In This Article:
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Net Inflows: GBP 2.3 billion for the year.
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Assets Under Management (AUM): GBP 20.7 billion.
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Revenue Growth: 23% increase in the first half of the year.
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Adjusted Operating Profit Growth: 23% increase in the first half of the year.
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Operating Margin: Maintained above 50%.
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Interim Dividend: Raised to 9.5p, a 19% increase.
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Cash Balance: GBP 27 million on the balance sheet.
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Return on Capital Employed: 47.9%.
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Cash Conversion: 94% from operations.
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Cost Guidance: Expected cost increase of 10% to 12% over the medium term.
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Target AUM by FY '29: GBP 30 billion.
Release Date: November 20, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Tatton Asset Management PLC (LSE:TAM) reported strong organic net inflows of GBP 2.3 billion for the year, with assets under management (AUM) reaching GBP 20.7 billion.
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The company achieved a compound annual growth rate (CAGR) of 17% in revenue and 22% in profits, showcasing robust financial performance.
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Tatton Asset Management PLC increased its interim dividend to 9.5p, reflecting confidence in its financial health and commitment to returning value to shareholders.
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The company maintained a high operating margin above 50%, demonstrating efficient cost management and operational effectiveness.
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Tatton Asset Management PLC's investment performance has been consistently strong, with 11 years of consistent investment returns, earning positive recognition from industry media like Citywire.
Negative Points
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The subdued mortgage market has slightly held back Tatton Asset Management PLC's overall performance, impacting growth potential in this segment.
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The company faces potential revenue impact from the expiration of its contract with Perspective in January 2026, although discussions are ongoing to renegotiate terms.
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Despite strong performance, the company acknowledges competitive pressures with over 200 MPS providers in the market, which could impact future growth.
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Tatton Asset Management PLC's reliance on the IFA channel means any downturn in this sector could affect its business model and growth trajectory.
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The company has no current M&A activity planned, which may limit opportunities for accelerated growth through acquisitions.
Q & A Highlights
Q: Can you please talk about the potential risks to your business in the short and long term that the senior management focus on? And can you talk about competitive pressures in this respect? A: Paul Hogarth, CEO, explained that the main risk is executing their organic growth plan effectively. They focus on expanding their IFA network and attending numerous industry events. Regarding competition, there are over 200 MPS providers, but Tatton maintains a competitive edge with a 15 basis point charge, which they believe will become the industry norm.