Mattioli Woods eyes fund management

31/08/2010 Robert Tyerman

Pension consultant Mattioli Woods is contemplating further diversification after liftng annual pre-tax profits 9.2 per cent to £4.5 million.

The acquisitive Leicester-based AIM counter increased turnover a modest 3 per cent to £13.7 million in the year to May, but the second half-year showed a 10 per cent gain as clients, immobilised by fear of collapse after the credit crunch, have been regaining their nerves.

Mattioli Woods, which has significantly increased its scope and links with independent financial advisers (IFAs) through the recent £1.85 million takeover of trustee and administration services specialist City Trustees, has counselled clients to change their objectives from growth to income, says executive chairman Bob Woods. Liking the yields offered by 'investment grade' corporate bonds and commercial property, he says the company is developing a 'discretionary fund management facility', for which it sees strong potential demand.

Woods enthuses about the Coalition Government's plans to change the tax regime in the pensions sector and to enhance the ability of pension scheme members to draw income from them from the age of 55. 'They will need clever and flexible advice', he comments, declaring 'that is right up our street'.

With £3 million cash, Mattioli Woods is looking for larger acquisition targets these days, and says it would contemplate also using bank facilities and shares for the right deal. The company, where Woods and Mattioli each hold nearly 21 per cent, proposes an 11.5 per cent dividend increase to 4.35p a share.

At 209.5p, down from a 251.5p year's high, the shares could outperform some sector peers.