Results published by the group for the six months to 30 June showed that its investment management arm recorded an annual FUM rise of 71%, climbing from £439m in June last year to £751m. This lead to investment management revenue going up 23% to £2.29m.
The firm’s discretionary and advisory multi-asset capabilities provided the main thrust behind the progress, accounting for 77% of the investment management arm’s total turnover following revenue growth of 26% to £1.76m in the past 12 months.
While European Wealth IM’s institutional treasury and cash management strategies saw FUM jump 60% to £377m year-on-year, revenue of £260,000 – despite representing a 112% increase on the previous year – was comparably weak, and the firm said it expects margins to improve following interest rate hikes.
European Wealth’s group revenue surged 90% year-on-year from £2m to £3.8m, while recurring revenue rose from 41% to 57% in the same period.
However, group EBITDA slid to just £30,000 in the first six months of the year, down from £480,000 in the comparable period in 2014, while loss before tax hit £400,000 – down 221% from £330,000 profit a year previously.
Morton cited the Chinese economic slowdown and ongoing deliberations over US and UK interest rate rises combined with overarching concerns around global economic growth as influential factors in European Wealth’s half-year performance.
“The group’s ambitions for organic growth are proving to be more challenging,” he said. “Inevitably, it takes time for a new company to establish a brand name. The organic growth in the underlying FUM has been slower than expected in the first six months of 2015.
“The signs are that some of the initiatives started in the first half of the year are starting to pay off and the board is hopeful that organic growth will accelerate during the second half of the year.”
