Shares surge as financial adviser spreads its wings

MATTIOLI Woods is testimony to the pace at which a company can grow when the bosses know what they are doing, the culture is strong and market conditions are favourable.

Midas recommended this financial adviser in 2008, when the shares were 223p, the company was a bit of a tiddler and professional investors had little interest in the stock. When we looked again, six years later, the shares had almost doubled to 428p and the firm had virtually tripled the funds it looked after for clients to £4.3 billion.

In the past three years, the pace of growth has accelerated. Mattioli now looks after almost £8billion on behalf of 6,000 clients and the shares have almost doubled again – to 839p.

Chief executive and co-founder Ian Mattioli is far from complacent, however. He is determined to take client funds up to £15billion and there is every chance that he will succeed, driving the share price to fresh highs over the coming years.

Back in 2008, the firm specialised in offering pensions advice to middleaged, middle-class customers. This remains a core part of the business, but Mattioli has since branched into wealth management more broadly, such as Isas and property, and also has a thriving employee benefits division.

Employers using Mattioli’s staff benefits arm often become wealth management clients and vice versa, so the two divisions complement one another well. Many employers are also keen to offer financial advice and education to staff and Mattioli is seeing growing demand for this service from customers including hospitals, DIY merchants, breweries and engineers.

Mattioli aims to provide a wide range of services in-house, to keep costs low and ensure that quality remains high. Much of the firm’s growth has been organic, but there have been several acquisitions too, including a 49 per cent stake in Scottish fund management business, Amati Global Investors in February. Amati is small, but it is extremely good at

what it does and should expand substantially under Mattioli’s wing.

The group’s financial year runs to the end of this month and brokers expect a 14 per cent increase in revenues to £49million, a 13 per cent rise in profits to £10.1million and a hike of nearly 13 per cent in the dividend to 14.1p. Further steady growth is forecast for the next two years.

Midas verdict: In an uncertain world, where interest rates are low, inflation is rising and politics are highly volatile, employers and savers are keener than ever to seek advice on pensions, benefits and savings products. Mattioli Woods specialises in providing this advice and offers a growing range of products as well.

The shares have come a long way and investors may be tempted to sell up to a third and bank profits. But the group is ambitious, so the shares should continue to gain ground.