Mattioli Woods Share Price (MTW)

The leaderboard .....lovely start for MTW and KAV both having great RNS this morning.....lovely start to Friday paternostpauper....nice indeed

Relatively happy too Pater but MTW is possibly undervalued even at the offer price given markets have performed poorly. In a booming .market they would have much higher funds under management. That said the premium is decent but I hope another bidder is flushed out now we are in play. Only started buying a year ago so I wish I had more but did reasonably well.

Happy with that. 34% premium plus keep the divi.

Nice start to a Friday!

New research report available here: https://www.equitydevelopment.co.uk/research/h1-24-showcases-benefit-of-diverse-income-streams

H1-24 revenue (to 30 Nov 23) was up 8% y-o-y to £59.1m (H1-23: £54.9m), with 4% organic revenue growth. H2 revenue is typically higher than H1 due to end of tax-year advice and H2 bias of client year-ends, and we maintain our FY24 revenue forecast of £123.6m (+11% y-o-y). Adjusted EBITDA grew 10% from £15.0m to £16.5m with positive effects from organic growth (409 new clients, +13% over H1 23) and a changing revenue mix towards higher-yielding services.

The core pensions business was the standout performer with 21% revenue growth, driven by strong demand for advice and increased banking margin on cash balances.

MW has a strong net cash position of £32.7m, after paying £9.3m of dividends and £6.2m of acquisition-related payments. MW has no debt. Management maintains a confident outlook, with the interim dividend up from 8.8p to 9.0p.

Our revenue forecasts are unchanged with adjusted EBITDA forecasts down slightly due to lower Amati profits but statutory profits increase on higher net finance income. Our fundamental valuation remains unchanged at 900p per share (53% above the current share price). With powerful longer-term structural tailwinds supporting the wealth management sector (see page 16), we think a sector-median PER of 15.7 is too low. Moreover, with MW being so well positioned (page 17), we find it strange it’s PER of 12.3 is below this median. We see potential for a re-rating.

New research report here: https://www.equitydevelopment.co.uk/research/on-track-for-10-annual-revenue-profit-growth

H1’24 revenue (to 30 Nov 23) totalled £59.1m, 8% up y-o-y (H1’23: £54.9m), with 4% organic revenue growth. H2 revenue is typically higher than H1 due to end of tax-year advice and H2 weighting of client year-ends, and we maintain our FY24 revenue forecast of £123.6m (+11% y-o-y).

MTW remains in a strong net cash position (£32.7m v £45.0m on 31 May 23), giving scope to pursue opportunities. Cash is as expected with c. £9.3m paid in dividends and some tranche-payments of previous acquisitions made. We expect cash to exceed £40m by year-end.

As in FY23, MTW has reported growth within the core pension consultancy and employee benefits business segments, with the proposed changes to pension and tax rules announced in the Chancellor’s recent Autumn Statement driving strong demand for advice.

Our sector PER analysis suggests potential for a rerating of both the sector and Mattioli Woods, where our fundamental valuation remains 900p / share, 50% above the current price.