Total assets under management and administration (AUM and AUA) increased by 6% during the period from £2.5bn on 30 March 2014 to £2.6bn and a marked a year-on-year rise of 25%.
However, the company’s year-on-year operating profits halved following Financial Services Compensation Scheme (FSCS) charges to £130,000. Aside from the levy, Walker Crips also cited market volatility and an administrative expense increase of £900,000 incurred by the ongoing expansion as reasons for the drop in operating profits.
Rodney Fitzgerald, CEO of Walker Crips, said: “The last six months hasn’t been great for the whole sector. But because we’ve had an influx of advisers we outperformed and managed to turn in a profit when ordinarily it might not have been so good.
"We’ve hired a lot of people; there has been forty good advisers coming in."
The group aims to hit £5bn of total AUM by late 2018.
“We’re expanding on the discretionary side so that the fee income component grows with the traditional stockbroking part of the business,” he explained. “They are both growing but the emphasis is on growing the fee part and asset gathering more quickly.
“A lot of clients are converting from transaction-based fee structures to asset-based fee income."
Although Fitzgerald emphasised that Walker Crips is not “hell-bent” on increasing its current roster of 12 branches, he outlined the possibility of broaching further regions if a suitable opening arose.
“A lot of opportunities present themselves in areas where we would like to establish an office,” he said.
“There are many pockets of wealth where we are not represented and we would like to be. The North West is certainly an attractive area where we feel should have a presence.
“We’re going to continue looking for growth in UK regions, and while the wealth management stronghold is in York, we would like to have that represented in the South East particularly. At the minute it’s all going well.”
Financials
Walker Crips financials for six months to 30 September
• Revenue increased by 12.4% to £10.9m (£9.7m in September 2013)
• Operating profit dropped 50% year-on-year to £130,000 (£260,000 in September 2013); operating profit excluding FSCS charge (£150,000) dropped 22% in same period to £280,000
• Gross profit rose by 10.4% to £7.4m (£6.7m in September 2013)
• Administrative expenses increased by 14% year-on-year to £7.3m (£6.4m in September 2013)
• Discretionary and advisory AUM rose 9.4% to £1.5bn from £1.3bn in March 2014, and increased 26.1% year-on-year (£1.2bn in September 2013)
• Fees and non-broking income up by 23.5% year-on-year to £6.3m (£5.1m in September 2013)
