A strong financial first-half performance has been reported today by Jelf, the Yate-based independent full service brokerage which supports businesses and individuals.
Revenues were slightly up on last year from £35m to £35.2m in the six months to March 31 as EBITDA (earnings before interest, taxes, depreciation, and amortisation) increased by 5% to £4.4m while EBITDA margin went from 12.1% to 12.6% and earnings per share shot up 41% from 0.7p to 1p.
Chief executive Alex Alway declared: "The business has performed well . . . revenues have been maintained and we have achieved improvements in both profitability and margin."
He said Jelf’s first half focus had been on:
- Continued development of new business and client retention
- Continued investment in growth initiatives and further improving cost efficiencies
- Developing lead generation and client engagement programmes
- Paying down debt ahead of schedule
The group, which has more than 30 branches throughout England and Wales, has recently opened its first London office – and it is performing ahead of schedule. Mr Alway said it is expected that this will provide a blueprint for further development in the capital.
He added: "We have continued to develop our new business sales and client engagement and I am pleased to be able to report good progress in our Insurance business with a 14% increase year on year in new business sales."
Jelf is in the middle of an investment programme which was signposted with its 2011 final results. It is "anticipated that this investment in organic growth will produce benefits for future years in terms of improved performance". The upgrade and integration in systems previously reported will be completed in 2012 and has gone to plan. Jelf has also invested in upgrading the working environments in Gillingham and Plymouth which are major offices for the group. Mr Alway declared: "Where we have upgraded the facilities we have seen improvements in the business performance."
Revenues for the insurance business grew 4% from £22.3m to £23.3m while EBITDA was up 11% to £2.9m. Insurance revenues now represent 66% of group revenues, up from 64% last year.
Elsewhere revenues for the Financial Planning business were down 10% to £3.5m although Mr Alway said underlying recurring income improved. There was a small EBITDA loss of £13,000 against a £1m profit a year ago but this was not unexpected, said Mr Alway, as the group continues to invest in preparing for the Regulatory Distribution Review (RDR).
The group's chartered financial planning business, which accounts for 10% of revenues, is going through considerable change ahead of RDR with the number of advisors reduced as Jelf re-positions the advice that it provides to clients. All advisors who remain are or will be qualified for the new regime.
The group has £483m (2011: £500m) in third-party funds on wrap and discretionary management mandates producing fund-based income. It provides advice on individual client requirements and outsources the investment management to third parties. An additional £500m of client funds is being migrated to the new style platforms – but this will take a couple of years as the process must be aligned with customer requirements and sound advice.
Meanwhile the group, which has reduced its net debt from £10m to £1.1m, continues to review acquisition opportunities as they arise but says it will retain a disciplined approach to price and value.
