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AFH Financial Group “confident” in profit expansion plans

The firm is looking to reach £10bn funds under management, £140mln annual revenues and an EBTDA margin of 25% in up to five years

AFH Financial Group PLC - AFH Financial Group “confident” in profit expansion plans
In the year to 31 October, AFH said its revenues are expected to be over £74mln

AFH Financial Group PLC’s (LON:AFHP) shares rose on Monday following a bullish trading update in which it said expect a "fifth successive year of strong growth and increased profitability".

For the year to October 31, the AIM-listed investment management company said its revenues are expected to be over £74mln, around 30% up on last year’s results, of which £29mln generated by new business, following the acquisition of eight assets.

The group also noted that its underlying earnings (EBITDA) are estimated to be £17mln, up 38% yeat-on-year, while funds under management reached £6bn in October, 27% more than in October 2018, and cash at the end of the period was £12mln.

AFH reiterated confidence in its three-to-five-year plan to reach £10bn funds under management, £140mln annual revenues and an EBITDA margin of 25%.

In a note to clients, analysts at 'house' broker Liberum said the firm continues to grow “at an impressive rate” compared to peers in a tough market environment.

The broker reiterated a 'buy' rating on AFH shares but reduced its target price to 484p from 568p to reflect cuts to its earnings per share forecasts for 2020 following a change to its Protection business revenue model.

In morning trade on Monday, AFH shares were higher 4.4% at 287p.

Quick facts: AFH Financial Group PLC

Price: 418.5 GBX

LSE:AFHP
Market: LSE
Market Cap: £179.35 m
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