Assetco chair Martin Gilbert pledged an “aggressive assault” on the firm’s annualised costs in the coming year, blaming the £22.5m of expenses for the £9.2m loss the company suffered in its financial year to 30 September 2022.
While the acquisitions of River and Mercantile and Revera Asset Management during the year added over £2.5bn to assets under management (AUM), which hit £2.7bn by 30 September, the costs associated with running the larger business shot up.
Gilbert (pictured) said that the firm had brought annualised costs down from a base of £32m, while affirming that cost-cutting would remain a central focus. Administrative expenses for the year totalled £25.6m, including the £670m charged for its readmission to AIM in June. This was an increase from £8.5m the year before.
Assetco acquired SVM Asset Management for £11m after its financial year end, and in December it pulled SVM, Saracen Asset Management, and Revera under the River and Mercantile brand.
Aside from costs, Gilbert added that River and Mercantile had taken a £2m revenue hit from outflows and a falling stock market. The figure, which was calculated on an annualised basis, covered the period between its acquisition by Assetco and the end of its financial year.
Despite the battle against annualised costs, Gilbert said the group was still on the lookout for inorganic expansion opportunities in the relatively difficult market conditions.
He added: “This creates opportunities for the agile Assetco in its mission to acquire, improve and grow otherwise attractive businesses that are experiencing challenges or whose true value is unrecognised.”
The firm’s wholly-owned subsidiaries are yet to reach profitability, a goal that has been made more difficult to achieve by the challenging market. In the final quarter of this year, AUM was largely flat as £369m of gross outflows cancelled out £147m of inflows and £225m added by market movements.
Shares in Assetco have fallen by 55% to 67p over the last 12 months but are still up 135% over the last five years.
Towards the end of November, the company declared an interim dividend of 1.3p per share, equivalent to 13p per share before shares were split in August.