Tatton, the UK’s largest provider of on-platform discretionary fund management services to IFAs, has released its interim results for the six months to 30 September 2019 and showed successful delivery against nearly all key metrics. We believe the prospects to rapidly scale up AUM and boost profits because of the (already proven) opportunity for operational leverage justify a fair value of 300p / share.
AUM grew 22.8% year-on-year to £7.0bn; revenue 15.2% to £9.7m; operating profit (adjusted) 23.2% to £4.1m; and EPS 19.1% to 5.9p. Adjusted operating margin continued to improve, rising from 39.7% in H1 19 to 42.4% in H1 20. Organic growth was the dominant story of the half, but the group did make its first acquisition since listing in 2017. Sinfonia Asset Management was acquired for up to £2.7m (£2.0m upfront payment), bringing with it £135m of AUM. Furthermore, AUM from the recent strategic partnership with Tenet Group (one of the UK’s largest adviser support groups giving access to 474 IFA firms – a £1.2bn AUM opportunity) are accelerating.
Tatton Asset Management PLC (LON:TAM) offers a range of services to directly authorised financial advisers in the United Kingdom. The Company provides on-platform portfolio management, regulatory, compliance, and business consulting services.
