Tatton Asset Management Plc · LSE:TAM
Tatton Asset Management — H1 2018 Earnings Presentation
29 slides from Tatton Asset Management's earnings presentation, December 2017
Slide 1: Tatton Asset Management Interim Results
TATTON ASSET MANAGEMENT Interim Results for the six months ended 30 September 2017 INVESTOR AND ANALYST PRESENTATION DECEMBER 2017
Slide 2: Disclaimer
2 DISCLAIMER The information contained in this document (“Presentation”) has been prepared by Tatton Asset Management plc (the “Company”(. The content of this Presentation has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. The information
Slide 3: Agenda
3 AGENDA • Introduction to the team • Key highlights • Outlook • Financial performance • Strategy for growth • Summary • Appendix
Slide 4: Introduction to the team
4 INTRODUCTION TO THE TEAM Paul Hogarth, CEO Lothar Mentel, CIO Noel Stubley, CFO • Over 30 years’ experience at Board • Co-founder of Tatton Capital Limited • Joined Tatton Asset Management level in the financial services sector in 2012 Group as Group CFO in 2012 • Founder of Tatton Asset • Ex CIO
Slide 5: Group structure
5 GROUP STRUCTURE Tatton Asset Management PLC (“TAM” or “Group”) Tatton Capital Paradigm Partners Paradigm Mortgage Limited Services (“Tatton” or “TCL”) (“Paradigm” or “PPL”) (“PMS”) Challenger model DFM IFA support services Adviser support services • On-platform only • Compliance services • Mortgag
Slide 6: Key highlights: Strong organic growth
6 KEY HIGHLIGHTS: Strong organic growth • Revenue and profit growth in all three divisions • Achieved Group revenue growth of over 30% to £7.3 million (1H16: £5.6 million) • Half year Adjusted EBIT up 56% to £3.1 million (1H16: £2.0 million) • 33% YOY increase in discretionary AUM within Tatton Capi
Slide 7: Key highlights (continued)
7 KEY HIGHLIGHTS (CONTINUED) • Successful IPO in July 2017, well received by client firms • Continued strong organic growth - increasingly benefitting from IPO profile improvement • Continued delivery of “new to group” IFA firms into TCL • Winner of the 2017 ILP Moneyfacts award for “Best Discretion
Slide 8: Outlook
8 OUTLOOK • We are on a firm path of growth, as strong organic drivers continue • Investment in sales and marketing is accelerating • Investigating strategic partnerships • Continuing to assess the market and look out for M&A opportunities
Slide 9: Financial performance
9 FINANCIAL PERFORMANCE
Slide 10: Profit & Loss
10 PROFIT & LOSS Half year to 30 September 2017 2016 Change (%) Currency: £'000 Revenue 7,298 5,586 31% Admin expenses (4,204) (3,595) 17% Share of joint venture (14) (13) Adjusted EBIT (i.e. before exceptional costs and share based payment) 3,080 1,978 56% Share based payments (IFRS2) (892) (38) Ex
Slide 11: Revenue evolution
11 REVENUE EVOLUTION PMS PPL TCL +£0.2m £7.3m +£0.6m +£0.9m £5.6m 6 month to 6 months to Sept 2016 Sept 2017
Slide 12: Adjusted profit evolution
12 ADJUSTED PROFIT EVOLUTION PMS PPL +£0.1m Central TCL +£0.4m £(0.3)m £3.1m +£1.0m £2.0m 6 month to 6 months to Sept 2016 Sept 2017
Slide 13: Revenue split evolution
13 REVENUE SPLIT EVOLUTION 6 months to 6 months to Sept 2016 Sept 2017 16.1% 14.2% 33.5% 38.1% 50.4% 47.7% TCL PPL PMS TCL PPL PMS Total: £5.6m Total: £7.3m
Slide 14: Tatton Capital Limited (TCL)
14 TATTON CAPITAL LIMITED (TCL) Six months ended 2017 2016 % • TCL division has continued to deliver a £’000 £’000 strong performance over the period Revenue £2,779 £1,872 48.5% • Revenues have increased 48% to £2.78m Admin costs £(1,499) £(1,554) (3.5%) and underlying EBIT has increased by 303% Adj
Slide 15: Growth in assets
15 GROWTH IN ASSETS Assets under management Tatton Assets under Management in £ million 4,800 4,600 4,400 4,200 4,000 Key milestones 3,800 3,600 • By June 2014: £1 bn of AUM 3,400 3,200 • By June 2015: £2 bn of AUM 3,000 2,800 £ Million • By June 2016: £3 bn of AUM 2,600 2,400 • At May 2017: £4 bn o
Slide 16: Tatton Capital Limited (TCL)
16 TATTON CAPITAL LIMITED (TCL) Six months ended 2017 2016 % • Continued strong AuM growth through client £m £m introduction from existing and new adviser Opening AUM 3,853 2,652 45.3% partner firms, despite widespread concerns amongst public about extended valuation Inflows 510 396 28.8% levels and
Slide 17: Portfolio performance
17 PORTFOLIO PERFORMANCE Fund performance core product set • Positive client portfolio returns in low single digit percentage range • Regional asset allocation positions and fund selection added additional value over the 6 TIML* Fund Performance (per cent.) - core produce set (1/1/2013 months. - 30/
Slide 18: Paradigm Partners Limited (PPL)
18 PARADIGM PARTNERS LIMITED (PPL) Six months ended 2017 2016 % • PPL has delivered strong results in the £’000 £’000 period, with revenues up significantly by over Revenue £3,475 £2,816 23.4% 23% year on year. Member firms utilising our compliance services increased from 347 in Admin costs £(1,681)
Slide 19: Paradigm Mortgage Services LLP (PMS)
19 PARADIGM MORTGAGE SERVICES LLP (PMS) Six months ended 2017 2016 % • Continued growth of our mortgage and £’000 £’000 protection distribution business, with the Revenue £1,032 £898 14.9% number of firms utilising the services increasing month on month. Admin costs £(501) £(433) 15.7% Adjusted EBIT
Slide 20: Strategy for growth
20 STRATEGY FOR GROWTH
Slide 21: The opportunity
21 THE OPPORTUNITY • Growing Directly Authorised IFA sector • Growing adviser wrap platform market • Growing regulatory pressure on IFAs to provide consistent client outcomes • Cost effective solution to bridge the advice gap challenge for mass affluent
Slide 22: Strategy for growth
22 STRATEGY FOR GROWTH Growing the IFA relationships to grow AUM • Marketing to: o ‘Membership’ base (e.g. PPL – c.200 out of 356 already using TCL) o ‘Non-membership’ base: addressable market c. 5,000 IFA1 firms • Back book migration for both non-membership and members • Target non-platform legacy
Slide 23: Strategy for growth
23 STRATEGY FOR GROWTH • Organic – the Group continues to drive new member firms who in turn enhance asset flows and revenues • Strategic Partnerships – opportunities to explore wider distribution avenues • Acquisitive – strong balance sheet, with opportunity to make profit enhancing bolt-on acquisi
Slide 24: Summary
24 SUMMARY
Slide 25: Summary
25 SUMMARY • Transformational year for the Group following the IPO in July 2017 • Strong financial performance for the half year to Sept 2017 • Continued growth delivered in AUM, revenues and profitability • Balance sheet strong and ready to seize opportunities for acquisitive growth • Firm path of
Slide 26: Appendix
26 APPENDIX
Slide 27: Timeline
27 TIMELINE RDR Tatton 1000 PMS AUM: £1bn members Paradigm Partners (PPL) 100 PPL 200 PPL 750 PMS 300 PPL Tatton Tatton Tatton launched members members members members AUM: £2bn AUM: £3bn AUM: £4bn 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Paradigm 500 PMS Launch of Tatton wins Wealth T
Slide 28: Group balance sheet
28 GROUP BALANCE SHEET As at 30 September 2017 (unaudited) As at 30 September 2016 (unaudited) ASSETS £000 £000 Non-current assets Goodwill 4,917 4,917 Property, plant and equipment 88 77 Investments in subsidiaries - - Interests in joint venture (46) (20) Total non-current assets 4,960 4,973 Curren
Slide 29: Group cash flow statement
29 GROUP CASH FLOW STATEMENT Six months ended Six months ended 30 30 September 2017 September 2016 • Cash flows in the period are (unaudited) £000 (unaudited)£000 after the significant impact of Cash flow from operating activities the IPO-related exceptional Profit for the period before tax 542 1,86
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