Tatton Asset Management Plc · LSE:TAM
Tatton Asset Management — H1 2019 Earnings Presentation
33 slides from Tatton Asset Management's earnings presentation, Nov 13, 2018
Slide 1: Tatton Asset Management Interim Results
TATTON ASSET MANAGEMENT Interim Results for the six months ended 30 September 2018 INVESTOR AND ANALYST PRESENTATION
Slide 2: Disclaimer
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 c
Slide 3: Agenda
AGENDA • Introduction to the team • Key highlights • Financial performance • Divisional analysis • Strategy for growth • Summary 3
Slide 4: Introduction to the team
INTRODUCTION TO THE TEAM 4
Slide 5: Introduction to the team
INTRODUCTION TO THE TEAM Paul Hogarth, CEO Lothar Mentel, CIO Paul Edwards, 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 Plc as Group CFO in May 2018 • Founder of Tatton Asset • Ex CIO
Slide 6: Group structure
GROUP STRUCTURE Tatton Asset Management PLC (“TAM” or “Group”) Tatton Investment Management Paradigm Partners Paradigm Mortgage Services (“Tatton” or “TIML”) (“Paradigm” or “PPL”) (“PMS”) Challenger model DFM IFA support services Adviser support services • On-platform only discretionary • Compliance
Slide 7: Key highlights
KEY HIGHLIGHTS 7
Slide 8: Key highlights
KEY HIGHLIGHTS FINANCIAL & OPERATIONAL • TIML AUM increased 29.5% to £5.7bn (2017: £4.4bn) • Average AUM inflows of over £90m per month • Group revenue increased 15.7% to £8.45m (2017: £7.30m) • Adjusted operating profit* up 8.3% to £3.35m (2017: £3.09m) • Reported profit before tax increased to £3.
Slide 9: Key highlights (financial & operational continued)
KEY HIGHLIGHTS (FINANCIAL & OPERATIONAL CONTINUED) • TIML delivered strong organic growth and client portfolio returns ahead of peer group averages • TIML increased its member firms by 41.6% to 405 (2017: 286) and number of accounts by 21.5% to 53.5k (2017: 44.1k) • ACD provider changed to improve e
Slide 10: Financial performance
FINANCIAL PERFORMANCE & 10
Slide 11: Profit & loss
PROFIT & LOSS Six months ended 30 • Revenue increased 15.7% September 2018 2018 2017 Growth % Currency: £'000 • Operating profit increased 8.3% Revenue 8,445 7,298 15.7% • H1 2017 excludes £260k additional governance costs Admin expenses (5,095) (4,204) following July 2017 IPO Adjusted Operating pro
Slide 12: Divisional analysis
DIVISIONAL ANALYSIS £000’s TIML PPL PMS 2018 2017 2018 2017 2018 2017 H1 H1 H1 H1 H1 H1 Revenue 4,025 2,779 3,118 3,475 1,278 1,032 Growth% +/- +44.8% -10.3% +23.8% EBIT* 2,050 1,280 1,537 1,795 718 531 Margin % 50.9% 46.1% 49.3% 51.7% 56.2% 51.5% £4.0bn £3.2bn £5.7bn AUM £4.4bn AUM gross gross +29.
Slide 13: Shape and pattern of growth
SHAPE AND PATTERN OF GROWTH H1 v H2 revenue splits (2018/19 consensus) Revenue split % Sep-17 52.0% 50.0% 14.1% 48.0% 46.0% 44.0% 38.2% 42.0% 47.7% 40.0% 38.0% TIML PPL PMS Total H1 Sep 18 H1 Sep 17 TIML PPL PMS H1 v H2 profit splits (2018/19 consensus) Revenue split % Sep-18 60.0% 15.1% 50.0% 40.0%
Slide 14: Balance sheet & cash flow
BALANCE SHEET & CASH FLOW BALANCE SHEET CASH FLOW 2018 2017 2018 2017 £’000 £’000 £’000 £’000 Goodwill 4,917 4,917 Cash from operations before 4,291 2,694 exceptional items Fixed assets & 310 42 Exceptional (13) (1,632) Investments Trade & other 3,410 2,037 Cash from operations 4,278 1,062 receivabl
Slide 15: Tatton universe
TATTON UNIVERSE Total number of IFA 13,250 Total FUM £520 billion firms Tatton number of user 341 Tatton FUM £5 billion firms Each IFA firm has an average £40m under control on platform 15 * Platforum – UK Adviser Platform Guide
Slide 16: TIML - Asset pipeline
TIML - ASSET PIPE LINE Source of assets £bn • £521bn Assets held on platform¹ and growing 6.00 • £41.6bn Assets held in DFM¹ and growing 236 Non-PPL or 5.00 58% of total Firms • Tatton £5.7bn from 405 firms 133 Non-PPL or • PPL - 169 or 42% firms = £4.5bn AUM or 79% 4.00 44% of total Firms • Non PPL
Slide 17: Our market
OUR MARKET • Latest PIMFA* statistics show increased IFA sector strength • More advisers / increased revenue / increased profitability ( +2.7% to 26,311) / ( +21.5% to £4.5bn) / ( +22.8% to £0.7bn) • Adviser platform market continues strong growth with asset of £521 billion** • DFM MPS on platform £
Slide 18: Dedicated Tatton sales team
DEDICATED TATTON SALES TEAM Justine Randall SALES DIRECTOR Chartered financial planner with nearly 20 years financial services experience, Justine joined Tatton from Retirement Advantage where she spent 8 years as Head of Sales and Strategic Partnerships Ryan Seaton Simon Church Steve Martell Jack B
Slide 19: Tatton Investment Management
TATTON INVESTMENT MANAGEMENT WHAT WE DO • Discretionary investment management ▪ Segregated, fund based, non-bespoke private investor portfolios (MPS based DFM) • Exclusively available on adviser platforms and only B2B through directly FCA authorised advisers • Platform agnostic, now available on 11
Slide 20: Distribution of AuM across proposition matrix
DISTRIBUTION OF AuM ACROSS PROPOSITION MATRIX Globally diversified multi-asset portfolio choices that satisfy multi-manager, index tracker, income drawdown and ethical investment choices across 6 standard UK risk profiles (3 to 8 out of 1-10) Defensive (3) Cautious (4) Balanced (5) Active (6) Aggres
Slide 21: What's changed? – Not much
WHAT’S CHANGED? – NOT MUCH Comparison of DFM (on-platform) charges DFM Annual Fee % (inc vat) Tatton Investment Management (on 11 UK adviser-led platforms) 0.15 AJ Bell (On AJ Bell platform only) 0.18 LGT Vestra 0.30 Momentum 0.30 Seven Investment Management 0.30 FE Invest 0.33 Bordier UK 0.36 Brewi
Slide 22: Platforum's OCF analysis – welcome addition to our sales tool kit
PLATFORUM’S OCF ANALYSIS – WELCOME ADDITION TO OUR SALES TOOL KIT 22
Slide 23: Growth in assets under management
GROWTH IN ASSETS UNDER MANAGEMENT +£1.3bn over 12 months Tatton Assets under Management in £ million Assets under management 5,800 5,600 5,400 5,200 Key AuM milestones 5,000 4,800 4,600 • By June 2014: £1 bn 4,400 4,200 • By June 2015: £2 bn 4,000 3,800 3,600 • By June 2016: £3 bn £ Million 3,400 3,
Slide 24: Investment portfolio returns
INVESTMENT PORTFOLIO RETURNS Ytd 2018 – to 30 September Since launch 1/2013 TCL* MPS performance (per cent.) – core produce set TCL* Fund performance (per cent.) – core produce set (1/1/2018 – 30/09/2018, (1/1/2013 – 30/09/2018, after DFM charge and fund costs) annualised after DFM charge and fund c
Slide 25: Blended fund range – multi-asset MM funds at MPS charging level
BLENDED FUND RANGE – MULTI-ASSET MM FUNDS AT MPS CHARGING LEVEL Risk/OCF Tatton Core Jupiter SEI Premier Liberation Cautious 0.54 1.48 1.05 1.31 Balanced 0.59 1.63 1.10 1.37 Active 0.64 1.73 1.15 1.44 Launched in Feb 2018 for platforms lacking DFM capability Now at ~£40m, although only just launched
Slide 26: Business developments – delivering against the plan
BUSINESS DEVELOPMENTS – DELIVERING AGAINST THE PLAN • Pipeline developments • PI Financial – strategic AR partner for legacy back book of assets • PFS Deal – partnership proposal accessing 1,500 IFA’s • 1 x White label Macbeth Scott not signed - contracts issued 26
Slide 27: Paradigm Partners
PARADIGM PARTNERS Income Analysis £m • Member growth 7.3% YonY to 382 4.00 3.50 • Paradigm Partners H1 a transitional period 3.00 1.35 2.50 1.16 • Recruitment of new resource and refocus 2.00 1.50 • Paradigm Consulting re-brand to Jan 2019 1.00 2.13 1.96 0.50 • New pricing Jan 2019 - Sep 17 Sep 18 W
Slide 28: Paradigm Mortgage Services
PARADIGM MORTGAGE SERVICES Income Analysis £ • Members increased +12.9% YonY to 1,290 1,400,000 • Mortgage lending increased +25.0% to £4.0bn 1,200,000 1,000,000 • Premier mortgage club and innovative distributor with increased market presence 800,000 • Marketing +42% through increased support from
Slide 29: Strategy for growth
STRATEGY FOR GROWTH 29
Slide 30: The opportunity
THE OPPORTUNITY • Growing strength of the IFA sector • IFA profitability up by 22.8%* • Growing understanding of need to outsource cost effective solution for mass affluent 30 * Source Pimfa – Financial Adviser Market in Numbers
Slide 31: Strategy for growth
STRATEGY FOR GROWTH Growing the IFA relationships to grow AUM • Organic – Signing up more new firms • Continued back book migration • White labelling • Strategic Partnerships • Explore other territories • M & A activity under consideration 31
Slide 32: Summary
SUMMARY 32
Slide 33: Summary
SUMMARY • Good start to the new financial year against the backdrop of a volatile market • Continued growth delivered in AUM, revenues and profitability • Balance sheet remains strong and we remain open to opportunities for acquisitive growth • Firm path to growth, opportunity remains to capitalise
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