could help the group act on its acquisition strategy once deal-making is once again possible.

Panmure Gordon expects adjusted earnings of 15.6p per share for the year to March 2021, and 16.3p in FY2022.

Alpha Financial Markets Consulting (AFM)  
TOUCH:181-198p12-MONTH HIGH:254pLOW:96.1p
NET ASSET VALUE:90.6p*NET CASH:£18.3m**  
Year to 31 MarTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
% change+17-26-33-65
Ex Div:n/a   
*Includes intangible assets of £90m, or 89.6p a share
**Includes lease liabilities of £2.7m