1st Jun 2020 11:32
(Alliance News) - AFH Financial Group PLC on Monday said its profit dipped in the first half of its financial year as a consequence of amortisation and depreciation as well as finance costs and it has reduced its dividend.
Shares in AFH Financial were up 3.8% at 300.00p in London in late morning trading.
The financial advisor's pretax profit for the six months ended April 30 amounted to GBP5.9 million, down 1.7% from GP6.0 million the year before. This resulted in part from a 38% increase in amortisation and depreciation to GBP2.2 million from GBP1.6 million as well as a more than trebling of finance costs to GBP370,000 from GBP113,000.
Revenue rose to GBP38.2 million from GBP36.6 million.
AFH's chief executive, Alan Hudson, acknowledged current uncertainties and "the heightened regulatory sensitivity at this time," which have prompted the firm to reduce its previously proposed second interim dividend of 5 pence per share to 3p per share.
The company will consider paying an additional 2p per share third interim divided, Hudson said, once "the financial and economic effects of Covid-19 become clearer".
Hudson said: "As a result of the financial upheaval experienced during 2020, we expect a growing requirement for professional financial planning amongst the mass affluent, many of whom have not sought professional advice to date, and the board therefore believes that the company is well-positioned to benefit from the medium and long term requirements of this demographic.
"Under the ongoing restrictions and uncertainty in the financial markets, the board expects that while gross revenue for the current year will be lower than market expectations this will be largely offset by the variable nature of the group's cost of sales and cost reductions implemented by the company."
By Anna Farley; [email protected]
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