TIDMTAM
RNS Number : 6500I
Tatton Asset Management PLC
20 April 2022
20 April 2022
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
Tatton Asset Management PLC
("TAM", the "Group" or the "Company")
TRADING UPDATE AND ACQUISITION
TRADING UPDATE, PROPOSED ACQUISITION AND NOTICE OF FINAL
RESULTS
Tatton Asset Management plc (AIM: TAM), the investment
management and IFA support services group, today announces the
following unaudited trading update for the year ended 31 March 2022
("FY22", the "Period" or the "Year"), which shows strong organic
growth in line with expectations. The Group's audited Final Results
are scheduled to be released on 15 June 2022.
TAM also announces that it has entered into a sale and purchase
agreement ("SPA") to purchase (the "Proposed Acquisition") 50% of
the issued share capital of 8AM Global Limited ("8AM") for a total
consideration of c.GBP7.0 million (the "Consideration"), with an
option to acquire a further 50% in due course. The transaction
remains subject to regulatory approval.
TRADING UPDATE
Record net inflows have contributed to a strong performance in
FY22 and the Board is confident that the financial results for the
year will be in line with consensus market expectations.
Highlights
Assets under management ("AUM") increased by 26.1% over the year
to GBP11.34 billion (2021: GBP8.99 billion). Tatton Investment
Management maintained a strong performance in the second half of
the year with healthy net inflows of GBP0.625 billion, an average
of GBP106 million per month. The total inflows for the year were
GBP1.277 billion (2021: GBP0.755 billion), an increase of 14.2% on
the opening AUM. The acquisition of the Verbatim funds added
GBP0.650 billion and market returns contributed a further 4.7% or
GBP0.420 billion.
Total GBPbn
---------------------------------- -----------
Opening AUM 1 April 2021 8.99
Organic Net flows 1.28
Acquisition (Verbatim) 0.65
Market and investment performance 0.42
---------------------------------- -----------
Closing AUM 31 March 2022 11.34
Paradigm has performed well with Consulting member firms
increasing to 421 (2021: 407) and Mortgage firms increasing to
1,674 (2021: 1,612). Mortgage completions remained strong following
the end of the government's stamp duty reduction in September 2021
with over GBP6.0 billion of completions being delivered in H2 FY22.
Total completions for the year have increased by 13.3% to GBP12.8
billion (2021: GBP11.3 billion) delivering a record year.
The Group ended the year with cash on the balance sheet of
GBP21.7million.
THE PROPOSED ACQUISITION
8AM is an investment manager primarily focussed on delivering
risk-profiled model portfolios ("MPS") and a small range of
multi-manager funds. Their model portfolios and funds will
complement TAM's existing proposition, further demonstrating our
commitment to supporting financial advisers in delivering low-cost
investment management and enhancing IFA client outcomes. The
proposed acquisition will provide our IFAs' clients access to an
extended range of risk profiled investments utilising 8AM's
experience, investment style and approach. On completion we
anticipate 8AM's AUM to be in the region of GBP0.8 billion.
Key highlights:
-- Contributes to the Group's "Roadmap to Growth" strategy
adding c.GBP0.8 billion of Assets Under Influence ("AUI") to TAM's
existing AUM of GBP11.3 billion;
-- Gives TAM access to a broader distribution base of UK financial advisers;
-- Adds an ambitious and strong management team with a wealth of industry experience;
-- The Consideration of c.GBP7.0 million represents 0.88% of
AUI, and comprises 50% or GBP3.5 million of initial consideration,
payable through the issue of new shares, and GBP3.5 million
deferred consideration payable in equal cash instalments against
financial performance targets at the end of the first year and
second year post completion, with an option to acquire the
remaining 50% of 8AM's share capital following the deferred
consideration period; and
-- Expected to be earnings enhancing with contribution from the
50% shareholding expected to generate adjusted operating profit of
GBP0.7m in its first full year
Commenting on the results for the financial year, Paul Hogarth,
Chief Executive Officer, said:
"The Group has delivered another good year of growth across both
divisions and I am particularly pleased with the significant
increase in net new inflows to the Group which underpins the
organic growth opportunity that exists in our market. The last
quarter was a difficult environment from a geopolitical and
economic perspective, but we demonstrated the resilience of our
business model maintaining robust net inflows and finished the year
strongly with GBP11.3 billion of AUM.
"Paradigm also delivered a pleasing year, in particular mortgage
completions remained strong despite the removal of Government
incentives and a changing market landscape."
Commenting on the Proposed Acquisition and outlook he added:
"I am also delighted to announce the proposed acquisition of 50%
of the share capital of 8AM Global Limited, an ambitious and
growing DFM MPS business. The business complements our existing
offering and brings with it an experienced and motivated management
team who are well known to us and culturally aligned to the values
of the Group. We are very much looking forward to working with
them.
"Post completion, this will be the second acquisition in less
than a year for the Group, demonstrating that we are executing on
our three year "Roadmap to Growth" strategy. With a three-year
target of GBP6.0 billion of growth in AUM, at the end of the first
year we remain on target to achieve this. This year we have grown
organically by GBP1.7 billion and acquisitions to date have
contributed a further GBP0.6 billion, a total contribution of
GBP2.3 billion towards the target and on completion 8AM will
further enhance this number.
"We look forward with confidence as we make further progress and
continue to deliver against our strategic objectives."
Commenting on the proposed transaction, Managing Director of 8AM
Global Limited Jeremy Nunn said:
"We are delighted with the proposed sale of 50% of the share
capital of 8AM to Tatton Asset Management plc. The sale will allow
8AM to build on its success and provide us with access to the
know-how and expertise of one of the market leaders in the MPS
space. It will act as a springboard for the growth of our assets
under management and provide advisers and investors with the
comfort that the development and resilience of the 8AM products
will continue to be at the forefront of our plans."
For further information please contact:
Tatton Asset Management PLC
Paul Hogarth (Chief Executive Officer)
Paul Edwards (Chief Financial Officer)
Lothar Mentel (Chief Investment Officer) +44 (0) 161 486 3441
Zeus Capital - Nomad and Broker
Martin Green
Dan Bate +44 (0) 20 3829 5000
Singer Capital Markets- Joint Broker
Peter Steel, Rachel Hayes (Investment
Banking) +44 (0) 20 7496 3000
Belvedere Communications - Financial
PR +44 (0) 7407 023147
John West / Llew Angus (media) + 44 (0) 7715 769078
Cat Valentine / Keeley Clarke (investors) tattonpr@belvederepr.com
Trade Media Enquiries
Roddi Vaughan Thomas +44 (0) 20 7139 1452
For more information, please visit:
www.tattonassetmanagement.com
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